Sam Hinkie, Boyd Varty, Charlie Songhurst - Trail Magic - [Invest Like the Best, EP.323]

22:49I'm hard to fire up. I don't mind being alone in my opinion for a very long time. Can you get to a place where that kind of steady temperament is rewarded and build an ecosystem with that kind of trust where people say, yes, we too believe in this kind of approach and that we can first slowly and over time with more and more leverage turn this wheel that generates the things that you're interested in. And then for me personally, it's quite easy to sort of design a vehicle like this because the things I'm actually after, I'm trying to compound wisdom and trust and try to figure out life better and try to figure out business because I'm deeply curious about it.

23:30And to try to understand how to compound trust with a very small set of people, very small meaning hundreds, not thousands, and how to sort of compound trust with them over a very long period of time because I think that builds a snowball that is amazing. and one that's, to be clear, deeply fun for me. One quick story I'll tell you on that. Mark Andreessen has this line that I love that sometimes he says he's like looking at his phone and people are annoyed. And he's like, of course I'm looking at my phone. The best of 7 billion people on the planet. This is the best they can muster. So yeah, it's interesting.

24:00I'm looking at it. I would say I'm kind of like that, but different. I told you, we sit in a meeting, I'm into you, fully into you. I'm not looking at my phone at all, for sure. My phone is filled with people in my life that I've invested in over a long period of time. and invested in with a lowercase i. These are my friends and people that I care about. Some of these people I've spent 15 years with, some of them 15 months with, and they're sending me awesome stuff. They found to read. They're telling me incredible insights they've come across. It's a freaking treasure trove. When I wake up in the morning, I'm so excited to look at my texts, which is maybe not super healthy, but I am because for someone like me that likes being dependable for those folks in your tribe, it's intoxicating.

24:41here is said person that I love, that I chose, that I very much led into my life eight years ago or eight weeks ago. And here they are with a real question. They're not asking me piddly stuff. They call me with big stuff and say, I'm thinking about this. What do you think? This just happened. What should I do? Here's my approach. Please beat it up. I'd love that. That only came from the way I've tried to live my life for several decades now, which is to really pour into a, again, a relatively small set of people, I often sort of think about it as like fewer, deeper relationships. I very much want that.

25:17I don't have any need to run an organization with tens of thousands of employees because I very much think about it in my mind's eye, the 10 or 20 or 50 that I spend the most time with and that I sort of get the most energy from and that honestly are the most rewarding personally for me. What are the strangest things that you've seen thus far in your time really focused on early stage investing, extra points for things which just persist, but seem crazy to you on the investor or founder side? Of course, I believe the way I'm going about this has some inherent edge, even if small, that has some inherent edge in it, which is why I'm doing it, that I think I see the world in a certain way that will persist and will compound over time.

26:04I say that, that's my intro to say the notion that in seven or eight minutes, you'd say with the founder, that's it. I'm done. I got you. I want to do this. I find very strange. By the way, I might in those first seven or eight minutes say, this is amazing. I really like her. She is wicked smart. I'd like to learn more. I don't say I'm done. And that race, I find a little strange that others think about it that way. Now, maybe to the extent, maybe if something comes along that's very much in my wheelhouse that I've looked at, not two companies, but 50 companies, and I'm looking for it to be a certain way, maybe I'll be that aggressive too on something when I meet someone with a unique approach that I've been looking for, but I think it will be rare.

26:46And I much prefer the sort of getting to know someone. It doesn't have to be months and months, although that's ideal. Years and years is even more ideal. But the notion that 10 minutes in, you turn your brain off, I think people do that in interviewing. I think it's a huge mistake. Huge mistake that you ask a set of open-ended questions and make a set of unconscious judgments two minutes in and call it a day. That's how we end up with some of the silliness that we do sometimes in hiring where a bunch of unconscious biases creep in. I want to finish the conversation basically where we started, which is with this idea of breadcrumbs.

27:20One of the reasons that I love doing this podcast, especially with friends like you, is that these are breadcrumbs, right? We're putting something out for hopefully founders out there to listen to and be attracted to a certain set of attributes, which are different and distinct and unique. And that's a very cool thing. I think what you've highlighted for us today is how powerful those things can be planned or unplanned to create the right kind of serendipity in someone's trajectory. How would you suggest people listening to this that want to throw out some of their own breadcrumbs begin to think about doing that?

27:54Write, write and put your thoughts out, particularly if you're proud of them, particularly if you want to make them better. This is something I really only come to understand. I think in the last several years, last couple of years, which is the returns to writing well and the returns to getting better and better at writing. I love the way I'm a Stripe fan in a whole bunch of ways and their business and their founders and all of that. I love the way Patrick talks about that they're in some ways kind of writing to the unborn employees at Stripe. You can have a meeting and you can have an all hands meeting and Stripe must have 2 ,500 employees, maybe 3 ,000 employees these days.

28:27They could do an all hands Zoom meeting and it would capture all those. What do you do about the 3 ,001st employee? What do you do about the 6 ,000th employee? What do you do about the 30 ,000th employee? And one of the ways to do that is to write, is to write down what you were thinking at the time, to write down where you thought the things should go, to write down why you made the decision you did so that someone that starts on the job next week or next decade could learn from it in a way that is useful. Most of the writing I do is sort of among my friend group and I I share things I've written and documents and things with a small set of friends around me.

29:04I don't do a whole lot of that publicly to date. I just think it's terribly critical as a way to sort of put your mark in the sand about what it is that you believe. And by the way, people may not agree with you. You may get criticized massively about it. But over time, it ends up being a shelling point where many people will sort of come your way if they resonate with it one way or another. You just made me connect two dots, which is so interesting. A friend of mine and the CEO of a company called Bottomless, in which I'm an investor, has this idea that the internet is the space of infinite possible actions.

29:32And that a lot of what's so magical about technology and software is making stuff that was not readable to software, legible to software. Basically, what you're describing is a human making themselves legible to the internet. When you do that, weird, cool stuff just starts to happen. Your people find you. I'm smitten by all these examples. Imagine being Charlie Munger and meeting Warren Buffett over dinner. And it's like, yeah, of course they were rude to everybody for 90 minutes. Of course they ignored everyone. Of course they got deeper and deeper into a private conversation in the middle of a large dinner.

30:08I don't want to overdo it. Soulmates or something, but close intellectual sparring partners that in some crazy world, both worked for whatever Warren's grandfather or vice versa, however it works, you come across this person and you can't find the bottom. And you're like, oh my gosh, I don't know if either one of them went home that night and said, I want to call this person every day for the rest of my life. But it's believable that they would. And it's believable that they would say, finally, there's someone else out there that I can shadow box with and pressure test my thinking with. It's surely been an amazing feeling in my life when I've come across those people.

30:45And of course, they're not hundreds of them, but dozens of them or more, it's an awesome feeling. I think it's such a wonderful place to close this awesome conversation. I sometimes think about what will I title these things as I'm having the conversation. And this one might be called Find Your People. Everything you've done, the way you've architected the conversation and your activity has been to find the right people and develop incredible relationships with them. So I think it's a wonderful place to close. Sam, as always, thank you so much for the time and a great conversation. Thanks, Patrick.

31:15maybe a really fun place to start would be there's a story in your book about an experience with your dad with a black mamba yeah to give people a sense for what your childhood was like and then we'll use that as a springboard for everything else we'll talk about when i was about nine years old i went to hunt an impala with my father and we had sussed out the terrain and the land sort of fell away and there was a termite mound which would have been which was a perfect position for us. And so we creeped up onto the termite mound and we were laying with our chests on it and our legs sort of, and the mound kind of rose up.

