#869: Max Levchin, PayPal and Affirm — The Path from The Soviet Union to Building Multi-Billion Dollar Companies (Plus: Real-World Socialism vs. Capitalism)

23:54Tim Ferriss:I asked you what book or books you've given the most as a gift and why. And one that I've still not read, I'm very embarrassed to say this, is The Master and Margarita. Missing out. Yeah. So this is now on my to-do list. I'm going to let you fill in the blanks here. But you said, I usually buy M &M, which even though literally five lines above it, it says The Master and Margarita. I was like, M &M's in batches of five. But you give it as gifts to new friends. I do. You always have copies on your desk at work in case someone wants to borrow one. Why? What makes this book so special? Who's the author?

24:32Tim Ferriss:What's the background? It's a great book. It is well translated by a couple of different translator teams. So you can almost not go wrong buying one of the last three translations. There's about six that I remember exist in English anyway. I would not bother with the first three. I think one is Pevear. Pevear and Volkonsky is the kind of a canonical, like great translation into English. The book is actually in Russian originally. There's now a new one. I'll remember in a second with my own OCD exactly who this is. But Pevear Volkonsky is a fantastic, very good translation. Anyway, it was written by Mikhail Bulgakov, who is arguably the greatest Russian language writer of the 20th century, in my biased opinion.

25:23There's a lot of great Russian language writers, so it's a bit of a fish-in-a-barrel type situation, like he was a great Russian author. And there's some fantastic science fiction Russian authors, incidentally, but he wrote many books, and all of them are really good. The premise for Master Margarita, so it's set in kind of an early 1920s Moscow. So Soviet revolution happened. The Russian civil war ended. The place is now socialist and sort of slipping into socialist bureaucracy building mode. And yet it's a socialist paradise in the making. And so the devil, like the prince of darkness, visits socialist Moscow in a summer of 1925, let's say, with a coterie of characters like from what you would expect devil to hang out with.

26:09wreaks absolute havoc on the socialist paradise. So first of all, it's a book within a book, which is like one of my favorite plot devices. The main character, the Panavist Master, is a writer who wrote a book about the last days of Christ. It's a book about crucifixion. A lot of it is in the book. It's interspersed with the chapters of the original. And obviously, Bulgakov wrote both, but he is very much referencing himself. So he was in Moscow during the revolution and on, and very quickly ran afoul of Stalin and was also, because he was such a prolific and brilliant author, was Stalin's favorite author, was persecuted, ultimately asked for permission to leave the country because he couldn't be himself, he couldn't write.

26:54Stalin apparently permitted it, but then he died before this could happen. It's a little autobiographical story of the writer himself. It's a story of devil making a mockery of socialist paradise. It's a story of Christ and his last days on earth told by an amazing writer, both the author of the book and the book's author, also known as the master. It would take many hours, and at some point I'd be like, you know, well, you should just go read the book because it's so amazing. But it is one of the best portrayals, certainly the earliest brilliant portrayal of Homo Seveticus. What happens to the human mind when exposed to rampant socialism?

27:33and it is funny as hell because having grown up there or spent 16 years there, the insanity of living in a socialist paradise and yet you don't have enough to eat is tragic, obviously, but it's also very funny. The book does it amazing justice and it's like super-duper supernatural, sort of science fiction-y in what's possible. There are flights, there are witches, there is a devil's Sabbath, there's all kinds of crazy shit that happens there. It's amazing.

28:04Tim Ferriss:Something for everyone. It's an amazing book. And it's shorter than most Neil Stevenson books, at least is my impression. It's like a quarter length or a fifth of a short Neil Stevenson product. So it's definitely very accessible. It's also incidentally, not to overshare, it is the reason I am married to the woman I am. Okay, I'm not going to let that pass. Yeah, please expand. We met completely randomly. through like a sheer accident and both were predisposed to be like, who is this weird person? Why am I talking to whoever this girl is, whoever this guy is? And then I thought she was quoting Master Margarita.

28:44And I was like, before I like found my way out of this conversation, I've got to find out. It's my favorite book. It's always my favorite book. Like, how can I not? So because I know the book as well as I do, because we're speaking in Russian, I quoted the next line. And she's like, oh my God, Master Margarita. That's my favorite book. Like, no, it's my favorite book. It's been 27 years and two children and a very happy life together. Incredible. So this is a book that many things in my life are owed to. By the way, to give credit where it's due, she's the one who said, oh my God, that is the best line I've ever heard in a movie referencing whenever there's doubt, there's no doubt.

29:22So she deserves full credit for this.

29:24Tim Ferriss:Full circle. Oh boy. Yeah, the brain in the vet question just keeps popping up. So let's actually talk about your wife for a second and your relationship for a second, because I was texting with another mutual connection, Sami Inkanen, who is also a absolute monster endurance fan. And we were texting back and forth about that. I was chatting with him. And I know you're an investor in Virta Health, which people should check out also. So let me just pull it up here because he shot me over a couple of different options for questions. I asked him the same thing. And I'll give you a sampling and then I'll indicate the one that most caught my attention.

30:06Tim Ferriss:I asked him about what it's like to cycle with you. And he said, well, if you're going to be riding with him, just know he pretty much goes all out always for the first 90 minutes, no matter who he's riding with. But enjoy. And I was like, I'm not going to be riding with him. Don't worry. and then he had he had a number of questions right grew up a super intense engineer now a well-rounded ceo leader what did it take to go from one to the other cycling why did he go like fully all in a few years back which is actually kind of an interesting question because i know that's been part of your life really really consistently on a near daily basis for much longer than a few years but third this is the one that caught my attention he's essentially working with his wife on sci-fi you know his family office vc what's his advice after years of experience regarding working with a spouse.

30:50Tim Ferriss:So that's the one that I wanted to hit next. You got to marry right. Otherwise, it's hard to work. Well, what are your thoughts on marrying right? If you have thoughts on that. I do, actually. I've spent a lot of time thinking. I mean, I spent a lot of time thinking about all kinds of random stuff. And this is no exception. The line marry up is a line people use all the time. And I think that's kind of a, that's cute. What it really, I agree with it. I just think it deserves unpacking. I was asking myself actually a question like, why is our relationship as good as it is? And it is really good.

31:24And is there anything to learn about co-founding companies? Like you're co-founding a family when you marry someone, you know, you get together with someone. And are there parallels? And I was contemplating all this stuff. And I sort of realized that I've had many co-founders over the years and some were amazing relationships and others didn't work out. And it's always tempting to sort of blame yourself, but you obviously have to examine it through the lens of like, what fell apart as a relationship between two co-founders. And I realized that the secret for my marriage is I'm still trying to impress this girl.

31:56Like every day I wrote a bit thinking like, well, I'm like, how did I get this? Like, this is definitely better than I should have gotten. So clearly I got to work on this. Like I can't let her find out that she married down. And so the attempt to impress your mate on a daily basis is the secret to the best marriage. And I think that The good ones are where both sides are kind of secretly thinking, I definitely lucked out. Like, this is so much better than I should have gotten. And so if the feeling is mutual, you're going to go very far together, just constantly trying to grow and, you know, come up with new tricks, new ideas, new.

32:29You don't let yourself be stale because you're watching the person next to you grow and become more well-rounded, more intelligent, more successful, et cetera, et cetera. So that's sort of the secret to our relationship. and everything I've accomplished in my life since we've met has been modulated by her. We keep on referring to this her. So her name is Nellie. I think I suspect many of our mutual connections refer to her as the sort of the actual reason behind anything that I've done successfully in my life. It is true. She's been extraordinary at both calling my BS out when there are some and pushing me at the, you know, things like whenever there's doubt, there's no doubt situations saying like, hey, trust your gut, make a decision.

33:16This isn't the right person. This isn't the right idea, et cetera, and so on. One fun fact. So we met in a very early days at PayPal. So that same sort of the summer of 98 is when the seeds were underground for PayPal. Early 99 is when we started. My wife and I met in mid 99. So exactly a year after I moved to Silicon Valley. And so she witnessed the entire PayPal saga from the front row seat. after PayPal, I was like, anything but financial services. I'm going to go build some other stuff. But like, I can't allow my sophomore act to be in the shadow of my freshman act. And she'd sort of say, you know, do whatever you want.

33:46Like, obviously, you have a right to come up with anything. But I'm just going to tell you, man, like, that's clearly what you're meant for. And so like, you know, you go on. So seven years later, after I've been meandering through a desert, she's like, you know, I think I said it before, but I just want you to know, it's still true. Maybe you should go do what you're good at. And I affirm it very much a product of that conversation. and I was like, I think she's right. I think I'm a one trick pony. And the trick to the good trick though. So here it is. Anyway, trying to impress your mate, trying to impress your co-founder every day because you can see the other person progressing in front of you and get better and smarter and more intimidating by way of just being so much sharper, so much more interesting than they were when you met is a great motivator.

34:29It keeps you on your toes, makes you work harder at improving yourself.

34:33Tim Ferriss:And on top of that, What have you learned about working with a spouse or collaborating with the spouse? Because sometimes spouses can be often very well matched and have a dynamic like the dynamic you describe, but they have some compartmentalization or separation. And I've met so many friends and even have some neighbors where they've just, quote unquote, attempted to retire, sort of like a failed retirement. And then one neighbor was describing this to me. his wife is also very active, has got tons of big projects she's working on. And he doesn't know what to do with himself. So he'd sit down at the breakfast table while she's on her laptop.

35:12Tim Ferriss:And he'd be like, so what are you up to today? And she took off her glasses very slowly. And she said, you know, I'm not used to checking in with you every morning. You need to get a job. So working together is a very different thing when you have that. And maybe I'm overstating the extent to which you guys sort of collaborate in that way. But any thoughts or recommendations for people who are entering that type of relationship with the spouse? It can definitely get hairy, for lack of a better term, if you're not thoughtful about it. So you have to think through, you have to talk through kind of what makes sense, what doesn't.

