# Picture yourself trying to start a company in an industry that hasn't changed in 5 decades

*American Dynamism represents the urgency for builders to revitalize sleeping incumbents.*

By [The Bigger Picture by Yash Bora](https://paragraph.com/@thebiggerpicture_2) · 2023-11-28

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A few weeks ago, Katherine Boyle, a general partner at Andreessen Horowitz, gave an inspiring speech at Shift's Defense Ventures Summit in Washington D.C.

Normally, I don't come across any defense related content in my day to day doom-scrolling, but Katherine's speech was shared by thousands of people on tech twitter.

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Here it is:

![](https://pbs.twimg.com/amplify_video_thumb/1726397754673414144/img/2u_NvfR-jnFxS6J5.jpg)

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Bearing witness to one of the greatest speeches ever publicly given by a venture capitalist.

 [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 4,442](https://twitter.com/JoshuaSteinman/status/1726419701042163993)[

8:58 PM • Nov 19, 2023

](https://twitter.com/JoshuaSteinman/status/1726419701042163993)

One quote specifically stuck out to me and many others as well:

> _We know technology is the escape hatch from a nihilistic world._

Up until a few days ago, I just assumed a16z's _American Dynamism (AD)_ fund was their defense technology portfolio.

But after reading that quote, I got interested in diving deeper into Katherine and the AD team's work. Turns out, military is just one sliver of their focus.

I went through all the essays & podcasts I could find on the topic since it was introduced two years ago and am a lot more excited about the spirit of American Dynamism.

Sections Below:

1.  Nothings makes you work faster than war
    
2.  IT has kept American innovation alive
    
3.  Waking up the incumbents of sleeping industries
    
4.  My favorite companies from the American Dynamism fund
    

Let's dive in 🚀

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* * *

### Nothing makes you work faster than war

To understand American Dynamism, it's important to start with the period between 1940-1970.

In these 30 years, the pace of innovation and improvements in technology accelerated at unfathomable speeds.

The catalyst was none other than war and military defense.

This was the period that included the likes of Vannevar Bush, Claude Shannon, Oppenheimer, Apollo 11, the Bell Labs mafia, the traitorous 8, & the early days of HP, Raytheon, etc.

![](https://storage.googleapis.com/papyrus_images/b81129c6e3c7166dbbcaeefb10ce3829.png)

Scientists, technologists, & policymakers worked side by side in order to accelerate quickly.

The point is that Americans were able to effectively build in a time when urgency was relevant and stakes were high.

Impossible problems became solvable.

But then, the flame that kept the relevant parties united slowly started to dim.

WW2 was over & the moon was conquered.

![](https://storage.googleapis.com/papyrus_images/84d8aaede29d99dee59b98b1f0b430dc.png)

Soon after, policymakers became "D.C." And technologists became "Silicon Valley". The former became increasingly fearful of new innovations. And the latter had a psychedelic excitement about the endless possibilities.

The new battle had become the coastal war.

* * *

### IT has kept American innovation alive

Since then, many of the traditional industries stagnated.

Real estate, education, infrastructure, etc. were all becoming more and more intertwined with the government.

Incumbents in these verticals only became stronger.

And regulatory capture prevailed.

![](https://storage.googleapis.com/papyrus_images/31cc4079e64583ff08bc3a6569d12987.png)

Improvements in communications & information technology have been the only area of hyper-growth in the last 50 years.

The cost reduction of PCs, the rise of the internet, the spread of smartphones, & the urge to post on social networks are all relatively new phenomenons.

And because of this, most people now strictly associate the word "technology" with newly minted unicorn startups funded by Sand Hill Road.

However, technology simply means "tools".

It's an underlying layer that augments society and improves people's lives.

The need for technology doesn't have to stop at social networks, productivity tools, & marketplaces.

New breakthroughs happening with AI, blockchain, robotics, manufacturing, automation, etc. can and should spread across all parts of our lives.

So, what's the hold up?

Rigid policies, intensive capital requirements, labor shortages, etc.

The list is endless but it all really comes down to one thing...

The growing desire to break past the barriers in legacy industries.

And to me, this is exactly what American Dynamism is about.

![](https://storage.googleapis.com/papyrus_images/0b6e5c43ba803ac089ae25e8d524a542.png)

* * *

### Waking up the incumbents of sleeping industries

Okay, but what exactly does this mean?

Pure software companies had the advantage of building on a blank canvas.

However, the minute the physical world comes into the picture, the dynamic of the conversation completely changes for builders. Think real estate, space, etc.

