Keith Krach – Businessman, Former Diplomat, and Nobel Peace Prize Nominee | Navigating Tech & Diplomacy

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About The Guest

Talking Points

• 00:00 — Intro
• 05:29 — Origin Unveiled: Keith’s Extraordinary Journey
• 07:01 — Awakening Abilities: The Key that Unlocked Everything
• 13:54 — Tech Diplomacy: Bridging Nations through Innovation
• 18:42 — China’s Ambitions Unveiled: A Global Power Play
• 24:18 — Taiwan’s Significance: A Key Battleground in US-China Relations
• 28:33 — Safeguarding America: Keith’s Principles in Action
• 34:36 — Galvanizing the Masses: Unleashing the Power of Paradigm Shifts
• 38:11 — Strategies Beyond Borders: Empowering Non-NATO Nations
• 41:24 — Unpredictable Tactics: China’s Strategic Moves in Focus
• 45:45 — Purdue’s Mission: Revolutionizing Education and Innovation
• 48:00 — A Nobel Nominee’s Journey: The Honor of Peace
• 51:00 — Connecting with Keith: Building Bridges in the Digital Age
• 51:38 — Beyond Success: Keith’s Unyielding Pursuit of Goals
• 56:20 — What Keeps Keith Up At Night Now?
• 59:07 — Life’s Influencer: Lessons from the Most Impactful Person
• 1:01:37 — Overcoming Adversity: Keith’s Triumph over Challenges
• 1:05:19 — Must-Reads and Must-Listens: Keith’s Recommendations for Growth
• 1:07:03 — Advice to the Young: Words of Wisdom for a 20-Year-Old
• 1:08:20 — Defining Success: Keith’s Personal Perspective

Show Links

• https://www.instagram.com/keith_krach/
• https://twitter.com/KeithJKrach/
• https://www.linkedin.com/in/keithkrach/

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Machine Generated Transcript

SUMMARY KEYWORDS

business, china, world, called, companies, ceo, netsuite, general motors, diplomacy, technology, trust, great, bravo, podcast, keith, docusign, undersecretary, democracy, worked, arriba

SPEAKERS

Scott D Clary, Keith Krach

 

Scott D Clary  00:00

You were nominated for the 22 peace prize walk me through what that feels like.

 

Keith Krach  00:05

God it was. It was a shocker.

 

Scott D Clary  00:11

Today, my guest is Keith Croft, former US Undersecretary of State for Economic Growth, Energy and the Environment, the first and highest ranking State Department official who had the guts and the strength to visit Taiwan. Even under China threat. He was the first official in the US to do that since 1979.

 

Scott D Clary  00:29

The things that you deployed in Taiwan in particular, why does that tie back to the impact that China could have on the US

 

Keith Krach  00:36

Taiwan is a lynchpin for democracy and a role model of freedom. That’s where they are to the free world. Now to General Secretary xi, what they are is they dispel his myth that the Chinese culture cannot live under a democracy, but it has to live under authoritarian rule. And he wants to

 

Scott D Clary  01:00

Talk about the current state of China, what they have under their control what they’re trying to do, how does that impact us? How do we fight back against that?

 

Keith Krach  01:10

I got asked by Senator Coons and he said, Keith, what would your strategy be to combat China’s economic aggression? And I said

 

Scott D Clary  01:23

Welcome to success story. I’m your host Scott Clary. The success story podcast is part of the HubSpot Podcast Network. Now, the HubSpot Podcast Network has incredible podcasts like my first million hosted by Sam Parr and Sean Perry. They interview some of the most incredible business leaders, Alex Mozi, Sophia Amoruso, Hassan Minh Hodge, who share their journey to success and how they made their first million on a recent episode, they featured the acquired podcast hosts Ben Gilbert and David Rosenthal to discuss how they scaled their multimillion dollar podcast. Don’t sleep on my first million if you want to get inspired. If you want to learn from the best, you got to tune into my first million wherever you listen to your podcast. Today, my guest is Keith Krach. Keith is a former US undersecretary of state, as well as the CEO of DocuSign and Arriba. He’s been nominated for a Nobel Peace Prize in recognition of his work, defending against Chinese techno authoritarianism, and leveraging the United States technology advancements towards a new form of diplomacy. he’s inaugurated the Kroc Institute for tech diplomacy at Purdue. They address emerging challenges such as artificial intelligence hypersonics, synthetic biology, sourcing of rare earth, minerals and semiconductors, quantum computing, 5g and 60 communication networks and Energy and Climate innovations. As a tech sector pioneer who co founded arriba and led DocuSign growth and IPO. He was the youngest ever vice president in the history of General Motors and the highest ranking US diplomat is Taiwan since the United States recognize a communist government in Beijing. He has quite the story to tell. And he’s one of the few high ranking individuals that was in the Trump administration that continued to have an important advisory role in the Biden administration, helping ensure policy continuity with respect to China, and US leadership in tech diplomacy. So we spoke about Keith’s origin story, we spoke about his humble beginnings in Ohio, he worked in industry, he worked for his dad’s business, and he was obsessed with technology and innovation and disruption, which obviously, translated into all the incredible companies he worked for and grew, and eventually exited. Of course, being CEO of arriba, and DocuSign, as well as all the other things that he’s done is no small feet. But over the course of his career, he noticed that innovation and disruption, if you play fair, that’s great. But you understand that there’s other players in the world that don’t play fair that don’t have that same ethical and moral compass that always guided the companies that Keith built. So he decided to take a stand against it, he understood the problem. And he worked with the US government as Undersecretary of State to create a trust principle, which fought back against techno authoritarianism. I’m going to tell you exactly what that is, and so will he, and also how it really impacts the US. And the battle that he won over 5g with China, the levers that he pulled in order to make sure that China does not dominate the US when it comes to technical innovation. And he did that through a variety of means, but a lot of it was based on galvanizing countries that had the same moral compass as the US and focusing on the things that differentiate the US and make it the greatest country in the world, which is democracy. Then we spoke about the lessons that he learned actually combating China 5g, they won that battle, and then the things that we have to look out for in the future, the risks that are very real to the US. We speak about all the things that he has done as Undersecretary of State. We speak about the trust principle we speak with a clean network alliance of democracies. We speak about why companies have to have a China plan, similar to when companies political Russia because of Russia attacking Ukraine, do you have a China plan for your business? And lastly, what is technical statecraft? And why do we have to worry about it? And this is something that he’s very focused on right now. So let’s jump right into it. This is Keith Krach, former US undersecretary of state as well as CEO of DocuSign and arriba.

