Penny Pritzker on Microsoft, Harvard, and Building Inspired

0:00You've co-founded more than seven companies solving some of the most complicated problems. You're on the board of Microsoft, you chair Harvard's board, and then at the same time you are using your free time to try to help rebuild Ukraine. I remember getting an email from President Obama, would you become an ambassador to the country on behalf of Penny Pritzker and U.S. Secretary of Commerce? And I truly was like, this is not real. And then quickly I was like, is this real? Oh my god, wow. So we just closed Fund 4, our$450 million fund.

0:27Penny Pritzker: But we're also asking ourselves, how can we do better? How can we do more? Inspired is a culture of hustle. I mean, we'll outwork, we'll outmuscle. We're going to work harder than basically anybody. Welcome to Inspired. I'm so excited. We're so excited. Penny, this is the first time I'm formally interviewing you, which just feels like such a gift. I'm glad you think it's a gift. I feel it's intimidating. Here we go. I was like, tables are turned. I'm so excited to talk about, you know, we became partners and our friends because we love building. But one of the things I've never shared broadly is your building story.

1:10And I want to go back to your childhood, which many people may not know this, but your dad founded Hyatt, founder and CEO. You grew up in a family truly of ambitious breakout entrepreneurs. Tell that story. I want to hear that.

1:28Penny Pritzker: Well, I grew up in a household where my dad was the CEO of a startup business, basically. Literally, when I was six months old, my parents left Chicago with me and we moved to a motel by the Los Angeles airport. And we lived there. My mother used to say she used to walk me in the stroller along the runway at LAX. But imagine this is a long, long time ago. And then we moved to Northern California because my dad with his brothers were building a company, basically a chain of motels. The thesis was is that air travel was taking off and people needed places to stay near airports. Pretty good entrepreneurial strategy.

2:13Penny Pritzker: Absolutely. So they were building motels next to airports. And I grew up where the dinner table conversation was really about building a business. And everything from how do you find people, how do you train people, how do you innovate, what would make us different. And my mom, interestingly enough, back then my mother didn't have a corporate job. She was what was called a corporate wife. And her job was all the aesthetics as well as taking care of the assistance for all of the executives. And my mother also ran all the openings for all of the hotels. So today that's a job. But back then it was a...

3:00Penny Pritzker: That would have been like CMO, basically. Exactly. Exactly. That's so interesting. I heard people like Henry Ford were stopping by your house as this business high it was taking off. Give us a sense of just what the business leader, what does it look like for you? And if we think the first 10 years of your life, what are some of the fond memories you have of just that sort of entrepreneurship spark that clearly was happening? So as I said, it started as a chain of exterior corridor motels. And then the Hyatt Regency Atlanta, we had the opportunity, which is a long struggle going to another time, the opportunity to basically the family bought a half-finished hotel in Atlanta that had this big atrium.

3:47So this would be like, if you think about some of our founders, a moment where they're pivoting into really travel, not just being lodges and motels, but into really spectacular hotels.

4:02Penny Pritzker: And this became a sensation, the Atrium Hotel. And when that hotel opened, and my dad moved to Atlanta for six months to basically get the hotel up and running. My mother was in charge of picking out all the uniforms and all of the, she planned all of the opening. And then, and the thing took off. It was a sensation. And every mayor and every city said, I want one of those in my downtown. Because it was attracting people back to downtown. And this is a time when downtowns were really more abundant and everybody was moving to the suburbs. And so Hyatt took off with that trend. And the other part of it was, is that my dad had been in the Navy in Japan.

4:54Penny Pritzker: And so he had fallen in love with Asia. And so they also, my mom and dad would go once or twice a year to Asia for three weeks, because then you didn't travel for four days. You went for a long extended time. And they would, they were going from capital to capital in major Asian countries. and making deals to have new hotels built that bore the Hyatt brand. And that's really how Hyatt grew from a motel chain to a hotel chain, which came from the atrium concept at Atlanta, and then this international expansion. That all happened before my dad was 39. Wow. And then my dad was at a friend of his was having an opening of a hotel in Hawaii.

5:41Penny Pritzker: and unfortunately my dad dropped dead of a heart attack on the tennis court and that was the end of his leadership of the hotel company but he really and my mom created what is the foundation in terms of excellence and service uh the vision of what it was like to you know travel and have fun with your travel and the idea that hotels were more than just bedrooms but instead where could be these really interesting architectural places. You and I talk about resilience a lot, and I know we bonded, unfortunately, over the sad thing we have in common, which is you lost your dad when you were 13. I lost my dad when I was 14, both unexpectedly.

6:24How do you think having something, and I'd love, you know, in so many ways, this shaped who we are pretty profoundly, how do you think going through something so tragic, so early, changed you? health?

6:39Penny Pritzker: Well, I think there's a couple of things that I think had big influence on me. I think the fact that I watched my parents building something and having so much fun and being energized every single day to get up and make a difference really made me think that every day is precious and that we need to take advantage of it and that you can have fun as you build things and that really it's noble to be a business builder. In terms of the resilience aspect of coming from losing a parent like you and I both did early is I think you treasure every day and you treasure moments and And there's a gratitude for all of the, how fortunate we are.

