Underdog Innovation w/Joe Lonsdale

25:02And if you want to create money officially, it should be tracked. OK, the US Federal Reserve has the ability to create this. And we're creating it. And we're tracking it. And we're going to report on it. And we're sending it here. And this computer is not going to issue this check. Instead of that, you have a computer all by itself, not talking to anything, just issuing checks. And they found so far at least 14 of these. This is actually insane. I mean, I would love one of these. It would be very useful. you know but and it's and it's like it's kind of like imagine having this and then turning it off i mean it's kind of like taking like the genie in aladdin you know the movie where instead of using your third wish for like something for yourself you've set them free yeah and this is what these guys are doing they're finding these things and they're setting the genie free they're turning them off and it's very clearly not what happened in the last administration when the last administration found these they used the genie to give stacy abrams billions of dollars for her you know non-profit that was super sketchy so it's like it you know and by the way dojo is not perfect but like thank goodness there's people in there who's biased i mean we're two trillion dollars in deficit this is a disaster like thank goodness people who actually want to turn these things off it's there's so much wrong in government that i'm willing to abide by a few small mistakes we can fix while confronting all this insane broken stuff in order to move the country forward yeah at a high level this is how i view it i think either america can keep increasing the deficit indefinitely and never face consequences, never face a debt crisis like Greece or Argentina or Puerto Rico because America's magic and we have the reserve currency and the rules don't apply to us or that's not true.

26:34And eventually we will face a nasty debt crisis that will affect all of us in a very nasty way. These things are very hard to climb out of. So if there's even a 10 % chance that the latter is true, then we need something like Doge. And so I assume they're going to be process files and things that I don't like, but I don't actually see any of the critics of Doge taking that problem seriously, A, or B, proposing an alternative to Doge where they lay out, here's the way to cut the budget by 30 % and with no process files. No one has said that. 100 % and for me it's two issues one is using the money towards activism that's making our civilization worse i don't like that either but two 100 we started to have a lot of inflation in the last few years and i think some of that was tied to just lots of money printing massive deficit if you accelerate that further the inflation is going to go up that's what happens like when every time you print money all the rest of money is worth less and you know so you know just stepping back it's really interesting if you talk to people in congress this is a problem with both sides right now in congress on average it's really hard to actually say here's how it would balance the budget.

27:41Like the one person who's done it in like living memory was my friend, Paul Ryan. When he was speaker of the house, he actually put out a balanced budget and everyone attacked him because guess what? To do a balanced budget, you got to cut some things you don't want to cut. It's really hard. And so, so right now there's literally no one willing to do it. So everyone will say like, yes, if we were in charge, we like in theory cutting waste, but then they never do because they're going to get yelled at. And then it just keeps getting worse and worse. And eventually you run into a wall and, and, uh, you know, or, you know, someone in five or 10 years left holding the bag, like, thank goodness for our civilization.

28:09We're now rerouting things in the right direction. Elon saw this very clearly. This has been my view as well. I was, you know, some of the first money supporting what he was doing. It helped him raise a bunch of money for the election and whatnot. And thank goodness we have a great man like that willing to take on this personal risk. I mean, he is getting attacked like crazy. Tons of death threats, tons of attempts on his life. You know, just all sorts of things smearing him. It takes a really great man to do what he's doing. Like he's the richest person in the world. He did not need to have this stress in his life, but he sincerely believed this was worth doing.

28:42And to me, that's just like, honor him the way you'd honor a great warrior sacrificing himself for your civilization. It's really amazing to me. So it seems to me that Trump administration has two impulses, one of which I really like and one of which I really hate. The impulse I like is the doge instinct, the instinct to cut through red tape, to cut waste, to make the government efficient, all of this stuff that administrations never do, but are really ultimately existential for the country. But then there's this other instinct that is vengeful, right? And this is mostly coming from Trump, I think, Trump's personality specifically, he likes to get revenge on people who he feels have done him wrong in the past, whether that's like a law firm that represented Hillary Clinton, and now he's retaliating against with an executive order or, you know, a pollster who puts out a poll, you know, that he didn't like the day before election and now he's filing a lawsuit and so forth.