31:48So we were leaning up against it. And I looked over the top of the mound and down the clearing, I could see the impala and I was waiting for the shot. And eventually it presented itself. And I took the shot. And as I took the shot, the herd kind of scattered, but they didn't run away. They scattered and then they stopped, which sometimes they do when they get a little bit stunned. And so my father said to me, just keep looking through the site and see if you can just be certain that that impala's gone down. And so we're lying there and I'm looking through the site and I just felt this movement on my leg.

32:20And I remember like just taking my eye away from the scope and just peering down and immediately I saw this coffin-shaped head and moving over the back of my leg was about a two and a half, three meter black mamba. And I knew snakes. I was passionate about snakes as a kid. So I immediately knew this is as bad as it gets. If it bites you, you know, it's a couple of minutes and you just, you're gone. So I grabbed my dad. I said to him, oh shit, dad, there's a mamba. So he starts looking around, like, like where, like it's somewhere around us. And I said to him, no, it's on us. Look down. Then he looks down and I felt him start to shake and I knew we mustn't move.

32:58So I said to him, don't move, do not move. So we stayed there really still and it just perused all over us. and then at one point it turned and it started like coming up the mound towards where our sort of heads were and I thought god if it gets like up around the face that's going to be a little bit too much and I look over at my dad and I can see blood coming out of his mouth and he has bitten the inside of his cheek with so much tension that he's bitten a cut clean into it and then the snake turned and it started to move away from us and I remember the way that the mound was shaped, there was the sort of direction to go directly away from the snake had a thick buffalo thorn that had kind of scraggled over the side of the mound.

33:39So we watched it get away and its tail was still on my foot and my dad grabbed me and said, let's go. And he pulled me and I remember he tucked me in behind him and he put his head down and he ran through this buffalo thorn. And when we came out the other side, he had a piece of the thorn and the branch broken off like in his head. It looked like an antler across his face and thorns in his jacket and blood coming out of his mouth and I was completely unharmed because I had been behind him and we got away and we stopped and I remember he just hugged me and then my sister who had been waiting for us in a vehicle we like walked up she said what the hell happened to you two both of us were completely white and then we got home and I thought I would tell my uncle about it I said to him you know I had this crazy experience he was a wildlife documentary filmmaker I was hoping to get some sympathy and the only thing I got was did you manage to film it a little bit different experience than my Saturdays going to a soccer game or something like that.

34:33Can we go back a bit to your early experiences with tracking? So in reading your book and thinking about this conversation ahead of time, this was the topic that I was most excited for because I think it's the most pervasive. And actually, I think it applies very directly to investing. And what I would say the overarching truth is is that anytime you're trying to do something via a playbook or a pre-written set of rules, you're toast. Emerson has this great line that I have pasted. I paste up quotes places to remind me. And this one is maybe a top five one, which is simple. It's that imitation is suicide.

35:11That if you are trying to just do what made someone else successful, maybe you'll have some nominal success from the external standpoint, but you won't really do anything interesting or maybe true. So the idea of tracking is, I think, one that we can explore. And I'd love to hear the early stages of this? I don't know how old you were, who you were with, how you learned. Can you learn? Can you even teach tracking or do you just have to kind of watch it and do it yourself? Let's jump off from your early experiences. Yeah, I mean, tracking is really the thing that has become central to me now. And I think of myself as trying to live as a tracker, trying to step away from actually following the footprints of animals and apply those principles to my life for sure.

35:56So I got introduced to it at a young age. And there were two brothers. And then they had some half-brothers who grew up south of Londolozi. Their names were the Mllongos. And my uncle was very close with this man called Almon Mllongo. And Almon was a true naturalist. He had grown up hunting and gathering. And he had, from a young age, fed himself off the land. He knew where to get water. He knew how to get a warthog out of a hole. He knew how to rob a beehive. He knew how to find a mock-a-bee. I mean, just an incredible naturalist. And so my early experiences were with him because I used to go out every morning, 4 a.m.

36:33My uncle would wake me. We would get in the Land Rover. We would go out and we would go and track leopards at that stage because he was a documentary filmmaker. So my first experiences were with Alman. And what struck me was this kind of openness with which he approached every morning. There was a paradoxical openness because he wanted to find a leopard. But in order to do that, he had to drop the idea of finding a leopard and work with what was presented to him, work with the track, work with an alarm call, work with some birds calling. And so it was this weird state of incredible, rigorous dedication, and yet complete fluidity and openness.

37:13And that was very formative. And then when I was about 19, I had sort of this introduction to tracking. And I had a sense of it, but I wanted to take it to the next level. And then I spent a year with this well-known local bush poacher. The reason I wanted to be with him is because he had some of these old school skills and he had fed himself off the land for years. And so I spent time with him and that was my tracking when it took a huge step forward because he would put me in the front and he wouldn't help me. He would say, go. and sometimes it would be days and days of, you know, losing the track, going back.

37:53And he would just look at me and I would say to him, okay, can you just give me the next track? And then no, work for it. And then I'd walk tight circles for a while and eventually I would get it. And then occasionally he would track and I would drop into his rhythm and get a sense of the process. Because some of the great trackers, they follow and then, so they go track for track and then they leave the track and they cut ahead. And they'll walk a half circle loop up ahead and just try and cut the track again. And they trust themselves to see it. And so then they start to jump ahead on the track and they'll walk big arches, seeing if the animal hasn't cut this way, hasn't cut this way.

38:27Okay, cut the track again. And they speed up or they know there's water up ahead. So they have this very, the process is always evolving. It's not just one thing. Sometimes you're following, sometimes you're using speculation, sometimes you're cutting ahead, sometimes you're using local terrain, sometimes you hear an alarm call. So I really got a sense of that. from him. And then finally, these two trackers who have now become my real mentors, this guy called Alex Vanden Hefe and Almond's brother, Renea Simchongo, they've become the people who I'm now out with all the time. And they are probably two of the best trackers in the world.

39:02I would say they're in the top five or 10 in the world. And my tracking has again gone to a different level, just being out with them for hours and being put on the track and being shown what the level of things they're noticing, the details they're noticing, the thought process that they bring to it. And so it's this kind of, as I said, like it often begins with sitting around a fire and just listening. And then somewhere out there in the wilderness, a lion roars. And the first act of it is, it could be anywhere out there. You try and get a sense of it, but it's this willingness to go. It's this willingness to try.

39:43It's thousands of hectares out there, but we're going after that lion. And even that, that's a threshold in itself. The decision to know, knowing that there's an impossibility to it. And yet, if we go and try and we use our skill, there's also a chance. And as you practice it more, it becomes more and more likely. I would love to hear about this concept you have of a full day on the track. From morning to night, the transitions that matter, sort of the archetypical movement throughout a day. Because I just think that's a beautiful kind of concept. And I know it's one that you've been thinking quite a lot about recently.

40:20So maybe tell us a little bit about that kind of perfect day of morning to night on the track. Yeah. I mean, and one of the things we've tried to do on the Track Your Life retreat is I wanted it to be an experiential space and I wanted it to be a metaphorical space the entire time. So everything that we do throughout the day is talking about the dynamics of creating, the dynamics of finding your way back onto being on track, the dynamics of finding what you're looking for. And so the first thing is waking up. Literally, we wake up earlier than anyone else at 4.30 in the morning. And one of the things that I've realized working with people over the last 10 years is that if you're a human being, as a matter of course, you will fall asleep in your own life.

41:09It will happen. It's part of being human is there'll be a place where you sort of, you go off track and you fall asleep in your own life. And I've had a lot of men say to me, I just, I feel like I've been automatic. I haven't even been awake in my own life. And so the first dynamic of tracking is, okay, waking up and we literally wake up really early and we wake up really early get in the vehicle it's 4 30 the stars are still out the night is still still and we head out for the next metaphorical movement which is waiting for the call and in the hero's journey the call is always the first thing but there's a kind of preparation that has to happen for the call and so we get ourselves out into the wilder parts of the park and the guys get off the vehicle and we make our coffee and we sit and usually waiting for the call is actually being in stillness and the act of tuning back in.