35:51we're well-matched because I am quite technical, have lots of interest in sort of the technical depths of matters that we work on together. She works on, I work on, et cetera. And she has an extremely strong finance background and understands business models and kind of state sort of philosopher of business these days. And so our conversations are very rarely about checking each other's work, which is where I think you could really end up with like, why are you checking my homework? Nitpicking. Yeah, like micromanaging. Don't micromanage what I'm good at. And she also, she's an incredible empath.

36:25And I'm not. Like I frequently be like, so I'm dealing with this in my day job. Why is this person unhappy? Can you explain to me? And she's incredibly good at that. And so I think because we are such kind of non-overlapping areas of strength, we end up being very complimentary. If anything, we tend to be like, wait a second, like we're on your stuff. Why are you bouncing to mine? Like we need to finish that thread. Both of us have pretty active professional lives. And so we're constantly discussing them. But we don't, I think, ever run into or step on each other's toes. She doesn't ask me, what's your token budget?

37:01Any more than I ask her, how did you make this hiring decision? Or like, how did you decide that this was a bad investment opportunity? With knowledge, like I'm pretty sure she looked at it with all the tools she's gotten. They're better than mine. But you have to be prepared to communicate. And it does not hurt to be direct with one another. And so you have to be able to take on directness without hurt feelings. And a great one-liner, another gift from my wife. She didn't come up with it, but she had read it somewhere. And she's like, here's a new motto for our family unit. Don't go to bed angry.

37:33Stay up and fight.

37:37Tim Ferriss:You guys put that into practice? We don't fight too often. but we definitely don't let curfew prevent us from hashing out whatever it is our differences are at the moment. We try very hard not to let things fester, and that works really well. If you're going to overlap familially and professionally, you better deal with conflict or disagreement quickly because you're accruing areas of negative overlap faster than most people do. Like, I hate the way you chew, but I love you all the other ways. Like, we got to talk about that, but it's not an important thing. It's like, I hate the way you chew.

38:15And by the way, you've belittled me by checking on my token budget. It's like compounding frustrations and marriages fail because people just don't say out loud, like, here's the thing that I'm not sure I'm prepared to put up with. Just got to stay up and fight. Get it out of there.

38:29Tim Ferriss:Stay up and fight. It'll be the title of this podcast. Max Lepchin, stay up and fight. You mentioned earlier, time is a zero some game. I want to talk about obsession and analysis and tracking for a second, because ultimately the question is, how do you choose what to track? This is pulling from a men's journal piece that came out in 2018. So some of it is dated, but today, if you can name it, Levchin has quantified it. Food, he spent weeks using his iPhone to photograph all of his meals and snacks and later gauged in nutritional values. Sidebar from Tim, I did that too. I still can't believe that say the Dexcom app doesn't give you some estimate of caloric content or macros.

39:11Tim Ferriss:It's just like, you ate chicken. I'm like, that's not helpful. Anyway, coming back to sleep. As an overtaxed entrepreneur, as a parent of two children under the age of five, Levshin determined his minimum threshold by saving five minutes off of each successive night. Interpersonal relations and time management, Levshin says he once spent a month grading every business and personal meeting on a scale of one to 10 on several metrics like usefulness, intellectual stimulation, and social stimulation. It goes on and on. It sounds like a weirdo, but I feel like, that's all true. Oh, man. So I've done lots of this too.

39:44Tim Ferriss:I'm just curious how you have over time determined what to track and maybe what you're paying attention to outside of a firm business metrics and things internal to a firm. And we'll get to a firm. But I'm just wondering for yourself, outside of that company professional context, how do you choose what to track? I've definitely gotten much better at deciding what matters, what doesn't. So when this article was written, I'm sure no metric looked dumb, no metric looked superfluous. I was like, great, counting the number of times I trimmed my fingernails. Hmm, what is their signal in that? As you age, you replace raw compute and willingness to engage in raw compute with pattern recognition and occlude paths that you don't need to travel down because you know there's nothing there.

40:40Like there's absolutely no value in tracking your fingernail clippings or rate they're off. I've become more focused on tracking sleep because there's more and more science showing that that's really important. Even that, I sort of used to obsess over a bunch of metrics. And I think at this point, the sort of reasonably cutting edge and, you know, better than I do, I think, these days, resting heart rate and heart rate variability are the two really good anchors. If you keep one down, keep the other one up, that predicts your recovery, predicts your intellectual capacity for the day really well.

41:10So I track that pretty obsessively. I try to stay in bed the right number of hours. I'm a lot less obsessed with I don't need to sleep more than X, so better be, you know, bullet out of bed by X plus one second. And I'm also not precious about, you know what, I don't feel like I need any more sleep. I'm just going to go and tool around and do more stuff. So I've relaxed a bunch on things that I found to be less impactful to my own life. But I have the benefit of spending a bunch of years obsessing over everything and deciding, well, it doesn't seem to matter that much what I eat, for example. So for a long time, I was obsessed with the exact sort of caloric and macro targets.

41:46And then at some point, I had to travel a lot more than I used to. And obviously that goes out the window because he can't bring your favorite yogurt with you everywhere you go. And so you end up like, well, I'm just going to have to have some fermented foods from the assortment available in this geography. And it turns out that basically your gut health is going to be okay as long as you're having enough fermented foods versus the fermented food you've selected for yourself. So you relax some constraints and move on to spending less time thinking about them. I track sleep. I'm still an obsessive cyclist, so I track every metric you can imagine.

42:16I've become more obsessive as a cyclist. It actually bothers me a little bit, but because I'm unwilling to believe that I'm ever going to age properly, I keep on looking for marginal gains by like obsessing over the exact crank length adjustments I can put myself through just to return some of you marginal watts that I lose with age. I've gone from believing that all you need is cycling to widening my physical training routine too. So it's a maybe slightly more brain allocated to like, what's the right day to lift heavy weights versus the right day to not do that.

42:58Tim Ferriss:Not to be a salty old dog, but in the early 2000s, back in the day when I was running my own e-commerce business, the tools were atrocious. They tried hard, but man, was it bad. You had to cobble all sorts of stuff together. I could only dream of a platform like Shopify. Shopify is the commerce platform behind millions of businesses around the world. And now 10 % of all e-commerce in the US is on Shopify. Now back to the early 2000s, then nobody even thought of AI. Who could have predicted, even in the last 24 months, the magic that is now possible with AI. Shopify has been ahead of the curve, and they are packed with helpful AI tools that will accelerate everything, write product descriptions, page headlines, even enhance your product photography.

43:46Tim Ferriss:Best of all, Shopify expertly handles everything from managing inventory to international shipping to processing returns and beyond. If you're ready to sell, you're ready for Shopify. Sign up for your$1 per month trial and start selling today at shopify.com slash Tim. One more time, shopify.com slash Tim. In 2026, stop waiting and start selling with Shopify.

44:13Tim Ferriss:I'm curious, and I've never asked you this before, but when cycling entered the picture, because in doing some research for this conversation, I can just pull, this is from, I believe, an alumni magazine, but behind the curtain of Sovita or Ukraine, and then you're full name, which I cannot pronounce, is born to a family of physicists. As a child, you struggle to overcome life-threatening respiratory diseases. And parents are told you won't live past childhood. And with your mother's urging, a determined young Max begins playing the clarinet to build lung capacity. So I mean, that doesn't seem to have the makings of a serious cyclist.

44:50Tim Ferriss:When did you embrace cycling and what does it give you also? There's an interesting origin story that actually kind of intertwines Ukraine and clarinet and everything. So I did have some fairly gnarly respiratory stuff when I was a kid. And I think my parents probably were scared into kind of throwing everything in the kitchen sink into it. The nice Jewish boy from Ukraine, I probably should have played the violin, but clarinet is a reasonable close second. They're like, oh, but lung capacity, great, let's do that. So that's how I got into clarinet. There was like literally something that will feed the stereotype, but also help the lung capacity development.

45:27And so I think my VO2 max at the time must have been like in a single digits or something. Because like I remember just trying to open up my lungs and breathe in it like it didn't work. And then like everything else I do, I feel like, oh, well, I can just like obsess in measuring it. And VO2 max is definitely not a thing Soviet Ukraine really measured. But they did have like the basic approximation, like blow into a tube and see how far you can push the ball, like all the physics equivalents of lung capacity measurements. And so I was already looking at Quantify itself from a lung capacity perspective as like a seven-year-old kid or something.

45:59All of this while living in an apartment complex that overlooked Kiev's only outdoor velodrome. And so my platonic ideal of a manly man who was like a sports phenom was these dudes who would like get on the boards of a Kia Velodrome and just put their watts down and like go for an hour or two just ripping through this thing. And I was like, wow, like one day when I'm not a scrawny little kid with a clarinet, I'm going to be like that. So I used to sneak into the velodrome when it was closed and try to ride my bike there, except the cranks would touch the wood boards. Like one of the worst accidents of my childhood was I had a giant wood splinter in my butt because I crashed at the top of the velodrome trying to do loops and slid down.

46:48Of course, these weren't well-finished boards and it was outdoors. So like the elements rained on it, probably not PG-13 after this. But anyway, so I always thought like cycling, like I didn't grow up with a ton of sport in my life. like soccer is prevalent, obviously, in Eastern Europe, but like cycling was right there on display every day. If I wanted to see someone who looked like just full of life and vigor, I would see a cyclist. And so I always rode a bike as a kid and always rode a bike in college. And sort of as I got into sort of busier and busier, where this notion of like, how do you stay sane became an important part of the consideration.

47:28Like if you're going to work for three days straight without sleep. Like you got to offset it somehow. You can't just like sleep it off. You also need to do something to your body versus your brain. I sort of naturally looked at cycling. And then back to Nelly, when I left PayPal after we got acquired by eBay, I definitely hit like a very low point where there's nothing going on in my life that was worth staying up all night for. And she pointed out that I have this amazing bike hanging on the wall that, you know, I had since I think before we met. She's like, why don't you like get back on the bike and see if you can find joy in that.

