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I'm Frannie Matthews, executive producer of The Business of Colorado.

On this show, we spend a lot of time talking about change, new technologies, new industries, new ways of working.

Sometimes it's worth stepping back and asking a bigger question how is our economy changing?

Seth Levine has spent 25 years as a venture capitalists, working with entrepreneurs and investing in innovation.

Our conversation with Seth covered a lot of ground.

We talked about capitalism, the middle class, wealth creation, and the role of business.

We also talked about how companies adapt to change the role of government and how we encourage innovation.

It's a conversation that made me think hope you find this as interesting as I did.

Seth Levine I finished your book twice.

I am so happy to have you here.

Thank you for reading the book.

Thank you for having me.

The name of the book is Capital Evolution.

give give the overview been a venture capitalist for 25 years.

I started with the Silicon Valley firm back in 2001.

It was interesting time to be in the venture world.

And then in 2006, I started my own firm here in Colorado.

It's called foundry, started that with three other guys, and we've been operating for the last 20 years.

We manage about $3.7 billion.

So it's by far the largest venture firm in Colorado.

It may be the largest.

I think it is the largest between the coast.

So that's kind of my background.

I wrote a book, my first book about six years ago.

And that book was about the future of entrepreneurship.

My coauthor, Elizabeth McBride, and I thought we were writing a kind of a lighthearted book to tell some stories about some interesting entrepreneurs.

But when we dug into the numbers, we found that actually more women, more people of color are starting businesses than people that look like me at a significantly higher rate.

But we don't do a very good job of connecting those people with capital.

sort of 20, 21 or so, I was asked a question by one of the companies that I worked with was a late we were I was in New York.

We were at a dinner right before a board meeting, and it was just me and the management team at this point, because the other investors had were local and they had gone home.

And the CEO asked me a question and that was essentially, would you accept we were talking about Dobbs, we were talking about George Floyd.

We were talking about all these companies speaking out about social issues.

And he said to me, would you accept a lower return for us living our values, right, speaking our values?

And I thought about that.

We had a conversation about it.

I thought about it, and it was just one of those questions that sort of kept at me.

And so I did what I often do when I get an interesting question.

Elizabeth and I are great friends.

We've known each other for a decade now, longer.

And so I called the up and I was like, hey, what do you think about this question?

And she did what?

I guess I could have guessed that she was going to do.

She's a journalist by trade.

And she said we should talk, you know, talk to people about it.

Let's go interview some people.

And that was the genesis for this idea.

We we didn't start to write a book.

We started because we were curious about the role of businesses in society.

That was the initial question.

And that really.

So we talked to a handful of people and then realized that we had something here.

So we wrote it up.

We sent it to our agent and said, hey, we think there's a book, another book here.

And that's what started us on this journey.

But it ended up being a broader discussion around what is the form of our economy, right?

What type of capitalism specifically do we live under and inside of that form of capitalism?

What's the role of business?

So that was kind of the genesis for this book.

That was probably for five years ago.

I mean, you know, this is we we interviewed probably a hundred people, CEOs, academics, you know, people on the front lines, workers, etc., at companies.

And, you know, that took a couple of years and it took a year to write it and then the editing process, all that kind of stuff.

So it's been it's been a bit, but yet this topic is probably more timely today, I think, than even when we started writing it.

So the concept is dynamic capitalism.

And you did a lot of of look back on how we think about capitalism.

And, you know, there we found some flaws or some things that don't work so well now.

Yeah.

And, and you know, you and I have had a little bit of conversation about it because I grew up, you know, I've been working for 50 years.

And so I grew up in this, and I was taught economics, that it was the Milton Friedman view of economics.

I was in college during the Reagan administration, supply side economics, Laffer curve, the whole enchilada.

Yeah.

And and yet you'd see over time sometimes some of those concepts works and sometimes it distorted behavior.

Yeah.

So I think I many people are aware that our society, our economy is deeply unequal.

And I would say deeply unfair as well.

But a lot of people and myself included, had never really thought about like, why is that the case?

And I just I took for granted, as you're describing, that the type of capitalism or what capitalism meant was that companies should maximize profits for shareholders.

Right.

And that the truth is that's a relatively recent ish sort of 50 year concept right before that time period, that actually wasn't how people thought.

And in the late 1960s, a guy named Milton Friedman wrote a book about capitalism.

Right.

And and then in 1970 published an article in The New York Times that sort of summarized his thinking and the title of the article.

I'm going to paraphrase slightly, but is the only role of a corporation is to make money for its holders.

And that became what we call Friedman style economics.

You might call it neoliberal capitalism.

Sometimes it's called the Washington Consensus, but that was sort of how we operated Democrats and Republicans, by the way, for the last 50 years.

Now, what's interesting is, and I also sort of believe that Reagan and Thatcher, his counterpart in the U.K., were the ones that sort of were the biggest proponents, if you will, of this, and that.

To some extent that's true.

And it really gained steam in the 80s.

But actually the, the, the sort of the table setting happened under Jimmy Carter and some changes he made to the FTC specifically that changed how we thought about, how big companies could be, frankly, how competitive they could could become through M&A and acquiring other businesses.

And I say that just because I think people kind of don't understand that the full history there, we think of this as sort of a Republican genesis under Reagan.

But actually it was Carter who started it, and then Reagan really took off with it.

And then really, every president since then has adhered to these neoliberal policies.

Right?

When Friedman died in, I think it was 2006 or so, and Larry Summers, who was Clinton's chief of staff, later somewhat controversial, but later a president of Harvard University.

He said, in thinking about Friedman and reflecting on his life, we're all neoliberals now, right?

And that was his way of saying that this is not a Democrat or Republican question.

This is just a sort of a broadly held view.

And what we wanted to do as we dug into this and what we wanted to write about in the book was, was to maybe push back on that.

Now, actually, an interesting thing happened in late 2019, which is this group called the Business Roundtable.

It's about 200 CEOs of the largest businesses in the United States at the time.

It was led by Jamie Dimon of JPMorgan.