29:43So I'm curious, like, where, if at all, do you feel the Trump administration oversteps and where do you feel you support them? Let's talk about the vengeful things. I think it's a really interesting point. To me, there's a dialectic here between something that's like very reasonable, maybe something to be more careful about. you have to imagine it from his point of view and his wife's point of view and his son's point of view living their lives where people went after him tried to frame him tried to put you in jail clearly illegally filtered money to people who were attacking you just did all sorts of things that were unfair and changed the nature of the playbook and used lawfare and attacked you so of course you're going to be angry and pissed off and then on top of that you know, a lot of this stuff we're finding that people did in Doge, in other areas.

30:35I, you know, I talked to my daughters about it and like, here's this thing we found and we're stopping it. And she says, oh, daddy, if they did that, they're going to jail. Right. And I'm like, well, I'm not, she's like, but daddy, that's really bad. You just told me, you know, they're stealing the money and using it for their friends and using it for things that are illegal and inappropriate. And, and of course they should go to jail. And it's, my daughter's right. That's a child's instinct that you have to have some consequences. And so, like, A, he's really angry about things, and B, there was a lot of grift and fraud.

31:02So you probably do need to kind of go back against these people. At the same time, you're right. I think there's just, like, a lot of anger, and you have to make sure you're applying the anger in healthy ways that are principled as opposed to just, like, being really angry going after things. Now, with things like the pollster, I don't know the exact details. I think there's an assumption that there was, like, illegal stuff behind the scenes where Democrats were potentially – or activists were potentially paying people off or whatever. And I think the idea is by doing a lawsuit, you could see what illegal things were going on around it.

31:30So some of that that sounds crazy might actually be part of the principled side. But you're right, there's probably also some stuff where they're just really angry. Like if someone's rifling through your wife's underwear drawer and attempt to frame you and put you in jail, like that would piss me off. I might get really angry. And I agree, as a leader, you try to like harness that in principled ways and not in unprincipled ways. And one hopes these things get pushed in the principled direction. Okay, so let's talk a little bit about the Democratic Party. It seems to me that the Democratic Party right now is in a crisis.

32:01A few days ago, CNN reported that their favorability rating is 29 percent, 29 percent, which is brutal. And at the same time, every crisis is an opportunity. Was it Rahm Emanuel who said never let a good crisis go to waste? Rahm is a bright guy. He's going to be trying to run for president if he can. Yeah, he might be. He'd be an interesting candidate. But so if there were a time when someone was really going to try to just dig the Democratic Party up by its roots and completely reinvent it, now would be the time after such a massive failure and failing to beat Trump in lying about Biden and their own favorability rating.

32:46I think both parties and we're talking about Democrats right now, but both parties are but hold them to certain special interests to make it really hard to do certain things properly, right? And so like Rob Emanuel, even in Chicago, was basically at war with these crazy teachers unions but then ultimately didn't end up going all the way there because they're too big of a donor and too big of a power block on the Democratic side. And I have friends who spoke in person and private at the White House with Barack Obama after he won who 100 % agreed these unions were corrupt, were hurting our kids, were way too powerful, and he's not going to touch them because they're just such an important part of the Democratic Party.

33:21And today it's even more complicated. It's not just the usual special interests that maybe both sides have some of. You have this really interesting ideology in our society that was really affirmed very strongly during the woke kind of movement over the last decade where you have the trans movement, you have the people born male and women in sports, et cetera. So Seth Moulton is a great example of a reasonable moderate Democrat. He and I disagree on it a lot. He's a representative from Massachusetts. And he tried to speak up and say, you know what? I actually agree with 75 % of Americans or 78 % of Americans.