47:59And then she knew my stories of rolling around the Kia Velodrome. And so I got on the bike, and it was one of these moments where I went for a ride with a bunch of people, and they were all like very serious road jewelry, as the saying goes. I've never heard that. It's like if you're buying more of a bike than you deserve to ride, like that's nice road jewelry I got there. I was on like a beater bike, relatively speaking. I think I brought it from college, actually. And I sort of dropped everybody on the first hill. And I was like, oh, yeah, I know how to ride a bike. I have big lungs. That clarinet really paid off.

48:30And so that was like, I should really invest some time into getting better at this thing. That's how I got into. But I am exactly what they call a hammerhead. So if I see a road, I can't not go fast or at least try to go fast.

48:45Tim Ferriss:What does it give you in terms of dividends just on an ongoing basis? A couple of different things. So it's definitely, I mean, it's a low-impact sport. so you can ride a bike for six hours and no part of your body will be like in absolute shreds the day after if you at least somewhat know what you're doing. So it's a great just, if you have the time and if you're interested in it, it's not a self-destructive sport, which some sports are more and others are less. This is definitely one of the less self-destructive on the actual physiology. Part of why I like to go hard on the bike is it actually allows me at least to clear my head.

49:19It's one of the few times when I'm not constantly playing with some work-related concept or thinking through some future ideas or whatever. It's a moment where sort of everything gets tuned out and it's just me and the pain in the legs and sort of you're telling yourself go harder or manage your energy, but there's not enough time or cycles left. And like, also, what if we went to this market now? It's a moment to go into like a pure moment of flushing the whatever's left in the head. And it does keep you healthy. It's a great way to stay alive and be healthy. And then more and more these days, it is a lifestyle sport of CEOs and leaders and people who sort of read the same kind of books.

50:01And it's another form of a community where you don't have the time to sort of join clubs. And I'm not a big foodie. I'm not a big drinker. I don't have a ton of time for these protracted social events. I try not to go to many conferences. And yet, I'm human. I enjoy human company. And so riding a pack of people who are interested in similar things is another form of staying engaged.

50:27Tim Ferriss:So I imagine that's a being near people, not a talking with people type of situation if you're going as hard as I suspect you're going, right? Part of the trick is if you can still talk and they cannot, then you're doing it right. Cycling takes place over hours. And so you can spend some time talking. There's also an important part of cycling culture is the coffee shop ride where you sort of, you hammer to a coffee shop and then you sort of, everybody falls in their chairs and gets their pinkies out and sips espresso. And I love coffee almost as much as I like bikes. So it's another part of it.

51:02Tim Ferriss:If we have time, we'll come back to coffee because I did dig into that in the research. Two other quotes that you gave for your potential billboard answers, you said, if it were in Marin County, and I'm going to mispronounce this so you can correct me, but it's either Jens or Jens Voigt. I'm not sure, but you can correct me in a second. So two quotes from him, legendary cyclist. Number one, when my legs hurt, I say, shut up legs, do what I tell you to do. That's the first. The second is, if it hurts me, it must hurt the other ones twice as much. That's a great one. It's so applicable in so many contexts.

51:34Tim Ferriss:Am I saying that name correctly? Probably not. I think it's Jens. I think he's East German, Jens Vogt. One of my proudest moves on the bike is I rode with Jens a few years ago now. He used to hang around Northern California. He's a lot of fans, actually. He's transcended the very specific sport of cycling into having a fan base worldwide because he's such a character. The shut-up legs, like I own multiple pieces of clothing with shut-up legs that I did not personally produce. he's famous for that line but he's a very funny he's now primarily a commentator in bike races but he is a great embodiment of this culture of endurance pain with a smile if you will pain with a smile before we move on because i do want to ask you a bunch about affirm and broadly how things you've done with affirm reflect your thinking and ability to see things that others don't see, perhaps.

52:32Tim Ferriss:But before we get there, I wanted to come back to Eminem. This book we were discussing earlier, and for people who are like, oh yeah, I meant to write that down, The Master and Margarita. You wrote here, just to reiterate some of what you already said, it's a fairly short novel, remarkable in its exceptional depth, exploring everything from fundamentals of Christian philosophy to the fantastical and hilarious satire soul corrupting 20th century Soviet socialism. So my God, that's really well put. Yeah. I don't think I'm alone in watching some of what's happening in the U S and elsewhere with respect to this embrace of socialism or things that go by the name socialism.

53:16Tim Ferriss:Perhaps you could apply other labels. And while capitalism is not a panacea for all things, and there are plenty of warts and risks and humans respond to incentives. As someone who came here at 15 or 16, I would just love to hear you speak for a few minutes on what you're seeing and what your thoughts are. I'm pretty worried, not to sort of go all dark immediately, but I think people without the questionable benefit of growing up in the collectivist paradise to, quote, the current mayor of New York, don't understand just how corrupting it is. The ideas of socialism are amazing. You know, me for my fellow men and share and share alike and do the right thing because it's the right thing to do, not because there's a financial incentive to it.

54:09All those things sound amazing. And so it's seductive. the idea of a worker's paradise without the greedy lenders, capitalists, bankers, sort of all the sort of things we were fed as children or I was fed as a child in Soviet Union. At first blush, you're so like, yeah, it makes sense. People who work hard should have more and people who are great, even though they're not capable of producing valuable things in society because they're good people, should have everything that I have. even though I'm working harder than they are. Those things sound pretty good, but they inevitably require a bunch of structural change that just does not work, thanks to human nature and many obvious things like it.

54:55For example, one of the greatest mental images I have from growing up in Soviet Union is if you went to a government-owned store, and every store was, of course, owned by the government, you would very quickly notice that the people whose job was to sell you things from behind the counter were always very fat, while everyone you knew in your life was always very skinny. And you're sort of like, this doesn't make any sense. Like, how do these people who happen to work in food stores are always really well fed? Like, well, because they're stealing, they get access to the food. And it expands that notion of, you know, this idea of everybody just pulls all their work product into one big pool.

55:35And then someone's in charge of fairly distributing it to everyone who needs it. That's the, you know, from each according to their abilities to each according to their need is kind of the socialist slash communist motto. And it works great, except people who are doing the actual redistribution get to keep a lot for themselves. And it doesn't matter how honest they begin that journey, by the time they get to real power, they become profoundly corrupt and steal and keep and redistribute primarily to themselves. And so that alone is just like an indictment of socialism that you cannot get around.

56:10But it gets worse because markets, free markets, capitalism, you know, whatever term you want to use, inherently forces competition. If you believe you have a thing that you can sell at a lower price than the other guy, you get the market's attention, you get the business that's available to you because the thing is worth buying by someone, you're going to work on creating a margin for yourself by lowering the cost of production, finding efficiencies, finding some ways of making the thing cheaper for you and or cheaper for the buyer so you can compete on price. So all those things do not exist in socialism because it's all centrally planned.

56:45We're going to make this many widgets and then we're going to have someone redistribute them to all the right people full stop. And what happens is there's never the pressure to improve. And so you always make stuff at the government-mandated cost and the government-mandated price is what's being used to sell it. And so you have natural stagnation. You have a system that rewards graft, gives power to people who are most likely to become graft-driven, and prevents anyone else, talented or otherwise, from trying to innovate and improve the efficiency of the system itself. And so it just does not work.

57:20And the thing that worries me in the U.S. and the world, this isn't unique to us here, is the headlines that make you feel like, wow, I would love to live in the world where everyone is fed and everyone gets more or less the baseline of good living is very compelling. Like it is easy to agree with. The recipe for that remains to be the best recipe we know, the best recipe we've discovered as humanity is capitalism. a force for constant creative destruction where you build the next thing better than the other guy. And yes, his business may be put out because your business thrives, but the beneficiary is the buyer or the user of the product, the buyer of the widget, because you're constantly working to make the whole thing more efficient.

58:03If you eliminate the ability to or eliminate the need to create efficiencies, you just stagnate. And the death of Soviet Union was surprised to exactly zero people because we knew as people who live there more than most that nothing ever changed for the better. Everything was the same price. The government mandated price. And we were still using phones that looked like they were made in 1950s and most of the office were like, oh, you have buttons on your phones? That's amazing. We still do the clickety. The rotary. Yeah. And so anyway, I can't say enough how the seductive story of socialism really appeals and I can understand why.

58:40But if I didn't have my knee job, I'd spend a lot of time screaming from every street corner, don't fall for the trap. It's a surefire way of getting to no progress at all.

58:50Tim Ferriss:So Affirm, you know, on some levels is a, I don't want to say a response, but it's a solution that replaces potentially predatory practices. And we're going to get to that. But I'm wondering how you would explain the current apparent wellspring of attraction to, just to keep it simple, socialism in the United States. Are there structural or systemic problems that have contributed to that? Is it mostly sort of demagogues using whatever talking points they think they can leverage to attract votes, et cetera? What are the ingredients in the cocktail that are contributing to this current phenomenon in your mind?

59:35I'm confident I don't know every strand of this particular disease. It's a complicated issue. And I think it is definitely the case that the brochure looks great. The storytelling of, do you know someone who is poor? Do you know someone who deserves better? Do you know someone who's been laid off? It's the case that capitalism can be profoundly unfair, at least to an individual. As a system, as a way of improving the world, it works amazingly well. We've not created anything better. But you get thrown off the bus if you build something that gets outmoded or outcompeted by another participant in the market.

1:00:19And it can hurt. For the entrepreneur, it looks like failure, which we are wired to accept. But it still hurts. For a worker, it looks like being laid off, which could be catastrophic for a family. for people who sort of misinvested their money or something went wrong. It doesn't look, doesn't taste good. And so the idea of social safety net, the idea of welfare is natural. Like you hate seeing your fellow men and women starve or not do well. So I understand the definition of the problem and the notion of income inequality and like all the things that we see in Silicon Valley firsthand is very real.

