00:00hi and welcome to the a 16z podcast I'm
00:02Hana and today's topic is modernizing
00:05infrastructure beginning with the almost
00:07existential question of what is
00:09infrastructure and more importantly what
00:11does infrastructure look like in the age
00:13of changing technology like drones and
00:15self-driving cars how do we think about
00:17modernizing not just the 19th century
00:19structures we inherited like roadways
00:21and airports and trains but creating the
00:2421st and 22nd century infrastructure of
00:27the future and finally what does it mean
00:29to democratize and crowdsource urban
00:31planning and public projects this
00:33conversation is moderated by a 16 Zee's
00:36policy team partner Matthew Cole furred
00:37and includes Secretary Anthony Foxx
00:40former Secretary of Transportation under
00:42the Obama administration and also former
00:44mayor of Charlotte North Carolina and
00:46Keller Renaldo CEO of zipline which
00:49provides to Rwanda and other governments
00:51the ability to do instant deliveries
00:53like delivering blood at national scale
00:55using autonomous aircraft and Jase
00:57Wilson CEO of neighborly which is
00:59reinventing the municipal bond and
01:01helping neighborhoods crowdsource
01:03funding for public projects secretary
01:05Foxx when you were Secretary of
01:06Transportation how did you even conceive
01:08of infrastructure a lot of people think
01:10about airports and roads and ports what
01:14do you guys think of when you think of
01:16infrastructure I thought about
01:18infrastructure is the apparatus or a
01:21Baretta peretta that are necessary to
01:24get people and things from one place to
01:27another and you know more broadly
01:30speaking you can think of infrastructure
01:32is what it takes to achieve a certain
01:35objective you have energy infrastructure
01:37you have financial services
01:39infrastructure you have Internet
01:40infrastructure in the broadest sense of
01:42the word I think we always think of
01:43infrastructure is kind of an
01:44instrumentality something that that
01:46helps us achieve a certain objective we
01:48do infrastructure as all of the common
01:50elements that help create the societies
01:53and the economies that we put in our
01:55community not just the roads the bridges
01:56those physical things that immediately
01:58come to mind but also those physical
02:01assets that help make modern society
02:02possible and connectivity like is
02:04something that should be viewed as the
02:06utility in and as infrastructure to a
02:09modern functioning society then even
02:12infrastructure than that is you know
02:14some of the assets of communities like
02:16education so schools and libraries we
02:19view all that in in the realm of of
02:21infrastructure it seems like kind of the
02:24feature of various technologies that is
02:26most going to transform infrastructure
02:28is autonomy for physical infrastructure
02:31you know in an age of flying cars that
02:33mean we're gonna start have to build
02:34these islands that flying cars can you
02:36know stop on or massive drone terminals
02:39you know scattered around the country
02:40let's think about kind of 22nd century
02:42infrastructure what does that actually
02:44look like it's definitely 21st century
02:46infrastructure Rwanda actually has the
02:48only autonomous system operating at
02:50national scale anywhere in the world
02:52zipline essentially provides two
02:54ministries of Health and other
02:55governments the ability to do instant
02:58deliveries at national scale using
02:59autonomous aircraft at this point
03:01zipline is delivering around 20% of the
03:05national blood supply of Rwanda outside
03:07of Kigali and it's basically used as
03:11infrastructure to allow them to provide
03:13care to patients closer to where they
03:15live I think this is gonna be part of a
03:17process that that probably is
03:20government-assisted but it's going to be
03:22driven a lot by by innovation the US has
03:26the most complicated airspace in the
03:28world because we've got so many
03:29different objects up there already and
03:31God knows I tried to to think ahead and
03:35to do exactly what I what Kelly just
03:37said which is you know instead of
03:39looking back nostalgically at the
03:42infrastructure we had 50 years ago this
03:45is not going to be for the US a time
03:47like the Transcontinental Railroad when
03:50Lincoln said let's build it and we built
03:52it or even the interstate highway system
03:55when Eisenhower said let's build it and
03:57we built it I think this is going to
04:00happen because the government gets
04:02nudged into doing it and that's what is
04:05so interesting about the the phenomenon
04:09of drones and drone delivery it's going
04:11to happen because industry creates this
04:14this thing called an autonomous vehicle
04:17that actually gets to a place where it
04:21sits in the market and people actually
04:22buying the service if not buying the
04:26look like for the US enemy how did we
04:27want to actually get to this point where
04:29they have such you know what we would
04:30consider the infrastructure of the
04:32future what would it look like for the
04:33u.s. to get there look at the the
04:35airports in the US I mean from like 1910
04:38to 1950 the u.s. led the world in terms
04:41of building this infrastructure for
04:43airplanes and and it's not just
04:45important because people get to use that
04:46infrastructure it's also important
04:48because the United States led the world
04:50in terms of developing that technology
04:51so there's a reason that the u.s. is the
04:55most complicated airspace is because we
04:56led in the development of that
04:57technology and the implementation of
04:59that technology the government of Rwanda
05:00have had the vision they knew what they
05:03wanted to achieve and they were willing
05:04to take a little bit of risk to get
05:06there it's a government that's willing
05:07to behave a little bit more like a
05:10start-up you know when I read stories of
05:12like the founding fathers in the u.s.
