How Kalshi Sued the U.S. Government and Won | CEO Tarek Mansour

27:24And so there's like, you could trace a curve. And then I, you know, a lot of times I tell the engineering team, it's like, well, be on a better curve. Like, you know, if you're better, you're going to be on a higher curve. And you can get more speed with less errors, you know? It's a sort of idea of barrier to frontier. Like, what is your frontier and can you push it forward? Same with risk. I like that concept. Yeah, it's the same with risk reward, right? Like some trades are better than others. Like some trades provide a better risk reward profile than others and like, or, or baskets or like a portfolio basket.

27:52Find those, right? Yeah. Like find the higher kind of, you know, uh, so I think it, it applies to life as well. Like, I think there are lives that are like better lived than others where like you can actually push, push your frontier higher and then you can figure out what trade-offs you want to make on that frontier. You know, this is one of the things I remember about meeting you early on is that you're probably the first person I met that had a very strong, like, expected outcome framework. But it feels that after, you know, over the years, you kind of, like, look at life a little bit less like that.

28:25That's true. Tell me, like, what was it before and, like, how it evolved? That's actually a very good observation. I mean, I think like, because I like really, like I'm a very math, like very mathematical person. Like that's how I think. And that's one. Two is I spend a lot of time in trading. I really like trading, like financial markets, pricing things. I mean, this is why I started Calshi, like pricing things, you know. And so, you know, when you trade, like you think a lot about, you know, two things really at the end of the day, like you think about expected value and you think about variance, right?

29:02Like you think about expected outcome, like what is the expected outcome of certain action or trade and how much variance is there around sort of the - Yeah, maybe you explained those concepts a little bit. Yeah, like expected outcome is basically like, you know, if it's like the average outcome, it's like you have a distribution of potential outcomes, like, you know, you might lose, like you put, let's say you buy like a share of Apple, you know, and the next week, you know maybe you lose the the distribution outcomes could be like losing minus 20 all the way to winning 30 right so that's the whole distribution and then you can figure out based on the probabilities if you put the probability to each one of these outcomes like this okay losing 20 is 10 chance and losing 10 is like 20 chance and then you put a probability to each one you can average all of them out to figure out what's the expected value of this and you're like plus five percent is the expected outcome here right that's like the idea of average or expected value and variance is basically like how large is sort of like how kind of like dispersed is the set of outcomes that are very likely so it's like and very simply to explain it's like if you have a stock that this this week could do minus 10 or plus 10 the variance approximately it's not exactly that but it's approximately like you know 10 that's a standard deviation and um if you have a that they can do minus 50 % or plus 50%, those are two outcomes possible in that stock.

30:24That's a higher variance stock, right? Like they both have the same expected value. It's 0%, but the variance is much larger. And that's important in trading because that allows you to size things, right? Like that tells you how precise you can be about where you're going to land. And variance is very important in that regard. I think that like this concept can be applied to a lot of things in life. Like, like, and you know, when we were first chatting, like back in the day, like, you know, I had a very kind of risk-based, like trader mindset framework for, for life. Like you can price everything in that way.

31:01Like, you know, if I, you know, take a certain job versus the other job, you can figure out, you can try to put sign probabilities. Like what is the percentage chance that I make these different outcomes over that trajectory? and then you can create an expected outcome, expected value for these two different paths. And it was interesting. I think when we were discussing this in the concept of starting a company, starting a company is a very negative expected outcome endeavor. It really is. It really is? It's crazy. It's like you look at it, you look at the stats, like, okay, you go and be a trader.

31:37What's your expected outcome as a trader? It's pretty good, actually. Well, when you were thinking about being a trader, what was the expected outcome, do you think? It was pretty high. Like, you know, I was going to go to Citadel and like, you know. Like, what is the expected outcome of going to Citadel? I mean, like, I don't remember, but it was like, I mean, like, look, reasonably, like, without kind of divulging like too much sort of like specific Citadel, but like roughly speaking in finance, it's all those kind of higher tier jobs. Like, I think in your first year, you could make, you could make one.

32:02That's like, you know, 22. And then your second year, you could make. Like$1 million? Yeah. Yeah. Two. And then like, if you're really good third year, you can start flirting with the sort of three, three, four range. and like within five to six years you could be you could like now be playing in the nine to ten million dollar a year range so and like so like by the time you're 30 32 33 like you know you're making tens of millions of dollars you could be making tens of millions of dollars now you have to be one of the best but like but still like you know if you assume that you're pretty good and you know and like you know and there's variants obviously you may blow up and like you know you have to you're fired you're fired but then like if you're good enough also you can go somewhere else And you have variance on the upside.

32:45My dad's the one that I was joining. I think my ex-boss is incredible. I interned with him. Incredible, super smart trader. I have an insane amount of respect for him. They crushed it in the following years. I absolutely crushed it. But the expected outcome there was high, really high. It was really hard to look at that from a dollar perspective and compare it to anything else and anything will look the same. There's nothing that in the next 10 years, I'm like, yeah, I'm going to make, you know, tens of millions, like 50, maybe even like, you know, up to nine figures in the next 10 years. With this high probability of happening.

33:21With this high probability, like nothing, you know, on an expected value basis, right? And like, look at the starting company, you look at the stats there and you're like, dude, like, this is horrendous. You know, it's like, right? Like, like the stats are horrible, right? Yeah. Truly horrible. Like, you know. It's like right now being an AI researcher and deciding to like start a company. Yeah. Like if you ultimately expected outcome, be an AI researcher, you know? Like that's so, so exactly, exactly. So, so, so that was one of the things that like were always hard for me at the beginning, like, you know, start a company.

33:52And honestly, like, this is kind of maybe that speaks a lot to why we started CalShe. Like it just wasn't about the money. Like it, it really wasn't like that math that I did was just completely tilted in the other direction. I think we like, we just genuinely got obsessed with the idea. Like I, I, my heart was in it, like, and I couldn't do anything about it. It was, it's, it's despite like, it's one of those like, like situation where like the idea pulled us into doing it rather than like us wanting to be an entrepreneur. And like, like, you wouldn't have started any company. This is the company.

34:23I don't think so. I really don't think so. I don't think so. It's very special, man. Maybe, maybe. I, I, I mean. It's not a reality for most founders. Yeah. I, I, I realized like afterwards, but then you look at the history of Calci and you realize like, like the, the, the types of things we have done. to deliver on that same consistent vision is not like, are not normal. As we started the company, the one thing I learned, and this is very different from sort of the trader, like pricer mindset, because as a trader, what you do is you try to price the world independently of you. And you just like, you don't care about what, like you're not trying to influence what's going to happen.

35:02Like you don't care what's going to happen. You just let it be. So it's a model. It's a mental model. Like you build a model of the world and how it functions. And you basically try to make money off of it. Right? The one big miss in that model in terms of the EV, like the expected value, the one big thing that was missing from that model and that I learned over time is that as an entrepreneur, there's a you part in it that's a very, very, very, very big factor in the probabilities. A huge factor. As an entrepreneur, your mental model is like you want to bend the world. You want to change things.

35:32As a trader, you're just pricing and letting it like whatever is going to happen, you basically make money off of it. And so I think the thing that I really kind of learned over time is that, dude, sheer force of will is like can break anything. Like I think sheer force of will can like truly. It's shocking, honestly, it's shocking how much sheer force of will can get you. And that was not something you can price. Like you cannot think of it as an expected outcome thing because you have to incorporate like, well, actually, the expected outcome as an entrepreneur is much, much, much higher. if you condition, like, you know, the expected outcome for any entrepreneur is pretty bad, but expected outcome for an entrepreneur, given that this entrepreneur, if you condition on that entrepreneur, basically being in a mindset of like, I'm going to do whatever it takes to win is actually much higher.

36:19You know, there's an investor once that told me something that I think I really believe in adopt, which is I asked like, Hey, you know, tell me about your process. Like how do you evaluate founders, et cetera. And he's like, well, one of the things I do is like, I always call their friends, you know, to ask about them. And the trait that I most think is correlated to success is when I hear from a friend, oh yeah, that person, they just like, everything they want, they just get, you know, they like shear things into reality, you know, it's like everywhere in their life. And I think, you know, that's like, I don't know, some people call that agency, you know, being very high agency.

37:00And I think you're absolutely right. Like if you have very high agency entrepreneurs, that's a really big factor in the probability. It's not an independent thing, right? Yeah. Yeah. Yeah. I mean, I think like sheer force of will just gets you very far. And I think, but now, even then, like even now, I mean, this is a matter of like, we'll talk a little bit about the story of Kaoshi, but like the, I still think a lot about expected outcome in terms of execution. It's like, there are certain things that you can control and certain things that you cannot control. And like, I think a lot about like, okay, what is the expected outcome of the direction that we're taking?

37:29And there's quite a bit of variance and like what could happen, the outcome may not be, it could be positive or negative. And this has happened in the history of the company quite a bit. And it's interesting because people don't think much about the expected outcome. They just like look at the variance and like that's what they kind of grade you on. But over time, like the hope is like on a long enough time horizon, like you get enough like rolls of the dice that your outcome basically converges with the expected outcome. Yep. Right. So like some years are bad, some years are good, but like, you know, over time, And when you say people like usually don't look as much as expected, do you think they over emphasize the negative or under emphasize the positive?

38:08I think there's a little bit of, I think there's that bias. I think so. It's a bit like, you know, when a soccer team loses, like, you know, when like, like soccer team loses, like they always blame the coach. And when it wins, they don't really like congratulate the coach. There's a little bit of that. What are they running a company? Yeah. Oh, the market was great. And, you know, and that's true. That's true. Yes. and like there's a number of things but like you have to really think look at it holistically like how how did the company get to where it is and like um and i don't i think people don't attribute that much and i think just purely like people just cannot differentiate beta from alpha which is another kind of trading concept but like explain that for everyone yeah like beta is basically the market you know like how did the overall market do alpha is like what what did you specifically contribute right like so very specific example like if you're a hedge fund and on any given year, like the S &P did 10 % and you did 15%.

