Cyan Banister & Lee Jacobs Investing in the Magically Weird | SpaceX, Uber, Anduril, Crusoe

0:00Well, hello. Hi, Cyan. Hi, Lee. It's great to have you on. I think this is an exclusive. I don't know if I've seen both of you on a podcast before, but I'm so happy to have both of you here. We're hopefully going to have the full Long Journey team in the future, but this will be a really fun conversation. Yeah, I thought it was a great idea. No one ever asked us to do both of us. And I was like, yeah, let's do it. Because, you know, I have a really fun history and fun relationship. And hopefully that'll come across today. So I want to dive deep into Long Journey's unique strategy. You've built out a brand, a community, and to start, let's really break this down into what the Magically Weird is.

0:45Lee, what is the ethos behind Magically Weird? Yeah, great question. You know, when we look back a few years ago, we looked back at sort of like what are the best investments that I had been a part of? And I had no sign at the time. What had she had been a part of? What had her husband Scott been a part of? What of Naval, who I used to work for at AngelList? And there was never any theme of like, it was really a hot space or, you know, it was a hot round or, you know, it was any particular theme. The only thing that really kept coming up was that the company looked quite weird at the time. You know, Sam likes to tell the story, which I'll let her tell.

1:23But when Uber got started, who was going to get into other people's cars? The black market, the black car market was really small. This is not a thing. Niantic is a good example of, you know, there's going to be Pokemon walking around the streets of San Francisco. That sounds a little nuts. When Crusoe got started, they're going to mine Bitcoin in the middle of North Dakota with, like, fire that comes out of the ground. That sounds a little insane. So we've really honed in on what we think great companies look like at the time in which we invest, which is the pre-seed and seed. We think they look quite weird at the time.

1:59so what that manifests in is it can be frontier kind of weird looking things but we also do you know magically boring businesses run by crazy people and that itself is a weird thing to do to actually want to work on something like government rfps why would someone want to do that well he has to be kind of crazy and weird to do it and that i think creates its own defensibility um so yeah that's what that's what magically weird uh means to us and um yeah happy to happy to go into it for others who want. Sam, do you want to add anything to that? Yeah, I mean, I think it's a siren call as well. You know, we only, not only did we notice it, but we started realizing that we want to be a home for these people so that when they realize they're going out and pitching people and people just aren't getting it, you know, if you've pitched 20 VCs or angel investors and they're like, I don't quite understand what it is that you're building or it's too soon or it's a lot of things.

2:53We really love that phone call. We love getting the phone call of, you know, another VC calls us and says, I just got this weird thing that landed in my inbox and it seems interesting, but I don't understand it. I think you guys will. And I think Cyber is a very good point. It's what we're looking for is that a little glimmer of intuition that someone has where they're like, I think this is interesting, but I'm not sure I can express it or I'm not sure I can tell my friends or I'm not sure I can tell my boss. those things tend to be the things that are really interesting. Because if it was easy to talk about or if it was something that everyone's going to like, by definition, it might be consensus or it might be actually, you know, it might be too obvious an idea.

3:34If it's something that you have an inkling on that you have a feeling about, we pay attention to that. So yeah, we're looking for things that other people are not really paying much attention to. How are you finding them? Oh, God. All different places. I think, yeah, I mean, Cyan has had so many interesting stories. We've all had great ways of finding companies. I think one thing that I think is true is that we've really built a brand for doing that kind of thing. I think people, I actually have an inbox. I looked at my email five minutes ago and there is an email that says, I have a weird one for you.

4:07I mean, that happens quite a bit these days where people are like, you know, the only people we can really think about sending this to is you guys. And then when you invest in these people that are really independent thinkers and they end up in interesting companies and start great things, they tend to have friends like that. And so it really compounds on itself. So you kind of get into the game of these independent type of founders that are doing out there things. And then they also have other people who, you know, frankly, those people can be lonely. And if they find friends and other people like them.

4:39And so that really compounds itself. Yeah, and I think through events is another big way that we do this. Going back to the compounding nature of this, we have a flock, if you will. We're part of the flock, but we have this flock of people that we gather and we get together and we have events and we invite others into it. and people get to see what our values and our mission are and live them. And that sort of thing radiates and just compounds over time. I like to say we're never going to do an event that's like a boring AI event where it's like seven VCs and two founders and your job is to like talk about the future of AI and someone's like, well, yeah, I was going to do this.