1:00:56It's not like, how are you complaining? There are a lot of people who are not doing well, and every new disruptive change from the Industrial Revolution to the AI Revolution, there's always someone on the receiving end of the efficiency because their work is no longer required or their products or their ideas are no longer relevant. And so socialism is a compelling story of how to protect those people, how to prevent them from suddenly being on the outskirts of society or worse. and I think And there's definitely a lot to do to make sure we don't leave our fellow humans behind. Certainly my love of capitalism and free market does not obviate my humanity.

1:01:38I care about people just because I am also human. And I see it as part of my job to ask the question, can we do better? Can we provide the social safety net for everyone? We're creating more and more efficiency. We're creating more and more value. there have to be ways of helping people who are thrown off the bus to make sure they don't end up in a gutter and i happen to have some solutions that i love and solutions that i think are worthless the idea of let's concentrate it all in the hands of the government give a handful of people the right to redistribute it all and we'll do better doesn't work and i lived to tell the tale i do think that things like philanthropy is profoundly important and the more disruption we're going through as a society, the more important philanthropy becomes.

1:02:20And I think in that sense, not an especially outwardly religious, but I think religion provides a really useful set of frameworks around how to think about it. Every organized religion has a version of what it means to be philanthropic. And the older I get, the more I start respecting the thought that's sort of been aggregated over the thousands of years that most religions existed. So I think that's super interesting and important and worth participating in. On the other side of it is I think capitalism in particular has created opportunities for products to develop where these are optimizing up and to the right of the most profit at lowest cost ends up building products that are actually devolved from not just their economic platonic ideal, but societal ideal.

1:03:12And I don't think we have to compromise by saying, well, you know what, I don't actually care that this is harmful to someone because it's the most profitable, market-efficient thing to do. And my theory for a long time has been that you can build products, certainly financial services, that are optimal, not just from the lens of most profitable, but also most societally beneficial. And that's not uniformly distributed. There are plenty of products that look like predatory lending and all the other things, or just make money because the underlying customer doesn't understand what's going on, doesn't have the capacity to deal with the complexity of the math involved.

1:03:49And Affirm is the answer to that question. In some ways, what we are doing here is trying to say, look, you can optimize a product beyond just making the most money. In fact, it's okay to make a little bit less money if you are able to create something that's societally more successful, more important. because in the long term, I think you will have retention that consumers will not go to a cheaper product or a product that is less profitable for its shareholders because it's so societally important. So I am, to at least some extent, embracing the ideas of pro-social product and engineering. I just choose to do it strictly through the lens of capitalism.

1:04:31Tim Ferriss:I'd like to go to early, early Affirm. This is parallel to PayPal, which looking back at, say, early fundraising for PayPal, it wasn't exactly like every door at Sandhill Road was opened with a red carpet. I mean, it was incredibly hard going. People were like, yeah, no way, impossible, not going to work. I mean, I've had conversations with Reid Hoffman about this, just like, yeah, no, like at every turn, no chance. And I mean, ultimately, with Peter pulling from the hedge fund and stuff, I mean, it's a hilarious story and incredible. A firm early on, similarly, it was not obvious. A lot of folks would be of the opinion, credit cards just fine, late fees too profitable.

1:05:14Tim Ferriss:And what I'm wondering, this applies elsewhere to your investing and involvement with companies like Yelp and so on. What are you seeing? What gives you confidence? And of course, there's a bit of a, in the phrasing of the question, a survivorship bias. So putting that aside for the moment, but what gave you, we could use Affirm as the example, but like what gave you the confidence to keep driving? What did you see that other people didn't see or what were assumptions you made or hypotheses that you felt just were worth continuing to hammer on and test because you had some degree of confidence?

1:05:52Tim Ferriss:And what does Affirm do? Maybe you should explain that first. Well, there's this acronym BNPL, Buy Now, Pay Later, that we kind of invented the genre about 15 years ago. And the basic idea is, at the point of sale, most of us pull out a debit card or a credit card. And those who pull out a debit card, generally speaking, think themselves financially responsible and think, you know, if I can't afford it, I'm not going to pay for it. So like if I don't have enough in my bank account, just not going to buy right now, I'm going to save up or maybe buy something cheaper. If you pull out a credit card, the minority of us who are, for all of his purposes, are independently wealthy, just say, I'm going to put it on my credit card because it's easy.

1:06:29and I'm going to pay it off at the end of the month and I'll get some free fluid on that, but I'm not going to pay interest or pay over time. The huge percentage of Americans that pull out their credit card and say, I'm going to add it to the giant pile of revolving debt that I already have and I'm going to pay interest on it and I don't really know how to calculate that and I have no idea when I'm going to be out of debt, but I need that thing and I'm not disciplined enough to pay for it with cash, right? I just don't have the cash and I need the thing. And sometimes the thing is like, well, I need a new bicycle, which we can maybe postpone.

1:06:55And sometimes the thing is like, I need a pram to put my baby in and yeah, I'm just going to have to buy it one way or the other. And so the idea of a firm was and is, and it's worked amazingly 15 years in, that what if there was a third way where what if you could have the same transparency and responsibility and clarity of a financial decision making with a pay over time product that you do have with a debit card? So what if we added the idea of I want to pay for this over time, but I don't want it to revolve and I definitely don't want to be confused as to when I'll be out of debt, essentially turning every transaction into a simple plan.

1:07:35Pay for my baby pram for over six months, let's say$100 at a time, doesn't break the bank, exactly six months out, I'm done, that's it, I'm not revolving, I'm not paying any more interest or anything like that. And as we sort of described the idea, sort of thought, well, like if you're going to do it right, how about you build it so that there is no revolving possible. There's a fixed schedule only, that every charge action is pre-priced. If you're paying interest, you know exactly how many dollars of interest you'll ever pay. Even if you take longer, that can't change. That shouldn't change. And if you're late, there shouldn't be any late fees.

1:08:10You should just be motivated to pay us on time because if you take too long and you're late all the time, maybe we won't lend you next time. So it was sort of almost like a too simple, too black and white, a way to lend money as an alternative to credit cards, which is a very long way of answering the question. But it is available now at three quarters of old e-commerce checkouts in the US and Canada and rapidly expanding into UK. And we've announced we're going to go to a bunch of European countries. And there's plenty of competitors to do the same thing. But we were kind of the first, I think.

1:08:42There were some obviously logical and spiritual predecessors to this idea, but we sort of purified it down to no fees, no revolving, simple schedule. everything is pre-priced, everything is super transparent. And this year we'll do almost$50 billion of these transactions. So it's definitely, it's worked out.

1:08:59Tim Ferriss:It seems to be working. It seems to be working. We were publicly traded, it's quite profitable, have been profitable for a bunch of time. The last 10 quarters we grew 30 plus percent year over year or faster. So it's like, it's both very big, growing really well, still never charged a penny of late fees, never charged a penny of revolving interest. So we're still true to the idealistic nature. And so as I was describing the product, I talked to a bunch of banking people who laughed at me like, okay, dude, you don't get it. You've obviously never lent money for a living. Late fees is where the profit is.

1:09:28Half the profit comes from late fees. So like you just cut your profitability opportunity by half. So putting that aside, if you don't revolve, what are you going to do when people take too long to pay you back? You want them to take forever. You want them to make minimum payments so the principal keeps being big and then interest will compound into principal. It'll be amazing. Like, yeah, all that sounds crappy. Like, none of this sounds transparent. None of this makes any sense. And people in Silicon Valley who, generally speaking, don't need these services, kind of don't get just how significant the cost is on your regular consumer that doesn't have a seven-digit salary, et cetera.

1:10:01And so as I was sort of trying to raise money for this idea, I would talk to, you know, VCs, and they're like, I don't know. Why can't they use their Platinum Amex? Like, they don't have a Platinum Amex. Like, yeah, but like, why don't they get a Platinum Amex? I'm exaggerating, but only slightly. Right, right. Anyway, so that was kind of the difficulty raising money for this financial services company, unlike PayPal, was I couldn't convince anybody this was a thing that normal people would use.

1:10:28Tim Ferriss:How did you land on this, though? How did you even get to the point where you're like, this is the deck I'm going out with, and this is what I'm pitching? The earliest version of this thing is actually pretty funny. Abridged, since it's a colorful story. Actually, Luke is involved. Like, weird, Luke makes another weird. I like colorful stories. We're not in too much of a rush. Yeah. Take your time. Right after PayPal went public, Luke and I, I mean, Luke is a wild and crazy guy. You've met him. I think he talked to me. I'm going to go with he talks me into, but I'm already dating Nelly. I'm trying to impress Nelly.

1:11:01I'm still trying to impress Nelly every day. But I decided the way to impress Nelly is to get a really cool convertible. And so Luke and I find this convertible. Mercedes just launched their first hardtop convertible. So we fly to LA with a view to buy these two identical, we can't have the same color, so we need to like take who. So we get to LA, we go to the dealership, like we want to buy this cool hardtop convertible from Mercedes, like a mechanical folding hardtop. So it's like a thing that like transformer car becomes a convertible if you press a button. Super cool. So we get there and they're like, okay, Mr.

1:11:35Nosek, here's your auto loan. Here are your keys, Mr. Lefchen. Your credit sucks. So we're not going to sell you a car today. I'm like, wait a second. Like, we like literally just took PayPal public. I'm okay. I've paid off my student loans and everything. Like, yeah, but your credit score is really, really bad. So if you want to buy a car today, you're gonna have to wire the total amount of money, which is like my future wife, then girlfriend is like, ooh, okay. You didn't tell me that part of your biography when we just started getting to know each other. What did you do? Like, I started this company in college with Luke Knosek, who's in the room.

