When Ted Ullyot started working in DC in the early 2000s, the conversation around tech was not about Google or drones or Facebook, but about Microsoft and its antitrust lawsuit.
Ullyot learned two things: tech companies are really powerful entities, and they should be sure to have a Washington DC presence.
“Conventional, cocktail party wisdom was ‘You know, Microsoft was too late to build out its Washington D.C. presence.’ By the way, I’m not ascribing to that. I’m just telling you what the view was,” Ullyot told Business Insider. “This great company that we all use had actually raised a very profound political, legal, and regulatory antitrust issues on both sides of the Atlantic. For such a big company, they were a little late to come into the lobbying game.”
Before Ullyot became known as Facebook’s first general counsel, he served as the deputy assistant to President George W. Bush and chief of staff to the attorney general in the Department of Justice. He also spent some time in the private sector, working for AOL Time Warner and a partner in a DC law firm.
In 2008, Ullyot jumped to Facebook — a move he says his friends questioned at the time. Facebook was still an unproven company, and Ullyot was only the second person the social network had hired working in DC.
“I remember in the early days, the reaction for when I went to Facebook was ‘Why would you do that? That sounds crazy. Why would you leave DC and all this and go out to fledgling social-network company, whatever that is?'” Ullyot says. “And now people say ‘Oh I get it. I see that’s pretty interesting. There’s some real issues you’re working on.'”
Today, Ullyot has embraced his role as the bridge between Silicon Valley and D.C. His time at Facebook taught him to make sure regulators understand your product and don’t just react to headlines. Under Ullyot, Facebook would pre-brief the FCC on some of its product releases so they had an understanding of how they approached privacy. It was a proactive model, and one that Ullyot is now championing for startups.
In April, Ullyot joined VC firm Andreessen Horowitz as a partner to help its startups negotiate the complicated world of policy and regulation — and try to stop the collisions before they happen.
Business Insider talked with Ullyot about when startups should be approaching regulators, why it’s a bad idea to decide these issues via class-action lawsuits, and what role tech has to play in the 2016 election. The following Q&A has been edited for length and clarity.
Business Insider: So when you joined a young Facebook in 2008, what part of your DC politics background could help a social network?
Ted Ullyot: In addition to my day job as general counsel, I was the second person, albeit part-time, in the Washington DC office for my first year there. I do think I brought some political balance to the firm and I think that was important. You have Sheryl and others, who are pretty identifiable on the democratic side although they have pretty balanced and bipartisan. And then me on the Republican side, also to bring balance and operate in a bipartisan environment. So I think that was probably useful to Facebook.
One of the things that I’m trying to address at the firm is the gulf, the divide you hear about between Silicon Valley and DC. I think it’s really hard unless you’ve spent time in both worlds. Because then you can say I was at the Justice Department, I was at the White House, and I was trying to promote innovation, job growth, public safety, let American technology companies flourish, and free speech and all that. It can be easy sometimes to bash Washington or bash Brussels and say they don’t have the right goals.
BI: How do you coach startups in your new role to deal with policymakers? Should they be knocking on their door as often as they’re knocking on investors doors, or do they wait for their first cease-and-desist letter before they decide they need to meet?
TU: There’s no one formula that works for every company in every situation. You’ll see articles sometime that say “well do I ask for permission or do I ask for forgiveness?” I think you have to evaluate each situation on its own merits: What company are we talking about? What regulator are we talking about? What law is it that you’re worried about? How clear is it that this law applies to your situation?
There’s probably no one magical formula, but having said that, the general thing that I like to advise is to certainly engage sooner rather than later with regulators and others just to avoid misunderstandings about what your business is doing and to help policymakers understand what you’re after, how carefully you’ve thought about some of the issues that might be on their minds, and what solutions you have put in place to address some of this issues.
BC: What role does the tech sector and Andreessen Horowitz have in shaping these discussions, especially when it comes to the sharing economy and Uber cases? Should the companies be putting together some sort of legislation or creating lobbying committees? Or is it the government’s responsibility to figure out how to deal with these issues?
TU: I think that’s a fascinating area for lawyers, policymakers, and the companies themselves. The companies are bringing amazing innovation to the modern workplace. It’s not even the modern workplace. They’re bringing amazing innovation to what it means to work in the modern era.
Let’s take Instacart as an example. Instacart has classified its workers as employees in the stores themselves and the drivers as contractors. And that’s an interesting model. If you are a worker, and you wanted to work for Instacart, you could choose whatever model works for you. We think that’s a great example of a company being innovative, being responsive, and really trying to think about what framework works best for each of its employees. We think that’s exciting. Other companies have different models. You probably saw this last week, the Medium post. A bunch of companies made a statement of principles and it talks about some of these issues.