05:14like I think we used to have that
05:15entrepreneurial spirit it's like a
05:16willingness to take a little bit of risk
05:19in order to lead the world if the
05:20assumption is we're only gonna do things
05:22that we know work perfectly and that we
05:23did in the past then we're gonna find
05:26ourselves following other more
05:27entrepreneurial more innovative
05:29countries one of the drivers is
05:30innovation obviously but the other is
05:33certainly the citizens who are using
05:35this infrastructure on a daily basis
05:37oftentimes these municipal building
05:39projects are initiated by cities and
05:41counties but is there actually a way in
05:42which citizens could start to suggest
05:44where things go public finance you know
05:46his invisibly guiding the nature and
05:48scale of the things that we build in the
05:50world the mobile municipal bond is
05:52another of the great American inventions
05:54it's two centuries old in the early days
05:57of our nation 1812 New York we're in you
06:01know lower Manhattan when we say we need
06:03a canal you know imagine all the great
06:05things we could do with this canal you
06:07know but how are we going to build this
06:08town well we have an ideal it's passed
06:09the Hat around and right ourselves I
06:11OU's it used to be fundamentally a
06:13community driven effort that would allow
06:15the community to build exactly what it
06:17needs when it needs it is now this like
06:19hyper consolidated aggregated one
06:21billion dollar per day market the cost
06:23structure is such that it makes more
06:25sense for you know communities to put
06:28together a bundle of 30 or 40 or 50
06:31projects at a time you know some of them
06:33that needed to happen years ago and then
06:35some of them that won't happen from
06:36there a couple of years to do a single
06:38mega financing rather
06:39then borrow exactly what's needed when
06:41it's needed you know if a community
06:43could receive the funds and a MoU from
06:46the local council that says yeah you can
06:49do that project you then you can do this
06:52project and you can put your resources
06:54together and other people from other
06:56parts of the country might join this
06:58idea of sort of democratizing and
07:00crowdsourcing urban planning these new
07:02units of collective action an
07:05organization that the current mode of
07:07public finance does not support like the
07:10neighborhood scale micro grid building
07:11their own all abilities playgrounds we
07:13saw distributed wireless mesh networks
07:16pop up in low-income communities to
07:18provide high-quality broadband 100
07:20households get together and say we're
07:22gonna borrow 5 million bucks and put
07:24together a bank of Tesla Power Packs and
07:27you know do distributed energy to our
07:30neighborhood do other countries use
07:31municipal bonds as this sort of modern
07:33public finance something that's come to
07:35other countries yeah it's a very active
07:37market in most of the developed
07:38countries around the world I've been to
07:40places like Scandinavia that are doing
07:43really remarkable things with getting
07:46public input the government's wave is to
07:48call a meeting at a certain time in a
07:51certain part of whatever government
07:52building if you work it's limiting if
07:54you're not plugged in if you don't get
07:56to notice governments are using their
07:58municipal resources but are actually
08:00working to go out to where people
08:02already are go out to go to the coffee
08:04shops to go to the universities to go to
08:07go out and get public input rather than
08:09expecting the public to come to you so
08:11to speak there's a role where the
08:13government even with a small amount of
08:15funding by basically being an anchor
08:17customer for that infrastructure it can
08:18have a catalyzing influence in terms of
08:21getting something off the ground and
08:22started where a little bit of critical
08:24mass is necessary and not only that but
08:27by working with the government as an
08:29anchor customer it also often makes it a
08:32lot easier to get regulatory permission
08:34I think a lot of people look at some you
08:36know big companies in the world that are
08:37doing drone delivery and say ok you're
08:39talking about delivering someone's latte
08:41to their back yard using something that
08:42looks like a lawnmower of death like
08:44we're not that psyched but when you're
08:47talking about you know working hand in
08:49hand with the Ministry of Health to
08:50deliver a medical product that someone's
08:53it's an easy decision for just about
08:55anybody in government even a relatively
08:58conservative regulator just a little bit
09:00of that can go so far in terms of
09:02catalyzing the creation of new
09:03infrastructure that ultimately will be
09:05fully sustainable from a from a you know
