1 00:00:00,240 --> 00:00:03,997 optimal minimal. >> At this altitude, I can run flat out for 2 00:00:04,080 --> 00:00:06,397 a half mile before my hands start shaking. 3 00:00:06,480 --> 00:00:08,557 >> Can I answer your personal question? 4 00:00:08,640 --> 00:00:10,637 >> Now, what is an appropriate time? 5 00:00:10,720 --> 00:00:12,077 >> What if I could be? 6 00:00:12,160 --> 00:00:18,040 >> I'm a cybernetic organism living over a metal endoskeleton. 7 00:00:19,000 --> 00:00:21,020 [snorts] 8 00:00:22,800 --> 00:00:27,117 >> This episode is brought to you by AG1, the daily foundational nutritional 9 00:00:27,200 --> 00:00:31,037 supplement that supports whole body health. I do get asked a lot what I 10 00:00:31,120 --> 00:00:34,317 would take if I could only take one supplement. And the true answer is 11 00:00:34,400 --> 00:00:38,797 invariably AG1. It simply covers a ton of bases. I usually drink it in the 12 00:00:38,880 --> 00:00:42,717 mornings and frequently take their travel packs with me on the road. So 13 00:00:42,800 --> 00:00:47,117 what is AG1? AG1 is a science-driven formulation of vitamins, probiotics, and 14 00:00:47,200 --> 00:00:49,197 whole food sourced nutrients in a single 15 00:00:49,280 --> 00:00:51,757 scoop. AG1 gives you support for the 16 00:00:51,840 --> 00:00:56,557 brain, gut, and immune system. So take ownership of your health and try AG1 17 00:00:56,640 --> 00:01:01,277 today. You will get a free one-year supply of vitamin D and five free AG1 18 00:01:01,360 --> 00:01:02,957 travel packs with your first 19 00:01:03,040 --> 00:01:05,037 subscription purchase. So learn more, 20 00:01:05,120 --> 00:01:09,757 check it out. Go to drink ag.com/tim. 21 00:01:09,840 --> 00:01:13,197 That's drink a1 the number one. Drink 22 00:01:13,280 --> 00:01:15,197 aag.com/tim. 23 00:01:15,280 --> 00:01:19,197 Last time drink a1.com/tim. 24 00:01:19,280 --> 00:01:23,997 Check it out. Hello my friendly little Magwa. This is Tim Ferrris and welcome 25 00:01:24,080 --> 00:01:27,837 to another episode of the Tim Ferrris show. I'm very excited about this one, 26 00:01:27,920 --> 00:01:31,997 folks. I've wanted to do it for a long time. Took about a year, year and a half 27 00:01:32,080 --> 00:01:34,477 to set up. And of course, every episode 28 00:01:34,560 --> 00:01:36,477 is my job to try to deconstruct 29 00:01:36,560 --> 00:01:39,757 worldclass performers to tease out the 30 00:01:39,840 --> 00:01:42,397 perspectives, habits, routines, favorite 31 00:01:42,480 --> 00:01:45,437 books, etc. that make them as good at 32 00:01:45,520 --> 00:01:48,237 what they do as they are. This episode 33 00:01:48,320 --> 00:01:53,517 we have Mark Andre at Parka PCA on 34 00:01:53,600 --> 00:01:58,237 Twitter. He is a legendary figure here in Silicon Valley and indeed worldwide. 35 00:01:58,320 --> 00:02:02,717 Even in the epicenter of tech, it's hard to find a more fascinating icon. Mark 36 00:02:02,800 --> 00:02:06,957 co-created the highly influential Mosaic internet browser, the first widely used 37 00:02:07,040 --> 00:02:10,157 graphical web browser. He also co-founded Netscape, which later sold to 38 00:02:10,240 --> 00:02:12,957 AOL for 4.2 billion with a B and then 39 00:02:13,040 --> 00:02:14,877 co-ounded loudcloud, which sold as 40 00:02:14,960 --> 00:02:18,557 Opsswear to Hip Packard for 1.6 billion. 41 00:02:18,640 --> 00:02:22,557 He is considered one of the founding fathers of the modern internet. This all 42 00:02:22,640 --> 00:02:27,357 makes him one of the few humans ever to create software categories used by more 43 00:02:27,440 --> 00:02:31,837 than a billion people. Also one of the few who's established multiple 44 00:02:31,920 --> 00:02:34,877 billion-dollar companies. He's now a co-founder and general partner of the 45 00:02:34,960 --> 00:02:38,397 venture capital firm Andre Horowitz where he has quickly become one of the 46 00:02:38,480 --> 00:02:39,917 most influential and dominant tech 47 00:02:40,000 --> 00:02:43,037 investors in the world. Now I want to 48 00:02:43,120 --> 00:02:45,597 try to keep this short but it's hard and 49 00:02:45,680 --> 00:02:50,237 I think you'll enjoy at least what I'm about to read. So we refer to an email 50 00:02:50,320 --> 00:02:54,797 in this conversation and our conversation took place at the San Hill 51 00:02:54,880 --> 00:02:56,877 Road offices of Andre and Horowitz. We 52 00:02:56,960 --> 00:03:00,157 refer to an email from Mark to Ben 53 00:03:00,240 --> 00:03:03,597 Horowitz an exchange and this is how it 54 00:03:03,680 --> 00:03:08,237 reads because we don't dig into it in the interview. This is page 13 in the 55 00:03:08,320 --> 00:03:12,077 hard thing about hard things by Ben Horowitz which is a great book [snorts] 56 00:03:12,160 --> 00:03:17,517 to Mark Andre. This is after a media interview where Ben felt that Mark 57 00:03:17,600 --> 00:03:21,837 disclosed the company's strategy prematurely to Mark Andre from Ben 58 00:03:21,920 --> 00:03:25,677 Horowitz. Subject: launch. I guess we're not going to wait until the 5th to 59 00:03:25,760 --> 00:03:28,157 launch the strategy. Period. Signed, 60 00:03:28,240 --> 00:03:31,197 Ben. Within 15 minutes I, this is Ben 61 00:03:31,280 --> 00:03:33,597 received the following reply to Ben 62 00:03:33,680 --> 00:03:39,117 Horowitz CC bunch of folks from Mark Andre. Subject launch. Apparently, you 63 00:03:39,200 --> 00:03:42,477 do not understand how serious the situation is. We are getting killed, 64 00:03:42,560 --> 00:03:46,077 killed, killed out there. Our current product is radically worse than the 65 00:03:46,160 --> 00:03:49,917 competition. We've had nothing to say for months. As a result, we've lost over 66 00:03:50,000 --> 00:03:54,157 $3 billion in market capitalization. We are now in danger of losing the entire 67 00:03:54,240 --> 00:03:56,557 company, and it's all server products 68 00:03:56,640 --> 00:03:58,717 management's fault. Next time, do the 69 00:03:58,800 --> 00:04:01,437 [__] interview yourself. [__] you, 70 00:04:01,520 --> 00:04:05,197 Mark. So, we get into some really fun 71 00:04:05,280 --> 00:04:06,877 stuff in this interview that I don't 72 00:04:06,960 --> 00:04:09,437 think Mark has discussed in many places. 73 00:04:09,520 --> 00:04:14,957 We talk about his epic debate versus Peter Teal. We talk about all the usual 74 00:04:15,040 --> 00:04:17,597 questions. Favorite books that he's gifted to other people, favorite 75 00:04:17,680 --> 00:04:22,317 documentaries, movies, morning rituals, what he would put on a billboard, etc. 76 00:04:22,400 --> 00:04:25,997 We talk about rules for investing, what he does in partner meetings to make 77 00:04:26,080 --> 00:04:28,317 people def defend ideas or propose 78 00:04:28,400 --> 00:04:30,877 ideas. We talk about AI. We talk about 79 00:04:30,960 --> 00:04:33,917 the future of Bitcoin, drones, who to 80 00:04:34,000 --> 00:04:38,317 watch. We talk about what he would teach in a nth or tth grade class, advice to 81 00:04:38,400 --> 00:04:42,237 his younger self, what he misses about the mid90s internet and how he might 82 00:04:42,320 --> 00:04:44,717 recreate it, how he thinks about or 83 00:04:44,800 --> 00:04:48,317 handles FOMO. It goes on and on. We 84 00:04:48,400 --> 00:04:51,037 really had an extremely detailed and 85 00:04:51,120 --> 00:04:54,317 rich conversation. And I hope you enjoy 86 00:04:54,400 --> 00:04:56,157 it. And please do say hi to Mark. He's 87 00:04:56,240 --> 00:05:00,237 very active on Twitter, P Marka. P M A 88 00:05:00,320 --> 00:05:06,000 RCA. Without further ado, please enjoy. 89 00:05:06,720 --> 00:05:08,557 Mark, welcome to the show. >> Thanks, Tim. 90 00:05:08,640 --> 00:05:10,877 >> I am so thrilled to be here. I've been 91 00:05:10,960 --> 00:05:15,917 hoping to make this happen for quite some time and I figure we'll just jump 92 00:05:16,000 --> 00:05:19,837 into it. Awesome. >> So, the the first question is strong 93 00:05:19,920 --> 00:05:23,917 opinions loosely held. Uh you're associated with that expression. Can you 94 00:05:24,000 --> 00:05:26,557 explain what that means? 95 00:05:26,640 --> 00:05:31,197 >> Yeah. So, it's kind of a mentality. It's a mentality around how to start a 96 00:05:31,280 --> 00:05:35,757 company for sure. Um, and it's a mentality of how to invest for sure. And 97 00:05:35,840 --> 00:05:38,397 I think [snorts] it's a mentality that's probably helpful in a lot of other areas 98 00:05:38,480 --> 00:05:42,317 of life. And so it's it's kind of this I'm I'm drawn to paradoxes. I'm drawn to 99 00:05:42,400 --> 00:05:45,277 kind of or you know, is it the philosophical term? It's like a thesis 100 00:05:45,360 --> 00:05:47,357 antithesis uh synthesis kind of thing. 101 00:05:47,440 --> 00:05:50,157 And so because a lot of people a lot of people in the valley have very strong 102 00:05:50,240 --> 00:05:52,957 theories and then the problem is they carry them too far because there's 103 00:05:53,040 --> 00:05:55,997 always there's a counterveailing theories, right? So kind of yin and yang 104 00:05:56,080 --> 00:05:59,277 kind of thing. And so strong views so strong views is very important, right? 105 00:05:59,360 --> 00:06:01,837 So most people go through life and and and and basically never develop strong 106 00:06:01,920 --> 00:06:05,037 views on things or or or specifically go along and basically buy into the 107 00:06:05,120 --> 00:06:08,477 consensus. Um and so one of the things I think you want to look for as both a 108 00:06:08,560 --> 00:06:10,957 founder and as an investor is you want to look for things that are out of 109 00:06:11,040 --> 00:06:14,077 consensus, right? So, you know, something very much opposed to the 110 00:06:14,160 --> 00:06:17,517 conventional wisdom, which sounds easy, you know, hard to do, but you want to 111 00:06:17,600 --> 00:06:19,757 try to do it. And then if you're going to start a company around that, if 112 00:06:19,840 --> 00:06:21,917 you're going to invest in that, you know, you you'd better have strong 113 00:06:22,000 --> 00:06:26,397 conviction because you're making a very big bet of time or or money or both. Um 114 00:06:26,480 --> 00:06:29,757 the problem is, okay, it's a strong view. Great. Okay. what happens when the 115 00:06:29,840 --> 00:06:33,917 world changes, right? What happens when like something else happens? U right and 116 00:06:34,000 --> 00:06:35,917 basically the way right the way the world works kind of in business and 117 00:06:36,000 --> 00:06:38,797 investing and other places is just when you think you have everything figured 118 00:06:38,880 --> 00:06:42,237 out that everything changes, right? So the sort of system evolves and and 119 00:06:42,320 --> 00:06:45,357 things happen. Um and so what do you what do you do when what do you do in 120 00:06:45,440 --> 00:06:48,877 the world changes and and there what you just see everywhere I think in the world 121 00:06:48,960 --> 00:06:51,437 and everywhere in business everywhere investing are people just hate changing 122 00:06:51,520 --> 00:06:54,637 their minds. People just like it's just like people get lock or you know you see 123 00:06:54,720 --> 00:06:55,757 it in politics all the time as well. 124 00:06:55,840 --> 00:06:58,397 people just get locked into a point of view on things and then you get this all 125 00:06:58,480 --> 00:07:01,437 this you get all these biases like confirmation bias where people feel like 126 00:07:01,520 --> 00:07:03,037 they have to well that's the thing in in 127 00:07:03,120 --> 00:07:04,877 in politics for flip-flopping right is 128 00:07:04,960 --> 00:07:08,557 viewed as bad right so take take as an 129 00:07:08,640 --> 00:07:12,077 example politician who flip flops is viewed as bad and and and sort of weak 130 00:07:12,160 --> 00:07:15,917 and pro probably evil um actually it's interesting if you talk to the world's 131 00:07:16,000 --> 00:07:18,797 best hedge fund managers they're the exact opposite they love changing their 132 00:07:18,880 --> 00:07:21,917 mind like like I'm I'm one of the few people who will openly admit I love 133 00:07:22,000 --> 00:07:24,717 spending time with hedge fund managers I think they're awesome I think they're 134 00:07:24,800 --> 00:07:27,197 >> I I I feel the same way. >> They're fantastic people and they they 135 00:07:27,280 --> 00:07:30,957 are the most open-minded people I know bec and they they love when you tell 136 00:07:31,040 --> 00:07:33,517 them that they're wrong. They get all excited. Their eyes light up and they're 137 00:07:33,600 --> 00:07:35,197 like, "Oh, why why do you think that?" 138 00:07:35,280 --> 00:07:38,717 And they're genuinely interested because if if you're right and they're wrong, 139 00:07:38,800 --> 00:07:41,117 they will change their minds and they will, you know, they're hedge fund 140 00:07:41,200 --> 00:07:43,837 managers. They'll literally reverse the trade. They'll they're long on a 141 00:07:43,920 --> 00:07:45,997 company, they'll flip around and go short on it. They're totally fine with 142 00:07:46,080 --> 00:07:50,717 that. And that's how it works. And so um so what I carry away from that is it's 143 00:07:50,800 --> 00:07:55,117 it's the weekly held part um which is convicted convicted convicted new facts 144 00:07:55,200 --> 00:07:57,757 change >> right but but it's a paradox right or 145 00:07:57,840 --> 00:08:00,637 it's it's a tension because those are those are antithetic you know it's 146 00:08:00,720 --> 00:08:03,037 determination coupled with flexibility like they're they're they're 147 00:08:03,120 --> 00:08:06,717 antithetical what you see in the startup world is sort of these two kinds of 148 00:08:06,800 --> 00:08:10,157 advice then that that that express this and there are people who with a straight 149 00:08:10,240 --> 00:08:12,557 face will give both of these forms of advice without ever acknowledging that 150 00:08:12,640 --> 00:08:16,237 they're in conflict right one of which is fail fast [snorts] right you know you 151 00:08:16,320 --> 00:08:18,397 want to fail fast like It's going to be it's great to fail. You want to discover 152 00:08:18,480 --> 00:08:20,397 what's wrong. You want to fail. You want to do something different. And then the 153 00:08:20,480 --> 00:08:24,717 other uh is you have to be determined and you can't give up. Okay. Like how do 154 00:08:24,800 --> 00:08:27,437 you possibly reconcile those? And and my view of that is that's that's where you 155 00:08:27,520 --> 00:08:29,037 get to strong views weekly held. 156 00:08:29,120 --> 00:08:31,677 >> So how do you advise in in that 157 00:08:31,760 --> 00:08:36,957 particular example for instance or assess uh which tacted uh founders or 158 00:08:37,040 --> 00:08:40,237 company should take potentially because you you look at some examples let's just 159 00:08:40,320 --> 00:08:44,797 say uh Uber or something like that where the model as it began is very much 160 00:08:44,880 --> 00:08:48,557 similar to where it is now. Then you have other companies let's say uh like a 161 00:08:48,640 --> 00:08:52,957 Twitter or others where they they pivot into a gold mine effectively and then I 162 00:08:53,040 --> 00:08:56,317 mean then obviously other things have to be laid on top of that to make it 163 00:08:56,400 --> 00:08:58,957 successful long term but uh having been 164 00:08:59,040 --> 00:09:01,997 in the valley now myself for 15 16 years 165 00:09:02,080 --> 00:09:04,557 you see a lot of people who change their 166 00:09:04,640 --> 00:09:06,397 mind almost too frequently that's right 167 00:09:06,480 --> 00:09:10,877 >> with uh in consequential facts perhaps. 168 00:09:10,960 --> 00:09:13,197 uh how do you think about advising a 169 00:09:13,280 --> 00:09:17,997 company that's struggling as to whether they should stay the course or uh pivot 170 00:09:18,080 --> 00:09:21,037 as they would say? >> Yeah. Yeah. So we have we see both 171 00:09:21,120 --> 00:09:24,157 cases. We see both we see both cases both both failure cases. We see 172 00:09:24,240 --> 00:09:27,117 companies that are just they're almost this fail fast thing is frankly 173 00:09:27,200 --> 00:09:30,237 completely out of hand and and I'm oldfashioned where I come from people 174 00:09:30,320 --> 00:09:32,957 like to succeed. Like it's like [laughter] >> great. 175 00:09:33,040 --> 00:09:35,597 >> I like to say like we before this word pivot like we didn't have like when I 176 00:09:35,680 --> 00:09:37,917 was when I was a founder when I first started out we didn't have the word 177 00:09:38,000 --> 00:09:40,557 pivot right we we didn't we didn't have a fancy word for it. we just called it a 178 00:09:40,640 --> 00:09:44,797 [__] right? [laughter] So, like I'm oldfashioned on this. Like 179 00:09:44,880 --> 00:09:47,197 I like to succeed. I think succeeding should be the goal, not failing and 180 00:09:47,280 --> 00:09:50,077 certainly not failing fast or slow or any other form of failing. So, 181 00:09:50,160 --> 00:09:53,037 [laughter] so I get really kind of cranked up about this. But, but we do 182 00:09:53,120 --> 00:09:55,517 see companies that literally every time we meet every time I meet them, they 183 00:09:55,600 --> 00:09:57,917 pivoted. Like, and so every time I meet them, they're off to something new and 184 00:09:58,000 --> 00:10:01,277 and they're it's like I don't like watching a rabbit go through a maze or 185 00:10:01,360 --> 00:10:03,757 something. They're just never they're never going to converge in anything 186 00:10:03,840 --> 00:10:06,157 because they're never going to put the time in into actually figuring it out 187 00:10:06,240 --> 00:10:09,677 and getting it right. But then you you do see the other case and this is what 188 00:10:09,760 --> 00:10:12,237 the where the fail fast thing came from is you do see the other case. You see 189 00:10:12,320 --> 00:10:15,517 people who just absolutely are determined will just pound their head 190 00:10:15,600 --> 00:10:18,957 against the same wall for years and years and years and years and at a 191 00:10:19,040 --> 00:10:21,277 certain you admire them for their determination and then at a certain 192 00:10:21,360 --> 00:10:22,797 point it just becomes obstinence, right? 