39:04Roughly speaking, the beta was 10 % and your alpha was 5%. So you did five on top, right? And if you're a hedge fund and you did 5%, you're actually pretty bad, because you're negative five alpha. Your contribution was like, you made your investors less money than the market made. And I think you can attribute that to companies too, right? Like you could think about that to companies. because there are companies that had no market tailwinds. Like one example is DoorDash. Like I think DoorDash is a company where like that company did not have much beta, like at all. Like it's market, you need to think of a company that like, where it's market, like the SMB was doing minus 20 % every year.

39:45And then, you know, Tony was managing to print 5 % every year. Or SpaceX. SpaceX is another one, right? Like very high alpha, you know, and very no beta. And then you look at them and it's like, okay, well, Tony, like this type of founder is a top tier founder, right? Like that's a killer founder because, you know, their market dynamics are very hard. They don't have anything to help, but like they are, you know, their execution, their discipline is basically the thing that's making the company successful. Yeah. I remember there was one investor once that told me something that I thought was interesting, this concept of like, how much, you know, he, you know, he generally believes that if the opportunity exists, eventually someone is going to take that opportunity, right?

40:27Which is like, you know, I think, look, you know, all these things, both SpaceX and DoorDash would exist at some form of them, you know, at some point in the future. But how much did that entrepreneur bring the future into the present? Yeah. Which is like, it would probably exist, but maybe it would exist five years later, 10 years later, 20 years later. But then they kind of like brought it to the present, right? Which is very hard to do. Yeah. I think that like, I like this idea because yeah, There is sort of like, the market was going to do itself and you wrote it. Like I see this a lot, for example, like in crypto, that's like one of the places where like the market beta was so good.

41:03It's hard to differentiate alpha, right? Like, I mean, are you a good trader because you bought Bitcoin in 2013? Like, I mean, I don't know. Like, you know, that doesn't say much, but like, are you a good trader if you're at Jane Street? Like probably because you make money in any market all the time. Yeah. You got into my team. Was that your top school where you wanted to go? Yeah. Yeah. I got into Stanford, MIT, a bunch of others, but like the, MIT was my number one. Like that was the one that, you know, I was kind of pretty dead set on. How was the MIT experience? I loved, I mean, I loved it.

41:35It was, it was like amazing. You know, it's like you get there like, holy shit, this is like crazy. I'm like, it was fun. You get out of Lebanon, like the, you know, it was a completely new environment. I mean, the one, one thing that was interesting is I didn't really speak much English. So that was hard at first. So what I did is like, I joined a frat. And I noticed something. It was like, you know how there's like people that are like have been around the US for like 30 years, but they have a very strong accent. Yeah. And I always wonder like how? Like you've been around for 30 years. How did your accents not change?

42:08And like what I kind of started learning was actually your accent is mostly formed in the early days of speaking. Like in the first month. Three to six years old as I'm now, right? Well, but if you're learning a new language. Yeah, of course. If you're learning a new language, it's like it's in your first few months. It's like in the first month or two. So it's like, okay, interesting. So what I did is I joined a frat and stayed a lot with, I didn't stay much with internationals, stayed with Americans. That's very different. Most internationals hang out with internationals. Yeah, yeah. And it gave me accelerated accent, basically, which was great.

42:41I mean, I don't have a perfect accent, but it's not very strong. And I was pretty intentional about that. And that also pushed me to speak English, better, faster, just improve my English. But then I loved it. I mean, I think the, you know, you realize you come in and you're like, okay, I was in a small pond. Now I'm in the ocean. And like, you know, there's always insanely smart people. Like truly, like, I mean, unfathomably smart. Like, and this thing is like exponential, I think. It's not like, like I've met people, you look at them, you're like, okay, well, the compute on this person is just like truly a 10x.

43:17and they can go way further ahead. When was the first time you noticed that at MIT? There was one person, this guy, Umair. Umair Sirahuglu or something like that. And we were doing this insanely hardcore advanced physics class. And there was these really difficult problems. We'd work on them for a week or two. And this guy would come in the night before, just open his thing and be sitting next to me and just would rip through the problems. And I'm like, what is up with this guy? He wouldn't even use it. we like have to Google it. And like, he was just like, you know, start writing. And like, you know, he would see it.

43:51And he would start speaking about things like, yeah, you could like think of it. And he would see things like, you know, these types of mathematicians that can see things and like, and. Just can connect patterns that like, you know. Yeah, at first I was like, man, I think this dude is cheating or something. Like, you know. Yeah. And then like, I Googled a guy. And he's like, this guy who like won the IMO when he was like, like he's the third youngest guy to ever win the IMO. He won it when, like he got a, he got number one when he was 13. Wow. Yeah. So there's Terence Tao who was the, who wanted like, I think six months or four months younger than this guy, than Umair.

44:24But like, and I like, I spent time with this guy because I was like fascinated. I mean, I'm really fascinated by like, you know, how these brains work. And like, man, this guy is like truly like, you know, when people, people use it, use genius, like very liberally, you know, genius, you know, like, dude, like that guy was like truly okay. His brain is wired different, you know, like is, and it's interesting because he kept taking harder and harder. harder class at MIT. He got so bored that he like, then got like, he went into poetry last time I heard about him. Like, he's not like now, I think, I don't know if he still are, but I know for a while he was doing poetry.

44:55So funny. Yeah. My, my, my smartest friends who that you know ended up doing something very different. Yeah, because they just get, I don't know, they get bored and like, you know, so, and, and, but MIT was amazing. And then like, you know, doing a lot of math. Then I got, I started like learning about finance because a lot of the smart math people were like basically

45:16And, you know, I like, I function a bit that way. It's like first, you know, I get obsessed about like, okay, like being the best at math and like, you know, getting exams. Then I got obsessed about getting to MIT. And so I focus all my energy and attention there. Then I got obsessed about getting into, like that time, like I was like, I need to go to Goldman Sachs. Because that's where, you know, the cool, like, you know, the cool kids are going and the smart people. So I get into Goldman my freshman year. For internship. Yeah. Or sophomore year, maybe. Like it was sophomore year in the winter.

45:42So it's like, you know, a few months in the winter and then a few months in the summer. And like that was 2016. So the summer, that summer, you know, right before Brexit and the Trump, the first Trump election, you know, I was looking at, I was working at this desk and like, it's called Equity Exotics. And like a few things I started noticing, like when you walk into this sort of trading floor and man, like you have like hundreds of traders trading things like swaps and options and like, you know, all these like, especially like swaps were the ones that were like, man, like this is like so far removed from like normal reality.

46:16You know, it's like, how do we get here? Like, you know, how do you, how is this like a massive industry? Right. And so many layers of abstraction over reality. It's like crazy. Right. And like, and so I got obsessed with financial history. Started reading everything. Like how did like different instruments come to be? Like, I got really excited about like, why is the financial market the way that it is? I, I, I love kind of learning about, you know, why is, why are financial markets structured in a certain way? How did it kind of evolve over time, et cetera. and you know it's like simple things like why do we have a few banks that own most of the flow and the u.s um and you go back it's like actually just it's like jp morgan like he just like called up a bunch of his friends he's like hey let's figure out how to build a coalition where we basically own and then he welded into existence and now this is how the u.s financial system or banking system is structured and and there's like a lot of interesting things in financial history and like I learned up here that like you know two things generally tend to be true financial instruments are usually double-edged sword they bring a lot of prosperity but they also generally speaking like bring out greed in people people start doing crazy things every time there's like a new type of or most times there's a new type of financial technology and and two it's always contested legally regulatory it was a very contested like financial service and healthcare, I think they are the two most contested sort of hardcore, you get like regulatory legal.

47:44And then the second thing that I like, okay, so that's what's happening. And then like, I was in this equity exotic desk and like, okay, I would like listen to what people were asking for. And like, man, they were like, the way they would formulate their questions and the way they were thinking about the word, they were like, hey, like Brexit might happen. I want to put a position on Brexit or I want to hedge against Brexit. Then it's like, oh, Trump might win the election. I want to get exposure to that, to Trump winning the election. I want to hedge against Trump winning the election and so what we would do is we take okay fine like we'll take a bundle of a bunch of these other instruments swabs and options and try to put them together to get them that exposure so one very common trade we did was like the trump trade was like oh if trump if you want to get exposed to trump winning the election make money if he wins or you know you can put like a it's called a calendar spread but like imagine like using like four options to basically like squeeze that week, that specific election week to put an effective short on the S &P.

48:40So it's a bit of a complicated correlation, a bunch of things. You can make it also more complicated. You could do it with S &P and Nikkei and a bunch of other indices. And we would sell these bundles. Then man, it was interesting because like Trump won the election but these people lost money, right? Like S &P rallied when he won. So this is like a bad proxy. Like, so the first problem is it was a proxy. It was a bad product. Like, you know, number two, second problem is - overcomplicated the thing and then was wrong. Just not the thing. It's like, yes, maybe you believe that, but that's not exactly the belief.

49:11The belief is like, I think Trump is going to win, not the S &P is going to go down. So it's a proxy. And these are not retail people, but like it's institutions, wealth managers, all the hedge funds, corporations, but like they were still thinking in natural terms because people don't think usually, like they don't walk around the street. The average person doesn't walk around the street thinking like, you know, I think the S &P, you know, the S &P end of day has like three theta. They think like, you know, I think maybe the Fed is going to raise interest rates. And so number two is very expensive.

49:45Like we would charge crazy fees because we're just the only pricer, right? Like we're the only counterparty that was offering these. And three is inaccessible. Obviously not everybody can walk into a Goldman like investment bank to basically do this. So this is sort of when the idea, like I started, and we started thinking about like, You have a financial market to price companies, like equities, to price credit and debt. You have one for commodities, like physical commodities. We have one for currencies. What if you just build a financial market to price simple questions about the future? It's one of those ideas I couldn't unsee.

