Scott Kupor's New Plan to Bring Tech Workers Into the Federal Government

If you're a high-skilled tech worker, then potentially huge fortunes await you working for a startup or one of our booming AI giants. But the government needs these types of workers too. And the government is not set up to pay commensurate salaries with the private sector -- particularly for these types of roles. This challenge has long been understood, and there have been numerous efforts over the years to infuse the government with high-tech talent. Scott Kupor is the director of the US Office of Personnel Management, which manages and coordinates recruiting of new government employees across the federal workforce. Scott was also previously one of the top partners at the famed VC firm Andreessen Horowitz. So he has a mind for bringing the recruiting practices of the tech world into DC. But of course, that's easier said than done. On this episode, we talk about how federal hiring works and doesn't work, and also his new endeavor called the US Tech Force, which aims to bring in top talent for a two-year stint of solving problems across the bureaus. We also talk about the DOGE initiative, and how he thinks about recruiting top talent at a time when the administration has been aggressive about shrinking the size of the overall federal workforce.

Read More: Federal Workforce’s Toll After a Year of DOGE and Trump: 317,000
USDA Lost a Third of DC Staff Even Before Relocation Effort 

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.

Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.

Speaker 3 (00:21):
I'm Joe Wisenthal and I'm Tracy Alloway.

Speaker 4 (00:24):
Tracy.

Speaker 2 (00:25):
One of the topics that we like to talk about,
but we haven't talked about it for a while, public
sector tech, public sector are hiring. We've done a number
of episodes on this. It's been a while though, since
we've revisited this question, but it raises so many fascinating things.

Speaker 3 (00:38):
I remember the ones that we did with Jennifer Palca,
which were fantastic and we got a good sense of
some of the issues facing public technology, including I think
it was seven thousand requirements in a single RFP that
was at the state level. But you hear stuff like

(00:59):
that and it just kind of blows your mind how
complex the whole process of developing new technology actually is
in government.

Speaker 5 (01:06):
Right.

Speaker 2 (01:06):
So, and we've also Patrick McKenzie is the other one
we've talked about this with, like these legacy systems, they
have all of this croft or whatever, and some of
its tech, and some of it's related to hiring. Everyone
I feel like comes in to the public sector and
they're like, why can't this look more like the private sector.
But I have an observation that I thought about after

(01:27):
the last time we talked to Jennifer, which again they're
excellent conversations.

Speaker 4 (01:31):
We'll move the ball forward. So they're all kinds of
obvious problems with the public sector.

Speaker 2 (01:35):
We'll get into them. That being said, and I think
you had the same experience. You hear these descriptions of like, say,
what's broken with the hiring process, and it's like, you
know what, that sounds kind of familiar.

Speaker 4 (01:47):
I've experienced that in the private sector too.

Speaker 2 (01:49):
Yeah, a lot of these pathologies seem to exist in
large organizations.

Speaker 3 (01:55):
I was going to say, I think it's it's endemic
to bureaucracy. Yeah, right, And I remember Jennifer specifically saying that,
like one of the main choke points is just the
operational process of getting stuff approved or getting a new
candidate through a hiring process that has been dictated by
Human resources and you have to fit into certain slots

(02:16):
or certain categories. So it's a big deal.

Speaker 2 (02:19):
But that's the whole dealing with HR thing and their
role as gatekeepers of the hiring process. And they're all,
you say, jar I love our HR people here a Bloomberg.
I'm just saying some of it sounded a little bit familiar,
that's all I'm gonna I'm gonna leave it at that.
Some of it sounded a little bit familiar. Fair So,
of course we know that the new administration. Of course,

(02:39):
lots of people from the tech world have come to it,
I think probably most famously Elon Musk and the whole
Doge endeavor, which you know, we'll get into perhaps where
we stand on the verdict for that, but widely viewed
is not particularly transformational et CIEC. Nonetheless, a lot of
like buying a lot of people from the tech world
thinking about what aspect of our most dynamic industry in

(03:02):
America can be brought into the public sector to perhaps
make it a more dynamic place, maybe more efficient, maybe
more effective, and a maybe a more desirable place to
work for talented people.

Speaker 3 (03:13):
Right, and the government, the Office of Personnel Management is
launching a new cross government program right to recruit top
technologists to modernize the federal government. And I would just
add it kind of has some new urgency because the
Trump administration has identified the AI race with China as

(03:34):
like this existential threat to the US. So you can
see stuff kind of coalescing totally.

Speaker 2 (03:41):
Well, we literally do have the perfect guest because we
are going to be speaking with the Director of the
Office of Personnel Management in DC. We're going to be
speaking with Scott Cooper. He's a former venture capitalist who's
at Indrees and Horowitz, so he knows all about the
public world, the private world, et cetera. Literally the perfect guest. Scott,
thank you so much for coming on the Outlots podcast.

Speaker 5 (04:00):
Well, thank you for having me. I'm glad to be here.

Speaker 4 (04:01):
Absolutely.

Speaker 2 (04:02):
What is let's start from real basics, what is the
job of the office the Director of the Office of
Personnel Management.

Speaker 5 (04:10):
Yeah, it's a great question, and I didn't know the
answer to this one before I started talking to the
administration about the job either. So I think the simple
way to think about it is, Look, we're the talent
management organization for the federal government. So there's about two
point one million federal employees roughly in the government today,
and we are responsible for all policies related to people.
So how do you hire, how do you fire? Performance
management system so HRIT systems, And then we're also across

(04:35):
functional organization that everything we do obviously touches all the
different agencies. So we're trying to make sure that we've
got consistency of policies across the government. And the simple
goal in my mind is just how do we make
sure we have the right people in the right jobs
in the federal government. That's basically the forward articulation of
what we do.

Speaker 3 (04:49):
Why did you decide to go from Andrewson Horowitz to
what seems like, you know, something of a challenging job
and possibly lower paid. You don't have to tell us
your salary.

Speaker 2 (04:59):
But public somewhere, but I assume it lower than It's
definitely lower than.

Speaker 5 (05:03):
A partner in a Jerisa Arty, right, right, my salary,
My salary is public. Actually, in fact, you know, you
know what you know when you've hit a hype point
in your life when your oldest daughter, who is I
won't give her age, but she is, let's say, under thirty,
is making more money than I am at this day.
So exactly, I'm very proud of her. Yeah, it's a
great question. Look, the honest answer is it was a

(05:24):
couple of things. One is just it was the right time.
You know, I'd been an injuriesent, as you know from
the Founding for sixteen years. Super proud of what we
did there, and Ben and Mark were incredibly gracious in
giving me this opportunity, and I really felt like this,
there is an opportunity in this administration to do something differently.
So you mentioned a bunch of technology people coming to
the administration, there's also just a bunch of you know,

(05:44):
business people more generally, and look, we're not going to
make a mistake of applying every private sector you know,
method and model to the federal government. But I think
what the President has asked us to do is to
think differently about things and giving us kind of the
permission and the flexibility to do that. And so to me, look,
I I've been around the venture capital business. You know,
ultimately company succeed or fail. My lesson from the venture

(06:04):
capital business is they succeed or fail almost entirely because
of the people in the organization and the organizational structure
and the culture and the incentives. It's pretty simple. And
so my view is, look, why can't we learn some
of those lessons and apply them as appropriate to the
federal government and think about creating a culture where we've
got great people who can do great stuff on behalf
of the American people.

Speaker 2 (06:23):
So let's say, I want you to tell me about
your new initiative to bring in tech talent, and also
in the answer, maybe like situated within maybe what makes
it different from other endeavors where you know it was
the code for America Endeavor, which you know probably had
some similar themes. Obviously there is the Joje experience, which

(06:43):
I want to get into further. But talk to us
about this new project. What is it and then why
is it different from past efforts to infuse technology or
infuse tech thinking into the government.