193 00:10:22,880 --> 00:10:25,837 And then you're just at some point it becomes self-destructiveness. It becomes 194 00:10:25,920 --> 00:10:28,157 nonyote. You're just tilting against windmills, you know, kind of 195 00:10:28,240 --> 00:10:33,757 arbitrarily. And so those are polls. Um we do see behavior at the polls. Um, you 196 00:10:33,840 --> 00:10:36,157 know, the question you're asking is, of course, the key question, which is like, 197 00:10:36,240 --> 00:10:39,037 okay, what's what's in the middle? How do you know? And and frankly, I I don't 198 00:10:39,120 --> 00:10:42,237 think there's an answer to that. I think that's or the answer is judgment. I 199 00:10:42,320 --> 00:10:44,317 think I [snorts] think that's the test. 200 00:10:44,400 --> 00:10:47,437 Basically, there's I think there's a couple key tests for for founders or for 201 00:10:47,520 --> 00:10:50,077 that matter for investors and these kinds of decisions. I think that's one 202 00:10:50,160 --> 00:10:53,037 of the really core tests is, you know, do you fundamentally have the judgment 203 00:10:53,120 --> 00:10:56,877 to be able to make that call knowing, by the way, that either either way could be 204 00:10:56,960 --> 00:10:59,597 a big mistake. Like, you know, nobody's going to tell you, you're not going to 205 00:10:59,680 --> 00:11:01,917 get any confirmation from anybody that, oh yeah, you made the right call. like 206 00:11:02,000 --> 00:11:05,197 that you're not you're not going to realize like if you change and then 207 00:11:05,280 --> 00:11:07,597 succeed it's all great but by the way you might have succeeded at the old 208 00:11:07,680 --> 00:11:10,637 thing even better if you change and fail you know you'll never know whether the 209 00:11:10,720 --> 00:11:14,397 old thing would have worked like you know the the counterfactual like you 210 00:11:14,480 --> 00:11:17,437 know science I call the counterfactual you never know the counterfactual the 211 00:11:17,520 --> 00:11:19,757 way my brain is wired I'm always thinking in terms of the counterfactuals 212 00:11:19,840 --> 00:11:22,637 I'm always thinking in terms of the way things could have been right the the 213 00:11:22,720 --> 00:11:25,277 world evolved in a certain way kind of as a consequence of people making all 214 00:11:25,360 --> 00:11:28,397 these decisions on the fly people could have very easily made a different set of 215 00:11:28,480 --> 00:11:30,877 decisions the world could have ended up in a very different place and so the 216 00:11:30,960 --> 00:11:33,677 idea that you're ever going to know the consequence of your decision I think is 217 00:11:33,760 --> 00:11:36,637 probably a fallacy or what the alternative would have been right 218 00:11:36,720 --> 00:11:40,237 >> like the relative uh the relative result of your decision 219 00:11:40,320 --> 00:11:43,197 >> and so I I I I just think you you basically have to fall back on judgment 220 00:11:43,280 --> 00:11:45,757 and you have to fall back on some sense of the intangibles 221 00:11:45,840 --> 00:11:48,237 >> and when you're looking to say stress 222 00:11:48,320 --> 00:11:52,557 test ideas uh and 223 00:11:52,640 --> 00:11:56,637 if we look at it in say the case of a partner meeting here so you mentioned 224 00:11:56,720 --> 00:12:01,117 hedge fund managers and I I' I've read a profile of Ray Dalio at one point I 225 00:12:01,200 --> 00:12:03,117 guess it's Bridgewwater Capital 226 00:12:03,200 --> 00:12:04,957 >> and he they talked about his his 227 00:12:05,040 --> 00:12:08,317 meetings and how they stress test ideas 228 00:12:08,400 --> 00:12:10,477 and and how people need to defend ideas. 229 00:12:10,560 --> 00:12:14,797 H how does a good partner meeting go if someone say proposes 230 00:12:14,880 --> 00:12:17,597 uh I was going to say a trade an investment >> investment 231 00:12:17,680 --> 00:12:19,277 >> uh that is a substantial investment. 232 00:12:19,360 --> 00:12:24,637 >> Yeah. >> What then happens from that point to a yes or a no decision? 233 00:12:24,720 --> 00:12:28,077 >> So we don't get the hedge fund manager can reverse himself. hedge fund manager 234 00:12:28,160 --> 00:12:30,877 bad trade can the next day he can turn around and take the opposite trade. We 235 00:12:30,960 --> 00:12:33,517 we don't get to do that right. So when we invest it's with it's knowing that 236 00:12:33,600 --> 00:12:37,037 we're in for 10 plus years basically is our assumption. So it's in and by the 237 00:12:37,120 --> 00:12:40,077 way when we make an investment decision it's a it's a commitment of dollars. 238 00:12:40,160 --> 00:12:43,277 It's also commitment of somebody's time and and and by the way the 239 00:12:43,360 --> 00:12:46,557 organization's time and bandwidth and and and there's only so much of that and 240 00:12:46,640 --> 00:12:49,197 then the other thing we have in venture is when we make a decision we then 241 00:12:49,280 --> 00:12:53,357 become committed to that company in that category and so we can't invest in their 242 00:12:53,440 --> 00:12:57,357 competitors including by the way their competitors who don't even exist yet 243 00:12:57,440 --> 00:13:00,717 right and so you know for example the investors in Fster were more more likely 244 00:13:00,800 --> 00:13:03,757 than not completely not only maybe unwilling but also unable to invest in 245 00:13:03,840 --> 00:13:06,637 Facebook when it came along because they were conflicted because the founder of 246 00:13:06,720 --> 00:13:08,957 Fster would have said you know you can't you can't invest in a competitive 247 00:13:09,040 --> 00:13:11,917 company and So our decisions are big decisions and they have serious 248 00:13:12,000 --> 00:13:13,357 consequences for the future of the firm. 249 00:13:13,440 --> 00:13:16,637 So on the one hand, it's very important to us to have a full discussion and get 250 00:13:16,720 --> 00:13:19,997 all the facts on the table and really kind of vet these things out. On the 251 00:13:20,080 --> 00:13:24,077 other hand, we're trying to preserve um we're trying to preserve the the the 252 00:13:24,160 --> 00:13:27,117 contrarianism of kind of at the core of what we do, the the the strong 253 00:13:27,200 --> 00:13:29,837 non-conensus views. We're trying to be able to invest in the things that really 254 00:13:29,920 --> 00:13:33,597 are unusual and odd that other people aren't taking seriously. Um, and one of 255 00:13:33,680 --> 00:13:37,597 our theories about venture capital is that so everybody thinks like investing 256 00:13:37,680 --> 00:13:39,677 it's like you either make a good investment or a bad investment. I 257 00:13:39,760 --> 00:13:41,117 actually think that's not the big issue. 258 00:13:41,200 --> 00:13:43,277 I think the issue at least in venture capital is whether you make a good 259 00:13:43,360 --> 00:13:47,597 investment or a great investment. And I think good is the enemy of great. We see 260 00:13:47,680 --> 00:13:50,717 many companies that are just fine and that are, you know, yep, you know, 261 00:13:50,800 --> 00:13:54,077 founders are good and the market seems good and the product seems good, the 262 00:13:54,160 --> 00:13:56,637 customers kind of like it and they got a little revenue and it's kind of all 263 00:13:56,720 --> 00:14:00,717 fine. But those companies tend to never go anywhere. And then every once in a 264 00:14:00,800 --> 00:14:03,437 while, we'll see these companies that just have some extremely strong 265 00:14:03,520 --> 00:14:07,277 strength, some extremely kind of, you know, special wonderful thing going on 266 00:14:07,360 --> 00:14:09,677 that by the way may have all kinds of problems and issues, but there's 267 00:14:09,760 --> 00:14:12,637 something at the core of what it is that's really special and magical. And 268 00:14:12,720 --> 00:14:13,917 those are the ones that we want to do. 269 00:14:14,000 --> 00:14:16,477 We're trying to do is basically stock our portfolio with just investments like 270 00:14:16,560 --> 00:14:21,197 that. Um, and so to capture that, you can't have, you know, it'd be very easy 271 00:14:21,280 --> 00:14:23,917 in a conversation about the weaknesses of something to beat the idea to death 272 00:14:24,000 --> 00:14:28,237 and you you never invest. And so the the rule that we have um and then and then 273 00:14:28,320 --> 00:14:30,637 you would only invest in the consensus ones. You'd only invest in the very good 274 00:14:30,720 --> 00:14:34,237 ones as opposed to the great ones and then you would fail as a firm. So so we 275 00:14:34,320 --> 00:14:37,357 have to kind of we have to do again both things at the same time. We have to we 276 00:14:37,440 --> 00:14:41,117 have to try really hard to encourage the strong non-conensus thinking but also 277 00:14:41,200 --> 00:14:43,997 have the full discussion to make sure that we really stress test that 278 00:14:44,080 --> 00:14:47,517 thinking. So the way we do it is basically each of our GPS has the 279 00:14:47,600 --> 00:14:51,517 ability to pull the trigger on a deal without a vote or without consensus. and 280 00:14:51,600 --> 00:14:54,877 and and and basically what we say is if the person closest to the deal has a 281 00:14:54,960 --> 00:14:57,757 very strong degree of positive, you know, commitment, enthusiasm about it, 282 00:14:57,840 --> 00:15:00,077 then we should do that investment, even if everybody else in the room thinks 283 00:15:00,160 --> 00:15:03,757 this is the stupidest thing they've ever heard of. [snorts] However, you don't 284 00:15:03,840 --> 00:15:06,557 get to just go do that yourself completely on your own without stress 285 00:15:06,640 --> 00:15:09,277 testing your own thinking. And so, it's the responsibility of everybody else in 286 00:15:09,360 --> 00:15:10,957 the room to stress test the thinking. 287 00:15:11,040 --> 00:15:14,557 And if necessary, we actually create we create a red team, right? We'll actually 288 00:15:14,640 --> 00:15:17,277 formally create sort of the counterveiling force and we'll we'll 289 00:15:17,360 --> 00:15:20,637 designate some set of people uh to [snorts] counter argue the other side. 290 00:15:20,720 --> 00:15:22,237 Um, and then >> it's like a debate team. 291 00:15:22,320 --> 00:15:25,437 >> Yeah. Basically, right. And then, and then and then the way that we try to, 292 00:15:25,520 --> 00:15:27,597 you know, and this is fraught with like there's all kinds of ways this can go 293 00:15:27,680 --> 00:15:30,157 wrong because like what if I bring in a deal or what if Ben brings in a deal or 294 00:15:30,240 --> 00:15:33,757 what, you know, versus the new person bringing in a deal or whatever. Um, and 295 00:15:33,840 --> 00:15:37,837 so what Ben and I try to do is we we we do this to each other, right? And so 296 00:15:37,920 --> 00:15:40,477 whenever he brings in a deal, like I just beat the [__] out of it, right? 297 00:15:40,560 --> 00:15:43,677 Just like and I may think it's the best idea I've ever heard of and I'll just 298 00:15:43,760 --> 00:15:44,957 like trash the crap out of it, right? 299 00:15:45,040 --> 00:15:48,237 And try to get everybody else to pile on. Um, and then at the end of it, if 300 00:15:48,320 --> 00:15:50,717 he's still pounding the table saying, "No, no, this is the thing." Then we all 301 00:15:50,800 --> 00:15:52,957 say, "Okay, we're all, you know, we're all in. We're all behind you, right?" 302 00:15:53,040 --> 00:15:56,227 And then and then it's an it's a it's an agree it's a disagree and commit, 303 00:15:56,310 --> 00:15:59,917 [snorts] you know, kind of culture. By the way, he does the same thing to me, 304 00:16:00,000 --> 00:16:02,317 right? And so we we basically it's the torture test. 305 00:16:02,400 --> 00:16:04,397 >> What are some of the keys to fighting 306 00:16:04,480 --> 00:16:09,357 well in I think it seems key to many different types of relationships, 307 00:16:09,440 --> 00:16:12,637 personal, business, or otherwise, the ability to sort [laughter] of conflict 308 00:16:12,720 --> 00:16:15,517 resolve or just fight well uh and then 309 00:16:15,600 --> 00:16:18,557 make up. So, it seems like uh you and 310 00:16:18,640 --> 00:16:23,517 Ben have uh not my words, but like fought like cats and dogs. Uh but you 311 00:16:23,600 --> 00:16:25,757 always kind of get over it. >> We prefer old married couple. 312 00:16:25,840 --> 00:16:28,877 >> Old married couple. Uh there is a story, 313 00:16:28,960 --> 00:16:33,437 I don't know if it's accurate, about uh Netscape early days, something related 314 00:16:33,520 --> 00:16:36,317 to an interview with a journalist. Do you know the story I'm talking about? 315 00:16:36,400 --> 00:16:39,757 >> It's in Ben's book. >> Okay. So, right. That's okay. Here we go. 316 00:16:39,840 --> 00:16:41,277 >> Including the email you're about to reference. 317 00:16:41,360 --> 00:16:43,917 >> All right. So, could you could you uh could you describe this for people who 318 00:16:44,000 --> 00:16:46,557 are unfamiliar? I really think you that for that you got to read you you got to 319 00:16:46,640 --> 00:16:49,197 read you got to read Ben's book. Let's just say we started out our relationship 320 00:16:49,280 --> 00:16:52,957 with vigorous disagreement [laughter] >> and and we've continued that to this 321 00:16:53,040 --> 00:16:58,877 day. >> And but how do you uh >> this is a family podcast. I don't want to use it. 322 00:16:58,960 --> 00:17:01,277 >> It's not a family podcast. >> If you want if you want all the bad 323 00:17:01,360 --> 00:17:03,997 word's book, The Hard Thing About Hard Things, it's it's it's in the book 324 00:17:04,080 --> 00:17:06,157 >> and I'll put it in the show notes. The 325 00:17:06,240 --> 00:17:08,957 How do you I mean you guys got off to a 326 00:17:09,040 --> 00:17:11,437 very aggressive start. How did you 327 00:17:11,520 --> 00:17:15,677 identify that Ben was someone worth 328 00:17:15,760 --> 00:17:19,597 having those types of disputes with that 329 00:17:19,680 --> 00:17:24,637 there was a value in in uh what he brought to the table as opposed to just 330 00:17:24,720 --> 00:17:28,477 another person that you were butting heads with who is not worth keeping at 331 00:17:28,560 --> 00:17:30,237 the table. >> So honestly there there were there were 332 00:17:30,320 --> 00:17:32,637 three there were three things. So one is he would he would talk back to me. So he 333 00:17:32,720 --> 00:17:34,237 would like argue right back at me. 334 00:17:34,320 --> 00:17:35,437 >> He wouldn't just go into the field. 335 00:17:35,520 --> 00:17:38,077 >> He would just roll over like he would argue right back. And a lot of a lot of 336 00:17:38,160 --> 00:17:41,517 what you see this I if you just observe a lot of companies over time or 337 00:17:41,600 --> 00:17:43,837 investment firms or whatever you know everything you know there's there's a 338 00:17:43,920 --> 00:17:47,277 temptation everything wants to become a hierarchy and then people always don't 339 00:17:47,360 --> 00:17:51,037 have trepidations about speaking truth to power and a lot of what I've always 340 00:17:51,120 --> 00:17:54,237 found the really sort of wise and smart leaders are trying to do is they're 341 00:17:54,320 --> 00:17:57,197 trying to actually find the people in the organization who will actually talk 342 00:17:57,280 --> 00:18:01,437 back um it's actually you know it's one of the ways to really get ahead you know 343 00:18:01,520 --> 00:18:04,157 this way there's certain organizations where the way to get ahead is to talk 344 00:18:04,240 --> 00:18:07,117 back to the leadership right that's how you get noticed 345 00:18:07,200 --> 00:18:09,197 By the way, there are other organizations where that doesn't work at 346 00:18:09,280 --> 00:18:12,477 all. Um, and I would recommend getting out of those as fast as possible. We we 347 00:18:12,560 --> 00:18:15,117 try to be at least Ben and I want this organization to be one where people will 348 00:18:15,200 --> 00:18:18,077 actually speak truth to power and and argue back at us just like anybody else. 349 00:18:18,160 --> 00:18:21,597 And so, which is why he and I argue so much is because we we want to set the 350 00:18:21,680 --> 00:18:24,957 set the model, you know, set the precedent. So, that was one is he would 351 00:18:25,040 --> 00:18:27,997 talk back to me too is he was often if not always right. And I wouldn't say 352 00:18:28,080 --> 00:18:31,277 always just because nobody is, but like he was very smart and and and very clear 353 00:18:31,360 --> 00:18:35,357 thinking. And then the third thing is I saw something early in him. Um that he 354 00:18:35,440 --> 00:18:39,037 was just amazing working with people. Um [snorts] which is not something I think 355 00:18:39,120 --> 00:18:42,477 has ever been necessarily true of me. Um but he was just like watching him in 356 00:18:42,560 --> 00:18:45,917 front of a group of people was just routinely magical in terms of how he 357 00:18:46,000 --> 00:18:48,477 could get people how he could communicate with people in a very clear 358 00:18:48,560 --> 00:18:52,717 way, how he could be very fact-based, but he could really make people feel uh 359 00:18:52,800 --> 00:18:56,077 you know kind of in a really fundamental way. Um and so that that combination you 360 00:18:56,160 --> 00:18:59,917 know made it clear that he was somebody very special. So we we mentioned Ben's 361 00:19:00,000 --> 00:19:02,557 book which is one of a handful of books 362 00:19:02,640 --> 00:19:07,357 that many many of the best operators 363 00:19:07,440 --> 00:19:09,197 founders I know in Silicon Valley 364 00:19:09,280 --> 00:19:12,237 routinely reference. Uh there are a 365 00:19:12,320 --> 00:19:14,797 handful uh that come to mind. Aside from 366 00:19:14,880 --> 00:19:16,717 that four steps to the epiphany I guess 367 00:19:16,800 --> 00:19:20,557 would be one. Uh this one here that was 368 00:19:20,640 --> 00:19:23,837 right in the lobby of your office, high output management with a new forward by 369 00:19:23,920 --> 00:19:27,757 Ben Horowitz is another which went out of print and then came back into print 370 00:19:27,840 --> 00:19:32,637 because it became a bit of a cult classic uh in here in Silicon Valley. 