They actually came out with the statement on a purpose of a corporation.

They've had.

They've issued a few of these over their time.

But this one was different.

And it said, well, actually, yeah, shareholders are important, but there are other stakeholders that we care about employees obviously, but also suppliers, our community, the environment, etc.. And that was super controversial for like a hot minute.

Some people thought it went too far.

Some people thought it didn't go far enough.

Some people started questioning, hey, why is this group of business people sort of usurping power from other places in society?

And then of course, Covid hit in early 2020 and we kind of moved on and talked about other things.

But but in our reckoning, having really now studied this, that moment in time, November 2019 really marked potentially a change, right?

Maybe the end of neoliberalism and a move to something.

Now, I don't think it's clear what we're moving towards.

And it's entirely possible, particularly under the current administration, that we pull right back to neoliberal style of capitalism.

But what we wanted to do in the book is both describe this sort of messy time period that we're in, this questioning period that we're in, and also outline maybe a potential for what capitalism could look like that isn't quite so harsh, right?

Isn't quite so focused on shareholders.

We call the dynamic capitalism as you as you described.

And that was the attempt to say, hey, here's an idea of what capitalism could become.

And obviously we give a little bit of a defense for why we think that that makes sense.

But I think it's a really important topic, right?

I mean, we're sitting here in 2026 and a lot of people are actually questioning capitalism, right?

40% of people below the age of 40 don't think capitalism works at all.

I think we see this in the rise of the democratic socialists.

On the on the left.

We see it on the in the rise of populism on the right.

It's sort of confusing.

But those two things are very, very similar.

They share lots of ideas.

Right?

It's why when when we went to the white House, he and Trump actually agreed on more than they disagreed on.

Now, Trump doesn't govern necessarily the way he speaks.

But but he certainly speaks in many, many respects like a dynamic capitalist.

And so it's a really important conversation to be having right now.

Well, what I really liked about the book was I couldn't tell if it was it.

It seemed nonpartizan to me.

There were so many.

And you kind of pointed out that sometimes extremes come around and they look a lot alike.

Yeah, but I really enjoyed reading it because it it kind of gave me a break from that, that fight.

Yeah, I appreciate that.

That was our attempt.

Yeah.

I've had we do talk about climate in the book, and I have had some pushback from people that really don't believe that climate matters or that climate is changing, and that I think that's the one piece, perhaps that maybe we weren't quite as in the middle as we thought we were, although, I mean, at some point that was a consensus view.

Maybe, maybe we're just in a crazy, crazy world.

But I appreciate that because we didn't write the book from a particular political perspective at all.

And actually we tried to highlight company.

When we talk about values driven organizations, we talk about Patagonia, but we also talk about Hobby Lobby, right?

They're both examples of it.

They have very different values, and people feel differently about those two businesses or chick fil A, let's say.

But but it's important to describe all three of those businesses as very extreme examples of but as examples of value driven businesses.

Yeah, yeah.

One of the big points that you make is the squeezing of the middle class.

Yeah.

You, you you caused me to do an experiment.

And so I sat down and looked at what my experience was in the early 90s and compared it to what my daughter's experiences now.

So I bought a house in southeast Colorado, Denver area for $160,000.

If you look at it from an inflation perspective, it would be worth 360 or so.

Today it's selling for $760,000.

Yeah.

So I mean, that's basically tantamount to doubling.

And so you make the point that wages have gone up about 30%, 36%.

And you look at these big chunky items of child care, health care, housing and the the debt load from education that a lot of people have that it it's it's a much more difficult experience.

Now I go back and go we can normalize all of those things.

But the world was different to we lived a much simpler life.

So I kind of that kind of makes my head hurt.

But I also see that it is harder that access to wealth building is harder today.

Absolutely.

So let me let me riff on this for a second, because I think this is really, really important for people to understand.

I think people feel it viscerally.

It feels more expensive.

It's things are harder.

Things are sort of more out of reach, if you will, for the average family.

And I think that we have a bunch of challenges related to the dynamism of our economy, right?

The ability for people to sort of make their improve their station in life.

And we also have like massive, massive concentration of wealth.

And so one of the things that happens is that we, we love to talk about averages, what GDP per capita in the United States or what's the average savings and things like that.

And we have what we sometimes joke about as the Jeff Bezos problem, which is that there's a sort of old joke about this, but Jeff Bezos walks into a bar and the average person is a billionaire, and it doesn't tell you anything about who's in the bar, of course.

Right.

And that's the whole point, is that when you use these sorts of averages, you actually don't pay credence to some of the challenges that people have.

So I'll give you just a couple of examples of, of the ways in which sort of the American dream, if you will, has become out of reach.

A couple of things.

One is that, 60 years ago, if you were born in the bottom 25th percentile of wealth, you had a 25% chance of dying in the top 25th percentile.

It's easy to remember that today.

If you're born in the bottom 25th percentile, you have a 5% chance of dying in the top 25th percentile.

So economy mobility has gone way down.

We were talking about this before we went on the air, but the average age of a first time homebuyer now is 41, right.

And and the ability to build wealth because people are not owning their homes.

And one of the main pathways towards building wealth as a family is owning your own home.

It's one of the reasons we see wealth disparities across different ethnic groups so dramatically.

That's gone away for most people, right?

My kids, your kids, that's much, much harder for them.

So this is at the heart of what we're talking about.

There is this this like, tension between capital and labor.

And one of the things that's happened over the last 50 years, we actually have a chart in the book that describes this is that the percentage of corporate revenue that is paid out in the form of wages has dropped precipitously.

And and what's happened is companies have become more and more profitable.

That's great if you're a shareholder and you're in the stock market and and you participate as an owner, that doesn't work at all.

If you are a worker and your wages have stagnated and they've largely stagnated, certainly relative to executive pay over the last 50 years.

And so one of the things we describe in the book is trying to bridge that gap, right?

Which is not to say companies should, become less profitable or anything like that is to say we want to find ways to have more people, have paths to ownership, have more employees, have an ownership stake in their businesses.

And we talk about a bunch of different ways to do that.