 

Keith Krach  05:28

Well, you know, my father had a five person machine shop. And in good times, it was just me and him in tough times, I was welding at age at age 12. The customers were, you know, the big three, three auto companies. And I learned I learned so much from from that experience, and my dad had a great yeah, he had a great sense of humor, you know, he’d answer the phone, let go industries steel fabrication, division, John, crocks, Biggie, Director of Sales, how may I help you and I will go, Hey, Dad, you know, there’s only three of us sitting here he goes, That’s right. You know, our customers are the big three. And, you know, we specialize in quality service, don’t let them cover to the factory. But, you know, it was great experience, you know, he wanted me to go off and get some college knowledge, and become an engineer, so I could grow the machine shop to a big company, maybe 10 people. And, you know, although I didn’t go back, I think he was, he was proud that, you know, I went to Purdue and studied engineering and, and General Motors gave me a fellowship there. And also then the business school. And then I ended up going to General Motors, matter of fact, you know, that fellowship. In business school, they paid me a half salary. So when I graduated, I actually bought my dad, for the first time a new car, I bought a Delta ADA diesel, General Motors car way back that.

 

Scott D Clary  07:01

When When did you when did you first get fascinated, interested in technology? When did you because you’re you’re working in industry at a young age, and you’ve been in, like every single industry possible that has been transformed over the past? Like, I don’t know, 2030 years. So robotics, engineering, commerce, education, diplomacy, philanthropy, like everything you touch seems to, you’re always at the right spot. Right time. So what was that catalyst? What was that first thing you did? That that made you understand that you had an exceptional ability to disrupt, to innovate to influence? And I think if I, you look at your incredible career, that’s kind of the That’s that point in your life led to so much more. And I want to understand what that point was.

 

Keith Krach  07:52

Yeah, you don’t, I think it was, it probably started in the factory, because, you know, I love working on the machines. And. And then when I went off to General Motors, you know, my first job at age 19, was as a production foreman, second shift, chassis line for Cadillac. And it was the only Cadillac plant in the world. We had 15,000 employees. So I was, I was fascinated with automation. And then my second year in Harvard Business School, I wrote is kind of like a mini thesis on utilization robotics to the Japanese auto industry. And so when I came out of business school, they said, Hey, because that also work in the New York treasurer’s office, and they said, Hey, what are you interested in? I go robots. And they said, Well, we have a super, super secret robot project, the most sophisticated robot in the world at the General Motors research lab. And back then GM was the biggest company in the world, 1.5 million employees. And they said, We don’t know what we’re going to do with it. We don’t know what, what. But we’d have you do I go, That sounds perfect. And so next thing, you know, I’m presenting to the board of directors at age 24, that General Motors should get in the robotics business. And, and brought it to my surprise, they said, Okay, let’s do it. How should we do it? I’m like, can I come back at the next board meeting? And I really was scared about it. And I hadn’t worked, you know, in the director’s office, that’s a staff for the board of directors had worked for a guy named Rick Wagner, and it’d be the CEO and chairman for like, 10 years. And so I came back and I said, well, we need a much broader product line. So we needed a joint venture with somebody and they go, okay, yeah, that’s a good idea. With who I go, can I come back in a month, and I came back and now understand the board back there all World War Two veterans. I said we should, we should do the joint venture, we should partner with Fujitsu FANTIC. At a go, you meet a jab at ease ago. Yes, the Japanese. And it was a brilliant operation to this day. It’s the largest manufacturer of industrial robots in the world. And at that end, we put GE, IBM and Westinghouse out of business, we became an industry leader by a factor of four, the average age of our team back then was, I don’t know, probably mid 30s. I was 26 when I became the VP of it. And it was a great experience. And that really got me going on technology. And then we were selling a lot of robots in Silicon Valley and the disk drive business. And, and I was fascinated by that. That’s why on my 30th birthday, I left General Motors, which was unheard of in those days, people thought I was nuts, to head on out to the West Point of capitalism, you know, the, the the United Nations, you know, the United Nations, you know, of business, and then the ultimate meritocracy with a premium youth. And we have to

 

Scott D Clary  11:11

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Keith Krach  16:28

headed out to Silicon Valley.

 

Scott D Clary  16:30

And when you when you when you look back at some of the problems that you’ve you’ve tried to solve and actually mentioned, like a few industries, and I, you know, incorrectly didn’t even cover the full scope of all the things that you’ve worked on. When you look at like the next problem you want to solve. You You are a disrupter, you look at an industry and you and you look like 10 years, 15 years ahead. And that’s probably how you’ve achieved most of your success. And that’s thinking different and you were wired that way from a very young age. So when you go into a variety of different industries and categories, we don’t have to go into all of them, because there’s been a lot. But how do you look at an industry? How do you how do you pinpoint because the serial entrepreneurship across multiple categories? That’s incredible. The very few people achieve, you see people that go into same categories again and again. But you’ve done it in so many different industries. What’s that secret? What’s that lens that you look at the business through?

 

Keith Krach  17:23

Well, in a phrase, I would say it’d be challenged the status quo, I would also say it would be look for a technology paradigm shift. So for example, the one after General Motors was in engineering design software. And back then they had just come out with a thing called workstations that had the power of a mainframe. So you could do all kinds of things with that. And we developed this new technology called mechanical design synthesis, where you could optimize designs, you could literally press a button, and it would redraw it for you. And it’s my son, my oldest son who works at NASA’s Jet Propulsion laboratories utilize that technology, you know, and, and, for example, when we started this company called a Reba, we invented business to business, electronic commerce, this was back in 95. And the internet had just can’t come out. So it was the first enterprise application written on the internet. So it’s always kind of on the cutting edge, you know, DocuSign was, it was, you know, cloud computing, and mobile has just really come into its own. Because when there’s a paradigm shift, what that means is all the old legacy players go back to kind of ground zero, so you can disrupt them, so you can challenge that status quo. So that’s, you know, I think that’s been the key. But at the end of the day, you know, the number one job of a CEO is to build a high performance team. And I really believe the company with the best people wins. The key is getting them working together as a team. And especially the key is to have different temperaments, talents and convictions. Because that diversity of thought is the catalyst for genius.

