Mastering Optimism: The Contrarian Lessons Naval, Elon, and Balaji Want You to Know | Eric Jorgenson

0:00I'm here on a job site with Tim who owns his own electrical contracting business three employees into work trucks Tim traded up to Geico Commercial Auto Insurance. We're positively here where he needs us most. They sure are. With step-by-step help on all his insurance needs. All for shockingly low rates. Shockingly low, huh? Just a little bit of electrician humor. Do you get it? I got it. You know, it feels like we have a real connection. All right, I'll stop. Get a commercial auto insurance quote today at geico.com and see how much you could save. Get more with Geico. Hello, everyone, and welcome back to the show.

0:33So we have a tremendous conversation for you today with Eric Jorgensen. He is the CEO of Scribe Media. He's a venture investor, and he's also the author of one of my all-time favorite books. It is one of the most recommended books that I have, The Almanac of Naval Ravikant. And if you are in business, if you are someone who believes in personal development, who is interested in the mindsets, the ideas, the concepts, the first principles that drive real success, happiness, satisfaction in our lives. It's an absolute must read if you haven't read it. Eric is also the author of the Anthology of Bology and the soon to be released The Book of Elon Musk.

1:17This is an incredible conversation where we dig into the idea of first principles and what ultimately ends up being the core through line of this conversation that optimism is a superpower and we all must figure out how to harness the power of optimism in our lives. If we want to grow and find that place of wealth and satisfaction, you're going to love this conversation. And because of that, I'm going to stop right here and get us on to Eric Jorgensen.

1:56in a crude laboratory in the basement of his home.

2:03I came across your work with one of my absolute favorite books. It's on the shelves behind me. It's probably in that stack right there of white books that's like over my left shoulder for those that are watching on YouTube. The Almanac of Naval Ravikant is one of, like, Like if you want just a punch you in the face over and over again, page turning book that you come out of with more notes. I think I ran out of ink in one of my pens, like underlining things and writing notes. Like one, what attracted you to Naval to begin with? I had been following Naval for maybe 10 years. I really resonated with even his very early stuff writing at Venture Hacks.

2:46He was one of the early bloggers about the game theory of venture capital and talking about Silicon Valley back in the 2000s, basically. So I'd followed him for a long time for his startup stuff. And watching his following grow as he sort of achieved all of his business goals and then turning to a little bit more of a philosophical. I think he calls himself a philosopher now to a certain extent, like modern-day philosopher or has been okay accepting that moniker. That's maybe a better way of putting it. Yeah. Like Shane Parrish called him the angel philosopher and like that podcast he did on the knowledge project.

3:22Uh, I think it's one of the greatest podcast episodes of all time. Um, and that was really the like inspiration for me to write this book. Cause I was thinking about all the people that I'd learned so much from and I, you know, I like Munger. I like Buffett. And to me, Naval is very much like in the spirit of Munger in a lot of ways, but with a really modern sort of like techno utopian like valley essence to him that like really jived with how I see the world. The other thing that I find about him and this is where all the research and the time you've spent I'd love to get your insights is he definitely has that modern tech spin to his take but I find it is also completely relatable to people who may not live in that space like it's not a tech his philosophy his philosophical beliefs are not tech focused but they obviously come out of a modern era how do you think like he so um uniquely or authentically is able to bridge that gap because very few people who come out of that space can then come back and talk to say kind of everyday neophytes who aren't digesting massive amounts of tech information every day Yeah, I mean, he's an incredible sort of distiller of truth.

4:43You know, like he'll get things down to a very principled level. Like when I was writing this book, I really thought, you know, there'd be a thousand of all nerds like me who would really love it. It blows my mind that we've now sold like a million copies and there's yoga teachers in Bali and like moms and little brothers reading it. Like that's so awesome. and I think it's a testament to how if you really articulate a principle well it's universally applicable and it sort of feels right to almost anybody who picks it up and like now that I've seen what this book you know five years almost five years on like seen what this book has done I think there's no human on earth who could pick up this book and not take something useful away from it yeah one of his one of the things he talks about all the time and like you know his influence is so powerful he's got me reading david deutch about physics and time travel and shit and uh but he but he always comes back to um he always comes back to this idea of first principles maybe you could explain a little bit why first principle he's for me and i consume i read a ton And he's really brought first principles into my life.

