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 |  Subject: Chase Koch on Applying Market-Based Management to Social Justice Programs  Thu Jul 11, 2019 9:51 pm | |
| Chase Koch, the son of billionaire industrialist and libertarian megadonor Charles Koch, knows people have preconceived notions about him, Koch Industries, and his family, and they’re not the notions he’d prefer. So the younger Koch says he was surprised to a get a warmer reception than he expected when he reached out to people in Silicon Valley a few years ago, seeking to get tech-industry leaders into his father’s “Stand Together” donor network to support various organizations and public policy initiatives, and bring new technologies into privately held Koch Industries.
To Koch, who runs Koch Disruptive Technologies, the venture-capital firm within Koch Industries, the connections he’s built in tech illustrate how openness creates opportunity. He is still looking to connect with entrepreneurs to enrich the network and find companies that “help people improve their lives”—a common refrain at the “Stand Together Summit” last week in Colorado Springs, Colo.
As the Summit wound down, Koch spoke with Barron’s about his recent initiatives. His comments have been edited for space and clarity.
On Koch’s partnership with social-action entrepreneurs:
Over the last four years, we’ve ramped this up, [working with] organizations such as Urban Specialists [a job-training company], CARA, Cafe Momentum [a Dallas restaurant which trains and employs juvenile offenders]. It starts with that local entrepreneur who has been in that problem before, like Antong Lucky, founder of the Bloods in Dallas [and now a master trainer at Urban Specialists]. He had local credibility. [He can] talk to kids going down the gangbanger path.
[Stand Together] doesn’t just bring capital. We bring market-based management, our philosophy from Koch Industries, to put structure around it and help unlock potential. [We] see guys like Antong Lucky and Omar [Jahwar, also at Urban Specialists] take market-based management and make it go within their organizations. Sometimes they apply it faster than folks at Koch Industries, they’re so hungry for those ideas.
I’m passionate about this whole idea of “uniting with anyone to do right.” That strategy has helped what we’re trying to do and how we’re trying to help people unlock their potential. [Stand Together backs] drivers of culture [such as sports and music organizations.] The more we can open those networks, [the more] we start uniting with collaborators we historically haven’t had.
On KDT’s interest in Israel’s tech scene:
We’re 18 months in with KDT and it’s playing out pretty well. We’ve made a number of investments. The first was in Insightec out of Israel. We saw such a huge opportunity in Israel. The company [which developed technology for MRI-guided focused ultrasound] is in health tech. Koch isn’t historically known for being in the health-care market, but we saw this as an opportunity.
We just opened an office in Israel [because of] the tech scene there, and the entrepreneurship coming out of Israel. Almost all [the entrepreneurs] come from the military. They’re all exposed to software and cyber, and they have a tech mind-set. Koch can bring significant value by taking the technology beyond Israel. We hired a managing director. That’s our first office outside the U.S.
On creative destruction and cooperation:
People say, you started in crude-oil gathering and refining. How did [Koch Industries] get into 10 different industry sectors? The answer is, we have a capability-bounded mind-set, not industry-bounded. When my grandfather started the company and my father grew the company, we were good at operations, excellent at logistics and trading, and at engineering.
Where else can we point it? That got us from oil to gas to wood products to glass.
We’re looking at KDT the same way—that capability-based model helps get us into new areas [like health tech]. We wanted to have freedom to look at things that were disruptive. We believe in creative destruction; it is fundamental to how we think about things.
Openness is something that’s fundamental [in everything from investing to policy]: I’d relate that to criminal justice reform [Koch Industries is backing efforts to get companies to hire the formerly incarcerated], on which we are partnering with folks like Van Jones and broader coalitions, and being open to driving progress in ways that we hadn’t done in the past. If you can figure out where you agree with others and you both have strong capabilities, [you can] make something happen.
https://www.barrons.com/articles/chase-koch-on-applying-market-based-management-to-social-justice-initiatives-51562858370?mod=RTA |
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