 

Scott D Clary  19:10

I love that. And as you you go through your career, you’ve had multiple successes, taking multiple companies public the concept of tech diplomacy, which is now what you’re focused on, mostly. How did that how did your career in private industry, in public industry in government, how did that inform and help you understand that this was something that you wanted to take on at this point in your life, and I want you all to describe what tech diplomacy is, because candidly, there’s a lot of subjects that I speak about on this podcast, and tech diplomacy. I’ve actually never heard it before. I, you know, started researching for our show, and we’re, you know, trying to do the research and figure out what exactly this is, and why is it relevant and what does it mean for the average person? So let’s understand where this where this passion for tech diplomacy came from, because it’s highly relevant now. And what is it and why are you working in it?

 

Keith Krach  20:00

Sure. So where it really came about was when I was running Docusign. And we were up to about 500 million unique users around the world, we had entered every major country except for China. And I went on a two week listening trip I use, usually we do that if we’re going in a big country. And I’ve been going there since 1981. I mean, I’m a lover of Chinese history, culture, the people, of course, the food, but, but this time, it was different, I could see that their traditional market competition was amped up into a new form of techno economic aggression. Under General Secretary, she, you know, I had a chance to see their Dwar their their drone swarm technology. I learned about the One Belt One Road initiative, which is look like a military supply chain to me, they were telling me to download 10 cent. Every 30 minutes, I met with five of the top seven polar Bureau members. And as I was getting back on that played a blank on, you know, the guys with the best technology went to war. These guys don’t see my good guys to me. And I go, I wonder if the guys in Washington know about this. And I really, I didn’t know really anybody in Washington or the administration. So a week later, I went out there, I made it my mission to do that. Next thing, you know, I’m in a room, explained about China, and they go, have you ever thought about serving your country, Keith? I go, Well, that’s a dream I never knew I had, I’d be honored. They go, can you move, I go, I can move anywhere in the world. It’s the fastest decision I ever made in my life. So that’s when they sent me to the State Department to run US economic diplomacy. And my mission there was to develop and operationalize a global economic security strategy that drives economic growth, maximizes national security, and combats economic aggression. And so one of the first things that I did, as always, is I brought in a great team. It kind of unheard of in the State Department, I brought in 12, folks from Silicon Valley, results oriented execs, entrepreneurs, technologists, and we combined it with the greatest Foreign Service officers and civil servants imaginable. And it ended up to be just a dynamite team. And so tech diplomacy, what that does, is that combines Silicon Valley strategies with foreign policy tools, based on a thing called the trust principle, which was a doctrine we created to defeat China’s master plan to control 5g communications.

 

Scott D Clary  23:08

Just want to take a second and thank the sponsor today’s episode, HubSpot. Now, if you’re growing a business, you’ve got a ton on your plate, you need more leads, you need to close deals faster. And to get better insights. To connect with our customers. You need a CRM, one that works from day one gives your teams a central source of truth, and helps them do more faster. That’s why you need HubSpot. HubSpot is an all in one CRM platform that will accelerate your business growth without slowing down efficiency. With 1000s of customizable tools like ad tracking, social media management and an AI content assistant, your teams will have everything they need to convert prospects to qualified leads. Plus, you can customize your CRM with apps and integrations that meet the needs of your business at any stage. So as your business grows, HubSpot CRM grows with you get started for free today@hubspot.com. It’s incredible what you did, because everything that you just said that you did is something that I speak about, in regards to the issue with government is that they don’t move quick enough, they don’t have outside thought coming in. So you effectively brought in some of the top talent in Silicon Valley, you applied that to a to an actual administration, and you brought them in and now you’re actually solving problems at the speed and with the, you know, the the lens that Silicon Valley exec would look at a problem versus a career politician. So that’s something that can actually make incredible moves. Now. When when you go down this pathway, you move from private, you were in public and you move from that into government. What the talk about the current talk about the current state of of China, of what they what they have, under their control what they’re trying to do, how does that impact us? For example, even if I think about foreign investment into startups in In the US, what do we have to be wary of? How do we fight back against that?

 

Keith Krach  25:05

Sure, sure, you know, I kind of had a chance to see it my whole life, because you know, what I could see through the years, you know, through my dad’s company back, you know, in Ohio, in the Midwest, I could see that China’s weapons of mass production had devastated the heart of our economic engine. That’s, you know, small and medium sized manufacturers. When I was a vice president, General Motors, I could see if he built a plant in China, you weren’t just giving them the blueprints, you were giving them the process engineering, how to build it, and also training their people so they can come back and compete again, which I also when I was at arriba, we had our intellectual property stolen from Alibaba. And now what we see is the reality we face as a nation. And as a free world is seemingly ceaseless, intense variation of weaponized economic competition. Because our rivals are playing the long game, they’re playing for keeps, they’re playing a four dimensional game of military, economic, diplomatic, and cultural chess. And at the intersection point, and the primary battleground is technology. And worst of all, these authoritarian regimes have no respect whatsoever, for rule of law, for property of all kinds, for sovereignty of nations, for human rights, for the environment, for the press. And, you know, we have to raise our our game, and there is nothing static, about superpower advantage. And so we and the world needs American leadership. So that’s what you know, this was all about. And when, when I had my Senate confirmation hearing, I had the good fortune, rare fortune of being unanimously confirmed was I got asked by Senator Coons. And he said, Keith, what would your strategy be to combat China’s economic aggression? And I said, I would harness you as his three biggest areas of competitive advantage, by rallying and unify our allies and our friends, by leveraging the innovation and the resources of the private sector, and by amplify the moral high ground of democratic values. And that turned out to be an enduring model now, that is used and the Biden administration to combat that aggression. And it was that strategy combined with that trust principle, that enabled us to defeat that master plan for 5g We also use it to create a thing called the Blue Dot network, which is an equitable and unifying alternative to what China has called the One Belt One Road or as a Malaysian finance minister called the One Belt One way toll road to be Jiang. This is where China goes all over the world, and creates these debt traps with these low income nations takes advantage of build their infrastructure, puts their you know, they literally devastates the environment. They also really take advantage of the people in that country. They don’t leave him with any skills, and they leave him strapped for cash. So we also use it and strengthening US Taiwan ties. So I was the highest State Department official visit Taiwan in 41 years, I was, I was greeted with 40 fighters and bombers. And we use that trust principle put together a thing called the economic prosperity, partnership and a number of other things, also use that to call out the human rights abuses against the Uighur Muslims in a western part of China called Xinjiang. And, and on July 4 2020, on national TV, I call it called out that genocide I was first government official do that. And so that trust principle was really the basis of everything.