5:59I think it started a lot with reading your book and then getting more into his work and hearing him talk about bringing everything back to first principles. So maybe you could describe for me and the audience, like, really, what are first principles? We hear this said, like, what are we actually talking about? And then what first principles have you taken from his work and applied to your own to be so successful and create as much as you do? Yeah. So first principles is a great, um, is one of the common sort of mental models. So if you're, somebody who's been reading like Munger or, uh, or Nassim Taleb maybe, or now Naval, um, I think there's these sort of like tricks you can pick up along the way.

6:42And first principles is a really powerful one that just has a way of clearing out all of the kind of dust and fog and getting to the essence of like what is truly possible in this situation like one of the most famous um kind of stories actually comes from elon musk so there's i'm writing a book on elon now in the same style and there will be quite a few sort of first principle stories and that's one of his most powerful things and the way he looks at it the question that he asked himself which is maybe a little more clear than you know if you don't know what first principles are is like does this break the laws of physics.

7:17If not, then it's possible to improve it, right? It's possible to do something better. So the example that he tells when he started SpaceX is, you know, why is this rocket $100 million? All right, well, let me look at what are the raw components of a rocket, not engine and like flaps, but how much aluminum, how much oxygen, how much carbon, like what is this thing made of? And what is the cost of those things? And he came up with this index. It's like, the raw material of stuff in this rocket is, you know, like maybe it's half a million dollars, and the rocket is selling for a hundred million dollars.

7:56So what accounts for that 2 ,000x increase? That's probably off by an order of magnitude, 200x? Yeah, whatever. What accounts for that? And so thinking in the limit of how could you approach this problem? Like how cheaply could you possibly arrange these materials in the shape that they need to be to have a rocket and how much more cheaply could you build it? And this is like a universal thing that you can look at anything in your life through this lens. You know, first principles might be like, it just opens your lens of problem solving to see a lot of different opportunities that you might not have included.

8:39it i i when i was thinking about this concept i you know i also read i read i read a lot i know you do too right but like the stoic idea uh and then taking it even farther back to say like the socratic method of this like waterfall of wise right so like we have this you know why are we using this these materials okay why do these materials cost so much okay why have we not you know uh tried to get these materials at a lower price right and we just keep going down until there really isn't another why and then we have that base principle for this thing we're trying to do and then from there we can start to reimagine how it could be is that does that feel like a relevant kind of way of thinking through how we get there yeah i think the wise is almost the inverse of first principles so okay if you ask enough wise you can drill down to and that's why it's not just why it's like the five whys or the six guys like keep going down why is it so expensive well why is it manufactured that way well why is it only like maybe it had to travel a really long way why is it only manufactured in china like why why why why why um but the first principles version just like cuts all of those and if you can make that creative leap to go all the way down from the very beginning.

9:59You know, like the opposite of reasoning from first principles is reasoning by analogy, which is how almost all of us do almost everything, right? If you say like, oh, I need to get to work. I can't afford a car. Like, because that's how you see everybody else get to work. You don't necessarily think I need to get to work. What is the cheapest possible way for me to get to work? Or what is the most efficient way? Or you just by nature, observe what everyone else is doing. And that's your starting place, rather than starting from what are your full set of options, because it's exhausting to think that way.

10:38Like, you can't do that for everything in your life. But for the most important problems, either the most important or the most valuable, like that is a really effective way. And it's, you know they continue to do this like i'm just going to keep using elon examples because that's where my head's been at but like that's where the tower came from like they what is the best possible what is the way to get the lightest possible craft and one of the really heavy things are the landing legs and so how do we not have landing legs like well put the landing legs outside the vehicle it's like is that even theoretically physically possible it's like sure it's physically possible.

11:16It seems extremely difficult, never been done before, but like, let's try it because they just run towards trying the most theoretically beneficial thing, even if it is the most technically difficult. And that's where so many of these breakthroughs have come from. And I think thinking in these first principles is actually one of the unlocking things. And it takes a lot courage and it takes a lot of talent to actually run down those ideas once they've been created but you've got to break the constraint of reasoning by analogy and you've got to run towards um that that like really clean terrifying idea that emerges when you strip away all the bullshit do you think the general lack of usage of this because i because i completely agree with with what you're saying, I created in 2020, I founded a digital commercial insurance agency.

