American dynamism: Building critical tech beyond Silicon Valley

Executive overview

The American economy has deep sectors—defense, manufacturing, housing, education—that software has left untouched for thirty years. Venture capital's Silicon Valley playbook works beautifully for consumer and enterprise SaaS, but misses the largest structural problems in America. Andreessen Horowitz launched an American Dynamism practice to fund companies attacking these legacy sectors with modern technology. These aren't charity plays; they're massive businesses that will reshape the country and create holding-company-scale winners. The next wave of venture returns comes from building the physical infrastructure America actually needs.

Why venture abandoned these sectors

• Classic venture returns demand pure software plays with perfect unit economics; physical goods look "worse at Series A" and go deeper down the J-curve.
• Regulatory capture and entrenched incumbents make these sectors harder to innovate in than greenfield categories.
• Silicon Valley's geographic and cultural distance from Washington reinforced a 20–30 year "do not engage with government" mentality.
• The cost of starting ventures fell because founders could buy cloud, payments, and compliance off-the-shelf—but government still builds everything internally, bloating budgets.

Why now: Talent and founder types are changing

• Pre-COVID, ambition flowed one direction: move to San Francisco or New York. The myth was law.
• Remote work broke the geographic lock. Founders now stay in hometowns, bringing insider knowledge of local problems (crime, manufacturing delays, housing constraints).
• Founder archetypes shifted: former teachers, defense procurement officers, and immigrant builders with domain expertise are entering tech—not just computer science majors.
• "The Social Network" (2010) merged tech into mainstream culture; a decade of cheap capital made starting a company an accessible escape from declining institutions (newspapers, academia).

The intelligence and conviction gap

Katherine Boyle spent 10 years at the Washington Post covering tech's collision with legacy institutions. She saw the 2018 story: Palantir, SpaceX, Lyft were already doing government's work in the shadows. Silicon Valley wasn't admitting it; founders and investors downplayed these deals because the cultural default was "government is hard."

• Washington and Silicon Valley operate on opposite incentive systems: power is scarce and hierarchical vs. capital and success are abundant and distributed.
• Defense and civic tech companies don't look "popular" until events like Ukraine force the reckoning.

Flock Safety: The case study of distributed American dynamism

A YC company building AI-powered license plate readers. Founded in Atlanta by Garrett Langley (second-time founder), not San Francisco.

• Started: Langley wanted to solve crime in his city and built cameras for homeowners associations.
• Expansion: As these cameras solved kidnappings and crimes, they generated local press; police chiefs called inbound.
• Now: 30 states, scaling across public safety without ever chasing government as a customer.
• Lesson: Build for your community's actual pain, place, and talent. Buyers will follow.

Hadrian: Manufacturing automation in Los Angeles

Chris Power (immigrant founder) initially raised a private equity fund to roll up aging machine shops—then realized private equity can't solve the structural problem.

• The insight: Machine shops are built on 50-year-old software. You can't bolt software onto legacy operations; you must build new factories from scratch with automation.
• The mission: Upskill the next generation of American machinists so they don't need to apologize for working with their hands.
• Why LA: Proximity to aerospace and defense customers; it's the heart of the sector, not an outpost.
• This is what 1950s Silicon Valley looked like: people solving real military problems in their own region with the latest tech.

Decentralization and the small-tech revolution

• Venture invested in SaaS, then biotech, then AI. Each became a "category." American Dynamism will follow: every major VC firm will eventually have a practice because these are the biggest markets in the country.
• Substack, Shopify, and capital availability are enabling a small-business revolution. Creators and founders can now be small-tech companies that employ people, pay taxes, and solve real problems.
• The internet flipped the power dynamic: talent distribution (remote), brand ownership (creator economy), capital access (democratized)—all no longer require living in a specific hub.

The American experiment as thesis

• 50% of unicorn founders are foreign-born; they testify to the American dream in ways native-born founders take for granted.
• Founders are misfits and contrarians escaping broken systems. The escape velocity and optionality America provides is unique among nations.
• Miami example: Unlike Silicon Valley's false humility, Miami celebrates success and hustle; that confidence in capitalism and hard work is the American ethos that should spread nationwide.
• Government runs 50 years behind the private sector in tools, culture, and speed. Closing that gap will require a generation of people who don't see government work as a consolation prize.

The journalism connection

Boyle left the Washington Post in 2014 during layoffs and decline. She initially didn't frame it as an ideological choice; her editor told her: "You're young enough to do something new."

• Journalism taught her to find cultural shifts before they hit mainstream awareness—a skill that transfers directly to venture spotting.
• Old media emphasized neutrality; new media is personal brand and activism. Both models exist now; they're not replacing one another.
• The greatest loss: individual journalists are now more valuable than institutions. Institutions no longer gatekeep narratives.

What to believe about American dominance

• The math: 70 years of compounding innovation in Silicon Valley built the infrastructure that undergirds all modern life. At some point, that leverage becomes society-wide.
• Continuation isn't guaranteed. Competition from other countries using the VC model is rising. But America's openness to misfits, its capital markets, and its willingness to question authority remain hard to replicate.
• Moral foundation: Freedom, democracy, free markets, and opportunity to escape your starting conditions. For Katherine, that's not an abstract ideal—her grandfather drove a truck with an eighth-grade education; she's the proof it works.

Takeaway for founders

If you have conviction about a structural problem in America and you see a way to apply modern tech, you no longer have to prove yourself in San Francisco first. Start where the problem is. Reach out to Katherine or Andreessen directly on Twitter or Substack. The era of forced geographic centralization is over.