Speaker 5 (06:56):
Yeah, so let me take you through the program. So
the program is called US Tech Force, So anybody who's
interested can go to our x at us TESK Tech
Force and find more information about it. Basically, here's the program.
The goal is to bring a thousand engineers into the government,
so software developers, AI experts, data scientists, product managers, so
anybody who can help us basically with the job of

(07:17):
modernizing government infrastructure. It's a two year program and we
partnered with about twenty five of the largest private technology companies,
private sector technology companies, i should say, And we're really
trying to accomplish a couple things here. Number one is
the government has a dearth of what I would call
modern software expertise and modern AI technology expertise. And that's
not a knock at all on the organizations, but a

(07:39):
lot of what these big cio organizations of the government
have to do as they're maintaining these massive legacy infrastructures,
and so the ability to do bespoke development is quite
difficult in those organizations. So this will be a vehicle
to help them accelerate bespoke development across the entire government.
The second problem we're trying to solve is we have
a massive early career pipeline problem in the federal government.

(07:59):
So seven percent of the federal workforce is early career
let's call that less than five or seven years worth
of work experience, and that compares to about twenty two
to twenty three percent in the non federal sector. So
by a factor of three to one, the federal government
is completely failing at getting early career people into government.
And if you look at the other end of the spectrum.
By the way, so we've got about forty four percent
of our population that's over the age of fifty, and

(08:20):
that compares with about a third in the you know,
non federal workforce. So we've got this looming problem, which
is we're going to have a ton of people, you know,
over the next five percent years who rightly so you know,
are at retirement age and want to go do other things.
And we've done very very little to actually replenish the pipeline.
So this program is really intended to do that. And
one of the ways we're doing that is by making
it a two year program. So I don't think it's

(08:41):
reasonable for us to go to a twenty two to
twenty five, twenty seven year old person and say, decide today,
do you want to commit forty years of your life
to be a career public civil servant. What I'd rather
do is expose them to the problems in government, let
them actually have a great experience, and you know what,
like we should convince them over time how great this is.
But you know what, if the end of the two
year period they want to go back to the private sector,
that's great. And that's why we've lined up all these

(09:02):
private sector partners who are going to actually help run
a job fair for us and make sure that we
have kind of greater a connectivity between the public and private sectors.

Speaker 3 (09:25):
Can you talk a little bit more about why historically
government roles have not been that desirable for tech workers.
Is I assume you diagnosed the problem before you came
up with a solution. But in your view, what is
the main choke point or market failure that is leading
to difficulty for the government to recruit the kind of

(09:46):
people that it wants to.

Speaker 5 (09:48):
Yeah, so I think there's a couple of problems. So
one is it's I think the fundamental issue, quite frankly,
in my mind, is a messaging problem, which is I'll
give you an anecdote. Right, So, when I first came
into office, I've been in the office about six months now.
How I met with one of my managers in the
organization who said, hey, you guys are ruining things. And
I said, what do you mean? And by you guys,
she meant DOGE. And you know, I'm not part of DOGE,
but obviously, look I come from you know, I know

(10:09):
lots of those people. And I said, well, how are
we ruining things? She said, well, our whole value prop
to employees has been come to the federal government and
have lifetime employment. And I said, oh my gosh, you're
not going to like my answer, because number one, I'm
going to tell you like, that's a myth and a
lie that people have been telling you. There is no
such thing as lifetime employment. And two, I said, look,
that's the most that's the worst least compelling kind of

(10:30):
narrative that I've ever heard that I'm going to go
tell some twenty five year old like, that's the value proposition.
I'm coming to work with the government. So number one
is like, we have to change the narrative. The narrative
in my mind is come work on the toughest, biggest,
most complex problems. You know, do some public service, but
then give yourself career options and you know what, if
you want to go to the private sector after that,
you know, God bless you, that's a perfect thing to do.
So that's part of the problem. The other problem is

(10:52):
the nature of what happens in government. And you know,
you know Jen Polka, as you guys mentioned in your intro,
who's like brilliant on this stuff, diagnosed it per which
is so much of what government does is it's a
compliance based culture. Right, It's not just literally you know
that we follow laws, but if I do something wrong,
you know, I'm worried about getting an inspector General report,
or I'm worried about a GAO report, or I'm worried

(11:13):
about some congress person hauling me in front of their
committee to testify about stuff. And so the short answer
as a result is like, we have a zero risk
based culture inside of government. There's no concept of you know,
you know, you guys mentioned I came to the venture
capital world. You know, in that world, look, we take
crazy risk because all we're doing is trying to maximize
upside opportunity. Now, I'm not proposing we do that in government,
and I've been using the term measured risk as a

(11:35):
better way to try to describe it in government, but like,
we have to kind of change the culture and enable
people to think about the upside opportunity that comes from
taking modest amounts of risk. And unfortunately, particularly on the
technology side of things, that has not been the case.
And so again, if you're a young, you know, early
career person, I think you want to do cutting edge stuff,
you want to learn things, you want to kind of
go out a little bit on the risk curve. And

(11:56):
right now, at least historically, government has not been in
a minimal place for that.

Speaker 2 (12:00):
Well, you mentioned that the pitch to work in the
federal government should not be this is lifetime employment. That
that is like, that's not healthy for a lot of reasons,
and I think a lot of people can intuitively agree
with it. On the other hand, you know, you mentioned
the sort of like in the VC world, you're always
shooting for the right tail, but when you're talking about

(12:21):
the layoffs or lifetime employee means like you're cutting off
the left tail. Just from a money standpoint, the employee
of the federal government never has the chance to experience
a right tail outcome. The highest paid worker in the
federal government, it's a very decent salary, but you know,
in the compared to very even moderately successful people, you know,

(12:41):
the most senior successful person in the federal government will
make less very often than just sort of like someone
who's hung around Google for a long time. So, like,
how much of a problem actually just comes down to
that simple monetary fact.

Speaker 5 (12:56):
So, look, there's no question that compensation is relevant, but
I actually think we've been overstating the nature of that problem.
So let me give you a couple of thoughts on it. So,
first of all, part of the reason why we're focused
on early career here is at least the pay gap
between private and public is a little bit more manageable,
and it just kind of it as themptotes like massively
as you go farther through your career. So yes, it's
totally unrealistic, you know, unless you're rich and you just

(13:19):
decide you want to do something different. It's totally unrealistic
for us to think we're going to compete against like
a VP at Google for a senior level executive person
in the government. So that's not even in my mind, like,
that's not even worth worrying about, basically, because like the
pay gap is just crazy and nobody's going to do that.
But my experience, at least, and you know, you guys
have been around a lot of organizations, is look, there
are some people who are purely kind of profit maximizing,

(13:40):
and that's great. It's not I'm not have no normal
objections to that, obviously, but my sense is that's actually
a relatively small minority the population of employees. I think
most employees come to work every day because they're being challenged,
they're learning, they have career development opportunities, they work for
someone who cares about their career and they feel like,
you know, they can be rewarded when they actually do
good stuff. They feel like they're held accountable Like that,

(14:01):
to me is a culture that we can create inside
of the federal government. And you know, even if it
means yes, in a short period of time, you are
going to have like a you know, remuneration challenge relative
to the private sector. But this is also why again
just to go back to it, This is why I
think this whole narrative of come, you know, work for
the federal government for forty years, to me is just crazy.