There's a lot more externalities that come into play. We have still yet to see meaningful shifts in the industries closest to the government.

This is not to say that there hasn't been any technological change. But we're still far from true disruption.

These legacy industries are all plagued by the same problems: lazy incumbents, regulatory capture, and misaligned incentives.

And that's why very few builders even think to disrupt in those spaces.

It's a challenge that involves an endless waltz with the government.

Regulators unfortunately work at snail speeds.

It's not just an American problem, but most western governments.

There's severe fragmentation and most policymakers are working on 4 year cycles so there's a lack of long term vision.

Heck, Brian Armstrong started Coinbase 11 years ago and is still fighting for basic securities regulation. Nuclear policy has barely changed since the '70s. And the Artemis program just launched in 2017 after 50 years of space innovation dormancy.

![](https://storage.googleapis.com/papyrus_images/f9c1290afa2ccbbebac80a8d358dc1f4.png)

However, there is light at the end of the tunnel!

The government is now slowly realizing that it must work with entrepreneurs if it wants to stay ahead of other countries.

In the last 20 years, there's been a build up of excitement in making new changes in old industries.

It took a few, brave companies such as SpaceX & Flexport to set the tone.

They wrote the playbooks on how to make a dent in verticals that the government effectively controls. This is what Oliver Hsu (partner at a16z American Dynamism) refers to as the "full stack startups".

![](https://storage.googleapis.com/papyrus_images/404be97795d6193e1111debfc777e3a8.png)

Full stack startups are great for three reasons:

1.  They wake up the sleeping bears (incumbents) of the industries.
    
2.  They form entire markets around themselves and bring new opportunities.
    
3.  If successful, these bold founders inspire thousands of builders to join them.
    

Much of the conversation around deep tech tends to start with space & defense. This is because the Department of Defense can't afford to lose - it's a matter of national security.

It won't be long before we see the Anduril of education or the Uber of manufacturing.

![](https://storage.googleapis.com/papyrus_images/21b31e1afb3e7f63073168e9b6a5e8e6.png)

So...what's the call to action?

You don't have to jump ship and go join SpaceX tomorrow.

Rather, you can think about how your work in tech applies to a broader range of societal problems today. And that can come from a variety of angles, all equally important.

*   If you're in AI research, how can your work change manufacturing?
    
*   If you're in crypto, how can you help improve the attestation process for labor marketplaces?
    
*   If you like VR, how can you help model disaster relief frameworks?
    

The intersections are endless.

Throughout my research, one point became clear:

![](https://paragraph.xyz/editor/callout/tip-icon.png)

American Dynamism is about inspiring those in the tech to think about how new innovations can revitalize American growth in industries where the lights are turned off.

In 2011, Marc Andreessen wrote his seminal post "Software is eating the world". For folks in the tech world, it's easy to forget that software has only eaten the first course so far. As more ambitious builders innovate in old sectors, we'll truly see the impact of code.

* * *

### A few Portfolio Companies from the American Dynamism Fund

I went ahead and picked out my favorite company in each sector (from the [American Dynamism 50](https://a16z.com/american-dynamism-50/) page which I highly recommend checking out)

1.  Agriculture: Taranis - Monitoring farm fields with drone imagery and AI to prevent crop yield loss
    
2.  Aviation & Space: Astranis - Building the next generation of internet satellites
    
3.  Construction & Housing: Cover - _Building high-quality, low-cost homes on a production line_
    
4.  Defense & Public Safety: Mark43 - Building a software-enabled public safety platform to improve police response and incident reporting
    
5.  Education & Community: Wonderschool - Empowering licensed providers to run their own in-home child care programs, partnering with local and state governments to avoid "childcare deserts."
    
6.  Energy & Materials: Radiant - Developing portable nuclear microreactors that replace diesel generators
    
7.  GovTech: OpenGov - Making government agencies of all sizes more effective and accountable
    
8.  Labor: Traba - Filling businesses’ open shifts with vetted workers in warehousing, distribution, and event staffing
    
9.  Manufacturing & Robotics: Gecko Robotics - Building inspection robots to maintain infrastructure for the energy and oil and gas industries
    
10.  Transportation & Logistics: Zipline - Streamlining the supply chain for healthcare and retail through the world’s largest drone delivery service
    

Lastly, if this blog post above was interesting and you want to learn more, make sure to check out the [a16z American Dynamism page](https://a16z.com/american-dynamism/#content). They've organized all the relevant content.

* * *

That's all for today's post.

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*Originally published on [The Bigger Picture by Yash Bora](https://paragraph.com/@thebiggerpicture_2/american-dynamism)*