WEBVTT 00:00:00.240 --> 00:00:03.997 optimal minimal. >> At this altitude, I can run flat out for 00:00:04.080 --> 00:00:06.397 a half mile before my hands start shaking. 00:00:06.480 --> 00:00:08.557 >> Can I answer your personal question? 00:00:08.640 --> 00:00:10.637 >> Now, what is an appropriate time? 00:00:10.720 --> 00:00:12.077 >> What if I could be? 00:00:12.160 --> 00:00:18.040 >> I'm a cybernetic organism living over a metal endoskeleton. 00:00:19.000 --> 00:00:21.020 [snorts] 00:00:22.800 --> 00:00:27.117 >> This episode is brought to you by AG1, the daily foundational nutritional 00:00:27.200 --> 00:00:31.037 supplement that supports whole body health. I do get asked a lot what I 00:00:31.120 --> 00:00:34.317 would take if I could only take one supplement. And the true answer is 00:00:34.400 --> 00:00:38.797 invariably AG1. It simply covers a ton of bases. 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Hello my friendly little Magwa. This is Tim Ferrris and welcome 00:01:24.080 --> 00:01:27.837 to another episode of the Tim Ferrris show. I'm very excited about this one, 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 00:01:32.080 --> 00:01:34.477 to set up. And of course, every episode 00:01:34.560 --> 00:01:36.477 is my job to try to deconstruct 00:01:36.560 --> 00:01:39.757 worldclass performers to tease out the 00:01:39.840 --> 00:01:42.397 perspectives, habits, routines, favorite 00:01:42.480 --> 00:01:45.437 books, etc. that make them as good at 00:01:45.520 --> 00:01:48.237 what they do as they are. This episode 00:01:48.320 --> 00:01:53.517 we have Mark Andre at Parka PCA on 00:01:53.600 --> 00:01:58.237 Twitter. He is a legendary figure here in Silicon Valley and indeed worldwide. 00:01:58.320 --> 00:02:02.717 Even in the epicenter of tech, it's hard to find a more fascinating icon. Mark 00:02:02.800 --> 00:02:06.957 co-created the highly influential Mosaic internet browser, the first widely used 00:02:07.040 --> 00:02:10.157 graphical web browser. He also co-founded Netscape, which later sold to 00:02:10.240 --> 00:02:12.957 AOL for 4.2 billion with a B and then 00:02:13.040 --> 00:02:14.877 co-ounded loudcloud, which sold as 00:02:14.960 --> 00:02:18.557 Opsswear to Hip Packard for 1.6 billion. 00:02:18.640 --> 00:02:22.557 He is considered one of the founding fathers of the modern internet. This all 00:02:22.640 --> 00:02:27.357 makes him one of the few humans ever to create software categories used by more 00:02:27.440 --> 00:02:31.837 than a billion people. Also one of the few who's established multiple 00:02:31.920 --> 00:02:34.877 billion-dollar companies. He's now a co-founder and general partner of the 00:02:34.960 --> 00:02:38.397 venture capital firm Andre Horowitz where he has quickly become one of the 00:02:38.480 --> 00:02:39.917 most influential and dominant tech 00:02:40.000 --> 00:02:43.037 investors in the world. Now I want to 00:02:43.120 --> 00:02:45.597 try to keep this short but it's hard and 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 00:02:50.320 --> 00:02:54.797 in this conversation and our conversation took place at the San Hill 00:02:54.880 --> 00:02:56.877 Road offices of Andre and Horowitz. We 00:02:56.960 --> 00:03:00.157 refer to an email from Mark to Ben 00:03:00.240 --> 00:03:03.597 Horowitz an exchange and this is how it 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 00:03:08.320 --> 00:03:12.077 hard thing about hard things by Ben Horowitz which is a great book [snorts] 00:03:12.160 --> 00:03:17.517 to Mark Andre. This is after a media interview where Ben felt that Mark 00:03:17.600 --> 00:03:21.837 disclosed the company's strategy prematurely to Mark Andre from Ben 00:03:21.920 --> 00:03:25.677 Horowitz. Subject: launch. I guess we're not going to wait until the 5th to 00:03:25.760 --> 00:03:28.157 launch the strategy. Period. Signed, 00:03:28.240 --> 00:03:31.197 Ben. Within 15 minutes I, this is Ben 00:03:31.280 --> 00:03:33.597 received the following reply to Ben 00:03:33.680 --> 00:03:39.117 Horowitz CC bunch of folks from Mark Andre. Subject launch. Apparently, you 00:03:39.200 --> 00:03:42.477 do not understand how serious the situation is. We are getting killed, 00:03:42.560 --> 00:03:46.077 killed, killed out there. Our current product is radically worse than the 00:03:46.160 --> 00:03:49.917 competition. We've had nothing to say for months. As a result, we've lost over 00:03:50.000 --> 00:03:54.157 $3 billion in market capitalization. We are now in danger of losing the entire 00:03:54.240 --> 00:03:56.557 company, and it's all server products 00:03:56.640 --> 00:03:58.717 management's fault. Next time, do the 00:03:58.800 --> 00:04:01.437 [__] interview yourself. [__] you, 00:04:01.520 --> 00:04:05.197 Mark. So, we get into some really fun 00:04:05.280 --> 00:04:06.877 stuff in this interview that I don't 00:04:06.960 --> 00:04:09.437 think Mark has discussed in many places. 00:04:09.520 --> 00:04:14.957 We talk about his epic debate versus Peter Teal. We talk about all the usual 00:04:15.040 --> 00:04:17.597 questions. Favorite books that he's gifted to other people, favorite 00:04:17.680 --> 00:04:22.317 documentaries, movies, morning rituals, what he would put on a billboard, etc. 00:04:22.400 --> 00:04:25.997 We talk about rules for investing, what he does in partner meetings to make 00:04:26.080 --> 00:04:28.317 people def defend ideas or propose 00:04:28.400 --> 00:04:30.877 ideas. We talk about AI. We talk about 00:04:30.960 --> 00:04:33.917 the future of Bitcoin, drones, who to 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 00:04:38.400 --> 00:04:42.237 his younger self, what he misses about the mid90s internet and how he might 00:04:42.320 --> 00:04:44.717 recreate it, how he thinks about or 00:04:44.800 --> 00:04:48.317 handles FOMO. It goes on and on. We 00:04:48.400 --> 00:04:51.037 really had an extremely detailed and 00:04:51.120 --> 00:04:54.317 rich conversation. And I hope you enjoy 00:04:54.400 --> 00:04:56.157 it. And please do say hi to Mark. He's 00:04:56.240 --> 00:05:00.237 very active on Twitter, P Marka. P M A 00:05:00.320 --> 00:05:06.000 RCA. Without further ado, please enjoy. 00:05:06.720 --> 00:05:08.557 Mark, welcome to the show. >> Thanks, Tim. 00:05:08.640 --> 00:05:10.877 >> I am so thrilled to be here. I've been 00:05:10.960 --> 00:05:15.917 hoping to make this happen for quite some time and I figure we'll just jump 00:05:16.000 --> 00:05:19.837 into it. Awesome. >> So, the the first question is strong 00:05:19.920 --> 00:05:23.917 opinions loosely held. Uh you're associated with that expression. Can you 00:05:24.000 --> 00:05:26.557 explain what that means? 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 00:05:31.280 --> 00:05:35.757 company for sure. Um, and it's a mentality of how to invest for sure. And 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 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 00:05:42.400 --> 00:05:45.277 kind of or you know, is it the philosophical term? It's like a thesis 00:05:45.360 --> 00:05:47.357 antithesis uh synthesis kind of thing. 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 00:05:50.240 --> 00:05:52.957 theories and then the problem is they carry them too far because there's 00:05:53.040 --> 00:05:55.997 always there's a counterveailing theories, right? So kind of yin and yang 00:05:56.080 --> 00:05:59.277 kind of thing. And so strong views so strong views is very important, right? 00:05:59.360 --> 00:06:01.837 So most people go through life and and and and basically never develop strong 00:06:01.920 --> 00:06:05.037 views on things or or or specifically go along and basically buy into the 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 00:06:08.560 --> 00:06:10.957 founder and as an investor is you want to look for things that are out of 00:06:11.040 --> 00:06:14.077 consensus, right? So, you know, something very much opposed to the 00:06:14.160 --> 00:06:17.517 conventional wisdom, which sounds easy, you know, hard to do, but you want to 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 00:06:19.840 --> 00:06:21.917 you're going to invest in that, you know, you you'd better have strong 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 00:06:26.480 --> 00:06:29.757 the problem is, okay, it's a strong view. Great. Okay. what happens when the 00:06:29.840 --> 00:06:33.917 world changes, right? What happens when like something else happens? U right and 00:06:34.000 --> 00:06:35.917 basically the way right the way the world works kind of in business and 00:06:36.000 --> 00:06:38.797 investing and other places is just when you think you have everything figured 00:06:38.880 --> 00:06:42.237 out that everything changes, right? So the sort of system evolves and and 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 00:06:45.440 --> 00:06:48.877 the world changes and and there what you just see everywhere I think in the world 00:06:48.960 --> 00:06:51.437 and everywhere in business everywhere investing are people just hate changing 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 00:06:54.720 --> 00:06:55.757 it in politics all the time as well. 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 00:06:58.480 --> 00:07:01.437 this you get all these biases like confirmation bias where people feel like 00:07:01.520 --> 00:07:03.037 they have to well that's the thing in in 00:07:03.120 --> 00:07:04.877 in politics for flip-flopping right is 00:07:04.960 --> 00:07:08.557 viewed as bad right so take take as an 00:07:08.640 --> 00:07:12.077 example politician who flip flops is viewed as bad and and and sort of weak 00:07:12.160 --> 00:07:15.917 and pro probably evil um actually it's interesting if you talk to the world's 00:07:16.000 --> 00:07:18.797 best hedge fund managers they're the exact opposite they love changing their 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 00:07:22.000 --> 00:07:24.717 spending time with hedge fund managers I think they're awesome I think they're 00:07:24.800 --> 00:07:27.197 >> I I I feel the same way. >> They're fantastic people and they they 00:07:27.280 --> 00:07:30.957 are the most open-minded people I know bec and they they love when you tell 00:07:31.040 --> 00:07:33.517 them that they're wrong. They get all excited. Their eyes light up and they're 00:07:33.600 --> 00:07:35.197 like, "Oh, why why do you think that?" 00:07:35.280 --> 00:07:38.717 And they're genuinely interested because if if you're right and they're wrong, 00:07:38.800 --> 00:07:41.117 they will change their minds and they will, you know, they're hedge fund 00:07:41.200 --> 00:07:43.837 managers. They'll literally reverse the trade. They'll they're long on a 00:07:43.920 --> 00:07:45.997 company, they'll flip around and go short on it. They're totally fine with 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 00:07:50.800 --> 00:07:55.117 it's the weekly held part um which is convicted convicted convicted new facts 00:07:55.200 --> 00:07:57.757 change >> right but but it's a paradox right or 00:07:57.840 --> 00:08:00.637 it's it's a tension because those are those are antithetic you know it's 00:08:00.720 --> 00:08:03.037 determination coupled with flexibility like they're they're they're 00:08:03.120 --> 00:08:06.717 antithetical what you see in the startup world is sort of these two kinds of 00:08:06.800 --> 00:08:10.157 advice then that that that express this and there are people who with a straight 00:08:10.240 --> 00:08:12.557 face will give both of these forms of advice without ever acknowledging that 00:08:12.640 --> 00:08:16.237 they're in conflict right one of which is fail fast [snorts] right you know you 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 00:08:18.480 --> 00:08:20.397 what's wrong. You want to fail. You want to do something different. And then the 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 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 00:08:27.520 --> 00:08:29.037 get to strong views weekly held. 00:08:29.120 --> 00:08:31.677 >> So how do you advise in in that 00:08:31.760 --> 00:08:36.957 particular example for instance or assess uh which tacted uh founders or 00:08:37.040 --> 00:08:40.237 company should take potentially because you you look at some examples let's just 00:08:40.320 --> 00:08:44.797 say uh Uber or something like that where the model as it began is very much 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 00:08:48.640 --> 00:08:52.957 Twitter or others where they they pivot into a gold mine effectively and then I 00:08:53.040 --> 00:08:56.317 mean then obviously other things have to be laid on top of that to make it 00:08:56.400 --> 00:08:58.957 successful long term but uh having been 00:08:59.040 --> 00:09:01.997 in the valley now myself for 15 16 years 00:09:02.080 --> 00:09:04.557 you see a lot of people who change their 00:09:04.640 --> 00:09:06.397 mind almost too frequently that's right 00:09:06.480 --> 00:09:10.877 >> with uh in consequential facts perhaps. 00:09:10.960 --> 00:09:13.197 uh how do you think about advising a 00:09:13.280 --> 00:09:17.997 company that's struggling as to whether they should stay the course or uh pivot 00:09:18.080 --> 00:09:21.037 as they would say? >> Yeah. Yeah. So we have we see both 00:09:21.120 --> 00:09:24.157 cases. We see both we see both cases both both failure cases. We see 00:09:24.240 --> 00:09:27.117 companies that are just they're almost this fail fast thing is frankly 00:09:27.200 --> 00:09:30.237 completely out of hand and and I'm oldfashioned where I come from people 00:09:30.320 --> 00:09:32.957 like to succeed. Like it's like [laughter] >> great. 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 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 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 00:09:40.640 --> 00:09:44.797 [__] right? [laughter] So, like I'm oldfashioned on this. Like 00:09:44.880 --> 00:09:47.197 I like to succeed. I think succeeding should be the goal, not failing and 00:09:47.280 --> 00:09:50.077 certainly not failing fast or slow or any other form of failing. So, 00:09:50.160 --> 00:09:53.037 [laughter] so I get really kind of cranked up about this. But, but we do 00:09:53.120 --> 00:09:55.517 see companies that literally every time we meet every time I meet them, they 00:09:55.600 --> 00:09:57.917 pivoted. Like, and so every time I meet them, they're off to something new and 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 00:10:01.360 --> 00:10:03.757 something. They're just never they're never going to converge in anything 00:10:03.840 --> 00:10:06.157 because they're never going to put the time in into actually figuring it out 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 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 00:10:12.320 --> 00:10:15.517 people who just absolutely are determined will just pound their head 00:10:15.600 --> 00:10:18.957 against the same wall for years and years and years and years and at a 00:10:19.040 --> 00:10:21.277 certain you admire them for their determination and then at a certain 00:10:21.360 --> 00:10:22.797 point it just becomes obstinence, right? 