7:31Penny Pritzker: I mean, we did have parents who cared about us. We were able to get a good education. We were taught, I know you were and I was, hey, as women, as young women, we can do this. We can be executives. We can be leaders. We can do whatever it is we set our mind on. And so I think it's, I've always tried to draw inspiration from the tragedy as opposed to allow it to, you know, bring me down. Yeah, I always say I think it gives going through something so hard so early gives you a different gear. And the gear really is one of a zest for life, risk-taking, comfort with risk. And I always say if the roof's over your head and you can breathe, you're going to be okay.

8:23Penny Pritzker: Well, I think that, I mean, you and I have talked about this. One thing that happens, I think, when you've overcome a number of very difficult situations in your life, as you have, as I have, as many people have, when you then face the next one, the next challenge, you say to yourself, okay, I know this is going to be hard. I'm not exactly sure how it's going to work out, but I know I have it in me to figure this out. That is one of my favorite things about you, actually, which we will get there later. But when things get really hard, you become your best. It brings out a part of you that I've watched many times now.

9:01You become sturdier. And it's something I really admire about you. OK, another thing I admire about you is when you were 16, your grandfather, because your dad had now passed away, you wrote to your grandfather a letter and said, why are you only talking to the boys in our family about business? And he responded by putting you in an accounting class. It is mind-blowing to me to think that you, of all women, grew up in a world where women weren't supposed to be in business. I mean, I'm like, are we still going to march for this? To say more, what made you write to your grandfather?

9:36Penny Pritzker: So it was my grandfather's 80th birthday. Oh, my goodness. And my mother said, you can give your grandfather whatever you want for his birthday. and I'm thinking here's a person in my eyes who'd accomplished everything and knew everyone right and so I was like what am I going to do and then I thought you know I want to tell him about who I am and what I want to be and he had always loved me very much and we'd been very close but I'd never really sort of expressed to him uh what I did so I wrote back then there you know colored stationery was new it was like a big thing and so I had this green stationery I'll never forget it and I wrote him a letter and I basically said dear grandpa you know you know happy birthday and I just really don't understand why you only talk business to the boys in the family and not to me I'm very interested in business so I arrive at his 80th birthday party and it's a who's who as far as I could tell as a 16-year-old.

10:42Penny Pritzker: And it's a big shindig. And my grandfather was not that tall. He was a little bit like my height. And my grandfather finds me in the middle of his party and he's got his tuxedo on because back then you wore a tuxedo to a party. And he has my letter is in the breast pocket sticking out of his tuxedo. I love that. And he grabs me and he pulls me into the hallway and he pulls my letter out. and he says to me, he said, honey, I was born in 1896. How am I supposed to know girls, that was the word he used, girls are interested in business? He said, but if it's something you really care about, because he had always said, I don't care what you do as long as you're passionate about it and really pursue it with all your energy.

11:31Penny Pritzker: He said, if that's something you're really interested in. Come spend time with me this summer, several weeks. And one of the things we're going to do is we're going to work on accounting. Because his view was, if you don't understand the income statement in the balance sheet, and you can't do T accounts, you don't really understand what's going on in a business. And so I did that. And first of all, it was magical to spend time with someone who had seen so much and had so much wisdom. But it also gave me a lot of humility about how hard it is to do what he had done. I love that. Also, what a great grandfather.

12:10That was a priority of his evening. I love it.

12:13Penny Pritzker: It was really fabulous. But I also appreciated his honesty. In other words, hey, you're stretching me a long way from where I started in my life. And so this is not necessarily comfortable, but I'm up for the challenge. So he also set a great example. I know. I really love it. I think it's something we can all do more of. Fast forward, you went to Harvard undergrad where you got a degree in economics, and then you went to Stanford for your MBA and for your law degree. So you got a lot of education very, very quickly. And when you came out, and actually an important stat, to this day, you have built almost seven plus businesses.

12:59And I'm sure that even underestimates some of them. And that entrepreneurial spirit was really, really there. Talk just a little bit about you. You finished, you leave Stanford and you start building businesses. How do you remember that?

13:14Penny Pritzker: When I finished graduate school, you know, I went and spent some time working with my family and I was in a quote training program and for about 18 months or 24 months and I was I feel like I did one of everything an acquisition a disposition I wrote a marketing report I had to do something of a little bit of everything but I felt and I said this to my uncle who at the time was kind of chairman of everything that we the family was doing I said you know look I love being here and I love working here, but I feel like I'm a fifth wheel. I don't think what I'm doing is making a difference. We have this idea to start a senior living company.

