Political heavyweights are exiting DC to find a new home in Silicon Valley
Twenty years ago, Lehane was part of a small team that coached the Clinton Administration through the Monica Lewinsky and Whitewater scandals. Their political maneuvering earned Lehane the nickname and a book deal.
Now three thousand miles away from the White House and two decades removed, Lehane is leading global policy for Airbnb, a $25.5 billion startup that enables people to rent their spare bedrooms.
His appointment is not the final resting place for his political career, but a new branch of it. Tech companies are gobbling up executives who have the political clout and connections to help build bridges to DC.
In turn, we're seeing these startups become more politicized too. Last month, Lehane revealed a playbook to encourag Airbnb hosts to join "clubs", which Airbnb will then turn into grassroots lobbying organizations.
The gulf that once existed between Silicon Valley and DC is growing smaller. The Valley has replaced Detroit as the mandatory campaign stop, Lehane says, and those in politics see the draw of the new tech economy.
"If you could be in Florence during the Renaissance or Paris during the Enlightenment, why wouldn't you?" Lehane questions, although admitting his analogy might be a bit hyperbolic.
"History will tell us if indeed this is the equivalent or at least close to the equivalent of that, but I do think it is the epicenter of a lot of the big ideas that are driving broader issues that are driving society globally," Lehane continues. "And to be able to have a seat in the bleachers and watch that and maybe at some small levels participate in that was an amazing opportunity."
The DC exodus
Lehane is just one of the many political movers and shakers to make their way to private tech companies in recent years:
- Ted Ullyot served as the former deputy assistant to President George W. Bush and chief of staff to the attorney general in the department of justice. He joined Facebook in 2008 as is first general counsel, trying to help the social network educate both DC and Europe about the company. Most recently joined VC firm Andreessen Horowitz as a partner to help its startups negotiate the complicated world of policy and regulation.
- Mark Penn, the former strategist for Hillary Clinton's 2008 campaign and a pollster in Bill Clinton's earlier years, joined Microsoft in 2012 to lead special projects, where he came up with the company's anti-Google "Scroogled" campaign. He left in June 2015 to start a new private equity fund.
- David Plouffe served as President Obama's campaign manager in the 2008 election and sculpted his campaign of hope and change. In September 2014, Uber brought on the former DC bigwig to be its senior VP of policy and strategy and lead the ride-hailing company, which had been pounded by both the press and regulators, to a more positive message.
- Joel Kaplan, the former deputy chief of staff to George W. Bush, jumped to Facebook in 2012 to head up their public policy. Kevin Martin, the chairman of the Federal Communications Commission from 2005 to 2009, joined Facebook in 2015 as its VP of mobile and global access policy.
- Jon Favreau and Tommy Vietor, a former speech writer and spokesperson for President Barack Obama, opened a firm this year to help teach story telling to startups.
- Tucker Bounds, a former spokesperson for John McCain's 2008 presidential campaign, made a pit stop at Facebook before launching Sidewire, a political newswire company, in 2014.
- Jill Hazelbaker, Niki Christoff, and Samantha Smith all worked on the McCain campaign before jumping to Google. (Hazelbaker later jumped to Snapchat and is now at Uber.)
- Susan Molinari is one of the few elected officials to have served in office before they launched into tech. She started her career as a Republican representative from New York where she stayed for seven years. After a tenure as a journalist and lobbyist, Molinari joined Google in 2012 to be its Vice President of Policy and Public Relations.
- Lisa Jackson joined Apple to be its VP of environment, policy, and social initiatives in 2013 after serving as administrator of the Environmental Protection Agency from 2009-2013.
- Al Gore, the former senator and vice president under Bill Clinton, joined Apple's board of directors in 2003 and became a partner at VC firm Kleiner Perkins Caufield & Byers in 2007.
In the latest high-profile shift, Amazon hired another Obama executive, former White House press secretary Jay Carney, in February 2015. The move was unusual for Amazon since it's known for growing its talent internally rather than hire from the outside, but the company gave Carney the role as senior vice president for corporate affairs.
In his short tenure, Carney's political background has already shown through. The company that has been notorious for declining to comment for years took 59 days to respond to a New York Times exposé that alleged bad working conditions for Amazon employees. Once unleashed, Carney and the New York Times engaged in public mud-slinging on Medium (another tech company and publication), trading posts back-and-forth over the merits of the story.