12:18And the way we built it was different than any other agency had been built in the property casualty insurance space before, where our entire mantra from day one was, you don't need to share the same air as someone to deliver the same value to them as a customer, which in most other industries would be like a duh, right? All right, people, serious question time. Did you know that driving high is considered driving under the influence? That's right. Driving under the influence of marijuana is against the law in every state. That means even in states where marijuana is legal. That means driving high could get you a DUI.

12:53And if you think law enforcement officers can't tell when you're driving high, well, you're wrong. If you're high, they can tell. Your friends can tell. Your co-workers can tell. Even your parents can tell. Everyone can tell. So what makes you think that law enforcement officers don't know when you're driving high? You'd be wrong. They can tell, too. Driving under the influence of marijuana can slow your response time and change how you perceive time and speed. So even if you think you're fine to drive when you're high, you're not. Because the bottom line is, if you feel different, you drive different.

13:23And driving high is driving under the influence. So remember, drive high, get a DUI. Paid for by NHTSA. In the property casualty insurance industry, there was still this incredibly widespread and entrenched idea that you had to press the flesh. You had to sit across the desk from them. You had to go to their business to sell them the thing. And the reason I did that was one, out of necessity, right? Like I was bootstrapping this agency and I didn't have the money or the time in order to scale fast enough to drive to all these places. but two, it was kind of thinking back to like this idea of like, why, why do we have to do that?

14:03Like what, what is, is there a cleaner idea, which is all an insurance customer wants is a product that serves their need at a price they can afford, right? At the end of the day. And they want to know someone's, I do have a philosophy that insurance consumers want to know they can at least drive to a location and, and punch someone in the face or yell at them if they do something wrong. but they don't need to share the same air with them. So, you know, but I got so much pushback in my industry for that idea. You're crazy, you're wasting your money, these people will never retain, they're only price shoppers if they're not willing to meet with you, they're not gonna be good customers.

14:41I mean, just idea after idea after idea. And when I was thinking about it, I was like, is it, is an unwillingness to allow yourself to go to that level? Is it naivety? Like you're just don't, you're not aware of this concept of first principles. Is it laziness or is it, and this is the one that may even be the most systemic to me. And I'm very interested in your take. Is it the status hit you could potentially take from the risk of going to a first principle and rebuilding out of what you see and not what has always been done? there's there's so many reasons for and usually they're overlapping reasons um for people either letting themselves off the hook or defending the status quo or defending the the method that they've been using for the last 5 10 or 50 years um it's you know biology has a great line like their incomprehension is your moat um like when there's just an obvious idea that people are refusing to see and especially if it like agitates them a little and it seems so obvious to you and they're like attacking you for it there's probably a good sign that like you're onto something it scares them enough that they're angry about it subconsciously they are unwilling to do the work to see what you see or to change themselves to accommodate you know the environmental change that has happened to create this new opportunity which means they're going to be slow to follow or not follow at all.

16:12And you're going to have a moat and an advantage that just comes from their inability or unwillingness to think more clearly about the space. So you've mentioned biology a couple times. I don't know that the audience will be as familiar with biology as maybe they are Naval or Elon, obviously. Can you talk a little bit about, obviously, after the success of the format of the almanac of naval you had really dialed in on something your style resonated easy to consume um but very hard hitting right so you had kind of a framework for for uh how to craft a narrative that really resonated why did you choose biology next i think biology is now where sort of naval was when i wrote the this book about him it's like you know three quarters of a million followers well known inside tech but not really outside tech and i think he's brilliant and contrarian and interesting and unique as a thinker but not very like not followed in the mainstream in the way that he deserves and i think a lot of people could benefit from like this is it all comes back to like what can i do for the reader like i followed Duvall for 10 years.

17:29Everything that I learned from him made my life better. I followed the biology for 10 years, like, and I, everything that I learned from him made my life better. And I want to package this knowledge that sort of lost in tech Twitter that has benefited me for 10 years and put it in a book and get it out to a broader range array of people and package it in a format that is accessible to people sort of all over the world and gets translated and gets shared and gets gifted. And I think books are really, really powerful in that way. Balaji, sorry. No, go ahead. Balaji is kind of interestingly parallel to Naval in the both sort of American dream stories.

18:09Like Balaji is a first generation immigrant family, clearly a brilliant guy, multiple degrees in like biomedical engineering and very successful startup founder in that space, then went to become a great investor at A16Z and has angel invested in hundreds of startups. He wrote a book called The Network State that is like about some of the challenges that the modern certain nation states are in and like the way bureaucracy really comes to constrain technological advancement. And what I think is the most important idea is like the fundamental moral importance of technology and seeing all of history through this lens of new technologies, unlocking new opportunities, improving lives all over the world, changing the sort of geopolitical moment slowly over time.

