Continuing her trips to the country's startup hubs, U.S. Commerce Secretary Penny Pritzker paid a visit to Los Angeles on April 15. And L.A., often considered the underdog at least next to Silicon Valley, did not disappoint: "[When you visit] what you realize is how robust the startup community is there," she told Inc. "It's exciting to see, frankly, also the number of women that are leading companies in the Los Angeles startup area."
The Honest Company, the consumer products startup co-founded by actress Jessica Alba, hosted Pritzker and a group of L.A.-based entrepreneurs, business leaders, and investors for a roundtable on the agency's efforts to support startups and nurture innovation.
Attendees included Alba and her co-founder, Brian Lee, Cornerstone onDemand CEO Adam Miller, Riot Games co-founder Brandon Beck, Greycroft VC and partner Dana Settle, Comparably CEO Jason Nazar, Dun & Bradstreet Vice Chairman Jeff Stibel, Upfront Ventures partner Kara Nortman, Dollar Shave Club COO Kevin Datoo, former Microsoft SVP Michelle Matthews, Amplify Managing Partner Paul Bricault, and HelloGiggles general manager Penny Linge.
The session was closed to the press, but in a phone call with Inc. on Tuesday, Pritzker and Lee reflected on the conversation.
Immigration reform was one of the biggest issues for entrepreneurs in attendance, who spoke about the need to retain highly qualified talent that comes to LA from overseas.
"That was really a big concern for the CEOs... over 50 percent of students that are in doctoral programs in engineering, computer science, math, or statistics are immigrants and yet we don't welcome them to stay here," Pritzker said.
She noted the executive action President Obama has taken recently proposing new rules on L1 and H1B visas for specialized knowledge workers. "There are a lot of things we're doing but the reality is, we need comprehensive immigration reform and that was an issue that was very much on the minds of these companies."
In addition to immigration policy, Lee said that he was particularly interested in the government's action on global trade policies.
"Five percent of our revenues today are coming from Canada and we have to pay certain tariffs and duties there. We're also looking to expand into Vietnam, Japan, and elsewhere in that region," Lee said. "I think the Trans-Pacific Partnership (TPP) will help us achieve some of those goals and stay competitive in the global economy."
The TPP is a trade agreement among 12 Pacific Rim countries that was finally signed in February after seven years of negotiations, although it still must be approved by Congress--and during election season to boot. The agreement offers benefits for e-commerce companies such as Honest that are looking to grow their export business because it eliminates tariffs for thousands of U.S.-made goods.
On the phone call, Lee also addressed a more timely issue for Honest's industry, though it wasn't discussed during the roundtable. Honest has come under fire recently after a Wall Street Journal investigation discovered its detergent contains a chemical that the company promises not to use. On April 12 the Federal Trade Commission--an independent regulatory body from the Commerce Department--cracked down on consumer products companies that advertise their products as "all-natural." The FTC brought charges against five companies in particular. Honest wasn't one of them, but the rulings were intended to send a warning to the natural products industry more generally.
"The problem with the national industry that we play in is that there is no clear definition of natural. I think it's a great first step that the FTC is trying to help regulate this industry but I think it's up to other government agencies such as the USDA and other organizations to define what 'natural' is and what 'all-natural' is," Lee said. "We at the Honest Company do everything we can to create the safest most effective products in our ability using the most natural ingredients that we can. But with that said, there is no definition of natural."
As she's done on her other visits to startup communities, Pritzker used her L.A. visit to make a pitch to entrepreneurs to exit the startup community, if only for a time, to work for the government. "My pitch is simple: Come work in government for a year or two. You can work on projects that will have an enormous impact." Pritzker cited projects such as fixing visa applications so they're easier to do online or working on the Commerce data service to make Census and National Weather Service data more easily available to startups.
"Hundreds of projects like this need the attention of America's best and brightest," Pritzker said.