5:23And it's just, everyone's been to those dinners and they suck. We want our events to be memorable. And we're really trying to put people in a position where they are comfortable to be themselves. Because I think founders are looking to work with people that they want to build long-term relationships with. And the only way you get to do that is to actually create a setting. People can be authentic. And then the other side, if you're really looking for things that other people aren't going to find, you need to know who these people are. Because if they're just going to say what the future of AI is, it's not a great way to get to know someone.

5:55I have to admit, I think you guys are drumming up some demand and some FOMO for these events because I keep on hearing about these dinners from multiple people all over the country. So you're definitely doing a really good job there, creating unique atmospheres for people to get to know one another. But I want to know, what is the recipe for this event? How do you construct these unique dinners or community building efforts where people can be themselves and not just talk about what's ever happening in AI land? Yeah, I'll happily take this. When Lee and I founded the firm, we sat down and talked about all of the things in our careers so far that we didn't like and that what we wanted to be different about.

6:43And one of the things I hate more than anything, and Lee does too, is going to these network events where you're walking around with your drink and you come up to someone and you're like, and it's the same question over and over again, which is, what are you excited about? and I remember Peter Thiel once told me, he said, when someone says, what are you excited about? It's because they don't know what to be excited about themselves. And so they're fishing you to try to get excited about something, um, because they lack it in their lives. And, and so they're doing, they're outsourcing their work to you.

7:15And so he asked, what are you upset about? You know, what keeps you up at night? What worries you? And so we, and I really liked that. And I really liked that about Peter and one of the things I learned from him. But we started thinking about, okay, is there a way that we can build our firm that's values-driven, but also have events that when we invite people to them, it really aligns with our values, but it's also super fun, so fun that you don't even feel like you're working. But at the same time, when everybody leaves this event, They're like, what the heck did I just go to? That was so amazing.

7:54I made a good friend. I found a co-founder with an idea I never thought I would have before. And I solved a problem I didn't even realize I would solve it. so how you do that and you know we we figured we got to bring somebody in to help with this and so we brought in Mike Wang and Mike Wang is a an amazing experience designer um and he he calls these recipes you know every time we do one of these events he comes up with a recipe and he's taught me this language which I really love which is every event has ingredients just like in making a soup has ingredients, right? You have your broth, maybe you have carrots or onions or whatever, and every event that you normally go to has these base ingredients, but what they don't do is spice it up a bit or make it much more interesting so that you remember it as the best soup you've ever had in your life.

8:45And so we have all the key ingredients, but what we do is we say, okay, instead of it going this way, what if we turn it on its head? What if we, you know, eliminate small talk. So from the very get-go, we're like, do not walk around and do this. Instead, we're going to give you a prompt. And this prompt is going to open you up in ways. For example, we had a dinner one time that talked about superstitions. And we went around the table and people confessed all their superstitions. And what was really interesting was that everyone had one. And some of them were fascinating, absolutely fascinating.

9:18And then there was games that we play at these dinners and there's a lot of things that we do. And at the end, people are disarmed and authentic. So the authenticity comes out. People are, you know, able to be themselves. We're able to surprise and delight them. And then most importantly, we show them a different way of living. And they can then steal that idea. We want people to steal the ideas of they come to one of our events and they see something and they're like, wow, I want to do this with my team at work or I want my next off-site retreat to be like this, by all means do it because that's why we do it is we're trying to show companies, founders, colleagues, LPs, that there's a different way that you can live life.

10:01There's a different way that you can conduct business in that you really truly enjoy it and it lifts your spirit and it makes you excited to do what you do every day and you make meaningful connections and meaningful memories out of it. An example I like to give is we did this movie screening and this came about because Mike and I and all of us were riffing on this concept of free will. And we were wondering, like, you know, everyone's talking about whether we have free will or not. Well, how do we express that? Do we write a blog post? Do we get on a podcast? I was like, why don't we have a movie festival and start showing movies that, you know, discuss the concept of free will and leave it kind of up to them.