00:10:22.880 --> 00:10:25.837 And then you're just at some point it becomes self-destructiveness. It becomes 00:10:25.920 --> 00:10:28.157 nonyote. You're just tilting against windmills, you know, kind of 00:10:28.240 --> 00:10:33.757 arbitrarily. And so those are polls. Um we do see behavior at the polls. Um, you 00:10:33.840 --> 00:10:36.157 know, the question you're asking is, of course, the key question, which is like, 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 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 00:10:42.320 --> 00:10:44.317 think I [snorts] think that's the test. 00:10:44.400 --> 00:10:47.437 Basically, there's I think there's a couple key tests for for founders or for 00:10:47.520 --> 00:10:50.077 that matter for investors and these kinds of decisions. I think that's one 00:10:50.160 --> 00:10:53.037 of the really core tests is, you know, do you fundamentally have the judgment 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 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 00:10:59.680 --> 00:11:01.917 get any confirmation from anybody that, oh yeah, you made the right call. like 00:11:02.000 --> 00:11:05.197 that you're not you're not going to realize like if you change and then 00:11:05.280 --> 00:11:07.597 succeed it's all great but by the way you might have succeeded at the old 00:11:07.680 --> 00:11:10.637 thing even better if you change and fail you know you'll never know whether the 00:11:10.720 --> 00:11:14.397 old thing would have worked like you know the the counterfactual like you 00:11:14.480 --> 00:11:17.437 know science I call the counterfactual you never know the counterfactual the 00:11:17.520 --> 00:11:19.757 way my brain is wired I'm always thinking in terms of the counterfactuals 00:11:19.840 --> 00:11:22.637 I'm always thinking in terms of the way things could have been right the the 00:11:22.720 --> 00:11:25.277 world evolved in a certain way kind of as a consequence of people making all 00:11:25.360 --> 00:11:28.397 these decisions on the fly people could have very easily made a different set of 00:11:28.480 --> 00:11:30.877 decisions the world could have ended up in a very different place and so the 00:11:30.960 --> 00:11:33.677 idea that you're ever going to know the consequence of your decision I think is 00:11:33.760 --> 00:11:36.637 probably a fallacy or what the alternative would have been right 00:11:36.720 --> 00:11:40.237 >> like the relative uh the relative result of your decision 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 00:11:43.280 --> 00:11:45.757 and you have to fall back on some sense of the intangibles 00:11:45.840 --> 00:11:48.237 >> and when you're looking to say stress 00:11:48.320 --> 00:11:52.557 test ideas uh and 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 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 00:12:01.200 --> 00:12:03.117 guess it's Bridgewwater Capital 00:12:03.200 --> 00:12:04.957 >> and he they talked about his his 00:12:05.040 --> 00:12:08.317 meetings and how they stress test ideas 00:12:08.400 --> 00:12:10.477 and and how people need to defend ideas. 00:12:10.560 --> 00:12:14.797 H how does a good partner meeting go if someone say proposes 00:12:14.880 --> 00:12:17.597 uh I was going to say a trade an investment >> investment 00:12:17.680 --> 00:12:19.277 >> uh that is a substantial investment. 00:12:19.360 --> 00:12:24.637 >> Yeah. >> What then happens from that point to a yes or a no decision? 00:12:24.720 --> 00:12:28.077 >> So we don't get the hedge fund manager can reverse himself. hedge fund manager 00:12:28.160 --> 00:12:30.877 bad trade can the next day he can turn around and take the opposite trade. We 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 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 00:12:37.120 --> 00:12:40.077 way when we make an investment decision it's a it's a commitment of dollars. 00:12:40.160 --> 00:12:43.277 It's also commitment of somebody's time and and and by the way the 00:12:43.360 --> 00:12:46.557 organization's time and bandwidth and and and there's only so much of that and 00:12:46.640 --> 00:12:49.197 then the other thing we have in venture is when we make a decision we then 00:12:49.280 --> 00:12:53.357 become committed to that company in that category and so we can't invest in their 00:12:53.440 --> 00:12:57.357 competitors including by the way their competitors who don't even exist yet 00:12:57.440 --> 00:13:00.717 right and so you know for example the investors in Fster were more more likely 00:13:00.800 --> 00:13:03.757 than not completely not only maybe unwilling but also unable to invest in 00:13:03.840 --> 00:13:06.637 Facebook when it came along because they were conflicted because the founder of 00:13:06.720 --> 00:13:08.957 Fster would have said you know you can't you can't invest in a competitive 00:13:09.040 --> 00:13:11.917 company and So our decisions are big decisions and they have serious 00:13:12.000 --> 00:13:13.357 consequences for the future of the firm. 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 00:13:16.720 --> 00:13:19.997 all the facts on the table and really kind of vet these things out. On the 00:13:20.080 --> 00:13:24.077 other hand, we're trying to preserve um we're trying to preserve the the the 00:13:24.160 --> 00:13:27.117 contrarianism of kind of at the core of what we do, the the the strong 00:13:27.200 --> 00:13:29.837 non-conensus views. We're trying to be able to invest in the things that really 00:13:29.920 --> 00:13:33.597 are unusual and odd that other people aren't taking seriously. Um, and one of 00:13:33.680 --> 00:13:37.597 our theories about venture capital is that so everybody thinks like investing 00:13:37.680 --> 00:13:39.677 it's like you either make a good investment or a bad investment. I 00:13:39.760 --> 00:13:41.117 actually think that's not the big issue. 00:13:41.200 --> 00:13:43.277 I think the issue at least in venture capital is whether you make a good 00:13:43.360 --> 00:13:47.597 investment or a great investment. And I think good is the enemy of great. We see 00:13:47.680 --> 00:13:50.717 many companies that are just fine and that are, you know, yep, you know, 00:13:50.800 --> 00:13:54.077 founders are good and the market seems good and the product seems good, the 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 00:13:56.720 --> 00:14:00.717 fine. But those companies tend to never go anywhere. And then every once in a 00:14:00.800 --> 00:14:03.437 while, we'll see these companies that just have some extremely strong 00:14:03.520 --> 00:14:07.277 strength, some extremely kind of, you know, special wonderful thing going on 00:14:07.360 --> 00:14:09.677 that by the way may have all kinds of problems and issues, but there's 00:14:09.760 --> 00:14:12.637 something at the core of what it is that's really special and magical. And 00:14:12.720 --> 00:14:13.917 those are the ones that we want to do. 00:14:14.000 --> 00:14:16.477 We're trying to do is basically stock our portfolio with just investments like 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 00:14:21.280 --> 00:14:23.917 in a conversation about the weaknesses of something to beat the idea to death 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 00:14:28.320 --> 00:14:30.637 you would only invest in the consensus ones. You'd only invest in the very good 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 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 00:14:37.440 --> 00:14:41.117 have to try really hard to encourage the strong non-conensus thinking but also 00:14:41.200 --> 00:14:43.997 have the full discussion to make sure that we really stress test that 00:14:44.080 --> 00:14:47.517 thinking. So the way we do it is basically each of our GPS has the 00:14:47.600 --> 00:14:51.517 ability to pull the trigger on a deal without a vote or without consensus. and 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 00:14:54.960 --> 00:14:57.757 very strong degree of positive, you know, commitment, enthusiasm about it, 00:14:57.840 --> 00:15:00.077 then we should do that investment, even if everybody else in the room thinks 00:15:00.160 --> 00:15:03.757 this is the stupidest thing they've ever heard of. [snorts] However, you don't 00:15:03.840 --> 00:15:06.557 get to just go do that yourself completely on your own without stress 00:15:06.640 --> 00:15:09.277 testing your own thinking. And so, it's the responsibility of everybody else in 00:15:09.360 --> 00:15:10.957 the room to stress test the thinking. 00:15:11.040 --> 00:15:14.557 And if necessary, we actually create we create a red team, right? We'll actually 00:15:14.640 --> 00:15:17.277 formally create sort of the counterveiling force and we'll we'll 00:15:17.360 --> 00:15:20.637 designate some set of people uh to [snorts] counter argue the other side. 00:15:20.720 --> 00:15:22.237 Um, and then >> it's like a debate team. 00:15:22.320 --> 00:15:25.437 >> Yeah. Basically, right. And then, and then and then the way that we try to, 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 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 00:15:30.240 --> 00:15:33.757 what, you know, versus the new person bringing in a deal or whatever. Um, and 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 00:15:37.920 --> 00:15:40.477 whenever he brings in a deal, like I just beat the [__] out of it, right? 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 00:15:43.760 --> 00:15:44.957 like trash the crap out of it, right? 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 00:15:48.320 --> 00:15:50.717 he's still pounding the table saying, "No, no, this is the thing." Then we all 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?" 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, 00:15:56.310 --> 00:15:59.917 [snorts] you know, kind of culture. By the way, he does the same thing to me, 00:16:00.000 --> 00:16:02.317 right? And so we we basically it's the torture test. 00:16:02.400 --> 00:16:04.397 >> What are some of the keys to fighting 00:16:04.480 --> 00:16:09.357 well in I think it seems key to many different types of relationships, 00:16:09.440 --> 00:16:12.637 personal, business, or otherwise, the ability to sort [laughter] of conflict 00:16:12.720 --> 00:16:15.517 resolve or just fight well uh and then 00:16:15.600 --> 00:16:18.557 make up. So, it seems like uh you and 00:16:18.640 --> 00:16:23.517 Ben have uh not my words, but like fought like cats and dogs. Uh but you 00:16:23.600 --> 00:16:25.757 always kind of get over it. >> We prefer old married couple. 00:16:25.840 --> 00:16:28.877 >> Old married couple. Uh there is a story, 00:16:28.960 --> 00:16:33.437 I don't know if it's accurate, about uh Netscape early days, something related 00:16:33.520 --> 00:16:36.317 to an interview with a journalist. Do you know the story I'm talking about? 00:16:36.400 --> 00:16:39.757 >> It's in Ben's book. >> Okay. So, right. That's okay. Here we go. 00:16:39.840 --> 00:16:41.277 >> Including the email you're about to reference. 00:16:41.360 --> 00:16:43.917 >> All right. So, could you could you uh could you describe this for people who 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 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 00:16:49.280 --> 00:16:52.957 with vigorous disagreement [laughter] >> and and we've continued that to this 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. 00:16:58.960 --> 00:17:01.277 >> It's not a family podcast. >> If you want if you want all the bad 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 00:17:04.080 --> 00:17:06.157 >> and I'll put it in the show notes. The 00:17:06.240 --> 00:17:08.957 How do you I mean you guys got off to a 00:17:09.040 --> 00:17:11.437 very aggressive start. How did you 00:17:11.520 --> 00:17:15.677 identify that Ben was someone worth 00:17:15.760 --> 00:17:19.597 having those types of disputes with that 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 00:17:24.720 --> 00:17:28.477 another person that you were butting heads with who is not worth keeping at 00:17:28.560 --> 00:17:30.237 the table. >> So honestly there there were there were 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 00:17:32.720 --> 00:17:34.237 would like argue right back at me. 00:17:34.320 --> 00:17:35.437 >> He wouldn't just go into the field. 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 00:17:38.160 --> 00:17:41.517 what you see this I if you just observe a lot of companies over time or 00:17:41.600 --> 00:17:43.837 investment firms or whatever you know everything you know there's there's a 00:17:43.920 --> 00:17:47.277 temptation everything wants to become a hierarchy and then people always don't 00:17:47.360 --> 00:17:51.037 have trepidations about speaking truth to power and a lot of what I've always 00:17:51.120 --> 00:17:54.237 found the really sort of wise and smart leaders are trying to do is they're 00:17:54.320 --> 00:17:57.197 trying to actually find the people in the organization who will actually talk 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 00:18:01.520 --> 00:18:04.157 this way there's certain organizations where the way to get ahead is to talk 00:18:04.240 --> 00:18:07.117 back to the leadership right that's how you get noticed 00:18:07.200 --> 00:18:09.197 By the way, there are other organizations where that doesn't work at 00:18:09.280 --> 00:18:12.477 all. Um, and I would recommend getting out of those as fast as possible. We we 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 00:18:15.200 --> 00:18:18.077 actually speak truth to power and and argue back at us just like anybody else. 