1:12:06And he knew and I didn't, that if you don't pay your credit card bills on time, it'll come and show up on your permanent record. So I had to, in fact, wire money. And like, as this dealership was wrapping up on the day, they're like, oh yeah, we finally got your wire. Okay, here's the keys. So we drove from LA to San Francisco on five, basically racing each other at some ungodly speeds and got pulled over at two o 'clock in the morning. And the cops were very upset with us, but actually let us go because they were similarly fascinated by these cool new cars. So we didn't actually get into a lot of trouble, but got into a minor amount of trouble for going way too fast at two o 'clock in the morning.

1:12:41But the story stuck with me because I was fine financially, better than fine. I was mid-20s and just never needed to work a day in my life. And yet the car dealer who knew who I was, like he looked us up. He was like, oh, yeah, I know you guys. You're PayPal kids. Cool. Yeah, you can buy a car. Sorry, your credit's stuck. And I'm like, why does my credit report or my credit score not reflect the fact that I'm basically independently wealthy now? And that really stuck with me. And so I had a version of this conversation, including the, and then Luke Nosek had a sweater wrapped around his head because it was really cold on five.

1:13:19And cops were really worried about him. Anyway, and so the story comes up or came up over and over and over again. And it sounded like I should do something about this. Like there's got to be a credit score to be built around like came to the US as a teenager with no record of any kind. and$600 for a family of five and now independently wealthy Silicon Valley entrepreneur. Like it was like a five or seven year window between those two events. So it's not weird, but it's super weird. Seven years, like, hello, I got a computer science degree. I was eminently employable. I started a bunch of companies.

1:13:55Not all of them failed. And like, why did not catch up to me at all? In fact, it seems to have had no bearing on my ability to borrow a fairly modest amount of money relative to, you know, everything else. That's been like sloshing around my head for years. And I finally sat down with another Luke Nosek friend from U of I. It's like, what if we built a better credit score? And so we're like, yeah, it wouldn't be too hard. So like all of us are CS majors. We all have some number theory background. Therefore, machine learning. Therefore, AI. And so we built a score and it was like, just use some publicly available data, a little bit sort of some other secret sauce.

1:14:28We built the score. Oh, well, now we should like make people lend money using our score because it's cool. And so I talked to some bankers, which is how I began the sort of like, you're doing it wrong, kid, conversations. And like, yeah, no one's going to lend money using a score that no one else is lending money against. Like, what if it's a bad score? What if it doesn't work? And so if you tell an entrepreneur over and over again, this thing will never work unless someone does X, the natural response is, well, I will do X and see if it works. And so like, I guess we're going to lend money. And so like, I'm just going to go and get into a lending business.

1:15:00At which point I was like, oh, I got to understand how this stuff works. I've never actually looked at lending very carefully. And that began the journey of like, okay, so how do credit cards really work? How did I manage to mess up my credit at the ripe age of 18 in like by missing three payments? How did that happen? And so a year later, I was like, oh my God, this whole thing is so broken and no one even knows it. revolving on a$1 ,000 draw and finding yourself with a$3 ,000 debt a couple years later and you can't explain it, or getting a 0 % loan but not realizing that if you're a dollar short or a minute late, it will compound retroactively from the time it was written to you.

1:15:42So there are all these things that the industry built over the years that are just profoundly anti-customer. It's one of the only industries in the world, actually, like a great way of thinking about it, I think I heard someone else explain this to me this way, but it's the industry where you and your service provider face each other and you're like, hey, I want to borrow some money. Great. I'm going to bet on you failing. I'm going to give you a loan, but I want to believe that you're not going to fail completely, but you're going to be really late. Ideal, you take forever to pay the loan back because I make more money that way.

1:16:15Optimally, we sneak in a few things you don't notice. And it's all in a fine print, but I hope you don't read it. It is a very, very strange vestigial. Capitalism is supposed to get to efficiency. This got us into a bad part of the decision tree. It's like, what if I took a bunch of steps back into the branching point where you could have done the more consumer-friendly thing and just did that over and over and over again? What product would I end up with? Like, oh, I ended up with a firm. That's how we got here.

1:16:40Tim Ferriss:And what was your confidence in market adoption? So going out, You're pitching a firm for fundraising. And I mean, there's so many questions I could ask. You're at a point where you could probably self-fund for a while, but what were some of your assumptions, correct or otherwise, that underpinned turning it into a business? So you have identified perverse incentives and predatory fine print and so on. So there's a problem. But then there are the bankers who are saying, hey, look, this will never work. but you're like, well, if I have to do X and get into the lending business, I'll get into the lending business.

1:17:19Tim Ferriss:So maybe that answers the fundraising question, actually. But how did you have confidence that there was a there there from a business perspective? I would pitch this idea in its various forms. So first of all, I did have to fund for a while on my own, which I didn't mind doing because I was getting completely obsessed with the idea. So as such things go, that was a small price to pay, relatively speaking. But I would keep on telling the story to somebody who was like a CEO or former CEO of a bank or somebody who managed a credit card portfolio. And they'd be like, okay, you're doing it wrong.

1:17:47All the money's in the late fees, the money's in delinquency. It's just like, eh, come on. And I had two ideas that both turned out to be amazingly right. By the way, every business is like, there's like a moment of luck where people's like, yeah, I don't really want to admit to it. And there were ideas that I'll claim some ownership over, but I had no idea if I was right. And the first one, I read the study that said that millennials hate banks. And I didn't really explain why. It was just like, millennials hate banks. Like they hate a lot of things. Like millennials and every generation has a list of things they want to complain about.

1:18:20I'm like, ah, these complaining millennials. I'm not a millennial. I'm a, I guess, young Gen Xer. But millennials were definitely like, oh, they're such whiny people. But they were willing to participate in some study where they ranked all the things they hate. And the number one thing they hated, like 70 % of millennials, according to that study, hated banks. So every time I would ask a banker, why can't this exist? Why can't there be a lending product that doesn't take advantage of people's unwillingness to read fine print and do exponential math? They're like, because banking is like the stickiest thing in the world.

1:18:49You bank where you live and like, yeah, you kind of like your bank. It's where your parents banked. Like you go to the marble hall and the vault and you like it. It's likable. I'm reading a study here that says that they hate you. Like all the people that are going to be shopping and buying stuff 10 years from now, five years from now, they hate you. 78 % of them think banks are terrible. They should go kill themselves. None of these people were like, I don't know. Like, I don't believe that study. Like, okay. I mean, they surveyed like 10 ,000 people. Like, that's a pretty stat sig study. So, like, if I'm right and I do a thing that's like even slightly better than the existing thing, I have a ready-made audience of people that are going to be like, cool.

1:19:25I hate the other one anyway. At some point, like, I need to, I need an explanation beyond they hate it. And so, what I realized, and I think this is the part that was lucky because I didn't know any better in the beginning, but I've since sort of confirmed this to be true. Millennials were early teens during the great financial crisis. And so if you are getting booted out of your house in 08 and you're like an impressionable youth and you're asking your parents like, what's going on? Why do we have to live in a motel now? Parents are like, because the bank, they just took the money. They took my house away.

1:19:58And the embarrassment and the horror of telling your kids we're going to move to a smaller house or to a rental or to like, we're going to live on the streets, God forbid. That's a horrible impression to have in your most impressionable years. And so I think there's a lot of people who are like actually quite genuine in the I am willing to try anything but the thing that my parents got the sharpened stick for. And so that was kind of luck number one. And I really believe that from the very beginning. And it turned out to be true. Like if we build something that normally you have to market it, you have to convince people to trust you and all that.

1:20:26Like I think they don't need any of that. They just need the belief that there's a better thing out there that exists. and they'll give it a try because they are predisposed to not liking the other part. And that turned out to be completely true. The other part, if you are unwilling to profit from all the sort of wacky externalities of financial services, you better be good at underwriting. So if you're lending money to someone, you are paving over underwriting mistakes or lack of underwriting or poor credit score. Can you define underwriting here? When somebody shows up and says, I'd like to borrow$100 and you want to respond to them in real time, you have some giant machine learning model or a small machine learning model, decide yes or no.

1:21:06And what that practically means is it has to take whatever available data that person is willing to share, be it public or private data, run it through some form of classifier, or these days, all kinds of interesting architectural sort of ideas exist in underwriting, and say yes or no. But yes or no is actually not enough. What you really want is a price of risk. So it's some, for simplicity, expected value or expected loss. If I give you money today, what are the odds? What's the expected value of you bringing it back to me with the appropriate amount of interest if that's what the price of the transaction is?

1:21:36And so underwriting is the discipline of doing that at scale, in our case, completely in real time. That's the score we built. The underwriting score, the credit score was that. And the theory that I had was credit scoring is hard and you would have to have the absolute best people working on it. And yet most of the time when you encounter people working on underwriting or credit scoring, They're not as impressive as people I'd met in my wandering in Silicon Valley up until that point. And they're like, why is that? It's an interesting problem. It's quite mathematical. There's some very smart, mathematically inclined people I know.

1:22:08And the best I could get to was it's embarrassing to talk about that you're working on loan and credit underwriting stuff at cocktail parties. Like when somebody asks you, what do you do? You're a math genius. You went to school for applied math or computer science. What do you do? Like one answer is, well, I went to Wall Street and I build real-time trading models. Like, that's kind of cool. Like, maybe it's like not societally important, but you're doing something interesting. And there's all the other answers. I work for the NSA and I break codes. Like, that's cool. That's what I wanted to do when I was in college.

1:22:37If you're like, I make lots of loans and I make sure that they're underwritten well. And by the way, I make most of my profits by charging people late fees and sneaking in nasty terms. So like, there's got to be a latent pocket of talent, people who would absolutely work on underwriting because it's a really hard and really interesting problem. But they won't join the industry until someone shows up and says, I'm going to strip it of all the gunk. I'm going to make it completely transparent. I'm going to be super pro consumer. I'm going to take a lot of pride in the brand that we have, which stands for transparency and honesty and all the good things you can do if you would just sort of take a broom to the whole thing.