10:40But if you just do a movie screening on its own and you hand out popcorn, then you're in the land of boring again, right? so the first one that we did right before the movie started we had a second screening where right before the movie started we said well in order to discuss the concept of free will we're going to give you an option b you didn't even know existed which is you can stand up right now leave this movie go to a theater that's a little outside next door where you're going to see a movie that you have no idea what it is um we're going to vote on it so when you go over there we're going to hold up some movies and we're going to vote.

11:15And so the first movie was Arrival and I showed up in an Arrival suit wearing the contamination unit outfit. But then I left the theater and what was interesting is about 30 people got up and went with me and we ended up watching the game. And two separate conversations happened in both of those rooms that were equally as important, but right for the right people that stayed in them and that had a profound impact on some people and they're still talking about it to this day. And then the second one was The Matrix, which is a classic one, you know, if you're talking about free will. And right when Neo is about to take the red or blue pill or make the choice with Morpheus hands those pills over, we stopped the movie.

11:57We brought the house lights up a little bit and then a phone on the stage that was a rotary phone started ringing. And our idea was to let it ring and ring and ring and ring forever if we had to until somebody answered it. And then the person who answered it, they were given a choice, which is you take the blue pill, you go back to your seat, you eat your popcorn, life goes on as normal, you watch The Matrix, that's what you came for, or you take the red pill, you gather all your things, you leave the theater, and you're going to go to some undisclosed location, and you have no idea what's about to happen.

12:29And this guy didn't hesitate, and he said, red pill. He's like, can I bring my wife? Yes. So outside we had a limo where we swept him away to a one star Michelin pop up experience that only existed for one night where he got to eat Chinese Mexican Michelin star food. And what was really, really fascinating about it was just before he ran up to the stage. He said to his wife, they were discussing what an MPC is. And he said, am I an MPC? And she said, no, you're not an MPC. And he's like, well, what is an MPC? And she explained it. And he said, you know, if an opportunity arrives in the world, I'm going to answer the call.

13:09Oh, my God. Exactly. So he did just that. And these are the types of, you know, afterwards he told us it was one of the best nights, if not the best night of his life. And if you can do that for somebody, if you can give somebody the best night of their life, you know, that's far more important than just an event. Right? Like you've changed, fundamentally changed someone's life and the perspective of how they can have fun and how they can engage with people. Like now this person and I text back and forth and I didn't know him before this. This was somebody we invited that spoke at an event previously and we were not friends yet, but now we're friends and we have a meaningful connection.

13:51Whereas before, had we gone up to each other and just clinked our glasses together, it wouldn't have been that meaningful. But now I know more about him and his wife and his family and his plight in this world because we had that intimate moment of realness where we were hyper present with one another. Our strategy is just to make more friends. Make more friends. We just want to make more friends. Yeah, make more friends. Yeah, that's incredible. That is an incredible story. And I love the questions getting, I love getting asked questions like that, like really abstract, but like kind of goofy.

14:25not really goofy but they're just you wouldn't expect it kind of questions uh dinners or work events um whether it's superstitions or like phobias and then you're just going around the table and you're like i had no idea you had a phobia of like candles that's crazy um you know simple things like that but it does it helps break down the barrier and like get get down to your more creative self which i think is really important i do have a phobia of candles oh really yeah new facts from cyan today i'm gonna write that one down i keep a list of things that are very special about cyan and that's going it's going in there yeah people keep asking me why i have any candles it's because i it's funny you should bring that one up because that is my number one phobia candles oh can you explain is it about starting a fire or yeah yeah i'm sorry for uh they were i'm interviewing our my partner yeah no go for it yeah yeah uh it's because when i was little um i was told this story about how my mother accidentally set her house on fire playing with candles and it caught a curtain on fire on fire and and so it got really drilled into me that candles are dangerous and if you don't mind them the bad things can happen and so I have not kept candles around ever since and I don't like being around them and I don't it's like I know where it came from and I know I know that if you tend to a candle it's not going to light your house on fire I can understand the logic behind a safe candle.

15:53I just don't keep any. If anyone gives me one, I give it away immediately. Fireplaces, matches, lighters. Where does fire stand? Yeah. I mean, I have a fire stove, but I tend to it, right? You have to be very mindful and present with a stove. You can burn a house down with a stove. So I don't like lighting fireplaces. I don't like, I just think fire belongs in certain settings and I try to keep it away from me. I respect that. Lee, do you have any phobias you want to talk about? Oh man, I don't, pros? I don't think I have any. Oh, well, good one. Yeah. Yeah. So I was walking in Austin with Ariel, our other partner about a year and a half ago.