14:01Penny Pritzker: It's kind of floating in the ether at the hotel company. I'd like to do that. And I was 27 years old. I had a ton of formal education, but I didn't have real, and I'd worked through school and during summers and everything like that. But I'd never built a business. But I had an idea. I thought I understood what it meant to build a senior living business because my mother also passed away at a very young age and she was an only child. So I was responsible for taking care of my grandmother. And I realized a couple of things about that. One is my grandmother was lonely because many of her peers had passed away.

14:47She was bitter because of it.

14:52Penny Pritzker: And she needed care. But back then getting care, reliable care was really difficult. And all of a sudden I get a call in the middle of the night. Well, the person taking care of her because she was in a wheelchair had left in the middle of the night. And so I'm getting up at 26 years old and driving over to her house to figure out what to do. And I thought, there's a business in this. There's something there. I didn't know what it was. But I said, I want to go figure it out. I understood pretty well the hospitality business because I literally grew up in it. You know, from age five, I was going with my dad to our motels and checking out, you know, what was going on.

15:36Penny Pritzker: So for me, that was, it was a natural to try and start something. And also, frankly, Alexa, it was harder then as a woman to gain access to, let's say, fast-growing opportunities. And certainly there wasn't a clear path to leadership. and so I figured if I started something and built it at least it would be harder to get rid of me because I I was sort of theoretically essential to the business if you will so that and don't kid me that was part of the motivation uh uh so anyway that's how I ended up becoming an entrepreneur it was the way I felt that you know there weren't a lot of paths for me to grow in existing businesses, you know, the guys were kind of looking out for the guys.

16:32Penny Pritzker: And so I was like, okay, then I'll build it. I'll do it from scratch. And once you've done that, once you have, and you learn a lot. I made so many mistakes. Unbelievable the number of mistakes I made, unbelievable some of the bad decisions I made. But I learned from them. And what I learned is, is if you recognize you hired the wrong person. Literally, I didn't know how to fire someone. I had to call my uncle and I said, I hired the wrong marketing person, but I don't know how to fire them. Could you give me a tutorial on how do you tell someone it's not working out? And of course I was racked with guilt and everything.

17:13Penny Pritzker: Of course. But he helped me understand that when someone's not in the right job, they usually know it too. And that you need to help them understand that it's just not working. It's often portrayed as being very brutal. But this was really, it was clear that this person I'd hired, they didn't really, they weren't comfortable in the job either. So anyway, I learned a lot by doing. There's a natural value system in your history around the love of the builds. And you've even said it a few times, there's something honorable about it. And I think you and I have not really ever had the conversation directly of we believe there's something noble about building a net new business from scratch, taking a white piece of paper.

18:01I believe it's incredible because there's a lot of innovation rooted in it, right? When you're innovating, you're making something better. You're rarely building something that's worse than what exists out there. And so I always love that piece. Why do you think you like building things? Like what part about it makes you feel so that it's noble?

18:19Penny Pritzker: Well, I think there are two things that are important. First is to build a business that succeeds means you're filling some need that society has. Businesses don't endure if society doesn't need them. It doesn't matter how much effort you put into it. I think the other part that I learned, and I learned this as a young person, I watched my parents help the bellman become ultimately the general manager of a hotel, if you will, or I watched them helping people grow. And I really felt the humanity of that. I felt the, boy, if you can create a new entity that employs people and gives people purpose, and they feel belonging, and the culture is healthy, we've all seen unhealthy cultures, but you can create a healthy culture where people feel respected and trusted.

19:15Penny Pritzker: What's wrong with that? That feels noble to me. You and I also bonded over the fact that the innovation economy, the innovation part sector, startups, whatever you want to call them, those are often the part of the economy where you go from zero jobs to 5 ,000, 10 ,000. When a company grows dramatically overnight and it invents a lot of jobs, that's also pretty noble, right? That's what I mean. You're creating opportunity. Creating opportunity. And you're absolutely right. It is the humanity of helping people get to the top and pulling people along with the business. But then also just the fact that you're solving real problems for society and creating net new jobs, all while creating a lot of value.

19:57It does a lot of alignment. It feels good. It feels good. It feels really good. So just to quickly name some of them, Penny, you've co-founded more than seven companies. v. Senior Living, which is basically your like an early breakout to the concept of senior living in general. The parking spot, which we've all seen those around the airports. Artemis, obviously an incredible real estate, inspired with me here. And then, and I won't name them all. And then you went in to become the U.S. Secretary of Commerce for the country. And one thing I'm really proud of and it's pretty corny but um when you were there you're really known as the innovation leader and it's like bringing incredible innovation to the white house um and i mean the way we met was because you i remember getting an email from president obama which i thought like my husband was punking me and it was like would you become an ambassador to the country with on behalf of penny pritzker and u.s secretary of commerce and i truly was like this is not real and then quickly I was like, is this real?

21:02Oh, my God. Wow. But you were just innovating. You were thinking outside the box. You guys were doing things, not following normal playbooks and really trying to think about being in the White House and using the reach of the incredible love of America differently. Say more about that.