33:54My daughters probably shouldn't have to compete with people born male. I think that's a reasonable position. And he just got reamed by the party. He was disinvited from Yale by some of the professors there. He was – people quit as a spokespeople. People told him they couldn't be friends with him anymore. And it was like really nasty. So I think there's like an interesting barrier here they have to overcome where there's some of these issues that are 80-20 issues. that their base is on the wrong side of. And how do you unwind that? And how do you get back to a point where you're not constantly at war with your base?

34:25And by the way, the Republicans have some things that are frustrating there too, but I don't think it's quite as bad as Democrats have to deal with that insanity. And I don't know how they get past that, but they need someone. And Gavin, I think, has been trying with some of his signaling. I think he's been a terrible leader in California, but he's been trying to show that he's reasonable on some of these things. Can someone signal and get past that and still win on the left? Maybe. We'll see. Right. Yeah, I see Gavin Newsom trying to innovate by talking to people like Charlie Kirk and Steve Bannon.

34:49I also see now Ezra Klein trying to innovate as a Democrat thought leader. I love his abundance agenda. I think it's like, I'd love it if both the left and the right both have an abundance, you know, pro-innovation agenda. That'd be great. Again, I don't agree with that. It's run a lot of policy, but at least that's a healthy direction to take the Democratic Party. I think for all of us, we should hope that that's where it goes as opposed to something darker, you know. If you woke up tomorrow in a fantasy world where you were governor of Texas, what would be at the top of your agenda? Gosh, well, I have a lot of respect for our lieutenant governor and governor.

35:21There's a lot of good things they're doing. I would be a lot more bold against some of the nonsense in terms of where we're still wasting billions of dollars here. And this is not necessarily the governor's fault or lieutenant governor's fault, but I would try to rally people together using my leadership to, for example, turn off the minority-based contracting. I think it's racist. I think it wastes billions of dollars. I think it's just inappropriate. It was still like 30 % of our money we spend is based on, it's not even like it's giving it to minorities. It's usually giving it, there's like someone manning a phone somewhere who's an Indian woman or something, and then she's passing it to a white contractor, but she gets to keep 30%.

35:52There's all sorts of nonsense like this. So, I mean, I think, I think Doge is key. There's all sorts of NGOs that are working in Texas right now today that are, that are sponsored. They were sponsored before by the federal government or by others, uh, who are governments who are trying to interfere in our business. I would make those fully transparent and look at them. Um, but you know, in general, Texas is a pretty well-run state. One other thing, one other area I'll give you. The two strongest special interests in Texas that are somewhat corrupt are the education administrators. We have like 1 ,200 school districts, each with their own administrator.

36:22And so tons and tons of money go towards these kind of activists. And there's just so much to fix there. I'd make school choice 10x what we're going to be doing to compete with that. And then two, the health care interests are very powerful in Texas. And Texas, by the way, should be proud of its health systems. We have MD Anderson. We have all sorts of other great places that are curing new diseases that are doing great research. And the problem, and we talked about this earlier in the conversation, when something's really great, you can hide a lot of grift and nonsense in it. And that's what's happened is these guys have become very powerful lobbyists, and they've blocked competition in health care.

36:53And they make it really, really hard using their cartel power to start up things. And so you get it to be way more expensive. And Texas health care costs have grown like 7%, 8 % compounding for decades now. And it's getting really expensive, and no one can afford health care anymore. And so changing a law to allow innovation, to allow competition into these types of areas, those would be my top preferences. OK, so let me ask you a question about leading an institution. And you lead several. O'Sullivan's Law, this idea that if an institution is not explicitly conservative, it will over time drift towards the left.

37:27A, to what extent do you think that is true? And how do you think about leading an institution like University of Austin in that framework? It's a really great question that we've debated and talked about with a lot of my friends who are quite cynical because of this. My view is it doesn't have to be that it's explicitly conservative, but it does have to have some explicit values. If you just say you're only for free speech and that's all it is, then I think the Sullivan's Law will apply and eventually it will get conquered. I will get conquered over time. The way I see it, at least at a board level for University of Austin, is we are, and again, this is a nuance, but it's really tough.