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 00:18:21.680 --> 00:18:24.957 set the model, you know, set the precedent. So, that was one is he would 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 00:18:28.080 --> 00:18:31.277 always just because nobody is, but like he was very smart and and and very clear 00:18:31.360 --> 00:18:35.357 thinking. And then the third thing is I saw something early in him. Um that he 00:18:35.440 --> 00:18:39.037 was just amazing working with people. Um [snorts] which is not something I think 00:18:39.120 --> 00:18:42.477 has ever been necessarily true of me. Um but he was just like watching him in 00:18:42.560 --> 00:18:45.917 front of a group of people was just routinely magical in terms of how he 00:18:46.000 --> 00:18:48.477 could get people how he could communicate with people in a very clear 00:18:48.560 --> 00:18:52.717 way, how he could be very fact-based, but he could really make people feel uh 00:18:52.800 --> 00:18:56.077 you know kind of in a really fundamental way. Um and so that that combination you 00:18:56.160 --> 00:18:59.917 know made it clear that he was somebody very special. So we we mentioned Ben's 00:19:00.000 --> 00:19:02.557 book which is one of a handful of books 00:19:02.640 --> 00:19:07.357 that many many of the best operators 00:19:07.440 --> 00:19:09.197 founders I know in Silicon Valley 00:19:09.280 --> 00:19:12.237 routinely reference. Uh there are a 00:19:12.320 --> 00:19:14.797 handful uh that come to mind. Aside from 00:19:14.880 --> 00:19:16.717 that four steps to the epiphany I guess 00:19:16.800 --> 00:19:20.557 would be one. Uh this one here that was 00:19:20.640 --> 00:19:23.837 right in the lobby of your office, high output management with a new forward by 00:19:23.920 --> 00:19:27.757 Ben Horowitz is another which went out of print and then came back into print 00:19:27.840 --> 00:19:32.637 because it became a bit of a cult classic uh in here in Silicon Valley. 00:19:32.720 --> 00:19:34.717 Are there any books that you would 00:19:34.800 --> 00:19:37.917 prescribe to say uh a wouldbe 00:19:38.000 --> 00:19:42.237 entrepreneur coming out of college just to give them to increase the likelihood 00:19:42.320 --> 00:19:45.437 of them succeeding? Are there any other books that come to mind? Yeah. So, high 00:19:45.520 --> 00:19:48.077 output management, it's one of Andy Gross's books. It's the best book on 00:19:48.160 --> 00:19:51.197 management ever written. Um, he wrote another book called Only the Paranoid 00:19:51.280 --> 00:19:54.397 Survive, which is one of my favorite topics. And so, that that is also a very 00:19:54.480 --> 00:19:57.437 good book. We recommend Ben's book is good. I think Peter Teal's book is 00:19:57.520 --> 00:20:01.197 self-recommenering and it's an excellent book, 0ero to1. And then there's a 00:20:01.280 --> 00:20:03.197 bunch, you know, there's a bunch of others. There's a bunch of others that 00:20:03.280 --> 00:20:07.197 are are are good. Um, uh, really though, 00:20:07.280 --> 00:20:10.957 I think where I got a lot of my education from um was uh history, 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 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 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 00:20:15.520 --> 00:20:18.157 contemporaries I would go back and read about Edison. Um I would go back and 00:20:18.240 --> 00:20:21.197 read about Ford, Rockefeller, JP Morgan. 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 00:20:24.880 --> 00:20:29.757 call it 1870 to 1920 1930 really interesting. Um because you had sort of 00:20:29.840 --> 00:20:32.317 the arrival of many of the technologies that kind of built the world that we 00:20:32.400 --> 00:20:33.997 live in today. >> Disruptive period. 00:20:34.080 --> 00:20:36.717 >> Yeah. And history's I always find history is this weird like I didn't 00:20:36.800 --> 00:20:38.557 really study history in college or anything but I find history is this 00:20:38.640 --> 00:20:41.277 weird thing where the way that you're taught history like in school like in 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 00:20:44.480 --> 00:20:47.357 kind of all you know Olympians the founding fathers and these great 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 00:20:50.000 --> 00:20:52.797 dates and they did these amazing things and they're kind of these great like and 00:20:52.880 --> 00:20:57.037 they feel like unrelatable like and you like you couldn't possibly like to even 00:20:57.120 --> 00:20:59.677 at least where I come from even think that you could have ever have anything 00:20:59.760 --> 00:21:02.157 in common with these people was just like a non was not something [snorts] 00:21:02.240 --> 00:21:05.277 that ever occurred anybody like they're like, you know, the pantheon of kind of 00:21:05.360 --> 00:21:09.277 the legendary people who have lived. Um, and I just found like the b the really 00:21:09.360 --> 00:21:12.317 well-written biographies that get you inside the heads of what it was like to 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 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 00:21:20.640 --> 00:21:23.437 that matter, William Randph Hurst, or, you know, these, you know, people we've 00:21:23.520 --> 00:21:26.477 all heard of, like the really good biographers are really good at getting 00:21:26.560 --> 00:21:30.157 inside the head of what what it was like to be them then before they became, 00:21:30.240 --> 00:21:32.557 right, before they became the people who ultimately made it into the into the 00:21:32.640 --> 00:21:36.317 history books. and and and honestly a lot of stuff like a lot of things have 00:21:36.400 --> 00:21:38.717 changed but a lot of things haven't changed like people haven't changed a 00:21:38.800 --> 00:21:42.237 bit and so you I always find like in those histories you can always kind of 00:21:42.320 --> 00:21:46.397 see okay that personality type like yep I know you know 13 people like that you 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 00:21:50.160 --> 00:21:53.677 against um and a lot more to kind of think about than people give than people 00:21:53.760 --> 00:21:54.797 kind of give history credit for. 00:21:54.880 --> 00:21:58.157 >> Oh definitely. I mean I had uh Cyrus the Great recommended to me I guess at 00:21:58.240 --> 00:22:02.957 Xenopon and people don't change. I mean, you see the same archetypes, you're 00:22:03.040 --> 00:22:07.597 like, "Oh, that's Bob, my coworker. He does the same thing." Uh, and the 00:22:07.680 --> 00:22:12.317 biography mention made me think of Walter Isacson's book on Ben Franklin, 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 00:22:16.880 --> 00:22:20.477 his foibless and challenges and self-doubt, and it really humanized it 00:22:20.560 --> 00:22:23.517 in a way that actually made me aspire to do bigger things. 00:22:23.600 --> 00:22:27.597 >> If you wanted to get someone hooked on biographies, is there any particular 00:22:27.680 --> 00:22:30.637 book you would recommend? >> Oh, there's a bunch. the the Walt Disney 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 00:22:34.480 --> 00:22:37.597 founders, Brian Chesky, the founder of Airbnb, has sort of Walt Disney is his 00:22:37.680 --> 00:22:40.957 hero. Um and so he's gotten even more deeply into that. So the author Neil 00:22:41.040 --> 00:22:45.037 Gabbler who's written uh the best biography on on Walt Disney and it's a 00:22:45.120 --> 00:22:49.437 phenomenal book. I actually like another one I really like um coming out of kind 00:22:49.520 --> 00:22:50.717 of left field, but there's Charles 00:22:50.800 --> 00:22:53.037 Schultz who's the creator of Peanuts. 00:22:53.120 --> 00:22:56.477 >> The the Schultz biography is amazing. 00:22:56.560 --> 00:23:00.397 And basically the case that he makes is that um he basically makes the case 00:23:00.480 --> 00:23:03.277 biographer makes the case that peanuts was the longest continuous work of 00:23:03.360 --> 00:23:05.597 American art ever made. It was a 60-year 00:23:05.680 --> 00:23:08.877 art project um with deep foundations in 00:23:08.960 --> 00:23:13.197 American history and psychology and philosophy. Um and uh through and it was 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 00:23:16.320 --> 00:23:19.437 of course it was also a great peanut is a great entrepreneurial accomplishment 00:23:19.520 --> 00:23:22.157 because you know it's this very personal thing but at the same time it became 00:23:22.240 --> 00:23:26.157 this gigantic business success. So I I think that one is great. Um, the wizard 00:23:26.240 --> 00:23:28.157 of Menlo Park is a great biography of 00:23:28.240 --> 00:23:31.277 Edison and Ed Edison is very much Edison 00:23:31.360 --> 00:23:33.917 was kind of proto Silicon Valley um, in 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 00:23:39.120 --> 00:23:42.557 record of sustained innovation in many many different areas and how he then 00:23:42.640 --> 00:23:45.037 went out to try to commercialize things. 00:23:45.120 --> 00:23:48.717 We [laughter] good news is we are much better at the commercialization part now 00:23:48.800 --> 00:23:51.757 um, than than than people were in those days. we we know how to build the 00:23:51.840 --> 00:23:55.837 companies much better now but the pace you know he would just routinely invent 00:23:55.920 --> 00:24:00.877 things like the photograph like just [laughter] it's just obvious right to him 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 00:24:04.080 --> 00:24:06.317 innovation and I it's a very inspiring story 00:24:06.400 --> 00:24:09.757 >> the Netscape uh story we touched on it 00:24:09.840 --> 00:24:13.357 very briefly and there are many places people can read about that so I don't 00:24:13.440 --> 00:24:16.317 want to take up too much time but on a 00:24:16.400 --> 00:24:21.597 related note I wanted to ask is there anything you miss about mid90s internet. 00:24:21.680 --> 00:24:23.997 >> Oh, yes. >> And what what would it be? 00:24:24.080 --> 00:24:27.197 >> Yeah. So, when I got to the valley um in 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 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 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 00:24:38.640 --> 00:24:42.237 up in Seattle, but Intel down here and then all these great, you know, all the 00:24:42.320 --> 00:24:44.957 big software companies at the time, you know, Noville and Lotus and all these 00:24:45.040 --> 00:24:49.277 companies, the game, you know, EA, the gaming companies. Um I the the great PC 00:24:49.360 --> 00:24:52.637 companies had gotten built in the 70s and 80s, right? And by the 90s by the 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 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 00:25:00.640 --> 00:25:03.117 in fact, the overwhelming mood in the Valley when I arrived was that it was 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 00:25:06.160 --> 00:25:10.877 because there was nothing else to do. Um and then there was this moment where 00:25:10.960 --> 00:25:14.637 I and you know, various people and then more people and then more people. For 00:25:14.720 --> 00:25:17.357 whatever reason, it was kind of like we really wrapped our heads around the 00:25:17.440 --> 00:25:20.397 implication of the internet, which today seems obvious, but at the time was a 00:25:20.480 --> 00:25:23.837 very contrarian. When I got to Silicon Valley, if you had said the internet 00:25:23.920 --> 00:25:26.317 will become a mainstream consumer medium that three billion people are going to 00:25:26.400 --> 00:25:28.957 use worldwide for all forms of human activity, you would have been laughed at 00:25:29.040 --> 00:25:32.077 like you would have been institutionalized like here, like people 00:25:32.160 --> 00:25:36.397 would have laughed at you. Um, and so as we figured that out, then what happened 00:25:36.480 --> 00:25:40.637 was it was like okay, new frontier, right? And this was part of the it goes 00:25:40.720 --> 00:25:43.037 back to the kind of history thing like you know for a long time the development 00:25:43.120 --> 00:25:45.837 of like you know the United States the new frontier was whatever was further 00:25:45.920 --> 00:25:48.797 west right and then eventually they got all the way to California and then they 00:25:48.880 --> 00:25:51.277 had the gold rush and like and then there was famous thing you know famous 00:25:51.360 --> 00:25:53.997 kind of theme in American history is the closing of the frontier like there's a 00:25:54.080 --> 00:25:57.037 theme of like every western right that every revisionist western that gets made 00:25:57.120 --> 00:25:59.917 is like there's nowhere frontier you know the radicals can't go any further 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 00:26:04.160 --> 00:26:06.877 have kind of virtual frontiers we have intellectual frontiers right or we have 00:26:06.960 --> 00:26:10.077 creative frontiers or we have entrepreneurial frontiers, technological 00:26:10.160 --> 00:26:12.157 frontiers and um and so the internet 00:26:12.240 --> 00:26:13.677 kind of represented the opening of a new 00:26:13.760 --> 00:26:17.197 frontier. And once we recognized that it 00:26:17.280 --> 00:26:20.717 was like aha [laughter] brand new and then at that point and 00:26:20.800 --> 00:26:23.117 that was where all the enthusiasm came from because it was that point of like 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 00:26:26.480 --> 00:26:30.397 that point right the list becomes very exciting like we have to do e-commerce 00:26:30.480 --> 00:26:33.517 we have to do online publishing we have to do transactions we have to do you 00:26:33.600 --> 00:26:36.797 know social networking we have to do auctions we have to do right all of the 00:26:36.880 --> 00:26:39.837 big franchise companies that came out of you know the next you know 101 15 we 00:26:39.920 --> 00:26:44.317 have to do search [gasps] right all the ideas kind of immediately materialized 00:26:44.400 --> 00:26:47.197 Um and then people, you know, was off to the races. 