50:23It makes a lot of sense. That's how people think naturally. And you can price it. Literally, you see it now in Kalshi. like, you know, we always seem like you can price this event, have people trade it actively based on the probability of whether it's going to happen or not. And the two things that I felt were true is like, one, if you could build such a financial market, it could be the largest of them all because the large number of people might care. And then number two, it'd be very useful because you're applying the power of markets to not pricing a company, but to pricing our future. Like important questions about the future, which would make us smarter, would be like a, would shed light on how we can basically be better as a species.

51:00And like, so I got very excited about that idea, but I didn't start the company then, right? Like that's 2016. So it's 2019, right? And then it was interesting because like, you know, Luana started at Bridgewater. And Bridgewater has two divisions, one that comes up with the views about the world and what's going to happen. And then the other division, like they take those views and figure out how to execute them in the market. It's like, well, how about you just take the view and trade on the view, right? like you know you know and i saw the same as citadel and we also were working at you know we were working at someone at five rings both of us and we were like it was just sort of whole thing about like make a market which is like any questions that you have like you think you know luana was like placing trades with people like i think kyle gener is gonna be pregnant i'll buy like 90 cents on the like dollar because i think there's a 90 chance probability of this happening so we were playing that game naturally all the time and so over it was this idea that would keep coming back and like over time we got more and more obsessed with the idea like we were like and i was gonna go to citadel like you know that was gonna go work there this is like what i was gonna do but i in some ways the idea was like you know i felt i found myself reading more and more and being pulled by the ideas and same with luana like it was just kind of pulling us it was kind of forcing us into basically going and doing it and i think maybe that's one of the parts that was because i was not a guy that was being the entrepreneur and meeting entrepreneurs and doing all these different things at MIT.

52:19Like, I was just not. You were not a startup guy. I was just not. Yeah. It's actually probably the opposite. Whatever the opposite of startup guy is, like, that was me. Yeah. You know? It was, like, frustrating. I was, like, I could not let it, like, I could not push it away. I'm, like, you know, go take the$1. And I couldn't. And I started putting thresholds for my... So what really happened, I have this friend, Sudanshu, this other friend, Perv. We were having breakfast one day at this place called Tate, which is like in Cambridge next to where we, you know, we are. And Juan and I were like talking about the idea.

52:52We're excited about it. And like, but we're again, like pretty set on our like path. But then he was like, so Donshu was like, hey, I'm going to this like hackathon in Y Combinator. And I had heard of Y Combinator. I was like, oh, all these like geniuses, like go to Y Combinator. The build is multi-built in our company. That was very, you know, still early YC, right? And he's like, you should come. And I still have the text. He released them on Twitter recently. It was crazy. It was like crazy. He was like, and I was like, and then we checked his website. He's like, oh, the website says that it's like, it's something like it's expired.

53:25Like the application is done and whatever. And then he was like, maybe just email them that like you did not have accommodation or travel. And like, you just figured out a way to do it. So, so I emailed the guy. I think his name was Craig. I forgot. He's like head of events at YC or something. So, so Nantro convinced me to do it. And he's like, email and just go. Like, it'll be, you know, at least try it out. and so I tell Luana and Luana you know you met Luana Luana's very like Luana's very risk loving very like I'm risk averse Luana's very risk loving very stubborn like you know just like you know like any idea like no matter how outrageous if Luana thinks she'll just go for it doesn't even think about the downside and how it balances and she's like yeah let's fucking do it let's go and we went and then so down she didn't end up going which is funny because he was going I went because he was going and then like he didn't end up going for some other reason so we And I emailed the guy, I was like, hey, like this accommodation thing, can we please come?

54:17You know, whatever. I know we're late. He's like, yeah, fine, just come. So we went there, we like scraped together some, you know, had 24 hours. We put together like some front end without a back end. Like we're just going to put it all together. And like, it was crazy. Didn't sleep all night, the whole thing. And then, you know, it was so funny because like they grouped everybody into groups and then you have to go pitch to YC partners. And then after that, they pick some finalists and like you go pitch on stage for everybody. And like, so we walk into the room and it's like Michael Seibel and Christina from Vanta.

54:55She hadn't started, I think she had just started Vanta at the time or, you know, something. But, and then, you know, I pitch, you know, I start, you know, hardcore, like I have a deck, like start pitching the idea. And then, you know, Michael, Michael like looks at us, like pause a bit. And he's like,

55:39what you're saying here is like totally illegal. this thing is not going to work out. So I can finally let it be. Because you just want to be a fucking sit-of-the-little trainer. Yeah, just let me be. And it's like, look, Luan, it didn't work out. But yeah, we're just going to go work and it's going to be great and it's fine. And I remember I just went and I drank a few beers. I got kind of tipsy and I was like, fine, we'll fly back tomorrow or whatever. And then they called us to be finalists. And I was like, it's kind of like looking at Michael, like dude you shat on the whole thing what happened here and then you know i i go on stage and like you know just pitch the idea and like and then we win that thing and um how did i feel it was a little bit like it's like first of all i was like pretty sick and then two was like surprising it was like i mean okay what happened there and like we were like pretty pumped and energized you know it's like it's like room of hundreds of people and you know like you're totally in your not environment that where you're in, you're in Silicon Valley, you know, all that.

56:37And so, and then, um, what you want, I think is like an office hour or an intro, like, I think we want an office hour with Michael. So we talked to Michael, um, well, yes, office hour, you know, it was like pretty cool. And like, just gave us some advice and stuff like that. It was very early days. Uh, he's like, oh, you need a name. I remember we, we also found the text between Luan and I like choosing the name and it's just like, and then like, uh, wait, let me, let me, let me read this text to you. So I was like, this is the one that asked me like, what's HN? And I was like, like Hacker News or Hacker News.

57:13And I was like, it's like some YC ID thing. It's like, oh, I don't have it. I was like, yeah, me neither. And then she was like, we need a name for the lawyer thing. It's like the lawyer thing, you know, it's like, I think we're like, I don't know, whatever. Tell me some name. And I was like, like name for a company that's so early. and she's like because we're like we're not starting a company you know it's like you know like we're just talking to michael or something and then she's like yeah lol anything works i was like that's kind of stupid it's just like just a random name and then i was like calci and then she goes like three question marks like what what and then i was like it means everything in arab i was like everything in arabic is kelchi so that seems like a decent start and she's like haha okay does it not sound good she's like it's too complicated i'm like okay We'll change it later.

58:01I guess I get that. It also doesn't sound good. And then I was like maybe Omniplex. That's also cool

58:12They're just like what does that sound for it's two sounds that sounds like a fucking like like a movie theater thing You know like it's like how you go to the Omniplex to watch something Yeah, I mean like and then and then and then when I go is like what does that stand for? It's too nerdy needs something millennial like Coachella

58:32I was like, I don't know. We'll think about it later. And then, you know, we started talking about some other like legal thing. And then like, well, it's funny. Actually, the next text that Luana sent was like, how would we summarize our legal problem? I was like, well, this is not legal in America. That's our legal problem. That's the summary. That's the summary. It's illegal. It's like one word, illegal. Yeah, exactly. That's our legal problem. You know, certain problems are very simple. You know, it's like, you know. And this one is very black or white, like, you know, not allowed. But so it was funny because that's how the kid, I forgot, this is how the name came about.

59:08And like, and it's interesting is all the like problems we have with the name today are, I mean, we knew at the time, but we were just sort of nonchalant about it. Like we were like, just find a name. Yeah, whatever. For a second, it's like Kalshi. And like, you know, then she found it at Kalshi.com and her sister bought it because we had no money. So her sister bought it for us. It was expensive? It was like a thousand bucks. Okay, so cheap. Yeah, he had no money. So it's like, you know, then, you know, Michael gives us an interview for YC. We did the interview and then he takes us. And it's interesting because I always ask, um, Michael about, so, okay, well, now we took YC.

59:46I called my mom. I was like, I really don't know what to do because like, I really didn't think we're like, we were literally just going to say, they're going to refuse us and we go to work. So what do I do now? And my mom was like, it was like this whole like, fuck. like you know and then she was like maybe like do yc and then if you manage to raise money above a certain threshold we'd like they had a threshold phrasing that that was a success it means the company is going to be successful but like uh then like you maybe commit to it and like otherwise like what was the threshold two million dollars not even at first it was like one and then it went up over time because you realized you could but what i mean it was like i could raise any money i mean for us a million dollars at the time was insane insane like it's like you know so anyways so like we we go to yc and and like you know uh we delay this sort of me starting like the the full-time job and you know yc experience was really tough because like everyone was like tracking kpis and users and talking to users and we were just like focus on the illegal part of it yeah we were like you know um we're focused on the illegal part of it like it's not allowed and what you know it's literally not allowed so what do we do and so like you know i knew that i wanted to do it in the u.s february 2019 we met we started meeting we started like looking for lawyers and like all of that for the u.s and like you know luan and i called 65 lawyers in one day literally we just packed them all like you know literally both and both of us were on meetings the whole day every lawyer touched financial services you want to like do this legal thing where you can like basically trade on any events in the US.

1:01:20Dude, like, the extent to which this sounded outrageous, like, it was insane, you know? It was, like, as ridiculous as, like, telling people, like, you know, like, like, some really, like, hot, contested topic, and you're just, like, a random dude showing up out of nowhere, and I, like, you know, like, I want to break the two-party system in America. You know? It was that one, like that reaction they're like like okay kid like yeah let me teach you something like cool yeah i mean it sounds cool but like not for me good luck with it you know and like did 65 lower said no like all every single one was like dude i don't want to take your money because like this is stupid that was the whole point of demo day and like yeah we're sorry and it's like why didn't you tell me beforehand like that's that's horrible so i remember i sent a text to michael that day It was a Friday.