38:06This is a problem for the West, by the way, as well. It's a problem for our civilization as well. I would say, in our board level, we are explicitly for a liberal society. We are explicitly against illiberalism. The three most common and most virulent forms of illiberalism around today are probably socialism slash communism. It's probably like all the stuff around a dead knee politics and wokeness. And it's probably all the stuff around Islamism. I think those are the three most dangerous worldwide kind of forms of illiberal ideologies that are very dangerous. And so it doesn't mean you can't debate the nuances around these or that we couldn't have a student who's a socialist.

38:45But I think the organization itself has to say, okay, we're not those three things. And we're not going to let those three things conquer our board or conquer our departments and start excluding people because those are illiberal ideologies that if any of them get in charge, if they get in charge of the DEI thing at University of Michigan, if they get in charge of the sociology department with the communists at Harvard or whatever it is, like they don't let anyone else in. So to me, it's not that you're explicitly conservative, but you do have to be explicitly opposed to illiberal ideologies. And this is a very sensitive conversation, but I feel strongly that's the right way to run things at that level while still allowing free speech internally.

39:19So the problem is the paradox of intolerance, right? Like if you allow an intolerant idea at the leadership, it will crowd out what you want to be, which is a tolerant institution. You can't allow the illiberals to conquer. You've seen this in so many different countries and so many different things over time. It's very, very dangerous. They'll get in using your freedom, using your liberalism, using the rules of your society, and then they will take over and then there's no turning it back without violence, which is what happened in lots of different places in the world. Okay, a few more questions.

39:55I've seen a troubling trend of antisemitism on the far right in, you know, on really in the media. I'm talking about certain guests that Tucker Carlson has had on, people getting a platform on Joe Rogan's show and and so forth. And just also just scrolling through my Twitter feed, I regularly see just straight up anti-Semitic posts getting anywhere between 30 and 80 ,000 likes. I mean, just the other day, someone started a YouTube page where they're just, it's like a Jew tracker, essentially. It's like, I think I might be on this one. Yeah, you're definitely on it. Actually, I know for a fact that you're on it because I saw the video.

40:40So he's just like Looking at all the people who are Jewish, who are in prominent positions. I mean, we are kind of awesome. I can see why they're jealous. Listen, yeah, this is. So what is going on here? You know, this is, this is, I did a post about this on my ex and got millions of views a couple weeks ago. And Elon said how great Jews are underneath it, which was nice of him. You know, this has been an issue for a couple thousand years, right? So, I mean, in 1066, William the Conqueror had fully solidified his position and invited the other Jews to come in 1067 the next year and be merchants in his empire.

41:19And they became extremely successful and actually were critical to making a lot of things very prosperous for a long time. And people got extremely jealous of this powerful minority, killed tens of thousands of them in York in 1189, 1190. and then over time they become blamed for multiple other things with plagues and other stuff and eventually just expelled them all in 1290 during a very bad economy. And this happens like again and again and again. And when you have like a group that's very good at like staying separate as part of its identity but is also a very successful minority, you're separate and you're successful.

41:55That's an obvious thing to attack and it's happened again and again in the West. And you could say maybe there's something particularly annoying about you that you're not aware of but i mean it's just it's i'm probably not the same i mean i'm half irish catholic i'm half jewish i'm probably it's probably not that it's like jews are exactly the same people for a thousand years obviously they're just a group of people but it's a group of people that happens to be uh more intellectual and have more priorities there and was forced to work more intellectual areas so you probably have them be a successful minority for a very long time and that's it's kind of a measure of a success of a society how do you treat like different people who are successful minorities in your society and when things are healthy and positive, they do well.