19:05And that lens that biology taught me really is also, I think, quite a helpful answer to like what you shared before of like, why are some people just unwilling to see change or embrace change. And working on that biology book and following him for so long showed me that there is a technological frontier in every single industry. And those who prosper are almost always, always close to that technological frontier. And that there's so much to be gained, even in a small business as an individual operator by embracing technology and moving closer to that frontier. I mean, technology fundamentally is a way of doing more with less, and there's always opportunities there.

19:47One of the through lines I see in the three individuals that you've picked here, Naval Ravikant, Balaji, and Elon, is technological optimism, right? I mean, that's when I think of those three guys, I immediately, you know, what I've been taken by by all three, And I will say I know the least about Balaji, mostly because sometimes he goes down nerd holes that I just simply can't follow. I'm listening and I'm engaged, but, you know, he will sometimes, and I love that about, I mean, I love it, right? It challenges you. It forces you to research new things. But sometimes I just don't always, I can't always keep up, especially when he goes into the blockchain stuff.

20:25Like, I'm a huge believer in blockchain, but the tech is a little beyond. I'm just getting used to AI. That being said, they are all optimists, right? Naval talks about it. I mean, he's done a couple podcasts, and he publishes podcasts very randomly. But it is worth subscribing to his podcast because every once in a while he'll put something out. And he did an episode with David Deutsch, who if you guys are unaware of David Deutsch, he's a physicist. Fucking brilliant. And he must have mentioned optimism five to seven times throughout it. And I thought it was incredible because I feel like there's so much fear developing in our world today.

21:08Obviously, there's a lot of issues. And we're recording this after New Year's in 2025. And there's a lot of different factors that are impacting fear. But technology is a big one. The pace of AI. What the heck is blockchain? We got these rockets being launched and caught. And how's that going to impact us? What does multi-planetary look like? You know, what should we regulate? What should we not? there's so much kind of fear and tension and negativity. And these three individuals, along with others, but these three in particular, as I think through a through line of who you've picked, they are so optimistic about the future.

21:40Where do you fall on that spectrum? I'm assuming you're an optimist as well. But just from everything you've learned from these guys and the other individuals that you follow, why should we be optimistic about the technological frontier that we're going to be looking at over the next 10 years, 50 years, et cetera? I mean, there are so many reasons to that. Like that it's, I think everyone gets to kind of pick their own. I think there can be a very selfish reason to be optimistic, which is just, it feels good. Like you are happier every day. If you walk on the sunny side of the street, if you focus on the opportunities that are new and exciting and find reasons to look forward to the future of which there are many.

22:23I think there's a lot of, I could also make a pretty strong argument, I think, and this is sort of where we get to David Deutsch that Naval has helped popularize, which is like optimism is a moral imperative. You know, there's some extent to which, you know, when you're, when you're doing rally driving, the, the advice is always like the car will go where you're looking. so even if you're skidding towards a tree just keep looking down the road and the car will end up there like your body knows what to do and i think that's that applies to like at a civilizational level like if you remain optimistic with a light dose of paranoia about our real problems and addressing them um but if you believe if you manifest dystopia by focusing on the negative and the tensions and the challenges and the you know the things that basically make headlines every day, you'll miss the fact that things have been getting better steadily for almost all of human history.

23:26And everything, I mean, look at what we're doing right now. Like we're sitting in a heated and or air conditioned building, well fed, well clothed, recording on absolute alchemy device that is computer and zero margin digital products and making a podcast that will preserve this hour of our time for thousands, tens of thousands, millions of people, like years into the future. It's fucking crazy. Like we forget that we are surrounded by miracles that are the fruit of labor and sacrifice of millennia of our ancestors. And we are so grateful. We are so lucky to have be alive right now in this moment.

24:11And we owe it to all the future generations to continue that progress. You know, there's, there are parallel universes where we are all like wearing loincloths and scrabbling around, stabbing each other to eat moss off a rock. Like there's a lot of dark and terrible things in our past and a lot of bright and beautiful things in our future. Um, and I think it's very important to like the other through line of these three people is that they are very well studied historically. They all, they are optimistic about the future because they understand the past and understanding the past gives them a different lens on the present than the media is going to present.