42:02It's actually we sit there in the dark, we drink our coffee and we listen and we pay attention to what's going on around us. And inevitably what happens if we're doing that is that we will hear the call because we've prepared ourselves. Now we tuned in. We're actually on the lookout for it and And attention is a kind of magical thing. Part of waking up in your own life is saying, I want to wake up in my own life. Part of hearing the call is just saying, okay, it's time for me to start listening again. It's time for me to tune in. And if that happens, that's where attention is magical. Something will cross your path if you turn your attention back on.

42:38And normally we'll hear a call or we'll hear the movements of animals. Something starts to speak to us in that space. and then the call for me is also like the thing you know that if you don't do it you'll go out of integrity with yourself so if you're sitting there in the darkness and dawn is just starting to break and we hear a lion call nearby if we don't go look for it there's something off inside of us so we know it when we see it and then if you get the call that gives you something to aim at we now have an intention we heard rhinos moving in this area we heard a lion roar we've got a broad idea of what to aim at so that's sort of like the broader vision then we've got to move towards it and what we'll need then is a first track we need a place to start and the first track is you know and it's so magical when you're driving around and you you want to get on a trail then boom there's the track of a rhino that's crossed your path boom there's the track of a of a lion that's moved through the area and like on that first morning we tracked rhinos and you know the park is huge somewhere out there is the rhinos but if we have the first track we have the first small movement towards what we're looking for and what i say to people all the time this movement towards yourself is going to start with the smallest thing you can do to take you more towards yourself most people want to say like okay well you know i want to move to being the best version of myself or when i know exactly what the next move for me is i'll do it but actually you got to break it down into a series of much smaller moves, things that take you a little bit closer to what you're looking for.

44:15And if you can identify enough small movements, enough first tracks towards what you're looking for, it's going to start to take you. And so that rhino out there could be anywhere and we dial that infinite possibility down to a first track and then a next first track and then a next first track. And then we start to string that trail together. And as you saw, guys like Alex and Rhenius and the trackers we were working with and yourself and the other guys in the group. At first, you don't know what the trail is because you're learning the characteristics of the track. And then, you know, in the space of a few hundred yards, it starts to pop.

44:53You start to know what you're looking for. And that I call track awareness, where you're actually training your brain, you're training your eyes, and you're training yourself to see the subtle signs of your trail. You're training yourself to see your path forward. And that's why body tracker, one of the exercises we do, is so important. Because in the metaphor, you've got to train your body to feel when it's on track. And it will speak in emotions and sensations. When you run into a feeling of expansion, you've got to know that's my track. When you meet someone who's inspiring and you have that feeling as you're talking to them, like you, you, you, you, you.

45:31You've got to see that track. And you can train yourself to feel how life is speaking to you. so that becomes the next movement developing track awareness and then we start to follow it's remarkably true and it's actually a good excuse to get back to the morning hours that we spent trailing the rhino because first of all there's all these different kind of states and we would take turns as lead tracker meaning it's on us to find the next track and follow this thing through all sorts of weird different little environments and that's a profoundly different feeling than being at the back of the line where it honestly feels more like a walk a beautiful walk than something where your attention needs to be incredibly focused.

46:09And it's amazing how quickly you can pop between those states, kind of like the dogs we talked about at the beginning. Talk a little bit about that experience where, and I'm thinking here specifically about this obsession with goals that we all have. And in this case, the goal is a rhino. And the important point here is in the morning, we didn't find them, right? Like we had to stop because it was getting really hot and we had to go eat. And we were on the trail for five hours or something like this, and we didn't find them. And you had some interesting thoughts at the end of that, that despite the lack of, you know, achievement or whatever, to take a look back and realize what happened.

46:43So talk about like the side effects, I guess, of what happens on the track. The one thing is, is that once you start tracking and there's an intention, you're not just walking through the woods, you're moving forward with intention. And then, and every person who gets on the front feels that. It's like, there's a story that's being told on the ground. And every time you see, little bit of the rhino's side toe, a little bit of its front toe, where it's turned, where it's cut, where it lay down. The story continues to unfold. And up front, there's this amazing feeling of you're being led forward and your eye scans the ground.

47:19Boom, there's the track. You move forward in that direction. Your eye scans the ground. You don't see anything. And then suddenly you see it and you move forward. And then you see where the calf had walked close to the mother. And then you see where the mother had rubbed her nose on that log where she had scratched. and there's this whole narrative and you are being led and you'll remember we dropped down into that little Tamburte Grove and it was just this beautiful area the trees, the way the steep banks of the riverbank and the way they had moved down there and they had slept for a while there was no ways in a thousand years that you could have just walked there there was this really strong feeling that the rhinos were taking us to places that we could never have gone and by the way a place that a car could never have reached So that's something I've been thinking about as well, which is we're here.

48:06There are paths. There are well-trodden paths, and then there are smaller game trails. And it's interesting to see the sizing of the paths. And obviously, the Range Rovers form these big paths. But in certain ways, that limits you so much to what you can see. And I can't stop thinking about that because we never would have seen that little grove in a car. Yeah, and the metaphor is so strong because in life, there are big pathways. You know, when Joseph Campbell says, if you can see your whole life laid out before you, it's not your life. The culture presents us with the roads of where we should go.

48:38But the tracker goes somewhere else. The tracker is guided by a different set of trails. And they let themselves go where they don't know to go on the track. They go where the track takes them. And so if you can identify your inner tracks, what really speaks to you, and follow those, is going to take you somewhere totally unexpected. And that's why I believe people who live like trackers, they innovate, they create new ways of living, they're original, because they're moving forward on a different guidance system. And it's not one where the culture is presenting to them. And it will take you to unknown places.

49:15Just like every track we followed here took us to a place we could never have thought we should drive there to check. There were no roads to the places we went. We went to parts of the reserve by following the tracks that no other people will go to. Can we expand a little bit on this notion of culture and the role that it plays in our decision, in our living, and how you think about it? That was one of the more interesting topics that we covered kind of again and again. And the contrast, because there's positives to culture. Yeah, absolutely. And I think we all kind of know those. But maybe talk about the negative aspects to culture and how it kind of stands in conflict to this way of living as a tracker.

49:50Let me sort of maybe lay down my sort of core principle, which is like really the center of the tracking metaphor. I believe that inside of you is a wild self. And the wild self, it's coded into you almost. It's like a part of your DNA in some ways. And it knows what you're here to do. It knows your purpose. It knows uniquely for you, and it's different for every person, what brings you to life, what nourishes you, what inspires you. so that is in us it doesn't have to be created it's there overlaying the wild self is the social self and we need some social self because we're social animals but in a heavily consumeristic culture and in the structuring of modern society the social self becomes so dominant that it overwhelms the wild self and we find ourselves trying to be all the things that the culture tells us to be.

50:53And it's so pervasive from the time you're young, you know, whether it's media, whether it's how to live a good life according to the culture, what's valuable, what's meaningful. And you'll know the social self because it's full of shoulds. Well, I really should. This is what I should do. And it's full of have-tos. Well, you have to do that. And as I said, we need a little bit of it, but most of it has overrun the wild self. And the wild self, it has tracks. And those tracks are in sensations in the body, things that make us forget about time, the feeling of expansion, joy, peace, or the way it speaks.

51:31And we have to shift our attention onto those tracks and learn those tracks and begin to follow the tracks of the wild self. And it will start to take us to unexpected places. It will start to guide us away from all the rationals of what we should do to a deeper dimension of what we're here to do. And that's how I think you really find your way to your own tracks and the understanding that you actually know. You actually know what's calling you. If you could shed the roles, if you could shed all the things that the culture told you to be, there would be something else inside of you that could guide you.