1:02:16And I was like, yeah, like, I think it's over, you know. Basically, I was like, hey, Michael, can you chat? Like, I think it's over. He's like, yeah, let's call you. Like, let's chat first thing on Monday. Come to the office. And it was done. So we're like super depressed. I'm like, okay, let me just go, you know, like, going to start preparing for my job. Again, like, this thing is not going to work out. We give it our best shot. And we're like, we'll go from there. And then Saturday, Sunday. and then it's like, it's a typical thing that happened to one eye. And I think this is like key for how the company, dude, no matter how hard we got punched and we have taken on like heavy punches, like truly like gnarly punches.

1:02:58We would take it, we'd get very upset for an hour or two and then we'd just like, you know, we had to reflect, stand back up and just fucking go. So we like open our laptop, like, okay, let's just think. Okay, so what do we have? Like, dude, literally think about like, you know this meme of the like guy on coke who has like like like conspiracy theory like dude that was our apartment like literally i started putting like like we started putting like papers like you know you know alderney has this sort of no now we have an incorporate like we have cashed eu limited in alderney and we have a bank account open with the director maybe we could use that to parlay and so i started figuring out a bunch of things and i realized there's another license in curacao that actually like curacao yeah it's like that actually like it usually but actually the long haul is like, you know, you have a need of public director.

1:03:41And then I called some random dude. So we start connecting jurisdictional arbitrage basically. And like, he's like, yeah, I think if you fire, wire me$15 ,000 now, and by the way, we had wired like 70 ,000 for the Alderney license. So we had no money. And this was basically it, this was lab. I'll give you something. And then at the same time, I was talking to Alex Bouaziz and like, we're pretty close. It's interesting because we're the two like closest during the batch and like ended up being the two main companies from the batch, which these things are also interesting in certain ways but like and then alex was like dude i actually have a guy in the uk that's looking to like sell his license and he's kind of desperate so what about you take it he's like well you know i talked to him he's like i want to sell it for 100k and then we came up i'm still unsure about that setup but like i was like what if you loan me the license so i lent i i pay 15k i negotiate that guy 10k and then 15k to lend the sort of uk license and we come to to on monday to with michael and like he's ready to basically help us like wind down and like you And I'm like, actually, we have two licenses now.

1:04:41It's like, you know, we have two licenses and like, you know, just go right. So then we go on Demo Day and like, and then we end up raising, uh, um, uh, it's like two, two in sum. Was it easy or hard? I went on stage. I was like, look, I think there's a 1 % chance of us being able to legalize this in the U.S. If we do, it's going to be massive. And here's the traction of how fast we have moved on legalizing stuff outside of the U.S. It was not very hard. It was fine. Not the easiest, but like not the hardest. A lot of the brand ship VCs didn't want to touch it because they're like, what are you talking about?

1:05:15Who said yes back then? A lot of angels. Like Saurabh from DST just like purposefully seeked me and he's like, this is going to be big. And I don't know if it's going to work, but if you do it. I don't know if you ever met Fethi and Cem from the Turkish guys. No. Anil from Soma. I mean, Oliver Samwer, like the GFC guys. A few others, but like, they were like, yeah, you know, let's go for it. I mean, Ali Partovi from Neo also. And then like, I remember I talked to Michael a bunch about like, you know, how did you, why did you take, I mean, it was one of those things where he's like, like the idea was so outrageous.

1:05:52Like the whole thing that you're talking about was so ridiculous. Like so far removed from reality that I was like, I have to take a shot at this. Like, you know, it's like, I have to see how this plays out. Like, and then the second thing is like, there was some sort of demeanor to you guys that was like, this like you always find a way there's this this always sort of like always find a way you will you will exhaust in juice like and i honestly it was one of those things like i didn't really see that in ourselves at the time but like there are people like michael or ali partovi like that saw it more than we did and i don't know if you had that like in the early days like you know this type of person that believes in you more than you do because they have seen more they have seen how kind of yeah pattern match and like you don't know you're like still insecure of it like you don't know, like, but they saw it.

1:06:37They were like, dude, in your trader mind, to fucking expect that outcome of this shit was hard. It was terrible. I was had an existential crisis every day. I'm like, what am I doing with my life? It's a 0 % for so long. Dude, the chances were so bad. Like, it's like a 1%. Honestly, it was a sub 1%. All of our investors believe it was sub 1%. Justin Mateen decided to invest really quickly. He was also one of the ones. He wanted to do the whole round by the way dude justin is insane justin's amazing he's always right and like and like he was like i remember he had like a very simple question it's like what are you gonna do when the government doesn't let you do it like what are you gonna do i'm like i like i didn't have a good answer i'm like i i think i'm just gonna i was uncomfortable i was like i'm gonna keep trying i'm gonna you know either like i'm gonna keep going until either the company dies or like they give it to me and i think again he was also pattern matching like in his view is like yeah, there's like a certain type of founder that just doesn't have a plan B that they'll have to figure something out.

1:07:32And so we started the company. Like that was really kind of like, okay, we're gonna go for it. We're gonna do it. And like, we had a long conversation. Like, well, we're gonna go on a few years journey on figuring out how to legalize this in the US without launching a product, without doing anything. And then that was really when I kind of started. And like, that was very long, basically. This episode of HD in HD is brought to you by a brand that's close to my heart. Brex. When we started Brex, it wasn't just about creating another financial product. It was about solving the real gritty challenges that founders and startups face every day.

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1:08:41So give me some time. So you started, this is 2019. Yeah. When were you able to launch in the US the first market? It was a bit like incremental, but like properly launched end of 2022. We launched the first market in 21. but like we couldn't do like it was very like i think of it as an alpha or a beta like like it was really not like so it was like three years of like just grinding on legal stuff three years and a half of literally just pure regulatory man that sounds like yeah hell i mean it was it was truly like people don't understand this is the thing that like i always like i wasn't gonna i wasn't gonna bid another company like every time we looked at pivoting or like doing something else Like, that's not what we started a company.

1:09:26You know? You would have been a trader if it was going to be that, right? And then like, now I'm like, dude, I'm not going to accept the fact that if I had done the two years at Citadel, I'm like, I'm fucking poor as fuck right now. And like, you cannot like, you know, you cannot - All your buddies are probably making out millions of dollars, right? Like, I'm like, dude, like my life sucks. Like, I'm like, you know, literally like homeless pretty much. Like, you know, I mean, it fucking sucked. So it's like, you, it had to work. You guys were leaving Gabe and Gabe and Lucas. It was horrible. I mean, it had to work.

1:09:58We had to make it work. We had to make it work. I will tell you, at that time, I didn't think it was going to work. No one thought it was going to work. No one thought it was going to work. I'm telling you, not a single soul, no matter what they say, thought it was going to work. There were a few people that were like, look, the logic I have here is if it works, it's going to be really big. And if anybody's ever going to figure it out, is probably these two like like crazy people like i think that's a little bit how the investor they're like these people are probably like going to kill themselves like to make it happen it's either they die or it happens and i think it was true like we're so dead set on this thing that like just thinking it's so much easier to be the investor in this situation it's so much easier because like you know it's like you have them and you have another and like look if calcium ribs amazing you know it's so much easier to be the investor for sure i always say that like you know uh and like dude you can just have like an expected outcome thing you know it's like hey yeah like look you know if it works it's huge if it doesn't set your here's some money i'll go chill out and that you know you're fucking grinding away dude like it was but but like you know it was important for us because like there's a you know there was an alternative path which was basically like we could have gone off offshore and done it like not really legally and like you know sort of like you know there's like a lot of companies like bovada or like a bunch of companies that sort of like do it from the outside like they do it offshore it's not really legal and like you know they like cater to americans and like there was that option but like you know i just didn't want to build that like i i you know i i wanted to find like when i think about the sort of this is the legal like this is the universal financial markets of what's legal and what's allowed i didn't want go around that i don't want to build it like a front-end betting casino or site i wanted to expand the universal financial market like that was like that was the thing that excite me at the core is like financial markets could be much deeper much more much bigger than what they currently are they have way more potential we could apply them to things that are more exciting and more relatable to people they had legal problems i think some older i remember meeting an old guy in brazil that owns a big family business big um wholesaler and i'm like why don't you take a company public he's like well because the stock market is a casino is there a purpose for this for this market to exist beyond just speculation so in in for example like grain futures were at the time like they were legalized in 1905 by a supreme court decision and it was the same thing some people were saying these are gambling because you know people are betting on like the price of grain and speculating so this is more like gambling but then some the other people were saying no because some people are hedging or like using the prices to figure out the futures were important because they would tell people how much they could sell their stuff at their their their grains at in the fall.

1:12:37So they decide how much to invest. It makes the economy more efficient. You can make better decisions. But the point here is like, it's about whether there's that kind of economic purpose. And it's like these things, I mean, obviously Brexit happening or not, that's like. Yeah, instead of having like the six trades at Goldman Sachs, the options and the swaps. There's a better product. You can just do that. Yeah, it's also very relatable to people. And it also impacts a lot of people. Like Brexit happening is not one, it's not like a, like it's not a non-economic event. It's a very much short economic event.

1:13:07It has drastic implications, right? Same with the election. And so three years and a half finally launched. And our first set of markets with their CFC was like 18 months, like brutal, like just actual, like think of harshest environment possible. Everything was taking forever. The regulator wanted to kill us at every step of the way, all of that. And then - But what was the process to launch a market? They have to approve everything. And like, you know, and - Maybe give some overview, like, what is the FCFTC? Just, like, a quick kind of... You know, in the U.S., there's SEC and CFTC. SEC is, like, everything that's, like, securities, like, things that relate to a single company.

1:13:44What did they tell you when you showed up there? So we found one lawyer, Jeff Bandman, who was an ex-CFTC guy. He's a character. And he was the one lawyer that was willing to work with us. Like, after 65, Luana talked to... Literally, like, it was so indirect. The friend of a friend of a lawyer. like literally that's how much we've extract like pushed in the network like it was like a fifth degree removed from luana she found this jeff guy who's like i'm down to work on this because i believe in this so much that i'll help you i think it's probably not going to work but i'll help you and he started putting us in the front of cfc so it helped to have someone that they know that had some degree of credibility because he would he got us the foot he got us in the door and then we started pitching them and then they would be like yeah like it's not happening and And then I'm like, why?