09:08private funding perspective you just
09:10need that ability to get started all of
09:12these technologies that we think are
09:14coming driverless cars and delivery
09:16drones autonomous shipping vessels what
09:19is the greatest challenge for policy
09:22makers in actually staying ahead of that
09:24well I think the challenge for policy
09:26makers is is knowing which tool to use
09:30in a given situation the autonomous
09:34vehicle guidance frankly there there was
09:36a lot of concern that we could end up
09:40with in a situation where 50 different
09:43states had 50 different regulations when
09:46it comes to autonomous vehicles and what
09:49we tried to do is the layout of
09:51framework that wasn't prescriptive that
09:54left room for for the technology to grow
09:56and become more mature you know without
09:59killing it in the crib so to speak which
10:02is different than what I think
10:04drones need right now you were the mayor
10:06of Charlotte North Carolina you know
10:08that the counter-arguments you Jace's
10:10point the vision that we've kind of
10:11talked about here is you sort of need a
10:14Robert Moses like figure this kind of
10:17you know somewhat autocratic City Parks
10:20Commissioner in New York City in mid
10:21century who kind of through sheer force
10:24you know builds these massive massive
10:27public projects so maybe from a mayor's
10:29perspective like how do you think about
10:32sort of democratizing and crowdsourcing
10:34the prot the process of urban planning
10:37or do you really need to kind of
10:38centralized control of planning in some
10:40ways we have a particular challenge in
10:43America when it comes to building
10:44infrastructure in that challenge and we
10:47shouldn't sugarcoat it is that we are a
10:50pluralistic country and you know if you
10:53look at the history of how
10:54infrastructure has been built and Robert
10:55Moses is a good example of this the
10:58autocratic style that was prevalent at a
11:00certain part of our history resulted in
11:04essentially using infrastructure as a
11:07barriers between between Americans and I
11:11worry frankly that we may be repeating
11:16some of the same problems when it comes
11:17to the use of technology and
11:20transportation there are some dangers
11:21inherent in a lot of his tech progress
11:23just with regard to further separating
11:25people further segregating certain
11:27communities how did you actually think
11:29about mitigating those risks especially
11:31since you were there at such a unique
11:33kind of point in history where you saw
11:34the emergence of drones and driverless
11:36cars to a citizen is showing up at a at
11:40a public input hearing on a road project
11:42or a rail project or something the
11:45process is mysterious because they don't
11:47exactly know what input they're giving
11:50where it's going to go what impact it
11:53could have on the overall project and we
11:55actually created a pamphlet that
11:57basically lays out for the average
12:00person how to influence the process of
12:03getting a project done the way that
12:05person would like to see it done and
12:07that's just one way of trying to correct
12:09past practice which which was more
12:11autocratic quite frankly we also looked
12:13forward a little bit we invited midsize
12:16cities across the country to tell us how
12:19can cities best utilize available
12:21technology to solve their problems we
12:23also asked them to explain to us how the
12:26deployment of that technology was going
12:28to help every citizen in that community
12:30regardless of their socioeconomic status
12:33we started to see the development of
12:35solutions around this one solution was
12:38neighborhood kiosks where people who
12:41didn't have a mobile phone that have
12:42access to the same application that you
12:44and I have access to through ours and
12:47solutions that worked around the
12:50unbanked that gave people the ability to
12:52use cash where they didn't have you know
12:55another way of paying for a certain
12:57service if we're not careful and
12:59intentional we could be unintentionally
13:02repeating some of the history that we
13:05have inherited I think it's so
13:07interesting because we've talked about
13:08how individuals at a local level can
13:10both create and fund a lot of these
13:12infrastructure projects that other
13:13people might not think about we talked
13:15about how technology might make it
13:16possible to get some of the same
13:18benefits from infrastructure for one
13:21but also that when you look at some of
13:23this these new solutions there are
13:24complicated regulatory environment we
13:27have to find ways of at a local level
13:29trying new things and experimenting and
13:32then taking advantage of the things that
13:34we see working and taking advantage of
13:35the things that benefit people equally
