A conversation between Ryan Stowers, executive director of the Charles Koch Foundation, and Patrick McKenna, founder of One America Works.
Silicon Valley is a concept.
If you were to ask someone where Silicon Valley is, they would likely respond with a geographic location somewhere between San Francisco and San Jose. Patrick McKenna, founder of One America Works, thinks differently. According to him, Silicon Valley is not a place, at least not anymore. It’s a trust network.
A trust network is the idea that you do not have to live in the Bay Area to work in Silicon Valley. So, if someone lives in Austin, Pittsburgh, or Indianapolis and works for Facebook or Google, they are a part of the Silicon Valley trust network. This type of distributed work empowers more people to gain access to tech career opportunities. It also helps boost local economies in areas often overlooked by tech companies and investors. Employers can drive better and lasting solutions when people solve problems based on their ability, rather than where they live. No matter where a person is located, they can contribute.
The idea of the trust network is what led McKenna to found One America Works (OAW), a nonprofit organization focused on expanding the Silicon Valley growth playbook to support world-class companies building out operations and creating jobs in communities across the United States. OAW connects the country’s fasting growing companies with the talent they need and to the communities that can best support them – creating more opportunity and helping revitalize local economies.
Ryan Stowers: Patrick, you have an incredible personal background as a successful tech entrepreneur, but you saw a lot more opportunity across the nation because the current top-down structure of the industry was missing so much potential talent. What exactly was it that led you to start One America Works?
Patrick McKenna: I grew up in a small town in northern California and went to school with a tremendous number of high-quality people, not all of whom got a chance to go to college, let alone live in San Francisco, the Bay Area, New York, Los Angeles, or other places I got to live in. Further, having served in the military, I got to see a broad spectrum of amazing people across the whole country from towns big and small that aren’t the typical places where you would think of tech innovation.
So, with my small-town and military background, as well as my background in investment banking and as an entrepreneur and founder in Silicon Valley, I recognized there’s talent everywhere. It’s so broadly distributed. That talent needs opportunities to engage in the innovation economy and join tech startups and investment companies.
Stowers: The perspective you gained through these experiences is telling. And I love that you were passionate and entrepreneurial enough to do something about it. You zeroed in on dispersed talent sources and saw the ability to take a bottom-up approach to solving this problem. You mentioned the term ‘innovation economy’ and helping more people participate in it. What do you mean when you use that term, innovation economy?
McKenna: Taking a step back, I think about the future of the United States. If you look at the challenges, as big as they are, local, regional, national and global, we can all agree that we need all the talent that we have in this country to solve these big challenges. We cannot believe that the talent we need is only in a few places and in the hands of a few companies.
With One America Works, I saw this huge opportunity to bring attention to what I knew to be true – there are tons of smart people in Silicon Valley, but not all the smart people are in Silicon Valley. To solve the problems facing companies in the innovation economy and the economy nationally, we need to broaden the scope of where we are looking for talent.
The subtext behind the name One America Works is when Americans work together, America works. The big idea is that we need to actually be integrating people in different places, different experiences to build a bigger pie. This is where the innovation economy starts to tie into the solution.
Innovation implies new solutions. Asking questions like ‘how do we do more with less?’ and ‘how do we increase productivity so we can have non-linear outcomes?’ These questions bring us closer to bigger pies and more prosperity.
That gets down to the fundamentals of the United States: that individual people make up families, communities, and, ultimately, our national economy. So, we need to go where the people are, bring access to innovation, capital, and knowledge so that ideas can flow more freely across locations, companies, and organizations, both public and private. It is these ideas flowing through the innovation economy that we get to bottom-up solutions, bigger pies, and more seats at the table.
Stowers: You and many others have done important work to challenge the assumption that talent is only in certain areas and showing that people with the right skills are everywhere. But in addition to skills, what other characteristics are you seeing in these individuals as they match up with these jobs or opportunities? What other things are they bringing to the table that stand out?
McKenna: This is where it gets really interesting. The talent we bring has new ideas on how to solve existing problems and they’re solving new problems.
For example, you’re seeing in Columbus, and in Ohio in general, that people are focused on a different set of problems than people in Silicon Valley. As a result, we see manufacturing 2.0, automation, and robotics. We’re going to see a lot of different problems because of the region they’re in, their personal experiences, their family, and community backgrounds, et cetera. This is really important for us to actually expand the whole pie. If everybody is solving the same problems that Silicon Valley is trying to solve, then we’ve expanded the pie only by making it cheaper to solve that problem. Leveraging the talent, innovation, capital, and knowledge of a bigger network to solve different and more problems is how we actually grow the economy from the bottom up.