1:23:11And so as I sort of formulated the product, like I'm going to get my unfair share of really brilliant mathematicians because they're not going to go to Wall Street because it's kind of a soul hollowing thing to do to squeeze pennies out of the market. They'd rather come to work for me and build underwriting models with me trying to help people in normal America borrow money and not feel screwed or not get screwed. And that was totally exactly right. Like we have people who've been here for 10, 11, 12 years doing that job who are like still, I'm so proud of what I do. I'm a mathematician and I'm putting my big brain to work on making honest financial products.

1:23:46So those two things were like, they're good ideas, but they're also a lot of luck.

1:23:50Tim Ferriss:Those quarter on quarter growth rates that you're mentioning are... kind of nuts. I mean, it seems really remarkable. And I'm wondering, looking through your scrying ball into the future, what do you think e-commerce looks like? This could be as it relates to a firm, it could be more broadly speaking in two to three years, who knows, right? Let's just pick that as an arbitrary timeline. And does agentic commerce, if that's actually going to be something that takes hold quickly, if you think, really affect a firm? Or do people state preferences in advance? So not really. It's just maybe the way that people purchase things change.

1:24:31Tim Ferriss:But honestly, for you, structurally, things don't really change. I mean, how do you think about the future of e-commerce? First of all, the reason the growth rates are compounding at an almost$50 billion mark, 30 plus percent year over year, quarter after quarter after quarter, is pretty awesome. It is a staggeringly good growth rate. It is made better by way of noticing that our credit-related losses are super consistent. It's easy to grow the top line. I've lent more money this quarter than I did last quarter. Great. But will it all come back? It's a really important question. And the way you measure the success of these underwriting models is you ask the question, okay, so you made a bunch of loans last quarter, last year, average half-life of our loan is like five months.

1:25:11So five months back, you get a pretty good picture of like, how good are you relative to today's macroeconomic reality? And if you look at our loss numbers or delinquency numbers, whatever metric you want to choose, they're really, really consistent. So we are, in fact, very good at underwriting. And yet, even at 50-ish billion, we are but a footnote. So the overall credit card debt in the US, last I looked, was like 1.3 trillion. So we're like scratching at the total size of just the credit card debt. Not all credit card transactions become debt, and there's plenty of debit card transactions, and so the overall size of commerce is enormous relative to where we are.

1:25:51And so our growth is not a surprise in a sense that what may have been a surprise at some point was people actually like this product. There are reasons to believe or reasons to say that this product is harder to use. So credit cards and debit cards, for that matter, is the single best financial interface ever created. If you think of the level of complexity that takes place when you take out your card and tap a checkout counter and just walk off with your cup of coffee, there's a lot of stuff that happens underneath. There's an acquiring bank, there's an issuing bank, they're talking to through a network, there's all kinds of complexity, just the technical level.

1:26:26And then there's credit and blah, blah, blah. There's like layers and layers and layers of many decades worth of innovation that make an incredible single transaction happen in like a tap and off you go. And so when you introduce buy now, pay later, which is this idea, every transaction is separate, You're conscious of every transaction. You understand how long it's going to take to pay this transaction off. You're actually creating friction. You're giving people more steps. So one counter argument to why this thing makes any sense at all is like, why would you want to trade the beauty of tap and go with this like open your app and do some stuff?

1:27:02And the answer is simple. The industry devolved and you don't really trust what's going to happen to you after you tap. So you hesitate and you're like, am I going to really be able to afford it? Or is my card going to work? Am I going to get declined? or am I going to go into debt that I probably shouldn't go into? A firm offers the antidote of you go into the app, you look at your purchasing power, you know exactly what we are comfortable lending to you. You get explicit approval. Next transaction is guaranteed to work. And by way of saying we're not going to charge you late fees or change any of the pricing, we're actually telling you you should feel very good about this transaction.

1:27:33We are going to make less money if you're a minute late. We'll make no money if you don't pay us. And we feel good about lending you this money. So what we sell or what we offer to the consumer end of this is certainty. sense of control by way of creating some incremental friction. Fast forward a couple of years, I don't have enough of a clear crystal ball to know exactly what agentic commerce looks like, but I know a lot of it is happening already and I think a lot more will happen. The discretization of transactions and this incremental friction will be reduced. You don't actually have to do all the manual labor we are putting you through right now because your agents will do it for you.

1:28:08And so today we're offering a thing in exchange for some friction. In tomorrow's world, we're offering the thing that obviously works. $50 billion can't be wrong, but the friction will go away or largely go away, which I think is just going to accelerate this whole approach to financial transactions. And the way people think about money will change towards, I know exactly what the total financial state I'm in. I have agents that are looking out for me. They won't get me into debt that I shouldn't be in. They will get me out of debt the second I should be out. I will have a PhD in consumer finance embedded in my phone looking out for every penny I got.

1:28:47There'll be no slop. And by God, no one's going to fool me again with fine print driven business model. So like the world in which you have AI looking out for all of your financial concerns is a beautiful world because we are already there by way of not having any dependency on, you're too dumb to know what's happening to you. So just pay up. That's how the industry, a lot of the industry works today. So So I'm very excited about the world where you don't have to change your business model because suddenly no one's getting fooled because that was never a part of our business model.

1:29:13Tim Ferriss:I'm going to ask you, might be naive, probably annoying, but it's going to be a like, how long until X happens type of question. So I apologize in advance for that. But I look at, say, China and WeChat. It's like the interface to everything in terms of purchasing, you name it. It's incredible what they've been able to do. And there are a lot of reasons for that. And then I look at, say, ChatGPT, I look at Claude. And as you mentioned with that tap to pay, a lot has to happen under the surface. So when people say, oh, well, ChatGPT can just put ads into the LLM responses, I'm like, you may be underestimating the relationship building that Google has done over decades and decades and decades.

1:29:58Tim Ferriss:There's a lot that goes into it. But I am curious to know how far away you think the reality is wherein someone can pull up a Claude or a ChatGPT and ask questions and make purchases directly from a single interface. I don't know if that's the form it'll take. I suspect it'll probably be, at least it'll be attempts made to create something like that. And then everything will happen in the background, including presumably some type of a firm-like option if you select to do that. How far off do you think that is? It's very close. It's very dangerous to consider commerce as this uniform fabric that just kind of won a thing, buy a thing.

1:30:43One of the dangers, by the way, of building on mass market products in Silicon Valley, if you're not inventing the future, in which case you're Greenfield, blank sheet of paper, if you're trying to improve something that exists and has existed for a while, it's essential you travel to where normal people live and see what they do. Because we are not normal in Silicon Valley, in a global Silicon Valley. This is not limited to San Francisco and the Bay Area. We think you just want a thing and buy a thing. And if that thing is$10, great. And if it's$10 ,000, well, you know, we get paid a lot. So, okay, just buy the$10 ,000 thing.

1:31:18like you care about speed and efficiency and less distraction. And normal people actually hang back and like, whoa, it's$10 ,000. First of all, that's an incredible amount of money. And by the way, for someone who is not within these hot, you know, beds of growth and opportunity, maybe$1 ,000 is an incredible amount of money. Maybe$500 is an incredible amount of money, depends on where you are. And they sort of, ooh, I got to think about this. I want to make sure I'm not exposing myself to a bad financial decision. I also want to make sure I'm getting a good deal How am I going to pay for this?

1:31:49How long is it going to be on my personal balance sheet before I'm done paying for it? Those are all questions people are very conscious of. And so for a lot of people in every part of the U.S., Agenda Commerce is here when you tell Instacart, bring me a sandwich or bring me back your groceries and DoorDash, bring me a sandwich or vice versa. And that's like the threshold of is this enough money for me to sort of hang back and ask these questions? who it is too much, they're probably not using these services just yet, for whom it's sort of like, yeah, I want a sandwich, I want it now, and I'm going to outsource the rest of this to an agent, be it a human or a robot, don't care.

1:32:25You have my credit card number, bring me a sandwich. I think that's here today. We will see more of that become a thing in many things like real-time delivery or near real-time delivery. If you go to other markets, you have, I think in India, somebody launched a like six minutes or less delivery service which boggles my mind but like their storage of mass market goods to buy at edge has got to be just like an exercise an extraordinary logistical prediction anyway that stuff is here it's coming and more will happen the i want to know what i'm getting into i want to have agency in selecting a thing my taste matters to me is a thing that probably will always involve humans.

1:33:10Like, I need a pair of pants is not actually a thing 95%. If you're a Silicon Valley engineer and you're too busy coding and you just, you know, you have a big hole on your butt, you gotta need some pants. Agents, bring me a pair of pants. Like, sure. For most people, like, I want them to make sure they fit and I want them to be my favorite color and I also want it to match the rest of my ensemble here and so on. And so, and it goes up from there. Like I need a bicycle, but I have brand preferences and my components are important to me, et cetera, et cetera. And so AI will not replace the need for decision-making and thoughtfulness in consumption.

1:33:44It will obviate some pieces, like who has the best price on the bicycle I want with the componentry that I prefer is a thing that you will gladly outsource. Like you need to make sure it's real. You need to make sure that the data you're, you know, LMs are fetching for you is current, but that's what we're working on today. But at some point very soon, you'll say, hey, chatbot of the moment or of my browser or my desktop, I would like to buy a beautiful looking Italian made bike with Shimano components. I want a good deal. I'm probably going to pay for it over time because it's expensive. And I definitely want to pay no late fees.

1:34:21And ideally, I don't want to pay any interest. I'm bringing my business to someone who should be so lucky because multiple people will sell me a beautiful Italian-made bike. And go to some comparison shopping for me, bring you some images of beautiful bikes, and I want to lust after all of them and then pick the one that gets my business. That's a great task for AI. The building blocks for that will include something like a firm where the AI will say, all right, so all these people offer some ways of paying. Some of them offer a firm which has no late fees and, by the way, has negotiated a special deal with a manufacturer or the seller where they will pay your interest for you.