21:20Penny Pritzker: Well, first of all, one of the great honors of my lifetime is to serve our country. And if one ever has the opportunity, I highly encourage people to do it. You know, first of all, I think I didn't really know what the rules were in the sense of, oh, well, this is the way it was always done. So I treated it like it was a business and I just brought my entrepreneurial thinking to the table. And it forces you in government, you know, because you're moving from different topic to topic. You have to be agile, but you also have to be creative because there's always problems, right? You're not there to work on things that are working smoothly.

22:06Penny Pritzker: You're working on things that aren't working. And one of the things that President Obama was interested in, he gave a speech in 2009 in Cairo about one of the challenges in countries is there isn't enough job creation or there isn't a capital. available for entrepreneurs to succeed. And so he wanted to really promote entrepreneurship in the United States and around the world. And he felt that that might be a solution to some of the ills and the fact that there were a lot of people who just didn't have opportunity. And so that was the concept. What are you going to, you know, come up with something?

22:48Penny Pritzker: And so now you're sitting there and on a white sheet of paper, it's like, well, let's create president's ambassadors for global entrepreneurship, which you were one. And that's how we met is, was we selected you among one of 20 people. And we asked you basically, would you, and then we made it up. It was not like there was a playbook. We made it up and we said, we would ask you as a premier entrepreneur in our country, agree to once a year, go on a trip with either the president or the vice president or the Secretary of Commerce, Secretary of State, and promote entrepreneurship. And then we also asked you each to have some kind of philanthropic activity around entrepreneurship.

23:29Penny Pritzker: So set an example, be an example. The way you're an example every day to everybody here and with our founders, please do it on behalf of the country. So you and I are in Morocco, which is we were at the Global Entrepreneurship Summit, which was another thing that was created. It didn't exist. But I think that summit had like 6 ,000 entrepreneurs from the region who were all creating things. And you realize that the president was right in the sense that most people in many countries don't know what entrepreneurship is or their families are like, I met a young man. He said to me, he had a company that he had created that had$70 million of revenue.

24:18Penny Pritzker: And I said to him, what does your family think about this? And he said, don't tell my mother. And I said, what do you mean don't tell your mother? And he said, my mother thinks I should be working for an accounting firm or a law firm because it's a safe and steady job. But I created this company and he was obviously wildly successful, much more so than he would have been as a lawyer or an accountant. But it gave me insight into the culture, which is do something safe as opposed to take a risk. And I think we take for granted in this country the fact that we honor risk and we allow for failure.

24:57Penny Pritzker: In other words, you don't go to jail if you fail building a business. There are places you go to jail if you fail or if you, you know, are out over your skis in this world. So this idea of promoting entrepreneurship, entrepreneurship. It's not a law, but it's an idea that is important. I want to touch on this because it's something that you and I have talked a lot about, and we kind of term it here, inspired together, American ambition. And it's something I know we are both pretty crazily passionate about, which when you get outside of the walls of the United States and really learn a lot about many, many other cultures, you quickly realize we almost take for granted how much we root here in America for people trying hard, scary things.

25:46We root for people. It is part of our DNA. It is such a deep part of the fabric of this country, which is you show up and say, I'm going to go build something. People say, cool. And that is a subset of how we think about building and innovation. And it is so truly a part of our fabric, doesn't matter what your political position is, all parts of America root for people doing hard, exciting, scary things. And when you leave the walls of this country, you realize, to your exact point, that is so not necessarily, I mean, I know when I was younger, I thought that was sort of a ubiquitous thing. I thought every culture does it.

26:27When you really see it firsthand, and I remember in Morocco with you seeing it firsthand, how that is not normal outside in many other countries. And then you realize it is so important that we in America keep innovating because it's not like every part of this globe is innovating all the time. There are not enough innovators. And in fact, one of the things that we are truly to our bones is leaders of the planet showing people how to do scary things and take risk. And if you fail, you get back up and you try again. And again, I feel like it's sort of embedded in our brains that that's okay. But when When you see how much other cultures don't necessarily walk that so naturally, you realize that we need more people on this planet having that American ambition in them.

27:17And we need the American entrepreneurs swinging harder on behalf of the whole planet. Well, and also encouraging innovation elsewhere.

27:26Penny Pritzker: Yes. It's for sure, I think innovation and risk-taking is part of the culture and part of the DNA of the United States. but I also think it's good to encourage that evolution, which has happened. One of the things that happened from you being a mentor and others is incubators and accelerators got created in places you would never have imagined. And so it is, to me, something that has to be nurtured and promoted as much as it is something just to talk about. I remember, and again, I probably had dropped out of Harvard Business School. Maybe I was in my 20s. And I heard Bill Clinton speak at something.

28:14And he was talking about how one of the things he wished for the planet was that there were more people putting their hand up to take personal, emotional risk as entrepreneurs to solve more of the problems. And it had never dawned on me. I remember as a young person really leaving this talk that he gave and thinking to myself, I just assumed there were billions of people on the planet waking up every day wanting to do that. And when you really start to think about the problems, it's like, you know, forget Elon Musk's politics. You appreciate people that work 20 hours a day on behalf of society to try to do hard things.