00:26:47.280 --> 00:26:49.677 >> Is there anything comparable right now for you? 00:26:49.760 --> 00:26:51.677 >> So I think in my view there always is. 00:26:51.760 --> 00:26:55.277 Um the thing is um these things look like cults and fringe activities until 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 00:27:00.080 --> 00:27:02.237 mobile rush in the last 10 you know basically since the release of the 00:27:02.320 --> 00:27:05.357 iPhone the mobile rush qualified for this. The social networking rush kind of 00:27:05.440 --> 00:27:07.837 post Facebook qualified for this and those are kind of known and well 00:27:07.920 --> 00:27:11.197 understood and it's just straight entrepreneurial opportunities probably 00:27:11.280 --> 00:27:15.117 you know generally kind of reaching some level of saturation, 00:27:15.200 --> 00:27:19.277 right? Slight digression. We don't foreclose 00:27:19.360 --> 00:27:22.237 the possibility that there will be another mobile killer app or another 00:27:22.320 --> 00:27:25.677 social killer app, but it's getting harder and harder and harder because 00:27:25.760 --> 00:27:28.237 more and more people have figured out that you can do these things and then 00:27:28.320 --> 00:27:31.597 the winners have now gotten very established, right? One of the ways I 00:27:31.680 --> 00:27:34.637 think about it is to to have, you know, you know, first you had Facebook and 00:27:34.720 --> 00:27:36.957 then you had Twitter and then you had Instagram and now you have Snapchat and 00:27:37.040 --> 00:27:40.717 those all became big winners. Okay, now what would it take to make the fifth 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 00:27:43.680 --> 00:27:46.717 phone, right? The fifth one has to knock something off. Has to knock one of the 00:27:46.800 --> 00:27:50.157 other ones off. And so, it's become as as these markets saturate becomes more 00:27:50.240 --> 00:27:53.437 of a zero- sum game. Or even even smartphones. Um, you know, smart 00:27:53.520 --> 00:27:57.037 smartphone smartphones a giant industry, but like unit volumes globally are now 00:27:57.120 --> 00:27:59.357 expanding at like single digit percentages. And so, the smartphone 00:27:59.440 --> 00:28:02.557 industry is becoming one that's mostly people competing directly with each 00:28:02.640 --> 00:28:07.037 other, not not creating new things. And so we would say like those opportunities 00:28:07.120 --> 00:28:09.677 those businesses are gigantic and those companies will get much bigger but 00:28:09.760 --> 00:28:12.877 there's not as much entrepreneurial opportunity. The opportunity is more 00:28:12.960 --> 00:28:15.437 likely to be in the areas that people think are cult and fringe. 00:28:15.520 --> 00:28:16.557 >> What would be some examples? 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 00:28:19.840 --> 00:28:23.517 weekends, [laughter] >> right? Their day job like the day job is 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 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 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, 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 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 00:28:39.120 --> 00:28:42.797 night or on the weekends? So then things get really interesting, right? So then 00:28:42.880 --> 00:28:45.517 you look at like things like cryptocurrency, Bitcoin. Um you look at 00:28:45.600 --> 00:28:46.957 things like a lot of the new advances. 00:28:47.040 --> 00:28:49.837 There's a whole the whole area of kind of health hacking, you know, quantified 00:28:49.920 --> 00:28:51.597 self is a very interesting new area. 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 00:28:55.120 --> 00:28:57.597 catalyst for this, but there's this whole kind of area of like scientific 00:28:57.680 --> 00:28:59.917 food and food hacking that's emerging. 00:29:00.000 --> 00:29:04.317 Um there is uh a revolution actually happening I think in robotics um because 00:29:04.400 --> 00:29:08.077 robotics robotics has finally become something tractable where people can do 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 00:29:12.560 --> 00:29:14.797 you can now download as a hobbyist you can now download this thing called 00:29:14.880 --> 00:29:18.237 TensorFlow from Google >> TensorFlow >> TensorFlow and which is a deep learning 00:29:18.320 --> 00:29:22.237 uh framework it's a framework for doing AI it's in 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 00:29:25.280 --> 00:29:28.557 world and do things like self-driving cars or you know self you know 00:29:28.640 --> 00:29:31.997 self-flying drones or all these things this is technology it was so 5 years ago 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 00:29:36.400 --> 00:29:39.437 employee at one of three or four big companies to have access to this 00:29:39.520 --> 00:29:42.237 technology and then Google just open sourced it And so now anybody in the 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 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 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 00:29:50.880 --> 00:29:55.160 bot, you can build a bot. You want to build a self-driving 00:29:56.080 --> 00:29:59.037 car. >> I read about it, >> right, George? [laughter] And by the 00:29:59.120 --> 00:30:02.157 way, you should him you should interview. But um like literally like 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 00:30:06.240 --> 00:30:09.197 DARPA funded like grand challenge like research project. Five years ago, this 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 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 00:30:15.920 --> 00:30:18.397 going to tip and then, you know, there's one George today, there will be a 00:30:18.480 --> 00:30:20.637 thousand Georgees tomorrow. 00:30:20.720 --> 00:30:23.837 >> Do you think the dangers of AI that some 00:30:23.920 --> 00:30:26.717 people talk about uh are overblown? 00:30:26.800 --> 00:30:29.757 >> Completely 100%. >> Yes. >> Can you elaborate? 00:30:29.840 --> 00:30:32.797 >> All the many things I worry about that machines rising up and killing us. 00:30:32.880 --> 00:30:35.277 >> Lite fallacy. >> It's not actually it's very it's related 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 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 00:30:42.960 --> 00:30:45.917 something deep-seated in human psychology where we are always going to 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 00:30:49.680 --> 00:30:51.917 going to we're going to unlock fundamentally we're going to unlock the 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 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, 00:30:58.160 --> 00:31:01.277 right? The big the big moral of the Prometheian myth was like fire. Fire is 00:31:01.360 --> 00:31:03.357 the thing that enabled human civilization is also the thing that's 00:31:03.440 --> 00:31:05.117 going to burn everything down and kill us all, 00:31:05.200 --> 00:31:07.277 >> right? Right? And [snorts] so this is very deeply embedded in our in our 00:31:07.360 --> 00:31:12.317 psychology. Frankenstein um Frankenstein the subtitle of Frankenstein of the 00:31:12.400 --> 00:31:15.917 novel the subtitle was the modern Prometheus. Right? It was direct 00:31:16.000 --> 00:31:19.037 Frankenstein was a reinterpret reinterpretation of the Prometheian myth 00:31:19.120 --> 00:31:21.677 except in this case it was literally the monster that was stitched together and 00:31:21.760 --> 00:31:25.837 then brought back to life through unholy literally unholy science. Um and then 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 00:31:30.080 --> 00:31:33.677 literature. There's a concept of the Gollum um which is the the the the 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 00:31:37.680 --> 00:31:40.237 of Warsaw or something to kill all the enemies and then come back and then they 00:31:40.320 --> 00:31:44.317 kills kills all the people who created it, right? So this is very kind of core 00:31:44.400 --> 00:31:48.397 John Henry uh the steel driving man, right? John Henry's the famous it's a 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 00:31:51.680 --> 00:31:55.197 the machine that can like uh can um can hammer in the railroad spikes faster 00:31:55.280 --> 00:31:59.037 than a human can and John Henry's famous showdown between him and the machine and 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 00:32:02.400 --> 00:32:05.197 in the myth that he drops dead of a heart attack right because technology 00:32:05.280 --> 00:32:09.517 has to get its revenge and so it's just that projected forward and and the 00:32:09.600 --> 00:32:12.397 reason I'm so confident on this is because it's just every single era of 00:32:12.480 --> 00:32:15.597 technological advance this has always been the response there's always been 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 00:32:19.120 --> 00:32:21.597 a tool. It's something that helps us do things in a better way. It's 00:32:21.680 --> 00:32:24.077 overwhelmingly to the benefit of mankind. And then we wonder why 00:32:24.160 --> 00:32:25.277 everybody got so worked up over it. 00:32:25.360 --> 00:32:28.237 >> So if we if we put aside the existential 00:32:28.320 --> 00:32:31.837 threat piece, you know, the summoning of the demon conversations, if we put that 00:32:31.920 --> 00:32:33.277 aside entirely, 00:32:33.360 --> 00:32:38.877 >> how would you answer someone who who worries about job displacement, 00:32:38.960 --> 00:32:41.917 >> right, >> of AI? And because there there are some 00:32:42.000 --> 00:32:44.957 re I think reasonably smart people who u 00:32:45.040 --> 00:32:46.957 are are very fearful of what will happen 00:32:47.040 --> 00:32:51.997 to society when people are are massively displaced. How how would you encourage 00:32:52.080 --> 00:32:54.717 them to think about that? >> Yeah. So let's crystallize the concern. 00:32:54.800 --> 00:32:57.357 So the World Economic Forum came out with this this thing last year that kind 00:32:57.440 --> 00:32:58.557 of made freaked a lot of people out. 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 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 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. 00:33:08.720 --> 00:33:13.197 Um, so then you look at the American economy. Just this year, 2016, and we 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 00:33:16.080 --> 00:33:18.637 say on AI. Um, this year, the American 00:33:18.720 --> 00:33:22.157 economy will destroy 21 million jobs and 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 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 00:33:31.760 --> 00:33:35.997 in the next 3 months um we will destroy more jobs than the World Economic Forum 00:33:36.080 --> 00:33:40.077 project will be destroyed by AI over the next 5 years. Why don't people know 00:33:40.160 --> 00:33:43.757 this? Why is this not obvious? Because whenever you read news stories about job 00:33:43.840 --> 00:33:47.277 growth, it's always the numbers quoted are always net numbers. So last month 00:33:47.360 --> 00:33:51.997 200,000 jobs, 230 250,000 jobs got created. And so but those are net jobs. 00:33:52.080 --> 00:33:54.077 Nobody ever reports the gross numbers. 00:33:54.160 --> 00:33:57.037 The gross numbers are you go back numbers. We destroy more than 5 million 00:33:57.120 --> 00:33:59.677 jobs a quarter and we create more than six million jobs a quarter. basically 00:33:59.760 --> 00:34:03.517 quarter in quarter out. And so one is people just dramatically underestimate 00:34:03.600 --> 00:34:08.397 the size and complexity and churn in the American economy as it currently exists. 00:34:08.480 --> 00:34:10.877 Another example would be there's about it turns out there's about 5 million 00:34:10.960 --> 00:34:13.597 people who drive professionally in the US. And so one of the questions with 00:34:13.680 --> 00:34:16.317 like self-driving cars, right, is where this what's going [snorts] to happen to 00:34:16.400 --> 00:34:18.717 the truck drivers and the taxi drivers and everything and everything else. 00:34:18.800 --> 00:34:22.557 Again, 5 million jobs. We can redeploy we we redeploy every every quarter we 00:34:22.640 --> 00:34:26.397 redeploy 5 million people. Like this is not in the scope and scheme of the 00:34:26.480 --> 00:34:30.477 American economy. uh it's it's it's a totally doable thing. The other thing 00:34:30.560 --> 00:34:33.917 that people don't appreciate and understand I find mind-blowing which is 00:34:34.000 --> 00:34:36.717 would you would you guess based on everything that people say would you 00:34:36.800 --> 00:34:39.997 guess that the rate of job creation and disruption of the American economy is 00:34:40.080 --> 00:34:42.797 rising over time or falling over time. 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 00:34:48.400 --> 00:34:49.997 opinion. >> Well you would you would I think most 00:34:50.080 --> 00:34:52.557 people would guess that it's rising, right? The view would be technology is 00:34:52.640 --> 00:34:56.237 having ever greater impact, right? And so and and change feels like it's 00:34:56.320 --> 00:34:59.197 accelerating, right? It's the big theme in the political season is it feels like 00:34:59.280 --> 00:35:01.917 the world's kind of getting away from us. Technolog [snorts] is getting away 00:35:02.000 --> 00:35:03.677 from us. Trade's getting away from us. 00:35:03.760 --> 00:35:06.557 You know, something is, you know, basically dramatic changes are happening 00:35:06.640 --> 00:35:09.437 that are historically unprecedented, right? It's kind of the feeling. 00:35:09.520 --> 00:35:11.917 >> So almost everybody believe if you do poll this almost everybody believes 00:35:12.000 --> 00:35:13.517 >> it's definitely the perception being created, 00:35:13.600 --> 00:35:16.557 >> right? Almost everybody believes that change is increasing change accelerate. 00:35:16.640 --> 00:35:19.837 Actually turns out in the American economy the reverse is happening. um the 00:35:19.920 --> 00:35:23.037 rate of both job destruction and creation are falling and have been 00:35:23.120 --> 00:35:26.717 falling for decades. Have been like over the last 50 years, they're not dramatic 00:35:26.800 --> 00:35:29.917 lines down, but they're basically very slow lines down. So basically what's 00:35:30.000 --> 00:35:33.757 been happening is in in in fact um every year the American economy gets less 00:35:33.840 --> 00:35:37.437 dynamic, right? And and and you might say, "Oh, that's good because that means 00:35:37.520 --> 00:35:39.917 that you'll have stability. That means people won't have to change jobs, all 00:35:40.000 --> 00:35:42.877 that stuff." I would argue that's bad because what that means is we're not 00:35:42.960 --> 00:35:46.317 creating enough opportunity, right? And if we're thinking about the future, I 00:35:46.400 --> 00:35:48.317 think we want to think about opportunity. We want to think about what 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 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 00:35:52.880 --> 00:35:56.637 the new fields, the new sciences, the new forms of art, the new industries, 00:35:56.720 --> 00:36:00.077 the new businesses, the new companies, the new jobs that will get created, 00:36:00.160 --> 00:36:03.597 right? Every job that we all have and everybody listening to this podcast has 00:36:03.680 --> 00:36:08.157 got created as a consequence of the process of change, right? Which is very 00:36:08.240 --> 00:36:11.117 has been very positive to literally everybody on planet Earth. Like this 00:36:11.200 --> 00:36:13.677 this is these have been very very positive changes in terms of increase in 00:36:13.760 --> 00:36:17.517 human welfare and opportunity. And so the idea of living in a world where 00:36:17.600 --> 00:36:20.317 change is becoming less rapid, which is 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 00:36:24.640 --> 00:36:26.877 should want more change. We should want we should want more change because we 00:36:26.960 --> 00:36:29.197 should want more advances because we should want more opportunity to get 00:36:29.280 --> 00:36:32.157 created. We should want more products and services in our lives. We should 00:36:32.240 --> 00:36:35.277 want more industries created. We should want you know more medical advances. We 00:36:35.360 --> 00:36:38.557 should want more advances in art and science and every other field of human 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. 