Why they make the jump
When Ted Ullyot was working in DC in the early 2000s, the conversation around tech was still all about Microsoft and the antitrust regulation the company was facing. Technology was still considered more of a service and less of the innovation and economic driver it's seen as today, says Ullyot.
In 2008, Ullyot jumped to Facebook - a move he says his friends questioned at the time. Facebook was still a young social network, and Ullyot was only the second person the company had hired based 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 told Business Insider. "And now people say 'Oh I get it. I see that's pretty interesting. There's some real issues you're working on.'"
She spent five years in government before joining Google in 2001 as its VP of Global Online Sales and Operations. It wasn't until 2008 that she joined the nascent social network, Facebook.
"There's a long history of people in public service that then go to public sector. Maybe a decade ago they would go to Carlisle, they would go to McKinsey or maybe TPG. They would just go to some other place where it was important for them to have access," said Semil Shah, an investor-writer who created and invests out of the Haystack Fund.
Those jobs still exist, but the tech sector gives these political figures another shining moment in the tech sector.
"David Plouffe, can he go create another Obama? No. So he's like 'OK this is an interesting challenge.' And if he doesn't do well in it, then he can go to Carlisle," Shah said.
Lehane thinks some of the most recent job changes - and the desire for new challenges - could be attributed to the state of Washington politics. Compared to DC, he says the Valley is optimistic and full of ideas are changing the world. "It's a place where the first instinct is to say 'yes we can do it,' not 'no we can't do it,'" Lehane said.
The draw of high tech salaries and great benefits packages pitted against a lack of forward movement in the government, it's not surprising to Lehane that more DC types have moved into the tech sector.
"You have paralysis in Washington DC and you have action in Silicon Valley. So for people who from a life perspective want to contribute in ways to move society forward, this is just a natural place to be," Lehane said.
Why startups need political handlers
While the early movers like Lehane used to be more like translators than negotiators, startups are now learning early how to deal with regulation.
"I think these companies realize that their very existence is not just a market battle but a political battle. The way that our regulatory systems are set up they're just not designed to handle them well," said Edward Walker, a professor specializing in grassroots campaigning at UCLA.
The need for political acumen is increasing because software and technology is only increasingly intersecting with every day life. Startups are now targeting sectors like transportation, water, and energy, all closely-regulated areas. It gets particularly complicated when companies have to deal with a patchwork of local regulations.
Lehane blames the DC paralysis for also pushing many of these decisions about new technology to the city and state level.
"The other issue is [startups] have a wildly varying regulation environment across cities, so you need an incredibly amount of acumen and skill to be able to navigate those wildly varying terrains across cities," Walker said. "I think the hiring of highly skilled political strategists says a lot about how much knowledge one needs about how these processes work across incredibly varying environments."
Now startups are starting to poach former political players from other tech companies.
Uber, for example, nabbed Plouffe from the Obama campaign, but soon thereafter, moved Plouffe to an advisory role. The company snagged Rachel Whetsone away from Google to be its new SVP of communications and policy, a position she held at the search giant after her career in British politics. Whetstone, in turn, brought on Jill Hazelbaker, another ex-Googler and former John McCain staffer, who was leading up communications and public policy at Snapchat.
Not a one way street
Startups aren't doing the only poaching, though.
In 2009, President Obama created the role of US CTO, first hiring people from within government to fill the role, before naming Megan Smith CTO in September 2014.
"I said, 'It'd be an honor, Mr. President,'" Smith told the audience.
She doesn't condemn tech workers who move to Silicon Valley and dream of building apps - after all, that's where she came from too. But she does think tech workers should consider spending some time in government because the issues on the horizon for the United States are only going to become more technical.
"In order to form a more perfect union, it includes us and we need to show up," Smith said.
Smith's not alone in the government. Facebook's lead open source guy, David Recordon, left the company in March to become Director of White House Information Technology and bring the executive branch into 21st century technology.
To Andreessen Horowitz's Ullyot, tech workers need to see the role model for success, like a Recordon or a Smith, before they go to the other side.
"Sometimes you need a model. You need to see somebody do that and be successful at it and come back with stories about how interesting it was," Ullyot said. "Due to the nature of things, it is harder to make that kind of immediate impact in Washington given the size of the federal government and bureaucracy out there than it is to come this way and be involved in a company and be immediately impact."