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Nick Hanauer at GeekWire Summit
Venture capitalist Nick Hanauer (center) at GeekWire Summit with GeekWire co-founders John Cook (right) and Todd Bishop (left).

Nick Hanauer is one of the most outspoken and controversial people in tech known for his polarizing positions on hot-button issues like that $15 minimum wage, gun control and taxes.

In fact, GeekWire’s John Cook joked that when we announced Hanauer as a speaker, someone said, “That’s a terrible choice.”

One thing you can’t say about Hanauer: He doesn’t shy away from a good fight.

The co-founder of VC firm Second Avenue Partners and founder of Civic Ventures, a “small group of political troublemakers,” he sat down with the GeekWire at the Summit to talk about tech’s civic and social responsibilities, gun control, and why Jeff Bezos didn’t want to pay for pizza in Amazon’s early days.

GeekWire’s John Cook: “You have an uncanny ability to see around big corners. You were one of the first to invest in Amazon, one of first in commercial drone company Insitu, you founded aQuantive, which you later sold to Microsoft for $6 billion…Can you speak to that?”

Nick Hanauer via Civic Ventures
Nick Hanauer via Civic Ventures

Nick Hanauer: “We live in age of increasing rapid technological innovation, that creates more and more larger and larger opportunities, it’s hard to pin down what the next big thing is…

Certainly at top of my mind, both because of business implications and civic applications, is biotech here in Seattle. By luck, my wife and I made a big donation to [Seattle] Children’s Hospital cancer research and simultaneously backed Juno Therapeutics, a leader in immunotherapy.

Actually curing cancer here in Seattle is the next big thing. That is going to happen. That is an unbelievably exciting thing.”

JC: “Let’s talk about the sharing economy and tech interrupting the middle class and losing jobs. Is innovation evil? How could we use tech to bolster middle class?”

NH: “Prosperity in human society is misunderstood. The difference between a rich and poor society is the number of problems that society solves for its citizens. That means technological innovation is the source of all prosperity, but with every tech innovation you also get disruption, ultimately social and civic disruption.

Tech innovation is something societies have to pursue as vigorously as they can. We have to innovate civically and socially at the same rate, otherwise you create unfortunate disruptions, and that’s where you have people opposing technological innovations.

People who want to lead tech advancement have a responsibility to ourselves and fellow citizens to innovate socially and civically at the same rate.”

JC: “Let’s talk about Amazon, which is incredibly disruptive technologically, but doesn’t do much civically. What could they do more of?”

NH: “There can be no doubt that Amazon as corporate entity could be far more civically involved in our community than they are — and they should be — but the bigger problem is the way in which these new business models ultimately and inevitably disrupt the economy generally, and we have to find a way to make sure those disruptions are not civically, politically and socially harmful.

First, shame on them [Amazon], they should be more involved civically…But second, overall, what do we do with good, hardworking people whose lives are destroyed due to innovation? Do we chuck them away? The least constructive answer is to ignore the problem. Fixing that isn’t Amazon’s problem, we have to collectively find ways to do things.”

GeekWire’s Todd Bishop: “We had a panel earlier today on Amazon’s workplace based on the New York Times story. You were there in the early days. What was it like?”

NH: “I think it’s a fantastic sign of a positive evolution of our society that the story was a story at all. That a story could be written on the front page of the New York Times and go everywhere that a giant corporation was treating its workers crappy. Fifty years ago this wouldn’t have made the news. We have changed our expectations which made that a story, and I think that’s very positive.”

“Jeff [Bezos] is a very hard-driving guy. I was very deeply involved in the early days, and we were having a company meeting, I think No. 2, where we had all these people working 24 hours a day, and occasionally they needed food to sustain their work, and they were like, “We would like to order pizzas and perhaps the company should pay for pizzas at 3 in the morning?” And Jeff was like “No, NO, your food is your problem.” And I was like, wow, that’s hardcore.”

TB: “Let’s talk about the $15 minimum wage and your involvement in that.”

NIck 2
GeekWire co-founders John Cook (right), Todd Bishop (left) and venture capitalist Nich Hanauer (center).

NH: “Here’s the thing: If you run a tech company, every single one of your employees can afford to walk into a Starbucks or McDonald’s or whatever it is, and get a Starbucks every day. Every single one of your workers is paying taxes.