00:36:42.800 --> 00:36:44.557 >> Mhm. >> As opposed to what everybody thinks, 00:36:44.640 --> 00:36:46.797 which is we have to fight to prevent that. 00:36:46.880 --> 00:36:48.717 >> What's the smartest way to fight to get that? 00:36:48.800 --> 00:36:51.117 >> If you were willing to go into politics, 00:36:51.200 --> 00:36:53.117 >> sure, [laughter] I'm willing. This is this is uh 00:36:53.200 --> 00:36:55.837 >> when you run for office, when you run for office, I will help you put your 00:36:55.920 --> 00:37:00.557 platform together. Um [laughter] short of that, um I think the thing to 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 00:37:03.280 --> 00:37:05.757 what do what you can to directly contribute to it, right? And so do what 00:37:05.840 --> 00:37:08.957 you can. Do what you can to either either try to create the new things. Try 00:37:09.040 --> 00:37:11.917 to create the new products. Create the new the new the new again art, science, 00:37:12.000 --> 00:37:16.957 technology products, what consumer goods, create new things. Um uh create 00:37:17.040 --> 00:37:18.717 businesses around those things, right? 00:37:18.800 --> 00:37:21.197 Create companies or for that matter by the way nonprofits like create 00:37:21.280 --> 00:37:24.637 organizations or models that can let things scale so that they can touch more 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 00:37:29.040 --> 00:37:31.277 them and support them and help and help enable them and train them and get them 00:37:31.360 --> 00:37:34.317 up and running. Uh you mentioned for instance when you first got to the 00:37:34.400 --> 00:37:38.877 valley there was a feeling on the part of many people that it's done. 00:37:38.960 --> 00:37:42.077 >> Yeah. >> PCs are finished. You missed the boat kid. 00:37:42.160 --> 00:37:44.317 >> Now in the venture capital world there's 00:37:44.400 --> 00:37:47.277 a term used fairly often FOMO. Fear of 00:37:47.360 --> 00:37:51.437 missing out. >> How do you think about or handle FOMO 00:37:51.520 --> 00:37:54.637 yourself? >> Yeah. Mostly we just fall right for it. 00:37:54.720 --> 00:37:57.520 Um [laughter] 00:37:58.960 --> 00:38:02.877 probably just total suckers for it. Um, [laughter] 00:38:02.960 --> 00:38:06.797 so the way we describe Oh, so so what fear missing out? Where does fear 00:38:06.880 --> 00:38:09.517 missing out comes from? It's it's like it's clear invisible signs that 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 00:38:12.320 --> 00:38:14.317 something that hasn't happened yet. It's FOMO of something that's clearly 00:38:14.400 --> 00:38:15.997 obviously happening. 00:38:16.080 --> 00:38:18.717 >> So which which for those people not in 00:38:18.800 --> 00:38:21.837 in the tech investment world comes uh in 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 00:38:26.160 --> 00:38:28.637 founder. Hey, we'd love to squeeze you 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 00:38:33.200 --> 00:38:36.797 tomorrow if you're interested >> blah right I mean there's a lot of sort 00:38:36.880 --> 00:38:41.117 of cult cortisol >> driven emergencies uh some of which may 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 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 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 00:38:49.840 --> 00:38:52.077 like you view that as like what it appears to be which is like okay the 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 00:38:56.320 --> 00:38:59.037 strikes everybody as like so clearly wrong like that must be wrong like that 00:38:59.120 --> 00:39:02.477 that must be just foolish behavior, which is why it's been encapsulated into 00:39:02.560 --> 00:39:05.117 this term called FOMO that's kind of designed, you know, designed to sound 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 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 00:39:11.840 --> 00:39:14.557 counter, you know, theory, which is like, okay, then by definition, those 00:39:14.640 --> 00:39:16.957 are probably bad ideas cuz you're probably getting played or you're 00:39:17.040 --> 00:39:19.997 probably a sucker kind of, you know, along for the the the latest scam. And 00:39:20.080 --> 00:39:23.277 so, um, or the opportunities passed or if it was a good opportunity, why would 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 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 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, 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 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, 00:39:39.040 --> 00:39:41.277 >> the uncredited trade. >> Yeah. Yeah. The thing that nobody else 00:39:41.360 --> 00:39:44.877 is interested in, right? And, you know, sort of it's on for old companies, we 00:39:44.960 --> 00:39:47.277 call that value investing. You know, for new companies, we just call that, you 00:39:47.360 --> 00:39:52.237 know, cold sectors. It's just an area in which nobody is interested. And and so 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 00:39:55.440 --> 00:39:57.837 way that's a dumb conclusion and there are investors who do that and it works 00:39:57.920 --> 00:40:00.317 very well for them. My personal preference what I try to get us to do 00:40:00.400 --> 00:40:03.837 around here is to just eliminate this as a variable altogether and literally just 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 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 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. 00:40:13.280 --> 00:40:16.957 Basically just take that out um for on both sides both the hot and the cold. 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 00:40:19.920 --> 00:40:23.757 actual thing, right? [snorts] Try to get to the it. So what what is it really? 00:40:23.840 --> 00:40:27.357 This specific company, right? Doing this specific thing with this specific 00:40:27.440 --> 00:40:30.477 technology, these specific people at this specific time, what is that thing? 00:40:30.560 --> 00:40:33.517 And [snorts] let's make our own evaluation of that thing independent of 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 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 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. 00:40:44.320 --> 00:40:48.637 Roughly on average the things that are hot are priced somewhere between two to 00:40:48.720 --> 00:40:50.717 4x higher than the things that are cold. 00:40:50.800 --> 00:40:54.957 At the extreme from coldest cold to hotest hot is about 4x, right? And so in 00:40:55.040 --> 00:40:57.357 in in investing terms, if it's super 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 00:41:02.160 --> 00:41:05.277 quality, right? For the same fundamental quality level. And a big part of our 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 00:41:08.960 --> 00:41:11.277 invest on market terms. If the market terms are 10 because it's cold, we'll 00:41:11.360 --> 00:41:13.757 invest there. If the market terms are 40 because it's hot, we'll invest there. 00:41:13.840 --> 00:41:16.397 But we've made our own decision about whether to invest. So we just try to 00:41:16.480 --> 00:41:19.437 strip it away. >> Got it. >> Very, by the way, easy to say. 00:41:19.520 --> 00:41:21.997 >> Easy to say, hard to do. Yeah. The uh 00:41:22.080 --> 00:41:28.397 Are there any particular investors outside of venture capital who impress 00:41:28.480 --> 00:41:31.037 you? >> Yeah. So I spend most of when I study 00:41:31.120 --> 00:41:34.477 other investors. Um I either study the people we study the people we compete 00:41:34.560 --> 00:41:38.477 with and and and collaborate with very closely. Um I also uh I particularly 00:41:38.560 --> 00:41:41.757 study the value investors on the completely other side of the spectrum. 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. 00:41:44.480 --> 00:41:47.037 It's a fascinating kind of thing. You know, sort of Warren Buffett as the 00:41:47.120 --> 00:41:49.117 archetype, but also there's now, you know, there's a lot of famous value 00:41:49.200 --> 00:41:51.597 investors, Seth Clarman and a bunch of others that have kind of, you know, 00:41:51.680 --> 00:41:53.837 written books and kind of built up this smart guy. 00:41:53.920 --> 00:41:55.277 >> Yeah. Yeah. This whole kind of theory of 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, 00:41:59.440 --> 00:42:03.197 1930s. And so there's this whole world of value investing. And on the one hand, 00:42:03.280 --> 00:42:08.077 there's no overlap um between the worlds because I like to say like um basically 00:42:08.160 --> 00:42:11.517 anything Warren Buffett's worth willing to invest in, we run screaming in the 00:42:11.600 --> 00:42:13.277 other direction and vice versa, right? 00:42:13.360 --> 00:42:15.917 And that's [snorts] as it should be, right? Basically everything he invests 00:42:16.000 --> 00:42:18.397 in like Hines ketchup, right? And the reason he invests in Hines ketchup is 00:42:18.480 --> 00:42:21.757 because people have been eat ketchup on hamburgers for a hundred years and 00:42:21.840 --> 00:42:24.237 therefore the best guess would be that they're going to continue to eat Hines 00:42:24.320 --> 00:42:27.757 ketchup for the next hundred years. Um we weren't screaming from that cuz like 00:42:27.840 --> 00:42:29.277 >> you're not going to invest in seize candy. 00:42:29.360 --> 00:42:33.037 >> No. [laughter] No. We like, no, absolutely not. And furthermore, I'm 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 00:42:35.600 --> 00:42:38.477 the new like scientific, you know, superfood candy company that's going to 00:42:38.560 --> 00:42:39.677 blow them right out of the water, right? 00:42:39.760 --> 00:42:43.277 So, like we're we're we're wired completely opposite in in in that sense. 00:42:43.360 --> 00:42:44.397 Basically, he's betting against change. 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 00:42:48.400 --> 00:42:51.197 makes a mistake, it's because something changes that he didn't expect. When we 00:42:51.280 --> 00:42:54.317 make a mistake, it's because something doesn't change, right, that we that we 00:42:54.400 --> 00:42:58.077 thought would. And so so they could not be more different in that way. But what 00:42:58.160 --> 00:43:02.717 both schools have in common is um an orientation towards I would say original 00:43:02.800 --> 00:43:05.917 thinking of really being able to kind of going back to the previous conversation 00:43:06.000 --> 00:43:08.797 willing to really view things as they are as opposed to what everybody says 00:43:08.880 --> 00:43:11.597 about them or the way they're believed to be like the value investor is always 00:43:11.680 --> 00:43:13.517 talking about like getting to the core of the truth of what's actually 00:43:13.600 --> 00:43:17.597 happening in the business and then the other is long-term. It's the only other 00:43:17.680 --> 00:43:20.077 place value investor value investing is the only other place in the market 00:43:20.160 --> 00:43:22.477 anymore where you can find long-term investors. So Buffett will actually 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 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. 00:43:30.880 --> 00:43:33.197 >> It's funny that at the extremes they have that in common. 00:43:33.280 --> 00:43:37.277 >> Yeah that's right. Yeah. [laughter] >> If you you were talking about uh 00:43:37.360 --> 00:43:41.037 creating opportunity if if you decided to close a chapter on your your career 00:43:41.120 --> 00:43:46.797 as a venture capitalist, a funer of ideas, uh a catalyst and you had to 00:43:46.880 --> 00:43:47.837 teach a class. 00:43:47.920 --> 00:43:51.597 >> Mhm. So, let's just say ninth grade or 00:43:51.680 --> 00:43:54.317 freshman year in college, 50 students. 00:43:54.400 --> 00:43:58.157 What would you teach? >> I would be highly inclined towards 00:43:58.240 --> 00:44:00.797 teaching people how to build things. 00:44:00.880 --> 00:44:03.277 There's a book I've actually never read, but I love the title. 00:44:03.360 --> 00:44:06.717 >> What's the title? >> Um, it's called Smart People Should Build Things. 00:44:06.800 --> 00:44:08.477 >> I do like the title. >> I almost don't even want to read the 00:44:08.560 --> 00:44:11.277 book because after that title, almost everything almost anything it says is 00:44:11.360 --> 00:44:14.317 going to be a letown, but the title is absolutely brilliant. It's [snorts] one 00:44:14.400 --> 00:44:16.317 of my two favorite titles. >> What's the second? 00:44:16.400 --> 00:44:18.637 >> Second one. Steve Martin. Uh, I have read this one. Steve Martin's 00:44:18.720 --> 00:44:20.157 autobiography is a fantastic book. 00:44:20.240 --> 00:44:22.237 >> Oh, my life standing up. >> My life standing up. And actually, 00:44:22.320 --> 00:44:23.357 sorry, it's not the title of the book. 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, 00:44:26.240 --> 00:44:30.477 he says, "The key to success is quote, "Be so good they can't ignore you." 00:44:30.560 --> 00:44:33.517 Right? And so, and I think it's just basically if you just had those two 00:44:33.600 --> 00:44:36.957 principles, like if smart people should make things and and be so good they 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 00:44:40.160 --> 00:44:43.277 way to orient. >> The the autobiography is amazing. Also, 00:44:43.360 --> 00:44:45.997 just as a side note, I listen to the audio book, the Steve Steve Martin audio 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 00:44:48.240 --> 00:44:50.397 genius, but more than that the level it's like the Schultz thing. It's like 00:44:50.480 --> 00:44:53.517 the level of thoughtfulness that he put into how he constructed his career. Like 00:44:53.600 --> 00:44:57.837 nothing about his career as an accident, which I thought was is fas anyway. So, 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 00:45:00.400 --> 00:45:03.117 necessarily even just mean new software and new computer programs, but how to 00:45:03.200 --> 00:45:06.237 make things more broadly. Um and so how to make, you know, again, it goes back 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 00:45:08.640 --> 00:45:10.957 make new technology, how to make a new company. 