Bradley Tusk, 45, is often called “the fixer.” As the CEO and founder of Tusk Ventures, a VC fund that invests in startups that operate in highly regulated environments, he helps these fledgling firms navigate the quagmire of rules to grow their business. In Israel, his $36 million fund has invested in Israeli insurance-technology firm Lemonade and in Nexar, a maker of a vehicle-to-vehicle network that detects dangers on the road and prevent collisions.
In an interview with The Times of Israel in the lobby of a boutique hotel in Tel Aviv last week, Tusk, dressed in white chinos and a blue V-necked T-shirt, said that working with Israeli entrepreneurs feels somewhat easier than working with those in Silicon Valley, because of their greater maturity.
You don’t see the “tantrums” you sometimes see in their generally younger counterparts in Silicon Valley, he said. That is, he figured, because most of the founders and employees of Israeli startups have served in the army.
They are “a little older. They get it, the world does not revolve around their one little service” that their newly set up firm was seeking to provide. They know that “one way or the other, there are bigger things to worry about. And as a result, they’re more mature, they make better decisions,” he said.
Israeli entrepreneurs also “know what they don’t know,” he added, “at least when it comes to US government and politics and regulation, so we’re able to deploy our expertise.”
In Silicon Valley many of the entrepreneurs and founders who went to top notch universities feel “very special,” he said. But they have “never really dealt with the real world… They don’t really have any real-world life experience.”
Startups, he noted, need not just technology but also “marketing and economics and human nature and management.”
Tusk Ventures, founded in 2015, typically invests at the seed or series A funding stages of startups. Its portfolio includes Bird, the US scooter rental service; ride sharing giant Uber; FanDuel a New York City-based firm whose online fantasy sports platform allows users to play and win cash prizes; CoinBase, a San Francisco-based digital wallet that allows traders to buy and sell bitcoin; and Ripple, a platform to send money globally using blockchain technology.
A former campaign manager for New York City mayor Michael Bloomberg’s 2009 successful re-election bid and communications director for US Senator Chuck Schumer, Tusk uses his political knowhow to help tech companies avoid “death by politics” by tackling regulatory red tape. He is the author of the book “The Fixer: My Adventures Saving Startups from Death by Politics.”
Tusk’s work with startups began in 2011 when he agreed to work as a consultant with the then new ride-sharing startup Uber, to help it overcome regulatory issues in New York City. Uber was at the time cash-strapped and Tusk agreed to take half of his fees in equity. That move, he said, gave him more money than he “ever expected to have.”
His stake was reportedly worth some $100 million in 2017. Uber’s much-awaited initial public offering of shares earlier this month on the Nasdaq is being viewed as a flop, with the stock declining in its first days of trading, as investors failed to see a clear path to profitability for the firm.
Commenting on the Uber IPO, Tusk last week wrote in a commentary in the Financial Times that “as someone who worked with Uber in its early days and still owns shares, I think investors are saying they want a lot more proof before they are willing to throw money at the loss-making company.”
Good and bad regulation
To know how to manage regulation is “critically important,” Tusk said in the interview. Any activity that touches the consumer is going to face government regulation; entrepreneurs can choose to ignore any potential issue and “hope no one notices” or they can be forward-thinking and get ahead of it.
There are some sectors, like drones, artificial intelligence and cryptocurrencies, in which “there’s just no regulatory framework,” he said, though one is needed in order to to separate the “frauds from the real companies.”
At other times, however, regulation is in place to protect incumbents, such as what he called the “taxi cartels,” from the upheaval technology can bring. And that is where it needs to be fought, Tusk said.
These “entrenched interests” that worry about losing market share to startups exert political pressure, Tusk said. “And sometimes they get away with it. And they kill new companies, and they kill innovation as a result. And so a lot of what we’re doing, really, is fighting against that.”
In short, Tusk believes that “two-thirds of the time” regulation is a “hindrance, because it creates unnecessary roadblocks. It creates unfair business practices.” But the other third, it’s needed, in order to protect consumers.
For “fun,” Tusk also has a podcast called Firewall, which focuses on the intersection of politics, technology and regulatory issues. During his visit last week he recorded a special Israel edition of the podcast, teaming up with Michael Eisenberg, the co-founder of Aleph, a VC firm with which Tusk Ventures often works.
For each of the eight episodes dedicated to Israel, Tusk and Eisenberg will interview founders of Israeli startups to discuss the challenges they face both in raising venture capital and in working with politicians and regulators.
Among the firms featured on the podcast will be Syque Medical, a medical cannabis firm that has developed a cannabis inhaler; Healthy.io, which has developed a kit for clinical analysis of urine at home; Colu, a fintech startup; cybersecurity consulting firm Konfidas; GreenQ, the developer of a connected garbage-collection platform for municipalities; and Mobileye, the developer of self-driving technologies acquired by Intel Corp. for $15.3 billion in 2017.
Bringing technology to bear upon democracy
Tusk is also a firm believer that to achieve real political change voter participation must be boosted via technology — blockchain in particular, given the built-in safety it provides. Via his philanthropic arm, Tusk Philanthropies, he is funding pilots in the US for safe online voting.
“Every decision every politician makes is based on how it affects their next election,” he said. So, if just a small number or people vote, the politicians will be listening to what they say and not what the silent majority actually wants. Making voting easier by allowing people to vote via smartphone will increase the number of voters in the system, he believes. Turnout in most US congressional, mayoral and gubernatorial primaries is well under 20%, Tusk Philanthropies says on its website.
And so, just like with Uber — where it was the users “who were willing to fight” for the app against regulators, because it was so convenient to use — Tusk is trying to do the same thing with online voting. With technology, he said, “when you let the genie out of the bottle, they can’t put it back in.”
Blockchain is the perfect technology for this, he said, because its distributed-ledger system, in which small and important pieces of data are saved on different computers, makes it harder for hackers to disrupt.
Tusk Philanthropies has funded mobile voting pilots for US soldiers posted overseas in two West Virginia elections: the May 2018 primary election and the November general election. The city of Denver also used mobile voting during the May 2019 municipal elections and will use it again during its June runoff. Tusk is also in discussions with several other jurisdictions across the country to implement pilots.
In all of its pilots. Tusk Philanthropies has used technology developed by US startup Voatz, but he is technologically agnostic, he said. Tusk Philanthropies is currently working with other blockchain companies in Estonia, Canada, Australia and the US to check out their products as well for voting purposes.
The idea is to get “seven or eight of these companies competing with each other,” he said. So, if Israeli blockchain firms think they have a relevant product, “they should contact us,” because Tusk can help them navigate their way through regulation. Many companies may have the technology but can’t be bothered with the approvals that would be needed for use in a voting system.
“We can provide a lot of help with the politics,” he said. “We’re the ones talking to election officials, we’re the ones doing the lobbying, we’re the ones doing the press.”
“My hope is that by November , we can put a few different options in front of the election officials.”