28:54And I remember being really proud that I was so grateful I was born here.

29:03Penny Pritzker: Yes. I think we're both very lucky to be born in this country. Yeah. So quick flag. When you were in the White House, they called everything that you were doing the Innovation Agency, which is pretty cool. Let's be honest. That's pretty rad. Because you broke through in 100 years, there wasn't enough data and infrastructure to think about business for this country. And you really went in and kind of took your gloves off as an entrepreneur that you are. And you were trying to innovate inside the walls of the White House. And my question is, do you like walk around with your cup of coffee and be like, I work in the White House?

29:37Like, I mean, that's pretty cool.

29:39Penny Pritzker: I remember the first time. But give me a story of like you. So as a secretary, you're dropped off at the White House in the West Wing. You're dropped off in the west wing and there's a door you walk in and I just walked in all by myself and I walked past the guard and I walked up the stairs and I watched Pax and another guard and I was walking down the colonnade which you know that famous colonnade you've seen present and I was going over to the east wing for a meeting that was occurring there and no one's escorting me and no one's telling me and I'm thinking to myself oh my god and I walked by the you know the fountain that's on the grounds of the White House and I said and I'm looking at the Washington Memorial and I said to myself oh my god I work here and then I felt this enormous weight in the sense of the responsibility to bring your best self and bring everything you've ever learned in your life to the job.

30:43Penny Pritzker: And there were so many instances where I was studying hard and work. I felt like I was back in college and graduate school, you know, working so hard to, you know, be knowledgeable enough. And, you know, it's a real privilege to have those positions, but there's a real responsibility that goes with it. And one of the nice things that is possible is when you reach out to people like you and say, I need help. Would you brief me? Would you teach me? Would you help me? What are your perspectives? You could reach out to expertise all over our country. And we did a lot of that. I did that constantly for every country that I worked with and for each of the topics and really listened hard to what the challenges were.

31:36Penny Pritzker: So innovation, I was talking with someone about innovation today and the relationship between innovation and listening to the customer. And to me as Secretary of Commerce, the customer was the American business community. And so what I did, the first thing I did was when I got there was also we took the country and we divided it into eight different sections. And I went to each of those geographies And I met with large business leaders and small business leaders and leaders in the community, et cetera, and tried to understand what are the most important things you think are getting in the way of your building your enterprise more and creating more jobs.

32:22Penny Pritzker: And they were tied together because at the time we had 10 % unemployment and the goal was job creation. And it's funny when you ask people what they need for help, they're willing to tell you. And so then you try to figure out how can you be of assistance. So it's the other thing about the job is the scope. The scope is large. And so I've never worked on things that were as big. But the reality is it's still all about human relations. You want to get something done, you really have to build trust and relationships with people, both inside the government and outside the government, inside the United States and around the world.

33:02You once told me that what you learned about diplomacy is that as long as you're talking, things are working. And I will never forget that.

33:09Penny Pritzker: I asked, what are these dialogues? I don't get all these dialogues because I'm used to like you. Let's have a meeting. Let's figure out the outcomes and let's go, go, go. But in countries, for them to work together, they have to work through really naughty issues often. And I'm not talking about war. I'm talking about just even in times of where everything is calm, there's issues. We worked, for example, the digital connection between the United States and Europe was at risk. And the agreements that we had had fallen apart. And so we had to renegotiate what was going to be the digital trade between the United States and Europe during my tenure.

33:55Penny Pritzker: That was probably one of the most significant things it was worth about at that time. And it's only got to be multiples of it now. At the time,$280,$290 billion. At that time, I'd never worked on something that large and that big. But we were very serious working with the European Union to create what was called the privacy shield, which allowed for digital trade to continue and grow. There were all kinds of issues. You remember, privacy used to be something we were there for. I also worked on cybersecurity the beginning days. We put together a blueprint that actually the Trump administration, the first term, used for cybersecurity.

34:39Penny Pritzker: We also did all the groundwork for the CHIPS Act, basically. We were very early in terms of understanding what was coming. Today, we take Waymo or things like that, autonomy in vehicles or in drones and things for granted, but in order to actually for those things to function, you need access to the airwaves. You need all kinds of infrastructure that has to be put in place. We worked on all of that. So it was fun and exciting, but it was also opened my aperture to the technologies that we're living with today. Truly, basically you're building the policy such that we could have the things that we have today happening in this country.

35:26A few things I want to make sure I say. As the U.S. Secretary of Commerce, your job was basically to be able to dialogue and be in touch with every major CEO, not just in the United States, but around the world. And that access is pretty wild if you really think about it. And I feel like as your partner, I've seen some of that access being just profound, how quickly people. And I think there's something to that, which is that people really do want to help. And the response time to people that are trying to do really good things is very quick often. And being alongside you, I've seen that, just how quickly people want to reply and help.