52:08One of the things, the phrases that we used a few times through the week and something I think a lot about is the ordering of chaos on behalf of others. and it makes me think of another term we've used, you and I, which is like funny Venn diagrams or goofy Venn diagrams where you have these weird intersection of interests or of talents or whatever that might be another way of thinking about tracks. I think people, they feel that they should be doing a certain thing, but I'm curious what you think about what happens when that person is not good at that thing. How much of this pursuit do you think needs to be the intersection of those two things?

52:40Not just your wild self and what you're interested in, but what you're actually like naturally inclined to be good at as well. I think that there will be a correlation though. I think that there will be, if you listen to that thing that is speaking inside of you, it will be something very fundamental to you. So it won't be a case of like, let's take you for example. I don't believe that what calls you from the inside, you'll have an inclination towards and you'll tend to be good at it. This podcast, for example, you love connecting with people. You love learning. You're naturally interested. You're naturally curious.

53:14So it pulled you into something that was a correlation of all of those parts of yourself. And because you're naturally into it, I mean, you're going to get better at it continuously, but because it's your natural inclination. So I don't think the wild self will pull you into something that you're naturally not inclined to. That's more the social self that says, okay, here's what you should be good at. The wild self will not pull you into something that is not in you. Does that make sense? It does. I'd love to take the position of a cynical listener out there and maybe talk about the most common objections that you think about yourself or that you hear from others that are like, ah, you know, this sounds great, but like it's not realistic.

53:53It's not pragmatic. Culture is culture. Society is society. We've built up this massive edifice and this is what we've got. Not everybody can go do this. So what are sort of the most cynical takes that you've heard on some of these ideas and how do you respond to them? The most classic thing is 100 % of the time, well, I would do that if I had the money, if I could. That's like the base level. And that's where I think the design element does come in. Okay, fine. Stick with that then. But how do we find, is that fulfilling you? No. Okay, well, then how do we find what would be a little more fulfilling?

54:31Well, you know, I like being outdoors. Okay, well, then let's start by bringing a little bit more of that in. But, yeah, I mean, here's the bottom line. In my 20s, I was like a zealot. I would convince everyone else that it was possible. Now I don't, you know. I maybe don't try and convince the cynic. Because, you know, fine, be cynical. Do what you want to do. But if something else is calling, if you have another longing, and if you feel that there is something else you're meant to be doing, well, then why not start? But if you don't and you're like, this is how it is and this is what it is, cool, I'm not going to try and convince you.

55:09You know, I mean, I think what I'm saying is that we begin these journeys when we decide to begin them and not a moment before. And sometimes a catalytic event will start it. You get sick, you have a heart attack, you get divorced, you get fired. And suddenly it's like, OK, well, what now? and sometimes that will suffering will start the journey sometimes you just have a calling inside of you and if you have the calling then you may as well start tracking you know you may as well start tuning your attention you may as well start trying things you may as well start going out there into the unknown you may as well move into the wilderness of life start to find something that's more fitting to you and if you're a total skeptic and you don't believe it and you're happy then cool you're not gonna you know if you're happy you're not gonna be inclined to look if you're a total skeptic and you're unhappy and you're just in the grind and it's eating you alive well then that's on you you mentioned money having done this a few times i think everyone would agree like wow great i wish i could flip a switch and and be in a better alignment or higher integrity, as you say, what are the other major excuses or barriers that you see as most common to letting this happen?

56:30So money is a big one. I don't have the money. If I had the money, I would do it. What are the other big excuses that you see? I'm not sure I would call them excuses, barriers. I mean, one is that we live in a culture that people really want to know. so when I know what I'm meant to be doing then I'll make a move that's when I'll take the big leap you know everyone's always talking about the big leap and that's that's not how it works you've got to be willing to move forward into the unknown and make the space and be in a state of unknown for a while because that's where you're going to find you're going to find a first track and a first movement and great entrepreneurs know this you know they know you you find out one thing then you find out another thing then you don't know how to do it for a while then you do know how to do it so that's one thing the other thing is is people want to know every movement they want to know all the pieces that they'll have to do before they do it so like once i was coaching a guy i i remember he said i'm totally burnt out so i said to him and he said you know i've got all these responsibilities i've got all these i've got family i've got all this stuff so i said to him okay cool what and he's like i don't know what i need i don't know how to move forward i don't know what it is i said to him okay cool just go quiet for a moment go inside yourself and just feel for one thing you need one thing you need so he's like oh man i don't know if i want to do so i said to him just shut up go quiet just and and here with me tell me one thing you need goes quiet for a few minutes he looks up and he says I need some time completely by myself you know but how does that help me i mean that way that's not going to take me anywhere where's and I said to him, you know, that's the first track.

58:20You got to go and get some of the one thing you know you need. That's one track. And then because you go and take some time, another thing will arise out of that. And then another thing, but you can't know the whole, you can't know the whole process. But if you can know the one thing you need and go and get it, the next thing will open up. The next thing will open up. That's the whole process. What's the single most memorable tracking experience that you have? Well, I have one with Alex and Reneas. We tracked a single male lion. We tracked him for three or four hours. And he got to a place where the lion's tracks teed onto the tracks of a herd of buffalo.

59:03And right there, he laid down next to a pile of buffalo dung. And this is the track telling you. And he rolled over into the buffalo dung. and he was covering himself in dung. And he's going to go hunt those buffalo. It's an amazing image. You can see where his tails shift. It's all laid out in the sand on the ground. Then he stands up and he starts walking. And Rhenius was picking his tracks amongst the track, like the ground had been churned up by the hooves of the buffalo. He was picking his track and he was walking zigzags and he'd get one track and he'd get a second track. And he was charting a course.

59:37And then where he saw the track, he would look up at a tree and he would use the tree as a marker. That's generally the line that the lion is moving on. And then he would cut it again. And he was just saying, I just keep trusting myself. Just keep trusting yourself. And then there was a place where the tracks of three lionesses came in and joined him. So suddenly you saw the male's track and then the track of a female and then a second female and a third. And lions are the only sociable cats. So on the ground, suddenly you can see where the tracks are all touching each other. They're walking next to each other and they're rubbing each other as the pride has joined up.

1:00:12And then about maybe a kilometer ahead of us, a Batalier eagle dropped down. And Rhenius stopped us and he said, you see, when that eagle drops down, it means one of two things. Either a buffalo has given birth to a calf and the eagle is eating the afterbirth, or these lions have killed. So we went up ahead and when we got to where the eagle had landed, it flew up and the ground had given way to like scrubby grass. It's very difficult to see tracks. Alex and I were walking around, we were looking for the tracks everywhere, we couldn't find it. Renia stood very, very still. And it was interesting to me, when he lost the track, he became still for a moment.

1:00:50And because he was standing still, he saw these flies going past him. And then he started to follow the flies. And then he put his nose up and he started sniffing, and literally he caught the scent of meat. And he walked us in on the remains of a small buffalo calf. And immediately as he saw the carcass, the lions that obviously move off, I saw him doing, it's a kind of calculation, but it's in his body. He's not thinking about it rationally. He felt the sun on him. So he feels the heat building. He sees the size of the carcass. It was a small calf. He knows that there are four lions, one male and three females.

1:01:29And as he was doing it, I realized I was thirsty. So if I'm thirsty, that lion is probably getting thirsty. So it's very alive. And then Alex and I continued to look for the tracks. Where had they gone from the carcass? Renia stood up, he just started walking. He said, where are you going? He said, I'm going. I know where the water is. So we were about three or four miles from the river and he walked down through the clearings. He completely forgot about the tracks, went down to the edge of the river, cut a game path on the edge of the river and we started walking along the river's edge. Walked like that for maybe 10 or 15 minutes, and up ahead of us, through the reeds, we saw this beautiful canvas.