371 00:19:32,720 --> 00:19:34,717 Are there any books that you would 372 00:19:34,800 --> 00:19:37,917 prescribe to say uh a wouldbe 373 00:19:38,000 --> 00:19:42,237 entrepreneur coming out of college just to give them to increase the likelihood 374 00:19:42,320 --> 00:19:45,437 of them succeeding? Are there any other books that come to mind? Yeah. So, high 375 00:19:45,520 --> 00:19:48,077 output management, it's one of Andy Gross's books. It's the best book on 376 00:19:48,160 --> 00:19:51,197 management ever written. Um, he wrote another book called Only the Paranoid 377 00:19:51,280 --> 00:19:54,397 Survive, which is one of my favorite topics. And so, that that is also a very 378 00:19:54,480 --> 00:19:57,437 good book. We recommend Ben's book is good. I think Peter Teal's book is 379 00:19:57,520 --> 00:20:01,197 self-recommenering and it's an excellent book, 0ero to1. And then there's a 380 00:20:01,280 --> 00:20:03,197 bunch, you know, there's a bunch of others. There's a bunch of others that 381 00:20:03,280 --> 00:20:07,197 are are are good. Um, uh, really though, 382 00:20:07,280 --> 00:20:10,957 I think where I got a lot of my education from um was uh history, 383 00:20:11,040 --> 00:20:14,397 reading history. And so I would go back like I would go back and read ra ra ra 384 00:20:14,480 --> 00:20:14,520 ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra 385 00:20:14,560 --> 00:20:15,437 ra ra ra ra ra ra ra ra ra ra rather than reading a lot more about the 386 00:20:15,520 --> 00:20:18,157 contemporaries I would go back and read about Edison. Um I would go back and 387 00:20:18,240 --> 00:20:21,197 read about Ford, Rockefeller, JP Morgan. 388 00:20:21,280 --> 00:20:24,797 Um I I just for I don't maybe it's just me but like I find the period of kind of 389 00:20:24,880 --> 00:20:29,757 call it 1870 to 1920 1930 really interesting. Um because you had sort of 390 00:20:29,840 --> 00:20:32,317 the arrival of many of the technologies that kind of built the world that we 391 00:20:32,400 --> 00:20:33,997 live in today. >> Disruptive period. 392 00:20:34,080 --> 00:20:36,717 >> Yeah. And history's I always find history is this weird like I didn't 393 00:20:36,800 --> 00:20:38,557 really study history in college or anything but I find history is this 394 00:20:38,640 --> 00:20:41,277 weird thing where the way that you're taught history like in school like in 395 00:20:41,360 --> 00:20:44,397 high school you know it's like it's it's all these legendary people and they're 396 00:20:44,480 --> 00:20:47,357 kind of all you know Olympians the founding fathers and these great 397 00:20:47,440 --> 00:20:49,917 generals or whatever and it's like they you know you got the names you got the 398 00:20:50,000 --> 00:20:52,797 dates and they did these amazing things and they're kind of these great like and 399 00:20:52,880 --> 00:20:57,037 they feel like unrelatable like and you like you couldn't possibly like to even 400 00:20:57,120 --> 00:20:59,677 at least where I come from even think that you could have ever have anything 401 00:20:59,760 --> 00:21:02,157 in common with these people was just like a non was not something [snorts] 402 00:21:02,240 --> 00:21:05,277 that ever occurred anybody like they're like, you know, the pantheon of kind of 403 00:21:05,360 --> 00:21:09,277 the legendary people who have lived. Um, and I just found like the b the really 404 00:21:09,360 --> 00:21:12,317 well-written biographies that get you inside the heads of what it was like to 405 00:21:12,400 --> 00:21:16,237 be Walt Disney at age 20, right? Or what it was like to be, you know, I don't 406 00:21:16,320 --> 00:21:20,557 know, Carnegie or Melon or Ford. Um, or what it was like to be, you know, for 407 00:21:20,640 --> 00:21:23,437 that matter, William Randph Hurst, or, you know, these, you know, people we've 408 00:21:23,520 --> 00:21:26,477 all heard of, like the really good biographers are really good at getting 409 00:21:26,560 --> 00:21:30,157 inside the head of what what it was like to be them then before they became, 410 00:21:30,240 --> 00:21:32,557 right, before they became the people who ultimately made it into the into the 411 00:21:32,640 --> 00:21:36,317 history books. and and and honestly a lot of stuff like a lot of things have 412 00:21:36,400 --> 00:21:38,717 changed but a lot of things haven't changed like people haven't changed a 413 00:21:38,800 --> 00:21:42,237 bit and so you I always find like in those histories you can always kind of 414 00:21:42,320 --> 00:21:46,397 see okay that personality type like yep I know you know 13 people like that you 415 00:21:46,480 --> 00:21:50,077 know uh and so I I I find that there's actually a lot more to to template 416 00:21:50,160 --> 00:21:53,677 against um and a lot more to kind of think about than people give than people 417 00:21:53,760 --> 00:21:54,797 kind of give history credit for. 418 00:21:54,880 --> 00:21:58,157 >> Oh definitely. I mean I had uh Cyrus the Great recommended to me I guess at 419 00:21:58,240 --> 00:22:02,957 Xenopon and people don't change. I mean, you see the same archetypes, you're 420 00:22:03,040 --> 00:22:07,597 like, "Oh, that's Bob, my coworker. He does the same thing." Uh, and the 421 00:22:07,680 --> 00:22:12,317 biography mention made me think of Walter Isacson's book on Ben Franklin, 422 00:22:12,400 --> 00:22:16,797 who was always sort of untouchable in my mind, and uh, but it it included all of 423 00:22:16,880 --> 00:22:20,477 his foibless and challenges and self-doubt, and it really humanized it 424 00:22:20,560 --> 00:22:23,517 in a way that actually made me aspire to do bigger things. 425 00:22:23,600 --> 00:22:27,597 >> If you wanted to get someone hooked on biographies, is there any particular 426 00:22:27,680 --> 00:22:30,637 book you would recommend? >> Oh, there's a bunch. the the Walt Disney 427 00:22:30,720 --> 00:22:34,397 biography. I'll just mention it because it's it's a great our our our one of our 428 00:22:34,480 --> 00:22:37,597 founders, Brian Chesky, the founder of Airbnb, has sort of Walt Disney is his 429 00:22:37,680 --> 00:22:40,957 hero. Um and so he's gotten even more deeply into that. So the author Neil 430 00:22:41,040 --> 00:22:45,037 Gabbler who's written uh the best biography on on Walt Disney and it's a 431 00:22:45,120 --> 00:22:49,437 phenomenal book. I actually like another one I really like um coming out of kind 432 00:22:49,520 --> 00:22:50,717 of left field, but there's Charles 433 00:22:50,800 --> 00:22:53,037 Schultz who's the creator of Peanuts. 434 00:22:53,120 --> 00:22:56,477 >> The the Schultz biography is amazing. 435 00:22:56,560 --> 00:23:00,397 And basically the case that he makes is that um he basically makes the case 436 00:23:00,480 --> 00:23:03,277 biographer makes the case that peanuts was the longest continuous work of 437 00:23:03,360 --> 00:23:05,597 American art ever made. It was a 60-year 438 00:23:05,680 --> 00:23:08,877 art project um with deep foundations in 439 00:23:08,960 --> 00:23:13,197 American history and psychology and philosophy. Um and uh through and it was 440 00:23:13,280 --> 00:23:16,237 a reflection of the life you know of the of the of the person who made it and and 441 00:23:16,320 --> 00:23:19,437 of course it was also a great peanut is a great entrepreneurial accomplishment 442 00:23:19,520 --> 00:23:22,157 because you know it's this very personal thing but at the same time it became 443 00:23:22,240 --> 00:23:26,157 this gigantic business success. So I I think that one is great. Um, the wizard 444 00:23:26,240 --> 00:23:28,157 of Menlo Park is a great biography of 445 00:23:28,240 --> 00:23:31,277 Edison and Ed Edison is very much Edison 446 00:23:31,360 --> 00:23:33,917 was kind of proto Silicon Valley um, in 447 00:23:34,000 --> 00:23:39,037 a lot of ways um, and uh, I think he's really interesting to to his his his 448 00:23:39,120 --> 00:23:42,557 record of sustained innovation in many many different areas and how he then 449 00:23:42,640 --> 00:23:45,037 went out to try to commercialize things. 450 00:23:45,120 --> 00:23:48,717 We [laughter] good news is we are much better at the commercialization part now 451 00:23:48,800 --> 00:23:51,757 um, than than than people were in those days. we we know how to build the 452 00:23:51,840 --> 00:23:55,837 companies much better now but the pace you know he would just routinely invent 453 00:23:55,920 --> 00:24:00,877 things like the photograph like just [laughter] it's just obvious right to him 454 00:24:00,960 --> 00:24:03,997 >> um and so and he did that you know for decades he he he was a fountain of 455 00:24:04,080 --> 00:24:06,317 innovation and I it's a very inspiring story 456 00:24:06,400 --> 00:24:09,757 >> the Netscape uh story we touched on it 457 00:24:09,840 --> 00:24:13,357 very briefly and there are many places people can read about that so I don't 458 00:24:13,440 --> 00:24:16,317 want to take up too much time but on a 459 00:24:16,400 --> 00:24:21,597 related note I wanted to ask is there anything you miss about mid90s internet. 460 00:24:21,680 --> 00:24:23,997 >> Oh, yes. >> And what what would it be? 461 00:24:24,080 --> 00:24:27,197 >> Yeah. So, when I got to the valley um in 462 00:24:27,280 --> 00:24:32,797 1993, 1994, I thought I had missed the whole thing. Uh cuz I thought the PC I 463 00:24:32,880 --> 00:24:35,677 had studied, you know, I'd studied the history and I I used all this stuff in 464 00:24:35,760 --> 00:24:38,557 and I thought, you know, the PC I knew I knew, you know, Apple and and Microsoft 465 00:24:38,640 --> 00:24:42,237 up in Seattle, but Intel down here and then all these great, you know, all the 466 00:24:42,320 --> 00:24:44,957 big software companies at the time, you know, Noville and Lotus and all these 467 00:24:45,040 --> 00:24:49,277 companies, the game, you know, EA, the gaming companies. Um I the the great PC 468 00:24:49,360 --> 00:24:52,637 companies had gotten built in the 70s and 80s, right? And by the 90s by the 469 00:24:52,720 --> 00:24:55,997 time the '90s arrived, like it was the PC was done. Like it was it was finished 470 00:24:56,080 --> 00:25:00,557 and like you could go buy one and it was great, but like it was done. Um and and 471 00:25:00,640 --> 00:25:03,117 in fact, the overwhelming mood in the Valley when I arrived was that it was 472 00:25:03,200 --> 00:25:06,077 done. Like the the the PC was done. And by the way, the Valley was probably done 473 00:25:06,160 --> 00:25:10,877 because there was nothing else to do. Um and then there was this moment where 474 00:25:10,960 --> 00:25:14,637 I and you know, various people and then more people and then more people. For 475 00:25:14,720 --> 00:25:17,357 whatever reason, it was kind of like we really wrapped our heads around the 476 00:25:17,440 --> 00:25:20,397 implication of the internet, which today seems obvious, but at the time was a 477 00:25:20,480 --> 00:25:23,837 very contrarian. When I got to Silicon Valley, if you had said the internet 478 00:25:23,920 --> 00:25:26,317 will become a mainstream consumer medium that three billion people are going to 479 00:25:26,400 --> 00:25:28,957 use worldwide for all forms of human activity, you would have been laughed at 480 00:25:29,040 --> 00:25:32,077 like you would have been institutionalized like here, like people 481 00:25:32,160 --> 00:25:36,397 would have laughed at you. Um, and so as we figured that out, then what happened 482 00:25:36,480 --> 00:25:40,637 was it was like okay, new frontier, right? And this was part of the it goes 483 00:25:40,720 --> 00:25:43,037 back to the kind of history thing like you know for a long time the development 484 00:25:43,120 --> 00:25:45,837 of like you know the United States the new frontier was whatever was further 485 00:25:45,920 --> 00:25:48,797 west right and then eventually they got all the way to California and then they 486 00:25:48,880 --> 00:25:51,277 had the gold rush and like and then there was famous thing you know famous 487 00:25:51,360 --> 00:25:53,997 kind of theme in American history is the closing of the frontier like there's a 488 00:25:54,080 --> 00:25:57,037 theme of like every western right that every revisionist western that gets made 489 00:25:57,120 --> 00:25:59,917 is like there's nowhere frontier you know the radicals can't go any further 490 00:26:00,000 --> 00:26:04,077 west they just they'll draw in the ocean so [snorts] instead what we have are we 491 00:26:04,160 --> 00:26:06,877 have kind of virtual frontiers we have intellectual frontiers right or we have 492 00:26:06,960 --> 00:26:10,077 creative frontiers or we have entrepreneurial frontiers, technological 493 00:26:10,160 --> 00:26:12,157 frontiers and um and so the internet 494 00:26:12,240 --> 00:26:13,677 kind of represented the opening of a new 495 00:26:13,760 --> 00:26:17,197 frontier. And once we recognized that it 496 00:26:17,280 --> 00:26:20,717 was like aha [laughter] brand new and then at that point and 497 00:26:20,800 --> 00:26:23,117 that was where all the enthusiasm came from because it was that point of like 498 00:26:23,200 --> 00:26:26,397 okay if that's going to happen then you know what what do we have to do and at 499 00:26:26,480 --> 00:26:30,397 that point right the list becomes very exciting like we have to do e-commerce 500 00:26:30,480 --> 00:26:33,517 we have to do online publishing we have to do transactions we have to do you 501 00:26:33,600 --> 00:26:36,797 know social networking we have to do auctions we have to do right all of the 502 00:26:36,880 --> 00:26:39,837 big franchise companies that came out of you know the next you know 101 15 we 503 00:26:39,920 --> 00:26:44,317 have to do search [gasps] right all the ideas kind of immediately materialized 504 00:26:44,400 --> 00:26:47,197 Um and then people, you know, was off to the races. 505 00:26:47,280 --> 00:26:49,677 >> Is there anything comparable right now for you? 506 00:26:49,760 --> 00:26:51,677 >> So I think in my view there always is. 507 00:26:51,760 --> 00:26:55,277 Um the thing is um these things look like cults and fringe activities until 508 00:26:55,360 --> 00:26:59,997 they break mainstream. Um and so for me it's not I mean so like for example the 509 00:27:00,080 --> 00:27:02,237 mobile rush in the last 10 you know basically since the release of the 510 00:27:02,320 --> 00:27:05,357 iPhone the mobile rush qualified for this. The social networking rush kind of 511 00:27:05,440 --> 00:27:07,837 post Facebook qualified for this and those are kind of known and well 512 00:27:07,920 --> 00:27:11,197 understood and it's just straight entrepreneurial opportunities probably 513 00:27:11,280 --> 00:27:15,117 you know generally kind of reaching some level of saturation, 514 00:27:15,200 --> 00:27:19,277 right? Slight digression. We don't foreclose 515 00:27:19,360 --> 00:27:22,237 the possibility that there will be another mobile killer app or another 516 00:27:22,320 --> 00:27:25,677 social killer app, but it's getting harder and harder and harder because 517 00:27:25,760 --> 00:27:28,237 more and more people have figured out that you can do these things and then 518 00:27:28,320 --> 00:27:31,597 the winners have now gotten very established, right? One of the ways I 519 00:27:31,680 --> 00:27:34,637 think about it is to to have, you know, you know, first you had Facebook and 520 00:27:34,720 --> 00:27:36,957 then you had Twitter and then you had Instagram and now you have Snapchat and 521 00:27:37,040 --> 00:27:40,717 those all became big winners. Okay, now what would it take to make the fifth 522 00:27:40,800 --> 00:27:43,597 one? Well, it's got to there's only so many icons on the home screen of the 523 00:27:43,680 --> 00:27:46,717 phone, right? The fifth one has to knock something off. Has to knock one of the 524 00:27:46,800 --> 00:27:50,157 other ones off. And so, it's become as as these markets saturate becomes more 525 00:27:50,240 --> 00:27:53,437 of a zero- sum game. Or even even smartphones. Um, you know, smart 526 00:27:53,520 --> 00:27:57,037 smartphone smartphones a giant industry, but like unit volumes globally are now 527 00:27:57,120 --> 00:27:59,357 expanding at like single digit percentages. And so, the smartphone 528 00:27:59,440 --> 00:28:02,557 industry is becoming one that's mostly people competing directly with each 529 00:28:02,640 --> 00:28:07,037 other, not not creating new things. And so we would say like those opportunities 530 00:28:07,120 --> 00:28:09,677 those businesses are gigantic and those companies will get much bigger but 531 00:28:09,760 --> 00:28:12,877 there's not as much entrepreneurial opportunity. The opportunity is more 532 00:28:12,960 --> 00:28:15,437 likely to be in the areas that people think are cult and fringe. 