And we describe some experiments, one in particular that KKR, interestingly enough, which is a large private equity firm not exactly known for their sort of, I don't know, holistic view of the world.

Right.

They they were if anyone seen the or heard of the concept of barbarians at the gate.

Right.

That this was about the RJR Nabisco takeover back in the 80s.

That was about the the PE firm behind that, the barbarian, if you will, was KKR.

But yet inside of their business, starting in their manufacturing group led by a guy named Pete Rose, who we were able to talk to when we were talking to folks about this concept, started actually experimenting with some really interesting employee ownership models and kind of changed the game around that.

It's now been rolled out across KKR more broadly.

Something, by the way, Silicon Valley or tech entrepreneurship has always done reasonably well, but they started doing it for manufacturing businesses and other sort of mainline style businesses.

And a number of those businesses have been sold, and people who were floor shop workers were making two, three, five, six, even in some cases times their annual salary on the sale of the business.

It was, you know, truly life changing, not unlike the way that, you know, it was life changing when, you know, when Facebook went public or presumably when anthropic goes public, things like that, where people in those businesses also will do well.

And I think taking those concepts more broadly across our economy is really important.

It's not the panacea, it doesn't solve everything, but we do.

We would like to see or I would like to see more, more us create more capitalists, have more people, have a stake in our market economy.

Well, you know, I also look at it, you know, as I was going through my career, we stayed a long time at companies.

Sure.

And and churn is is really expensive.

And so if you give somebody a stake for the success of the organization, they tend to want to stay.

They tend to have that feeling of ownership.

I mean, the company that is most associated with the opposite of that was a complete an abject failure.

Right?

Which is GE under Jack Welch.

He was called neutron Jack because he loved to fire people.

And he had this concept where every year they would take the bottom 10% out of the organization, regardless of their absolute performance.

It was sort of all a relative idea.

And GE became a really toxic workplace.

by the way, the opposite is true.

One of the organizations that I, that I work with, I helped found is this this work called pledge 1%.

And we've developed a model for companies to give back to their local nonprofits, local communities.

We have about 20,000 members now worldwide.

It's kind of blown up.

I started it with Ryan Martins locally, but Suzanne De Bianca from Salesforce, Marc Benioff from Salesforce, Scott Farquhar from Atlassian, a few other people.

And and so it's been a global organization now 20,000 members, as I mentioned, over $3 billion activated for local nonprofits.

That's great.

And there's a wonderful like, hey, do the right thing for your local community angle.

But I sometimes find myself on on the phone with investors who are saying, hey, I don't.

Why do I need to do this?

Like, shouldn't the CEO give me give away stock if he or she wants to or whatever?

And I, I actually make the argument because the numbers back this up that that companies that are more purpose driven, that do better by their their employees, do better by their communities, have volunteer days, other things that bring people together, they have lower employee churn and they have higher employee satisfaction and therefore higher employees productivity.

So actually, it's a really nice way for a business to or one way for a business to think about how they kind of bring people together and make them feel that kind of alignment.

And by the way, there's lots of examples.

I mean, Publix, which is a owned company, probably the largest employee owned company in the world.

Their churn is lower.

Their, their profit margins are higher, their employee satisfaction is much higher.

I think a lot of people shop at Costco for the same, same reasons, right?

We know Costco pays their workers higher wages.

Their managers are, you know, are very, very highly compensated.

Their employee base as a whole, measured by employee satisfaction, is much more satisfied than their competitors, and it makes it a more enjoyable place to shop.

And people enjoy.

People have, you know, have fun going to Costco and.

Absolutely on a weekly basis.

I've seen the same people at at the Costco I shop.

At absolutely.

For a decade.

Yeah, they they have huge employee retention.

I love we go there all the time.

Yeah.

It's a good model.

I want to talk a little bit about I call it and it's known as creative destruction.

One of the things that capitalism is great for is spawning innovation.

And, when I was at IBM, one of the things that you mentioned, Nabisco, Lou Gerstner took over in the early 90s and from Nabisco and is in, in IBM.

And his comment was, I cannot believe that this entire industry continues to put their selves out of business.

And it was just it was the way technology worked.

What you did three years ago was not going to work in today's environment.

Yeah.

So that that, you know, it's the innovation side of it is great, but it also destroys.

And so I always thought of it as cannibalization of of revenue streams.

And it's kind of important when you don't you have you wind up being stale.

But it's also kind of tough.

So when you look at that.

How do you how do you look at that?

And we can even use the power, production in Colorado.

We are in oil and gas state, and it's a very important industry for Colorado.

But we have all these other innovative power technologies that are incredibly important for us to stay on the innovative curve as a society.

Yeah.

So how do you looking at that for the state of Colorado?

Yeah, I love it.

So let's let's talk general and then we can talk about Colorado.

So creative destruction.

Destruction was the term coined by Joseph Schumpeter, who's an Austrian a to talk about exactly what you just described.

Right.

Which is businesses essentially cannibalizing their own business, remaking themselves.

And here's a stat that's an interesting stat, because not all businesses are great about this.

The average half life of of a company on the fortune 500 is 20 years.

Right?

So 250 of those organizations that are on the fortune 500 today won't be on it in 20 years.

And that's a byproduct of creative destruction or in many cases, creative destruction or companies not choosing to disrupt themselves.

Right.

And I think you worked at IBM sort of talk about that story under Lou Gerstner, who was, you know, a fantastic leader and very open to this concept.

My father worked for Digital Equipment Corporation, right.

Similarly sized at the time, right, that they were kind of fighting each other, if you will, and deck didn't do a good job of making the transition specifically from mainframe to PC and ended up being kind of a shadow of itself and ultimately bought by Compaq.

Right.

So to, to sort of counterexamples, AT&T as another example, as some of our, our viewers are probably not old enough to sort of remember when AT&T itself, in fact, what you call what we call it today is not actually even the AT&T that we're talking about, because AT&T, which was this huge behemoth, right.

And eventually spawned all of the Baby Bells when it was broken up.