00:45:11.040 --> 00:45:15.117 >> How would you teach that? >> Uh I think projects. I think hands-on 00:45:15.200 --> 00:45:17.277 projects. So you would have say an art 00:45:17.360 --> 00:45:22.237 assignment, you would have a science/engineering assignment of some 00:45:22.320 --> 00:45:25.197 type. >> Yeah. Yeah. Or you'd have an objective. 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, 00:45:28.080 --> 00:45:30.797 it actually turns out one of the reasons why computer science has advanced so 00:45:30.880 --> 00:45:34.237 fast in the last, you know, 30 years is because people can make new things on 00:45:34.320 --> 00:45:35.997 computers without anybody's permission. 00:45:36.080 --> 00:45:38.717 >> And so, you know, it lends itself very well to that. But, you know, people can 00:45:38.800 --> 00:45:40.637 also write books without anybody's permission. And they can also write 00:45:40.720 --> 00:45:43.997 music without anybody's permission. and they can also start companies mostly 00:45:44.080 --> 00:45:47.677 without anybody's permission in most industries. And so basically just 00:45:47.760 --> 00:45:50.397 anywhere where you can actually do where you can actually yourself create 00:45:50.480 --> 00:45:54.717 something new, make something new. Um and then I find you know I'm I'm 00:45:54.800 --> 00:45:58.557 actually a little a little bit from folks like Elon Musk on this like I find 00:45:58.640 --> 00:46:01.277 making something new for sure there's part of it what everybody wants to say 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 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 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 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 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 00:46:19.440 --> 00:46:22.157 I think the great artists and the great scientists and the great business people 00:46:22.240 --> 00:46:24.957 often have this in common which just goes back to history which is okay for 00:46:25.040 --> 00:46:27.997 whatever you're going to make learn about how things got made in the past 00:46:28.080 --> 00:46:30.557 and get inside the heads of the people who made things in the past and what 00:46:30.640 --> 00:46:33.517 they were actually like and then realize that actually they're not that different 00:46:33.600 --> 00:46:37.037 than you. Like at the time they got started they're kind of just like you. 00:46:37.120 --> 00:46:38.317 See, Steve Jobs Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve 00:46:38.400 --> 00:46:38.797 Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Steve Jobs 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 00:46:41.760 --> 00:46:44.157 commencement speech he said everything everything in the world around you was 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 00:46:47.680 --> 00:46:50.877 nothing stopping any of the rest of us from doing the same thing 00:46:50.960 --> 00:46:53.917 >> um and so I think that that would probably be what I would try to do 00:46:54.000 --> 00:46:57.117 >> maybe a boring left turn but I'm 00:46:57.200 --> 00:46:59.277 interested to ask and that is uh what 00:46:59.360 --> 00:47:01.997 are the companies or who are the people 00:47:02.080 --> 00:47:05.437 you're watching most closely in AI 00:47:05.520 --> 00:47:09.037 drones and cryptocurrency Yeah. So, I'm very proud of we have a 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 00:47:12.480 --> 00:47:16.557 conflict of interest or put your money where your mouth is. We have both. Um we 00:47:16.640 --> 00:47:19.997 have lived up to both principles. So, um we have two drone companies that I think 00:47:20.080 --> 00:47:23.517 are spectacular. Um uh so, uh Airware was our first drone investment. 00:47:23.600 --> 00:47:27.117 Commercial drones, which turns out is going to be just a giant market [snorts] 00:47:27.200 --> 00:47:31.437 um for in industries, oil and gas and insurance and all kinds of all kinds of 00:47:31.520 --> 00:47:35.117 implications. But the one that people are going to see I think in in in in 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 00:47:37.760 --> 00:47:42.477 Deal. Um which is a a company we back doing um autonomous consumer drones. Um 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 00:47:45.280 --> 00:47:49.117 of hobbyist level. >> What does an autonomous consumer drone do? 00:47:49.200 --> 00:47:51.467 >> Um it well whatever you tell it. 00:47:51.550 --> 00:47:55.037 [laughter] >> Got it. Okay. >> And so um they haven't really uh they 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 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. 00:48:00.480 --> 00:48:02.157 Mhm. >> It doesn't there's no it doesn't require 00:48:02.240 --> 00:48:05.037 remote control. Um and so it can be given assignments and it will go carry 00:48:05.120 --> 00:48:08.397 out those assignments and it can fly through it can fly through tree 00:48:08.480 --> 00:48:11.837 branches. It can fly through power lines. It can fly through underground 00:48:11.920 --> 00:48:14.077 parking garages without any collisions. 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 00:48:17.680 --> 00:48:19.357 current drones, they don't work that way. 00:48:19.440 --> 00:48:22.077 >> Hard to do. >> Yes. [laughter] It's exercise in how 00:48:22.160 --> 00:48:25.517 quickly you crash it. And so like that that technology is about to tip and 00:48:25.600 --> 00:48:30.957 become very widely usable. Um and so that that's very exciting. Um, so 00:48:31.040 --> 00:48:34.237 there's that. Um, >> I'm sorry to to interrupt. Commercial 00:48:34.320 --> 00:48:37.117 drones for insurance. >> Yeah. So, for be an example. 00:48:37.200 --> 00:48:38.317 >> Yeah. Res residential insurance. 00:48:38.400 --> 00:48:41.597 Residential insurance. You you get an insurance inspector. You you're a new 00:48:41.680 --> 00:48:44.077 construction. You're remodeling or you're building a new house and there's, 00:48:44.160 --> 00:48:46.157 you know, you're going to get the insurance company's going to insure it. 00:48:46.240 --> 00:48:49.597 Um, they do an inspection. Um, the inspection involves, you know, a person 00:48:49.680 --> 00:48:53.357 climbing up on the roof and hopefully not falling off, right? And taking a 00:48:53.440 --> 00:48:55.917 bunch of notes on a clipboard and writing up a bunch of stuff. And like 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. 00:48:59.020 --> 00:49:01.837 [snorts] >> Or another example, cell tower inspection. Um, oh, there's all these 00:49:01.920 --> 00:49:04.397 cell towers. There's, I don't know, 30,000 or something cell towers in the 00:49:04.480 --> 00:49:08.797 US. They only need inspected. Inspection literally is a dude on cables, right? 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. 00:49:12.720 --> 00:49:15.917 Like you get to a drilling rig, you got to inspect that thing. Okay? You know, 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 00:49:19.760 --> 00:49:21.677 very these are these are these are dangerous things. 00:49:21.760 --> 00:49:24.157 >> Lethal professionals, >> right? These are these are Yeah. And so, 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? 00:49:26.480 --> 00:49:29.277 Like what if you could literally do the entire thing by air, right? What if the 00:49:29.360 --> 00:49:32.157 inspector just rolled up to the house and just took the drone out of the back 00:49:32.240 --> 00:49:34.797 seat and just launched up in the air and the drone flies a pattern above the 00:49:34.880 --> 00:49:38.637 house, takes comprehensive 2D photographs of everything and then 00:49:38.720 --> 00:49:42.397 creates a 3D representation from the 2D photographs, which you can now do, and 00:49:42.480 --> 00:49:45.917 then does all the recognition, elevations, everything, materials, 00:49:46.000 --> 00:49:49.837 figures everything out, and then the guy's literally the the inspector's like 00:49:49.920 --> 00:49:53.297 sitting in the driveway in the car, you know, with air conditioning on like 00:49:53.380 --> 00:49:54.957 [snorts] in no danger, >> safe and sound. 00:49:55.040 --> 00:49:56.477 >> Yeah. Yeah. And so that kind of thing or 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 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 00:50:05.120 --> 00:50:07.517 in the morning you get a call um that there's a convenience store and 00:50:07.600 --> 00:50:09.997 somebody's broken in the convenience store you have to go do the check. The 00:50:10.080 --> 00:50:12.957 check involves going and seeing whether the you know the lights and all this 00:50:13.040 --> 00:50:15.757 stuff and broken glass but you also have to check the roof. And checking [snorts] 00:50:15.840 --> 00:50:19.117 the roof is actually a very important thing because if there was a bad guy and 00:50:19.200 --> 00:50:21.837 they saw the cops coming they might have climbed up on the roof and they might 00:50:21.920 --> 00:50:23.517 have a gun and they might shoot at you. 00:50:23.600 --> 00:50:25.277 Um, and so you got to go clear the roof. 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 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. 00:50:32.240 --> 00:50:35.197 >> Hope no one plays whack-a-ole with your head with a revolver. 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 00:50:38.320 --> 00:50:41.357 help that? What how about how about every every police car have a drone in 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 00:50:44.320 --> 00:50:48.477 launch the drone and the drone does an infrared camera sweep right of the roof 00:50:48.560 --> 00:50:50.397 right before you even walk up to the thing. 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 00:50:53.280 --> 00:50:55.597 drone recognizes like, okay, there's a person on the roof. And what if the 00:50:55.680 --> 00:50:58.157 drone locks onto that person and then just basically follows that person 00:50:58.240 --> 00:51:00.237 wherever they go >> and they [snorts] rabbit, you know, they 00:51:00.320 --> 00:51:02.797 run they run for it and the drone is like right there 10 ft above following 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 00:51:06.480 --> 00:51:09.037 becomes a lot safer. >> Mhm. >> And so and this by the way even goes 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 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 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 00:51:18.400 --> 00:51:21.437 new technology, this new AI. It's the same technology, by the way, that was 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 00:51:26.080 --> 00:51:28.637 the Google AI beat the beat the human player faster. Yeah. 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 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 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 00:51:36.720 --> 00:51:39.517 safer and better. Um, and we're just going to take them completely for 00:51:39.600 --> 00:51:41.677 granted and we're going to work in combination with them and we're going to 00:51:41.760 --> 00:51:44.077 be really glad we had them and we're going to be completely unwilling to go 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. 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 00:51:50.400 --> 00:51:52.557 they can they can really I think really fully see it. 00:51:52.640 --> 00:51:57.117 >> What do most people not understand about cryptocurrency? 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 00:52:00.400 --> 00:52:03.597 a surprise to you. Um I thought I understood it and I really didn't. Um 00:52:03.680 --> 00:52:05.617 money gets people really cranked up. 00:52:05.700 --> 00:52:10.477 [laughter] >> Yes, it does. >> The entire concept of money is probably 00:52:10.560 --> 00:52:13.437 the single I don't know maybe after God it's like the single most emotionally 00:52:13.520 --> 00:52:15.597 loaded concept that we have in humanity. 00:52:15.680 --> 00:52:20.397 like money just be money makes people mad under any circumstances on any topic 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 00:52:22.800 --> 00:52:25.677 such something that we all rely on and it's something that we always think is 00:52:25.760 --> 00:52:29.677 being, you know, like there's always this sense of unfairness. [gasps] And so 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 00:52:32.800 --> 00:52:35.357 the idea of cryptocurrency and blockchain and this kind of new idea of 00:52:35.440 --> 00:52:38.317 distributed trust in the internet and then there is this application of that 00:52:38.400 --> 00:52:41.437 technology which is a very fundamental application which is a you know a new 00:52:41.520 --> 00:52:45.117 kind of money. I think most people are unable to just simply objectively 00:52:45.200 --> 00:52:48.877 dispassionately look at the mechanics of how it works without almost getting 00:52:48.960 --> 00:52:53.357 preemptively upset. Like just angry like how dare the nerds come up with some new 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 00:52:57.120 --> 00:53:00.637 with this, right? And I will now attempt to find you know the 30 possible things 00:53:00.720 --> 00:53:03.837 that could be wrong with this uh until I find one that basically proves that this 00:53:03.920 --> 00:53:06.717 can't possibly work because obviously it violates the laws of nature and 00:53:06.800 --> 00:53:09.277 government and you know whatever whatever and like somehow I'm going to 00:53:09.360 --> 00:53:10.317 come out on the wrong side of this. 00:53:10.400 --> 00:53:12.957 people just get, and by the way, I'm not even just talking about like regular 00:53:13.040 --> 00:53:16.397 people. I'm also talking like bank CEOs just are furious. Like, you bring up 00:53:16.480 --> 00:53:19.677 Bitcoin and they're just like, they just get really upset. [snorts] And I'm like, 00:53:19.760 --> 00:53:22.477 you know, did you get upset about your new toaster? Like, it's just a 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 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 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 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 00:53:35.680 --> 00:53:38.317 just it we now have this idea of cryptocurrency. It's a it's a 00:53:38.400 --> 00:53:42.397 fundamentally new and very important idea. Um, we now have this ability to 00:53:42.480 --> 00:53:46.477 have this new kind of currency based on top. You know, everybody's had 18,000 00:53:46.560 --> 00:53:49.277 theories why it's not possibly going to work. Bitcoin is still working today 00:53:49.360 --> 00:53:51.517 exactly the same as it worked last year and the year before that, the year 00:53:51.600 --> 00:53:55.597 before that system is complet by all the noise and all the stuff and all the 00:53:55.680 --> 00:53:58.717 crashes and this and that and the other thing like it just continues to work. 00:53:58.800 --> 00:54:01.437 Um, it just is >> like it it's becoming, you know, it's 00:54:01.520 --> 00:54:03.197 becoming like air or water. It just is. 