42:31When things are turning negative and polarized for some reason, they do worse. The Joe Rogan thing, I think he likes conspiracy theories in general. I think he's going to bring on whatever the conspiracy theories are that are popular. I'm not necessarily forgiving him for not knowing any better, but that's just who he is. He's like a force of nature who brings on these crazy conspiracy guys. Of course, some of them are going to be anti-Semitic. If he's not aware that they're repeating a blood libel people have used to attack us for a thousand years, He's not thinking that way. He's going to make that mistake.

42:59The Candace Owens and the Tucker thing seems a little darker. It seems like they probably do have some deep-seated issues there that are a little scary to me, especially Candace Owens. She has millions of viewers, but she's kind of seen as very clearly anti-Semitic and crazy. The Tucker one's scarier because he's more tied in with the right. I think that is very problematic. It does seem like there's probably a psyop going on where he's probably funded by some Arab countries. Probably some of these bots are probably funded by people who do want to divide Jews and Christians in the U.S. And I think part of why America is so great is that there is a really strong natural alliance between Jewish and Christian values.

43:37It's really powerful. And if you look at the highest form, to me, of some of the Christian values in Christianity, when you look at the example of Jesus Christ himself, like following Rene Girard's analysis, rather than saying scapegoating is good, because basically every ancient myth, there's scapegoating where people kill the monster and then that's what happens again and again and again. And in this case, he puts himself as a scapegoat. And in the Christian example, which kind of builds on the Jewish examples, he actually himself becomes, God becomes a scapegoat. And he's basically saying like, you should overcome this cycle of violence in your society because you're making God myself the scapegoat.

44:15And that's a really deep wisdom that really should say not to do these things. And I think Christian and Judaism, like they came from the same root. They are natural allies. And I think the wisdom of Christianity is saying, stop doing this. But it is really sad. People are trying to divide us very strongly right now. Yeah, Thomas Sowell has a great essay called Are Jews Generic? It's a little bit of a weird title. But what he's getting at is he looks at societies all over the world, West Africa, East Africa, Southeast Asia. He finds that often there have been cases where you have super successful minorities, whether that's like it was like the Indians in East Africa.

44:51the Chinese minority in Southeast Asia and places like Malaysia. And when you have a small minority that's disproportionately successful without political power, they're often the subject of actually just deadly riots. They become scapegoated, basically. They become scapegoated. They get expelled quite often. That happened in Uganda or Kenya. And usually the economy suffers when you expel them because they were actually playing an important role in the economy, which is why they were successful. They weren't stealing the money. Oh, yeah. When the Jews were kicked out of England, it was not good for their economy.

45:22Yeah. So this is a pattern that happens over and over again. It seems to me anti-Semitism is sort of like systemic racism, but for white people. What do I mean by that? I mean a lot of black Americans have looked at the numbers around black wealth and black income and black representation at the top level and have said, okay, why are we underrepresented? it must be that white people are basically conspiring against us in this way, right? And that's what the theory of systemic racism is in a nutshell. And anti-Semitism is kind of similar in that you can say, okay, well, why isn't the white working class doing well?

46:05Well, it must be the Jews because they are on average more wealthy. So it's actually the same illogical... It's a really good point. The last 10 years when the woke, something got stronger and stronger, I think all of our schools around the country started teaching it implicitly that there's an oppressor class and an oppressed class. And they use that. Obviously, you said that. I think it's actually very dangerous, like you said, because if that is used to explain why black people aren't doing as well, it therefore also implies that Jews must be oppressors and must be bad. So I think it's a very, very dangerous framework for this.

46:34I mean, maybe that's tied to why more of this is going on as well. That's a good point. Yeah. Okay. So I want to talk about this. the coalition on the right right now is partly libertarians. I would call Elon basically a libertarian. I don't know if he calls himself that, but Silicon Valley libertarian right, thinking of people like yourself in a way, like David Sachs, Elon, and so forth, and the nationalist MAGA conservative right. It seems to me the only thing holding this coalition together is Donald Trump himself and a few shared policy interests like, you know, getting out of quote unquote forever wars and hating the left and loving America.