533 00:28:15,520 --> 00:28:16,557 >> What would be some examples? 534 00:28:16,640 --> 00:28:19,757 >> We call this what we call our test on this what do the nerds do on nights and 535 00:28:19,840 --> 00:28:23,517 weekends, [laughter] >> right? Their day job like the day job is 536 00:28:23,600 --> 00:28:26,957 I work at Oracle or I work at you know I work at Salesforce.com or Adobe or Apple 537 00:28:27,040 --> 00:28:30,557 or Intel or one of these companies. Um or I'm or or not or I'm just I I work at 538 00:28:30,640 --> 00:28:34,477 an insurance company or I work at a bank or whatever or I'm a student. whatever, 539 00:28:34,560 --> 00:28:36,717 that's fine. They go they go do whatever they need to do to make a living. It's 540 00:28:36,800 --> 00:28:39,037 the question is like what what's the hobby? What's what's the thing at at 541 00:28:39,120 --> 00:28:42,797 night or on the weekends? So then things get really interesting, right? So then 542 00:28:42,880 --> 00:28:45,517 you look at like things like cryptocurrency, Bitcoin. Um you look at 543 00:28:45,600 --> 00:28:46,957 things like a lot of the new advances. 544 00:28:47,040 --> 00:28:49,837 There's a whole the whole area of kind of health hacking, you know, quantified 545 00:28:49,920 --> 00:28:51,597 self is a very interesting new area. 546 00:28:51,680 --> 00:28:55,037 There's food, you know, there's kind of you've you've actually been part of the 547 00:28:55,120 --> 00:28:57,597 catalyst for this, but there's this whole kind of area of like scientific 548 00:28:57,680 --> 00:28:59,917 food and food hacking that's emerging. 549 00:29:00,000 --> 00:29:04,317 Um there is uh a revolution actually happening I think in robotics um because 550 00:29:04,400 --> 00:29:08,077 robotics robotics has finally become something tractable where people can do 551 00:29:08,160 --> 00:29:12,477 it at home. There's uh AI deep learning is right on the tipping point. um you 552 00:29:12,560 --> 00:29:14,797 you can now download as a hobbyist you can now download this thing called 553 00:29:14,880 --> 00:29:18,237 TensorFlow from Google >> TensorFlow >> TensorFlow and which is a deep learning 554 00:29:18,320 --> 00:29:22,237 uh framework it's a framework for doing AI it's in 555 00:29:22,320 --> 00:29:25,197 the field of AI it's a it's for how computers can kind of deal with the real 556 00:29:25,280 --> 00:29:28,557 world and do things like self-driving cars or you know self you know 557 00:29:28,640 --> 00:29:31,997 self-flying drones or all these things this is technology it was so 5 years ago 558 00:29:32,080 --> 00:29:36,317 it didn't really work um two years ago you would have had to have been an 559 00:29:36,400 --> 00:29:39,437 employee at one of three or four big companies to have access to this 560 00:29:39,520 --> 00:29:42,237 technology and then Google just open sourced it And so now anybody in the 561 00:29:42,320 --> 00:29:45,357 world can download it, run it on their own computer. So all of a sudden like AI 562 00:29:45,440 --> 00:29:48,477 is like a tractable thing that you can just have on your own laptop and you can 563 00:29:48,560 --> 00:29:50,797 build you can build new things on top of. You can build you want to build a 564 00:29:50,880 --> 00:29:55,160 bot, you can build a bot. You want to build a self-driving 565 00:29:56,080 --> 00:29:59,037 car. >> I read about it, >> right, George? [laughter] And by the 566 00:29:59,120 --> 00:30:02,157 way, you should him you should interview. But um like literally like 567 00:30:02,240 --> 00:30:06,157 one guy can now build a self-driving car, right? 10 years ago, this is like a 568 00:30:06,240 --> 00:30:09,197 DARPA funded like grand challenge like research project. Five years ago, this 569 00:30:09,280 --> 00:30:12,797 is a, you know, team of a thousand at Google and now it's George, right? And 570 00:30:12,880 --> 00:30:15,837 so that that's an example of the kind of thing where it just looks like it's 571 00:30:15,920 --> 00:30:18,397 going to tip and then, you know, there's one George today, there will be a 572 00:30:18,480 --> 00:30:20,637 thousand Georgees tomorrow. 573 00:30:20,720 --> 00:30:23,837 >> Do you think the dangers of AI that some 574 00:30:23,920 --> 00:30:26,717 people talk about uh are overblown? 575 00:30:26,800 --> 00:30:29,757 >> Completely 100%. >> Yes. >> Can you elaborate? 576 00:30:29,840 --> 00:30:32,797 >> All the many things I worry about that machines rising up and killing us. 577 00:30:32,880 --> 00:30:35,277 >> Lite fallacy. >> It's not actually it's very it's related 578 00:30:35,360 --> 00:30:38,957 it's it's it's related to the lite fallacy. Um uh uh it's it's sharply 579 00:30:39,040 --> 00:30:42,877 related. It's it's the it's the it's the um it's the Prometheian fallacy. There's 580 00:30:42,960 --> 00:30:45,917 something deep-seated in human psychology where we are always going to 581 00:30:46,000 --> 00:30:49,597 invent the thing that's going to kill us. Um and at one point or we're we're 582 00:30:49,680 --> 00:30:51,917 going to we're going to unlock fundamentally we're going to unlock the 583 00:30:52,000 --> 00:30:54,637 power of the gods, right? It's it goes back to the Prometheian myth. It's like 584 00:30:54,720 --> 00:30:58,077 that it's it's it's almost like the concept of original sin. It's like fire, 585 00:30:58,160 --> 00:31:01,277 right? The big the big moral of the Prometheian myth was like fire. Fire is 586 00:31:01,360 --> 00:31:03,357 the thing that enabled human civilization is also the thing that's 587 00:31:03,440 --> 00:31:05,117 going to burn everything down and kill us all, 588 00:31:05,200 --> 00:31:07,277 >> right? Right? And [snorts] so this is very deeply embedded in our in our 589 00:31:07,360 --> 00:31:12,317 psychology. Frankenstein um Frankenstein the subtitle of Frankenstein of the 590 00:31:12,400 --> 00:31:15,917 novel the subtitle was the modern Prometheus. Right? It was direct 591 00:31:16,000 --> 00:31:19,037 Frankenstein was a reinterpret reinterpretation of the Prometheian myth 592 00:31:19,120 --> 00:31:21,677 except in this case it was literally the monster that was stitched together and 593 00:31:21,760 --> 00:31:25,837 then brought back to life through unholy literally unholy science. Um and then 594 00:31:25,920 --> 00:31:29,997 there was um uh there's even religious versions of it in in uh in in Jewish 595 00:31:30,080 --> 00:31:33,677 literature. There's a concept of the Gollum um which is the the the the 596 00:31:33,760 --> 00:31:37,597 creature made out of mud that that rise rise up out of the like the ghettos of 597 00:31:37,680 --> 00:31:40,237 of Warsaw or something to kill all the enemies and then come back and then they 598 00:31:40,320 --> 00:31:44,317 kills kills all the people who created it, right? So this is very kind of core 599 00:31:44,400 --> 00:31:48,397 John Henry uh the steel driving man, right? John Henry's the famous it's a 600 00:31:48,480 --> 00:31:51,597 there's a song or the the sort of story about the railroad worker and there's 601 00:31:51,680 --> 00:31:55,197 the machine that can like uh can um can hammer in the railroad spikes faster 602 00:31:55,280 --> 00:31:59,037 than a human can and John Henry's famous showdown between him and the machine and 603 00:31:59,120 --> 00:32:02,317 of course he wins and then drops dead of a heart attack right and it's critical 604 00:32:02,400 --> 00:32:05,197 in the myth that he drops dead of a heart attack right because technology 605 00:32:05,280 --> 00:32:09,517 has to get its revenge and so it's just that projected forward and and the 606 00:32:09,600 --> 00:32:12,397 reason I'm so confident on this is because it's just every single era of 607 00:32:12,480 --> 00:32:15,597 technological advance this has always been the response there's always been 608 00:32:15,680 --> 00:32:19,037 this line of thinking And then it turns out it's a tool. It's a technology. It's 609 00:32:19,120 --> 00:32:21,597 a tool. It's something that helps us do things in a better way. It's 610 00:32:21,680 --> 00:32:24,077 overwhelmingly to the benefit of mankind. And then we wonder why 611 00:32:24,160 --> 00:32:25,277 everybody got so worked up over it. 612 00:32:25,360 --> 00:32:28,237 >> So if we if we put aside the existential 613 00:32:28,320 --> 00:32:31,837 threat piece, you know, the summoning of the demon conversations, if we put that 614 00:32:31,920 --> 00:32:33,277 aside entirely, 615 00:32:33,360 --> 00:32:38,877 >> how would you answer someone who who worries about job displacement, 616 00:32:38,960 --> 00:32:41,917 >> right, >> of AI? And because there there are some 617 00:32:42,000 --> 00:32:44,957 re I think reasonably smart people who u 618 00:32:45,040 --> 00:32:46,957 are are very fearful of what will happen 619 00:32:47,040 --> 00:32:51,997 to society when people are are massively displaced. How how would you encourage 620 00:32:52,080 --> 00:32:54,717 them to think about that? >> Yeah. So let's crystallize the concern. 621 00:32:54,800 --> 00:32:57,357 So the World Economic Forum came out with this this thing last year that kind 622 00:32:57,440 --> 00:32:58,557 of made freaked a lot of people out. 623 00:32:58,640 --> 00:33:02,237 They said there'll be 5 million jobs destroyed um in the next by 2020 um by 624 00:33:02,320 --> 00:33:05,917 AI, right? Um so let's let's run the numbers on that. So that sounds like a 625 00:33:06,000 --> 00:33:08,637 lot of jobs. Like that's a lot of people. That sounds like a lot of jobs. 626 00:33:08,720 --> 00:33:13,197 Um, so then you look at the American economy. Just this year, 2016, and we 627 00:33:13,280 --> 00:33:15,997 don't quite have this AI thing working yet, so we can't blame what I'm about to 628 00:33:16,080 --> 00:33:18,637 say on AI. Um, this year, the American 629 00:33:18,720 --> 00:33:22,157 economy will destroy 21 million jobs and 630 00:33:22,240 --> 00:33:27,437 create about 24.5 million jobs for a net ad of about 3 and a half million jobs is 631 00:33:27,520 --> 00:33:31,677 is about the pace we're on. And that's this year, right? And so we will destroy 632 00:33:31,760 --> 00:33:35,997 in the next 3 months um we will destroy more jobs than the World Economic Forum 633 00:33:36,080 --> 00:33:40,077 project will be destroyed by AI over the next 5 years. Why don't people know 634 00:33:40,160 --> 00:33:43,757 this? Why is this not obvious? Because whenever you read news stories about job 635 00:33:43,840 --> 00:33:47,277 growth, it's always the numbers quoted are always net numbers. So last month 636 00:33:47,360 --> 00:33:51,997 200,000 jobs, 230 250,000 jobs got created. And so but those are net jobs. 637 00:33:52,080 --> 00:33:54,077 Nobody ever reports the gross numbers. 638 00:33:54,160 --> 00:33:57,037 The gross numbers are you go back numbers. We destroy more than 5 million 639 00:33:57,120 --> 00:33:59,677 jobs a quarter and we create more than six million jobs a quarter. basically 640 00:33:59,760 --> 00:34:03,517 quarter in quarter out. And so one is people just dramatically underestimate 641 00:34:03,600 --> 00:34:08,397 the size and complexity and churn in the American economy as it currently exists. 642 00:34:08,480 --> 00:34:10,877 Another example would be there's about it turns out there's about 5 million 643 00:34:10,960 --> 00:34:13,597 people who drive professionally in the US. And so one of the questions with 644 00:34:13,680 --> 00:34:16,317 like self-driving cars, right, is where this what's going [snorts] to happen to 645 00:34:16,400 --> 00:34:18,717 the truck drivers and the taxi drivers and everything and everything else. 646 00:34:18,800 --> 00:34:22,557 Again, 5 million jobs. We can redeploy we we redeploy every every quarter we 647 00:34:22,640 --> 00:34:26,397 redeploy 5 million people. Like this is not in the scope and scheme of the 648 00:34:26,480 --> 00:34:30,477 American economy. uh it's it's it's a totally doable thing. The other thing 649 00:34:30,560 --> 00:34:33,917 that people don't appreciate and understand I find mind-blowing which is 650 00:34:34,000 --> 00:34:36,717 would you would you guess based on everything that people say would you 651 00:34:36,800 --> 00:34:39,997 guess that the rate of job creation and disruption of the American economy is 652 00:34:40,080 --> 00:34:42,797 rising over time or falling over time. 653 00:34:42,880 --> 00:34:48,317 >> Oh this this seems like a test I'm bound to fail. Uh I don't have an informed 654 00:34:48,400 --> 00:34:49,997 opinion. >> Well you would you would I think most 655 00:34:50,080 --> 00:34:52,557 people would guess that it's rising, right? The view would be technology is 656 00:34:52,640 --> 00:34:56,237 having ever greater impact, right? And so and and change feels like it's 657 00:34:56,320 --> 00:34:59,197 accelerating, right? It's the big theme in the political season is it feels like 658 00:34:59,280 --> 00:35:01,917 the world's kind of getting away from us. Technolog [snorts] is getting away 659 00:35:02,000 --> 00:35:03,677 from us. Trade's getting away from us. 660 00:35:03,760 --> 00:35:06,557 You know, something is, you know, basically dramatic changes are happening 661 00:35:06,640 --> 00:35:09,437 that are historically unprecedented, right? It's kind of the feeling. 662 00:35:09,520 --> 00:35:11,917 >> So almost everybody believe if you do poll this almost everybody believes 663 00:35:12,000 --> 00:35:13,517 >> it's definitely the perception being created, 664 00:35:13,600 --> 00:35:16,557 >> right? Almost everybody believes that change is increasing change accelerate. 665 00:35:16,640 --> 00:35:19,837 Actually turns out in the American economy the reverse is happening. um the 666 00:35:19,920 --> 00:35:23,037 rate of both job destruction and creation are falling and have been 667 00:35:23,120 --> 00:35:26,717 falling for decades. Have been like over the last 50 years, they're not dramatic 668 00:35:26,800 --> 00:35:29,917 lines down, but they're basically very slow lines down. So basically what's 669 00:35:30,000 --> 00:35:33,757 been happening is in in in fact um every year the American economy gets less 670 00:35:33,840 --> 00:35:37,437 dynamic, right? And and and you might say, "Oh, that's good because that means 671 00:35:37,520 --> 00:35:39,917 that you'll have stability. That means people won't have to change jobs, all 672 00:35:40,000 --> 00:35:42,877 that stuff." I would argue that's bad because what that means is we're not 673 00:35:42,960 --> 00:35:46,317 creating enough opportunity, right? And if we're thinking about the future, I 674 00:35:46,400 --> 00:35:48,317 think we want to think about opportunity. We want to think about what 675 00:35:48,400 --> 00:35:49,917 we're going to be able to do in the future. And we want to think about what 676 00:35:50,000 --> 00:35:52,797 our kids are going to be able to do in the future, right? What will be the new 677 00:35:52,880 --> 00:35:56,637 the new fields, the new sciences, the new forms of art, the new industries, 678 00:35:56,720 --> 00:36:00,077 the new businesses, the new companies, the new jobs that will get created, 679 00:36:00,160 --> 00:36:03,597 right? Every job that we all have and everybody listening to this podcast has 680 00:36:03,680 --> 00:36:08,157 got created as a consequence of the process of change, right? Which is very 681 00:36:08,240 --> 00:36:11,117 has been very positive to literally everybody on planet Earth. Like this 682 00:36:11,200 --> 00:36:13,677 this is these have been very very positive changes in terms of increase in 683 00:36:13,760 --> 00:36:17,517 human welfare and opportunity. And so the idea of living in a world where 684 00:36:17,600 --> 00:36:20,317 change is becoming less rapid, which is 685 00:36:20,400 --> 00:36:24,557 what's actually happening to me is is to me that would be the problem. Like we we 686 00:36:24,640 --> 00:36:26,877 should want more change. We should want we should want more change because we 687 00:36:26,960 --> 00:36:29,197 should want more advances because we should want more opportunity to get 688 00:36:29,280 --> 00:36:32,157 created. We should want more products and services in our lives. We should 689 00:36:32,240 --> 00:36:35,277 want more industries created. We should want you know more medical advances. We 690 00:36:35,360 --> 00:36:38,557 should want more advances in art and science and every other field of human 691 00:36:38,640 --> 00:36:42,717 activity. And we basically the way I view it is we have to fight to get that. 692 00:36:42,800 --> 00:36:44,557 >> Mhm. >> As opposed to what everybody thinks, 693 00:36:44,640 --> 00:36:46,797 which is we have to fight to prevent that. 694 00:36:46,880 --> 00:36:48,717 >> What's the smartest way to fight to get that? 695 00:36:48,800 --> 00:36:51,117 >> If you were willing to go into politics, 696 00:36:51,200 --> 00:36:53,117 >> sure, [laughter] I'm willing. This is this is uh 697 00:36:53,200 --> 00:36:55,837 >> when you run for office, when you run for office, I will help you put your 698 00:36:55,920 --> 00:37:00,557 platform together. Um [laughter] short of that, um I think the thing to 699 00:37:00,640 --> 00:37:03,197 do, I mean, I think that the valley view and I guess my view is, you know, do 700 00:37:03,280 --> 00:37:05,757 what do what you can to directly contribute to it, right? And so do what 701 00:37:05,840 --> 00:37:08,957 you can. Do what you can to either either try to create the new things. Try 702 00:37:09,040 --> 00:37:11,917 to create the new products. Create the new the new the new again art, science, 703 00:37:12,000 --> 00:37:16,957 technology products, what consumer goods, create new things. Um uh create 704 00:37:17,040 --> 00:37:18,717 businesses around those things, right? 