(14:21):
Like we should have an open idea that you can
go back and forth being the public and private sector.
And you know what, if you have points in your
life where you think, like profit maximization is the most
important thing, then yes, like you should go to the
private sector because the government's never going to deal with that.
But I think we just have to break this. Like,
to me, this dichotomy that there's one way to go
or the other makes no sense. So look, in the
perfect world, I'd wave a magic wand and say we

(14:42):
pay everybody like what they can get paid to Google.
But that's not realistic, and quite frankly, you know, there's
there's zero support in Congress for that. The final thing
we can do, though, just to Joe, to give you
one last perspective, is we can do things inside of
OPM to mitigate some of the challenges on the compensation
side of things. So let me give you a very
specific example. So, as you probably know, there's a GS
schedule which is like everybody gets paid, you know, GS

(15:03):
one through fifteen. These are different levels today. All those
GS schedules are driven off of tenure and they're driven
off of degree requirements. So if I don't have a
college degree and I haven't worked for ten years, no
matter how good I am, I can't get to a
GS fifteen level in government. In my mind, that's just silly,
quite frankly, right, that's the opposite of a merit based culture.
You all will remember, since we've talked does, right, You'll

(15:24):
remember I won't mention his name, but you know there's
a doge engineer with a very colorful name that turger
listeners have heard of. You know, when all the kind
of exciting dose stuff was happening, there was a quote
from an administration official who said this guy's terrible. We
never would have hired him because he didn't graduate from
college and he didn't have whatever five years of work
experience coming here. And in my mind, like, I literally
wanted to pull my hair out when I heard that,

(15:45):
because I'll say, that's the craziest thing in the world. Like,
if this guy is capable of performing at a GS
fifteen level, why should we care about what his tenure
is or whether he has a college degree. And so
one of the things we're doing inside of OPM is
we're going to eliminate all requirements and all tenure requirements
in the pay schedule and so as a result, if
someone is doing awesome, like we can hire them at

(16:06):
the appropriate level. So some of the pay gap problem
is not just a numerical problem, it's a leveling problem.
And I think we can solve that even in the
absence of congressional legislation.

Speaker 3 (16:15):
Yeah, I remember Jennifer again said something very similar about
like the best coder in America or a young guy
who had won this huge coding competition and then couldn't
get hired by the government because you didn't take all
of the official boxes.

Speaker 4 (16:30):
Kind of crazy specific role.

Speaker 3 (16:32):
Yeah, since you mentioned doing awesome. How do you actually
go about evaluating the performance of a tech worker in
government and how do you figure out which people you
actually want to hire in terms of talent?

Speaker 5 (16:48):
Yeah, so the short entwer is we have to do
it differently from how we do it today. But let
me give you the very specific So on the front end,
historically we have relied on self attestation of skills in
order to hire people into the federal government. So I
apply for a software engineering job and I get this
application where I check boxes and I say, you know what,
I'm an expert in Perl programmer, I'm an expert in

(17:11):
you know, AI technology, And I literally checked the boxes.
And that is the basis on which, like, my application
gets through or doesn't get through to the next round
of screening.

Speaker 3 (17:19):
I assume this is at some point, though, right, there's
some sort of contency test.

Speaker 5 (17:25):
So in many roles there's not. And the reason is,
let me give you APEC. There's a historical reason for this.
So way back when we used to have literally a
civil service exam, it was called PACE was the name.
I forget what the acronym stands for, but it's PACE
that existed until nineteen eighty and there was a lawsuit
at the very tail end of the Carter administration, very
beginning the Reagan administration, first Reagan administration, where there was

(17:48):
desparate It was a disparate impact claim basically, so the
kind of test results on this exam were disproportionately negative
for minority applicants versus majority applicants. And so in nineteen
eighty one, the government entered into a consent to free
where basically they banned essentially the use of these examinations.
And from nineteen eighty one until literally four months ago,
we were living under that consent decree. Nobody ever revisited it,

(18:10):
and as a result, every agency was terrified to use
any kind of actual merit based assessment for hiring because
they were afraid they would run a foul of this
consent degree. Luckily for us, we revisited it along with
the Department of Justice, and we got out of the
consent decree. We actually found the original plaintiff actually was
still alive, Levano was his name, and we actually, you know,

(18:31):
finally said okay, forty three years later, we think it's
time to get rid of this consent degree, and they
agreed to that. So for the first time ever, now
we have kind of avoided we've eliminated the risk that
the agencies worried about, which is if I use a
technical assessment to judge somebody in the employment process, I
might get sued, you know, under some type of disprit
impact theory. So we are now doing that. So number

(18:52):
one to answer your there was a long way to
answer your question. But so like, the way we're going
to evaluate people is they actually have to demonstrate merit.
So there's lots of private sector tests as you probably know,
code signal, all these other things, and every single private
sector company uses where they're like, hey, basically, let me
give you a coding test if you're applying for a
software development job, and then we can level you and
figure out are you a you know, GS five or

(19:12):
GS fifteen based on that, and then we can do
secondary stuff like obviously an in person interview or other
things to make sure that you know, you're actually a
good fit for the organization. So that's kind of thing.
The more when we have to do on the front end,
does that make sense at least?

Speaker 3 (19:23):
And kind of you know, yeah, it totally does. It
is kind of wild to think that, you know, last
year or a few years ago or just four months ago.
Joe and I could literally say that we're like, I'm
hunting experts.

Speaker 4 (19:36):
I'm a ten X engineer.

Speaker 3 (19:38):
Yeah, that's right, and apply I know, I'm a cokeball expert.
Cobyl COBBYL.

Speaker 5 (19:43):
I can never write cobol expert, would be very much
in demands. Coball, cobyl, Cobalt is Cobalt is the mineral.
There's a cobalt mineral.

Speaker 4 (19:51):
Yeah, I never know if it's cobble.

Speaker 3 (19:53):
I want to say cobble because it's like cobbled together
on across IT systems.

Speaker 5 (19:58):
Oh, that's actually really good. Okay, I didn't think about that.

Speaker 2 (20:01):
Okay, actually, but on the second part of Tracy's question, Okay,
so once they're in, once they're in the office, and
again because it's not a for profit entity, like, how
do we current how does the government currently go about
evaluating how someone did this year? And what would be
the optimal way for the government to evaluate how productive
someone there there is? And they're saying, and this is
a problem in private sector too. I'm pretty sure that

(20:23):
if you went into facebooks or Google, et cetera, they
would also not have a clean answer of like which
software engineer is more productive or core attributed more value
than the other one.

Speaker 5 (20:34):
Yeah, no, you're upsote. Right. Look, this is not a
problem that's unique at the government. But what I think
is unique to the government is historically, basically everybody gets
an A in government. To give you a perspective, most
agencies rank people one through five at the end of
the year on their performances, one being the worst and
five being the best. And if you look historically over
long periods of time in government, about eighty plus percent

(20:55):
of people get ranked A four or five. Okay, so
meaning basically, you know, everybody is in you know, kind
of like Globa gone and well well above average. And
then about zero point two percent of federal workers get
ranked A one or two, meaning that you're performing below expectations.
So number one, like, we've had no system that actually
recognizes like outstanding performance and quite frankly unfortunately, no system

(21:16):
that actually holds accountability on the other end of the spectrum.
We're changing that. We've already put out regulations for the
most senior executives what are called the sees, which are
the most senior executives, where we effectively. For the SEES
have put out a regulation that requires a forced distribution,
so a cap of thirty percent of fours and five rankings,
which we think is appropriate to actually distinguish people, you know,

(21:36):
in terms of their performance. So number one is we
got to reform the system, period and we're working on
that and you'll see more regulation from us. In that
number two, you're actually right, which is look like sometimes
the metrics are hard, right, so you know, you don't
really want to measure like lines of code that somebody
produces because obviously all code is not created equal. But
you know, what I think does work in the private
sector is, look, managers are responsible for their frontline workers.