Those workers at Starbucks, McDonald’s, Walmart, Walgreens, what have you, they can’t afford to buy the products we make, and none of them are paying taxes, and they are getting food stamps, Medicaid and housing assistance from the taxes your employees pay.

It’s a parasite economy, one where people get paid enough to robustly participate as consumers, innovators and citizens, and others where they are exploited and we pick up the difference. It’s a moral abomination, but there is also no earthly reason why giant corporations can’t pay workers enough to participate in the economy.

As tech companies, we should want every single Walmart worker to be able to afford our products. And the only way to do that is to raise the standard.”

JC: “Have you thought about running for political office?”

Photo via Nick-Hanauer.com
Photo via Nick-Hanauer.com

NH: “Almost certainly not. My wife and I have lived a life that would not hold up under that kind of scrutiny (laughs).

In seriousness, whether what we do resonates, at the risk of self-aggrandizing, what we’ve accomplished there is probably not any U.S. senator who has made a bigger civic or economic impact than me and my gang [at Civic Ventures]. The $15 minimum wage, which we invented is rolling across the country, and will become the standard. Whether it’s gun stuff, or political economy stuff, we have invented a way of participating civically and politically that is more effective than being in office.”

TB: “Can you share your thoughts on today’s shooting in Oregon (the shooting at Umpqua Community College that has killed 13 people and injured 20 as of this time, as King 5 reports).”

NH: “My gang leads gun violence stuff in the state and at the tip of sphere nationally, and yeah, I’m horrible at knowing what to say in these moments, and I almost always say something that leads someone to say, ‘That guy’s an asshole,’ but if you work on this as I do, you take these things extremely personally.

Those kids dying today — and a lot of kids died today — I take as a personal failure. People in my office are sobbing at their desks today because this happened. It’s very emotional for us, and it’s awful and a national embarrassment. There’s much to be done.”

JC: “Civically and socially, what can we do to protect our climate of innovation?”

NH: “It’s awesome there’s all this growth, but most people don’t make what a software developer at Amazon.com makes, and if they can’t afford to live here anymore, you can expect that that majority will enact laws that will bring this party to a screeching halt.

Again, we have the responsiblity of leading the charge to find ways to mitigate the destrucitons we create. Obviously, affordable housing is a big piece of that, Seattle is becoming an incredibly expensive place to live. Obviously, transportation is a huge issue, and it’s going to get worse before it gets better. The homeless problems. We are all involved in investments, taxes and tradeoffs, and pretending like we don’t need to deal with it is not constructive. We’ll get bit by that.”

TB: “What should the tech community be doing to make sure Seattle continues to be a place of innovation?”

NH: “Be civically engaged. For better or worse, the city has a plan for dealing with affordable housing, a plan for transportation. These things need to be sorted out and supported. I’d be stunned if 5 percent of the people in this room were up to speed on what those proposals are, and if they don’t get sorted out, the [tech] party will end.”

JC: “You sold aQuantive to Microsoft for $6 billion? What’s your view of Microsoft?”

NH: “When I sold aQuantive to Microsoft, it was a large company…It was a real business, not an idea that something would happen, and 18 months later it was gone.

It’s just a matter of cultures and alignment and priorities. Microsoft is a very specialized ecosystsem and environment. It’s really good at certain kinds of things and adapts itself to a niche, and they totally dominate this niche…It was like they invited us to a place at the bottom of the ocean that was 800 degrees, and they thought it was fine and could survive there, but bam, my people were dead.

That’s the difference between software and the Internet. In software, it’s easy to understand what people want and it’s hard to build. Internet stuff is super easy to build, but it’s hard to know what people want. These kinds of companies don’t go well together.”

TB: “Any predictions for what will be big in tech in 2018?”

NH: “AI. It’s here. Siri, would you find me a place to eat? is here. And will you park my car? is here, or will be in 2018.

I have a 15-year-old boy and we are about to give him car keys, which seems like an act of insanity when you know what you know about 15-year-old boy behavior. But in 2018, we’ll have self-driving cars and it will be so much better.

My son may be the last generation of kids who learns to drive. In 10 years, cars will be self-driving and there won’t be driving schools anymore. Think about how that will change the world, and change the landscape. It will change everything.”

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