1:14:30And they're like, well, here's the 10 reasons. And then we go and we spend the next 48 hours writing huge memos, like researching everything on how we solve every single one of those reasons. And like, okay, here's another 20. And then it was three years of that. Three years and a half of that. If charge of you is easier, so that would be easier. Yeah, I mean, that would be easier. It's so much easier. Dude, I spent one day, like there was a point where I spent 27 days straight in a room without exiting the room, eating the same thing every day, writing a legal memo, like a 70 page legal memorandum it's still there like it is the foundation of how prediction markets are regulated in the US it's fucking insane dude I did nothing I went I like exited that room at the time as if dude like a caveman I didn't know how to like talk to people after that like beer it was horrible I'm telling you like I had not seen any I like you should find a picture of that I ate Pacwan like you know the Indian place and like from from Tenderloin and SF for like 27 days straight wow I mean, I was so unhealthy.

1:15:26But then we got it regulated. So it worked. And then we launched the exchange and started working. And that was the first... We expanded now. There was a true expansion in the universe of financial markets, which is like now there's legal way to trade and buy positions on events, buy shares of things. But then even then, they would block a lot of things. So it was a constant war of attrition. You slowly expand, you slowly expand. We kept pushing the boundary to slowly expand. And we expanded, expanded, expanded. And then there was one key thing that we wanted to do, which is the election market.

1:16:00And Elizabeth Warren did not want the election market to exist. And I remember at that point, you guys were launching, but there wasn't a ton of volume, right? No, because like - Why was that? It's just so hard because you have to like regulate it first. So you have like this, the regulatory piece is in and of itself as hard, if not harder than product market fit. You have that like, you know what I mean? Like - Regulatory fit was the product market. In some ways, but you still have to find product market fit, right? Yeah, it was still like, you need to get it legal and then find the markets that people want to bet on, right?

1:16:29So now we have the shot at going and finding product market fit, right? Like, you know, and like people don't like, like usually companies already have enough, like, you know, they take five years to find product market fit and that's already like an excruciating problem. We had to first get the legal ability to find product market fit, then get the shot. And then we finally thought we got the shot, but not really because now you're finding product market fit But like, you have a massive carriage on your back. Monster carriage. Every time you want to try something, you have to ask. The regulator don't want you to succeed.

1:17:04They don't want us to find product market fit. That's the whole point. Like the last admin did not want us to find product market fit. They want us to die. They want to try and shutting us down at every step of the way. So it was like the situation where like, you know, you're trying to find product market fit, but like every single tiny little thing that you're trying to do, they're blocking you and they're hampering you and death by a thousand paper cuts. And no, not this market, not this market. Well, but this is the market that people want. No. And every market that people want, they wouldn't let us do it.

1:17:27And so it was this constant, like slowly expanding. So we started growing, but it was tough and like very harsh environment. The regular wouldn't let us do anything. And then here's the last sort of really difficult piece to this is it's a network effect business. There's supply and demand problem. So imagine you're trying to like break the chicken and the egg. So enough liquidity and enough demand problem while trying to do all of that. there's not enough like momentum behind it there's not enough sort of like you know like you know uh what do you call it like uh acceleration and like you know there's not enough velocity behind the thing because the regular is making it so that you cannot have enough velocity so you know 70 of my time is making sure that they're not killing us and 30 is like talking to users and trying to find product market fit but then that talking to user is not you cannot just talk to the man you have to talk to market makers you're trying to figure out the the guests and the hosts at the same time or like the writers and the dash was already like a really hard like yeah even without any regulation it'll be really hard it'll be really hard because marketplace businesses are already fucking weird like there's product market fit there's product market fit in a marketplace business and then now you have product market fit in a marketplace business where the regulator trying to kill you like i think we we took on the most sort of like i believe there's like hard mode and like you know we took the hardest mode basically and my our gut feeling is the election market would be the thing that basically like gives enough lift off energy for the whole thing to come.

1:18:47And obviously, I didn't mention also the education. There are other proof points in the world, right? Of like places you can bet on elections. Yeah, that. But I also thought like a legal election market in the US will just rip. You know, and I think that like and rip from a variety perspective, it would bring enough lift off energy so demand comes in. I would be able to acquire customers for enough customers cheaply. It would enable me to educate en masse about what this is because there's an education thing like financial services. People don't like to put their money on new things. It's very hard to onboard people.

1:19:17That's why it's very hard to build a brokerage business. And it's harder to do it when it's something that people don't understand. They don't know what this is. What am I putting money on? And then enough to get enough supply, like get enough market maker traction, get enough traction so that people coalesce around Calci. And so we started engaging about the election market in early 22, even before we really launched. And the regular was like, yeah, maybe, yeah, maybe, maybe. And then at the end of 22, after spending a year, actually late 2021 when we started, And then end of 2022, I was spending a year and a half to do it.

1:19:48The CFC blocked it. They shut it down. Officially, like formally. Or like basically we had to withdraw. They forced us to withdraw. That was brutal. That was, I think, one of the hardest. I mean, all the other parts of the company were really hard, but that was really uniquely hard. Do you think you were going to win that one? I don't know, man. I thought that like we were underdogs, but I thought it was close to 50-50. Yeah. And 3-2 we lost on the vote. Even though one of the commissioners had said that they were going to vote with us, but she voted against. And this is the expected outcome outcome thing.

1:20:24Right? Like the expected outcome was pretty good. That was the right strategy. I still believe it. And I, you know, the proof is still that now is now there finally. But the variance, we got the bad side of the coin. You know, we got tails. We didn't get heads. And what happens in these moments is like everyone around you. Like there are some investors by the way to their credit, like Alfred, Michael, Ali Parto, be like, you know, they were always believers in the company. they never like wavered they were always like you know all in with us but you know everyone around you the investors your people or different friends like the the the employees dudes like they just start pointing at you you know not like exactly but it's like well this strategy we should not focus on that the strategy was wrong and you know some people leave and they're like like to start leaving you like employees leave and you get like a bunch of like attrition and um or like turnover and i think like like belief in the company at that point was like basically like in the shitter like close to zero you know people and so that was really hard like i remember that stand-up where we like had to tell the company like we we didn't get it that's what we bet the farm on and like you know been a year and a half process we didn't get it and you know there are some people I mean a lot of people left we had to also do a layoff it was a brutal time like early 23 like it was just dark dark dark like full on darkness and like we just didn't know what to do with the business you know and we had raised a decent amount of money to basically do the regulatory thing we had raised like you know I think at that point like 100 million dollars right like you can't sell like you know you think you had nothing so like so it was hard and then you know then like a week later like luana was like you know we we try again it's amazing but that's luana dude like he's like insane and like i mean a lot of that part she's the most stubborn human on earth like it's un-fucking-believable and like it's like truly unfa-like like wake up you know like wakes up and like like we try again it's like what are you talking about you know it's crazy dude it's fucking insane like like it's like you know imagine like and like i'm like i'm not telling the board dude like dude like i kid you not like goes up the board and like yeah you know the 2023 plan we're gonna go over the election market again oh my god because the 2022 was the midterms right so we missed the midterms window so that's stand up which was the day before the winter was like it's not gonna happen we're gonna get the presidential one yeah just like we're gonna get the presidential one dude like imagine like you got i hit so hard right now and we're like whatever we're gonna work for the next for the one in two years from now like oh my god the level of like like actual grit this requires i don't think i have it like luana i think a lot of luana pushed for coming like luana pushed this was the main thing with luana like i think she will push till the end no matter what Like literally no matter what, it's like no matter how on the ground, how ridiculous, like dude, I mean how ridiculous does that sound?

1:23:40It's insane. It's fucking insane. Like I'm putting myself here, I would have given up years ago. It doesn't make any sense. Yeah. Like it's like completely insane. And like, you know, where did that come from for her? I think very similar. Like she was ballerina, you know, she was at the Bolshoi school. Like they were like, you know, whipping them in the school, like, you know, like completely like destroy the kind of like person. like ballet for years and like she pivoted out of ballet. She was like, she had long, lots of times where she was alone without her parents like growing up. So like, she has a monster ship on her shoulder.

1:24:12Like Luana, like, like monster. Like, it's like, you know, like she wants to win at all costs. Like just, you know, and so, and Luana has a little bit more. So I'm more calculated sort of like, you know, risk measured. Luana has a little bit more of the irrational, like, just faith faith yeah like delusional faith like i i don't like we're gonna get the election market you know like why do you know what like we're gonna get regulated first it's like also why you know why look what it was like we just talked to the regulator it's been three months and everything they say is like it's not happening like they made it very clear and now the election market same thing you know it's like ridiculous so 2023 the board was like okay we'll start trying to find broad market faith in other places which we really couldn't but like we focus on the election market or like sorry we tried we tried the election market again end of 2023 gets rejected again then again the same thing when i was like well okay we're gonna sue our own regulator like um it's so insane yeah yeah yeah now we're getting in the territory of like you know this is like you went from like grit to insanity yeah yeah it turned inside like that was insane and like I remember having a conversation about this.

1:25:26I think it was with Louise that works for you guys. Yeah, yeah. When you guys put that, I was like, Ashley, like, what do they have in their heads, dude? Like, what is it that they have in their heads that they think they're going to, like, sue the government and win? Like, are they fucking crazy? Like, are they delusional? Like, just help explain, you know? They seem like smart people. Like, how are they doing this? I mean, it was, I don't know. I don't know. I'm telling you, I didn't sleep for weeks before that decision, like, we were making it. And like, you know, I talked to the board and like, you know, Alfa and Michael were like, like, we've never, like, that doesn't work.