705 00:37:18,800 --> 00:37:21,197 Create companies or for that matter by the way nonprofits like create 706 00:37:21,280 --> 00:37:24,637 organizations or models that can let things scale so that they can touch more 707 00:37:24,720 --> 00:37:28,957 people. Um and then you know a big part of our role is is is is fund them fund 708 00:37:29,040 --> 00:37:31,277 them and support them and help and help enable them and train them and get them 709 00:37:31,360 --> 00:37:34,317 up and running. Uh you mentioned for instance when you first got to the 710 00:37:34,400 --> 00:37:38,877 valley there was a feeling on the part of many people that it's done. 711 00:37:38,960 --> 00:37:42,077 >> Yeah. >> PCs are finished. You missed the boat kid. 712 00:37:42,160 --> 00:37:44,317 >> Now in the venture capital world there's 713 00:37:44,400 --> 00:37:47,277 a term used fairly often FOMO. Fear of 714 00:37:47,360 --> 00:37:51,437 missing out. >> How do you think about or handle FOMO 715 00:37:51,520 --> 00:37:54,637 yourself? >> Yeah. Mostly we just fall right for it. 716 00:37:54,720 --> 00:37:57,520 Um [laughter] 717 00:37:58,960 --> 00:38:02,877 probably just total suckers for it. Um, [laughter] 718 00:38:02,960 --> 00:38:06,797 so the way we describe Oh, so so what fear missing out? Where does fear 719 00:38:06,880 --> 00:38:09,517 missing out comes from? It's it's like it's clear invisible signs that 720 00:38:09,600 --> 00:38:12,237 something is happening that you're not a part of, right? And so it's not FOMO of 721 00:38:12,320 --> 00:38:14,317 something that hasn't happened yet. It's FOMO of something that's clearly 722 00:38:14,400 --> 00:38:15,997 obviously happening. 723 00:38:16,080 --> 00:38:18,717 >> So which which for those people not in 724 00:38:18,800 --> 00:38:21,837 in the tech investment world comes uh in 725 00:38:21,920 --> 00:38:26,077 in a concrete form just as a as a maybe mundane example like an email from a 726 00:38:26,160 --> 00:38:28,637 founder. Hey, we'd love to squeeze you 727 00:38:28,720 --> 00:38:33,117 in. We're overcommitted. so and so and so and so is in can you get us doxed by 728 00:38:33,200 --> 00:38:36,797 tomorrow if you're interested >> blah right I mean there's a lot of sort 729 00:38:36,880 --> 00:38:41,117 of cult cortisol >> driven emergencies uh some of which may 730 00:38:41,200 --> 00:38:44,077 be real many of which are illusions >> yeah yeah and so the thing is so I guess 731 00:38:44,160 --> 00:38:46,477 there's kind of there's kind of you know there's kind of a couple ways to handle 732 00:38:46,560 --> 00:38:49,757 it one is you just like you one of is you you view that as a sign of success 733 00:38:49,840 --> 00:38:52,077 like you view that as like what it appears to be which is like okay the 734 00:38:52,160 --> 00:38:56,237 train is leaving the station and do I want to be on the train or not um that 735 00:38:56,320 --> 00:38:59,037 strikes everybody as like so clearly wrong like that must be wrong like that 736 00:38:59,120 --> 00:39:02,477 that must be just foolish behavior, which is why it's been encapsulated into 737 00:39:02,560 --> 00:39:05,117 this term called FOMO that's kind of designed, you know, designed to sound 738 00:39:05,200 --> 00:39:09,037 scary. Like that that must be a stupid thing. You know, a lot of people will at 739 00:39:09,120 --> 00:39:11,757 least say that what they try to do then is kind of take the cynical kind of 740 00:39:11,840 --> 00:39:14,557 counter, you know, theory, which is like, okay, then by definition, those 741 00:39:14,640 --> 00:39:16,957 are probably bad ideas cuz you're probably getting played or you're 742 00:39:17,040 --> 00:39:19,997 probably a sucker kind of, you know, along for the the the latest scam. And 743 00:39:20,080 --> 00:39:23,277 so, um, or the opportunities passed or if it was a good opportunity, why would 744 00:39:23,360 --> 00:39:26,717 you be asked to participate in it? Um, and then you go to the other side, the 745 00:39:26,800 --> 00:39:29,597 other the other cynical side of the poll, which is like, okay, now I'm I'm 746 00:39:29,680 --> 00:39:33,037 I'm I'm not I'm not and there are certain VCs who do this, by the way. Um, 747 00:39:33,120 --> 00:39:35,677 I'm not ever going to invest in anything hot because it's going to have that 748 00:39:35,760 --> 00:39:38,957 characteristic. So, I'm going to I'm only going to invest in things that aren't hot, 749 00:39:39,040 --> 00:39:41,277 >> the uncredited trade. >> Yeah. Yeah. The thing that nobody else 750 00:39:41,360 --> 00:39:44,877 is interested in, right? And, you know, sort of it's on for old companies, we 751 00:39:44,960 --> 00:39:47,277 call that value investing. You know, for new companies, we just call that, you 752 00:39:47,360 --> 00:39:52,237 know, cold sectors. It's just an area in which nobody is interested. And and so 753 00:39:52,320 --> 00:39:55,357 um and you know by the way like I don't think that that's I don't think in any 754 00:39:55,440 --> 00:39:57,837 way that's a dumb conclusion and there are investors who do that and it works 755 00:39:57,920 --> 00:40:00,317 very well for them. My personal preference what I try to get us to do 756 00:40:00,400 --> 00:40:03,837 around here is to just eliminate this as a variable altogether and literally just 757 00:40:03,920 --> 00:40:06,877 like not think about it. And so like if it's urgent and we have to invest 758 00:40:06,960 --> 00:40:09,277 tomorrow and then if it's you know they may or may not ever be able to raise 759 00:40:09,360 --> 00:40:13,197 money in 5 years what I try to get us to do is just ignore that part entirely. 760 00:40:13,280 --> 00:40:16,957 Basically just take that out um for on both sides both the hot and the cold. 761 00:40:17,040 --> 00:40:19,837 just take it all out and then and then try to get to the try to get to the 762 00:40:19,920 --> 00:40:23,757 actual thing, right? [snorts] Try to get to the it. So what what is it really? 763 00:40:23,840 --> 00:40:27,357 This specific company, right? Doing this specific thing with this specific 764 00:40:27,440 --> 00:40:30,477 technology, these specific people at this specific time, what is that thing? 765 00:40:30,560 --> 00:40:33,517 And [snorts] let's make our own evaluation of that thing independent of 766 00:40:33,600 --> 00:40:37,517 whether it's hot or cold. Um and then if it makes sense, we'll invest. And if it 767 00:40:37,600 --> 00:40:41,277 doesn't, we don't. But we won't factor in whether it's hot or cold. Now, the 768 00:40:41,360 --> 00:40:44,237 challenge, we we've actually we've we've we've we've worked on this over time. 769 00:40:44,320 --> 00:40:48,637 Roughly on average the things that are hot are priced somewhere between two to 770 00:40:48,720 --> 00:40:50,717 4x higher than the things that are cold. 771 00:40:50,800 --> 00:40:54,957 At the extreme from coldest cold to hotest hot is about 4x, right? And so in 772 00:40:55,040 --> 00:40:57,357 in in investing terms, if it's super 773 00:40:57,440 --> 00:41:02,077 hot, it's could be 40 pre. If it's super cold, it's 10 pre and for the same 774 00:41:02,160 --> 00:41:05,277 quality, right? For the same fundamental quality level. And a big part of our 775 00:41:05,360 --> 00:41:08,877 answer is okay, fine. Like it's fine. If we're going to invest, we'll we'll 776 00:41:08,960 --> 00:41:11,277 invest on market terms. If the market terms are 10 because it's cold, we'll 777 00:41:11,360 --> 00:41:13,757 invest there. If the market terms are 40 because it's hot, we'll invest there. 778 00:41:13,840 --> 00:41:16,397 But we've made our own decision about whether to invest. So we just try to 779 00:41:16,480 --> 00:41:19,437 strip it away. >> Got it. >> Very, by the way, easy to say. 780 00:41:19,520 --> 00:41:21,997 >> Easy to say, hard to do. Yeah. The uh 781 00:41:22,080 --> 00:41:28,397 Are there any particular investors outside of venture capital who impress 782 00:41:28,480 --> 00:41:31,037 you? >> Yeah. So I spend most of when I study 783 00:41:31,120 --> 00:41:34,477 other investors. Um I either study the people we study the people we compete 784 00:41:34,560 --> 00:41:38,477 with and and and collaborate with very closely. Um I also uh I particularly 785 00:41:38,560 --> 00:41:41,757 study the value investors on the completely other side of the spectrum. 786 00:41:41,840 --> 00:41:44,397 And it's a it's a fascinating and I've gotten to know some of them directly. 787 00:41:44,480 --> 00:41:47,037 It's a fascinating kind of thing. You know, sort of Warren Buffett as the 788 00:41:47,120 --> 00:41:49,117 archetype, but also there's now, you know, there's a lot of famous value 789 00:41:49,200 --> 00:41:51,597 investors, Seth Clarman and a bunch of others that have kind of, you know, 790 00:41:51,680 --> 00:41:53,837 written books and kind of built up this smart guy. 791 00:41:53,920 --> 00:41:55,277 >> Yeah. Yeah. This whole kind of theory of 792 00:41:55,360 --> 00:41:59,357 of uh of uh value investing that go back to Ben Graham in the 19 in the 1920s, 793 00:41:59,440 --> 00:42:03,197 1930s. And so there's this whole world of value investing. And on the one hand, 794 00:42:03,280 --> 00:42:08,077 there's no overlap um between the worlds because I like to say like um basically 795 00:42:08,160 --> 00:42:11,517 anything Warren Buffett's worth willing to invest in, we run screaming in the 796 00:42:11,600 --> 00:42:13,277 other direction and vice versa, right? 797 00:42:13,360 --> 00:42:15,917 And that's [snorts] as it should be, right? Basically everything he invests 798 00:42:16,000 --> 00:42:18,397 in like Hines ketchup, right? And the reason he invests in Hines ketchup is 799 00:42:18,480 --> 00:42:21,757 because people have been eat ketchup on hamburgers for a hundred years and 800 00:42:21,840 --> 00:42:24,237 therefore the best guess would be that they're going to continue to eat Hines 801 00:42:24,320 --> 00:42:27,757 ketchup for the next hundred years. Um we weren't screaming from that cuz like 802 00:42:27,840 --> 00:42:29,277 >> you're not going to invest in seize candy. 803 00:42:29,360 --> 00:42:33,037 >> No. [laughter] No. We like, no, absolutely not. And furthermore, I'm 804 00:42:33,120 --> 00:42:35,517 I'll, you know, every time I hear a story like Ces Candy, I want to go find 805 00:42:35,600 --> 00:42:38,477 the new like scientific, you know, superfood candy company that's going to 806 00:42:38,560 --> 00:42:39,677 blow them right out of the water, right? 807 00:42:39,760 --> 00:42:43,277 So, like we're we're we're wired completely opposite in in in that sense. 808 00:42:43,360 --> 00:42:44,397 Basically, he's betting against change. 809 00:42:44,480 --> 00:42:48,317 We're bet we're betting for change. And and that's a very very big like when he 810 00:42:48,400 --> 00:42:51,197 makes a mistake, it's because something changes that he didn't expect. When we 811 00:42:51,280 --> 00:42:54,317 make a mistake, it's because something doesn't change, right, that we that we 812 00:42:54,400 --> 00:42:58,077 thought would. And so so they could not be more different in that way. But what 813 00:42:58,160 --> 00:43:02,717 both schools have in common is um an orientation towards I would say original 814 00:43:02,800 --> 00:43:05,917 thinking of really being able to kind of going back to the previous conversation 815 00:43:06,000 --> 00:43:08,797 willing to really view things as they are as opposed to what everybody says 816 00:43:08,880 --> 00:43:11,597 about them or the way they're believed to be like the value investor is always 817 00:43:11,680 --> 00:43:13,517 talking about like getting to the core of the truth of what's actually 818 00:43:13,600 --> 00:43:17,597 happening in the business and then the other is long-term. It's the only other 819 00:43:17,680 --> 00:43:20,077 place value investor value investing is the only other place in the market 820 00:43:20,160 --> 00:43:22,477 anymore where you can find long-term investors. So Buffett will actually 821 00:43:22,560 --> 00:43:27,757 invest in a company and he will hold it for 40 years and that does not happen 822 00:43:27,840 --> 00:43:30,797 you know elsewhere in the market. It's only the deep value guys who will do that. 823 00:43:30,880 --> 00:43:33,197 >> It's funny that at the extremes they have that in common. 824 00:43:33,280 --> 00:43:37,277 >> Yeah that's right. Yeah. [laughter] >> If you you were talking about uh 825 00:43:37,360 --> 00:43:41,037 creating opportunity if if you decided to close a chapter on your your career 826 00:43:41,120 --> 00:43:46,797 as a venture capitalist, a funer of ideas, uh a catalyst and you had to 827 00:43:46,880 --> 00:43:47,837 teach a class. 828 00:43:47,920 --> 00:43:51,597 >> Mhm. So, let's just say ninth grade or 829 00:43:51,680 --> 00:43:54,317 freshman year in college, 50 students. 830 00:43:54,400 --> 00:43:58,157 What would you teach? >> I would be highly inclined towards 831 00:43:58,240 --> 00:44:00,797 teaching people how to build things. 832 00:44:00,880 --> 00:44:03,277 There's a book I've actually never read, but I love the title. 833 00:44:03,360 --> 00:44:06,717 >> What's the title? >> Um, it's called Smart People Should Build Things. 834 00:44:06,800 --> 00:44:08,477 >> I do like the title. >> I almost don't even want to read the 835 00:44:08,560 --> 00:44:11,277 book because after that title, almost everything almost anything it says is 836 00:44:11,360 --> 00:44:14,317 going to be a letown, but the title is absolutely brilliant. It's [snorts] one 837 00:44:14,400 --> 00:44:16,317 of my two favorite titles. >> What's the second? 838 00:44:16,400 --> 00:44:18,637 >> Second one. Steve Martin. Uh, I have read this one. Steve Martin's 839 00:44:18,720 --> 00:44:20,157 autobiography is a fantastic book. 840 00:44:20,240 --> 00:44:22,237 >> Oh, my life standing up. >> My life standing up. And actually, 841 00:44:22,320 --> 00:44:23,357 sorry, it's not the title of the book. 842 00:44:23,440 --> 00:44:26,157 It's called My Life Standing Up is the title, but the main lesson of the book, 843 00:44:26,240 --> 00:44:30,477 he says, "The key to success is quote, "Be so good they can't ignore you." 844 00:44:30,560 --> 00:44:33,517 Right? And so, and I think it's just basically if you just had those two 845 00:44:33,600 --> 00:44:36,957 principles, like if smart people should make things and and be so good they 846 00:44:37,040 --> 00:44:40,077 can't ignore you. Like that's a pretty good way to like that's a pretty good 847 00:44:40,160 --> 00:44:43,277 way to orient. >> The the autobiography is amazing. Also, 848 00:44:43,360 --> 00:44:45,997 just as a side note, I listen to the audio book, the Steve Steve Martin audio 849 00:44:46,080 --> 00:44:48,157 book. Yeah, it's a >> Yeah, he's I mean he he's he's a comedy 850 00:44:48,240 --> 00:44:50,397 genius, but more than that the level it's like the Schultz thing. It's like 851 00:44:50,480 --> 00:44:53,517 the level of thoughtfulness that he put into how he constructed his career. Like 852 00:44:53,600 --> 00:44:57,837 nothing about his career as an accident, which I thought was is fas anyway. So, 853 00:44:57,920 --> 00:45:00,317 um I think it would be how to make things. Um and by the way, I don't 854 00:45:00,400 --> 00:45:03,117 necessarily even just mean new software and new computer programs, but how to 855 00:45:03,200 --> 00:45:06,237 make things more broadly. Um and so how to make, you know, again, it goes back 856 00:45:06,320 --> 00:45:08,557 to how to make, you know, how to make new art, how to make new science, how to 857 00:45:08,640 --> 00:45:10,957 make new technology, how to make a new company. 858 00:45:11,040 --> 00:45:15,117 >> How would you teach that? >> Uh I think projects. I think hands-on 859 00:45:15,200 --> 00:45:17,277 projects. So you would have say an art 860 00:45:17,360 --> 00:45:22,237 assignment, you would have a science/engineering assignment of some 861 00:45:22,320 --> 00:45:25,197 type. >> Yeah. Yeah. Or you'd have an objective. 