16:43and we had just met a pretty well-known founder and we were just talking about that and it was really interesting and a crow landed on my head out of nowhere. And the way that I experienced it was I felt this weird thing and then I looked at someone who was walking towards me and they were just like, what's going on? They were shocked. And then I realized that this crow just came on my head and fell off. And of course, Ariel, who I love, all she could do was laugh. She wasn't going to help me. She wasn't like, hey, there's a crow on your head. She just started cracking up and watched this crow land on my head.

17:18So I have noticed that in the last, ever since that, there are crows all over the place and they're always kind of following me. I think I have a number of theories. I think it's because I once heard a pigeon long time ago by throwing a pen at it. It was in an area that it shouldn't have been and it hit the pigeon and the pigeon wasn't very happy and hedges and crows are friends like everyone knows. And I'm just dealing with that. So anyway, it cracks the top of my head. And, you know, there's a theory could be thought that it was my hair is a nest. We don't know, but a crow did land on my head.

17:55So that is a first time telling that story publicly. So I got the text message right afterwards and I was like, what is going on? It's so ridiculous. Might be good luck, could be impressive. I don't know. Maybe it's your spirit animal. Yeah. Well, now that it's out there, maybe someone can tell me what they think it means. Yeah. Let us know. Comment and let us know what the crow means. Yeah. That'd be good. Well, I love that. So the strategy and the branding around Magically Weird. I was thinking about this. It's like marketing. It attracts things. You typically draw in people from all these different places.

18:37so what does magically weird attract like what does that look like and how does that come together yeah i mean we're looking for misfits free-thinking people people who didn't fit in in a company um you know they couldn't be employed like a lot of um i forget what breck says but he says what did he say he's never been hired only been fired it's something like that yeah that's actually true yes exactly he's yeah that's right he's only been hired does every company he's ever built that has been acquired, he ends up like, and there's certain character traits to a founder, right? They don't fit in places for a reason.

19:14They think about the world differently. They think about, you know, they're not trying to fit in. They're actually trying to break things or remold things to this vision that they have. And so, you know, I think that every fund has its own flavor. I mean, I don't know if you ever watched Mad Men. Did you ever watch Mad Men, the show? Might be too long ago. But there's this one episode where they talk about the cigarette company that they're trying to brand. And they say that all cigarettes at that point are fungible. And they say, well, we're going to call your cigarette toasted. Well, if you think about it, all VCs are kind of, we have money.

19:54It's the same, right? The money's not different. So what makes us stand apart is our ethics and who we are and what we stand for and our compass. And then the siren call that we're putting out for the types of people we want to show up at our doorstep. And so we're looking for people who are really, really independent thinkers that are dreaming big in ways that are going to reshape humanity. You know, if you look at Airbnb, the founder said, you know, people are going to sleep on strangers' couches and everybody said, well, you're insane. You know, those are the types of people we want. You know, the people who just have this insight that whatever it is that they're going to work on is going to change how everything's done.

20:36I mean, you think maybe you could talk about Chase, like when he showed up at your door and tried to convince you to go to South Dakota and jump on a plane with him to harness energy from gas flares. Like, what did you? Yeah, yeah. I don't know how much people know about the business Pousseau. It's an AI data center business at the moment. But when it started, he showed up. Yeah, we had a nice conversation at Dandelion Talklet. And he basically was like, there's all this gas that comes out of the ground in places like North Dakota. And it's wasted. And it's burnt away. And it's in these huge fireballs.

21:17and um there's so that's one problem and the other side of it at the time um since 2017 18 bitcoin was just kind of continuing to ramp up and it was very energy intensive uh and it's a huge problem for the industry and so he was sort of in it was a polychain at the time and he grew up in with a friend that was in oil and gas industry and he kind of learned about that the flaring issue and so he was like yeah i took a uh basically like a a truck with a bunch of servers and moved them out into the middle of North Dakota and started mining Bitcoin in like oil and gas world. And everyone in the oil and gas world was like, what are these crazy nerds doing?