47:26Basically, those are like, that's what they have in common. Outside of that, they've got a ton of differences. So how do you think that that coalition is going to hold together or break apart? You know, I think J.D. Vance represents the coalition really well. I think he has things on both sides for where he came from. He definitely came from a neighborhood that, you know, he's very poverty and has a lot of the, what it's kind of more traditional MAGA side. And he's done very well within the tech world and navigating that world, understanding it. And, you know, I mean, I think all of us are learning a little bit from others.

47:56And just because you're the coalition with someone doesn't mean they're correct about everything. But there are needs in our country that are really important. So, for example, I'm very much in favor of merit and of excellence. And I think a lot of the Meyer coalition generally is that way too. I think a lot of them see they've been discriminated against, especially as white men is their view in a lot of these areas. And so I think the merit excellence thing does hold us together. I also see the Trumpian point, which is very popular, that some of our policy was probably worse for some of the Rust Belt areas and some of these other areas.

48:30Some of the types of outsourcing and some of the types of immigration could be adjusted to still have merit and excellence when without necessarily breaking these constituents. We probably do have too many people abusing H-1Bs to bring over huge numbers of not very well-paid Indians to replace people in certain areas. That actually is the case. Maybe that is slightly better overall for our economy, but maybe that's not what you owe to the people living here in America. Maybe you should have some merit-based rule where a compromise could be we can only bring people in if they have a certainly high enough salary not to be stealing away kind of those sorts of jobs.

49:07I think that's very reasonable in some cases. And similarly, like a lot of this like left ideological stuff probably does like attack these people even a lot more than we realize. And we need to fight it for that reason and stuff too. So there's a lot of ways in which I think people are getting together. And I think J.D. Vance is kind of right now the natural heir to Trump, and he definitely hopefully brings those sides together in a healthy way to keep going like this competence coalition, which is how I see it. All right. So final question. If you were a University of Austin student right now, how would you be spending your time?

49:42what would you be paying attention to? Like what sectors of the economy would you be eager to get in on the ground floor on? Obviously you'd be doing all your schoolwork very diligently, but how would you be spending your time if you were like a 19 year old UATX student? Well, I'd definitely be excited to be in your course, Coleman. It's really cool you're here this quarter. I mean, I think the chance to have the intellectual foundations, by the way, is really amazing. And I wish I'd done a little bit more of that. I kind of did it on my own time, but this is a great place to do that and hang out with people.

50:12And I think that's important. The other side of what I'd be doing is I'd be learning as much as I can about AI. And I'd find at least one or two sectors that I was interested in and trying to understand everything about how AI was going to improve or change those or make those look very different in the next five or 10 years. And I'd be using the fact that I'm in a university like this to get access to people who could teach me. And one of the best things, if you want to be an entrepreneur, you need to have hypotheses. So I'd be trying to learn enough to form my own hypotheses. And I guess I was probably pretty, not that I'm not obnoxious now, but I was probably a very obnoxious 20-year-old because I have all these strong opinions and you go talk to people.

50:44But that's actually really good for an entrepreneur, even if your opinions are wrong, as long as you're listening and learning, you can make them better. So I think a lot of young people are afraid to have opinions. I think the better thing is to learn what you can, have an opinion, and then go try to talk to people about that. And being here is a huge advantage because we have all these innovators around this. We have all these cool people tied to this, that if you do have opinions, they're going to be able to expose you to the right people to iterate and learn on those opinions. Then the person who has the opinions and is exploring and is keeping getting feedback, they're going to be miles ahead of a person who's just going to come out not having had those opinions.

51:16I think to be an entrepreneur, study the new boundaries of what's possible, talk to people, have opinions, iterate, and hopefully meet other smart people here who want to build with you. All right, Joe Lonsdale, thanks so much for your time. Thanks, Colvin.

51:35You