1:02:08Elephant bull was walking towards us. And they kicked the ground, and a little puff of smoke came up and drifted, and Alex and Wren stepped in the direction that the sand had drifted, this little puff of dust. They're stepping downwind. They stepped downwind, and they got in under a little palm tree. And this elephant bull walked past us maybe two or three meters away. And for a moment, I remember he's towered over us. His shadow was on us. And on the game path, he smelt where we had walked. He picked up the sand and he was smelling our footprints. And I just felt this incredible energy kind of sensory awakeness.

1:02:47And then he He walked past us. As he moved away, we got back on the game path. And now there's these big, beautiful elephant, huge tracks on the game path in the soft sand. About 100 meters down the track, the lion tracks come back onto the path. And now on top of the tracks of the elephant are the tracks of the lions. And we've just seen the elephant. So we now know we are close. And Renia said to me, come up to the front. So my job now is to follow the tracks. And he's putting me on the tracks because he wants, him and Alex want to look over my shoulders into the brush ahead so that they can see the lions before the lions see us.

1:03:25And we start to follow the beautiful lion tracks in powdery sand. The whole pride walking in a line along this game path. And up ahead of us, 200 yards, a monkey starts to alarm. We know that. And I can see the monkey looking down into the river. We know those lions are moving ahead of us. keep going, get to where the monkey's over our head. He's still looking down the river shouting. And then an Inyala starts to alarm. One of these antelope. So it's an incredible feeling of being in the story, the narrative. You can see the tracks. Everything is talking to you. The monkey's talking to you. The Inyala is alarming.

1:04:01Beyond that, a squirrel starts to call. And you're immersed in this unfolding story. And it's like the sense of you and the tracks start to collapse. and it's one story. And it also occurred to me that you could walk down that trail as a non-tracker, someone who was completely shut down, and all of that could be going on, and you could miss it. You know, this incredible information, language, this whole scape is guiding you. It's telling you, and you could miss it. We go for about another 50 meters, and then there's this amazing thing. All the tracks are going away from us, and then suddenly, on top of all of the tracks going away from us, there's one set of tracks facing back towards us.

1:04:43And what's happened is the female at the back of this line of lions moving, she can't smell us, she can't hear us. But as we're tracking her, she's starting to get a feeling. Something behind her is saying, there's something there. And I think it's because we're dropping into the resonance of the lions. We're moving like them. We're starting to connect in some way. She's feeling something. So she stops and she turns and she looks back down the path. And she doesn't see us, but it's just a beautiful moment in the track. You know, she's starting to get a sense that you're back there. And then the tracks cut off the riverbank and they went down into thick reeds.

1:05:21And we had a little bit of a, we called it an endaba, a bit of a meeting. We said, are we going down there? And Renia said, let's just take a little look. And so we went down on a hippo path where the hippos come in and out of the river and it made like a tunnel in the reeds. So we move, we like crouch down, we crawl through this tunnel. And then it opened up into a little sandy beach. And if you see, I should tell you, if you see lions on foot, one of two things happens. One, they get a fright, they run away from you, they take cover. Or two, and particularly when they have cubs or meat, you start to hear a growling.

1:05:59It sounds like a dirt bike. And then you see one of the females or one of the males, usually it's a female if there's cubs, and she just locks you in the most intense, I'm going to massacre you gaze. And slowly she starts to walk towards you. And there's like an intent to the walk and the head is down and the tail is lashing. And she starts to walk faster and faster and faster. And then it becomes a trot and then it becomes a full-on charge. And the whole time she's growling. She comes in and at that moment, your only hope is to stand your ground. So everyone grabs each other. You start shouting and usually she'll come and stop two or three meters.

1:06:38The sand flies up. You get sand in your teeth and your eyes is terrifying. And everyone stands and you shout. And then what's happening is while she's got you there growling at you, the other female is taking the cubs away. So you stand, my uncle used to say to I mean, lions are afraid of your courage. You have to stand your ground, otherwise you'll get eaten. So she turns and she moves away, and then you get away. So this is all going through my mind as I crawl through a hippo path in a thickly reeded river. And we come out onto this open beach, and we go over to the little stream of water, and I can see where the male lion has come in to drink.

1:07:16And then the first female, there were three females with him, then the second female, then the third female. And this is all in the tracks telling you, and this is how it can help you. Then a fourth set of tracks, fourth female. And then I saw tracks of what I thought briefly as I glanced at it was a civet. A civet is like a small raccoon-like creature. I saw the tracks of the civet, and then the three of us, all looking at the civet track, realized at the same time, that's not the tracks of a civet, That's the tracks of a cub. And Alex looked at it. Rhenius, who's a black Shungan man, went completely white.

1:07:50And Alex looked at me and he mouthed a profanity. And he grabbed the top of his head. And we realized now we are down in the river and the pride has joined up with a female with cubs. And all of us just sank down onto our haunches. And we sat there incredibly still because we know the lines are now very, very close. And you don't want to be in between the mother who stashed the cubs somewhere in the reeds. Now we're in her way. And it's because it's a terrifying situation. And I saw Rennius, and this is experience. I saw him listen very intently to the soundscape around us. And he was listening for subtleties in bird calls that I don't know, that he knows.

1:08:37little indicators of where the lions might be. Because birds have a very unique language, but it's subtle. Some of it is very obvious when they're alarming. But some of it, when the lions have laid down, when they're not moving, is much more subtle. And he heard, he got a sense that they had moved a little bit away from us. And he clicked once and he pointed us back up the path. and I mean our hearts were in our throats. We stood up and we moved up the path and we got to a tree on the riverbank and we looked down and then we saw them down in there with the cubs. And we didn't get charged. No one got bitten.

1:09:15No one got mauled. But the experience of it again was just this incredible aliveness. And in some ways, again, his experience, there's a chance if we had been by ourselves, we would have blundered on and we would have got badly, badly charged. But But, you know, I watch all these Discovery Channel things and everything is like death week, deadly snake week. Like if you actually are listening, if you're actually aware, if you actually take the time to learn about the wilderness, it talks to you and it doesn't want to tear you up. That's not the animal's natural inclination. They're actually, if you learn the language, it can be a very, very safe environment.

1:09:58So I like to just pause and recognize the single best answer to any question that I've ever asked anybody. That was incredible. Perfect bridge into my last and always my favorite question that I ask everybody, which is what is the kindest thing that anyone's ever done for you? Wow. Well, I had this guy who I used to track with. His name was Solly. And he was just a tremendous human being. If you drove past Solly out on the reserve, he was in his car, you and his, you drove past each other on a dirt road. You just kind of waved at each other. You look up in your rearview mirror, he stopped the car and he's waiting there just in case you need help with anything.

1:10:35And you decide like you might want to come back and ask for some. We had that one guest who said he would look after people on safari so incredibly well, everything they needed. He was so attentive. This guy said to him, Sali, you are pathologically helpful. But in 2001, we were tracking a leopard together, and the tracks ran up the side of the river. And it was a hot day, and because it was hot, I went into the water. I had rolled my sleeves up, and I was walking in the water. and it was clear water, sort of knee deep running over sand. And as I walked upstream, this little sand bank sort of fell away.

1:11:15And there was a place up ahead where a branch, a tree had fallen over and the branches were in the water and there was a little rapid there. And if it had been a horror movie, people would have been like, don't go in there. But I sat down just on the edge of that rapid and Solly was on the far bank and the crocodile was in this little depression. Came out, grabbed me by the leg. When a crocodile bites you, just the force of the bite is the first thing. It's just like you immediately, I immediately knew I was in trouble. And it tried to pull me down into the water and I reached up and I grabbed this branch.

