00:43:10 · Molly O'Shea
[00:43:10] S1: VCX by Fundrise, the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View the portfolio at getvcx.com. That's getvcx.com. Some of you may not have heard this yet, but our sponsor Public just launched something called generated assets, and it brings AI into investing in a way I've honestly never seen before. Here's how it works. You type in an idea like AI powered supply chain companies with positive free cash flow or defense tech companies growing revenue over 25% year over year. Publix AI then dispatches a swarm of agents that scan every single US stock, evaluates them, and instantly builds a custom index around your thesis. What really stands out is how clearly it explains why each stock is included. And before you invest, you can even backtest your idea against the S and P 500, so you're making decisions with real context, not just guessing. And beyond generated assets, Public lets you invest in stocks, bonds, options, crypto, all in one place. They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com/sorcery, paid for by Public Investing. Full disclosure is in the description. Enterprise AI runs on Merge, the AI infra platform for integrations, agent tooling, and model orchestration, so your teams ship product, not plumbing. Mistral, Dropbox, and Drata already trust Merge in production. Start building at merge.dev. Founders scale faster on DEAL. Set up payroll for any country in minutes, hire anyone anywhere, get visas handled fast, and get back to building. Visit deal.com/sorcery. That's deel.com/sorcery. I want to get into, before we get deeper into the General Catalyst Institute, I want to go back to your point on landing the CIA partnership and contract and how transformational and important that was for cementing the AWS cloud service for public sector. How important is it for startups and these AI companies to land those contracts early and first? We did see that with Anthropic and DoD and the drama around that, but how important is that for these companies to secure their legitimacy to get those types of things?
00:45:33 · Teresa Carlson
[00:45:33] S0: I think it's very important. One of the mistakes that I see is when companies have great technology but they don't determine who's going to use it. And what legitimizes you is usage of those tools and the customer saying it's a good tool. And we over focus, In fact, I have such a deep appreciation for Andy for challenging me on some of these concepts because when I first got to AWS, I had kind of been taught at Microsoft, we did not get customers to speak out a lot. And we always called it back then the Washington Post test because they didn't want to be on the front page of the Washington Post if something went bad. And again, back to sometimes they would overbuy or a project. I could point to so many tech projects that went wrong when it was kind of just a license based model because they defined their requirements poorly a lot of times. I mean, when you're in that, I'm not saying government means to do this, but if you're defining a requirement, just like us sitting here today, today you have a requirement about how you run your podcast. In two months, there may be a new technology and you're like, woah, I got to change up the way I'm doing this or, deploying my podcast or how I'm marketing my podcast. And you want to have flexibility in how you're doing something. The government back then had no flexibility. They would define something, they would put it out in an RFP, and they would buy that thing. Within two months, it might be outdated. So after two months, something new had come up and they're like, oh, this project's not working. With cloud, that actually changed the game because you had a lot more flexibility in how you would define that. But with startups, it is critical with startups that they define what they're selling, who the user of that tool is going to be, and they get great legitimacy. And with Andy, he questioned me. He said, look, you got to get references. You got to get people to talk. And I said, Andy, in government people want to tell the story. He goes, yeah, they will. And I was like, oh, I was concerned because was like, how do we get customers to actually say good things about what they're doing? And if you go back and look at all of my public sector summits in re:Invent, I had so many customers that wanted to tell their stories. And I really appreciated that he pushed me on making that a reality.
00:48:07 · Teresa Carlson
And we decided that our superpower was not really what we did, but what our customer did. And getting the customer to say that cloud computing was game changing was what made all the difference. So I really think these startups should over focus. Once they have what they're doing, spend time getting the right customers, getting the customer to say you're doing a good job, going after those contracts, really working to make sure that they have scale and growth in revenue because, again, it legitimizes them that you have customer usage that you can go back and say, okay, CIA, CIA is using it, NRO or JP Morgan or Goldman Sachs. You can use that as a reference point over and over. I could continue to talk to you about all these topics for hours, but we need to talk about the General Catalyst Institute. So why did you and Hamant decide to launch this? Well, again, another great leader that I've had the opportunity to work with in my career, just so blessed. And HT is such a great leader. He is a goat of investing. I used to say Andy and Jeff were the goat in retail and cloud, and now I've got this amazing leader in investing. And, you know, I got to meet Himat because I was recruited to be on one of the boards that they started called Chemure. And I got to know him there and he said, Oh, you should meet some of team. And then I met Paul Kwan, who runs our Global Resilience. I was like, Woah, they're doing public sector and all these industries I love. And Hemant said, you should be an advisor to us. They have this program that they bring former executives on as advisors. So I worked for about eighteen months doing advisement and helped do four investments. I brought some investments to the table. So I kind of learned the investment side. And then Hamant and I talked about, he goes, you know, you should think about coming on here full time. And I was like, do what? Because I don't feel like my superpower is investment. I am not, like I see, I'm more of a builder. I like to help companies build versus like that day to day investment is not what kind of gets me out of bed every day. But I love seeing what we invest in and making them successful. And one of the things we talked about was have a general callous. They're amazing. They raise a lot of money. They invest in amazing founders, but most of these companies are in highly regulated industries.
