As "disruptive" start-ups pioneer new business models that threaten to upend the long-established ways of the world, Silicon Valley's sweethearts increasingly butt heads with government regulators. And Bradley Tusk wants to be the man start-ups call to navigate — or eliminate — regulatory obstacles.
Tusk, a longtime political advisor who led Uber’s knock-down, drag-out fight against City Hall in New York this summer, has launched a political strategy firm, Tusk Ventures, that focuses exclusively on helping startups navigate political and regulatory hurdles. In the last few months, he's signed on to help startups like the on-demand handyman service Handy navigate the thorny issues of the 1099 economy and the cryptocurrency startup Ripple tackle the complex regulatory hurdles of the world of digital money.
Tusk hopes to help startups in the throes of regulatory battles as well as to train Silicon Valley's next generation of unicorns to think about regulations long before they're an issue. He says his firm will act as a broker for regulatory peace, using his political savvy to help foster relationships between tech and politics before things get too heated. Tusk explained that he's in a rare position to see both sides of a fight — a veteran of the public sector who understands that while sometimes government moves too slowly, government regulators often have good points, too.
But his track record isn't exactly that of a peace-broker. Tusk is someone who tries — and often succeeds —at destroying anyone who gets in his clients' way.
He ran billionaire Michael Bloomberg’s contentious (and successful) bid for an unprecedented third term as mayor of New York City. His corporate consulting firm, Tusk Strategies, advised Walmart during its long (and unsuccessful) battle to open a store in Manhattan. Like Uber's New York campaign, Bloomberg's relied on deep pockets: the $109 million campaign was the most expensive private campaign in US history, sparing no expensive on budget items like a DJ to perform in the campaign's 35,000-square-foot headquarters as volunteers called voters.
When Uber wanted to defeat New York's proposed plan to cap the number of cars that on-demand ride companies could have on the road, Tusk helped steer a ferocious, multi-million dollar media blitz that painted plan supporter Mayor Bill de Blasio as a puppet for taxi industry donors. The campaign involved pro-Uber rallies outside of housing projects, shamelessly exploiting racial politics, and messages displayed in the Uber app to urge riders to e-mail the mayor in opposition to the law. City Hall surprised everyone by abruptly reversing course.
Sometimes, Tusk told me, the fighting has to get dirty.
“If something is patently wrong like de Blasio’s regulations, we just fight to kill and that’s that,” Tusk said. “But a lot of the time the government’s perspective isn’t all wrong, there’s some kernel of validity. My hope is that, in the future, we can be that bridge between tech and government.”
Political muscle like Tusk makes a lot of local governments extremely nervous. Uber, for example, has forced its way into cities like Portland by simply overwhelming city government with its deep pockets and lobbying might. Of course regulators aren't always just looking to protect campaign donors like the taxi industry, they're also often working to protect public interests, like urban housing stock from getting swallowed up by Airbnb.
“Good public policy seldom results from a deep-pocketed lobbying campaign," Wiley Norvell, de Blasio's deputy press secretary, told me. "And as a regulator entrusted with protecting the public interest, a specific company’s wealth or tactics shouldn’t impact the way it’s regulated."
The tech industry as a whole has recently woken up to the need for political muscle. Tech industry spending on lobbying has more than doubled since 2001, prompting K Street lobbyists to set up California outposts. The "disrupters" entering heavily-regulated industries like taxis and hotels, are especially in need of help. Uber has 250 lobbyists and 29 lobbying firms in US statehouses alone.
Tusk's firm essentially offers startups with war chests far smaller than Uber's access to the same breed of might.
Tusk, an intense, Brooklyn-raised politico, served stints as Deputy Governor of Illinois and running Lehman Brothers’ lottery privatization group before founding Tusk Strategies to advise Fortune 500 companies on campaigns across the country. In 2011, he received a call from a little startup called Uber that was butting heads with regulators in New York. Since it couldn’t afford to pay for his services, he agreed to take them on as a client for equity.
“That worked out pretty well,” says Tusk. When he turned 40 last year, he found himself very rich, thanks to his equity in a company now valued at $50 billion, and restless at the head of a corporate strategy firm that “basically ran itself.”
He bought a Tesla. Then he founded Tusk Ventures.
“It was more fun to work with a startup than a giant corporation,” he said. “For a startup, regulation can be an existential threat. Our work is critical to their survival so I felt like we could have a bigger impact.”
Tusk Ventures is a political consulting firm that’s structured like a venture capital business. Startups trade Tusk Ventures equity for the firm’s political expertise and Tusk goes to war, winning over popular opinion, public officials and regulators.
"Bradley's advice has been invaluable as we remake an industry protected by entrenched interests," Uber CEO Travis Kalanick told me, via e-mail. "We wouldn't have been so successful without his work.”
Besides Uber, Handy and Ripple, the firm is advising coding school General Assembly, an on-demand parking company called Valet Anywhere and Zendrive, a driving analytics startup. For each company, the political challenge is different.
Valet Anywhere CEO Robert Kao told me that he realized they needed someone like Tusk when they inked their first contract with a real estate developer to provide the valet service for new condos it was building in lower Manhattan. For developers, building garages is costly, so they're happy to opt instead for valet-service, but many cities have regulations mandating buildings include a certain number of parking spots in their development plans.
Tusk then will be fighting a battle to change zoning laws for parking in cities to help services like Valet Anywhere expand. (Tusk is a also customer. His Tesla lives in the South Bronx but can be summoned to his Flatiron residence in an hour or less.) That will put the start-up in opposition to those who can't afford valet services and suddenly can't find parking spots.
Part of what makes Tusk attractive to startups, which often run into trouble when they try to expand beyond their hometown to new cities with different laws, is his experience running campaigns for both politicians and corporations across the country. The startup doesn't need to know local law or leaders, Tusk probably already does.
"In general, a business like ours is bound to come up across city-specific rules we’re not aware of," Kao told me. "Having Tusk on our side is a way to protect ourselves and be prepared as we expand elsewhere."
Tusk imagines he will double the number of companies in his portfolio over the next year. Generally, he looks for companies that present both a good investment opportunity and an interesting political challenge. (He also still runs Tusk Strategies, as well as a casino management company and a digital archiving service.)
“One of the most fun parts of the job is you hear all these pitches,” he said. “To me, they all sound great. I’m like, ‘Yeah great! We should do this!’ And the investment team has to pull me back after the meeting and tell me we probably shouldn’t do it.”
Tusk is a true techno-optimist — he doesn't view Uber's tactics as bullying, but a noble charge to force slow-moving, out-of-date regulations to change. After more than a decade in government and politics, he told me, he’s come to the conclusion that society’s thorniest problems are better addressed by the tech world.
“Take California’s drought,” he said. “A state can say we’re going to mandate restrictions on water usage and that works for a while, but it’s going to take desalination technology to solve the problem and that’s something government isn’t going to develop.”
I asked Tusk what other kinds of companies he thinks will wind up needing his services.
“Anyone in education, anyone in health, anyone in gaming, anyone in water or solar tech, anyone in transportation or cryptocurrency or cybersecurity,” he said.
In other words, basically everyone.