1:26:01You know, it's like, well, not even that. It's like suing your own regulator. You know, there's like bad ideas, terrible ideas, like, you know, like, and then there's like suing your own regulator, right? Like, you know what I mean? It's like suing your own regulator is like, because regulators have a lot of latitude. They can pull your license. They can like kill you in many ways. Like they can like make your life absolutely miserable. They can sue you back, you know? I mean, they can make your life absolutely miserable. They can like kill the company. Like, you know? And so, man, I remember like I was like, you know, I was like, yeah, we're suing it.

1:26:36Like she's like, we're suing. I'm like, it doesn't make sense. There's all these reasons. Like they're going to block all, like we're trying to launch the brokers. I mean, the license, like the approval to launch brokers, they're going to block it. They're going to block the clearinghouse, which we need because our old clearinghouse was bought by FTX and FTX is trying to kill us. And now it's bought by Max, who's also trying to kill us. So we have a third party that's trying to kill us. And now they're not going to give us our clearinghouse. Like we will die if we make this decision. And she's like, we're suing.

1:27:02And then Michael, I remember Michael and Alfred in that board meeting were like, look, honestly, like we don't know what to tell you. We're like completely way out of our depth here. Like we don't, we can, like, this is the type of thing that we don't, you know, every single part of our intuition and data and pattern matching is saying, you know, absolutely not you know and then i remember like no then they said like look every time you pitched us on something like this magic ended up happening you know and it's not the first time so like yeah we we made the decision so we sued the regulator and then all the things that we worried about that we talked about in that board meeting happened dude no clearing house no brokers like we didn't get the broker approval till january took us three years to finally be able to launch like, you know, a bunch of the broker partners.

1:27:49And then death by a thousand paper cuts. Every piece of, I mean, I discovered recently after the transition that there were like 11 enforcement actions personally against me, like me. They were going to actually drag me. And like, I'm not doing anything wrong. Like everything we did was actually played by the book. We're trying to do the right thing. We, again, this is the set of legal. We're trying to expand it, not actually go around it. We never wanted to do anything illegal ever. That's a core ethos of the company because in financial services and healthcare, care you do that you're fucked you're fucked yeah at some point you're gonna get fucked things are gonna go very wrong we started with ftx and you may go to jail man yeah i mean it's not just about jail it's like it's wrong for the customers you started ftx and it's like also it's just not gonna not gonna trust you they're not gonna work with you and so um and then like um yeah i mean obviously after that the rest of the history like we we won the election lawsuit uh how dude how did you want him like we just we thought we were right on the law like the whole time you know we we really We felt confident.

1:28:44We were right on the law. And the judge, who was the judge? It's like Judge Cobb, who was actually a Biden appointee. So when we got the judge, we were like, there's a Biden appointee that needs to rule against the Biden administration. And what did the judge say that the CFTC was wrong? What was the summary judgment? I don't see how this is gambling. There's real economic purpose for elections, which we made a very strong case for. It's important. It's not the same as rolling a dice in a casino. It's just not. and then it was actually more complicated than that because we won on September 7th.

1:29:16Dude, I remember we got the oral hearing on May and then the lawyer that was doing it is this guy, Yakov Roth. Just an absolute killer. We interviewed everybody. Scalia was amazing. This man, the reason I took this man is because I don't think there's anyone on this planet that wants to put the federal government in check more than this man you know that type of lawyer like like like no money not his purpose in life it's purpose in life i want like it's like the technical like i want you know the government to abide by the administrative procedural act you know like which is basically like how much leeway the federal government did they overstep on something and i want to make sure they don't overstep and so i was like this man cannot not lose this you know he cannot lose this lawsuit like he he will personally not sleep over this lawsuit and it was true he felt it as much as us which was so important.

1:30:07But he had the whole hearing in May, which went well. And then we didn't know, you don't know when the decision was going to come. And we didn't even know if it was going to come by the election day, right? So it was the whole thing. And then I remember like, every time he called me once and like I freaked out, I was like, wait, did we get a decision? He's like, no, I was just calling about something I wanted to do. And I told him like, don't call me. Don't ever call me, basically, until you have a decision. And then, did I remember like, I was sitting in the office and I see Yakov Roth on my phone.

1:30:34Dude, I literally felt like a you know like a physical reaction like my entire body got numb you know and like I literally couldn't pick up the phone like the guy next to me like Rayner was like dude someone is calling you and then like I pick up the phone and like he said we won how did I feel man? I don't know I was like crazy I screamed like I screamed crazy where were you? in the middle of the episode I screamed like crazy Like, literally, like, create, like, a manic. Like, you know. And then people were like, wait, what happened? And then I was like, we won. Dude, the, like, chairs were flying, you know.

1:31:14And then, you know, so that was, like, we won. And then, dude, the CFTC, what they do is they move to appeal the decision. And, again, they're hell-bent on not letting us do this. Like, even though they lost. Like, we're right on the law. So, they basically file an appeal. emergency it's like it's like i don't know man it's like the whole law fair situation last few years was real i think um i just think there's a camp of the you know like elizabeth warren others that just really hated these markets and like i think they were trying to please them and so they moved to do an emergency appeal and it was naughty because what they asked for the appeal is like let's appeal the decision but like like so we'll go through the appeal which takes like nine months but let's stay the decision from the district court in the meantime so can we pause on the decision in this record because they they're like if we allow this there's gonna be disastrous consequences on democracy so pause till the appeal makes its decision which would mean we would miss on the election which defeat the whole purpose now we have to wait another four years what have you waited in the first dude i i i look i don't know that that was really that three week was so hard dude like i i like it was so gut-wrenching like i it was the worst i mean it was so difficult because then we're like okay fine let's just do and then you have to do an oral hearing for the state uh to decide like you you go and like debate with the judge like you have to do an oral hearing with the judges on whether the the state was going to get upheld so we got the we were in the dc circuit of appeal which is the most i would say like like progressive court so it's not very good for our type of case uh obviously the conservative would be like more easy with this sort of case free money free markets and you know progressive would prefer like you know And you have 11 judges and you have three picks out of the 11.

1:33:01So there was like 84 combinations pretty much that we could get. We ranked all the combination of the judges we could get. And just like probably, most probably to be admirable to this case, to most probably to be against us. Or not against us, but like the ones that would least philosophically align with our case. Dude, we got the 84th. Wow. Dude, we were like, I mean, we were like, okay. And then we go into the oral hearing and they batter us. Like they just, you know, what do you, how is this like? So dude, there was like a three week period after that. So that happened September 14th. That was, and then this one came October 7th.

1:33:39There was three period after that. Dude, I thought it's done. They're, you know, they took too long. Obviously they know that this, this matters for us in terms of timing. So like we need this to happen ASAP. And if they're taking a long time, that means that, you know, they're just gonna stay they're gonna let it be that was maybe one of the hardest three weeks like it was just like after the win like getting that it's like now you just had the high and you're like let's lose it all again and like now I mean you know it was like dude like I think this I think this would I think this would kill the company like I you know how are you gonna stand up from that and then we won on October 7th I was in London like I had given up I was like London to see my brother and like um i got the call and like we won like what and i had given up literally i was like dude i'm so done like you know we did everything we could and then did like the the like next few weeks after that it was we're insane he's like the most parabolic like what was it like what was it like well like uh what was the high of it was like i'm okay i i got like we and we won three zero by the way which was like crazy but like i was like we were given this opportunity i will just literally give it my all like i will literally i mean dude i was showering once every three days like you know i'm admitting that in public you know like screw it i mean it was just like i am going to give every single inch of me for for this thing like i and not just for the scale of calci i just wanted the world to see that these things can be done in a safe way and like are actually a force for good and you know we were committed to like we're only going to do it legally because that's the only way that we could sustainably build this business.

1:35:16Like that's the only way that this sticks, right? If you do it from the outside, it's not gonna be what we're seeing this year, right? And so we needed to deliver that to our industry. We really felt like we needed to deliver that to these markets. And like, yeah, I mean, obviously we got to the top of the app store within like a few weeks. I mean, the day of the election, we had 500 million unique site visits. It was just like insane. Was the infrastructure even ready for that? Yeah, the team just locked in. Yeah. locked in like crazy. We had other issues actually because one of the issues is our third party clearinghouse, which we talked about, the night before listing, and they knew obviously they've been with us with this whole thing, 9 p.m.

1:35:56They asked me for a call at 9 p.m. And they're like, we want$30 million or something like that. I forgot the exact number. And like some like lifetime revenue on certain markets and a cap of 5 ,000 traders per day to list the election market. Oh my God. Yeah. I mean, these things are just like, you know. Just keeps coming, dude. It just fucking keeps coming. You don't get a break, man. Finally. And then, but we were lucky enough that two weeks before, we actually got the approval for the clearinghouse because we had threatened to sue about the clearinghouse as well. And they were like, because they missed their window.

1:36:35So they were like, they gave it to us. And so we transitioned in flight. Over like 48 hours. We literally launched the market while transitioning. So we had to build a new ecosystem from scratch to launch the election. And then we like market and scale the user base like crazy, like, you know, like absolutely crazy. And I mean, it went really well. I mean, like obviously the company is at a completely different scale. I mean, the brand got mainstream. This year we kind of entered sports also legally at the federal level in all 50 states. And the business has obviously been like, you know, doing incredibly, incredibly well.

1:37:07It's amazing because like we're now the largest in prediction markets by like quite a margin. uh and um but the other amazing thing is like it's mainstream people are talking about prediction markets surreal like we've actually created an industry right like and and like actually like legal like legalized an industry then took it mainstream and now it's like a real thing and um and it's awesome like there's a lot of big companies and big players that want to get into the space now it's amazing it's just like kind of early days crypto uh and i i think you know 10 years from now prediction marks are larger than the stock market i really believe it I really, really believe it.

1:37:39What do you think needs to happen for that to be true? More adoption. Like now the flywheel is kicking. Like we have a very strong liquidity flywheel and like liquidity brings liquidity. And so just need to keep driving that flywheel. But is that what was missing right from the early days before you have elections? Was it liquidity? Flywheel, you need enough, like, you know, it's like you need liftoff, right? Like there's path dependence to these things, right? It's not like a, like, you know how two companies with the same idea, one of it gets liftoff and the other doesn't. It's not just about the idea, right?