BI: But that’s still just a Medium post. It’s a group of people coming together, sure, but are we expecting these tech companies to take more proactive action or are they just going to be on the receiving end of lawsuits until a court decides one way or the other if their innovative business model is legal or not?
TU: It may just be a Medium post, but I think they will continue to speak openly and say ‘Hey here’s what we’re doing, here’s how we’re trying to solve the problem.’ I think you’ve got that innovation taking place.
I think the worst way you could resolve this is by class action innovation. That’s never a good way to resolve the legality of these things. We’ll see what happens with these cases. They’re under way, they have been underway for a while now, and we’ll see how those turn out. But in the meantime, there’s a lot of interesting innovation that these companies are doing.
I think part of it is having these discussions. So if there is a member of Congress who is concerned about the sharing economy, they may not have heard about what Instacart is doing. They may have not heard about the Statement of Principles. So part of what we do is raise these issues proactively and talk to them with elected officials so they’re at least aware of the healthy debate and ongoing discussions around these.
BC: We obviously have a big upcoming election. There’s only one tech candidate, Carly Fiorina. Does she get Andreessen’s vote because she’s from the sector? How are you approaching the 2016 election now?
TU: There’s no Andreessen Horowitz endorsement. I think fundamentally it’s important whatever your personal views, but in the end of the day, the job of a firm like this is to be bipartisan.
This is a very long term approach. The mechanism could be having them meet a company in our portfolio that has an interesting policy approach today, but the idea is over the long term to have a policy approach that can build out the network that connects Silicon Valley and Washington and Brussels and state capitals. Like Marc Andreessen yesterday helping the Department of Defence open up its Silicon Valley office. We’re equal opportunity about who we bring into Andreessen Horowitz.
BC: Well you dodged the question about Carly Fiorina. Is it good to have an experienced tech executive on office? Does that help the industry?
TU: Look, I think many of the candidates are quite focused on tech across the spectrum. Even Jeb Bush was here this summer, he took an Uber ride to Thumbtack and spoke to the employees there. So with tech issues, we will see them and we have seen them already in some of the discussion and debates. Jeb Bush got asked about DraftKings. I do think the relationship between technology and government and government’s attitude toward tech will be something that is on the minds of the campaigns.
BC: Have you found that politicians have certain misconceptions about the tech industry, or vice versa when you’re talking to startup founder about working with politicians?
TU: When you don’t spend time in each other’s worlds, or you’ve only come up in one world, you may have never set foot in Silicon Valley or you don’t know people who work in tech companies. You read about things, you watch movies that are misrepresentations or exaggerations. Maybe you think Silicon Valley is the show “Silicon Valley.”
If you came up through Silicon Valley, your world has been startups, small companies, just grinding away at an awesome problem, you’ve never really focused on policy makers except for maybe seeing them on West Wing or House of Cards or something. The misconceptions can be all across the board from what they wear to what they think to what their style is, in both directions. A common misconception of someone outside Washington who has not been brought into the fold is that “oh these are just bureaucrats who are slow and behind the times and don’t understand that stuff.”
BC: How much of your job is coming to the regulators and being your own policy arm versus helping startups establish theirs?
TU: The type of engagement depends on the scale of the company and where the company is. When you get to be the size of Airbnb and you get that kind of traction, I’ll be first to say they don’t need Andreessen Horowitz’s help. You might have other companies in the portfolio that might have seven employees and they will say “i’ve been invited to go on a trip to meet with policymakers X, Y and Z. Help. What should I do? Do I accept this invitation? Is this good? Is this bad?” They’re probably a company that doesn’t have a general counsel, doesn’t have a government relations person, might not even have a communications person, they have engineers and a great product. That’s a case where they might say “Hey Andreessen Horowitz, can you help me?” and we’ll be more hands on.
BC: Within the tech industry, there’s a lot of sectors that are dealing with new regulations, like drones or transportation. Are there any sectors where you don’t think regulation is the right approach?
TU: All companies whether they are traditional brick and mortar companies or pure software companies have to comply with the full legal and regulatory landscape that is out there. But you’re asking about the ones that we read about in the press in the clash of tech and regulation.
I certainly would take a pro-innovation and patient approach. The term I’ve seen out there that I like is “regulatory humility,” the idea is that if you’re a regulator and you come across a business, your first instinct should not be “I need to waylay these things and derail this business.” I urge regulators to go slowly on regulations to let these things play out and to be wary as a regulator of the incumbent in the space trying to use you to prevent competition.
Disclosure: Marc Andreessen, co-founder of Andreessen Horowitz, is an investor in Business Insider.
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