1:34:54So they're actually covering the time value of money. So the plan is interest-free, which a lot of our transactions are interest-free exactly this way. They're funded by the retailer or the manufacturer. And we're like grasping at that future right now. We're certainly building a lot of the pieces. So I tend to be slightly ahead of schedule as far as like the future I want to live in. I'm trying to pull it in here. But this is quarters, not years.

1:35:19Tim Ferriss:Incredible. Man. For the foreseeable future, there's so much to build. The thing that irks me the most in today's media is the SaaSpocalypse, whatever, but the jobpocalypse people are proclaiming is so goofy. There's so much opportunity to build so many exciting things for everyone, not just Silicon Valley startup. Everyone from the oldest companies to the youngest ones are like, oh my God, there are all these pieces of software that I had to buy from someone who did a bad job or that I could never buy anywhere and I wouldn't know how to start with. like, well, now you have all these amazing tools that just like birth it for you straight from your head.

1:35:53Speaking of things you can put on your brain, very soon we're going to have ultrasound mind reading that spits code on the other side of it. That's what I'm waiting for.

1:36:03Tim Ferriss:Seems a lot closer than I would have predicted if you asked me just a few years ago. It's wild. The world changed a bunch of times over the last 12 months, but I think like the The Claude Code moment last December was like a big like, whoa, it really is here. The ability to produce something from glimmer in your mind to like a thing that actually works reasonably well and has only improved since was like a big breaking point. The one before was obviously ChadGPT and so on. A couple of rapid fire questions for you. Coffee. We're going to shortchange this one. I apologize. Maybe we do another podcast solely dedicated to coffee.

1:36:41Tim Ferriss:but for people who want to improve their coffee experience, cheap option, intermediate option, Bugatti option. Any thoughts on improving coffee experience? I'm not paid by any of these brands, so I just want to make it very clear. I have some very strong opinions. You? Strong opinions? Come on, Matt. Yeah, exactly. All right, so first of all, this is primarily relevant to espresso. I love all coffee in all forms. I happen to prefer espresso as a beverage of choice, but I don't judge. You can have your lattes, your Americanas, you know, whatever. But from the point of view of espresso and espresso based drinks, the single most important thing is the grinder.

1:37:20And so you can get a fantastic grinder like a niche or kind of these$600,$700 grinders that will elevate your game to an incredible level. If you have a grinder that you didn't pay a couple hundred dollars for, got to go do that. If you want to get to like a demonstrably better grinder than sort of the$600 range, go get something that looks like a Kaia Orbit. That's like a$1 ,600 to$2 ,000 grinder. That's a great grinder. You can swap out burrs. So switching out burrs is really important. But even if you're never going to replace your burrs, you still want something that's a fall-through grinder.

1:37:58And a good one will cost you on the order of$2 ,000 plus or minus. And then if you're like, you know what, no price too large. I'm going to get me the absolute fantastic home grinder. I mean, obviously there's like industrial strength stuff that's even out there. There's this thing called Weber Workshops that produces unbelievably expensive, but unbelievably good stuff. So if you want a Weber, God bless. That's a great product. Same company that makes the grills? No, different. It's got to be. No, no. It's totally different. I had this exact question yesterday. Anyway, so better grinder goes a very long way.

1:38:28After that, go invest in skills. So there's an incredible number of online resources that'll teach you how to do a great job. I'm but a student of those people. There are many, many, many great videos you can watch on YouTube that'll teach you how to make a great cup of espresso. Before you buy anything else, just go watch all that stuff because it'll teach you a lot of things you don't know about. After that, you're probably going to want to buy a good espresso machine. The great news is that there are many, many very good espresso machines. I don't want to begin religious wars here, so I'll state my preferences, but these are preferences.

1:39:01I prefer 58 millimeter portafilter diameter. Many people now swear by 54, 53 millimeter. You can go up or down, but I stick to the classics. I think the finest, most reliable home machine is made by La Marzocco. That is definitely in the multi-thousand dollar range, but that's what I have on my counter and it's never failed me and it's beautiful in both inside and outside. There's lots of cool, like if you're a super nerd and you really want to nerd out on the metrics, Beeson Nespresso is a fantastic product, really fun, but it's like an Android tablet that happens to be attached to an espresso machine, basically.

1:39:36La Marzocco is old school. That is the logo you'll find in every self-respecting coffee shop, like the long red typically spelled out La Marzocco. That's a granddaddy of them all. It's amazing. And so on. There are many, many other brands that will sell you a good espresso machine. If you're trying to go down market a little bit, but like Bulletproof will make a good cup every time. Breville, people tend to sort of hate on it a little bit because it's so coffee.

1:40:00Tim Ferriss:Yeah, Breville's surprisingly good. It's very, very good. I mostly just wanted you to showcase my obsession. Yeah, your obsession. I'm going to force your hand, though, on one here. We're going to take a side quest away from pure espresso territory. Chemex, French Press, or AeroPress, if you had to do coffee with one of those three. Chemex. Chemex. Why Chemex? If you're going to go for a light roast, I mean, each type of roast, each type of bean speaks to a method. So I happen, it's like another heresy, by the way, in the modern day, I like medium dark roast for my espresso. I love the honey viscous, feels like it's like too thick.

1:40:44You can almost chew it. Like I love that in espresso. Like that's a great cup of espresso. For non-espresso drinks, I actually love thin, high clarity, low body. just give me the pure essence of like, not diluted, but like the bean in water. And Chemex are probably the best one of those. It's totally the most controllable. Beyond that, French press is great. I mean, that's like a campfire type setup. And AirPress, if you're going to go there, just get an espresso machine.

1:41:15Tim Ferriss:Chemex, for those people wondering, will cost less than$600. And I will say also that you can get, correct me if I'm wrong, you're going to know this better than I do, but you can get, they're not going to be anywhere near as sophisticated as the devices you described. But if you are using, for instance, a blade grinder, something that is not a burr grinder, and you get a handheld burr grinder, which you can probably buy for$100 or less, the difference between those two will still be noticeable. What would you think? You're like in the territory where I probably be like, you know what, no coffee today.

1:41:54I'm kidding. I've been known to exhaust the local supply of pre-ground pods in hotel rooms. So there's coffee and all the beauty of it. And then there's caffeine and I need both. They're not the same. The spice grinders as they're known, you can definitely make a cup of coffee with that too. But that said, by the way, if you must have a thing that is not an electric grinder, get a manual grinder. Like those are very cheap. I think Lido, if I were correctly, is a brand that'll sell you like a very, very high end, but like still an order of magnitude cheaper than any of the stuff that I threw out.

1:42:30I mean, it's a little bit of a, you know, good workout, but you'll make beautiful coffee with that. There's a really nice correlation to the lower the RPM, the less you're damaging, if you will, the bean as you're grinding it. So you can actually get some amazing taste out of manny leground beans. It does take like 10 minutes per cup though. So you gotta, you gotta be ready. Yeah.

1:42:50Tim Ferriss:This is what I'm talking about. This is exactly what I'm talking about. So I wasn't totally misspeaking. Yeah. The Lido OG manual coffee grinder. Yeah. This one's 273. There are some other options that I found at slightly lower prices, which I thought did a nice job. It is a workout. It is a workout. Yeah. But Hey, switch arms every once in a while. If you're going to go into the ritual of it, I know people who have traveled with something akin into that and AeroPress and some other stuff. AeroPress, great campfire attraction, for sure. All right. I'm going to destroy any shred of respect that you have for me with respect to coffee by also saying, if you want something simple, Cometeer, actually, I really enjoy some of their stuff.

1:43:30Tim Ferriss:These frozen, oh, the face. If you guys aren't watching video, they're the response. By the way, so I grew up drinking not just instant coffee, which was hugely popular in Eastern Europe. I occasionally was exposed to chicory coffee, which I don't know if you've ever tried that. Oh, yeah. Popular in New Orleans. They've had a lot of sugar. Except there's no coffee in it. It's just chicory. Oh, God. So it's just like placebo. Yeah. It's like kind of sort of tastes a little bit like coffee, maybe. Like you put enough hot water into it. If it's hot enough, you're like, ah, it doesn't smell right, but whatever.

1:44:04Yeah, it was in Soviet Union, it was one was marketed under coffee light, coffee beverage stock, something meant to evoke some plant component that both coffee bush and chicories would share. So like, well, you know, they both have it, so it's good enough. It was disgusting, but it'll wake you up.

1:44:28Tim Ferriss:So there is that. Yeah, chicory is pretty interesting from a fiber perspective, but I'll leave that for another conversation. Max, last question. This might be a terrible question to end on, but I am curious. For someone who is technical or just an individual contributor in the sense that you were very technical and then grew into the CEO role and running a public company, let's put that aside because that's a whole kettle of fish by itself. But any books or resources that you would recommend to people who are hoping to become a CEO for the first time slash founder? Yes. So here's a couple. There's not a panacea, but I will preface this by saying I have extremely low degree, by which I mean like zero to negative of respect for business books.

1:45:17Vast majority of them are far too long, present company excluded. Business books that are verbatim anecdotes of people who've done it are actually high value because I think it's very hard to distill what is inherently a collection of unique experiences. So like you can edit it down, but you can't make it generalizable. Yeah, if you generalize it, like you're robbing the reader of the true history of what really happened. So I'm a huge fan actually of what you do in your books because there's always so much color directly from the source versus, I think this person meant X when they talked to me and I'm not going to print anything they said.