(21:59):
They meet with one on one, they have you know, weekly,
they have a sense of what they're doing. They provide
feedback along the way, like I think the performance management
ongoing process works better in the private sector. In the
public sector, what I found is instead of managers, we
use the term supervisor, which I think actually unfortunately does
a disservice to what the job is. Like, I don't
think the job is necessarily supervision. The job is to manage,

(22:20):
meaning are they working on the right stuff, are they
doing the right things. Do they need training for this
kind of stuff, And historically we haven't done a great
job on that. So one of the things that we
just did, for example, is we just rolled out a
brand new training program that's mandatory for all supervisors specific
to this issue on performance management, so to teach them
like what does a one on one look like? You know,
those of us who go up in the technology industry.

(22:40):
The first book that we were all assigned to read
was Andy Groves Only the Paranoids Survive, which I still
think is a fantastic book. I don't know if y'all
have read it. It's actually a really all I have read it.

Speaker 4 (22:51):
Yeah, keep going, Yeah.

Speaker 5 (22:52):
I mean basically, he literally talks about like what is
a one on one meeting with your you know, team member,
Like what should it look like? And it's like, you know,
it's very much like management one on one stuff. But
I think the understands or is like, most people don't
get that training, and so as a result, we have
had a performance management culture where we have inflated grades
and we have basically once or maybe maximum twice a
year people actually get feedback. So it's totally unfair to

(23:14):
the employee and it's also just unfair to top performers
who are not actually getting differentiated reviews and differentiated compensation.

Speaker 3 (23:20):
I was just about to ask, just to be one
hundred percent clear, compensation is going to be tied to performance.

Speaker 5 (23:27):
Correct, Okay, correct, yes, all right, yes, And again it's
not that it hasn't been before. But the problem is
if everybody's a four and a five and you have
a finite bonus pool, then you're peanut buttering out the
bonuses basically. So like, yeah, just you know, Tracey, just
give me a sense. Like when we gave guidance on
this sees these very senior executives, what we said is
a thirty percent cap. We also said we think sixty
percent of the bonus based compensation should go to those

(23:49):
that thirty percent of the individuals. And you know that's
a you know, we can argue whether it's sixty percent
or eighty percent, but the point is, like, let's let's
actually really pay per performance, and let's differentiate compensation as
a posed to giving everybody a three hundred or five
hundred dollars bonus, which in the scheme of things, has
little retentive or incentive value for employees.

Speaker 3 (24:07):
So you mentioned project management just then, and I was
looking at some of the press releases and documentation that
you put out as part of this program, and there
really is an emphasis on getting project managers, and I
am very curious why that particular role seems to be
in short supply, because I know someone who moved from

(24:27):
a completely different industry into project management for a graphic
design company. They had never done it before, and it
didn't seem that hard.

Speaker 5 (24:38):
Okay, So I'm going to distinguish between project management and
product management, which is I hope we wrote product management
in the in our in our Stone.

Speaker 3 (24:47):
So did I miss read it?

Speaker 5 (24:49):
Well, I don't know that you didn't matter. We may
have put it in there. But what we need is
what I would call a product manager job, which is,
you know, a product manager, in my mind, is basically
somebody who sometimes they ca from an engineering background. They
might actually have been developers themselves, but they're kind of
people who sit between the engineering organization and the end
user customer and they listen to the customer and say, great, okay,
tell me your problems. What are you trying to solve?

(25:10):
And their job is kind of to translate that into
ultimately in tech speak, what we'd call a PRD a
project requirements document for the engineers to develop against. So
like that's the role we need. So in a well
functioning engineering organization, you have developers, you have designers, uh,
and then you have product managers. And the product managers
probably aren't puting their hands on the keyboard actually you know,

(25:30):
you know typing, you know, ones and zeros, but they
are literally that go between between like the end user
customer and then the requirements that ultimately drive the development process.

Speaker 4 (25:40):
It's interesting.

Speaker 2 (25:40):
I feel like that's something I've really come to appreciate
in working for a large organization, how valuable translation skills are,
because you have this one part of the room that
knows one very specific thing, and then there's these generalists
on the other end that have some vague thing, and
that person who could sit in the middle and talk
to both sides is clearly a very is a valuable person.

Speaker 5 (26:02):
You know.

Speaker 2 (26:02):
So you mentioned, like the one thing that comes up
a lot in a common theme on our podcast is
like the importance of this sort of like tacit organizational knowledge.
Things that are like cannot simply be written down. They
do not exist necessarily in one person's head. They're just
things that are sort of collectively known process knowledge and

(26:24):
so forth. How do you think about that in light
of the fact that these are two year roles and
you know, again maybe in some cases someone will do
two years and then continue their career in the federal government,
but that but you know, especially given the pay gap
that emerges specifically for technologists, like that's probably you're taking

(26:45):
on the one area where the pay gap probably gets
the widest over time. How do you think about fostering,
fostering and maintaining that kind of knowledge, especially given what
you laid out at the very beginning, which is this,
I don't know if crisis is the right word, but
these looming retirement of all these people that do have
years of accumulated knowledge about how things really work.

Speaker 5 (27:09):
Yeah, so you're absolutely right, which is, look, we have
to balance kind of the two year time period against
the need for actually the organization being able to maintain
these systems once people leave. So let me just give it.
I'll give you a real world example, Joe, just so
you have it because it might be helpful. So in
my organization o PM, we own the retirement process and
retirement for you know, several million and new attempts. Basically
who have you know, kind of completed their professional careers

(27:32):
and we are completely it's a very I won't go
into the details I want for you, but there's literally
it's a like a ridiculously manual paper based process where
for years we have had people literally filling out paper
applications as recently as the beginning of this year and
sending paper by postal mail and all kinds of stuff.
And we literally have a mine in Bowyers, Pennsylvania, which
is very fun if you ever want to come see it,

(27:53):
where we have hundreds of millions of file cabinets of
people's retirement records.

Speaker 4 (27:57):
So we'd love to I would love to.

Speaker 2 (27:58):
I've always wanted to go like those those like huge
like under mountain like big.

Speaker 4 (28:03):
Yes, that's literally very lo it is. I I'd love to.

Speaker 3 (28:07):
Check warehouse for government.

Speaker 2 (28:10):
I've always wanted to check out on these places. We'll
arrange that, all.

