Conference Presentation, Keynote
Intro to American Dynamism
- Andreessen Horowitz (a16z) has launched the "American Dynamism" practice, defined as an investment movement focused on founders and builders supporting the national interest through software and technology.
- The practice targets "core components" of the American economy that remain under-optimized by technology, specifically housing, transportation, education, public safety, logistics, defense, and aerospace.
- The initiative is driven by the convergence of three specific trends:
- A "quiet crisis" where the participation of young people in the government bureaucracy and civic life has been declining since the 1990s.
- A demographic shift in US universities where, by 2023, computer science and engineering degrees are projected to surpass liberal arts degrees, creating a highly technical, idealistic talent pool.
- A shift in Silicon Valley capital liquidity, where investors no longer view government contracting as a barrier but recognize the success of companies like SpaceX and Palantir.
- The emergence of "curious government customers," spearheaded by the Department of Defense Innovation Unit (DIU) and now expanding across agencies to actively seek startup innovation.
- Investment criteria for American Dynamism companies include:
- Founder Profiles: A shift toward non-traditional founders, including veterans and former government officials (e.g., former FBI agents), rather than standard Silicon Valley types.
- Geographic Distribution: A deliberate move away from centralized hubs; in the current year, a16z has made zero American Dynamism investments in San Francisco, favoring distributed tech hubs where the problems exist.
- Market Positioning: Success in industries previously dominated by legacy incumbents and services-heavy models that have resisted software disruption.
- Direct government sales are not a requirement for inclusion; the category encompasses:
- Companies selling directly to government entities.
- Suppliers to the defense industrial base that view the government as a key stakeholder.
- "Bottom-up" companies (e.g., Flock Safety) that originate in the consumer or community sector and are subsequently adopted by government agencies due to proven efficacy.
- a16z views this movement as a reaction to Marc Andreessen's earlier thesis, positing that "software is finally helping government" in critical infrastructure sectors.
- The firm reports that over a dozen investments have been made in this category this year alone since the practice's announcement.