862 00:45:25,280 --> 00:45:27,997 You'd have a, you know, you'd be trying to construct something. Um, it's very, 863 00:45:28,080 --> 00:45:30,797 it actually turns out one of the reasons why computer science has advanced so 864 00:45:30,880 --> 00:45:34,237 fast in the last, you know, 30 years is because people can make new things on 865 00:45:34,320 --> 00:45:35,997 computers without anybody's permission. 866 00:45:36,080 --> 00:45:38,717 >> And so, you know, it lends itself very well to that. But, you know, people can 867 00:45:38,800 --> 00:45:40,637 also write books without anybody's permission. And they can also write 868 00:45:40,720 --> 00:45:43,997 music without anybody's permission. and they can also start companies mostly 869 00:45:44,080 --> 00:45:47,677 without anybody's permission in most industries. And so basically just 870 00:45:47,760 --> 00:45:50,397 anywhere where you can actually do where you can actually yourself create 871 00:45:50,480 --> 00:45:54,717 something new, make something new. Um and then I find you know I'm I'm 872 00:45:54,800 --> 00:45:58,557 actually a little a little bit from folks like Elon Musk on this like I find 873 00:45:58,640 --> 00:46:01,277 making something new for sure there's part of it what everybody wants to say 874 00:46:01,360 --> 00:46:04,957 is it's creativity and so therefore it's like you want to do something new have 875 00:46:05,040 --> 00:46:08,317 an original idea but but again that that makes people feel like it's it's a it's 876 00:46:08,400 --> 00:46:12,717 an unattainable thing. It's like how how am I how am I how how am I possibly 877 00:46:12,800 --> 00:46:15,037 going to come up with a new idea in a field and where people have been working 878 00:46:15,120 --> 00:46:19,357 in it for 100 or 200 years like it just seems implausible. So I also find u and 879 00:46:19,440 --> 00:46:22,157 I think the great artists and the great scientists and the great business people 880 00:46:22,240 --> 00:46:24,957 often have this in common which just goes back to history which is okay for 881 00:46:25,040 --> 00:46:27,997 whatever you're going to make learn about how things got made in the past 882 00:46:28,080 --> 00:46:30,557 and get inside the heads of the people who made things in the past and what 883 00:46:30,640 --> 00:46:33,517 they were actually like and then realize that actually they're not that different 884 00:46:33,600 --> 00:46:37,037 than you. Like at the time they got started they're kind of just like you. 885 00:46:37,120 --> 00:46:38,317 See, Steve Jobs Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve 886 00:46:38,400 --> 00:46:38,797 Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Jobs 887 00:46:38,880 --> 00:46:41,677 had a great he said uh one of his in his I think in his commencement famous 888 00:46:41,760 --> 00:46:44,157 commencement speech he said everything everything in the world around you was 889 00:46:44,240 --> 00:46:47,597 made by somebody who's no smarter than you than you are right and so there's 890 00:46:47,680 --> 00:46:50,877 nothing stopping any of the rest of us from doing the same thing 891 00:46:50,960 --> 00:46:53,917 >> um and so I think that that would probably be what I would try to do 892 00:46:54,000 --> 00:46:57,117 >> maybe a boring left turn but I'm 893 00:46:57,200 --> 00:46:59,277 interested to ask and that is uh what 894 00:46:59,360 --> 00:47:01,997 are the companies or who are the people 895 00:47:02,080 --> 00:47:05,437 you're watching most closely in AI 896 00:47:05,520 --> 00:47:09,037 drones and cryptocurrency Yeah. So, I'm very proud of we have a 897 00:47:09,120 --> 00:47:12,397 bunch of we have a bunch of companies that we put our like to say we're we 898 00:47:12,480 --> 00:47:16,557 conflict of interest or put your money where your mouth is. We have both. Um we 899 00:47:16,640 --> 00:47:19,997 have lived up to both principles. So, um we have two drone companies that I think 900 00:47:20,080 --> 00:47:23,517 are spectacular. Um uh so, uh Airware was our first drone investment. 901 00:47:23,600 --> 00:47:27,117 Commercial drones, which turns out is going to be just a giant market [snorts] 902 00:47:27,200 --> 00:47:31,437 um for in industries, oil and gas and insurance and all kinds of all kinds of 903 00:47:31,520 --> 00:47:35,117 implications. But the one that people are going to see I think in in in in 904 00:47:35,200 --> 00:47:37,677 their day-to-day lives is going to be more the other one which is called Sky 905 00:47:37,760 --> 00:47:42,477 Deal. Um which is a a company we back doing um autonomous consumer drones. Um 906 00:47:42,560 --> 00:47:45,197 and this is going to be a very big advance in what you can do at the kind 907 00:47:45,280 --> 00:47:49,117 of hobbyist level. >> What does an autonomous consumer drone do? 908 00:47:49,200 --> 00:47:51,467 >> Um it well whatever you tell it. 909 00:47:51,550 --> 00:47:55,037 [laughter] >> Got it. Okay. >> And so um they haven't really uh they 910 00:47:55,120 --> 00:47:57,357 haven't rolled out the product yet and so I don't want to spoil too much of the 911 00:47:57,440 --> 00:48:00,397 surprise but it's basically it's it's a drone that can it can fully fly itself. 912 00:48:00,480 --> 00:48:02,157 Mhm. >> It doesn't there's no it doesn't require 913 00:48:02,240 --> 00:48:05,037 remote control. Um and so it can be given assignments and it will go carry 914 00:48:05,120 --> 00:48:08,397 out those assignments and it can fly through it can fly through tree 915 00:48:08,480 --> 00:48:11,837 branches. It can fly through power lines. It can fly through underground 916 00:48:11,920 --> 00:48:14,077 parking garages without any collisions. 917 00:48:14,160 --> 00:48:17,597 Like it it can just it can pilot itself which if you've tried flying any of the 918 00:48:17,680 --> 00:48:19,357 current drones, they don't work that way. 919 00:48:19,440 --> 00:48:22,077 >> Hard to do. >> Yes. [laughter] It's exercise in how 920 00:48:22,160 --> 00:48:25,517 quickly you crash it. And so like that that technology is about to tip and 921 00:48:25,600 --> 00:48:30,957 become very widely usable. Um and so that that's very exciting. Um, so 922 00:48:31,040 --> 00:48:34,237 there's that. Um, >> I'm sorry to to interrupt. Commercial 923 00:48:34,320 --> 00:48:37,117 drones for insurance. >> Yeah. So, for be an example. 924 00:48:37,200 --> 00:48:38,317 >> Yeah. Res residential insurance. 925 00:48:38,400 --> 00:48:41,597 Residential insurance. You you get an insurance inspector. You you're a new 926 00:48:41,680 --> 00:48:44,077 construction. You're remodeling or you're building a new house and there's, 927 00:48:44,160 --> 00:48:46,157 you know, you're going to get the insurance company's going to insure it. 928 00:48:46,240 --> 00:48:49,597 Um, they do an inspection. Um, the inspection involves, you know, a person 929 00:48:49,680 --> 00:48:53,357 climbing up on the roof and hopefully not falling off, right? And taking a 930 00:48:53,440 --> 00:48:55,917 bunch of notes on a clipboard and writing up a bunch of stuff. And like 931 00:48:56,000 --> 00:48:58,937 it's actually turns out to be a pretty like it's a fairly dangerous job. Mhm. 932 00:48:59,020 --> 00:49:01,837 [snorts] >> Or another example, cell tower inspection. Um, oh, there's all these 933 00:49:01,920 --> 00:49:04,397 cell towers. There's, I don't know, 30,000 or something cell towers in the 934 00:49:04,480 --> 00:49:08,797 US. They only need inspected. Inspection literally is a dude on cables, right? 935 00:49:08,880 --> 00:49:12,637 And some of these are big towers. Um, and then you get to like oil and gas. 936 00:49:12,720 --> 00:49:15,917 Like you get to a drilling rig, you got to inspect that thing. Okay? You know, 937 00:49:16,000 --> 00:49:19,677 try climbing up to the top of an oil and gas rig, right? [snorts] Like these are 938 00:49:19,760 --> 00:49:21,677 very these are these are these are dangerous things. 939 00:49:21,760 --> 00:49:24,157 >> Lethal professionals, >> right? These are these are Yeah. And so, 940 00:49:24,240 --> 00:49:26,397 um, if you could but what if you could what if you could just fly the drone? 941 00:49:26,480 --> 00:49:29,277 Like what if you could literally do the entire thing by air, right? What if the 942 00:49:29,360 --> 00:49:32,157 inspector just rolled up to the house and just took the drone out of the back 943 00:49:32,240 --> 00:49:34,797 seat and just launched up in the air and the drone flies a pattern above the 944 00:49:34,880 --> 00:49:38,637 house, takes comprehensive 2D photographs of everything and then 945 00:49:38,720 --> 00:49:42,397 creates a 3D representation from the 2D photographs, which you can now do, and 946 00:49:42,480 --> 00:49:45,917 then does all the recognition, elevations, everything, materials, 947 00:49:46,000 --> 00:49:49,837 figures everything out, and then the guy's literally the the inspector's like 948 00:49:49,920 --> 00:49:53,297 sitting in the driveway in the car, you know, with air conditioning on like 949 00:49:53,380 --> 00:49:54,957 [snorts] in no danger, >> safe and sound. 950 00:49:55,040 --> 00:49:56,477 >> Yeah. Yeah. And so that kind of thing or 951 00:49:56,560 --> 00:50:00,397 there's another I'll give you another um uh this nobody's doing this yet but 952 00:50:00,480 --> 00:50:05,037 somebody's going to um so if you're if you're a cop if you're cop on the beat 2 953 00:50:05,120 --> 00:50:07,517 in the morning you get a call um that there's a convenience store and 954 00:50:07,600 --> 00:50:09,997 somebody's broken in the convenience store you have to go do the check. The 955 00:50:10,080 --> 00:50:12,957 check involves going and seeing whether the you know the lights and all this 956 00:50:13,040 --> 00:50:15,757 stuff and broken glass but you also have to check the roof. And checking [snorts] 957 00:50:15,840 --> 00:50:19,117 the roof is actually a very important thing because if there was a bad guy and 958 00:50:19,200 --> 00:50:21,837 they saw the cops coming they might have climbed up on the roof and they might 959 00:50:21,920 --> 00:50:23,517 have a gun and they might shoot at you. 960 00:50:23,600 --> 00:50:25,277 Um, and so you got to go clear the roof. 961 00:50:25,360 --> 00:50:28,957 Um, and so what do you do? You get your flashlight and your gun and you climb 962 00:50:29,040 --> 00:50:32,157 the ladder and you poke your head up and you hope that nobody's on the roof. 963 00:50:32,240 --> 00:50:35,197 >> Hope no one plays whack-a-ole with your head with a revolver. 964 00:50:35,280 --> 00:50:38,237 >> Yes. Exactly. Right. And so what would be the what would be what could we do to 965 00:50:38,320 --> 00:50:41,357 help that? What how about how about every every police car have a drone in 966 00:50:41,440 --> 00:50:44,237 the back seat and you just you get to the thing and from a safe distance you 967 00:50:44,320 --> 00:50:48,477 launch the drone and the drone does an infrared camera sweep right of the roof 968 00:50:48,560 --> 00:50:50,397 right before you even walk up to the thing. 969 00:50:50,480 --> 00:50:53,197 >> Right. And by the way, like if there's a bad guy on the roof, like what if the 970 00:50:53,280 --> 00:50:55,597 drone recognizes like, okay, there's a person on the roof. And what if the 971 00:50:55,680 --> 00:50:58,157 drone locks onto that person and then just basically follows that person 972 00:50:58,240 --> 00:51:00,237 wherever they go >> and they [snorts] rabbit, you know, they 973 00:51:00,320 --> 00:51:02,797 run they run for it and the drone is like right there 10 ft above following 974 00:51:02,880 --> 00:51:06,397 them the entire time, right? So all of a sudden like just the job of beat cop 975 00:51:06,480 --> 00:51:09,037 becomes a lot safer. >> Mhm. >> And so and this by the way even goes 976 00:51:09,120 --> 00:51:11,837 back to the question you asked which is like is an AI is an AI a threat? And 977 00:51:11,920 --> 00:51:14,637 it's like no no like this is a case the way those drones are going to work is 978 00:51:14,720 --> 00:51:18,317 with those are the power by AI this is all based on deep learning. This is this 979 00:51:18,400 --> 00:51:21,437 new technology, this new AI. It's the same technology, by the way, that was 980 00:51:21,520 --> 00:51:25,997 just used in that go in the in that in the in the famous now go thing where the 981 00:51:26,080 --> 00:51:28,637 the Google AI beat the beat the human player faster. Yeah. 982 00:51:28,720 --> 00:51:30,877 >> It's the same technology. It's just going to get used for it's going to get 983 00:51:30,960 --> 00:51:33,437 used for drones. And it's going to be these are going to be things in our 984 00:51:33,520 --> 00:51:36,637 lives that we are just going to be able to rely on to be able to make our lives 985 00:51:36,720 --> 00:51:39,517 safer and better. Um, and we're just going to take them completely for 986 00:51:39,600 --> 00:51:41,677 granted and we're going to work in combination with them and we're going to 987 00:51:41,760 --> 00:51:44,077 be really glad we had them and we're going to be completely unwilling to go 988 00:51:44,160 --> 00:51:47,037 back to a world where we didn't have them. And it's just going to be obvious. 989 00:51:47,120 --> 00:51:50,317 It's just we have to get it. We have to get this stuff in people's hands before 990 00:51:50,400 --> 00:51:52,557 they can they can really I think really fully see it. 991 00:51:52,640 --> 00:51:57,117 >> What do most people not understand about cryptocurrency? 992 00:51:57,200 --> 00:52:00,317 >> I think it's just such a well so a couple things. So this will not come as 993 00:52:00,400 --> 00:52:03,597 a surprise to you. Um I thought I understood it and I really didn't. Um 994 00:52:03,680 --> 00:52:05,617 money gets people really cranked up. 995 00:52:05,700 --> 00:52:10,477 [laughter] >> Yes, it does. >> The entire concept of money is probably 996 00:52:10,560 --> 00:52:13,437 the single I don't know maybe after God it's like the single most emotionally 997 00:52:13,520 --> 00:52:15,597 loaded concept that we have in humanity. 998 00:52:15,680 --> 00:52:20,397 like money just be money makes people mad under any circumstances on any topic 999 00:52:20,480 --> 00:52:22,717 related to money, right? And it's just because I think it's just because it's 1000 00:52:22,800 --> 00:52:25,677 such something that we all rely on and it's something that we always think is 1001 00:52:25,760 --> 00:52:29,677 being, you know, like there's always this sense of unfairness. [gasps] And so 1002 00:52:29,760 --> 00:52:32,717 money gets people really cranked up. And so I think that the the there's sort of 1003 00:52:32,800 --> 00:52:35,357 the idea of cryptocurrency and blockchain and this kind of new idea of 1004 00:52:35,440 --> 00:52:38,317 distributed trust in the internet and then there is this application of that 1005 00:52:38,400 --> 00:52:41,437 technology which is a very fundamental application which is a you know a new 1006 00:52:41,520 --> 00:52:45,117 kind of money. I think most people are unable to just simply objectively 1007 00:52:45,200 --> 00:52:48,877 dispassionately look at the mechanics of how it works without almost getting 1008 00:52:48,960 --> 00:52:53,357 preemptively upset. Like just angry like how dare the nerds come up with some new 1009 00:52:53,440 --> 00:52:57,037 form of money. Like this has got to be like there has got to be something wrong 1010 00:52:57,120 --> 00:53:00,637 with this, right? And I will now attempt to find you know the 30 possible things 1011 00:53:00,720 --> 00:53:03,837 that could be wrong with this uh until I find one that basically proves that this 1012 00:53:03,920 --> 00:53:06,717 can't possibly work because obviously it violates the laws of nature and 1013 00:53:06,800 --> 00:53:09,277 government and you know whatever whatever and like somehow I'm going to 1014 00:53:09,360 --> 00:53:10,317 come out on the wrong side of this. 1015 00:53:10,400 --> 00:53:12,957 people just get, and by the way, I'm not even just talking about like regular 1016 00:53:13,040 --> 00:53:16,397 people. I'm also talking like bank CEOs just are furious. Like, you bring up 1017 00:53:16,480 --> 00:53:19,677 Bitcoin and they're just like, they just get really upset. [snorts] And I'm like, 1018 00:53:19,760 --> 00:53:22,477 you know, did you get upset about your new toaster? Like, it's just a 1019 00:53:22,560 --> 00:53:26,157 technology. Like, it's just a thing and you can you can study it and you can 1020 00:53:26,240 --> 00:53:29,037 learn about it and you can think about it and you'll either conclude it's good 1021 00:53:29,120 --> 00:53:32,637 or not, but like it's not going to bite you. Like, it's just a thing, right? And 1022 00:53:32,720 --> 00:53:35,597 so, like the way I look at it, it goes back to like it's just a thing. It's 1023 00:53:35,680 --> 00:53:38,317 just it we now have this idea of cryptocurrency. It's a it's a 1024 00:53:38,400 --> 00:53:42,397 fundamentally new and very important idea. Um, we now have this ability to 1025 00:53:42,480 --> 00:53:46,477 have this new kind of currency based on top. You know, everybody's had 18,000 1026 00:53:46,560 --> 00:53:49,277 theories why it's not possibly going to work. Bitcoin is still working today 1027 00:53:49,360 --> 00:53:51,517 exactly the same as it worked last year and the year before that, the year 1028 00:53:51,600 --> 00:53:55,597 before that system is complet by all the noise and all the stuff and all the 1029 00:53:55,680 --> 00:53:58,717 crashes and this and that and the other thing like it just continues to work. 1030 00:53:58,800 --> 00:54:01,437 Um, it just is >> like it it's becoming, you know, it's 1031 00:54:01,520 --> 00:54:03,197 becoming like air or water. It just is. 1032 00:54:03,280 --> 00:54:07,037 Like it or hate it, it just is. And so anyway, we're still very excited. We're 1033 00:54:07,120 --> 00:54:09,917 very excited and we're we're actually we we'll we are going to continue to make 1034 00:54:10,000 --> 00:54:13,117 new investments against it. >> Are there uh of your current investments 1035 00:54:13,200 --> 00:54:17,037 or non-investments? Are there particular companies that you you think are uh 1036 00:54:17,120 --> 00:54:19,117 breaking new ground or doing interesting things in crypto? 