 

Scott D Clary  29:35

And, and why was the you know, I think it’s because you’ve you’ve dealt with and observed China for so long. And maybe that’s the answer. But why were these particular causes so important to you? Because there’s a lot of other things that threaten the US in terms of their equity, economic prowess, and there’s other other countries obviously China is one of them, and we look at Russia as well. And I’m sure there’s a few others that probably are trying to compete on various levels. But the things that you deployed in Taiwan in particular, why does that tie back to the impact that, you know, China could have on the US because I think Taiwan is in a precarious position right now.

 

Keith Krach  30:14

Rich, Taiwan, is the linchpin for democracy and a role model of freedom. That’s where they are, to the free world. Now to General Secretary she, what they are, is they dispel his myth that the Chinese culture cannot live under a democracy, but it has to live under authoritarian rule, and he wants it gone. And, and by the way, two companies around the world, China, US conflict would be devastating and literally catastrophic for the high tech business, because in Taiwan, that’s where they manufacture the most sophisticated semiconductors in the world, which is the foundation for all, you know, for all technology. So this is this is really a big deal. And if you think of China is the biggest threat to freedom and democracy around the world. And, you know, it was interesting. When I was undersecretary, and this was in January 2020. I came back from Washington to my home in San Francisco, I hosted 36 of the top CEOs in Silicon Valley, you’d recognize all their names, all the companies, they may have been here before a safe environment, I asked them go around the room and tell their China horror stories. And you know, I can’t talk about the contents of that meeting. But I can tell you this is that they, it, I’d say it was cathartic. It was enlightening. And it was frightening. All it was Scott. And at the end of it, I said, you know, guys, we say out here, that corporate responsibility, social responsibility. It’s also national security, its global economic security, too. Because not only is China really an urgent threat to our democracy and our freedom, but they’re also really an urgent threat to our businesses. And so if you think of the things, it’s got the We Are those things like respect for rule of law and property and the environment, human rights. These are things that we are and authoritarian regimes like Russia and China do not. And they, as a matter of fact, they use it against them for their strategic advantage. So think about this guy. So let’s say you’re a Silicon Valley CEO. And I’m a Chinese company. So if I could steal your intellectual property, if I don’t have to be transparent, if I can use slave labor, if I can use cheap, huge energy, coal fired power plants, if I don’t have to be reciprocal with my market, if I either am the law, or I don’t have to obey the law, I’m going to beat you every time. And so and a US co-option coercion off all this stuff, no respect for human life. That’s what we call the power principle. So we did is we created his doctrine called the trust principle, where we actually use the dollar advance advantage. So one jujitsu move, we flipped them on their back. So we actually weaponized the very principles that protect our freedom.

 

Scott D Clary  33:50

So walk me through. So I’m super curious, because you were successful in the campaign, when they were trying to basically control 5g. So if you wanted to deploy this strategy against future tech, because obviously this is going to be a recurring thing, it’s not like a one and done. How do you actually, how do you actually because all the things you mentioned before, are, are are great, and they’re nice, and they’re high level but tactically, that you’re allowed to talk about? How do you actually deploy this principle to safeguard to protect the US? What are the levers that you pull?

 

Keith Krach  34:26

Yeah. So by the way, it applies across all areas of technology and all areas of economic competition, maybe even some military areas. So what was going on with 5g because it’s a great case study. And by the way, we extended it to cloud computing, we extended applications with underwater cable, plastic, it can be applied to clean currency, it can be applied to electric vehicles, all that. So this was back in In early 2020, so it was in China had a master plan to control 5g and 5g is way more than a cell phone. The speeds are so fast that it control power grids, utility systems, sanitation systems, manufacturing processes, Internet of Things. It carries people’s most personal data government’s most precious secrets. And it looked like their national champion, Huawei, who’s the backbone for their most important company, and their backbone for their surveillance state enabler genocide was gonna run the table. There just announced 97, 5g deals, you know, 47 of them in Europe, and US efforts were failing. And we got the authorities within the government to go make a last ditch effort. And the reason why the previous efforts were failing. So predecessors going around in different countries banging on a table saying don’t buy Huawei. So as guys from the private sector, we said, hey, why don’t we just treat him? You know, these other countries, these telcos like customers, and the customer’s always right, and we need a value. Nobody likes to be told what to do. And we need a value proposition. So to partner with us, and that was key. The other thing too, the most, the biggest key comes back to this issue wasn’t a technology issue at all, Scott, it was about trust. And in my first 60 bilaterals is undersecretary of state where I meet with Foreign Ministers, finance ministers, economic ministers, you know, I’d be in a meeting, I’d say, Hey, how’s your relationship with China, they would say, all other important trading partner, you know, they’re number one, number two, and then they kind of look both ways, like somebody’s in a room with a needle, but we don’t trust him. And that rang bells in my head, because just a year before, I’m standing up in front of all the DocuSign employees go, we’re not in a software business. We are in a trust business. We deal with people’s most important documents. Those are the ones you sign. And trust is the basis of every late relationship, personal business or otherwise. You do business people you trust, you partner with people to trust you buy from people you trust, you love people you trust. And boy, 5g is a trust business. So we go around to these companies. These Telco’s would say, Who are you going to trust with your citizens? Personal data? Who are you going to trust with your company’s proprietary technology? Who are you going to trust with your government’s most precious secrets? And that was what we deployed. And it really was a successful strategy. Now, we did a lot of things that were non traditional in government. An example was, we called on foreign company CEOs because we knew so many of them we were calling on the telcos. But like Deutsche Telekom, or there’s one in Australia, Telstra, these are the ATI T’s of these different companies and T T. To get, you know, to get them on our side, by the time we were done. In less than a year, we had 60 countries representing over two thirds of the world’s global GDP. 200 Telco’s and a host of industry leading companies on this clean network. And this is what defeated him. And in that process, we expose their biggest weakness, which is lack of trust. Nobody trusts these guys. And that was, that was the key that was the street key strategic positioning. And this ended up being the first government led initiative that actually defeated China egg and now has turned into this bipartisan bipartisan model. That is bridge from a Republican administration to Democratic administration. And you know, when you look at what’s going on in Ukraine right now, those courageous Ukraine a that a heartbreaking atrocities that Putin is commit. This is what we need more than ever is this alliance of democracies. Because if you look at if you look at these authoritarians and xi in particular, what is his strategy? His strategy is to divide and conquer and pick off the weak is all from the herd. And I you couldn’t even believe how intimidated that countries and companies are of China because they have a formula of intimidation, retaliation retribution. So with the clean network provided was a security blanket. Because there’s strength in numbers, and there’s power and unity and solidarity.