13:37rather than lead to more inequality yeah
13:39so how do we make sure it's not just the
13:40wealthy communities getting better and
13:42better infrastructure and lower-income
13:44communities not getting these benefits I
13:45grew up really poor in really crazy
13:48turbulent circumstances in a rural
13:50community in the Midwest right and I had
13:52an awesome mom and park down the street
13:55and some public school teachers that
13:59were willing to unable to look past the
14:02nonsense of of a troubled little dude
14:05right and you know those things the
14:08awesome mom is kind of unique to me I
14:10would do that park right and think about
14:13a world that was like better than the
14:14world that I currently knew and I go to
14:16the public school and and have these
14:18teachers who would mentor me and and I
14:20would come to understand things that
14:21existed outside of my immediate
14:23circumstances and grew up assuming
14:25that's like constant that's just a given
14:28that everybody has those things right
14:29everybody's at a park everybody's got a
14:30good school then I ended up studying
14:33cities right and I'm seeing up close and
14:35personal that if that's not the case
14:36that you know those things are highly
14:38unevenly distributed when times get
14:40tight what goes and it would be there's
14:4350% of the budget for the park this
14:46school is cutting this many hundreds of
14:48there are programs gone communities
14:51looking at things like privatizing
14:52playgrounds literally creating
14:55you used to be a nation of communities
14:57that would get together and say we want
14:59a ballpark we're going to you know crowd
15:02fund the ball park with municipal bonds
15:03and we're going to all get together and
15:05invest and do this thing and it's gonna
15:07be for the benefit of all citizens but
15:09then there's a global capital network of
15:11thousands of investors of various types
15:13from someone down the street from the
15:15project all the way up to a global bank
15:17that because of the Community
15:19Reinvestment Act needs to put you know
15:22three hundred million dollars a year
15:24into low to moderate income communities
15:26as designated by the Fed they haven't
15:29been able to really invest in those
15:32communities through municipal bonds
15:35the aggregation that you know it's clean
15:39energy energy upgrades for the school in
15:42the low-income districts combined with
15:44you know the the sewers citywide and
15:47suddenly that Bank can't say this is a
15:50Community Reinvestment Act investment so
15:52it doesn't count towards that now we can
15:54do very specific targeted types of
15:56things where we have banks that say
15:58we're going to you know invest in this
16:00energy upgrade that'll save this
16:02low-income school district a hundred
16:04thousand dollars a year this is a new
16:06type of investor that has direct access
16:08to those types of opportunities we
16:10mentioned Robert Moses earlier and
16:11that's the antithesis of what we do it
16:14really is more about Christopher
16:16Alexander right the if you read Moses
16:18you have to read Alexander it's for you
16:20know projects that get beat up in
16:22today's billion dollar a day public
16:24finance market like bike lanes fantastic
16:27so infrastructures been in the news with
16:30this proposed trillion dollar or
16:32infrastructure plan that President Trump
16:34has talked about setting aside the
16:35politics of it secretary Foxx how does
16:37it compare to these other previous
16:38infrastructure plans like say the you
16:41know 1956 interstate highways
16:43transportation act that President
16:44Eisenhower so famous for the American
16:47Society of Civil Engineers has done a
16:49series of studies that show that the
16:52country has an infrastructure deficit in
16:55transportation of a trillion dollars
16:57President Trump tried to more or less
17:00craft a package that would achieve that
17:03amount of investment one using project
17:07streamlining as a way to accelerate
17:09projects secondly he's talking about
17:11putting forth some credits to the
17:14private markets to invest in
17:16infrastructure and credits to local and
17:19state communities for taking assets that
17:23were once publicly owned and putting
17:25them in the marketplace for some level
17:29of privatization and then the third
17:31piece is some type of investment at the
17:33federal level I think this is where they
17:36will struggle the most is finding the
17:37revenue sources to build a system to
17:40actually build a trillion dollar program
17:42now you ask me you know how does this
17:45differ from 1956 the short answer is I'm
17:48because from 1956 to now we've basically
17:53had a view of transportation that was
17:56very much focused on the automobile and
17:59I argued strenuously for a national
18:03program that would take a more
