Scott Kupor, a 16.5-year a16z veteran who became OPM director, recounts joining Marc Andreessen and Ben Horowitz as their first employee in 2008 with no job description.
Kupor says a16z copied CAA's team-based agency model to replace John Doerr's one-to-one venture relationships with a team of operating professionals.
Kupor credits the 2009 financial crisis, when rivals like Sequoia went quiet, with giving the firm room to grow while it pitched capital plus services.
a16z's first employee takes the venture playbook to federal hiring
Scott Kupor helped build Andreessen Horowitz on the idea that venture help could be institutionalized, replacing one partner's relationships with a team of specialists. He now runs the U.S. Office of Personnel Management on the same belief that any organization depends on the right people and incentives. Federal personnel rules fail that test, rating nearly everyone highly and promoting by tenure, so he is rewriting them as a generation of workers retires.
Takeaways
a16z borrowed CAA's team model for venture. Michael Ovitz's CAA split an agent's job across a team. Andreessen Horowitz copied it, pitching LPs on institutionalizing John Doerr's one-to-one relationship building through operating professionals in talent and business development. It marketed itself as capital plus services, a stance rivals mocked.
The 2009 crisis cleared space for early wins. While rivals such as Sequoia went quiet, the firm bought Skype with Silver Lake, and Microsoft acquired it about eighteen months later at four times the price. Half the first fund came back quickly, and second-fund fees paid for expanding services.
Federal ratings and promotions ignore actual performance. 99.7% of federal staff are rated three or above on a five-point scale, and about 90% of senior executives get four or five. Promotions wait on tenure, at least a year in a job and twelve more months after. A new rule caps top ratings at 40%.
Compliance culture leaves no room to innovate. Kupor describes a government culture built around compliance that crowds out innovation, made worse because government never takes work off its plate and keeps adding to it. He proposes what he calls permissioned risk as the counterweight.
An aging workforce needs a hiring reboot. Only 7% of federal staff are under 30 and 44% are 50 or older, and Kupor expects about half to retire within five to ten years. Techforce will hire a thousand engineers and AI experts at GS 14, alongside OPM's first college tour.
OPM must institutionalize DOGE's cuts and digitize retirement. DOGE, led by Elon Musk with Steve Davis, cut the workforce from about 2.3m to 2m in a big bang. With Joe Gebbia, OPM is ending paper retirement files once mailed to a Pennsylvania limestone mine, cutting processing over 50% toward 90%.
Scale forced decentralization into domain teams. About ten years in, the firm split into specialized teams, such as AI infrastructure under Martin Casado, and in 2019 launched a later-stage fund with David George from General Atlantic. Kupor moved from operations to investing, backing about 15 companies.
How a16z got started
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On this episode 2
Show 1
Marc Andreessen and Ben Horowitz sold Opsware, the successor to Loudcloud, to Hewlett-Packard in 2007, and part of the team stayed at HP for twelve to eighteen months.
Kupor joined in 2008 as the first employee, with no job description, and set up the firm's operations.
On his first day he sent a capital call to about 50 limited partners from his personal Gmail.
Most of his early time went to hiring finance staff and domain experts.