Speaker 5 (28:15):
Right, we're gonna we're gonna work on that one together. Anyways.
I bring that up to say, Okay, so look, we've luckily,
uh we've had a small team of developers Joe Jebbia,
who you guys may recognize the name. He's a co
founder for Airbnb. He joined the administration even actually before
I got there, but he's been he's been kind of
housed in o PM, and he has like a team
of like three developers and you know, a design person,

(28:37):
and they've been completely redesigning this retirement application. So we
now have what we call ORA, the Online Retirement Application,
where instead of paper, people actually can go, you know,
in the year twenty twenty five onto a you know
computer and and you know, type in their Apple their information,
upload their documents, it gets routed to the HR and
it's you know, it's you know, vastly better than what
we've had. So I bring this up to say, look,
I think this is me is a good example, which

(28:58):
is all those people are going to disappear at some
point in time, and then the responsibility for that application
is going to shift to the existing CIO organization within
OPM to maintain it, to integrate it with other systems.
And so a requirement of being able to do that
development process for Joe and his team is, Look, they
have to do documentation, they have to do training of
the team. Look, I think it's not an insurmountable problem.
I just think it means, as part of your process,

(29:20):
you just have to anticipate that there is going to
be a time where people are going to disappear. And
quite frankly, it's a smart thing to do anyways, because
we just know and look, this happens in private companies
all the time. Look people's average tenure in private companies.
I can tell you in Silicon Valley it's way less
than four years, is what the average tenure of an
engineer is. So these are not new things. They are
new things to the government, which is this idea of
kind of knowledge capture and knowledge management, you know, kind

(29:41):
of in light of the fact that people might not
be there for their entire career. But I think it
just means, as we've designed this program that we have
to have the appropriate level of documentation, of integration of
source code notes and all those things that are you know,
you would do in a normal circumstance to recognize that.
Now look at Joe in the perfect world. I hope
people love it and they're like, wow, this is this
is exactly where I want to spend the rest of
my life, and that's awesome. Want to do that like
we want to keep them in government, but you know,

(30:02):
I think we'll also have to deal with the practical
realities that you know, the current generation of you know,
people are not thinking about you know, three, five, ten
year you know, employments basically think things are much more
clearer than that.

Speaker 3 (30:30):
What are you doing to streamline the operational side of
the process, because I imagine you mentioned culture before. If
the pitches come work for government, it's important, but you're
going to be lower paid and you're going to have
to constantly deal with paperwork and put together you know
RFPs that have seven thousand requirements and things like that.

(30:52):
That that's a tough sell to someone who's used to
the whole move fast and break things culture.

Speaker 5 (30:59):
Yeah, So anyways, let me just be totally clear, which
is we are not going to move fast and break
things because we can't quite do that. In government. We
can move faster than we currently do, and we can
afford to take some risk, but we generally don't want
to break things because you know, people do need to
get their Social Security checks and you know, the IRS
needs to actually make sure you get your tax refunds.

(31:19):
So but it's a great it's a great question so look,
there's a couple of things that we're doing both inside
and outside this program. So outside the program more generally,
one are the big things that OPM is driving along
with OMB, you know, kind of the offseome management budget
is we're working with all the agencies to basically what
I would call do headcount planning and reshape the priorities
for the organization. So there's a huge amount of government

(31:40):
is very good about adding things to the plate, and
they're very bad about actually ever taking anything off. So
every time something new comes down from Congress, we add
you know, thousands of more people, We add stuff to
the plate. And then we have this list now of
twenty things, probably five of which we've been doing for
twenty years, and quite frankly, nobody even remembers while we're
doing them anymore. They've just now become like, you know,
embedded into our culture. So part of the exercise in

(32:02):
order to kind of make the throughput faster and to
make sure that an engineer isn't like sitting on their
hands dealing with you know, crazy bureaucracy, is we have
to go back and look at prioritization and actually remove
services that are no longer statutory, and they're no longer
valuable to the American people. So that's the exercise we've started.
That's the exercise that we're kind of is ongoing right now.
But the purpose of that will be not only to

(32:23):
make sure that we're hopefully spending our money in the
right places, but will also be to remove layers that
ultimately slow down the actual work product of government. The
second thing we can do is, as I mentioned, we're
really trying to kind of change the performance management culture
in government and eliminate barriers to people being able to
move through the organization and change the idea that you
can't take any risk. I mean, obviously that's a big

(32:43):
cultural challenge that we have in government. So everything from
down to like what your performance plan look like. Your
performance plan should have, you know, efficiency, it should have
you know, some measured amount of risk taking in there.
So things that again will speed the pace of deployment
and makes sense. The third thing we're doing is and
this is again you guys asked me, you know, how
is this program different from other programs. As we hire

(33:04):
these thousand engineers, ultimately they will live in various agencies. Right, So,
doctor oz At CMS says, you know, it's like, look,
I need seventy five engineers to do you know, kind
of important projects there or obviously Department of War you know,
have lots of stuff, so they're going to live in
those agencies. But what we're not going to do, which
is historically where I think these programs has failed, is
if you drop these teams just into the blob that

(33:25):
is the federal government, they're going to have a terrible
experience and they're going to get lost, and they'll their
two years will literally go by without them actually having
accomplished anything. So our whole goal with this is keep
these teams together. So when you know what I'm what
I'm hoping from doctor Oz is there's going to be
a team of seventy five engineers who are going to
be a team, and they're going to work on the
projects that he thinks are the most important projects. And

(33:46):
of course they have to integrate with the existing CIO
organization because so much of what we do has integration
back ends and all that kind of stuff. But we've
got to make sure that that happens because otherwise, you know,
you hire a random you know, intern to and you
PLoP them into ananization and they get swallowed by the beast. Basically,
it's just it's understandable why that happens. So we've got
to think about the organizational implications of bringing people in

(34:07):
and make sure they're set up for success. And you know,
my expectations are and certainly the conversations that I've had
with all the agency heads are that they understand that,
and they understand that for them to achieve what they
want to do, they have to create the organizational structure
that enables these guys to actually do what they're there for.

Speaker 2 (34:22):
Yeah, I think that this is another thing that we
could probably say from firsthand experience, is you come to
a big organization, You've spent a long time, maybe the
first year of just getting to know the lay of
the land, who are the people that you should talk to,
et cetera. It's a real challenge. It's a real challenge
being effective of actually accomplishing anything.

Speaker 4 (34:42):
The amount of time. I mean, I've been a bloomberg and.

Speaker 3 (34:44):
There's all experience.

Speaker 2 (34:45):
Yeah, they're still I've been here ten years. That there
is like who do I call it? It's just like
the nature of large organizations. I want to talk about
you know, people who you say, Okay, like you, we
need to do something about the fact that all these
people are going to retire, and there is this pipeline
et cetera. Set it aside, optimal levels of how big
the federal workforce should be, et cetera. One thing that

(35:07):
I could see as a bit of a problem about
maintaining careers if federal workers do not feel that they
are respected in their jobs. And there is a rhetoric
that is that you hear it's like the federal governments
they you know again some people it's like, oh, they're leeches,
they're part of the deep state. They're all look and
they spend money on this, and that's ways. But even

(35:28):
that spending looks like what I observe is spending in
the private sector, et cetera. And then you know, there's
at least from this administration, there's been these sort of
seemingly from the outside and probably from the inside, capricious
layoffs or arbitrary layoffs. And so if you respect this workforce,
then how how could you possibly have just like cut

(35:51):
so arbitrarily. I mean, these are this is what it
seems like when you think about building a talent pipeline.
Do you think think about this dimension and do agree
with the sort of premise of the question that it's
a challenge that no one is going to work at
a place if their boss is to some extent sort
of think they're you know, do not respect them.