1:11:51I started shouting and it couldn't get me all the way and it bit me a second time. My foot went down its throat, spat me out. and I started and I kind of pulled myself up into the tree and then over and I looked down at my leg my leg was mangled and then I kind of got over onto the bank and I was in a I was in quite a dangerous position on the bank I think it probably could have grabbed me again but I was trying to like sort out how to get my leg to stay together and Solly who was on the far bank saw me he saw me come out of the water he saw the mangled leg and so he knew that between him and I in this deeper channel, there was a crocodile.

1:12:29And he just booked straight in. He came straight towards me, went straight into the channel. He knew there was a croc in there. He waded across it. And he got to me, he grabbed me, picked me up. He's a freakishly strong guy. Picked me up and he carried me up onto this bank. And he took his shirt off and he wrapped my leg in the shirt, got me back to the vehicle and got me to safety. But just not the blink of an eye. And when I talk about that to audiences, sometimes I'll say to them, I don't know how many people you know who come into a deep channel of water that they know has a crocodile in it that's just trying to eat a person.

1:13:10But for him, it didn't even blip on his radar that there was something exceptional about it. and it was like that that to me is the core of the more collective psychology of ubuntu it's just if you're in trouble i'm in trouble i love the heuristic from prior guest peter atia where you measure wealth by the number of people that you would give a kidney to yeah so maybe we'll change that to the number of people yeah you would you would dive headfirst into crock infested waters to try to save and a great heuristic for the idea the closing thought on the idea of the village, that people within that village are those kinds of people for whom you would do something like that.

1:13:48And this has been just a total blast, just chock full of fantastic stories and lessons and fresh perspectives on the world. So I deeply appreciate your time. People are going to love this one. Thank you. Thank you. It's so great to be with you and I appreciate your time. Charlie, I like starting these things in a unique way. And one idea that you've had is to have people stack rank their vices of power, money, and fame. I'd love you to begin by explaining why you're interested in this idea and what you've learned from the answers over the years. So it's a two-part question. One is the virtues, which is working with people you like, working on amazing problems and having impact.

1:14:31And then the three vices, power, money, and fame, and you can't avoid them. They have to be stacked ranked separately. And it's really trying to get at the differences between, there's no good answer, but there are definite good fit answers. So someone who's interested in power tends to be better at execution. Someone that's more interested in money tends to think more about some capital efficiency. I tend to avoid people interested in fame. But if you are doing something in showbiz, it would presumably be the number one criteria. If you think about the difference between sort of impact, intellectual interest, working with people, you really get the impression of where people are going to be happy and where they're not going to be happy.

1:15:09And you also start to understand why certain organizations do so well. So SpaceX, if you think about it, stacks high on all three. It's intellectually interesting, you're working with amazing people, and you have huge utilitarian impact in the world. Whereas if you're working, say, FinTech, you're less likely to sort of have that utilitarian positive impact. Any especially memorable or interesting series of answers that you've gotten on the two stack ranks that come to mind? A lot of people have negative utility from fame. A lot of people start with power and then when you push them, it's actually money, but they don't want to say it.

1:15:42And that's more true outside of the US culture than it is in the US. It's particularly true with Europeans. And so a lot of it is trying to get people to actually say what they truly believe, as opposed to say what they think they should say. I'm curious in what context, whether it be interviewing prospective founders, interviewing potential hires or others, you find it most interesting and useful? All of the above. The founder one is fascinating because you actually end up going down different lines and helping them depending on whether they answer the power and the money. Founders that answer with power tend to need help more on managing their startup capital efficiently.

1:16:18They tend to be the ones that spend more. They tend to be the ones that over-expand. they're often too aggressive. Conversely, the ones that answer money tend to be very capital efficient, but often slightly too cautious, slightly under aggressive, sometimes not willing enough to stamp their authority on the company and make it the culture that it needs to be to be successful. I'd love to take a step back now and introduce you to the audience a little bit. One device that I've been using with people on the podcast is to ask you to give the thumbnail two minute sketch of your life and career up until this point.

1:16:51I studied politics first for economics at Oxford, ended up very briefly at McKinsey, then at Microsoft, and then sort of bumbled my way into becoming an investor and do a lot of angel investing. So I think I've done about 500 angel investments. I think the actual number is 483 and about 300 in the portfolio at the moment. I believe you ran strategy at Microsoft. What exactly did that entail and what is most memorable about that time? There's so many memories working with amazing people. The hostile acquisition of Yahoo as an attempt was just unbelievably intellectually fascinating. Trying to buy a company and a hostile acquisition for, I think it's$47 billion, and just the drama and the soap opera, and realizing how much part of dependency matters and big deals, how much a casual comment misinterpreted by one side or the other actually changes the outcome.

1:17:42It's remarkable how little system theory there is in the sense of if you ran experiments again and again, I think you'd get a lot of different results in M &A activity. Whereas in things like product usage, good products and bad products would probably be the same in each experiment. 483 investments is a crazy amount. I want to come back to your time at Microsoft probably later on and talk in more depth about strategy. But given the sheer volume of investments that you've made, I think a great place to begin our conversation is your idea or your thinking around why startups succeed and fail. I'd love to begin by you outlining sort of what, if anything, is shared in common across those 483?

1:18:21So are there certain features that you're always looking for and sort of how your process works? And then we'll get into the success and failure of startups. In some ways, it's two tied together. So I think the dominant sort of failure mode for startups is the same at each different stage. So sort of pre-seed to seed, you basically have a failure to achieve labor productivity, which is only just a polite way of saying the team doesn't come together, doesn't gel and produce good output. Usually a team that just produces good work will generate enough sort of kinetic energy to get continuing funding.

1:18:53Once you're sort of going from seed to series A, it's another single cause, which is failure to get product market fit. You're basically on the search for demand curve and you either find one or you don't find one. And this is where you've got the highest element of pure chance in a startup. It sort of always feels akin to sort of gold prospecting in the California gold rush, which is you can be good or you can be bad. You can do the right thing. You can do the wrong thing, but there's some irreducible amount of chance. The wisest prospector with the best maps and the most intelligent strategy sometimes just won't find it.

1:19:26And someone will just fall asleep, put the pan in a stream and gold will come out. And there really is a real nexus of serendipity at this stage. Then when you move to series A, it's really all about labor productivity, but in a different form, it's can the manager scale? And one of the fallacies is most early stage startup founders think they're managers and they're actually not. What they have is a team that's actually managing them. Because when you're managing, say, 10 or less people and you're spending time with them every day, what's actually happening is they're managing you by influence because they know you well enough and they talk to you enough to work out what your desires are.

1:20:05So as long as you're articulate and energetic and sort of engaged, you actually don't have to manage. The team manages you upwards. But when you scale to 30 people to 90 people or above, you no longer have those personal connections and you have to move to formal management techniques. And that's like a sort of Fermi paradox, great filter. It wipes out an amazing amount of startups. And the way that's devinced is a collapse in the labor productivity per person. There's a term in microeconomics called managerial diseconomies of scale. And I think in some ways, the angle of the decline of productivity per person is the difference between sort of the stripes, the great startups and the failures.

1:20:44And maybe if you're a great startup, as you go from 10 people to 100 people, output per person drops 15%. And if you're a bad startup, it actually drops over 90%, with the result that often 100 people startups produce less than they did when they had 10 people because the managerial collapse has been so extreme and one interesting thing is if you look at the companies get very big maybe there's a sort of interesting explanation where more of the shared attributes was an instinct for the sort of structures and processes of management that were shared between gates zuckerberg bezos the carlessons all these sort of super talented people because my guess is they didn't receive formal instruction on it their vcs and advisors weren't that helpful on it it may be either by chance or by skill, they just sort of intuitive their way through it.