36:08I'm going to move on, but I want to quickly confess one fun thing, which is I remember when you invited me to come to the White House, I obviously picked my fanciest dress and I was going to get to meet President Obama in the Oval Office. And we were all standing in there. And, you know, it was these incredible other CEOs. And I did feel like sort of a younger CEO in the room. And, you know, President Obama gets in front of me and it's my time to get to meet him. And he gave me a fist pump. And I almost just died of how cool that was just like, the President of the United States just fist pumped me.

36:43And I was just like, what a cool guy. And I don't get nervous often. And it was probably one of the only times I've been nervous in like the last decade. I want to move on before we get to some of the things that you've been tackling in just the last few years. But not only after being U.S. Secretary of Commerce, you know, you joined the Microsoft board, you chair Harvard's board. But I just want to take a minute. You did some really important work on Ukraine. And I remember when you called me and said, hey, Alexa, I'm going to, you know, I just want to inform you, I'm going to take a short-term role where I'm going to help the Ukraine, help Ukraine rebuild, which is pretty wild if you think about that after such a, you know, tragic time to be asked to go and do that on behalf of our country.

37:38Can you just like share one thing you learned about seeing a country through devastation have to think about rebuilding? I mean, that's resilience on a different level. And what did you learn?

37:49Penny Pritzker: Well, so I was a special representative. During that time, it was about 10 or 11 months, I went to Ukraine six times. But what I learned was a couple of things. What I learned about our government is, is when we put our mind to helping a country, And this was basically, I was asked to help them with their economic resilience. So everything from helping to figure out how do you open the Black Sea up to how do they get their exports out to, frankly, you're seeing today, I'm really, you know, feel proud of the United States that we did this. And I was very much involved in this. We've helped them stand up their defense industry.

38:39Penny Pritzker: And I think when Ukraine is done with this war, it will be one of the great defense industry centers in Europe, if not the number one center. But what I saw was, so one thing I learned was air defense is essential for security, is essential for prosperity. In other words, if you can protect your skies and then you can do all the things that we think about that are commerce, whether it's digital or it's analog, if you will. So figuring out how to deal with air defense was a big thing that I worked on. And you see now the problem that they're having because they're running out of air defense and we don't have the world doesn't really have extra air defense.

39:37Penny Pritzker: right now, I don't think. And so it's a real problem. But what I saw up close and personal was the ingenuity of the Ukrainian people, not just their leadership, down to the average person, whether it was creating the drone industry that they created. I went to a number of drone factories in places where you were not allowed to tell anybody where you were, where they were producing the drones that are allowing them to have the success that they've had in the war, to the amputees creating prosthetics, because you now have a huge need because of the bombing for many more prosthetics than one would need in, let's call it, a normal population and a normal existence.

40:31Penny Pritzker: And so the advances that they're making because of the commitment of their people, and frankly, the great education system and their ingenuity is really remarkable. And frankly, there's a lot for us to learn from them. A few years ago, I remember in a very short window of time. It was roughly 90-ish days. And I, as your business partner and co-founder, having a moment where I was like, wow, Penny has been in some of the most interesting conversations happening on this planet. You were on the board of Microsoft when all of the dynamics around open AI were happening, where there was that, I believe it was a weekend where it was like, is Sam in the seat?

41:16Is he not in the seat? What happens? Fast forward a short period of time when Harvard had to decide to stand up to the U.S. government. And as an alum, I remember having a moment thinking, wow, that probably felt like a big, hard, hairy decision. And I remember you telling me actually the values there were so clear. And then at the same time, you were using your free time to try to help rebuild the Ukraine. And I just remember being like, oh my God, Like, how is pen, like three totally different dynamics? And I'm still answering all my little phone calls for building businesses and doing all the things that we do here.

42:01You have been in some of the most complicated rooms, solving some of the most complicated problems. And I know we could talk just on this topic for a day and still not answer it. But can you just give us a sense of what you've learned? Like if you had to step back and think about in your career, you've seen even in more rooms that people can't be in and seen crazier hard choices and decisions.

42:25Penny Pritzker: I think one of the most important things to do when you face a hard decision is to step back and ask yourself, what are your values? What are the most important things you believe in? and how, as you face whatever the challenges you're trying to address, am I being true to my values? And when you use that as a framework, when you have a framework of this is my mission and here are my values, in a funny way, hard decisions are pretty easy. It's living with the fear of the consequence of making that hard decision that is often the hardest part. And I learned a lot from my friend Ken Chenault and Ted Wells, both of whom were on the Harvard Corporation at the time.

43:21Penny Pritzker: Ken talked a lot about the framework and Ted talked about fear. And I think in facing hard decisions, it's almost liberating to to acknowledge your framework and confront the fear. And the other thing I would say that I've learned that's absolutely essential in good times and in bad is you're not alone. Life is a team sport. You and I have built something very special here. We're doing it together. I've had the privilege of working on all different kinds of teams as have you. You know, when you go into tough situations with people that you trust and respect, that makes it easier, too, even if the outcomes are really lousy.