But was the massive long distance carrier and they refused to cannibalize their own business in any way, and they just hung on to that long distance business as it just went down the tubes.

Right.

And ultimately got bought by one of the baby bells that rebranded itself AT&T.

So what we call AT&T today was actually like a child, if you will, of the original.

In.

The entry of MCI at the time.

Yeah.

That's what they didn't they wouldn't react to.

Right.

And I actually remember I was I worked in I was, I worked briefly for an investment bank right out of college in their telecommunications group.

And we that was back before all of this sort of happened in area.

Then MCI was just coming up and AT&T just sort of refused to respond to that because MCI and they had some creative.

Again, this is people will find this not because you you know, you have a cell phone plan now you call long distance or or locally it doesn't really matter.

But at the time long distance was quite expensive.

And MCI, I had this really interesting marketing program where if you and I were both MCI customers, we could call for significant call each other for significantly lower rates.

And 18 just they just refused to respond to that.

A good example of creative disruption not happening.

So you asked specifically about Colorado and specifically about energy.

I'll make a couple comments about energy.

One of the things that is maybe a little bit of an uncomfortable truth, especially for those of us that care about climate change and are worried about our reliance on fossil fuels, is that what won the 20th century economically for the United States?

Because if we go back to sort of the early 1900s, the United States was look like most other countries around the world, right, including a whole bunch of countries that are significantly poor today than they were, on a relative basis back then.

Right.

It was much more of sort of an even playing field.

And what won the 20th century for the US was our dominance in energy, specifically in that case around fossil fuels.

Right.

We actually invented in the US the refining of all.

Obviously, we've got a quite robust coal reserve, and natural gas now and sort of other forms of, of fossil, fossil fuel energy.

But that's what won the, the 20th century.

And that will be what wins the 21st century.

And one of the things that we point out in the book is that we're not doing a very good job of investing in those new energy technologies, specifically around new generations of nuclear reactors.

I know that's challenging for people to understand, but actually, Gen four reactors, of which China is building 35 and we're building essentially zero, right?

There's a little bit going on at Three Mile Island, which you and I will remember back from, you know, when we were coming up.

But, you know, is a is a very, very, very old nuclear power plant that they're trying to Microsoft specifically is trying to retool.

But we're not investing in that.

Right.

There's fusion technologies that now look to be very viable.

And we should be investing more in that.

Obviously, wind and solar, we just cut basically every wind project, even a number of them that were in process.

Again, none of these things alone are the only answer, but we should be investing in all of them.

Yes and yes.

Yes.

And and here's part of the uncomfortable truth is we we need to continue to invest in, fossil fuels.

Right.

And I obviously, or at least obvious to me, ideally more clean versions of fossil fuels.

But we can't this idea that we're going to, like, get off fossil fuels and all of a sudden everything's going to be renewable is just not realistic.

It won't work for our economy.

It'll be too big a shock.

And I think that's sometimes hard for people who want desperately for us to move away from fossil fuels to get their arms around.

And I understand it's a point of debate, but my view is very clear, which is we should be investing in these alternative technologies a lot more than we are, and we should think about transitioning from not cutting away from fossil fuels.

So now back to Colorado.

We're not getting a lot of leadership from the federal government.

So we're going to have to the states are the laboratories right of democracy.

We're going to have to do some more as a state to try to promote some of these new technologies.

And, you know, not to sort of touch the third rail.

But when we talk about AI and data centers, for example, I mean, I view data centers, just given how much money is going into that world and how much, sort of market value, if you will, is being created there.

I think that's a great opportunity for us to push on some of these new technologies by requiring data centers to bring their own power and pushing them to invest in these alternative forms of power, because I think that the economics actually work there.

And so I think, you know, when you ask me, like, what's going to drive fusion, like what data centers are going to drive fusion, we we need to generate a lot more power.

The move to electric vehicles is going to drive fusion, because we need to be able to power all of these vehicles.

And I think sometimes people sort of forget that they think of like, oh, electric is electric vehicles are much more sort of environmentally friendly, and they are, but you're really just shifting where the, you know, the gas is burned, right?

It's not burned in your car.

It's burned.

It's not the same gas.

But yeah, it's burned at some, some plant that produces the electricity that ultimately powers your vehicle.

But it's certainly more economical for us as consumers.

I mean, I'm doing the math on it with the hybrid that has a really long, mileage for the electric version.

Absolutely.

And it'll get even more compelling from an economic perspective if we make some of these additional investments into solar.

I had a neighbor of mine a while ago when I first I bought my first electric vehicle.

Gosh, it was probably 15 years ago now, something like that.

And and I bought a Tesla and he he's a he was at the time the CEO of a coal company.

It's it's went bankrupt because coal doesn't work economically anymore which is great right.

A good example of creative destruction actually working.

Right.

But he bought me a t shirt that had a big Tesla symbol on the front and said, powered by coal in the back.

It was funny also because I had a ton of solar on my house at the time, and so my car was actually powered by solar, not by coal, but but he was trying to make the point that, like, we were just simply shifting where that power came from, not in the internal combustion engine, but to some, some power plant.

But I think but I think that that shift allows us to make these investments and investments at scale, which is what's required.

Ideally, some of that comes from the US government.

There's a whole chapter about sort of the pros and cons, if you will, of government and government investing and sort of government as a as providing guardrails, things like that.

I think sometimes people think government should do too much.

Sometimes people want government completely out of the way.

I think neither of those two ideas.

Back to your comment about it being a relatively sort of middle of the road book.

So we describe that in the book.

But I think one way that government can be helpful is by subsidizing investments in things that we know long term are really important, but short term don't necessarily make economic sense.

And by the way, they did that with electric cars.

We don't talk about it a lot, but the government made nearly a $500 million loan to Tesla to keep them alive at a really critical time in their business.

They paid it back.

And but ultimately, if that if the government hadn't made that loan, Tesla would have gone out of business.

And Tesla, for all of the challenges that we sort of have now with with the leadership of Tesla, they've done more than any other company to push the entire industry to electric.

Well, it's a model.