24:48Or then if you just consume the news or the feed or the social media, what you're going to see, um, biology talks about this a lot. There's a, there's a great whole section on truth and the media is sort of, um, and the incentives that they have to not necessarily be truth-seeking or wide lens historical perspective to today's information. But when you do that and when you follow people like Naval, Balaji, and Elon, you gain a little broader of a lens. You become naturally more optimistic. I feel like I've been that way. I've been attracted to people and minds who feel that way also. And I feel like joy and compulsion to share that perspective.

25:34with others, especially when, um, you know, people feel, feel stuck or feel trapped or feel like the future is going to be dark. I feel like they're just wearing blinders that they can just take off by focusing on different ideas. Yeah. I completely share the optimism. I, that's a big reason why I do this show is, is bringing people on who have stories, who have insights to say, look, like there's so much more to the world. There's so much out here for you to grab onto. And, you know, you made reference to how well read they are of the past and of history, these particular individuals. And I have a theory as I've read more into the past as well, you know, back from, you know, right.

26:20You can't be a male over 40 in the United States if you haven't read about the Roman empire. So obviously I've gone back that far and, you know, and all the way through I really like a lot of the enlightenment reader or writers and you know just just how different people attack history when you understand where we've come from I feel like you almost have to be optimistic and here's the caveat that I put on it is because you you understand the pain it will take to get there right so I feel like so many people become pessimistic because they feel the smallest little minutia micro negativity micro pain, micro discomfort.

27:00And they're like, my life sucks, right? I shouldn't have to, you know, why my, my tires flat, God's out to get me. The universe hates me. Why me? Right. We go down this because we haven't, when you read history and you understand how fucking terrible it was and how these people were still able to live these valuable, fulfilling lives and get through it and perpetuate the species forward and make all these improvements to get us where we are today. when you have a little bit of pain in your life, you're like, yeah, but like my enemy down the street doesn't have a sword and isn't trying to attack my house.

27:35Like I'm not currently like defending and, you know, the British aren't invading my French fort or whatever. Like it's just a tire, my tire's flat. Like everything's gonna be fine, right? Like we're good. And it gives you that perspective to understand the discomfort and fear and pain that will come with getting through these things to actually make more amazing things happen does that does that feel like it resonates does that work yeah i mean this um the perspective that you get from studying history i think is so useful and valuable it makes you appreciate every day it makes you appreciate what you get to do um like i feel like insurance is probably often a um you know not treated as like the sexiest most exciting no it's never treated that way no it's never treated that way yeah well yeah but like broadening the lens to be like if you live in a time and place where you get the privilege to sell insurance you are in the top fraction of a fraction of a percent of wonderful times and places to live in all of human history because it is an absolute luxury product that is a sign of a very advanced civilization that cares about socializing risks and pain and supporting people who are less fortunate and that is it is an important um and respectable thing that a lot of people don't appreciate the role that it plays i think um but it also means like you have a much better job than basically any other human who ever lived in history who died either like farming or fighting um and there's just so much to be grateful for.

29:17That's the past looking perspective. The forward looking perspective is we often lack the imagination to see how much change can happen even in the rest of our lifetimes, let alone, you know, that we are participating in building the foundation of cathedrals that we can't even imagine over a few hundred year time span. You know, like there are people who are maybe closer to those like sexy places like SpaceX that are very obviously building the future. But we are also all part of the sort of substrate that supports those people and creates the civilization that keeps expanding those frontiers.

30:05It just makes me very proud to like be a human, especially an American human, and continue to move forward with these good ideas about optimism and civilization and engineering and truth-seeking and um you know how lucky are we to be alive when you know these things are getting developed and i know you're deep down the deutsch rabbit hole um but i will like underline that as being you know he's also a very interesting read uh yeah probably like if naval is 101 um deutsch is 201 or 301 yeah it's a little more difficult of a course he's much more he's a little bit more academic of a writer, but his interviews are incredible.

30:43His ideas are important. It's a very philosophically robust approach to optimism and over a very long time horizon. And it also will make you very proud to be a human and proud to be an American and proud to be a part of continuing to advance like our understanding of the universe. So you brought up cathedrals and this idea that in our past, and for anyone who's read a fictional version of this, Pillars of Earth is an absolutely incredible book. But we used to build, you take some of the largest and longest standing cathedrals that exist today. Some of these took 300, 400 years to create these cathedrals.