44:17Penny Pritzker: So, and you can't always guarantee you're going to get a good outcome. And hopefully in your decision making, no one gets hurt. But, you know, for in government, you're making really tough decisions. But I think having a framework, being really clear about your values, knowing who you can trust to talk about it, and frankly being honest about fear. I would say you're a pretty good phone call to have when things are really, really hard. Well, the feeling is mutual. Cool. But man, I feel like you really did teach me, which is if you align on your values and align on what you believe in, before you have to make the hard decision, the hard decision actually isn't about heart.

45:03It's just powering through what comes on the other side.

45:06Penny Pritzker: And then that's the power through. And I would say that's one of your superpowers is to power through. We're pretty good at powering through. Yeah, it's a, what do they say in Special Forces? You know, when the going gets tough, just keep going. Yeah, just keep going. We're pretty good at keeping going, Penny. I want to transition a little bit to Inspired. You have given me a compliment about the organization that we've now put together seven years ago, where you said that you really love our culture and our culture is really different. Can you just say a little bit more about what you mean about that, the culture you and I are building here?

45:45Penny Pritzker: Well, first of all, inspired as a culture of hustle. I mean, we'll outwork, we'll outmuscle, we're going to do our homework, we're going to work harder and be more responsive than basically anybody. And fundamentally, I think my mother used to say, I'll take an overachiever any day of the week. I think that hustle is an essential part of success. I think the second is the values we talked about. We deeply, deeply, deeply care about our founders and their vision. And we promise them if we go into business with them, we are going to be there through thick and thin to help them build a business. We talked about business building earlier.

46:30Penny Pritzker: I mean, we take pride and enjoy and we find it fun to build businesses. Other people find other things fun, but that's what turns us on. So there's a number of things that are fundamental to who we are that I believe will allow us to make better decisions and to do right. We take our fiduciary duty very seriously. Really, really. Yes. We're always thinking about our investors and thinking about what, how would, you know, making sure that they're aware of important decisions that are being made. It's not like they're over there and we're over here. No, we're all here. We carry that rock with us always and in our hearts because it's who we are.

47:22Penny Pritzker: So it's a place I'm very proud to be associated with and a group of people that I really enjoy and think are doing really exciting things. There is an athleticism. By the way, you're also somehow on top of all this triathlete, which is just bananas because I'm not a triathlete. I'll stick to the running. It's been a while, but I'm still training, but I haven't raced in a while. I feel like you're just so impressively bananas sometimes. I'm like, you do what? But there's an athleticism to us building business here, which is that. You build muscles. In a funny way, it's like training in the sense that you build muscles and you start to have pattern recognition.

48:05Penny Pritzker: But you also build muscles of learning how to be a good partner to a founder. I was trying to remember the two. You said intensity and care were the two pillars. Yes, exactly. I was like, if you're calling me intense, I don't know what that says. but I will take it. But intensity and care, and we really do bring it every single day. So we just closed fund four, our$450 million fund. And culturally here, you, me, the team out there, Mark, Lucy, Annie, et cetera, we tend to be kind of quiet in the way that we like to build. We kind of feel like this is a really long sport. We have to keep our head down and the results in the future will just continue to speak for themselves.

48:52And that's how we like to show up. It's kind of nice to be six and a half years in and start to have some things that we can actually share. Want to share some of the stuff we're proud of?

49:02Penny Pritzker: Well, I think first of all, let's just talk about getting to fund four. I think that less than 20 % of venture capital funds actually get to a fund four. And I'm particularly proud of the fact, and I know you are, that our investors have stuck with us. In other words, they've come in and seen what we're doing and want to stay with us over the duration, which to me is a really important sign of retention of folks who want to invest with us. The second is, I think we have 10 companies in our portfolio that are unicorns, which is amazing. And we also have 15 % of our core portfolio of companies that have revenues over$100 million.

49:52Yep. Where we were the first investor.

49:53Penny Pritzker: Where we were the first investor at the Seed and Series A, which is pretty amazing. I think we actually have one company over$500 million and several over$400 million in revenue. So, I mean, and that's across funds. That's not just in one vintage because often there are periods where it's easier to invest than others. So I think it's that consistent effort. I also think the other thing I'm particularly proud of is the way we go about constantly self-evaluating, constantly asking ourselves, are we the best embodiment of an early stage venture investor? And you always hold us to a massively high standard.

50:45Penny Pritzker: And I think we're top quartile in fund one. I think we're top 5 % in fund two. And fund three, we're just finishing the investing, so it's too soon to know. But we have some very early breakouts there. So it's exciting, but I think you and I are, as you said at the beginning, we're not really people to go out and sort of brag about what we're doing. We want the results to speak for themselves, but we're also asking ourselves, how can we do better? How can we do more? What's the next iteration of Inspired so that we can be best in the best? Yeah, it feels like we're just really getting started in a way where hopefully we can prove that we help our companies outperform, out-execute, and especially at a time when I think it's never been more important to build towards where the future is headed.