I mean, the lighting in the room that we're in is so much better than what was here 30 years ago from a energy usage, but it had to get kick started.

Yeah, yeah, yeah.

So LEDs didn't come from anyone, you know, from nowhere.

Right.

Like there was it was the product of a lot of research and a lot of that was government funded research.

And, you know, it's funny to me, just to go off on a quick tangent about Silicon Valley and some of the, you know, it's easy to sort of be outside of Silicon Valley.

I've spent my entire career in Colorado, even though my the sort of nexus of my work, or my, my industry is in Silicon Valley, but they like to pretend like the government didn't, like, invent the internet in Arpanet, right?

Or for that matter, invent the transistor effectively or invent the scale for the transistor.

Right.

Which was the transistor itself was actually invented in new Jersey via Bell Labs, but it ultimately scaled in Silicon Valley, and it scaled because of government defense spending.

Right.

Fairchild semiconductor is largely known as the first venture backed business.

Most of their customers initially were the US government and then Fairchild.

A couple people spun out traitors.

Eight is the way it's described in history, but these eight eight people spun out of, of Fairchild and founded Intel.

And 65% of Intel's initial customers were government or government defense contractors.

Right.

Well, and we've got a huge aerospace business here.

Aerospace.

I grew up in Orlando.

Yeah.

Martin Marietta at the time was the largest employer.

And and that was all to put the NASA, you know, the Mercury program, the Apollo program.

And that was the genesis of all the things that we're seeing in in aerospace.

Aerospace is very and very important for us in Colorado.

Absolutely.

And when you think about all these private aerospace businesses, again, spawned initially by the sort of government spending, I spent a lot of time in quantum computing.

Now the US government, it's not the only buyer, but it's the most significant buyer of quantum technologies for a bunch of different reasons.

And and ultimately, that's going to benefit all of humanity when we figure out how to get to larger scale quantum machines.

So mean it's going to break encryption.

So it will break encryption.

Yes.

Probably sooner than we than we expect.

But yeah, we could go.

We don't need to go down that rabbit hole.

It's also interesting thinking about the regulatory environments.

And you brought up AT&T and I don't want to get I don't want to go down a big tributary on this, but, regulating technology is a really tough thing to do.

Yeah.

And I can, you know, when I initially looked at the AT&T breakup and the modified final judgment, I was like, gung ho this, you know, let's let's go do this.

And then as things progressed and we were in the mid 90s and that was falling apart, the modified final judgment.

And Judge Green was the guy who designed it.

And what I realized and not to say anything disparaging disparaging about Judge Green, but it was an ego thing.

Yeah.

He was not going to let that go.

And when the Telecommunications Act of I think 1996 came in, that's when we started digging up streets and putting fiber in.

And that's why we have the robustness that we have right now.

So it has to change.

These things have to change.

But I really am concerned about regulatory efforts and we need guardrails.

And I don't know how you look at that when it comes to technology.

I would say that I'm very cautious about regulatory regulations generally, but I think that one of the roles of government is to provide those regulations.

Right.

I'd like to know that when I go to the grocery store, things are safe.

I'd like to know what I am, you know, taking the pills that I have to take to, you know, whatever lower my cholesterol, that that's actually been tested.

By the way, some people don't agree with that, and they think the market should just figure it out.

And if a bunch of people die from eating bad chicken, then more people will not buy that chicken and that, you know, the market will solve that.

I actually don't subscribe to that.

I think that the government, as a regulator, a regulatory actor, makes a lot of sense.

But I also think the government intervention should be the sort of minimum required in order to achieve the right outcome.

And I think that as it relates to technology, it's really hard for government to provide those regulatory guardrails because the government, excuse me, the technology is changing so rapidly and the government doesn't understand.

And when you if you really want to cringe, like watch these government oversight hearings on any technology subject and the people that are running government, especially now that the average age of a senator has gotten significantly higher.

Right?

These people in their, you know, 70s and 80s don't fundamentally understand the technology.

And I think we need to be really careful about regulating outcomes versus regulating the technology.

We went through this in Colorado with the initial AI bill thinking about what are we actually trying, what what outcomes are we trying to prevent.

And our first step in 2024 was not so great.

The new the new statute that was just adopted and is currently being implemented, that was a 26 statute.

So very, very recent is a much better version of how do we think about what outcomes in AI are we worried about and how do we focus on those outcomes, provide the, sort of regulatory framework so people understand what outcomes we're trying to prevent, provide the enforcement mechanisms specifically for the AG's office to make sure that companies are complying with that law.

Like that works.

What doesn't work is trying to model a to regulate the models.

And I, I understand the desire for, you know, embedded government regulators maybe inside some of these big frontier model companies.

And I'm, I'm actually open to that in those particular cases because we're only talking about a few.

And I think we should be a little worried about, certainly those, those companies as good actors on their own, and even they are kind of raising their hands to to say, hey, wait a minute.

We actually do want a bit of oversight, but I think we need to be very careful about not extending that so far, that we basically grant those companies and oligopoly in that market by making it impossible for someone else to start.

So there's a bunch of ideas for how you do that.

Minimum revenue thresholds, things like that, that would allow other companies to develop, let's say smaller models.

But again, the government understanding at the legislative level, right, the embeds will understand it because they'll be experts.

But at the legislative level, I worry a lot about that.

And I think we should be thinking about like broad frameworks, not very specific points.

Well, and I worry about it just in general on the on when you have at the federal level, House of Representatives having to get reelected every two years, that's all they're working on.

Not all I shouldn't be so.

But.

Yeah, yeah, they're spending a lot of time because they have to in order to survive in their office.

Yeah.

So, anyway.

Okay, so I kind of went on the third way.

To fix that, by the way.

Yeah.

Me all sorts of ideas for how to fix that, which I would love to jump down the rabbit hole.

And by the way, I think, you know, there are there are a bunch of reasons to believe that government isn't working particularly well.

One of them relates to the House.

It also relates to how we fund elections.

It relates to, sort of the role of government in our in our world.

Right.

We've got a much more activist government right now.