 

Scott D Clary  39:52

Do you feel like the fact that you deployed this and now you have the clean network and there’s a model that we can work off of? Do you feel like kind Countries, private companies are going to feel safer collaborating on on similar things in the future. Do you think we’ve sort of seen a paradigm shift and galvanizing people?

 

Keith Krach  40:12

By the way? Absolutely, because they could see how powerful it was. And the need and by the way, you can see what’s going on over in Europe, you can see you know, these democracies rallying because these authoritarian regimes, these are these are guys that that care only about two things. One is regime preservation, and the other is domination. I have no regard for human life. And you know, one of my other responsibilities to State Department was infectious diseases. And I can tell you, terms, the pandemic, all roads lead to Wuhan. And the emperor has no clothes. And these guys covered this thing up so bad. I mean, they destroyed all the original samples, a lot of that killed people, you know, rolled out their propaganda machine. And it’s, you know, I mean, is one of the biggest crimes ever committed in the world.

 

Scott D Clary  41:24

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Keith Krach  44:02

Yeah, yeah. You know, as a matter of fact, I think it gets back to those three key principles of unifying and rallying our allies and leveraging innovation or private sector and amplify those moral high ground. I, I just wrote a piece it came out in Fortune today. That is called present your china plan at the next board meeting. Because it this is all about the private sector. So if you think about what happened in Ukraine, in Russia, there’s over 300 big companies that pull up their operations out of Russia because of Ukraine. And this is expensive proposition caught everybody off guard, nobody had a plan. And so, what I’m seeing now in the boardrooms with the most you know, the most respect two board members around the world are asking from their CEO, what’s your china contingency plan, if there’s a US China conflict, or a US or China, Taiwan conflict, because now that probability has gone up, and she is obsessed with taking over Taiwan, because, hey, if, when it happens is too late. So don’t be good, get caught off guard again, and you should have that plan, they’re sitting on that shelf, as matter of fact, the CEO should begin to implement it immediately. So that’s one of the that’s one of the really, really big things.

 

Scott D Clary  45:44

It’s interesting, expensive, expensive problem to solve the very interesting.

 

Keith Krach  45:51

And, you know, China’s economy is 10 times what Russia is. So and there’s a lot of entanglement there. So it’s, that’s a, that’s a key thing. And, you know, I’ve, I’ve said on a lot of boards, and you know, the number one responsibility of a board member, in addition to hire to fire the CEO, is, you have to mitigate risk. And you have a plan sitting on the shelf, for like, the one that keeps you everybody up at night. That’s a cyber breach. By the way, you need to plan sit down on a shelf for his China contingency plan, because she is not slowing down. As matter of fact, he is just speeding up. And it looks like he’s going to be elected for life. So he’s going to be unencumbered.

 

Scott D Clary  46:41

When you now when you look forward to the future, what keeps what are the what are the tactics you think China could deploy to keep you up at night? What are the different things that you think they will go after now, knowing that you have, you have a plan to sort of counter attack what they’ve been doing in the US and with 5g and any other technologies developed? Like the only thing that I think of it, maybe you can provide commentary on this? Or other? Would they would they try and find, for example, startups that maybe don’t, are a little bit hungry or are a little bit more, you know, they need help more than a large fortune 500 private company or public company? Maybe they go after people at an earlier stage? When they really need that capital? And then they sort of plant that seed there. Is there as that real or is that there are other things that we have to watch for?

 