1:38:06you have to compound enough yeah the momentum yeah especially with network effect type businesses yeah and and it's amazing because it's like you know we were very like very stubborn and like focus on our pro like on like on the vision from the start day one no pivot like we're gonna do the same thing and number two is like we were very very kind of like uh true to our principles which is we are gonna do it like it's it's nice to see that our principles worked which is like we're going to do it like regulated and legal first. And instead of like going around, we will change the system. And we managed to change it.

1:38:43Like, and I think that was very important for us because if we didn't change the system, then we didn't think that this could get to the scale that it would get. Man, I swear to God, I'm like listening to you tell the story. The last time I felt what I'm feeling right now was like literally like hearing the Elon book, you know, and like him going through Tesla and SpaceX and all the challenges. That's literally the last time I felt like what I felt. We went through a lot. I mean, really like it's like, and this is why like, it's like, I don't know. I think at this point, if people from the outside understand why it's easy to bet on CalShea, and it's not like, it's, I think it's, we're so committed to this.

1:39:22We're so committed to this. Like we will, I mean, after going through all of that, it's like, I will go through anything for this company. Like, after all that, now you're going to the moon, man. Yeah, like I'm going to do anything for this company, right? And so it's like, we have suffered a lot, like true suffering. And it's a different type of suffering. It's not like, hey, users are not adopting the product. It's like you can't do anything about it. You're shackled by the government. And that's a different type of suffering. But we have a lot to do now. But I mean, this year has been insane.

1:39:53The numbers are like, I keep forecasting and I keep drastically overperforming the forecast. I mean, the company, I mean, I think the company is going to do like 100x this year. Wow. Yeah. That's insane. That's absolutely fucking insane. Yeah. It's like, and like, it's not stopping next. It's not like, oh, 100x. I feel like there's a 3x next year, 3 to 4x. So it's like, you know. And what are the markets now that people are like most excited about? I mean, politics is big. Sports is huge. Culture is growing really fast. I mean, the amazing thing about CalShare is like we're accessing, you know, we expanded the universal financial market, which expands the time of financial markets.

1:40:35I don't have an edge there. I don't gamble. And it's like, I do Calci. And it's because it's a financial market for what I know. It's like something for me. It could be culture and entertainment because I care about these different... I care about what Taylor Swift is going to do and what album she's releasing and how successful it's going to be. I care about the weather. We see so many people that like... I love seeing people in the world. seeing it so much. It's like, you know, people, someone discovers calcium is like the first thing I need, I got to tell my dad about this. And, you know, they bring their dad and now they're like, you know, like trying to predict the weather on calcium.

1:41:10Like that's sort of an activity they do together. Like there's a people that would never touch any of these things that now can be brought into this and see, I mean, understand the power of markets and like engage with it in a more meaningful way. Right. Like the person at trivia that things that write about everything, like, Hey, you can put money where your mouth is if you know so much, you know, why would you have, do you have a position on this? And if you don't, then why are you speaking? Why are you talking? It is also replacing polling, right? Yeah, I think it wouldn't necessarily replace it, but it would make polling better and polling also makes the market better.

1:41:40The market incorporates all the data sources, including polling, right? But polls obviously have issues, right? And the way I think about this, the reason why this is, I think, such a fundamental idea is like it helps humans like markets help human calibrate better right so you you take you know you take the debate that we have about the world from the plane of emotional subjective debates which is like i think you're dumb climate change is 100 real to you telling me no you're the who's dumb because climate change is zero percent like which is the current rhetoric it's super polarized like very emotionally charged and it takes the the debate from that to the plane of like objective market-based mathematical truth right like the minute you tell those two people okay like how about you put some money on it you think it's 40 50 odds now we're talking like and like and so you're pricing these different things it's like you know brax is no way back is happening for sure Trump is winning, for sure Trump.

1:42:50No, like there's 65 % chance, 62 % chance of Trump winning the election. And that was the truth. You know, and markets do a very good job at doing that. And I think over time, as you kind of educate people to basically start engaging with this, like we can become smarter. Like humanity will get smarter because like instead of just debating about all these different random things, like we have some skin in the game and we trust people that have some skin in the game more than people that don't. And, you know, this is the way kind of, I think it's like, okay, we're expecting the universal financial markets, but the big way, like the mission, the way that this kind of really delivers the full kind of blown thing is like, we are now thinking more critically about our future and making better decisions about our future, you know, because of prediction markets.

1:43:34And I think we're getting closer and closer to that world. I really, really think so. Like people are already looking at prediction markets for a lot of different things. You know, we have candidates in the cabinet during their confirmation hearings, they were looking at the odds based on what they were saying. If that was like improving their odds or like lowering their odds. So there was like, they were improving their sort of like, does that make sense? Like if you're a political candidate, you can see, oh, that worked, that didn't work. Yeah, exactly. And it's better than polling. It's like real-time feedback.

1:43:56It's real-time feedback, exactly. And it's amazing because now you have a place, way to price everything in real time. And, you know, and I think we're very well underway now. I think we're getting closer. Yeah. And, you know, there's, there's gonna be so many second order effects to this, right? And like, like, like you're describing the political one is going to be like, wow, like, how does that gonna change the way they campaign, right? Like, how is that gonna, you know, just change the way people operate if you can get this kind of like real time feedback? I think it's, it's that I mean, I think, look, you know, I'm gonna make a statement, it's gonna sound a little bit crazy, but Caltech is more accurate at predicting earthquakes than any other alternative.

1:44:34it. Wow. It's not very accurate. There's more than the rest. Right. And there's a little bit of this sort of like, you know, you want to promote your industry type thing, right? Like, you know, if there's no earthquakes, then, you know, the earthquake industry is not very relevant. But my point is like, pundits have self-interests, right? And so, you know, they're not always kind of as accurate, whereas markets just don't lie. They don't have any self-interest. You know, all you have to believe is that people want to make money and not lose money, which is a very easy thing to believe right like and and so i think this is going to be a much better way to engage with the news over time to basically like uh think about think critically about the world like understand the world better than the news itself than pundits and polls and any other mechanism it's amazing man and so now too well how is your mom doing this whole thing it's interesting because like you know she's as stressed as before i mean you know it it's I mean, my mom now tells me like you should slow down and there's a lot on your plate.

1:45:37But moms don't care about this stuff. It's interesting. Mom cares. Moms care about like, hey, what did you eat for breakfast? Did you eat enough for breakfast? And did you go to a dentist this month? It's still not the same. But imagine the level of stress you were undergoing those last few years. That must have been, she must have noticed that. Yeah, she had gone through a lot. I mean, my mom had gone through a lot. I mean, my girlfriend Juliette has gone through a lot. I mean, they were both, I mean, honestly, especially in those hard times, like the surroundings are so important. Like, you know, and this is a part of like, I mean, my mom, my brother, my girlfriend, like they, I mean, they keep me grounded.

1:46:16Like, you know, they sort of like, I think one thing about us, like Luan and I, we still have sort of the underdog chip on our shoulder mentality. Like, you know, we, like we don't take ourselves too seriously. Like, you know, I think we, and I think part of it is people like around us. I think they just keep us grounded. I know today is your anniversary. Yeah. Maybe so. Tell us a little bit how she has influenced you and impacted you during this journey. I think she has a massive, she's a fundamentally, genuinely, like one of those rare people that are in this world. that are like, you spend time with them and you're like, this is a truly great person, like very strong value system, fundamentally kind and caring and a bunch of other things, like fun and all these other things.

1:47:07But like the, A-Net's very rare, like very, very rare. And like everybody says that about everybody, but like I read it and very, and, you know, I think there were a lot of times where like, you know, the, I mean, the two impacts are like, there are a lot of times where things were so hard that like she carried a lot of the burden with me. And like, I think people don't talk about that enough. Like, I think that partners oftentimes, like they carry a lot with whoever is sort of like, you know, doing the thing, whether it's the president or like the entrepreneur or like, you know, whatever. They carry a lot.

1:47:39And you know, that's right. I mean, a lot of rappers probably is very similar, right? 100%. Like, you know, and in some ways it's a bit disproportionate, honestly. Like they deal more with the downsides than the upsides in some ways, right? Honestly, mostly because they don't care that much about the upsides. It's interesting, like, you know, especially those types of people. I mean, there's certain type of people that would care a lot more about the upside, but those probably wouldn't be there for the downside. So, you know, but like, the people that would be there for the downside, they usually don't care that much about the upside.

1:48:06So they get more negatives out of the downsides than they get positives out of the upsides. And so it's tough for them, I think. And so she's been instrumental in basically like keeping me sane through the very, very hard times. There were times where things were really, really rough. And she pulled me out of those times to make sure that I'm staying reasonably sane. I think the second thing is like, he keeps me very grounded. Do you think it's better for founders to be in a relationship? I think it depends on the founder. I mean, you know. For you, it was? Yeah, definitely. I mean, it just depends on the founder, but for me, definitely.

1:48:34I mean, like, same question like kids. I don't know. People think about that a lot. Like, I think it depends, right? Like, I think it depends. I think there are some people where kids just get them to be more disciplined, which ends up being net positive. Yeah. Right? If you aggregate all the kind of time waste that you have in the day, you know, and you basically actually optimize that, it gets better. And then people that just slow down. I think it just depends. Yeah. So now, like, you know, let's go back through the story, right? And try to get the kind of, what do you think were some of the key learnings for you and that would be applicable for people watching the story and listening to the story?

1:49:14It's hard because, you know, one of the advice is like, oh, you know, like the easy advice, I mean, look, the two things is like, you know, being naive is actually like a pretty powerful force because it allows you to bend the curve. And that's why I've done like younger people are the people that can change the system more than older people. Number two is I think that I really believe this. Like I think that like the sheer force of wealth. Like I think that like the number one risk for any company is the founder is giving up. It just is. Like that's the actual company killer, you know? It's not like competition.