And it's interesting to think about.

We're not going to be able to do a justice on this in a conversation, but it's a very interesting maybe that'll be a new book, right?

Yeah, yeah.

I would love to have that conversation.

You know, I want to go back to something that your book, made me think so much about, and a lot of it had to do with the, the definition of capitalism under the Milton Friedman definition.

And, you know, we kind of got into 90 day cycles.

Right.

And so I we're we're sitting on a hot and cold burner with AI and technology just in general.

Things are moving so fast.

You can be put in business and out of business in minutes, it seems.

Yeah.

And, so you've got this, time horizon thing that really fascinates me and makes me nervous.

So we have to really move quickly.

We have to execute quickly.

Yeah, we have been thinking about measuring that for a long time and measuring the C-suite based on short term execution.

I don't see that working.

I'm looking at like the the strategy needs to be like a longer term vision than the next 90 days and compensating somebody for 90 days.

So the first question that I have for you is that capital pushes that.

Yeah.

So we have Wall Street and I had the opportunity to interview Kate Johnson a few years ago.

She'd been in the job for two or I think it was like six months.

And they're like, what have you done for us lately?

And she's like, I'm trying to turn a ship here.

Yeah.

And, and she was very candid about that.

On the pressure that Wall Street was putting on.

I think analysts put it on.

I think venture capital puts it on.

Yeah.

So how do you look at that to to make this a healthy environment.

And what is the role of the guy with the capital.

Yeah.

So let's talk about sort of more public companies first.

And then we can talk about venture capital and some of the challenges of that model.

So first observation I would make is that and people may not necessarily realize this, although it makes sort of intuitive sense because everything in our society kind of is falls into this pattern.

But capital is very, very concentrated.

Right?

80% of all sort of US public fund holdings is are held by four different firms.

Right.

So it's a very, very concentrated group of asset management firms that, control the sort of power of the purse, if you will.

So that's just an observation.

That's that's not probably the right thing for society.

I don't know how you break through that because people make their own decisions on capital allocation, but that the result of where we are is that four firms control 80% of all money market accounts effectively.

I don't know how we move away from this quarter by quarter public company focus.

But but I completely agree with you that it's not good.

And one of the things we argue for in the book more generally is longer term thinking, right?

If you're making quarterly decisions, it's really hard to think about things like your impact on your community or the environment.

Let's say, because you're just worried about making next quarter.

We've had we have had a couple of companies sort of try to buck that trend.

I mean, it's a while ago, and we can argue whether they really ultimately did this or not.

But Google was very clear when they went public in a letter that the two founders wrote essentially to their perspective, investors saying, hey, we're not going to do that.

We're going to make longer term bets.

And they've they actually have done a lot of that, right.

Investments in self-driving, it's sort of this whole Google X kind of stuff.

Now they were able to do that because they had a cash cow.

And so maybe they weren't like fully under the same pressure that other companies were.

So I don't quite know how to get that, get out of that other acknowledge that that's the case.

One of the things that is a challenge here, which is something I would say to corporate boards, is that the average tenure of a CEO was Kate was talking about is only a couple of years.

Right.

So part of the problem is you're to Kate's when you're, you're trying to to turn an aircraft carrier.

And it just takes a minute.

Right.

It's not that easy to, to turn to tack a boat like that.

And, and yet at the same time, your boss, your board of directors, is not giving you enough time to do that.

So, I mean, what I would say to boards is like, develop a long term plan and give it a minute to breathe right, and be comfortable with the sort of choppiness of that transition.

Now there are some efforts to create, let's say, a parallel public market.

Eric Reis, who wrote Lean Startup and his new book uncorrupted is fantastic, talks about, this kind of he's been trying to build this, this parallel market where the investors would have a sort of better and self-selecting view around longer term growth versus shorter term profit.

Also thinking about sort of this trust concept where you'd have a trust company board that had a bunch of different things that it was potentially measuring the business on other than just profits, and it would actually sit above the corporate board and with the power to fire that corporate board.

Right.

So the trust would the trust board members would only actually be beholden to whatever the company said it was.

Its intentions were right.

And that could be, you know, really almost anything.

So it's sort of like a public benefit corporation, B Corp, but on, on with, with real teeth and on steroids.

Right.

And interestingly, some of the AI companies is set up with this structure.

I think it will be a good test for whether that structure really works or not.

We'll hear more about it when anthropic and ultimately OpenAI, although as we're recording this, OpenAI said they're going to delay their IPO.

But when they when those filings become public, we will hear more about actually how they structure those trusts.

And I'm going to be really fascinated to read what those look like.

And that was their attempt to say, hey, we're we're actually looking for different types of investors, and we're actually beholden to something other than just shareholders and shareholder value.

So these are steps in the right direction.

And yet there's more to do.

Let's talk about venture for a second because you mentioned it.

And I don't want to I don't want to skip that.

Well I was going to put you on the hot seat.

For it.

Well, I'm complicit in it, right?

I mean, I am, I'm a I've been a venture capitalist for 25 years, part of my aunt's.

And there is a lot of, like, once you take money from a venture capitalist, the clock is ticking, right?

I mean, venture VCs run ten year funds.

No one actually wraps their fund up in ten years.

And the average life of venture funds probably 18 or 20 years.

But that said, there is pressure to create liquidity for our investors, both because that because of the ten year timeframe, but also because it drives the the measure that we're measured against or the metric that we're measured against, which is internal rate of return IRR.

And so part of the answer is don't take money from VC.

Right.

I actually wrote a blog post years ago about this.

It's a bad deal, right?

We get a lot of we we get a decent amount of economics.

We have a bunch of control.

Right?

Even though we might own a minority of your business, we still get a say in whether you sell your company, whether you hire and fire maybe certain positions.

Certainly the CEO position, we get bored seats so we can affirmatively vote for things you can or can't take debt without our approval, things like that.

So it's not always a great deal for every single company.