Keith Krach  47:34

Scott, they’ve been doing that for years, that’s that’s kind of a standard operating procedure is to get guys early on who need that financial capital, so they could take control of a comic, particularly here in Silicon Valley. And by the way, they they disguise a lot of these competencies, guys are masters of concealment, and, and deception. You know, what a lot of people don’t understand is the average American investor and, and pecha is financing. China’s military buildup, their surveillance state, enabling their genocide. And the way China does that. When you think of all these, all these Chinese companies, you know, they’re involved in this. They’ve broken into an unnatural amount. You’ve never seen a real world of subsidiaries with different names in the Cayman Islands. And that’s for the purpose of concealment of deception. Then what they do is they seduce with money. These index funds like MSCI index funds, FTSE Index Fund, where they’re able to bury their companies, whether they’re on a Chinese stock exchange, or even in the US stock exchange. And then those go into these big funds, like Blackrock is the biggest, they’re 431 emerging market funds, these are like ETFs, and mutual funds. And then those get buried in the $11.7 trillion pension funds in the US. So one of the big phase we need to do is stop financing. China’s malign activities, because see, they need hard currency over there. So that’s a really, really a big one. And that’s something a lot of people don’t realize, you know, my last press conference is undersecretary, you know, I asked the press, they said, you know, send a message to the average American investor, to ask their financial manager, whoever manages their pension to tell them what Chinese companies are in our funds. And if they say they don’t know, then ask them to find out. And if they come back, and they don’t give you the answer, or if they don’t come back, but I find a new fund manager. And this is something that, you know, I wrote to a letter to all university governing boards, because it’s also in all these university endowment funds is big money’s in there. I wrote a letter to all United States CEOs and and boards about utilizing slave labor, and financing the Chinese intellectual property theft and all that. Because, you know, when I think back when I was a CEO, or when I was also I was chairman, the Board of Trustees at Purdue. I didn’t know any of this stuff. Yeah. And, you know, so it’s, it’s time to turn that tide. Because, you know, we thought, Scott for longest time, we thought capitalism equals democracy. We’re trying to prove, prove it proved us wrong on that. And it’s time to take off the rose colored glasses, and treat them not how we hoped they’d be, but how they truly are.

 

Scott D Clary  51:02

Talk to me about you, you co founded at Purdue, the Institute for tech diplomacy. So I feel like that’s in the same vein as what we were just speaking about. So what’s the goal with this? What are you trying to accomplish? What’s the teaching over?

 

Keith Krach  51:19

Well, Scott, technology must advance freedom, technologies powerful, get more powerful every day, it can be used for good or bad purposes. So that, you know, that mission is to advance technology, or to advance freedom through trusted technology, by utilizing the trust principle, and also by training diplomats around the world training in the private sector. In tech statecraft, how do you compete against somebody who doesn’t play by the rules, and wants to put you out of business. So that’s what it’s about. And it’s, it’s now become probably the world’s preeminent authority. In this whole area of tech, diplomacy, and tech statecraft, and building trusted networks, and it’s totally bipartisan. For example, we have former Secretary of Defense Leon Panetta is on the board, we have the longest serving director of NASA’s on the board, we just put on the number two guy at NATO Deputy Secretary Juwanna. So this is an international effort. And really, against probably the biggest existential threat that democracy faces. And it’s real, because, you know, this, this democracy we have is just an experiment. And, you know, growing up in that little house in Ohio, with a white picket fence, and a dog and 2.5 children, that’s kind of goes against all the laws of physics, that unnatural act, because, you know, the most natural order of things is bad king, the dictator and the Emperor, you got to fight every day for that. I clearly learned that in my service to the country.

 

Scott D Clary  53:15

Yeah, no, I appreciate what you’re doing. And, and hopefully, and I’m sure this is I’ll ask this question in a second. But I also want to know, like, what your plans are for the future after your incredible career and where you want to take it from here, because this is like you’re building up the blueprint, again, in another category that’s just being developed. So you know, you’re leading the way. But before I asked that question, I’d be silly of me not to just commend you. You were you were nominated for the 2022 Nobel Peace Prize. Well walk me through even what that feels like to be part of that. Did you expect any of this? Was this something that you’ve ever even dreamed that would happen? Or is this something that, you know, it’s just the byproduct of somebody who’s committed their whole life to trying to do the right thing?

 

Keith Krach  54:01

Well, God, it was. It was a shock, first of all, but the, but the lasting feeling is humbling, because you look at the Nobel Peace Prize winners in the past, whether it’s guys like Nelson Mandela, or Mother Teresa made out like Martin Luther King, that list goes on. But also, you know, I think of, for example, what’s going on in Ukraine, and encourage those Ukrainian you know, it’s hard to compare. And, you know, the other thing when something like this happens, it is really about the team and I had a fabulous bipartisan, diverse team that that really made they really made that happen. So, you know, it was a surprise for me. It’s obviously great honor, you know, you know, I’ll never forget is kind of funny is that. So when my father and I, we work in that factory, you know, when I was teenager, we go in and on Saturdays and clean, we clean out the bathrooms together and I remember once we’re scrubbing out the toilets and all sudden I am just yell, because I hated it. You know he hated it too. And and I hear him. Yeah, Keith, we can’t solve world peace but we can try. You know, I mean this is funny. And anyway, I wish he was alive right now. Here’s another funny story. The only person that wasn’t surprised was my 95 year old mom. So I have her on a zoom call. Right and my two sisters are by a mA. I’ve been nominated for a Nobel Peace Prize. She goes, Oh, I knew you would I knew you always would be of course. Yes. Yes.

 

Scott D Clary  55:49

She’s she’s a good mom.

 

Keith Krach  55:52

Even as one years old, I wish she would have told me Yeah, yeah. I mean, she was in person where we played football Friday nights that she would go kill, you know, and we’d be in a huddle. They go crock. Is that your is that your BA? I go. Yeah, we just shut the heck up. I’m not gonna shut the heck up you. Go. We’re not Yeah, I go run to play. Let’s go. Ready. Break.

 

Scott D Clary  56:14

That’s beautiful. It’s good. She’s good. She’s around for this. That’s very beautiful. I want to do a couple rapid fire to close this out. But most importantly, before I pivot to those, where can people connect with you? Where do you want to send people? The websites, the social, anything you’re working on? What are the places you want to go see?

 

Keith Krach  56:35

Yeah, so I’m on LinkedIn. I’m on Twitter. There’s Keith kroc.com. website. And then of course, visit our website at the Kroc Institute for tech diplomacy. That’s tech diplomacy.org. I think.

 

56:51

So getting the show notes on the show notes. Perfect. Okay. So let’s do a couple rapid fire. So I alluded this question before, but it’s a great question. Because, again, you’ve accomplished so much like serial CEO, entrepreneur, now underwriter and now Nobel undersecretary, excuse me a Nobel Peace Prize nominee.

 

Scott D Clary  57:13

What do you want to accomplish next? what’s your what’s your goal? When you know, in the next 200 years, when somebody speaks your name? What what do you want them to associate with what you’ve accomplished?