1:21:27Then when you get beyond that sort of series B and beyond, I think it's institution building. And one of the interesting problems is the sort of people that become entrepreneurs are often full of energy and sort of flexibility, almost a sort of combination of street smart and book smart. But there's a point where they've hit product market fit, where actually what they're doing is repeating a process at scale. And to repeat a process at scale, you need to build an institution. And often that sort of is almost anathematic to their personality. If you're going to take in revenue from 42 countries, you really need a well-developed finance department.

1:21:59Once you get to a certain size, you will always be in court cases because of being sued by ex-employees, you'll have patent infringement suits, you'll be debt collecting customers that didn't pay. Like the shift to sort of building an institution with institutional norms, with institutional values, with institutional culture, and all the boring stuff of building a strong finance department, strong legal department, strong HR department, that again is a big filter. And so those are sort of filters by stages. What's interesting is some of those you can do when you meet someone and proceed. One interesting thing is I sort of close my eyes and think, can I imagine this person in a public company, conference school, remembering the Microsoft, some of the Microsoft earning schools?

1:22:36And I'm thinking, can I imagine them sitting as a sort of CEO next to their CFO, talking with all the sort of Wall Street equity analysts on the buy side and the phone, and just be incredible enough and deep enough and mature enough to pull that off? It's a fascinating set of framing. The one that jumps out as maybe most interesting to me is this idea of the declining curve of people's productivity. And in your experience, whether or not that is something that is typically innate to the founder, meaning they just handle that naturally and with a plum, or if instead it's something perhaps that could be coached.

1:23:09And if it's really just a set of best practices that are fairly universal that the founders just don't get. I think the irony is it is absolutely something that can and should be coached, but often isn't. So often the people that get it intuitively are the people that survive, but there's no need for that. It can just be coached in. And I think a lot of it is you get this very strong transition. When you're a very small startup, most of the people you're employing just come in and do their job and go home. And the drawback of that is you tend to end up having to do tight management, a lot of micromanagement.

1:23:42And the beauty of it is you tend to get a very low level politics within the organization. Then you get this transition to where you're hiring people that are sort of execs would be the sort of headhunters description, VPs, senior people. And the beauty of these more senior people is you can give them much more complex tasks, build me a product division doing this, go open European markets for me. And the drawback is it anyone capable of those complex conceptual abstractions necessary to do that tends also to be capable of politics. And because the world is not composed of saints, as an organization scales, the level of intonesian politics increases exponentially.

1:24:20Someone once said to me, the difference between a great company is one where the execs spend only 25 % of their time playing politics, and a bad one is where they spend 50 % of their time playing politics. And that delta is the entire Gaussian bell curve from the best Fortune 500 company to the worst. And I think one of the things that really matters as a founder is acting as a dampener on politics. So reducing intonesian warfare, reducing the tendency for marketing to try and take control of the sales funnel, reducing tendency for the head of sales to want to take over sort of inbound marketing, trying to stop the CFO controlling spending so tightly that you don't get positive return capital investments by sales, trying to stop sales getting so much control over spending that your margins go out of control.

1:25:03All those boundary conditions between sort of VP leaders and functional heads, defining those well and managing through that transition is just so important. and there's nowhere where someone learns that through the process of entrepreneurship. One of the things that's, I think, very interesting about people's careers in general is the early stages and the personalities that go into them often have negative correlation at the later stages. So if you look at a sort of McKinsey or Goldman Sachs analyst, often what they need is attention to detail, strong work ethic, high diligence, high conscientiousness and sort of by factors, all those sort of things.

1:25:38If you look at middle management at those companies, they need good project management, good ability to abstract and structure problems, good ability to pull a team together and create team morale, and the sort of being cost of detail and the technical knowledge matters less. And then if you look at the sort of partner level in those firms, often all that matters is relationship building and sales and charm and the ability to empathize with the client and connect with them. And so it's very hard to find people that are stars in all three parts of those careers. And I think it's the same with entrepreneurship.

1:26:09The street smart entrepreneur at sort of pre-seed who can raise money with a good narrative and get energy and recruit people and sort of create a sort of sense of momentum and esprit de corps is often very negatively correlated with the sort of personality that wants to put in quarterly HR reviews and QBR reporting and really make sure that the finance team is taking at a later stage. And then conversely, often the entrepreneurs that do very well later find the early stage capitalizing hell on earth because in some ways they're so tightly gripped to reality and they're slightly pessimistic, which makes them very good at sort of avoiding chaos, often makes them very bad at pitching.

1:26:49I'd love to hear your thought on this interesting concept that actually our mutual friend Graham and I have batted around quite a lot, which is this notion, the term we use based on a blog post by a guy named Rick Burton is the idea of an alien founder. An alien here is used as the best possible compliment to a founder, where it's somebody that just has sort of what seems to be like an unfair and privileged access to some sort of underlying substrate, the thing that is going to build the business. And they just kind of know what to do. They have an incredible first principles mindset, typically.

1:27:18And say, Bill Gates would be a great example of this. I think Bezos would be a great example of this to use obvious ones. What do you think of that idea that in some ways, the absolute best founders are in some sense alien and distinctly unique people? I will maybe for the Socratic sake of it, sort of take the opposite argument and say, I think one of the mistakes it's fall into is just sort of seeing sort of evanescent genius because you're seeing people at the height of their powers. You're not seeing them on the way up. There's that famous clip of Bezos, I think in 99 with Amazon sprayed and spray paint in the back of the office.

1:27:53It would be really interesting if you talk to him, whether he is similar to the Bezos of today, because in the intervening 20 years, remember you've got this incredible training program for the mind. they're working every hour in the startup they're talking with the smartest people they're constantly getting new information they're hiring they're firing so their pattern recognition of executives get so much better they've got a million failed initiatives so they have all these learnings of what not to do they've got all the things that have worked and they've seen what's scaled they've seen the commonality and so how much of that is sort of looking at an athlete at the peak of their performance and not seeing the 10 ,000 hours of practice that got them there.

1:28:37And I could almost argue you could invert it and say, what are actually the causes of mortality? And how do we just avoid suffering that mortality this year? And if you survive long enough, maybe greatness eventually becomes you. So one of the things I think that sort of is perhaps underestimated is if you want to live forever, maybe don't start thinking about study centenarians. Instead, they'd work out how to not die of a DUI, like drink driving or anything, or smoking 20 cigarettes a day. And to some extent, the same in entrepreneurship is, it would be amazing. And of course, the problem with sort of the observation of the world is people spend a lot of time studying greatness.

1:29:12They don't study failure. They study Muhammad Ali. They don't study all the heavyweight boxers that flaked out after losing their first match. But maybe if you study all of those, you can find a commonality in their mistake. Maybe they all, I don't know, offered their chin to the opponent or something. And in startups, I think there are, common mistakes. There's an original sin about capital raising. I see so many startups three to five years in still haunted by a bad capital raise at the beginning, some investor they don't want, some valuation that was hopelessly dilutive and puts VCs off now.

1:29:44Often one of the things that I see very well with success is how quickly they exit their first employee that doesn't fit. And I think what that's actually showing is, are they willing enough to be disagreeable to make the company what they want. And so the willingness to cross that chasm, and often you're dealing with young founders, that's a major inflection point. And if you don't do it, that often leads to a toxic culture and bad results. Then there's sort of more subtle maladies, like turning things into an academic project, particularly with founders with very strong academic backgrounds, often in deep tech and PhDs.

1:30:19They're sort of like generals fighting the last where they think of prestige as a currency because it is in academia. And so they just think if we do amazing work and we tell the world about that amazing work, good things will happen. Because as a holistic, that did work, but it means they don't engage with revenue. They don't get quite product market fit. It's too much a sort of ivory tower intellectual exercise. Or conversely, do they just sort of think we get momentum, we get revenue, we get traction, it'll work. And they haven't really thought about the deep microeconomics and unity economics of a scaling company.