And one of the reasons it's not a great deal is the clock is ticking, and I have a few friends who have been building businesses and who kind of come to me for advice on on capital raising who I've said very clearly, like, you don't want to take money from VCs like you think you do because it sounds sounds exciting and you get to say your venture backed or whatever it is.

But actually knowing you and knowing the company you're trying to build and what you just described to me, you need to find some patient capital.

And that's not venture capital.

We are not patient capital.

So I put it in a little bit of a different bucket than the public markets, because public markets are supposed to be essentially perpetual capital, right?

I can get in or out of a stock any day.

I want, for most stocks.

And so the result of that is every day I'm making an investment decision.

Right.

If I, if I hold a stock, if I, if I continue to hold it through the end of trading today, I've just made a buy decision on that stock at that stock price.

So there's a bit more liquidity.

With that comes this pressure around providing a results.

But I think one of the things that we can and should shift is this notion of results being, what did I do this quarter?

Versus do I believe that this company's mission and future is in secure hands, and am I willing to wait out maybe some shorter term disruptions?

And there are plenty of vessels that do that.

So I think we need to we need to encourage more and more of that.

Yeah.

Yeah it's interesting.

Well you kind of sold sold me on.

Yeah.

It is a problem, Frannie.

Yeah, right.

Exactly.

Now, interesting.

In the rocket ship, too.

Well, it's a great again.

Of course.

Again, it mirrors everything in the world.

Right.

So somewhere between 55 and 60% of Americans own stock, and the number fluctuates a little bit.

Most of that is actually owned in 401 K is not directly.

And of course the stock ownership is highly concentrated.

I don't have the exact stats, but the top 1% of stock owners own like 50% of all stocks of all the stocks that are owned by American.

So it does kind of reflect our concentration in wealth.

Now, that said, I'd like to see more people be stock owners.

And, you know, for example, one thing that we argued for in the first book, we wrote about again in the second book, and it's now actually happening under Trump, is this baby bond concept.

I love it.

Let's go.

Let's go on this one, because it's a really interesting.

And it couldn't be because the Genesis can be a third rail.

Yeah.

That it's like, wait a minute.

That can't be right.

Well wait a minute.

This looks like it's pretty good.

It's a funny example, Franny, of something that the left has talked about forever.

And now under Trump is actually come true.

Right?

And none of you know, Obama couldn't get it done.

Clinton couldn't get it done.

And because we've been talking about this concept for a while, and the concept is every child born in the United States gets a investment account that's funded, at least in part, by the government, and that they can't access that account until age 18.

And if they keep it longer, they get some better tax benefits and things like that.

And the idea is to provide both a platform for friends and family to provide, to give a little bit more money to for birthdays or, you know, whatever special occasions.

And by the way, I we run the math in the book, but like, you don't have to give a lot of money for that to develop into a really, really large account, especially if you're willing to hold it to age 25, let's say, instead of interest, miracle of compounding interest.

Exactly.

And it's a great idea and it makes absolute sense.

So we struggle with it.

Some people struggle with it because now they're called Trump bonds, which of course is Trump's branding for it, which is dumb.

But and the genesis was Trump.

But actually the idea is super solid and I think makes a ton of sense.

And what's interesting is and we saw this a little bit with some philanthropists as well, Dell and the Dells gave a like billions of dollars towards people's trust accounts.

Right.

There's some talk from some of these large companies.

Anthropic has talked about this, for example, going public, that they would actually provide some stock in their IPO again to fund some of these accounts.

It's a great way for people to get a foothold in the market economy.

And, you know, ultimately, again, back to like, we want to create more capitalists.

We want to create more, more people who are participating in the market.

It's a great way to do that.

So I'm a huge fan of it.

There have been a bunch of experiments, by the way, where people, nonprofits have done this locally.

Gary community has done this quite a bit, with people that were a little older, with accounts that were a little larger, but it's proven to be a really, really, really good way to start people on a path to wealth and give them a little bit of a safety net.

But I will say the condiment to that is education on finance, budgeting, all the stuff that we kind of let fall by the wayside.

I mean, we, you and I grow up, grew up in a time when we had home economics and we learned at least a little bit about like, and this is going to sound anachronism, but, but like balancing our checkbooks and things like that.

No one needs to do that anymore because you can just see it online.

But but the concept of financial literacy, and actually it is something that we talk about in the book.

There are a couple states.

Maryland, for example, is really experimented deeply with this.

I would love to see back to the sort of states as the incubator.

I would love to see Colorado implement a requirement that every student who graduated from high school goes through a financial literacy class.

And by the way, that could be an online class, right?

It doesn't necessarily have to be like someone coming into every single high school in Colorado, but it could be a requirement.

In order to get your diploma, that you have to take this online class and maybe take some exam associated with that, so that you've got at least some basic understanding of how finance works, because most people don't actually understand finance, and they sure don't understand the miracle of compound interest.

No, no.

And and I'm old enough to have been raised by people who experienced the depression.

Yeah.

So I know that I have a very conservative view of how you spend money.

I really clear that I'm the one in the room that's got that.

Yeah, absolutely.

And I mean, in my life, my my parents are, you know, did not grow up in the depression, but my grandfather did.

He actually quit.

He grew up in Denver and he quit high school.

He had to go work for.

He never graduated from high school, had to go work for.

He was one of 11 children to work for money for his family.

And I think my dad like deeply felt that.

But I also remember when my dad was counting bus fare.

He was.

My parents are very highly educated, but most of my my life we were like solidly middle class, because my dad was a professor and my mom was initially a teacher and then stayed home for a little bit.

They my dad worked for Dec eventually, and he left academia and my mom became a school principal.

And so sort of our as I went to college, our fortunes, you know, kind of changed around that.

But I remember dad counting bus fares and, you know, sort of like having, like, real pressure on our budget.

And I grew up, like, worried about.

And it was only I actually was talking to a friend about this recently.

It wasn't that long ago, even though I've been pretty successful, wasn't that long ago that I finally like, like loosened up my, like tight grip of this fear of being broke.

Yeah, no, I have it too.

And my kids laugh at me because I love taking the bus in New York City.

Love it.

Yeah.