 

Keith Krach  57:27

Well, you know, I think I’ve been I’ve been I’ve been jumping water over my head my whole life, and it creates an adrenaline rush. And after a while, that adrenaline rush is addicting. So, you know, I think that’s, that’s maybe the first sign of surreal transformational leader. I mean, I can’t join an organization that I don’t try to transform. So, what’s next? I’m not really sure. But the next thing usually comes. But I can tell you, you know, if you ask me what I like to do the most. I have a wonderful family. I have five children, there’s nothing I like more than that, and transform their lives and a wonderful wife, whose name is Mater who I’ve affectionately now just call Facebook. But she’s funny. But if if you asked me, you know, Croc, what do you think your legacy will be? I don’t think it will be. You know, to me, it’s not the companies I built, or even the causes, I think it’s people that I’ve mentored along the way. And I’ve benefited great from mentors my whole life. You know, my mom always used to say the best way to learn is ope other people’s experience, because she said, learn from other people’s mistakes because you learn the most when you make mistakes, you’ll have time enough to make your own. And, and, and so, I also started an organization called the Global metro network, which mentors the transformational leaders of tomorrow at scale with some of the greatest transformational leaders. By the way, that’s a great website to send your audience to is called the Global mentor network. And, you know, my dad used to say, you never know if you’re a good father until you see your children’s jeweler. I also think you never know if your great, great leader until you see your mentees, mentees because the ultimate is to pay it forward and pass it down. And and by the way, that’s the secret to Silicon Valley is the genealogy and the mentorship because all this stuff is not written in a book. And so anyway, I I I think my legacy would be the people that I’ve mentored you know, through the years, and they’re, you know, I’d be like your great great grandchildren kind of thing. That’s, that’s, that’s the best way to leave a legacy.

 

Scott D Clary  1:00:12

A success story listeners, Scott here, just want to give a shout out to the sponsor of today’s episode, the eBay for business podcast. This is a resource that every entrepreneur should be tapping into. I don’t take this lightly. I’m a podcaster, I have a high level of scrutiny for the other podcast that I tell people to go check out. But this is a good one, whether you’re starting out or you’re looking to grow your existing business, this podcast is your golden ticket. It’s packed full of insider knowledge on how to start run scale, a business on eBay, with firsthand insights from eBay employees on product launches and campaigns. But it’s not just about eBay. It dives into external factors affecting your business, like tax reporting, marketing, sales, all the stuff that you’re going to have to figure out to sell stuff on eBay, effectively build a business on eBay effectively, what sets it apart, they bring on eBay executives and successful sellers who’ve been there done that and are eager to share their experiences, advice and tips. If you have a burning question, there are q&a sessions tackle seller submitted inquiries, all types of questions. So you’re always in the loop. So this is what you got to do. Don’t miss out on this go to source for all things, eBay, tune in to the eBay for business podcast weekly. Wherever you get your podcasts, it’s time to take your business to the next level with insight from those who’ve already done it. What keeps you up at night now?

 

Keith Krach  1:01:42

Well, you know, if you ask me that, as a CEO, I’d always say, well, it’s at cyber breach, right? DocuSign is the most hacked application in a world now. By the way, it’s I mean, it’s it’s the authoritarian. It’s the Russians and the Chinese because she and Putin are not going to stop there. Because if they do, they’re dead. And, and these guys have, obviously nuclear weapons at their disposal. And, you know, she is too smart to do a 911 or Pearl Harbor. So it’s kind of like a Python just keep wrapping around. So most important thing is, can a world wake up soon enough. And you know, what was interesting for me, as we were going around building the clean network year ago, during the height of COVID, I could see citizen of the world, waking up to what I call China’s three C’s doctrine of concealment co-option course, because he said it says, Now understand that the pandemic is a result of the concealment of the virus, whether you believe it came from the Wuhan lab or not. And they could also see the CO the CO option of Hong Kong resulted in evisceration of all existence, freedoms. And people are learning now about the coercion in Xinjiang and how that has resulted in a punishable genocide. And the citizens don’t like it as beginning to give the political will to government leaders and CEOs. To stand up to that China bully. It’s the most unifying issue, bipartisan issue on Capitol Hill. And all’s I know, is, you know, we’ve all been bullied, right? Sometimes in our life. And all’s I know is when you confront a bully, they back down. But they really back down. If you have your friends by your side, and by the way, they really, really backed down. If you ever have friends by your side, you punch him in the nose. And that’s what we need to do. We need to unite the world. And we need this next generation of transformational leaders because things are changing so fast. We need honorable leaders, principle leaders, we need transformational leaders who can envision solutions for complex problems. That’s, that’s that’s really my quest.

 

Scott D Clary  1:04:24

If you had to choose one person, there has been many in your life, but one person has had an incredible impact. Who was that person? What did they teach you?

 

Keith Krach  1:04:33

Well, for sure, it would be my dad, uh, tell you a funny story. So, you know, I’ve always been fascinated with leadership. So I’m off at Harvard Business School, and there’s just my first year and there’s a professor teaches second year classes that he’s the guru for leadership. I tried to get a one on one with him for a long time. Finally, I got I get it. I go into his office. He goes, What are you here for? I go I I just have one question. What makes a great leader? He goes, close your eyes. Close my eyes. And he goes, as soon as you can just picture your head, like the leader is following, you know, just right who’s who’s leader right in your mind. He goes, You gotta go, I got it. He goes now that open your eyes? Why? Why is this person a great leader? You got it? Yeah, I got it. He goes, you could open your eyes. Now go, okay. And he goes, You know, I don’t know the answer number one. But I can tell you the answer number two. By the way, I bet that person’s fun to be around. They might even have a great sense of humor. And I go, Sure, absolutely. Right. And be like super fun. Eddie guys. Probably funniest. funniest guy. No, he goes, just out of curiosity. Who is it? I go, That’s my father. He goes, you have any more questions? I go, No, because you’re dismissed. So I mean, that’s a big right most important things are written in the book. And by the way, I remember my dad saying he goes, he was a boxer in the army. And we’re sitting there drinking a beer one night, that I think I was in college or something like that. And he goes, Keith, you ever feel like you’re like corner rain? You? You’re in a jam? You can’t get out of it? I go, we’d be dead. He goes, Yeah, no, your corner. You don’t get that warm feeling? How am I gonna get out? I go. Yeah, yeah. Because you know, there’s a way to get out of it every time. I go, Well, what’s that dad? He goes, works every time. He goes, knock yourself out. He goes, You know, I don’t think he do like with the word self deprecating humor. He just goes knock yourself out. He goes gets you out every time. And he goes, and it’s funny now. Don’t mock somebody else out because you’re gonna hurt your feelings. Plus, it’s not funny. You know? I mean, that’s right. That’s kind of stuff.