21:55And then no one in the crypto world was like, oh, it seems like a great idea. I'm going to put some servers in, you know, the middle of North Dakota and see what happens. So I remember thinking, that's one of the more absurd things I've ever heard. Like, tell me more. And so that's a great example of, you know, the kind of thing we look for, which is often something you've never heard before. Or it could be easily dismissed. It was certainly dismissed at the time. But if you look past and you're willing to really think about why is this person so excited about it? What's actually behind there?

22:26You can discover secrets. And then the other piece of that is actually something that I really, really respect Cyan for is willing to stick your neck out for things even if it's not popular. And so I think that's a big piece of what we do at Long Journey. We're willing to put our neck out there. And it's a reinforcing thing. We encourage each other if you believe in something. And we want to support everyone to do that. Yeah, the other thing is we're looking for people that this is their life mission. You know, maybe they had a certain type of upbringing or they grew up in a certain region of the world that impacted this decision that gives them a unique insight that nobody else could have.

23:06You know, that's the vote. Totally. And which ties back to what we were talking about earlier with the events, which is you put people in these moments where they can really understand, as you said, Molly, these creative moments and they're thinking about things creatively, you can see inklings of what it is about for them. And often those things that when they're relaxed and they're thinking about something interesting, there's often a tieback to what it is they're doing and why they're working on that thing. And those are the things you want to discover. Not just like, hey, I've got a business plan and I'm going to go and sell SaaS for things.

23:41It's going to be$9.99 and people are going to love it. Everyone says that. There's no alpha in that. You're looking for what's a little interesting, what's a little out there about what's going on. You can only figure that out as you put people in a good environment. Yeah, that's true. Absolutely. And that's so important at the earliest stages too when story is probably one of the number one driving factors of why things get funded. Founders and the story. And for Long Journey Ventures, you guys have evolved from early stage to later stage too. I'd love to unpack more of the originations of the fund and what that looked like to today.

24:25Yeah, sure. Yeah, I mean, I think about it as like, we want to have as big as impact as we can, but we want to grow in an organic and responsible way. And, you know, we're very values-oriented, and one of our values is it's not monopoly money. And so the origin of kind of going from super early stage, which is never going to change, we're always going to do that and be a big part of what we do, from doing more follow-on checks at slightly later stages is we saw a lot of our companies mature. The Crusoe's, the Fox Securities, the Andorolls, the Diamond Foundries, all these things that we continued to, you know, very early on and continue to have a good relationship with.

25:11And we saw that they were still misunderstood. They were still magically weird, even after raising a series B or C. So they were still alpha there. So initially we just, in my roots at AngelList, the first Angel of Syndicate and did a lot of SPVs, I knew that there was this mechanism which we could start investing in some of these companies that were not pre-seed and seed, but we still thought there was a lot of upside in. So we started doing it in 2020 when Simon and I founded the fund. We started doing some SPVs in some of these opportunities. We did Anderle in that period and a few others. And as that strategy grew and it started working and those companies went on to continue to grow, we designed a strategy and a fund around it.

25:56But what it wasn't, it wasn't like, oh, we're going to raise like a$200 million fund. We think that there's all these, we can do this strategy and we'll just, we'll just try it. You know, it was more a very thoughtful and meticulous way of building this thing out. And that's kind of how we use, we've grown AUM in that direction. And that's why we've done it. We want to, we want to continue to support the businesses that we really believe in and um i think we have a really incredible strategy for that and arielle was a huge part of that too and she brought her on um you know she had a traditional background at co2 and kleiner and was used to writing those slightly later stage decks than we are going back to the origination story uh lee and i's roots are an angel investing and we both met at angeless we're both angeless alumni and you know we had a remarkable time there together and that's Lee and I started collaborating at first, which was, you know, how do we solve this problem where we can make access available to people for deals that they didn't previously have access to?

26:58We both wanted to serve this higher calling. One was him to find the next emerging fund managers, but most importantly at the end of the day was to share the deals with other investors, other angel investors who maybe they're not, they're just getting started and they could write microchecks. But microchecks, as we know, add up into larger checks. But we also knew that founders didn't want to deal with all these people in the cap table. And so Naval had this brilliant, and all of the engineers there had this brilliant insight that they could build a platform around this. And I was angel investing at the time.