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 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 00:54:10.000 --> 00:54:13.117 new investments against it. >> Are there uh of your current investments 00:54:13.200 --> 00:54:17.037 or non-investments? Are there particular companies that you you think are uh 00:54:17.120 --> 00:54:19.117 breaking new ground or doing interesting things in crypto? 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 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 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 00:54:27.920 --> 00:54:30.557 and then we have this company 21 um uh 00:54:30.640 --> 00:54:33.517 with a uh really brilliant founder uh 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 00:54:38.400 --> 00:54:42.797 very smart guy >> um and he has he he has the he has the 00:54:42.880 --> 00:54:46.397 highest output per minute of new ideas of anybody I've ever met in my life 00:54:46.480 --> 00:54:48.317 >> and by the way I mean output per minute. 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 00:54:52.640 --> 00:54:57.037 outpouring after especially after you know one or two glasses of wine. It's 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 00:55:00.640 --> 00:55:03.437 of character. It's just it's just literally thousands of ideas. 00:55:03.520 --> 00:55:06.877 >> Um and then it's whatever percentage of the ideas that he can personally get to, 00:55:06.960 --> 00:55:09.437 right? And then he'll give the other ideas to everybody else and then wonder 00:55:09.520 --> 00:55:12.947 why they're not pursuing them, which is which is which is often a good question. 00:55:13.030 --> 00:55:15.357 [laughter] Um and then the next time you meet him, he'll have a thousand new 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, 00:55:18.320 --> 00:55:21.277 but it's done a bunch of interesting things. He has a whole additional set of 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 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 00:55:27.520 --> 00:55:29.837 know, in the middle of the night driving, you know, on the freeway, 00:55:29.920 --> 00:55:33.197 bology in my ear, you know, idea number 38. I was like, this is awesome. 00:55:33.280 --> 00:55:36.877 >> This could be worse use of time, you know, [laughter] 00:55:36.960 --> 00:55:39.197 >> that's good food for thought. The 00:55:39.280 --> 00:55:41.117 >> uh on on food for thought. What what 00:55:41.200 --> 00:55:43.917 advice would you give to Mark the 20some 00:55:44.000 --> 00:55:47.007 at Netscape? And you can pick the time. 00:55:47.090 --> 00:55:51.757 [laughter] [gasps and snorts] You know, I've never even thought I've 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 00:55:55.840 --> 00:55:59.277 don't do replays well. It goes through this history. Like I don't do replays 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 00:56:01.840 --> 00:56:04.797 would you what would you have done differently had you known X? And I never 00:56:04.880 --> 00:56:06.557 ever play that game because it's that 00:56:06.640 --> 00:56:08.617 you never you didn't know X, right? 00:56:08.700 --> 00:56:11.837 [snorts] Um and so uh I have you have 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 00:56:15.920 --> 00:56:18.797 novelist Michael Grace uh >> there's his [snorts] uh books his novel 00:56:18.880 --> 00:56:21.997 Elvis Cole is this kind of postmodern LA private detective they're great novels 00:56:22.080 --> 00:56:25.437 and he's got this partner Joe Pike he's my favorite fictional character maybe of 00:56:25.520 --> 00:56:28.797 all timeike >> Joe Pike um who's a former uh Marine uh 00:56:28.880 --> 00:56:31.997 force recon uh guy a lot like your your 00:56:32.080 --> 00:56:36.077 friend Jaco >> and uh in in the in the novels um uh Joe 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 00:56:39.680 --> 00:56:42.797 wears a sweatshirt with the sleeves cut off and aviator mirrored aviator 00:56:42.880 --> 00:56:47.037 sunglasses love him already. >> And um and he's got um uh bright red 00:56:47.120 --> 00:56:52.077 arrows tattoo tattooed um on on his deltoids uh pointing forward. And 00:56:52.160 --> 00:56:53.817 basically his entire thing is forward. 00:56:53.900 --> 00:56:57.037 [snorts] >> So that's that's we don't stop, we don't 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 00:57:00.640 --> 00:57:04.077 don't second guess. Um and so yeah, I honestly that question I have no idea 00:57:04.160 --> 00:57:06.157 how to answer. >> I think you just did. 00:57:06.240 --> 00:57:08.237 >> Okay, good. [laughter] Onward. 00:57:08.320 --> 00:57:11.277 >> Uh when you think of the word successful, who's the first person who 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 00:57:14.960 --> 00:57:19.917 great question. I mean, honestly, my father-in-law for one. Um, who's a whole 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 00:57:24.480 --> 00:57:27.357 why that is? >> He's an amazing guy. John John Aria. Um, 00:57:27.440 --> 00:57:30.957 he uh is one of the small handful of people who basically built Silicon 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 00:57:35.200 --> 00:57:37.997 short version is he went to Stanford. He went to Stanford on a basketball 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 00:57:41.840 --> 00:57:45.437 the country. Went got a basketball scholarship. Um uh studied got a a 00:57:45.520 --> 00:57:49.757 bachelor's in geography uh from Stanford. You may have not ever in your 00:57:49.840 --> 00:57:52.557 life met a lot of people who have a bachelor's degree in geography. 00:57:52.640 --> 00:57:55.437 >> Uh I have not. >> Um they abolished the major the year he 00:57:55.520 --> 00:57:56.317 got his degree. [laughter] 00:57:56.400 --> 00:57:59.437 >> Abolished. It's a strong word. Wow. 00:57:59.520 --> 00:58:03.757 >> Um uh he became a real estate broker uh commercial real estate broker in like 00:58:03.840 --> 00:58:08.557 1958 um when the valley was all orchards. um within two years he was 00:58:08.640 --> 00:58:11.917 making 10 times more money um buying and developing properties as he was as a 00:58:12.000 --> 00:58:14.717 broker. Um and his boss fired him because he was making all the other 00:58:14.800 --> 00:58:17.997 brokers feel bad. [snorts] [laughter] 00:58:18.080 --> 00:58:22.157 So he uh starting like it's basically continuously from 1960 to today he's 00:58:22.240 --> 00:58:25.037 been one of the biggest developers in Silicon Valley. Uniquely by the way as 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 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 00:58:32.080 --> 00:58:34.477 years. So he's a real estate developer who does it entire 00:58:34.560 --> 00:58:38.877 >> that's extremely uncommon >> entirely on equity and and basically it 00:58:38.960 --> 00:58:42.237 was he he and there's a small handful of him and his contemporaries who basically 00:58:42.320 --> 00:58:44.557 built literally literally built the 00:58:44.640 --> 00:58:48.477 valley um and so yeah no and I want to 00:58:48.560 --> 00:58:52.317 yeah and [laughter] he's great he's fantastic I I really love him he's 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 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 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 00:59:02.160 --> 00:59:05.610 money's in real estate [laughter] 00:59:06.320 --> 00:59:07.437 >> does have a lot of street cred. 00:59:07.520 --> 00:59:11.510 >> And I said, "Yes, sir." [laughter] 00:59:11.680 --> 00:59:14.717 >> Uh, do you have any particular morning rituals? 00:59:14.800 --> 00:59:16.397 >> They're important to you. >> Sleep in as long as possible. 00:59:16.480 --> 00:59:18.397 >> Sleep in as long as possible. When do you usually wake up? 00:59:18.480 --> 00:59:20.957 >> Try not to blow through any red lights on the way to work. 00:59:21.040 --> 00:59:21.997 >> When do you usually wake up? 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 00:59:26.880 --> 00:59:28.957 do I do the uh what do they call the hot docking? 00:59:29.040 --> 00:59:31.117 >> Hot [snorts] docking. >> Hot docking. It's like the the 00:59:31.200 --> 00:59:32.987 controlled crash into the office. 00:59:33.070 --> 00:59:37.117 [laughter] >> Uh, >> it's not. Yeah. No, you read these the 00:59:37.200 --> 00:59:40.717 whole the 14 things successful people do in the morning. Like I can't even imagine. 00:59:40.800 --> 00:59:42.557 >> Do you drink coffee? >> A lot. Yes. 00:59:42.640 --> 00:59:44.957 >> You do? >> Yeah. [laughter] >> It's an emphatic yes. 00:59:45.040 --> 00:59:47.277 >> If it has caffeine in it, I drink it. 00:59:47.360 --> 00:59:50.477 >> Yeah. >> Uh, >> I really think no. The perfect day is 00:59:50.560 --> 00:59:52.077 caffeine for 10 hours, alcohol for four. 00:59:52.160 --> 00:59:55.597 Like I think it [laughter] is. It It balances everything out really well. 00:59:55.680 --> 00:59:56.637 >> It sounds a lot like my day. 00:59:56.720 --> 00:59:57.877 >> I'm not shy for a second about that. 00:59:57.960 --> 01:00:00.317 [clears throat] >> The Silicon Valley Speedball. Yeah, that's right. 01:00:00.400 --> 01:00:03.757 >> Uh, [laughter] do you have any favorite documentaries or movies? 01:00:03.840 --> 01:00:08.397 >> Uh, I have lots of favorite movies. Um, I don't know where to start. 01:00:08.480 --> 01:00:10.877 >> What have you seen? >> Actually, you know, in the last 20 01:00:10.960 --> 01:00:14.077 years, in the last 10 years, really, you know, it's TV even more than movies. 01:00:14.160 --> 01:00:18.397 >> Okay. What any favorites? >> Well, the holy trend. So, uh, Mr. Robot, 01:00:18.480 --> 01:00:22.157 um, which I just think is absolute genius. Um, if you can never go by the 01:00:22.240 --> 01:00:23.917 way, get you should get him sometime. 01:00:24.000 --> 01:00:27.277 Get the guy. >> He's great, >> Sam. I have never met him. 01:00:27.360 --> 01:00:29.917 >> You're probably right about him. Heard about him. Yeah. So, he's he's directing 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 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 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 01:00:39.600 --> 01:00:44.557 Oscars or whatever it is people win. Um and then um uh Halt and Catch Fire. 01:00:44.640 --> 01:00:45.597 >> I'm not familiar with that. 01:00:45.680 --> 01:00:47.117 >> Um Halt and Catch Fire is extraordinary. 01:00:47.200 --> 01:00:50.317 It's a very it's the best fictional portrayal of what a tech startup is 01:00:50.400 --> 01:00:52.077 actually like. >> Halt and Catch Fire. 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 01:00:56.880 --> 01:01:00.477 was a myth IBM mainframe days. There was a mythical instruction that is sort of a 01:01:00.560 --> 01:01:03.357 sort of an urban legend that there was a specific piece of code that you could 01:01:03.440 --> 01:01:06.717 write that would cause the computer to stop and then catch on fire. [snorts] 01:01:06.800 --> 01:01:08.237 >> It's like the mission impossible command. 01:01:08.320 --> 01:01:10.797 >> Yeah. I don't think it was ever really verified for sure whether or not it 01:01:10.880 --> 01:01:13.677 existed, but it kind of became this mythical thing. And so it's it's the 01:01:13.760 --> 01:01:16.477 story actually it's loosely the story of the the birth of the PC. And it 01:01:16.560 --> 01:01:19.837 particularly it's sort of based on how the company compact got built in 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 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 01:01:28.560 --> 01:01:31.117 the reviews are funny. So, it's a historical piece. It's very ser very 01:01:31.200 --> 01:01:34.237 serious drama. So, you know, it gets compared to Mad Men and shows like that. 01:01:34.320 --> 01:01:37.757 Um, uh, set, you know, set in the office and the personal lives of everybody. And 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 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 01:01:43.680 --> 01:01:47.117 melodrama is too exaggerated of like all the stuff that happens. And everybody I 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 01:01:49.680 --> 01:01:53.277 like. [laughter] That's actually 100% what it's like. And like I knew that guy 01:01:53.360 --> 01:01:55.837 and I saw that thing happen and I saw that person blow up that way. 01:01:55.920 --> 01:01:57.597 >> It's like Ben's book. >> Same thing. 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 01:01:59.920 --> 01:02:03.837 what so they they really caught the it's fictionalized but they really for 01:02:03.920 --> 01:02:06.477 anybody who really wants to know what it's actually like to go through one of 01:02:06.560 --> 01:02:08.957 these things that that that show is tremendous. Um and then of course 01:02:09.040 --> 01:02:12.877 Silicon Valley. >> Yeah. >> Do you have a favorite scene or episode from 01:02:12.960 --> 01:02:18.557 >> I've actually still only seen the first season. Um uh I I'm not current. 01:02:18.640 --> 01:02:21.357 starting to actually become culturally irrelevant because I I I can't I don't 01:02:21.440 --> 01:02:23.287 get any of the new references at all. 01:02:23.370 --> 01:02:25.997 [laughter] >> I think you'll think you'll survive. You seem to be doing just fine. 01:02:26.080 --> 01:02:28.477 >> I have to I have to I have to binge. Um 01:02:28.560 --> 01:02:33.037 the uh uh the sesame seed scene in the first episode of the first season was 01:02:33.120 --> 01:02:37.437 probably the highlight [laughter] that the uh the u let's just say loosely 01:02:37.520 --> 01:02:41.757 based on Peter Teal >> scene. [laughter] 01:02:41.840 --> 01:02:45.117 >> Yeah. Loosely or not. >> Or not. Right. Exactly. Or not. Or maybe 01:02:45.200 --> 01:02:49.357 very precisely, very accurately. You know, who knows? Uh, if you could have 01:02:49.440 --> 01:02:53.917 one billboard anywhere with anything on it, what would you put on it? That could 01:02:54.000 --> 01:02:56.157 not be an advertisement for one of your portfolio companies. 