1037 00:54:19,200 --> 00:54:22,797 >> Yeah. So, well, so um I mean Coinbase is our sort of our big that most people 1038 00:54:22,880 --> 00:54:24,957 have as a company that most people have heard of. It's kind of the easiest way 1039 00:54:25,040 --> 00:54:27,837 to buy and sell Bitcoin and they have a whole bunch of stuff they're doing. Um 1040 00:54:27,920 --> 00:54:30,557 and then we have this company 21 um uh 1041 00:54:30,640 --> 00:54:33,517 with a uh really brilliant founder uh 1042 00:54:33,600 --> 00:54:38,317 Bali Senovasan who was a um uh actually was a partner here to be a partner very 1043 00:54:38,400 --> 00:54:42,797 very smart guy >> um and he has he he has the he has the 1044 00:54:42,880 --> 00:54:46,397 highest output per minute of new ideas of anybody I've ever met in my life 1045 00:54:46,480 --> 00:54:48,317 >> and by the way I mean output per minute. 1046 00:54:48,400 --> 00:54:52,557 >> Oh no I've been at a few dinners with him and it's hilarious to just watch the 1047 00:54:52,640 --> 00:54:57,037 outpouring after especially after you know one or two glasses of wine. It's 1048 00:54:57,120 --> 00:55:00,557 it's astonishing. He's he's like an Edison for me. He's like an Edison kind 1049 00:55:00,640 --> 00:55:03,437 of character. It's just it's just literally thousands of ideas. 1050 00:55:03,520 --> 00:55:06,877 >> Um and then it's whatever percentage of the ideas that he can personally get to, 1051 00:55:06,960 --> 00:55:09,437 right? And then he'll give the other ideas to everybody else and then wonder 1052 00:55:09,520 --> 00:55:12,947 why they're not pursuing them, which is which is which is often a good question. 1053 00:55:13,030 --> 00:55:15,357 [laughter] Um and then the next time you meet him, he'll have a thousand new 1054 00:55:15,440 --> 00:55:18,237 ideas. And so his his company, he's uh people can read about it if they want, 1055 00:55:18,320 --> 00:55:21,277 but it's done a bunch of interesting things. He has a whole additional set of 1056 00:55:21,360 --> 00:55:24,957 ideas he's pursuing now. >> [snorts] >> I had a long I I went to this thing up 1057 00:55:25,040 --> 00:55:27,437 up up north and I drove back and I was on the phone with him for two hours, you 1058 00:55:27,520 --> 00:55:29,837 know, in the middle of the night driving, you know, on the freeway, 1059 00:55:29,920 --> 00:55:33,197 bology in my ear, you know, idea number 38. I was like, this is awesome. 1060 00:55:33,280 --> 00:55:36,877 >> This could be worse use of time, you know, [laughter] 1061 00:55:36,960 --> 00:55:39,197 >> that's good food for thought. The 1062 00:55:39,280 --> 00:55:41,117 >> uh on on food for thought. What what 1063 00:55:41,200 --> 00:55:43,917 advice would you give to Mark the 20some 1064 00:55:44,000 --> 00:55:47,007 at Netscape? And you can pick the time. 1065 00:55:47,090 --> 00:55:51,757 [laughter] [gasps and snorts] You know, I've never even thought I've 1066 00:55:51,840 --> 00:55:55,757 never for a moment even thought about that. I don't do So, the thing I don't I 1067 00:55:55,840 --> 00:55:59,277 don't do replays well. It goes through this history. Like I don't do replays 1068 00:55:59,360 --> 00:56:01,757 well in this. I like the question I'll never answer is what would you do? What 1069 00:56:01,840 --> 00:56:04,797 would you what would you have done differently had you known X? And I never 1070 00:56:04,880 --> 00:56:06,557 ever play that game because it's that 1071 00:56:06,640 --> 00:56:08,617 you never you didn't know X, right? 1072 00:56:08,700 --> 00:56:11,837 [snorts] Um and so uh I have you have 1073 00:56:11,920 --> 00:56:15,837 you ever read was it the uh the Elvis Cole novels? the the the great the crime 1074 00:56:15,920 --> 00:56:18,797 novelist Michael Grace uh >> there's his [snorts] uh books his novel 1075 00:56:18,880 --> 00:56:21,997 Elvis Cole is this kind of postmodern LA private detective they're great novels 1076 00:56:22,080 --> 00:56:25,437 and he's got this partner Joe Pike he's my favorite fictional character maybe of 1077 00:56:25,520 --> 00:56:28,797 all timeike >> Joe Pike um who's a former uh Marine uh 1078 00:56:28,880 --> 00:56:31,997 force recon uh guy a lot like your your 1079 00:56:32,080 --> 00:56:36,077 friend Jaco >> and uh in in the in the novels um uh Joe 1080 00:56:36,160 --> 00:56:39,597 Pike has a uh he's he always wears the same outfit every day wears jeans he 1081 00:56:39,680 --> 00:56:42,797 wears a sweatshirt with the sleeves cut off and aviator mirrored aviator 1082 00:56:42,880 --> 00:56:47,037 sunglasses love him already. >> And um and he's got um uh bright red 1083 00:56:47,120 --> 00:56:52,077 arrows tattoo tattooed um on on his deltoids uh pointing forward. And 1084 00:56:52,160 --> 00:56:53,817 basically his entire thing is forward. 1085 00:56:53,900 --> 00:56:57,037 [snorts] >> So that's that's we don't stop, we don't 1086 00:56:57,120 --> 00:57:00,557 slow down, we don't revisit bad, you know, past decisions. Um we don't uh we 1087 00:57:00,640 --> 00:57:04,077 don't second guess. Um and so yeah, I honestly that question I have no idea 1088 00:57:04,160 --> 00:57:06,157 how to answer. >> I think you just did. 1089 00:57:06,240 --> 00:57:08,237 >> Okay, good. [laughter] Onward. 1090 00:57:08,320 --> 00:57:11,277 >> Uh when you think of the word successful, who's the first person who 1091 00:57:11,360 --> 00:57:14,877 comes to mind and why? Oh geez, that's a great example. That's a great that's a 1092 00:57:14,960 --> 00:57:19,917 great question. I mean, honestly, my father-in-law for one. Um, who's a whole 1093 00:57:20,000 --> 00:57:24,397 could be the subject of a whole podcast >> podcast. Can you give us a taste of uh 1094 00:57:24,480 --> 00:57:27,357 why that is? >> He's an amazing guy. John John Aria. Um, 1095 00:57:27,440 --> 00:57:30,957 he uh is one of the small handful of people who basically built Silicon 1096 00:57:31,040 --> 00:57:35,117 Valley. Um, and so he um he has an amazing life story, but just to do the 1097 00:57:35,200 --> 00:57:37,997 short version is he went to Stanford. He went to Stanford on a basketball 1098 00:57:38,080 --> 00:57:41,757 scholarship in the 1950s. grew up grew up very in a very uh very poor part of 1099 00:57:41,840 --> 00:57:45,437 the country. Went got a basketball scholarship. Um uh studied got a a 1100 00:57:45,520 --> 00:57:49,757 bachelor's in geography uh from Stanford. You may have not ever in your 1101 00:57:49,840 --> 00:57:52,557 life met a lot of people who have a bachelor's degree in geography. 1102 00:57:52,640 --> 00:57:55,437 >> Uh I have not. >> Um they abolished the major the year he 1103 00:57:55,520 --> 00:57:56,317 got his degree. [laughter] 1104 00:57:56,400 --> 00:57:59,437 >> Abolished. It's a strong word. Wow. 1105 00:57:59,520 --> 00:58:03,757 >> Um uh he became a real estate broker uh commercial real estate broker in like 1106 00:58:03,840 --> 00:58:08,557 1958 um when the valley was all orchards. um within two years he was 1107 00:58:08,640 --> 00:58:11,917 making 10 times more money um buying and developing properties as he was as a 1108 00:58:12,000 --> 00:58:14,717 broker. Um and his boss fired him because he was making all the other 1109 00:58:14,800 --> 00:58:17,997 brokers feel bad. [snorts] [laughter] 1110 00:58:18,080 --> 00:58:22,157 So he uh starting like it's basically continuously from 1960 to today he's 1111 00:58:22,240 --> 00:58:25,037 been one of the biggest developers in Silicon Valley. Uniquely by the way as 1112 00:58:25,120 --> 00:58:28,077 far as I can tell uniquely I've never met anybody else. Um after the first few 1113 00:58:28,160 --> 00:58:31,997 years he basically he he has not used debt on a project I think in almost 50 1114 00:58:32,080 --> 00:58:34,477 years. So he's a real estate developer who does it entire 1115 00:58:34,560 --> 00:58:38,877 >> that's extremely uncommon >> entirely on equity and and basically it 1116 00:58:38,960 --> 00:58:42,237 was he he and there's a small handful of him and his contemporaries who basically 1117 00:58:42,320 --> 00:58:44,557 built literally literally built the 1118 00:58:44,640 --> 00:58:48,477 valley um and so yeah no and I want to 1119 00:58:48,560 --> 00:58:52,317 yeah and [laughter] he's great he's fantastic I I really love him he's 1120 00:58:52,400 --> 00:58:56,237 fantastic he um he once sat me down he's like okay he's like you know he's like 1121 00:58:56,320 --> 00:58:59,517 this tech stuff I understand like you guys think it's a big deal it's fine you 1122 00:58:59,600 --> 00:59:02,077 you should go do it for now he's just like I just want you to know the real 1123 00:59:02,160 --> 00:59:05,610 money's in real estate [laughter] 1124 00:59:06,320 --> 00:59:07,437 >> does have a lot of street cred. 1125 00:59:07,520 --> 00:59:11,510 >> And I said, "Yes, sir." [laughter] 1126 00:59:11,680 --> 00:59:14,717 >> Uh, do you have any particular morning rituals? 1127 00:59:14,800 --> 00:59:16,397 >> They're important to you. >> Sleep in as long as possible. 1128 00:59:16,480 --> 00:59:18,397 >> Sleep in as long as possible. When do you usually wake up? 1129 00:59:18,480 --> 00:59:20,957 >> Try not to blow through any red lights on the way to work. 1130 00:59:21,040 --> 00:59:21,997 >> When do you usually wake up? 1131 00:59:22,080 --> 00:59:26,797 >> Oh, it um 45 minutes before I have my first meeting. It's Yeah. No, it's I I I 1132 00:59:26,880 --> 00:59:28,957 do I do the uh what do they call the hot docking? 1133 00:59:29,040 --> 00:59:31,117 >> Hot [snorts] docking. >> Hot docking. It's like the the 1134 00:59:31,200 --> 00:59:32,987 controlled crash into the office. 1135 00:59:33,070 --> 00:59:37,117 [laughter] >> Uh, >> it's not. Yeah. No, you read these the 1136 00:59:37,200 --> 00:59:40,717 whole the 14 things successful people do in the morning. Like I can't even imagine. 1137 00:59:40,800 --> 00:59:42,557 >> Do you drink coffee? >> A lot. Yes. 1138 00:59:42,640 --> 00:59:44,957 >> You do? >> Yeah. [laughter] >> It's an emphatic yes. 1139 00:59:45,040 --> 00:59:47,277 >> If it has caffeine in it, I drink it. 1140 00:59:47,360 --> 00:59:50,477 >> Yeah. >> Uh, >> I really think no. The perfect day is 1141 00:59:50,560 --> 00:59:52,077 caffeine for 10 hours, alcohol for four. 1142 00:59:52,160 --> 00:59:55,597 Like I think it [laughter] is. It It balances everything out really well. 1143 00:59:55,680 --> 00:59:56,637 >> It sounds a lot like my day. 1144 00:59:56,720 --> 00:59:57,877 >> I'm not shy for a second about that. 1145 00:59:57,960 --> 01:00:00,317 [clears throat] >> The Silicon Valley Speedball. Yeah, that's right. 1146 01:00:00,400 --> 01:00:03,757 >> Uh, [laughter] do you have any favorite documentaries or movies? 1147 01:00:03,840 --> 01:00:08,397 >> Uh, I have lots of favorite movies. Um, I don't know where to start. 1148 01:00:08,480 --> 01:00:10,877 >> What have you seen? >> Actually, you know, in the last 20 1149 01:00:10,960 --> 01:00:14,077 years, in the last 10 years, really, you know, it's TV even more than movies. 1150 01:00:14,160 --> 01:00:18,397 >> Okay. What any favorites? >> Well, the holy trend. So, uh, Mr. Robot, 1151 01:00:18,480 --> 01:00:22,157 um, which I just think is absolute genius. Um, if you can never go by the 1152 01:00:22,240 --> 01:00:23,917 way, get you should get him sometime. 1153 01:00:24,000 --> 01:00:27,277 Get the guy. >> He's great, >> Sam. I have never met him. 1154 01:00:27,360 --> 01:00:29,917 >> You're probably right about him. Heard about him. Yeah. So, he's he's directing 1155 01:00:30,000 --> 01:00:33,277 um he's he's written and he's personally directing all 10 episodes of the new 1156 01:00:33,360 --> 01:00:36,957 season. So, it's going to be >> I think he's the he's he would be he he 1157 01:00:37,040 --> 01:00:39,517 would win he actually made a movie, but like he's he's definitely going to win 1158 01:00:39,600 --> 01:00:44,557 Oscars or whatever it is people win. Um and then um uh Halt and Catch Fire. 1159 01:00:44,640 --> 01:00:45,597 >> I'm not familiar with that. 1160 01:00:45,680 --> 01:00:47,117 >> Um Halt and Catch Fire is extraordinary. 1161 01:00:47,200 --> 01:00:50,317 It's a very it's the best fictional portrayal of what a tech startup is 1162 01:00:50,400 --> 01:00:52,077 actually like. >> Halt and Catch Fire. 1163 01:00:52,160 --> 01:00:56,797 >> Halt and Catch Fire. So there was a uh it's a it's a the title is there's there 1164 01:00:56,880 --> 01:01:00,477 was a myth IBM mainframe days. There was a mythical instruction that is sort of a 1165 01:01:00,560 --> 01:01:03,357 sort of an urban legend that there was a specific piece of code that you could 1166 01:01:03,440 --> 01:01:06,717 write that would cause the computer to stop and then catch on fire. [snorts] 1167 01:01:06,800 --> 01:01:08,237 >> It's like the mission impossible command. 1168 01:01:08,320 --> 01:01:10,797 >> Yeah. I don't think it was ever really verified for sure whether or not it 1169 01:01:10,880 --> 01:01:13,677 existed, but it kind of became this mythical thing. And so it's it's the 1170 01:01:13,760 --> 01:01:16,477 story actually it's loosely the story of the the birth of the PC. And it 1171 01:01:16,560 --> 01:01:19,837 particularly it's sort of based on how the company compact got built in 1172 01:01:19,920 --> 01:01:23,837 Houston. It's it's set in Texas. Um, but it's it's basically the birth of a new 1173 01:01:23,920 --> 01:01:28,477 computer company, but it's a very and it's it's funny because the the reviews 1174 01:01:28,560 --> 01:01:31,117 the reviews are funny. So, it's a historical piece. It's very ser very 1175 01:01:31,200 --> 01:01:34,237 serious drama. So, you know, it gets compared to Mad Men and shows like that. 1176 01:01:34,320 --> 01:01:37,757 Um, uh, set, you know, set in the office and the personal lives of everybody. And 1177 01:01:37,840 --> 01:01:40,637 so, and it's funny cuz the the critics reviewed it and they said, I don't, you 1178 01:01:40,720 --> 01:01:43,597 know, it all seems like it all seems super heated, like it's all too like the 1179 01:01:43,680 --> 01:01:47,117 melodrama is too exaggerated of like all the stuff that happens. And everybody I 1180 01:01:47,200 --> 01:01:49,597 know in the valley who's seen it is like, no, no, that's actually what it's 1181 01:01:49,680 --> 01:01:53,277 like. [laughter] That's actually 100% what it's like. And like I knew that guy 1182 01:01:53,360 --> 01:01:55,837 and I saw that thing happen and I saw that person blow up that way. 1183 01:01:55,920 --> 01:01:57,597 >> It's like Ben's book. >> Same thing. 1184 01:01:57,680 --> 01:01:59,837 >> Yeah. Yeah. Exactly. Yeah. Yeah. It's what it's actually it's what it's it's 1185 01:01:59,920 --> 01:02:03,837 what so they they really caught the it's fictionalized but they really for 1186 01:02:03,920 --> 01:02:06,477 anybody who really wants to know what it's actually like to go through one of 1187 01:02:06,560 --> 01:02:08,957 these things that that that show is tremendous. Um and then of course 1188 01:02:09,040 --> 01:02:12,877 Silicon Valley. >> Yeah. >> Do you have a favorite scene or episode from 1189 01:02:12,960 --> 01:02:18,557 >> I've actually still only seen the first season. Um uh I I'm not current. 1190 01:02:18,640 --> 01:02:21,357 starting to actually become culturally irrelevant because I I I can't I don't 1191 01:02:21,440 --> 01:02:23,287 get any of the new references at all. 1192 01:02:23,370 --> 01:02:25,997 [laughter] >> I think you'll think you'll survive. You seem to be doing just fine. 1193 01:02:26,080 --> 01:02:28,477 >> I have to I have to I have to binge. Um 1194 01:02:28,560 --> 01:02:33,037 the uh uh the sesame seed scene in the first episode of the first season was 1195 01:02:33,120 --> 01:02:37,437 probably the highlight [laughter] that the uh the u let's just say loosely 1196 01:02:37,520 --> 01:02:41,757 based on Peter Teal >> scene. [laughter] 1197 01:02:41,840 --> 01:02:45,117 >> Yeah. Loosely or not. >> Or not. Right. Exactly. Or not. Or maybe 1198 01:02:45,200 --> 01:02:49,357 very precisely, very accurately. You know, who knows? Uh, if you could have 1199 01:02:49,440 --> 01:02:53,917 one billboard anywhere with anything on it, what would you put on it? That could 1200 01:02:54,000 --> 01:02:56,157 not be an advertisement for one of your portfolio companies. 