Stowers: I think one dynamic that is critical is creating mutual benefit between the employer and the employee. What are you seeing happen when companies step out, take risks, and change their behavior to bring in new talent that previously was overlooked?
McKenna: We’re at a crucial tipping point right now post-COVID. During the pandemic, the majority of people were remote, and anyone could live anywhere and do their jobs. Because of this phenomenon, companies figured out that they can use distributed work via Zoom or online tools to collaborate and actually be successful.
The opportunity now is for companies to keep themselves open to distributed talent. The benefit of having a bigger talent pool is so powerful. It explains why companies are not able to force workers back into an office in San Jose or Manhattan. If the value wasn’t as high as it is, they would just have done it already.
So now, companies have this huge incentive to ask: how do we think about the career progression of distributed talent? They have this amazing new talent, and they don’t want them to leave, but they do want them to move up the leadership ladder. So, it’s figuring out the balance accessing the talent, keeping them in place, and moving them up. It’s investing in talent.
Stowers: If companies invest in these people as though they are assets in ways that are more individualized, I assume you’re going to see an increase in retention.
McKenna: Retention is an excellent thing to point out.
Retention is famously low in competitive labor markets like Silicon Valley. A typical engineer stays at a company for 12 to 18 months. In regional offices or remote offices, retention may be double that.
If you think about it as an employer, it takes six months to bring somebody up the learning curve to be productive. If you have a high turnover, the investment cost is exponential. Distributed workers and regional workers have much higher retention. So, you do get a better return on that investment dollar.
Anecdotal evidence would show that retention is much higher for companies outside of Silicon Valley. It needs to be studied more, but my prediction is in five years we are going to see a huge benefit from higher retention.
Stowers: Given your role as an investor, as founder of One America Works and the perspective this has given you on a national scale, are there examples of entrepreneurs who are already creating jobs and driving investments in their own communities?
McKenna: There’s a couple that I’m really excited about that exemplify the bigger theme of new ideas, unique teams, and solving problems.
In manufacturing 2.0, reshoring is having a moment. One company partaking in this movement is Path Robotics in Columbus, Ohio, originally started in Cleveland. Their main service is robotics welding, and their insight is there is a shortage of welders in the United States, and welding is becoming a more precision automated component of the manufacturing process. Not only do they create robots that can do high-performance welds, they also changed the business model and now offer robots as a service. So, people in the manufacturing space can contract out the robots to have welding systems in their workflows at a much lower cost.
Another company is Facet, which was started in Baltimore, Maryland, which offers financial planning and wealth management for the mass market. The idea with Facet was to use technology to lower the cost of offering a high-quality wealth management service for people with more typical family wealth. It offers a technology-enabled service, which is artificial intelligence, automation, and humans working together.
It is a national company with more than 250 employees in 37 states and thousands of clients from all 50 states – and it has no office.
Stowers: I’d like to add on to this. So often talent is overlooked because they don’t meet the traditional degree requirement. You’ve sent the message that we need to identify individuals that have the right aptitudes, are contribution motivated, and bring the right mindset to the table. Therefore, what advice would you give to hiring managers and company leaders that are trying to solve real talent problems, but are maybe overlooking opportunities to actually do that?
McKenna: This is a huge opportunity.
If you’re only looking in the places where you have the highest validation, like at somebody who went to Stanford and worked at one of the biggest banks in Silicon Valley, then the talent pool is going to be very narrow. That is a very small percentage of the population.
We need to change the way we think about who can do the job. This is where we can get innovative and access a huge amount of talent. Hiring managers have a huge opportunity to step back and ask, what do I need this person to do? They need to think about the actual job and the needs of the position and map out other ways to find people with the skills needed.
Millions of people have the skills hiring managers are looking for, they just need to be innovative.
Stowers: Given what you’ve learned throughout your career, what advice would you give an entrepreneur reading this interview today who wants to drive change and shift paradigms?
McKenna: First, I would encourage anyone thinking a big idea to not assume someone else is thinking it too. Second, don’t think an idea is valuable as an idea because it’s all about execution. Once you determine that your idea is actually very special, I would suggest asking yourself a few questions, including why is this an important problem to solve? Why does this problem need to be solved should you be the one to solve the problem? Why does this problem need to be solved here?
For OAW the “here” question is powerful. You have to ask yourself “why here?” Understanding why a problem needs to be solved where you are is powerful. It gives me a reason to believe that you’re going to be more successful than someone solving the same problem somewhere else.
If you ask yourself these four questions over a rigorous analysis period, you will be successful starting something with this framework.
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