18:05multimodal focus that would from surface
18:08transportation perspective look at the
18:09roadways and cars but also transit and
18:12walking and biking and give people more
18:15choices one of the most important things
18:17that we think about is we need to make
18:20sure that we're investing in the
18:21infrastructure not just in the
18:23infrastructure the 19th century but that
18:25we're also investing in the
18:26infrastructure of the 21st century I
18:27think it's kind of easy to look at this
18:29and say hey you know rebuild the
18:31railroads rebuild the bridges and it's
18:34like yeah we have to do that but at the
18:35same time there are so many ways that
18:38new technology autonomous vehicles
18:40ride-sharing drones are gonna make it
18:42possible to actually achieve the same
18:44goals for less cost look everybody knows
18:46there's not like a trillion dollars just
18:48lying around so how can we find ways of
18:50solving the same problems in an order of
18:52magnitude more efficient ways so what is
18:55the greatest challenge that's going to
18:56confront on the one hand regulators and
18:59on the other hand entrepreneurs in
19:01building this next generation of
19:02infrastructure yeah when you really
19:04think about what the future looks like
19:05is that particularly when it comes to
19:07being a start-up and wanting to work on
19:09big infrastructure problems secretary
19:11Foxx was talking about the inequality
19:13between the haves and the have-nots on a
19:16national level but what about the global
19:18level because the reality is so many of
19:22the infrastructure shortcomings that we
19:25have here in the US I mean this is
19:27nothing compared to some of the
19:28infrastructure challenges that lead to
19:30for example five point eight million
19:32children dying every year due to lack of
19:34access to basic medical products and so
19:36we think particularly if you're building
19:38infrastructure it's not just like oh
19:40we're a US company so we're gonna try to
19:42build infrastructure in the US I
19:43actually think this is one of the
19:45shortcomings of the vision of so much
19:47technology coming out of a place like
19:48Silicon Valley I think our assumption is
19:50that any technology company that's gonna
19:52scale fast is gonna sell to you know
19:54rich people in like this specific
19:56geographic part of the world
19:57particularly when you're talking about
19:59infrastructure some of the most exciting
20:02and the places that have the highest
20:04needs are not the US but these are
20:07global problems there are global
20:09infrastructure problems that are looking
20:10for new solutions and you can build
20:12viable sustainable businesses serving
20:14them and in fact this is probably where
20:16a lot of the innovation in
20:18infrastructure is gonna happen because
20:19the need is so high and and a lot of
20:22times you may not have as complicated of
20:24a regulatory framework we're able to you
20:27know understand each other and
20:29communicate with one another a pace that
20:32was simply unimaginable even 30 years
20:35ago right that now we have a global
20:37brain and we can transmit ideas and
20:41share ideas and get feedback and iterate
20:43towards something very quickly at the
20:44global scale and I have really high hope
20:47our will be defined at the local level
20:49and as you know autonomous really takes
20:53off on the street you start to see
20:55autonomous and drones as you know
20:57combined the next big paradigm shift in
21:01our settlement patterns right you know
21:03the 20th century was defined as the sort
21:05of hollowing out at the hands of the
21:08automobile of cities and becoming
21:11distributed and you know the rise of
21:13suburbs as this new paradigm shift
21:16allows us to get together in new ways
21:17like the quilt work the polycentric
21:19model right regions of places around the
21:24human being which is the most important
21:26unit the truth the matter is that we are
21:29we are still a society under
21:32construction and we still have fissures
21:35in our society we still have needs as
21:39people to congregate to socialize to be
21:42with each other it's really important
21:44not to lose sight of that because again
21:48when we talk about equity issues that's
21:50one variation of what I'm talking about
21:52where we can completely create this
21:54whole new thing and build a moat between
21:58the people who can afford and the people
22:00who can't you know I don't think it's an
22:02issue of people's intentions at this
22:04stage I think it's more of blind spots
22:07that we have to be careful to fill in
22:09right well thank you guys we're all
22:12excited about this infrastructure of the
22:15spend some time talking about it thanks
22:17for advancing the conversation yeah
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