1:49:49It's not like, I mean, running out of money is sometimes, but you could always figure that out. And you can always like, but the number one killer of a company is the founders giving up. And so, you know, does that mean I, you know, I would advise people to go through the journey we went? I don't think so. This is the interesting thing. Like I like, I think it's for a specific set of people, not everybody. You know how like there's this sort of idea that like being an entrepreneur is like better than anything else. Like it's, that's the all, Like that's the, that's the holy grail of what one can do.

1:50:17And it's like, it's a, it's a, it's not quite right. Right. Like it's a bunch of the trade-offs, right? Like, you know, it has a lot of upsides, but it has a lot of downsides with it. And it's not for everybody. Like, you know, there are people that can have a very successful, like balanced, happy life without, without that, you know, and like, and that's fine, you know, and there are people that can't. And, you know, that's, that's also fine. So, so my, my general sense is like, okay, well, if you figure out what to do in life, have to figure those questions out first but like the the if you want to be an entrepreneur i mean i think i really believe now it's like you're picking a career and you're like you know you you the single biggest thing that you have like the single biggest asset you have is you're just not giving up you know uh because everything else you can learn you can become like a really good leader you can become a really good fundraiser you can become a really good recruiter you can become really good at product and all these different things you could do um um But like, I think the giving up part, it might actually be the hardest part about building a company.

1:51:19I don't know. What do you think? Yeah, I agree, man. And look, I think that I say this all the time to my younger friends is like, look, everyone in their life will have opportunity. That opportunity does not be the same for everyone, right? Like this opportunity, you know, is just like so fit for you. You know, it's like you said, you didn't want to be an entrepreneur. You wanted to be an entrepreneur for this. Yeah. Right. Yeah. And I think it's very powerful that you found that so early in life, you know? And I think that if someone, I don't know, my advice for people would be that if you feel that you found that thing that just pulls you the same way this pulled you, you know, go for it.

1:52:02Yeah. You're not, it's hard. I mean, it's hard to find another one, right? Like it's unlikely. And I agree with that. I do think so that like, if you find the thing. So special. Yeah. I think I do think that like, yeah, the pain of regret is like, is higher than the pain of, uh, of doing the thing. Exactly. Um, exactly. The pain of regret kind of sucks, you know? And dude, like, what would you, do you think that the grit that you have, it was just, that was just inherent or is there something that was going on there that you think like made you have more grit? Was there anything you were doing or anything that was going through your mind?

1:52:38Like any specific chip that like kind of had you, was it sunk costs like what what what where do you think that grid come from that part i think is like just you yeah i don't think you can like rub like i i i i think this is like i mean innate plus how you grew up like i think it's a mix of like you know how uh yeah i think jeans plus you know those formative years when you grow up maybe the combination of luana too right i mean has also independently also had that so the two of us together like just ends up being like and it's like we we rank extremely high on the spectrum of grit like um i don't think this can be instilled in somebody do you think either of you could have done by yourself or no maybe i don't know i'm not sure i don't maybe i don't think so i i this i don't know like there's too many ways that this would have fallen and felt you know if it wasn't the two of us so i it's hard it's hard it's hard to as a guy but i don't think so like i i don't think so there's like too many ways where you know, her loan, it would have failed and me alone, it would have failed.

1:53:38So having like a co-founder with similar level of grit, that was like a huge thing too. Yeah. And I think it depends like, right, like you just have to have a combo that works. There's so many ways to kind of think about what works and, you know, because we have very similar background. Usually the pattern is like, oh, you should have someone like that's a bit more tech and engineering and someone that's a bit more like, you know, the commercial business person And like, and there's a lot of like, you know, I, it's hard. It's, I really think that over time is like, you have to figure out a company that works for you and the way that you want to build a company.

1:54:11And there really is not, it's just really one of those things that there is not like a, there isn't a playbook. There really isn't. I mean, that you cannot replicate, like could Tony Hsu build the company, his companies like Elon is building? Like no chance. you know, and vice versa. Yeah, I understand. It's completely, you know, and like, and the image of the company becomes the founder. And like, to the point here, I don't know if it's like necessary that maybe one could have, look, I think both founders need to have a reasonable degree of quit. I think so. Otherwise, you're going to have problems at some point.

1:54:49Founders are not very committed. But I place like, like I trade on, like I can't trade on cash here, obviously, because I don't, it's illegal for me to trade. But like, I mean, I buy crypto and stocks every once in a while. as we're getting close to the end here if you think five years from now what do you think is going to be the largest market in a call sheet? well it's interesting it depends on the year right because like three years from now it's the election right but you know five years I mean

1:55:18five years from now we have sort of commoditized and created tradable indices out of a variety of different things like the same way you trade like snp and the same way you trade like interest rates you're trading like the republican index and you're trading the um climate change like you're trading like all these big sort of like questions about the world actively like all these different things so which one of these are i don't know honestly uh i think politics will be very large uh generally i I think the political process will be very traded and very large across the board. But I don't know.

1:56:00I don't know. The one single market, I don't know. It's going to be something surprising. Some crazy things that happened in the world that none of us expected. And people will be trading it in bulk. Who's the entrepreneur that you most relate to? And I didn't say admire on purpose. Relate to, it's interesting. I mean, admire is there's a lot, right? like Elon, Tony Hsu, a lot of others. Me personally, like when I kind of think about it, like it's interesting. Like I'll tell you maybe like, let me answer it a little bit differently. Everybody wants to be like Elon. That's like the kind of, you know, and I think a lot of our history has some similarities, like has this sort of crazy.

1:56:42I actually think everyone says that, but if you actually said it, I would think it has some truth to it. Yeah. And I believe like, I do generally think that like I have this sort of, I don't, by the way, I don't mean this to be like, some of these questions like sometimes can make me like, maybe one thing is like, it doesn't mean like I'm this sort of mythical special figure, right? and I like. It's just like brain chemistry. It's brain chemistry. Yeah. Right. Like it's, it's the way that your brain is wired and it comes with a lot of downsides, right? Like your internal dialogue is like, is, is pretty tough.

1:57:11So, and I always try to say, tell this to people, like, don't sort of like, Oh my God, there's, you know how there's these mythical figures in Silicon Valley. Idolize it. Yeah. Idolize. Don't idolize it. Like, Like that's not what you think it is, right? But I think I have, I often sometimes think like, you know, some of my, the way I grew up, like the rejection that I've received, you know, like, you know, I got bullied at certain times when I was a child. The way my brain chemistry works, I have a little bit of this sort of like, you know, I want to call it a crazy tilt that I think he has. And everybody wants to be like that.

1:57:44Part of me is honestly, sometimes I'm like, when I look at some of the founders that are around, like I think Tony Hsu is like, Amazing. Like, I would love to be more like Tony. Yeah. You know? Yeah, yeah, yeah. Like, this insane discipline in the company, the insane discipline personally, et cetera. But I have a long way to go, you know? It's like, I just think he's figured it all out. And also, it's like, Dodosh being a$100 billion company is insane. Like, from where, you know, that's like a hard market to basically turn into a$100 billion company from where he started. Yeah. And dude, I think that, you know, look, in the trade-off section, I think you have an extremely high pain tolerance.

1:58:24Yeah, yeah, yeah, yeah. But, you know, but the thing of that is you actually seek more pain, right? Because you know you can take it. Correct, correct. It's like a double, it's like what we discussed at the beginning, right? Like you have a high pain tolerance, so it means like you can do these types, like you can go all the way to be an entrepreneur and do crazy things. But like, if you stop doing it, in some ways you kind of like need it to basically be alive, you know? Otherwise you get sluggish. What is something that, you know, now, when you have kids, what is something that you, based on how you brought up in your history, like, what would be some of the values that you're going to want to pass to them?

1:59:06I mean, think about it this bunch. I mean, it's interesting. I don't know if I want my kids to be this sort of hyper, like, you know, I don't know if they need to have this pain tolerance. Like, maybe they can just, like, be successful and live a healthy, balanced life without having to be like pushed to the ultimate extreme you know so yeah i think that like you know there's a few things but like i think this general idea of like you know like the important things in life are generally hard you just don't get them like you you will have to figure out what type of pain you want to take and you have to basically like deal with it you know like you could be rich could be not like no matter what it is you're gonna have to deal with some level of pain like you're gonna or and like you have to figure out how to position your like you need to figure out which type of pain you want to do and make sure it's like a purpose like a purpose-driven pain not like just pain you know um and um and maybe just make sure to concretize that it's like you know the the guy in the arena is like having is in pain obviously but like the guy in the stand is also in pain he's kind of jealous and like feels like his life is meaningless you know 100 so which pain do you want right your pain yeah yeah and so i think that's important i think too i i do think that like don't take yourself too seriously i think that's like it's going to be very important like i i think that like you know i i i think just being like a normal person is pretty important and like i i've seen you know like it's kind of coming scale is like you know people change the way that they act with you and like all of that but like you know the the the if you start taking yourself seriously, the problem is like you, you will lose the core.

2:00:42And the core is the only thing that is, is left in all your darkest moments. And you will have dark moments. Like people will have that, like dark moments will happen. You know, it doesn't matter. Like, you know, there'll be death, there'll be, you know, it's like when you're 90 years old, like who's around you, like, you know, all these different questions. And I think that like, uh, they require a certain level of discipline around sort of staying humble and saying like, I mean, humble is a bit too strong of a word, but not taking yourself too seriously. Right. but yeah, maybe those are two.

2:01:09Amazing, dude. Well, I know we're at time, so very, very grateful to do this. Very inspiring story. Thanks for having me. Honestly, one of the favorite interviews I've done so far. Oh, really? Yeah. That's awesome. Thanks for having me. Of course, dude. That was fun. Thanks to our friends at Atomic Growth for helping with production and distribution.

2:01:30Thank you.