 

Scott D Clary  1:06:53

I love it. What was the biggest challenge that you had to overcome in your own personal life? How did you overcome it? And what did you learn from it?

 

Keith Krach  1:07:04

Poof? Oh, I think there

 

Scott D Clary  1:07:09

has been probably a lot. But what’s one that stands out? Yeah, there

 

Keith Krach  1:07:12

are a bunch of, well, I’ll tell you what that really struggle is. So when I left General Motors, you can imagine, I mean, I was a high potential candidate youngest VP in history, I’d be either tracking, right. And I leave that leave everything behind. So I got this software startup coming a lot of people don’t know about it was called Chronos. This was the first one it actually wasn’t Raz. And to be the number two guys software company. And my second day on the job, the CEO says, This is what I want to say the next board meeting. And I go, Maria will not say that, that would be lying. And I got that word warm feeling in my stomach. Go, I just made the biggest, you know, mistake in my life. And because I knew we had different definitions of integrity. And I thought I could fix it. I tried for about nine months. And and finally, it sort of my first son was being born in a hospital. And IBM was a big investor in this company you you by the way, it doesn’t exist it was Kronos with a queue, nobody knows about it. And, and as long as you kept calling me up, so you got to be here for IBM I got I’m not missing the birth of my son. So after a couple of times, you call me get me trying to come back. I just told her to do something that’s an N and an anatomically impossible to do. And I said I quit. And I was probably one of the greatest inflection points of my life because I’ve been surrounded my whole life with a great set of eyes from family, Rocky River, General Motors, Purdue, all of that. And it was always before my very eyes. But I just took for granted everybody was and I learned that’s not true. So out of that experience, every company that I helped built, or every organization I’ve been part of, it’s always those set of values and integrity is always always at the forefront. And then that led to all these high tech companies and the government and stuff at Purdue and everything so that you know, my dad, my dad would say another thing too. He goes when when the world has you sours sack of shitty lemons, your job is to turn it into Sweet Lemonade. And, and by the way that I think is that’s a key quality for good Read and adversity quotient, which are probably the two most important things I’ll take, I’d say grit over brains or anything any day because you know anybody can run the ball. You know what at first 80 yards down to the goal line or 90, but when you’re but when you’re there close to the endzone and punch it in for the score. That’s when it’s the hardest. And that’s when you gotta get bloodied and bloodied on that battlefield. So anyway, I think that’s key

 

Scott D Clary  1:10:35

bar. If you had to pick a book or podcast or something that’s influenced your life that you’d recommend somebody go check out what would you pick Well, The Art of War by censored one that the good one Yeah,

 

Keith Krach  1:10:50

yeah. But ironically I would order companies I built I’d have you know because short burger I’ve ever folks read it you know, says stuff like when you’re strong act weak when you’re weak X strong, the highest paid guy the Army’s the spy speeds, the ultimate weapon. So I think that that’s when you know, when I was I think it was a high school, I read just the classic Dale Carnegie’s How to Win Friends and Influence People. That was a really interesting one. For me, it made me think API, maybe you got me fascinated in, in leadership, I think. Yeah, I think that was, that was a real groundbreaker. I think Ben Franklin’s autobiography too. Yeah, that’s a good so I you know, yeah, it was a good record. And of course, your podcast, that’s actually my favorite.

 

Scott D Clary  1:11:55

I appreciate your, your kind, but that’s a, those are, I’m in the shadows of giants compared to all the books that you just, you just listed off a one day, one day,

 

Keith Krach  1:12:06

but they all started, they all started with a podcast and you know, got

 

Scott D Clary  1:12:10

whatever their version of a podcast was way back then. But yeah, so I could repeat Yeah, just talking. This is why this is why

 

Keith Krach  1:12:18

this target. Talk to people.

 

Scott D Clary  1:12:22

If you could tell your 20 year old self one thing, what would it be?

 

Keith Krach  1:12:33

Hmm. I mean, so many things are running through my head, I think I would say don’t get too high on the highs and don’t get too low on the lows. Everything is going to evened out good advice. You know, and you know, when things are going really good. Best be looking over your shoulder because there might be a freight train common. And when you’re just down in the dumps, the tomorrow’s a new day. And I mean, I you know, I’ve experienced some things where it’s like, a man to see it and trucks might be on you know, your front lawn, you know, tomorrow, no, you know that I’ve been curled up in a desk in a fetal position. You know, as a CEO, you’re guaranteed to do at least once a quarter. So it’s like a bad you got to see it through and your safety, that is your faith and your family and your friends at the end of the day. And that’s what really gives you the courage to put it out on the line and get bloodied.

 

Scott D Clary  1:13:37

And then last question, what does success mean to you?

 

Keith Krach  1:13:44

I think as I said before, I think it’s paying it forward. That’s and seeing what my, you know, see my grandchildren. Like my dad said, You’d never know if you’re good father. Until you see your children’s children. I just got two of them. graduate and thank you, thank you, Craig. It’s a great feeling. I got these 10 year old twins, man, they’re dynamite. AMA and JD. I mean, they’re, they’re fun, they come up with the funniest things. And then I also think too, in the business world, you know, like a company like arriba I think we spawned 12 public company CEOs. So to see those guys do really great. I think that’s that, that’s my definition of success. My you know, my other definition of success is that my grandchildren, my great grandchildren be able to live free because that is not a given. And that I want more than anything else.