00:50:42 · Teresa Carlson
And with AI coming on the forefront so quick and fast, said, look, it's not like the thing I would probably love to do day in and day out, but what I found in my work with Microsoft and Amazon, without the right policy and government affairs and working with governments globally, it's very challenging with businesses to take off if you're not advocating for the right policies. It can really be detrimental. And if you look at it, so we're financial services, healthcare, defense, intelligence, manufacturing, energy, these are all highly regulated. So I said, we should So we kind of said, okay, let's create this institute. It's General Catalyst fact. We're inside the company. And our goal is we have about 1,000 companies we've invested in, somewhere that never plus or minus is probably plus. And what my team and I do is we work with policymakers around the world to educate and advocate for good policies that make sure that our startups can thrive. And one of the things I think that I I love working with our partners when I was at Microsoft and Amazon, but I don't think I understood that there was no one really advocating for them on the policy end. And for larger companies, look, they have deeper pocketbooks. They don't like it, but it's a lot easier for them to meet requirements and do lobbying and policymaking and do this stuff. For startups, it's hard. Like they don't have they can't go do all this work. They don't even know how to do it. A lot of times they're aware of it, but they're like, where should we begin? So for us, we do this at the industry level. We don't do it on behalf of any one company. And we go in and meet lawmakers around the world. We do it in partnership with our, like AWS, they're the same mind. We work with them. We work with Microsoft. We work with Anthropic. We work with think tanks and education institutions. We have written some reports. We bring our founders to The Hill. You know, people say go to the Valley, they got to come to The Hill. And we bring them in, we curate a set of founders like in defense or manufacturing or financial services or cyber. We curate them together. We work with them on here's how you tell a story to a lawmaker. So we take them to the White House to meet key leaders. We take them to Capitol Hill.
00:53:11 · Teresa Carlson
We take them to the Pentagon as an example, if it's a defense related or industrial, and we get the absolute best meetings we can for them. And we give them all an opportunity to tell their story. We try to do some special events like I've done things like I get all the best reporters and we do on background and we do a luncheon, or I've done receptions where I've invited all of the top Hill staffers to come and meet them and we do like a fireside chat. And the idea is make them aware, educate our lawmakers and the agencies on this amazing technology, what we have built. These founders are, I'm just like so blown away by them. They're so smart, they're so optimistic, they're very creative, and they desperately want to build something that is useful to the US government or the government if it's Brussels. We just took a group into Brussels and that went really well. We just were in The UK and London. And I just, the impact is profound from the moment we started to the moment they walk out the door and they all are like, we're so glad we did this. It taught us so much. We really understand how this works. And the idea is one, they get educated. Two, we demonstrate to lawmakers why they need to hear what they're doing because it's so profound. And thirdly, we want to teach them then how they actually build a business with government. So the kind of the side is we help them understand the go to market and help them create how would they contract and then get work with government.
00:54:49 · Molly O'Shea, Teresa Carlson
[00:54:49] S1: Who are some of the companies that you're super excited about that you're working with? [00:54:53] S0: Well, will tell a quick story. So many, first of all, there's like, I mean, and I would not wanna hurt any of their feelings because they really are all spectacular. The first fly in that we did, I'll call, we did our first report in March '5. We launched this thing in September '4 and we did our first report on healthcare. And it's out there, I'll make sure, Molly, I send you the reports that we've done. But this one we brought in, it was during the Cherry Blossom Festival last [00:55:28] S1: Oh wow. [00:55:29] S0: So we had cherry blossoms on it. And we brought, I think it was eight founders in, and we took them in to meet with lawmakers, and they were blown away. Hippocratic AI was one that I'll And Hippocratic does work with, they use agentic AI to do follow-up with patients. And he would play these recordings on Capitol Hill to senators and congressional leaders, congressmen and women. And they were like blown away how the patients were responding to an agent doing follow-up from a physician's visit. And one of the calls was, it was a tracker, and he was so funny. He called it Skylink. Remember the Arnold Schwarzenegger? He goes, Are you from Skylink? Skynet. Skynet, [00:56:20] S1: are you