Speaker 5 (36:13):
Yeah, So the short answer is yes, like absolutely, this
is a critical part of making sure that the federal
government is an attractive place for the people who are
there and also the people who you know, we're trying
to recruit in. So I got a million thoughts. Let
me try to see if I can keep them in
the time we have remaining. So I'll give tell you
one thing. So just to back up, as you know,
I've worked at entries in Horowitz and Ben Horowitz, in

(36:34):
my mind, is one of the best CEO's, best managers
that I've ever learned from. And I had worked for
him for literally ten years prior, so for twenty six
years of my life I've had the benefit of learning
from Ben. The most important thing I learned from him
is exactly what you describe, which is when you have
restructurings in companies, basically you have broken trust with your employees. Okay, so,
particularly in the startup context, right, Like, you know, when

(36:54):
we were in startups, we personally recruited every single person
into that company, and we told them how we were
going to conquer the world and how awesome we were
going to be, and we believed that we weren't like
lying to them. But it turns out we were wrong.
Like the market change, we didn't have to no money
and and you know, we had to live through this
in our loud cloud opsware days we laid we had
to lay a bunch of people off, and so you've
immediately broken trust with those employees. So you are from

(37:15):
that day forward basically in a situation where you have
to rebuild that trust. Right, so you have to demonstrate
to them that you know it wasn't capricious and arbitrary,
and that you're not like lying to them in a jerk,
but that you actually do care about them. And it
turns out, through no fault of their own, their next
door neighbor who sat in the cube next to them
unfortunately lost their job because like we couldn't afford to
pay them anymore. So I say that only to say, look,

(37:37):
I recognize that very clearly. I understand that. And if
you literally go back to like the testimony I gave
when I went through my hearing, I said that very splicit.
I think that's important. All that being said, I think,
look the way to think about. Let me just give
you the context of the headcount reductions that happened in
the government, because I think there is in my mind
at least some misinformation out there that I think is
worth talking about. So it'll give you some numbers. You know,

(37:57):
you've got a very sophisticated audience. As at the end
of the year, roughly about three hundred and seventeen thousand
people will have exited the federal government. Okay, we started
the year at about two point four million ish roughly
in terms of civilian These are civilian employees, by the way,
so forget about the armed services, because my organization doesn't
touch that. About two point four million civilian employees will
be roughly two point one million civilian employees as of

(38:18):
December thirty first of this year. At the same time,
we hired about sixty six thousand employees. So on a
net basis, call it two hundred and seventy you know,
two hundred and sixty two hundred and seventy thousand roughly
kind of net departures from the government. If you go
back to that three hundred and seventeen thousand, number, ninety
two and a half percent of those people took some
form of voluntary retirement. So we had this thing called
DRP Deferred Resignation Program that was the back that was

(38:41):
literally half of it. One hundred and fifty four thousand
people took that, which was an eight month seference that
we gave to people to voluntarily leave government. And then
the rest of it was where there are some other programs.
The acronyms aren't relevant for your for your listeners, they're
called Viera and VISA if people want to look them up,
but those are other voluntary kind of you know, retirement programs.
And then only seven and a half percent of people
were removed through either rifts or what we call probationary employees,

(39:05):
which is in the government, if you've been if you've
been there for one or two years, it depending upon
the job. You're kind of the closest thing to an
app will employee that we have in the federal government.
And so that we're about seven thousand of those probitionary
employers who were removed in about seventeen thousand people who
were ultimately riffed, you know, reductions and forced as a
result of restructings. So I say that number one, not
to I want to be totally clear with your listeners,

(39:26):
not to make light of any of this. Obviously those
are real people with real jobs and real families and stuff.
But the numbers, again, you know, kind of I think
bear out what we tried to do in the government,
which is tell people that things were changing, tell people
that you know, we do have a different view as
to what, you know, we think the federal government should
be doing, and give people an opportunity to voluntarily say, okay,
this is not what I signed up for, which is

(39:47):
a very noble thing to do, and say, you know,
it's time for me to go do something different. So
ninety two and a half percent of the people who
left the government did so because they decided, you know,
this wasn't an environment they wanted to be in. So
that being said, now, look I totally agree with you,
which is we have to demonstrate to the people that
are there and to the people who are coming in
that you know, we obviously care about them and that
we think they do valuable work. And I think that's

(40:08):
the case for the vast fast majority of people there
do great work, like any organization. Yes, there are some
people who are not doing great work, and we have
a system that makes it very hard to hold them accountable.
We're going to try to fix that. But look, that's
true of any organization. So I don't think it doesn't
make sense that kind of demean the broad federal government
based upon the work of a few. But we have
to do that, and we also have to be honest
and transparent with our people, which I believe very strongly,

(40:29):
and is Look, we can't be all things to all people,
Like we're running two trillion dollars deficits. That's not sustainable.
And so look, we've got to be smarter. We have
to use technology to find ways to improve efficiency. We
have to think about if we're doing twenty things, are
all twenty of them still required? Do they still add value?
Because ultimately we're stewards of the taxpayer dollars, Like this
is not our money we're spending, and so I think
it's incumbent upon everybody. And this is the message that

(40:50):
I'm trying to get across to my team and to
the rest of the government. Is efficiency doesn't mean just
cutting cost. Efficiency means are you thinking about delivering a
better service but doing so you know, at or below.
So like what you do today, because you're thinking about
organizational changes, you're thinking about technology. Like to me, that
is just like quite frankly required of anybody in any
organization to do. And so that to me is like

(41:12):
what I'm trying to convey to people. And yes, that
means that there may be some jobs that are impacted
because of technology, but those things are going to happen,
whether you know kind of you know, we want them
to happen or not. The question is do we actually
set up the workforce and do training and do all
the kinds of things we need to do to make
sure that people have opportunities in light of what is
a very very rapidly changing, you know, technological market.

Speaker 3 (41:32):
So I get that part of the problem that you're
trying to solve is an operational one. This idea of
like a COBOYL programmer who's been there for decades and
he retires and walks out the door, and no one
knows how to do what he was doing, or no
one understands the system that he's basically had control over
for ages. But at the same time, you know, we're

(41:53):
talking about a decent amount of turnover a lot of
new employees. If this goes the right way, how are you,
I guess, guiding for safety. Are there any sort of
like institutional guardrails that you're putting in so that the
government doesn't actually end up breaking things?

Speaker 5 (42:15):
Yeah, I mean, look, there are you will hopefully appreciate
this bill. Look, there are a ton of institutional guardrails.
You know. In my mind, like the problem is we
have too many institutional guardrails. And again, you know, rational
people may disagree with me, but you know, I can
just tell you, like the entire culture of everything we do.
Any everybody I've talked to in government and luckily we've

(42:35):
had lots of kind of impact on making change ear on,
everybody is like, we can't do that because of X, right,
And the answer is either because like it's statutory and
the honest answers when you dig and dig and dig
the realities it's not statutory, Like we've built up this
like urban myth over time that something is statutory, or
as I mentioned, because like I'm terrified that I'm gonna
get a GAO report, an inspector General report, or a

(42:57):
congressional inquiry. And like, we we have built such a
compliance culture that we are just literally like unable to
do anything that actually is kind of modern and you know,
forward thinking in terms of government. And so this is
what I'm this is what I'm trying to do. And
as I told you guys from the beginning, like, yes,
this is not the private sector. We're not going to
take crazy risks. We're not going to like go like
put everything on black, you know, in the casino. But

(43:20):
we can have a rational conversation, which is okay, like
what are the risks we're taking and what's the upside.
So if you'll give me a minute, let me give
you a very very tangible example for your listeners. So
I mentioned to you that we handle retirement services and
it's a very manual process, and so like it takes
us a really long time to get people formally retired.
So you quit from you know, you retire from the
government on September thirtieth. In the current process, you know,

(43:43):
it takes sixty ninety one hundred and twenty days sometimes
for you to actually get a check because we have
this ridiculous, manually paper process that takes forever to for
us to calculate what are you actually entitled to and
to make sure you're getting the right money and all
that stuff. So that's a huge burden on retire reach. Right,
You've been getting a paycheck every two weeks for the
last forty years, and now I'm going to tell you,
like sorry, like go manage your cash flow some other

(44:04):
way while I'm doing this, Like, that's terrible in my mind,
and it's a complete disservice and completely disrespectful to people
who are retired with the government. So we have a
process in the Retirement Services thing called interim pay right,
which is as the name sounds, right, The idea is, okay,
can we get you some money on an interim basis
that may not be one hundred percent accurate, but at
least helps bridge this gap between you when you retire

(44:24):
and when you get your actual annuity check. Okay. So
going into and then the couple this with we've got
this massive You know, we have had a lot of
exits in government. So the three hundred and seventeen thousand
I mentioned, not all of those are retirees, but like
on average people, we have about one hundred to one
hundred and fifty thousand exits a year, so we're you know,
more than double the number. So and as a result,
there's more than double the number of retirees that are happening.