1:45:50Anyway, that said, I'm a big fan of business books that have been distilled to business essays because then I feel like the author did the work of like, I'm going to generalize. I'm going to really generalize it. There's this book called Seven Powers by Hamilton Hemler. If you haven't read it, it's a really worthwhile distillation of what it takes to build a competitively lasting business. It talks about why network businesses are longer living than non-network businesses and what brand actually means. Like, oh, you know, I'm going to build a brand. Like, why do you care about having a brand? And so it's a great book, distills a ton of these things that you kind of think, you know, but like they need names and terminologies.

1:46:32And it's idiosyncratic in a sense that I didn't think of the word power, didn't think of the term power until I read his book. And I found it to be a great kind of a distillation. It's very short, slightly shorter than Master of Margarita. So anyway, that's a good book. Another good book that is off the beaten path, but a great one called A Failure of Nerve. It's a book about leadership. And it really postulates this concept of differentiated leader. As a CEO, as a founder, a lot of times you find yourself at odds with your own team, where you're making an unpopular decision, you're firing a beloved employee, the sort of whenever there's doubt, there's no doubt, then you go do it and you're like, holy crap, what have you done?

1:47:11So you find yourself in these moments where you have to persevere before and then after a decision that you made and many, many flavors of it. it's a good book that kind of teaches you how to think about it, how to tolerate the stress that comes with it, how to sort of put up with the pressure you're going to get and not lose your humanity and like not become a tyrant, but also not be someone who is easily bowled over into like, okay, okay, I'll reverse my decision because then you lose the confidence of the people you're supposed to lead. So that's a great book. I am sure it's in your list and everyone's list, but you should read, if you haven't read it, if you're trying to start a business, you should read Influence by Cialdini because that is probably the most important social science book published in the last 50 years.

1:47:54So good. It's a great book.

1:47:56Tim Ferriss:I'm shocked that I had never heard of Seven Powers. And I just looked it up. The foreword's written by Reed Hastings of Netflix. I have never even heard of it. That's shocking. There you go. I'm excited. If there's one thing you find in this podcast. Any biographies. They don't have to be business related, but biographies that have informed how you approach leadership or running companies. It could be indirect too, right? It could be a biography and how it informed your view on persistence, right? Through stories or anything. So Cherno wrote a bunch of these like tomes, speaking of enormous books.

1:48:29So there's like everything from the JP Morgan.

1:48:32Tim Ferriss:Hamilton. Yeah, yeah, exactly. Washington, Alife, Grant, Mark Twain. Yeah, so Mark Twain is a great one. Titan is a huge one. So Titan is probably the one that's closest to like business advice. It's a bit of a like how to be ruthless, basically, but that's besides the point. Yeah, it's The Life of John D. Rockefeller. The cover photo looks just like the vampire in Nosferatu. It's terrifying, but yes. Exactly. Kind of apropos. Those are great books. There's a great book called A Mind at Play, which is Claude Shannon's biography. By the way, when I was preparing for our conversation, not nearly as well as you are, I was listening to your conversation with Ed Thorpe, who I knew a little bit about, but I was like, oh my God, that guy's flipping amazing.

1:49:16Like I want to be like him when I grew up. He's now like 1A of the list of people I'd like to meet at some point in my life. So incredible. He just seems like an unbelievable guy. So he was friends with Claude Shannon, that alone makes him unbelievably interesting. So Claude Shannon is kind of like a platonic ideal of what I thought it was going to be before I left academia. Because like the guy is just like brilliant in every way. Like everything he touched became this flower of intellectual brilliance.

1:49:40Tim Ferriss:American polymath and mathematician, right? Yeah. Why does Shannon stick out to you so much? Fun fact, you know, Claude Code named after Shannon. I did not know that. That's incredible. I didn't like learn this from anthropic people, but I'd be shocked if that's not the answer. Claude is not a common name. And Shannon is obviously the inventor, the postulator of the information theory. Right, father of information theory. So anyway, so he is a great example of someone who worked on some very serious stuff and was always playful. He's like Richard Feynman of computer science. So Feynman was famously brilliant and would, like, there's a great quote from Murray Yellman.

1:50:24Somebody asked him, like, what's your algorithm for solving really hard problems? Like, encounter a really hard problem. Step two, give it to Richard Feynman. Step three, receive solution. And so Shannon was kind of that in computer science, proto-computer science, obviously. He was building this in the 40s, 50s, 60s, and he managed to remain fun. He managed to have fun. Like he was just this unbelievable fountain of fun ideas, and he was like a hardware tinkerer and made card counting devices and all kinds of hilarious stuff.

1:50:52Tim Ferriss:Yeah, makes sense that he would know Ed Thorpe, right? Who beat the roulette table. Of course, exactly. And so that's a good book about him. These days, it's so hard to read books because there's so much content online and like podcast and blog form that you're sort of like, I'll get to this thing. It's content online feels ephemeral. So you're like, I must read this now because it might scroll off and I'll never see it again. A book is in my hand. Like I have books in my backpack that I travel with that I've been meaning to read for half a year now and I still haven't opened them and just like carry the weight.

1:51:23Tim Ferriss:I have a 500 page graphic novel that I'm going to be lugging to New York City because still the digital experience just doesn't do it. but the burden I bear. I keep on looking for a great digital graphic novel consumption experience but it does not come close. It's not there. We'll be able to replay our dreams before we get that. Max, so much fun to hang. Thanks for taking the time. Where would you like to point people? We've got levchin.com, we have sci-fi.vc, we have various social. Affirm.com. There's a lot we could point people to. Anything else you'd like to add, whether it's pointing people somewhere or closing comments?

1:52:04Tim Ferriss:Anything at all? No, my work is out there. I try to build in public. If you're interested in Affirm, obviously Affirm.com is where you find that. I tend to go deep, so my project list is short at any given moment. But Leftchin.net, Leftchin.com, either one is the list of those things. Amazing. Max, thank you again for taking the time. and everybody listening, we will link to all of the things we mentioned, books and resources and people and everything else, a firm, of course, and on and on and on in the show notes, as per usual, at tim.blog slash podcast. Just search Levchin. I can promise you if you will be the only one.

1:52:43Tim Ferriss:I might be the only Max, in fact, on the podcast so far. We'll find out. I might eat my words. And until next time, of course, thank you for tuning in, but be just a bit kinder than is necessary to others, but also to yourself. And that's all for now. Thanks again, Max. Great to see you. Safe travels. Hey guys, this is Tim again. Just one more thing before you take off. And that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend? Between one and a half and two million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday.

1:53:22Tim Ferriss:Easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kind of like my diary of cool things. It often includes articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast guests. and these strange esoteric things end up in my field and then I test them and then I share them with you. So if that sounds fun, again, it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about.

1:54:01Tim Ferriss:If you'd like to try it out, just go to tim.blog slash Friday, type that into your browser, tim.blog slash Friday, drop in your email and you'll get the very next one. Thanks for listening. Most people's finances live in say a dozen places. This includes me. Accounts, cards, investments, and more that never talk to one another. It's hard to keep track of. This episode's sponsor and one of my team's absolute favorite tools, Monarch, is the all-in-one personal finance app that uses AI to give you a complete, organized view of your money. Accounts, investments, net worth, savings goal, all in one place, always up to date.

1:54:37Tim Ferriss:A bunch of my friends also love this. Monarch has helped users save more than$200 per month on average. And you can ask it all sorts of things. You can ask Monarch's AI assistant anything about your money. Am I on pace to hit my savings goal by December? Or how has my travel spend trended over the last six months? You can ask it anything. Monarch then analyzes months of data so you don't have to. And with AI insights, Monarch flags things you don't think to look for. So it can go beyond your question. And now you can get half off of your first year of Monarch with code Tim at Monarch.com. That's just$50 for your first year at Monarch.com with code Tim.

1:55:15Tim Ferriss:One more time, monarch.com. That's M-O-N-A-R-C-H, monarch.com, code TIM. One name that has come up on this podcast more than once is Dr. Walter Longo, USC professor with decades of peer-reviewed research on fasting, nutrition, and aging. And as some of you long-term listeners know or readers, I regularly fast. I've done a lot of experimentations with fasting over more than a decade, including intermittent fasting, extended water-only fasts up to 10 days, and I've looked at the before and after. Frankly, the fasting has been one of the most incredible unlocks that I have found. The before and after, looking at glucose control, oral glucose tolerance tests, chemoglobin A1c, et cetera, all these things that really do matter for the long term, for mental health, for physical health, have had dramatic, dramatic shifts.

1:56:06Tim Ferriss:And I've talked about that before. But the sad truth, the truth about fasting is that it can be really hard. And that is why Walter is interesting. He's best known for something called the fast mimicking diet, FMD, which is essentially a way of eating that produces many of the benefits of fasting while still allowing you to eat food. So if we look at that a little more closely, he took what he learned in these randomized control trials and so on and packaged it into a five-day program called Prolon, P-R-O-L-O-N. It's five days. So for five days, you restrict your food a bit. And what Prolon does is makes it idiot-proof.

1:56:44Tim Ferriss:It comes in one box. Everything is laid out. There's no guesswork. You just follow the packages. And in scientific studies, five-day cycles of the fast-mimicking diet, improved markers tied to metabolic health and aging, helped people drop fat while holding on to lean muscle, and even associated with measurable drops in biological age. And to put some numbers to it, with glycemic management, blood sugar management, we were able to see 1RCT improvements in 53 % of FND participants versus 8 % of controls. So it does make a difference. You get the benefits of fasting, including autophagy, your body's cellular self-cleanup process, while still eating real structured plant-based meals.

1:57:23so you don't have to negotiate with yourself you don't have to struggle it all comes in one box

1:57:30Tim Ferriss:and it's right there laid out simple to follow and there are other people who recognize friends of mine like patrol who also have used prolon for a limited time prolon is offering my listeners 15 off site-wide plus a 40 bonus gift when you subscribe to their five-day program just visit prolonlife.com slash tim that's p-r-o-l-o-m-l-i-f-e.com slash tim to claim your 15 discount and your bonus gift