01:02:56.240 --> 01:02:58.877 >> Oh, outside Trump Tower. >> Okay. 01:02:58.960 --> 01:03:02.557 >> No, it's [laughter] too tempting. 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 01:03:06.080 --> 01:03:09.037 many people as possible? >> Oh, I've got one. 01:03:09.120 --> 01:03:11.437 >> All right. >> Maybe this is a little maybe a small 01:03:11.520 --> 01:03:13.517 scale for what you're looking for, but I've got one. I've actually thought 01:03:13.600 --> 01:03:15.597 about hiring a skywriter to do this one. 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 01:03:19.120 --> 01:03:22.317 with just two words on it. Um raise prices. 01:03:22.400 --> 01:03:25.277 >> Raise prices. >> Yes. >> Can you explain? 01:03:25.360 --> 01:03:28.077 >> The number one thing just the theme and we just see it everywhere. The number 01:03:28.160 --> 01:03:30.877 one theme of our companies have when they get really struggling um is they 01:03:30.960 --> 01:03:33.277 they are not charging enough for their product. 01:03:33.360 --> 01:03:36.557 >> Um it it has become absolutely conventional wisdom in Silicon Valley 01:03:36.640 --> 01:03:39.437 that the way to succeed is to price your product as low as possible and then 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 01:03:42.320 --> 01:03:45.917 get to volume. And we just see over and over and over again people failing with 01:03:46.000 --> 01:03:49.597 that because they because they get into the problem we call too hungry to eat. 01:03:49.680 --> 01:03:51.917 They don't charge enough for their product to be able to afford the sales 01:03:52.000 --> 01:03:54.957 and marketing required to actually get anybody to buy it, right? And so they 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 01:03:57.520 --> 01:04:00.077 the product. They can't afford to buy the whatever TV commercial, whatever it 01:04:00.160 --> 01:04:02.877 is. They can't afford they cannot afford to go acquire the customers. 01:04:02.960 --> 01:04:04.717 >> Too hungry to eat. >> They're too hungry to eat. And then they 01:04:04.800 --> 01:04:07.037 sit there, they don't sell anything, and then they don't sell anything and they 01:04:07.120 --> 01:04:09.117 get nervous and upset and then they cut the prices 01:04:09.200 --> 01:04:11.837 >> and then it's a race to the bottom >> which just makes the problem worse. 01:04:11.920 --> 01:04:13.677 Yeah. >> And so probably the single number one 01:04:13.760 --> 01:04:16.077 thing we try to get our companies to do is like raise prices. 01:04:16.160 --> 01:04:20.717 >> Raise prices. >> Yep. >> So the last >> And by the way, you know, it's like 01:04:20.800 --> 01:04:23.997 okay, like is your product any good if people won't pay more for it? 01:04:24.080 --> 01:04:26.157 >> Exactly. >> You know, it's like you get good lit test. 01:04:26.240 --> 01:04:29.357 >> Good lmus test. Right. >> Uh last two questions. What have you 01:04:29.440 --> 01:04:32.877 changed your mind about in the last few years? [snorts] 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 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 01:04:39.040 --> 01:04:41.917 healthcare related stuff here investments here. Um, and we've now done 01:04:42.000 --> 01:04:43.677 a complete almost complete 180 on that. 01:04:43.760 --> 01:04:46.557 Um, and we're now very deep into health because we think a bunch of really 01:04:46.640 --> 01:04:50.317 interesting things are happening. Um, and that was a response to like the 01:04:50.400 --> 01:04:53.117 hedge fun thing I was telling hedge fun like that was respon we just we just 01:04:53.200 --> 01:04:55.917 basically had very smart founders coming through here basically telling us we 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 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 01:05:03.120 --> 01:05:06.637 we have this guy uh VJ um Pande from a former Stanford professor running this 01:05:06.720 --> 01:05:09.517 program now for us and it's it's extraordinary what's happening at the 01:05:09.600 --> 01:05:13.117 kind of intersection of healthcare and computer science. Um so there's a lot 01:05:13.200 --> 01:05:16.397 that's happening there. Um the thing 01:05:16.480 --> 01:05:19.197 that I'm probably think about the most 01:05:19.280 --> 01:05:21.117 that I am still trying to work out in my 01:05:21.200 --> 01:05:24.637 own head is that uh a combination of 01:05:24.720 --> 01:05:29.597 Peter Teal, Larry Page and Elon Musk in different ways have provoked a 01:05:29.680 --> 01:05:33.357 fundamental cris a fundamental conversation in the valley around you 01:05:33.440 --> 01:05:35.037 know kind of the um the sort of 01:05:35.120 --> 01:05:37.517 moonshots the big the big the big the 01:05:37.600 --> 01:05:41.037 big um the the big challenges. Um and so 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 01:05:44.640 --> 01:05:47.437 have new kinds of rocket ships? Why can't we go to like literally go to 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? 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 01:05:55.520 --> 01:05:58.717 things. We talked about earlier a little bit like Silicon Valley has always 01:05:58.800 --> 01:06:01.517 viewed itself a little bit in the tools business, right? Or a lot in the tools 01:06:01.600 --> 01:06:04.637 business. Silicon Valley has been getting more and more assertive entering 01:06:04.720 --> 01:06:07.917 more and more industries directly, right? So like Uber, Lyft entering 01:06:08.000 --> 01:06:11.277 directly into transportation, Airbnb entering directly into real estate, uh 01:06:11.360 --> 01:06:14.797 fintech companies entering directly into banking. So our our our companies are 01:06:14.880 --> 01:06:17.757 getting more assertive at going into markets that previously they may not, 01:06:17.840 --> 01:06:20.957 you know, other founders may not have been willing to go into in the past. And 01:06:21.040 --> 01:06:23.997 then Larry, Elon, and Peter basically all say in different ways like we're 01:06:24.080 --> 01:06:28.317 still not doing enough. There are these much bigger things to be to be done. Um, 01:06:28.400 --> 01:06:31.757 and why are we waiting for either governments to do them or for large 01:06:31.840 --> 01:06:35.437 industrial companies like GE to do them or for, you know, I don't know, research 01:06:35.520 --> 01:06:40.157 universities to figure them out? Like why can't we do these things? Um, and 01:06:40.240 --> 01:06:43.197 you know, there's one school of thought that says they're simply too hard. 01:06:43.280 --> 01:06:45.437 They're simply too hard. They're too daunting. They're too expensive. They're 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 01:06:48.240 --> 01:06:50.477 they're they're there's a reason we haven't been doing them is because 01:06:50.560 --> 01:06:51.437 they're they're they're too difficult. 01:06:51.520 --> 01:06:53.757 And then there's another school of thought that says, you know, that's just 01:06:53.840 --> 01:06:56.957 being a wimp and you should [snorts] go try to do all these things. Um, because 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 01:07:01.040 --> 01:07:03.997 something in the middle like is there like what are the shades of gray? 01:07:04.080 --> 01:07:05.757 >> Mhm. >> Right. What's what's the line? Right. 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 01:07:09.120 --> 01:07:12.877 made sense but you know Tesla a Tesla that flies didn't make sense like >> right 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 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 01:07:21.440 --> 01:07:24.557 that flies right and so it's to me that's the provocative thing because it 01:07:24.640 --> 01:07:28.317 it's a question about stretching the limits how far 01:07:28.400 --> 01:07:30.557 >> Icorus myth how far can we stretch the 01:07:30.640 --> 01:07:32.957 limits of what we can before our wings 01:07:33.040 --> 01:07:36.157 melt right and Well, it strikes me also 01:07:36.240 --> 01:07:37.837 that I mean just you mentioned Peter. 01:07:37.920 --> 01:07:40.157 So, uh the we wanted flying cars and we 01:07:40.240 --> 01:07:42.557 got 140 characters. There were a lot of 01:07:42.640 --> 01:07:45.277 questions from from fans asking how to 01:07:45.360 --> 01:07:50.317 how would he suggest people uh entrepreneurs are be encouraged to say 01:07:50.400 --> 01:07:54.957 solve the big problems versus making social media networks etc. And I think 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 01:07:58.560 --> 01:08:02.157 the Milkin Conference could have been elsewhere that Twitter and I would agree 01:08:02.240 --> 01:08:06.557 with you as one example the 140 characters has been world changing in a 01:08:06.640 --> 01:08:09.517 lot of ways. I mean you look at political activism you look at many 01:08:09.600 --> 01:08:11.917 different examples when you have uh 01:08:12.000 --> 01:08:13.517 adoption that that that is that wide 01:08:13.600 --> 01:08:17.677 that global uh free with the emergent 01:08:17.760 --> 01:08:21.517 properties are just uh unpredictable. I mean you get some incredible use cases 01:08:21.600 --> 01:08:23.837 >> including political revolutions. Exactly right. 01:08:23.920 --> 01:08:27.357 >> Yeah. Uh, last question. Oh, sorry. 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 01:08:30.320 --> 01:08:33.917 one of my shining moments is >> I prepared for weeks for that debate. 01:08:34.000 --> 01:08:37.357 >> Yeah. >> Knowing [snorts] Peter wasn't going to prepare at all. [laughter] 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 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 01:08:43.600 --> 01:08:46.237 that I had prepared for it. >> I enjoyed the I really enjoyed the conversation. 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 01:08:48.640 --> 01:08:53.277 almost keep up with Peter. Um, so, um, it's actually funny his whole thing, his 01:08:53.360 --> 01:08:56.077 whole slogan that, you know, the slogan of his firm, which is, as you said, we 01:08:56.160 --> 01:08:58.957 we were promised flying cars, instead we got 140 characters. It's actually 01:08:59.040 --> 01:09:01.997 interesting. He will immediately concede that both of those are actually not the 01:09:02.080 --> 01:09:04.637 point. So, he first of all, he immediately concedes that flying cars 01:09:04.720 --> 01:09:07.597 probably don't make sense. Um, and then he immediately concedes that Twitter 01:09:07.680 --> 01:09:10.157 probably is more important than like just being dismissed like that. And so, 01:09:10.240 --> 01:09:12.877 he will he he basically he just basically says the slogan is just to 01:09:12.960 --> 01:09:14.797 provoke provoke the conversation. 01:09:14.880 --> 01:09:17.197 >> But to your point, it does provoke the conversation. And I actually think 01:09:17.280 --> 01:09:19.197 you're right. I think you're right. I think it provokes a conversation from 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 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 01:09:26.160 --> 01:09:29.277 things why don't we have supersonic flight >> right 01:09:29.360 --> 01:09:32.797 >> like we had the Concord now we don't even have the Concord like seriously it 01:09:32.880 --> 01:09:35.037 takes 9 hours to get to London like really [laughter] 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 01:09:38.160 --> 01:09:40.877 I also think it provokes the thing on the other side which is I think the 01:09:40.960 --> 01:09:44.477 computer stuff communication stuff like Twitter and all these other things I 01:09:44.560 --> 01:09:47.037 mean Peter flatly says the iPhone doesn't count as innovation and I just 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 01:09:50.400 --> 01:09:52.797 absolutely counts as innovation. I think it's one of the most important products 01:09:52.880 --> 01:09:56.077 ever developed. I think the impact on the world is absolutely enormous and 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 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 01:10:04.000 --> 01:10:05.917 think there's a lot more to do in the core of what we do. 01:10:06.000 --> 01:10:11.037 >> The last question is do you have any any ask or request of my audience, people 01:10:11.120 --> 01:10:15.357 listening, anything you'd like them to consider, ponder, do? Well, so f first 01:10:15.440 --> 01:10:19.197 of all, they should all for sure work for our companies. Um, and [laughter] so 01:10:19.280 --> 01:10:23.277 please come to our website, a16Z.com. We have jobs. Uh, we have job listings. Uh, 01:10:23.360 --> 01:10:25.037 we'd like to get everybody in our orbit. 01:10:25.120 --> 01:10:27.517 Um, anybody smart enough to listen to your podcast, we definitely want to work 01:10:27.600 --> 01:10:31.357 for our companies. And then, um, you know, I I would say, you know, I would 01:10:31.440 --> 01:10:34.557 say build new things. >> Um, and then, uh, if it's something that 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 01:10:37.040 --> 01:10:40.077 money, you know, we're we're open for we're open for business. 01:10:40.160 --> 01:10:43.597 >> Mark, any, uh, last places you'd like people to check you out online? And 01:10:43.680 --> 01:10:46.557 where can they say hello? >> Oh, Twitter. Twitter's good. Twitter's good. 01:10:46.640 --> 01:10:49.197 >> Twitter. Parka. >> Parka. P M A R. 01:10:49.280 --> 01:10:51.357 >> Is that from your Unix handle way back in the day? 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 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 01:11:00.400 --> 01:11:04.077 behind it, which is his private email address. So, we thought that was a 01:11:04.160 --> 01:11:07.517 little bit too much. And so, we all gave ourselves P, but nobody knew who we 01:11:07.600 --> 01:11:10.157 were. [laughter] And then it stuck. 01:11:10.240 --> 01:11:14.637 >> Perfect. Well, [snorts] everybody say uh check out the Andre Horowits website. 01:11:14.720 --> 01:11:16.157 I'll put that in the show notes as well. 01:11:16.240 --> 01:11:21.117 You should also check out their podcast uh which I've greatly enjoyed. You can 01:11:21.200 --> 01:11:23.757 start with I mean one that I really enjoyed was the uh sort of 01:11:23.840 --> 01:11:26.557 deconstructing Amazon episode. 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 01:11:30.000 --> 01:11:31.197 appreciate it. >> Thanks, Tim. 01:11:31.280 --> 01:11:34.717 >> And to everyone listening, you can find all the links and everything else in the 01:11:34.800 --> 01:11:38.477 show notes, which you can find at 4hourweek.com/mpodcast. 01:11:38.560 --> 01:11:42.720 And until next time, thank you for listening.