(44:45):
So you've got this terrible papal process like massive volumes,
and we're just going to make life miserable for all
these people who can't get money. So I asked the team.
I said, okay, how many people go through interim pay today?
This is kind of pre are change, and it's about
like percent of people. And I was like, well, what's
the problem. Layer like, well, that's how we've always done it,
so you know, again, part of the answer was statutory,

(45:06):
which it's not statutory. And they're like, well, there's huge
risk to the system because if we pay somebody more
and then they die between the time we paid them
their interim payment and we get their actual annuity, there
may not be any assets left into the estate, and
so we might compromise the fidelity of the trust fund. Okay,
Now keep in mind, this is a one point two

(45:26):
trillion dollar trust fund that is actually cashful, a positive.
So among trust funds for retirement. It's actually fairy rare.
But we earned two and a half percent on government
treasuries a year, which is horrendously bad because we're only
allowed to invest in government treasuries but not with Spain.
That it's actually still pet cashul the positive and fully
funded like almost in any any circumstance. So we finally
went through the math, and I said, let's go through

(45:47):
the math, and let's assume, you know, we get it
wrong x amount of time and all this sudden stuff.
And we did a bunch of math, and I said, look,
if we're wrong one hundred percent of the time, it
could cost us a couple million dollars over payments at
one point two trillion dollars trust fund. But we can
shrink from ninety to one hundred and twenty days the
time somebody gets a payment to either zero to seven

(46:08):
days if we put more people through this interim pay process.
So in my mind, like this is just the most
obvious thing to do, and we are doing it by
the way we decided to do it. But like it's
a great example, at least in my mind, of where
we have so ingrained in the culture that risk, any
kind of risk is bad without actually people being willing
to have the conversation to say, Okay, like what is
the cost of that risk relative to the upside opportunity

(46:30):
that that taking that risk entails. And I'm perfectly happy,
you know, I told them, I said, look, you don't
need to protect me if it turns out some congress
person wants to yell at me because like, I took
a modicum of risk in order to like make you know,
hundreds of thousands of retirees lives better and not have
to like take loans out after they've given their career
service to the federal government. Like, I'm totally fine defending that.
I think that's a perfectly rational answer. So that, to

(46:51):
me is the issue.

Speaker 2 (46:52):
I have one least question, and maybe I'll sort of
ask you a little bit to put your VC hat on,
maybe because maybe you will go back to VC when
this level is over. But who knows someone who knows
a lot a lot about technology. So we had an
episode recently with Tyler Cowhen we talk about one of
the weird things, Yeah, is that you know, the AI.
We haven't even really talked about AI. So this's my
AI question. AI the tech make you know, makes your

(47:15):
jaws drop when you see it. On the other hand,
the impact so far on the economy or the real
world is sort of muted. It maybe is like you
might have, given the capabilities, you might have expected more
more revolutionary change. And his thesis that he put forth
was like, we're really not going to see that sort
of meaningful, impactful diffusion of the tech until we have
organizations that to some extent are built ground up from

(47:37):
AI that you know, yes, you can maybe get some
productivity gains here and there by putting AI into some
existing workflow, but that the real breakthroughs will come from
whether it's companies or so forth, that are truly AI
native from day one. I'm curious, you know, when you
think about you know, again going back to the VC world, A,
does this feel intuitive to you that the real deployers

(48:00):
will be AI native And then does that have any
implications for like, we're not going to have a revolution,
I guess hopefully at the at the federal level, are
not going to have a complete destruction and starting over.
Does that have any implications then for thinking about how
AI will be diffused within federal processes?

Speaker 5 (48:20):
Yeah? So obviously, Yeah, Tyler is a brilliant guy, so
far from me to disagree with him. But let me
give you just a couple thoughts on what he said.
So look, I guess I generally agree with most of
what he says, which is, and this is true by
the way I think of adoption of most new technologies,
which is, we go to the common use cases and
we think about incrementality as the first thing to do it.
So if you go way back when Mark Andresen told

(48:42):
me this, so if it's if it's made up, I'll
blame him. You know, when when we when we first
when we first had movies, you know, actual like you know,
moving pictures, they were just plays basically that people filmed, right,
so like they weren't like producing them, they weren't new content.
It was literally just we said, Wow, we have this
cool thing called a camera. Let's film a play and
then go in a thing. Now it's obviously that's not

(49:03):
that relevant to this conversation, but my point is just
like we tend to go to these very common incremental
use cases for things. And so look, I believe that
if you look at any major fortune five hundred company,
I guarantee you that every single board conversation is what
the heck are you doing about AI? And how do
I get three to five to seven percent greater EPs
growth relative to last year because you can fix my

(49:24):
customer support problem or stuff like that. So I think
that's what's happening right now. I do agree that, Yes,
what often happens is then there will be a new
generation of companies And we see this in the venture
capital world too already. Which is the most obvious use
cases that people did is there's a ton of companies
who have customer support applications for AI, and there's a
ton of companies who have you know, how do we
help lawyers read documents better using AI? And that's great

(49:45):
and those companies are fantastic, but the real breakthrough is
going to be yes, like when someone says, Okay, we're
not just gonna make salesforce dot com more efficient, but like,
we're just going to rethink customer relationship management with an
AI first mentality, and like, the AI should know who
my customers are. It should anticipate what I want to do,
and it should send me emails and texts and say, like,
you haven't talked to this person in five weeks and

(50:05):
I just saw that they you know, spoke at this
conference and they talked about this, and you know you're
not following up on it. So that's where we will
get and I have no doubt we will get there,
quite frankly. And look, I'm an optimist by nature. You
have to be to be in the venture capital business.
But yes, I would agree with him generally. I think
that's right. What does it mean for the federal government?
Very simple, which is that if the private sector is incremental,
the federal government's going to be like, you know, a

(50:27):
hundred x incremental relative to a hundred x less incremental.
I guess I would describe it, but that's in my mind.
That's okay. Like, so again I've told everybody in my team,
I'm not asking you. I don't want you to go
build like the twenty forty AI plan because we have
no idea what the heck that's going to look like.
That's a total waste of our time. What I want
you to do is look at a process you do
today and figure out can you use an AI tool

(50:48):
to help you get three, five, ten percent greater performance
out of your organization? Right, So we do a ton
of I'll give you very simple say, we do a
ton of regulation writing obviously, because you know that's what
we're ultimately in the business of government is producing regulation,
and we're about to put out a regulation. We got
forty thousand public comments on this regulation. We literally assigned
each one of those forty thousand comments to a person
to read and to draft a response to. Now, to me,

(51:12):
that's just insane, right, And I'm not saying that like
the AI, we should just like the AI should do it.
But like, clearly AI is very good at you know, summarization,
at you know, helping people think about stuff like that's like,
that's all. If we did that, like, we would unleash
so much creativity and opportunity to government if we just said,
take the very basic stuff we're doing today and use

(51:32):
your you know, companion, chat, GPT or XAI, whatever your
favorite tool is, and just you know, eke out a
little bit of productivity. So anyway, that's how I think
about it. So, yes, the government is not gonna we're
not gonna transform government overnight. But what we're trying to do,
and what the US Tech Force is trying to do,
is can we get the right people in here who
understand those things that we start to drive ourselves forward
so we don't wake up five years from now and

(51:53):
find that we're the last dinosaur basically, and you know
the world has passed us by.