1201 01:02:56,240 --> 01:02:58,877 >> Oh, outside Trump Tower. >> Okay. 1202 01:02:58,960 --> 01:03:02,557 >> No, it's [laughter] too tempting. 1203 01:03:02,640 --> 01:03:05,997 >> What would you put on it, though, if you wanted to convey a short message to as 1204 01:03:06,080 --> 01:03:09,037 many people as possible? >> Oh, I've got one. 1205 01:03:09,120 --> 01:03:11,437 >> All right. >> Maybe this is a little maybe a small 1206 01:03:11,520 --> 01:03:13,517 scale for what you're looking for, but I've got one. I've actually thought 1207 01:03:13,600 --> 01:03:15,597 about hiring a skywriter to do this one. 1208 01:03:15,680 --> 01:03:19,037 >> Oh, let's do it. Okay. uh right in the heart of San Francisco be a billboard 1209 01:03:19,120 --> 01:03:22,317 with just two words on it. Um raise prices. 1210 01:03:22,400 --> 01:03:25,277 >> Raise prices. >> Yes. >> Can you explain? 1211 01:03:25,360 --> 01:03:28,077 >> The number one thing just the theme and we just see it everywhere. The number 1212 01:03:28,160 --> 01:03:30,877 one theme of our companies have when they get really struggling um is they 1213 01:03:30,960 --> 01:03:33,277 they are not charging enough for their product. 1214 01:03:33,360 --> 01:03:36,557 >> Um it it has become absolutely conventional wisdom in Silicon Valley 1215 01:03:36,640 --> 01:03:39,437 that the way to succeed is to price your product as low as possible and then 1216 01:03:39,520 --> 01:03:42,237 under the theory that if it's low priced everybody can buy it and that's how you 1217 01:03:42,320 --> 01:03:45,917 get to volume. And we just see over and over and over again people failing with 1218 01:03:46,000 --> 01:03:49,597 that because they because they get into the problem we call too hungry to eat. 1219 01:03:49,680 --> 01:03:51,917 They don't charge enough for their product to be able to afford the sales 1220 01:03:52,000 --> 01:03:54,957 and marketing required to actually get anybody to buy it, right? And so they 1221 01:03:55,040 --> 01:03:57,437 can't hire the sales rep. They can't afford to hire the sales rep to go sell 1222 01:03:57,520 --> 01:04:00,077 the product. They can't afford to buy the whatever TV commercial, whatever it 1223 01:04:00,160 --> 01:04:02,877 is. They can't afford they cannot afford to go acquire the customers. 1224 01:04:02,960 --> 01:04:04,717 >> Too hungry to eat. >> They're too hungry to eat. And then they 1225 01:04:04,800 --> 01:04:07,037 sit there, they don't sell anything, and then they don't sell anything and they 1226 01:04:07,120 --> 01:04:09,117 get nervous and upset and then they cut the prices 1227 01:04:09,200 --> 01:04:11,837 >> and then it's a race to the bottom >> which just makes the problem worse. 1228 01:04:11,920 --> 01:04:13,677 Yeah. >> And so probably the single number one 1229 01:04:13,760 --> 01:04:16,077 thing we try to get our companies to do is like raise prices. 1230 01:04:16,160 --> 01:04:20,717 >> Raise prices. >> Yep. >> So the last >> And by the way, you know, it's like 1231 01:04:20,800 --> 01:04:23,997 okay, like is your product any good if people won't pay more for it? 1232 01:04:24,080 --> 01:04:26,157 >> Exactly. >> You know, it's like you get good lit test. 1233 01:04:26,240 --> 01:04:29,357 >> Good lmus test. Right. >> Uh last two questions. What have you 1234 01:04:29,440 --> 01:04:32,877 changed your mind about in the last few years? [snorts] 1235 01:04:32,960 --> 01:04:35,517 >> That's a good question. So one is we started I'll just give you a very 1236 01:04:35,600 --> 01:04:38,957 practical one. Uh we started on um we started out we did we didn't do any 1237 01:04:39,040 --> 01:04:41,917 healthcare related stuff here investments here. Um, and we've now done 1238 01:04:42,000 --> 01:04:43,677 a complete almost complete 180 on that. 1239 01:04:43,760 --> 01:04:46,557 Um, and we're now very deep into health because we think a bunch of really 1240 01:04:46,640 --> 01:04:50,317 interesting things are happening. Um, and that was a response to like the 1241 01:04:50,400 --> 01:04:53,117 hedge fun thing I was telling hedge fun like that was respon we just we just 1242 01:04:53,200 --> 01:04:55,917 basically had very smart founders coming through here basically telling us we 1243 01:04:56,000 --> 01:04:59,597 were dumb [snorts] like and by the way they were right like we we just hadn't 1244 01:04:59,680 --> 01:05:03,037 figured it out yet. Um and so we we got serious about it a couple years ago and 1245 01:05:03,120 --> 01:05:06,637 we have this guy uh VJ um Pande from a former Stanford professor running this 1246 01:05:06,720 --> 01:05:09,517 program now for us and it's it's extraordinary what's happening at the 1247 01:05:09,600 --> 01:05:13,117 kind of intersection of healthcare and computer science. Um so there's a lot 1248 01:05:13,200 --> 01:05:16,397 that's happening there. Um the thing 1249 01:05:16,480 --> 01:05:19,197 that I'm probably think about the most 1250 01:05:19,280 --> 01:05:21,117 that I am still trying to work out in my 1251 01:05:21,200 --> 01:05:24,637 own head is that uh a combination of 1252 01:05:24,720 --> 01:05:29,597 Peter Teal, Larry Page and Elon Musk in different ways have provoked a 1253 01:05:29,680 --> 01:05:33,357 fundamental cris a fundamental conversation in the valley around you 1254 01:05:33,440 --> 01:05:35,037 know kind of the um the sort of 1255 01:05:35,120 --> 01:05:37,517 moonshots the big the big the big the 1256 01:05:37,600 --> 01:05:41,037 big um the the big challenges. Um and so 1257 01:05:41,120 --> 01:05:44,557 you know Elon you know why can't we build self-driving cars? Why can't we 1258 01:05:44,640 --> 01:05:47,437 have new kinds of rocket ships? Why can't we go to like literally go to 1259 01:05:47,520 --> 01:05:51,917 Mars? Um why can't we cure cancer? Why can't we, you know, do nuclear fusion? 1260 01:05:52,000 --> 01:05:55,437 Why can't you know long list of things um that are like, you know, big big 1261 01:05:55,520 --> 01:05:58,717 things. We talked about earlier a little bit like Silicon Valley has always 1262 01:05:58,800 --> 01:06:01,517 viewed itself a little bit in the tools business, right? Or a lot in the tools 1263 01:06:01,600 --> 01:06:04,637 business. Silicon Valley has been getting more and more assertive entering 1264 01:06:04,720 --> 01:06:07,917 more and more industries directly, right? So like Uber, Lyft entering 1265 01:06:08,000 --> 01:06:11,277 directly into transportation, Airbnb entering directly into real estate, uh 1266 01:06:11,360 --> 01:06:14,797 fintech companies entering directly into banking. So our our our companies are 1267 01:06:14,880 --> 01:06:17,757 getting more assertive at going into markets that previously they may not, 1268 01:06:17,840 --> 01:06:20,957 you know, other founders may not have been willing to go into in the past. And 1269 01:06:21,040 --> 01:06:23,997 then Larry, Elon, and Peter basically all say in different ways like we're 1270 01:06:24,080 --> 01:06:28,317 still not doing enough. There are these much bigger things to be to be done. Um, 1271 01:06:28,400 --> 01:06:31,757 and why are we waiting for either governments to do them or for large 1272 01:06:31,840 --> 01:06:35,437 industrial companies like GE to do them or for, you know, I don't know, research 1273 01:06:35,520 --> 01:06:40,157 universities to figure them out? Like why can't we do these things? Um, and 1274 01:06:40,240 --> 01:06:43,197 you know, there's one school of thought that says they're simply too hard. 1275 01:06:43,280 --> 01:06:45,437 They're simply too hard. They're too daunting. They're too expensive. They're 1276 01:06:45,520 --> 01:06:48,157 too different. You know, they're they don't have Mo's law on their side. Like 1277 01:06:48,240 --> 01:06:50,477 they're they're there's a reason we haven't been doing them is because 1278 01:06:50,560 --> 01:06:51,437 they're they're they're too difficult. 1279 01:06:51,520 --> 01:06:53,757 And then there's another school of thought that says, you know, that's just 1280 01:06:53,840 --> 01:06:56,957 being a wimp and you should [snorts] go try to do all these things. Um, because 1281 01:06:57,040 --> 01:07:00,957 if we're not going to do it really, who is? And then I'm trying to find is there 1282 01:07:01,040 --> 01:07:03,997 something in the middle like is there like what are the shades of gray? 1283 01:07:04,080 --> 01:07:05,757 >> Mhm. >> Right. What's what's the line? Right. 1284 01:07:05,840 --> 01:07:09,037 What's what what's the line where you know Tesla what's the line where Tesla 1285 01:07:09,120 --> 01:07:12,877 made sense but you know Tesla a Tesla that flies didn't make sense like >> right 1286 01:07:12,960 --> 01:07:17,837 >> and there's a line in there somewhere I think right or maybe Peter's right and 1287 01:07:17,920 --> 01:07:21,357 maybe there isn't a line and maybe and maybe maybe the next Tesla should be one 1288 01:07:21,440 --> 01:07:24,557 that flies right and so it's to me that's the provocative thing because it 1289 01:07:24,640 --> 01:07:28,317 it's a question about stretching the limits how far 1290 01:07:28,400 --> 01:07:30,557 >> Icorus myth how far can we stretch the 1291 01:07:30,640 --> 01:07:32,957 limits of what we can before our wings 1292 01:07:33,040 --> 01:07:36,157 melt right and Well, it strikes me also 1293 01:07:36,240 --> 01:07:37,837 that I mean just you mentioned Peter. 1294 01:07:37,920 --> 01:07:40,157 So, uh the we wanted flying cars and we 1295 01:07:40,240 --> 01:07:42,557 got 140 characters. There were a lot of 1296 01:07:42,640 --> 01:07:45,277 questions from from fans asking how to 1297 01:07:45,360 --> 01:07:50,317 how would he suggest people uh entrepreneurs are be encouraged to say 1298 01:07:50,400 --> 01:07:54,957 solve the big problems versus making social media networks etc. And I think 1299 01:07:55,040 --> 01:07:58,477 you made a point actually in a debate with Peter at one point maybe it was at 1300 01:07:58,560 --> 01:08:02,157 the Milkin Conference could have been elsewhere that Twitter and I would agree 1301 01:08:02,240 --> 01:08:06,557 with you as one example the 140 characters has been world changing in a 1302 01:08:06,640 --> 01:08:09,517 lot of ways. I mean you look at political activism you look at many 1303 01:08:09,600 --> 01:08:11,917 different examples when you have uh 1304 01:08:12,000 --> 01:08:13,517 adoption that that that is that wide 1305 01:08:13,600 --> 01:08:17,677 that global uh free with the emergent 1306 01:08:17,760 --> 01:08:21,517 properties are just uh unpredictable. I mean you get some incredible use cases 1307 01:08:21,600 --> 01:08:23,837 >> including political revolutions. Exactly right. 1308 01:08:23,920 --> 01:08:27,357 >> Yeah. Uh, last question. Oh, sorry. 1309 01:08:27,440 --> 01:08:30,237 >> So, that that was it was a debate at the Milking Conference, which is one of my 1310 01:08:30,320 --> 01:08:33,917 one of my shining moments is >> I prepared for weeks for that debate. 1311 01:08:34,000 --> 01:08:37,357 >> Yeah. >> Knowing [snorts] Peter wasn't going to prepare at all. [laughter] 1312 01:08:37,440 --> 01:08:39,917 >> And I bring that up because I think I was actually able to go toe-to-toe with 1313 01:08:40,000 --> 01:08:43,517 him, but I I I I had to sandbag him to do it. Um, he was absolutely shocked 1314 01:08:43,600 --> 01:08:46,237 that I had prepared for it. >> I enjoyed the I really enjoyed the conversation. 1315 01:08:46,320 --> 01:08:48,557 >> That was my one of my one of my great debating moments is I could I could 1316 01:08:48,640 --> 01:08:53,277 almost keep up with Peter. Um, so, um, it's actually funny his whole thing, his 1317 01:08:53,360 --> 01:08:56,077 whole slogan that, you know, the slogan of his firm, which is, as you said, we 1318 01:08:56,160 --> 01:08:58,957 we were promised flying cars, instead we got 140 characters. It's actually 1319 01:08:59,040 --> 01:09:01,997 interesting. He will immediately concede that both of those are actually not the 1320 01:09:02,080 --> 01:09:04,637 point. So, he first of all, he immediately concedes that flying cars 1321 01:09:04,720 --> 01:09:07,597 probably don't make sense. Um, and then he immediately concedes that Twitter 1322 01:09:07,680 --> 01:09:10,157 probably is more important than like just being dismissed like that. And so, 1323 01:09:10,240 --> 01:09:12,877 he will he he basically he just basically says the slogan is just to 1324 01:09:12,960 --> 01:09:14,797 provoke provoke the conversation. 1325 01:09:14,880 --> 01:09:17,197 >> But to your point, it does provoke the conversation. And I actually think 1326 01:09:17,280 --> 01:09:19,197 you're right. I think you're right. I think it provokes a conversation from 1327 01:09:19,280 --> 01:09:23,197 both sides which is okay why don't we have the other big maybe flying cars are 1328 01:09:23,280 --> 01:09:26,077 not but why don't we have nuclear fusion why don't we have like all these other 1329 01:09:26,160 --> 01:09:29,277 things why don't we have supersonic flight >> right 1330 01:09:29,360 --> 01:09:32,797 >> like we had the Concord now we don't even have the Concord like seriously it 1331 01:09:32,880 --> 01:09:35,037 takes 9 hours to get to London like really [laughter] 1332 01:09:35,120 --> 01:09:38,077 >> right I mean I think that's that's it's a very relevant question and then um but 1333 01:09:38,160 --> 01:09:40,877 I also think it provokes the thing on the other side which is I think the 1334 01:09:40,960 --> 01:09:44,477 computer stuff communication stuff like Twitter and all these other things I 1335 01:09:44,560 --> 01:09:47,037 mean Peter flatly says the iPhone doesn't count as innovation and I just 1336 01:09:47,120 --> 01:09:50,317 think That's I think that's too far, right? I I think it it the iPhone 1337 01:09:50,400 --> 01:09:52,797 absolutely counts as innovation. I think it's one of the most important products 1338 01:09:52,880 --> 01:09:56,077 ever developed. I think the impact on the world is absolutely enormous and 1339 01:09:56,160 --> 01:09:59,997 growing. Um and so I I think there's there's a there's a tendency to write 1340 01:10:00,080 --> 01:10:03,917 off the stuff that built the valley and I don't think I don't agree with that. I 1341 01:10:04,000 --> 01:10:05,917 think there's a lot more to do in the core of what we do. 1342 01:10:06,000 --> 01:10:11,037 >> The last question is do you have any any ask or request of my audience, people 1343 01:10:11,120 --> 01:10:15,357 listening, anything you'd like them to consider, ponder, do? Well, so f first 1344 01:10:15,440 --> 01:10:19,197 of all, they should all for sure work for our companies. Um, and [laughter] so 1345 01:10:19,280 --> 01:10:23,277 please come to our website, a16Z.com. We have jobs. Uh, we have job listings. Uh, 1346 01:10:23,360 --> 01:10:25,037 we'd like to get everybody in our orbit. 1347 01:10:25,120 --> 01:10:27,517 Um, anybody smart enough to listen to your podcast, we definitely want to work 1348 01:10:27,600 --> 01:10:31,357 for our companies. And then, um, you know, I I would say, you know, I would 1349 01:10:31,440 --> 01:10:34,557 say build new things. >> Um, and then, uh, if it's something that 1350 01:10:34,640 --> 01:10:36,957 needs, uh, if it's a, you know, if it's a business that's promising, that needs 1351 01:10:37,040 --> 01:10:40,077 money, you know, we're we're open for we're open for business. 1352 01:10:40,160 --> 01:10:43,597 >> Mark, any, uh, last places you'd like people to check you out online? And 1353 01:10:43,680 --> 01:10:46,557 where can they say hello? >> Oh, Twitter. Twitter's good. Twitter's good. 1354 01:10:46,640 --> 01:10:49,197 >> Twitter. Parka. >> Parka. P M A R. 1355 01:10:49,280 --> 01:10:51,357 >> Is that from your Unix handle way back in the day? 1356 01:10:51,440 --> 01:10:55,997 >> It's an old old joke. It's We had a boss one time who was so important that he 1357 01:10:56,080 --> 01:11:00,317 had both his real he had his public email address and he has P with his name 1358 01:11:00,400 --> 01:11:04,077 behind it, which is his private email address. So, we thought that was a 1359 01:11:04,160 --> 01:11:07,517 little bit too much. And so, we all gave ourselves P, but nobody knew who we 1360 01:11:07,600 --> 01:11:10,157 were. [laughter] And then it stuck. 1361 01:11:10,240 --> 01:11:14,637 >> Perfect. Well, [snorts] everybody say uh check out the Andre Horowits website. 1362 01:11:14,720 --> 01:11:16,157 I'll put that in the show notes as well. 1363 01:11:16,240 --> 01:11:21,117 You should also check out their podcast uh which I've greatly enjoyed. You can 1364 01:11:21,200 --> 01:11:23,757 start with I mean one that I really enjoyed was the uh sort of 1365 01:11:23,840 --> 01:11:26,557 deconstructing Amazon episode. 1366 01:11:26,640 --> 01:11:29,917 >> And uh thank you so much for the time, Mark. This has been a blast. I really 1367 01:11:30,000 --> 01:11:31,197 appreciate it. >> Thanks, Tim. 1368 01:11:31,280 --> 01:11:34,717 >> And to everyone listening, you can find all the links and everything else in the 1369 01:11:34,800 --> 01:11:38,477 show notes, which you can find at 4hourweek.com/mpodcast. 1370 01:11:38,560 --> 01:11:42,720 And until next time, thank you for listening.