51:40I want to end just asking a few questions about the future. I know just in the last few weeks, we've been talking about the future of AI and what that means, you're sitting in the Microsoft boardroom, probably truly one of the most important companies on the planet around the future of what's happening. Give us just a sense of what it's like to be a fly on that wall and like what you get to learn. And again, you've been in the White House, you're on the board of Microsoft, et cetera. What can you see about the future and what gets you excited?

52:18Penny Pritzker: Well, I'm excited about, first of all, I think it's extremely important. I think Microsoft embodies this, which is to know your values. And Microsoft really is committed to this idea of trust and being there for the enterprise, i.e. the customer, as opposed to just existing for themselves. And so what I see is at a time when people are talking about the end of civilization because of AI, Microsoft is working on what's the bill of rights for individuals and for enterprises in the world. We're going to, AI is in our world. It's not going away. So we need to create rules around that. And I don't mean rules that are self-serving.

53:05Penny Pritzker: I'm talking about rules that are truly in the best interest of our customer. Humanity. And of humanity. First and foremost, humanity. And so I think that that is something that I am, do we always get it right? No. But I think it's really an important endeavor to try and figure out and to work to build a common collective support for doing the right thing. I mean, one would hope that at some point there will be regulation and things like that, but it doesn't feel like that's coming. So the industry is kind of trying to figure out how to do it itself. And the problem with that is, of course, is we're also in a competitive race with China in terms of AI.

53:53Penny Pritzker: And really, truly, that's the job of the federal government, not any country, any company can't do that alone. But the other thing I'm struck by is the humanness of uh of the endeavor in other words i watch the ceo and and uh our president and i watch them wrestle with what's the best approach what is the how do we serve our customer right i watch them listen we have that boardroom has a ton of people who are customers of Microsoft, and they are not easy on the CEO in the sense of saying, hey, here's what my team thinks. Here's what you need to get done. Here's how to improve. And the fact that that CEO invites that, doesn't want to skirt it, doesn't want to skirt it, but instead is inviting in feedback is, I think, is setting a good example for all of us.

54:55Penny Pritzker: We need to be closer to our customers. Now, what do I think the future is? I think one of the things in talking to CEOs is they're beginning to realize that the org chart is changing. The org chart is going to be people and agents. Yes. The org chart is also going to be less pyramidal. Our amazing company, Windmill, which is rapidly growing, is doing the exact work. Right. The skills that we need are evolving. And so a young person is going to be able to, and a person early in their career may be able to do so much more. But they're also realizing, how do I get the judgment that we need? How do I make sure the wisdom isn't lost?

55:39Penny Pritzker: And so I listen to thoughtful CEOs who are grappling with these questions. I talked to one today. He said, look, I'm not saying to anybody you're going to lose your job because of AI. What I am saying is if you don't embrace AI, that's when you're at risk. And so all of us, it's incumbent, all of us to learn and to push ourselves. I just went to MIT for three days and sat there and was doing coding with the professors and with my CEO and with our COO to really begin to understand what does this feel like And where are we going? Now, the challenge is the pace is fast. This is like nothing we've ever seen.

56:28Penny Pritzker: It is like nothing we've ever seen. And so it's requiring of all of us as leaders to adapt quickly. But I think we have to be very thoughtful about the human being. We're pushing humans really hard to adapt. And we're going to have to probably create more scaffolding for that. What the outcome looks like, there's many predictions. I don't really know. But what I do know is AI is not going away, so we've got to figure out how to adapt. And for me personally, I'll just add this, Alexa, I'm very interested in this helping people get the skills they need. It's always been a passion of mine, but even more so now.

57:14Penny Pritzker: And so I've got a number of endeavors going on in that area. It goes with the business building. That's right. It's noble to help people find their opportunity. And it's something you do every day, you know, in leading this firm. And it's something I care deeply about. As we think about the future, I know the team at Inspired wants to be known for huge bets, taking big, big, big swings. We always say we want to solve the biggest problems facing humanity because we think the biggest innovators and the best businesses are going after huge problems. I often say ideally even touching a billion people, that big of an idea.

57:55We obviously touch every sector. So we have defense tech, we have AI, you know, healthcare, consumer, robotics. I mean, we truly deep tech. Quantum. Quantum. And we really are here to find the best, the 0.01%, the best and the brightest, solving some of the biggest, hardest, hairiest problems where they want a team like us in the boat with them rowing really, really hard. and so I'm excited to see what we accomplish over the coming many years. I feel like we really are just getting our momentum fully kicking into gear here and I just am so grateful for everything that you have done for all the wisdom you bring and as your friend I'm grateful for everything that you've taught me.

58:47So thank you.

58:48Penny Pritzker: Well Alexa thanks first of all for having me. Most important thanks for being partners. We finally did this. We should have done it a long time ago. It is. We're so happy. It's a lot of fun and it's important and we're serious and we are not, we take the opportunity and the responsibility seriously and I'm proud of that. Thank you.