Speaker 3 (51:57):
So you sort of mentioned it just then, But can
you talk at all about what kind of platforms you're
using currently or what kind of models, because I you know,
I'm sure some people would find it very ironic if
the federal government was using deep seek or something like that.
And I'm curious whether you lean towards like an open
source thing or a closed source thing because of privacy concerns.

Speaker 5 (52:19):
Right now, the honest answer is we're at the very
very early stages, which is most of what people are doing.

Speaker 3 (52:24):
It.

Speaker 5 (52:24):
Literally, this may make your head spin because it made mine.
Until about a month ago, we did not even have
chat GPT on our government desktops. So, like you know,
I literally would sit there on my phone and ask
chat GIPT questions myerson my personal phone, just to be
totally clear on my personal phone, and then I would
go back to my work laptop and do stuff. So
as of about a month or two ago, we actually
have chat GPT, we have Xai. Now we might even

(52:47):
have We not even have a third one. I don't
even know. And of course we're the government's a big
Microsoft client. So we have my soft copilot for an
individual user in government that's basically the state that is
like the state of you know, kind of advanced automation basse.
We literally have it on our laptops. Now for the
development work that's happening. You're absolutely right, which is, Look,
there are major security issues that we all have to

(53:08):
think about. Look, I'm a big believer as you can
imagine an open source and certainly our firm entries in Horowitz.
You know, you've seen Mark make lots of public comments
about this. So I think the government will use open
source and can appropriately do so. Clearly we're not going
to use like the deep seat commercial version, but you know,
so much of that stuff is open source, and if
you bring it in you know, to your environment, and
you make sure that you get the right security standards.

(53:30):
You know, there's tremendous value to develop on open source.
But I would just just to give you a sense
of where we are, I would say we're very very
early in that journey in government.

Speaker 3 (53:37):
I have one last, very quick question, which is how
much of a constraint is drug testing on new hires nowadays?

Speaker 5 (53:45):
You know, I wish I had a really smart answer
to your question. I don't know the answer to that.
I have not seen it. It hasn't I say, it
hasn't shown up as some like big red flag where
we're losing people in the recruiting pipeline because of that.
But the very honest answers, I don't know, but I
will find out.

Speaker 4 (54:03):
I think it's a good que we should.

Speaker 2 (54:04):
I'm actually very curious about drugs in the workforce in general.

Speaker 4 (54:07):
We should do more on that.

Speaker 2 (54:08):
Scott Cooper, thank you, no for real, for real, I
you hear about it. My bark was talking about how
hard it was to hire because he's like everyone is sort.

Speaker 5 (54:15):
Of if somebody I would just say, Joe, if somebody,
if somebody clips that and puts it on Joe is
very I'm very I'm very curious about drugs in the workforce.
That's gonna be a great click.

Speaker 2 (54:24):
We'll get our producer, we'll clip it. Well, we'll get ahead,
We'll get ahead of that one. Scott Cooper, thank you
so much for coming on od Laves. That was really
really appreciate your take.

Speaker 4 (54:32):
Your time.

Speaker 2 (54:33):
Very helpful, and I would love to stay in touch
and hear more about how these projects evolved during your tenure.

Speaker 5 (54:39):
Right, thank you both for your time. I appreciate it.

Speaker 4 (54:57):
I thought that was great.

Speaker 2 (54:58):
I love I love these comm conversations. I mean because
I think they're just I guess the sociology of them. Yeah,
like that is what these conversations are really about. And
especially you know, we talk about some of these pathologies
that replicate from the public to a private sector, et cetera,
that are both like, they're really interesting sociological questions.

Speaker 3 (55:17):
The Department of War needs to get a bunch of
ping pong tables and tree snacks to recruit the most
cutting edge tech workers, right.

Speaker 4 (55:24):
With a macha bar, that's right.

Speaker 2 (55:26):
I wonder, I wonder if they're experiment We should have
asked that whether they have a macha on tap at
the office and whether that could move the dial.

Speaker 3 (55:32):
But it's also interesting, again, there's that cultural sociological aspect,
but it does apply to large bureaucracies and private organizations.
And I think everyone at some point in their lives
will experience this type of unnecessary paperwork, whether it's in
their jobs or when they're applying for a driver's license
or whatever.

Speaker 2 (55:53):
Yeah, you know what like this is like where I
have like the sympathy for like sort of like modern life,
large complicated things. How can the individual with our I mean,
how could we do How could you navigate insurance? How
can you navigate all this stuff? It like drives you
crazy at any scale. I do think, you know, And
this came up also in our conversations with Jennifer, and

(56:15):
I believe it that there is a lot there is
more to a career than pay, right, But I also
think that's like a very real issue, especially when you're
talking about the tech workforce specifically, where we know you
could just make an absolute fortune, and in many cases
you can make it a fortune as a very young person.
You'll be in the right company at the right time,
and many overnight multimillionaires in Silicon Valley. So it's not

(56:39):
just the late stage, although that's where it becomes the
most obvious. I really the pay is a very tricky situation.

Speaker 5 (56:45):
Well.

Speaker 3 (56:45):
I do think the emphasis on time constraints for the
tech force that's really interesting, and that's kind of a
shift again, a cultural shift from the way people have
perceived government jobs for a long time. And I can imagine,
you know, like if you were a young tech worker,
maybe you're having trouble getting into the private sector. You know,

(57:06):
just last year, you know, two years ago, remember there
was the wave of like layoffs. Yeah, and now everyone
is recruiting because of AI.

Speaker 2 (57:15):
But well, I mean no, I mean you're to your point,
like there are even like there are many talented tech
people if they're right there on the sweet spot, even
though that's not what it used to be.

Speaker 3 (57:24):
So I can imagine, like you go to the government
for two years and it's it's an educational process, and
you can take some of that knowledge away from you
when you then go into the private sector. Although that
also opens up the question of rotating doors between the
government and private companies, but maybe that's a topic for
a different day.

Speaker 2 (57:43):
I just and I do think there is and it's
not just this administration, but I think it's been very notable,
at least with some parts of the administration or some
parts of the rhetoric. There's this sort of like vilification
of bureaucrats, which is again of sort of a long
time thing, Like bureaucrats has sort of been a kind.

Speaker 4 (58:00):
Of a pejor, I mean a beer word.

Speaker 2 (58:04):
Anyway, I do think that's an issue. And I also think,
you know, like maybe we should just bring back civil
service exams everywhere and if you could know seriously and
if you could pass this test, you can get a job.
Like it's Lindy, you know, it's like famously, you know,
go back thousands of years in China.

Speaker 3 (58:19):
It's like the Big I was about to say, do
you know about the Chinese civil service exams? Those are
so interesting and crazy? Shall we leave it there?

Speaker 4 (58:27):
Let's leave it there, all right?

Speaker 3 (58:28):
This has been another episode of the Oud Loots podcast.
I'm Tracy Alloway. You can follow me at Tracy.

Speaker 2 (58:33):
Alloway and I'm Jill Wisenthal. You can follow me at
the Stalwart. Follow our guest Scott Cooper, He's at s Cooper.
Follow our producers Kerman Rodriguez at Kerman Arman, dash O
Bennett at dashbod at kil Brooks at Keil Brooks. From
where Oddlots content go to Bloomberg dot com Flash Odd
Lots were the daily newsletter and all of our episodes,
and you can chat about all these topics twenty four
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Speaker 3 (58:57):
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