1:30:50And so I almost inverted and say, don't study greatness, study failure, and work out how not to be that. If you're sort of thinking of history, trying to be a good aluminum as Augustus would be really, really difficult. Not being as incompetent as a Caligula seems really easy. And so as a practical advice, not making the catastrophic mistakes and just surviving long enough feels like a good strategy. There was some general somewhere that said, it's not that good soldiers become veterans, it's that lucky soldiers become veterans but veterans are good soldiers meaning just the luck of surviving the first few hours put you up an experience curve and i see entrepreneurs transform in those first 36 months of leadership and management and half of it is just stay alive till you get good we've talked a little bit about recruiting as someone that all of a sudden seems like half my time is spent just recruiting people in all different directions I'm curious how early you encourage entrepreneurs to make that a major part of what they do and whether or not that effectively lasts the rest of their career if they're successful.

1:31:56I think recruiting is way underestimated precisely because in an early company, people replicate themselves. So because people tend to hire not so much in their own image, but with their own set of biases, all the initial people you hire will influence all their other hires. And so you can either get this sort of upwards iterating culture of excellence, or you can get this downwards iterating culture of excellence. So those first few hires are utterly critical. And I think people way underestimate just the sort of the maths of the return, which is, it seems excessive to say spend 100 hours hiring a person.

1:32:32But if you're only hiring 10 people, that person is 10 % of the output of your company for the next seven years if they stay. But then if they hire as well, they may actually contribute to 10 % of the productivity of the company for the first decade, both by their own labors in the early years, but also in terms of the way they themselves recruit. So I think people just sort of underestimate the power of the math here and don't focus on bias that entrepreneurs often have of going for speed and the desire to move fast. And partly this has sort of come out of startup culture because of the sort of synergies of network effect businesses where speed often really does matter.

1:33:11But 99 % of startups don't have strong network effects. 80 % don't have them at all. Maybe 19 % only have weak network effects. And in those, quality matters far more. And so going slower, spending an inordinate amount of time picking exceptional people that are deeply synergetic, exceptional in and of themselves, and then have deep and meaningful synergies with the other team members creates this thing, which is a sort of algebraic functional labor output. And I almost think that's how you have to think in the first year. How do I find amazing stand-alone people that are also synergetic? And so my net labor output of the firm is super high.

1:33:47And the biggest mistake I see is when they're panicked to hire someone because they need sort of a job done. And so they just go for the earliest person. And then, sorry to monologue here, the pernicious mistake is the change in hiring rate based on the amount of capital available to the startup. So what you notice if you graft it is hiring is not consistent on a quarter by quarter basis. It bulges after each capital raise, pre-seed, seed, A, B. And then it's attenuated almost to nothing in the six months before the next capital raise. So the sort of entrepreneur is like the proverbial sailor coming into port who spends all their money and then doesn't have any months afterwards, but it's in hiring.

1:34:28And if you think about that, that's absolutely insane because what's the chance that you can find, say you're hiring 10 people, what's the chance you can find eight in the first 90 days, that it's right to find eight in the first 90 days and then only right to find two in the next 540 days. Your chance of coming across the exceptional people is so much lower than if you space that out evenly. And because you'll know the existing people and see them working together, if you hire two in that first quarter, each next one you hire, you will understand their synergies with the existing team so much more.

1:35:00What have you seen successful founders do to make sure that when recruiting, they're able to win the best candidates out there? So it's one thing to be patient and spend the time to identify them. You also have to hold out an attractive proposition to those very talented people who presumably have other opportunities as well. So what have you learned about the best recruiters in terms of how they market the opportunity and market the firm? I'll give a sort of very cynical answer and then a sort of more aspirational answer. The cynical one is just be in a labor market sort of low competition. You really don't want to be sitting there in San Francisco trying to close your candidate when John Cullison's trying to close the candidate as the alternative, because John's going to win.

1:35:41Knowing John, I agree. He's one of the greatest ex of his age. But you see this actually happen. Whereas if you're hiring that person in Kiev and their other option is working in outsourced IT for Deutsche Bank, it's a much, much easier win. So in some ways, what you want to find is where are the incredibly qualified people in weekly competitive labor markets? And that is a much easier filter than actually being good at recruiting and a much more powerful one. You're much better being a heavyweight boxer who's not very good fighting lightweight boxers than you are getting good as a heavyweight boxer.

1:36:12And it's the same. you're better going and competing in a market where the other recruiters are lightweight because they're boring industrial firms with tenure-based promotions. So that's one. And then two, look, it's some combination of sort of painting a vision that people want to be part of, understanding what they themselves are motivated. So it goes back to those sort of early questions. Are they motivated by working with great people? Are they motivated by utilitarian impact? Are they more motivated by things like money and power? It goes back to just getting the impression that they want to spend time with you.

1:36:41Do they actually want to spend every day with you as a founder? Because these companies are small. It's not like you're accrued by a big company and the hiring VP you may be going to spend an hour a month with. You're going to spend a lot of time with this founder. So there has to be a natural desire to do this. And then third, I think there's just a sort of sense of being in a sort of gang that's going to succeed. A sense of, we happy few, to quote Shakespeare, of just, I want to be with this because this is going to be something that changes the world and it's going to be an adventure and fun.

1:37:12And that cliche, the journey will be the reward, will be true. And the economic outcome will be a reward. And when I look back, the impact will have a reward. And if you get that trip tech, you'll close them. I asked once a group of people, what if any specific sector or category of companies they would invest in if they could only choose one for the rest of their career. And one person said communications because you'll always have some monopoly to pick from, which is sort of a classic expression of the network effect idea? I'll go for if you pick two axes, one axis is boredom, and the other is complexity.

1:37:44You want highly boring and highly complex, because everything in the universe is a supply and demand curve, and you just get insufficient supply of entrepreneurs in the highly boring but highly complex space, and therefore you get elevated returns. So if you go to the quadrants, you've sort of got the whole simple side, boring and simple and complex and simple. It's just too hard to get differentiation without enough complexity. That's when you get commoditization. If you go for interesting and complex, you get brilliant entrepreneurs. This is a problem, say, with space tech as an area of innovation.

1:38:11Every single person involved with space is basically a brilliant genius who's passionate about their work and loves it. And so very, very strong dynamic. On the other hand, if you hang out in audit software, accounting software, you're sitting in an area that's complex, but no one wants to boast they do it at a dinner party and what you might call the sort of spiritual rewards of the industry are lower. And therefore, you just get less by entrepreneurs. Therefore, the chance of every entrepreneur succeeding is significantly higher. Well, Charlie, I feel like I could do this with you almost weekly basis and be sort of endlessly entertained by your prolific interest in so many different things.

1:38:48I'll certainly remember this conversation as one that's a reminder that investing in business are complicated. And if you want to spend your career in those spaces, you better love it because there are so many variables and so many things happening and you have to develop your own niche and your own strategy. My closing question for everybody in each of these conversations is to ask for the kindest thing that anyone's ever done for you. Oh my God, there are so many. There are so, so many examples. I think it's probably a reculent one of often my enthusiasm has been greater than my competence. And it's the people that bet on the enthusiasm more than the competence.

1:39:25I'm internally grateful to them. I love that. Again, you're sometimes describing my life, so I know exactly what you mean. And it is a wonderful thing. And a major category of these answers is betting on somebody early, seeing something in them and taking that risk is always a great kindness. Well, Charlie, this has been a highlight of my early week, even though it's just Monday. I really appreciate your time and I've loved all your insight. Thank you. Thank you. If you enjoyed this episode, check out joincolossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning.

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1:40:27Thank you.