Like, what are you doing, mom?

I mean, the truth is, I take the most more the subway than the bus is better.

It's a good, just a better way to get around.

But no, I totally agree.

You need to check out the busses.

Now that they've got the lanes really moving.

The busses are a little bit easier, actually.

And now it's so easy, right?

You can literally get like, tap your Apple Watch and get in and out of the, the bus or the, the subway.

It's, you know, the problem with that.

No.

I don't get my senior discount.

Yeah.

Well.

I'm not I'm close, but not quite there yet.

Yeah, I've got it.

I, I don't want to go into in depth, but what I love about the book, you didn't just explain what the problem is.

I don't like admiring the problem.

You had a lot of really good ideas.

And one of them you just mentioned the the fund for every child born in the United States, you have some others.

So kind of figuring out, you know, how do we move forward and how do we how do we stay in our prefrontal cortex and not dive into that little peanut part of our brain and really look at these problems with the solution oriented mindset?

Well, I mean, we live in a world of grievance politics right now.

And I think one of the things that Elizabeth and I were acutely aware of was not just writing a book where we kind of complained about stuff we wanted to actually, first of all, we want to give a historic perspective.

We wanted to write a very balanced view of, like, here's where we see ourselves.

And then we also wanted to write about a path forward with some specific ideas for policies that we might implement.

So it's it's not a policy book, by the way.

We did this in our first book as well.

We had a chapter that described how can we better support the new builders, was the name of the book, these new builder entrepreneurs.

And so we wanted to do that here as well.

So yeah, we did write about some different ideas for how to better promote an ownership economy.

We did write about how to better spread wealth around in ways that doesn't feel like we are just taking from from one group to give to another.

We think about the world as a not in a zero sum mindset, right?

Which I think is very pervasive now and pernicious.

It is.

And we see this with our current administration.

It's there's a winner and a loser in every transaction.

I fundamentally don't believe that that's the case.

And one of the things that I think will help us allow people to sort of step into that ownership class, step into the market economy, is by acknowledging that we need to grow the whole pie, right.

The way our way out of this is actually to create more opportunity for more people, not just to sit there and say, this is the group to blame.

I totally agree with you, and I shouldn't do that.

I should end up, yeah, I should push back and say, Seth, I'm going to have to think about.

That, please.

It was such a pleasure to talk to you today, and I feel like I hit the tip of the iceberg.

There were so many things.

Like I said, I read the book twice or listened to the book twice.

And there were so many things that really made me more curious and made me question assumptions and made me sit on a few things.

So I really appreciate the thoughtfulness.

Now, here's my sequel for you, okay?

Because I think you need a workbook or I think you need because we talked about systems in we you talked about systems in your book.

But what I'd like to see next is when you look at all the characters, the cast of characters in this great ecosystem we have, what are some things that they can do?

What if you're a college graduate right now?

What do you need to do?

What what are the things you need to prepare for?

Because it's not coming to you from a lecture.

You gotta you gotta.

You experience it.

Absolutely.

And you got to do it.

And you got to lean in, right?

I mean, people sometimes ask me, like, what's your advice to, you know, young people?

I have 222 year olds and an 18 year old now.

I don't it's not very successful to give them advice, as you know.

But but I'll give this advice to other people's kids and they can give it to mine.

But but to like to lean in.

I'm smiling because just yesterday I was speaking to a group of professors at Metro State about the book, and and someone had the exact same concept.

We need to have a workbook for this.

Now I am working on something called the Dynamic Capitalism Index, which is essentially a scorecard for companies who are interested in these concepts.

And that it will then also give them some ideas for areas where there may be scoring lower than they'd like, for how they might increase their score and implement some of these concepts.

So I've got a group of folks that I'm working with on that, and maybe that actually morphs into what you're describing, which is a workbook, because I've actually been asked a couple different times for something like that.

Well, you told me that you got an advice on it before we started, and I really fascinated.

It was the.

Same, same thing.

Same thing.

I love it.

Seth, will you come back?

This is fantastic.

I would love to.

There's so much more we could talk about.

I'm noted for going down my tributaries, and I tried really hard not to do that.

There's a couple of things I skipped.

So, this is a great long form.

I hope a lot of people are on their commute or listening to this, and.

I hope so.

So one thing I'd say is, you know, one of the interesting things about writing a book, especially on a topic that's controversial right now, capitalism is you hear from a lot of people, but I actually love hearing from folks, and I hear from a lot of people, probably more people who disagree than agree.

Just because that's sort of the nature of the world right now.

But I'm very, very accessible online.

I mean, if you Google Seth Boulder, you'll find me, you know, it's the top result.

So, or if you go to the capital evolution, there's ways to, to connect with me.

And I love hearing from people.

So, you know, if I said something that angered you, let me know.

If I said something you agreed with, let me know.

I love to hear from folks because it sharpens my thinking.

And one of the things that you said as a reader, which I really appreciate, is that it made you step back and it made you think.

And the truth is, as a writer of this book, I actually ended up changing my views on a couple of things because I had a chance to talk to all sorts of different people, including putting myself in positions where I was speaking to groups that just that I disagreed with, and I tried to really listen carefully to what people were saying so I could better inform my my thinking.

And actually, I think one of the things that's been challenging about sort of the way that the world has evolved over the last 20 or 30 years is that we don't spend a lot of time with people that disagree with us.

And I think that the process of writing both these books has helped me open my eyes to why that's so challenged, why it's not a good thing.

And, even though it's uncomfortable, I've tried to put myself in a bunch of positions where I'm with people that don't look like me, that don't come from my background, and or that disagree with me, because I've found that it's a really good way to test my assumptions.

Sometimes it makes me strengthen my views, you know, and kind of dig in a little bit.

Oftentimes it makes me think harder about what I'm really trying to say and how I can say it.

And sometimes it makes me change my my views.

That's the agility of the human being, and that's what we need.

This presentation of the Business of Colorado is made possible by the generous support of Collegiate Peaks Bank, Colorado Business Roundtable, Ibotta, and by viewers like you.

Thank you.

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