20VC: Former Meta CTO, Schrep on Why Climate is a $10TRN Problem, Operating Lessons Scaling Products to Billions at Meta and Why the Best Leaders are Like Music Conductors

22:24What technology shifts did you mispredict or get wrong? And are there any lessons from that misprediction? Well, I think that timing is often challenging on these things. Like how soon something is going to become big is often a challenge. Can I push back on you that? In companies is a challenge. It's like startups is a challenge because you don't have budget. And if you are too early, it's the equivalent of being wrong. But when you're matter, you have enough cash to sustain, obviously, indefinitely. And so being early on VR just means you get more lessons, you get more apps, no? Maybe. I still think it's important to be right because you are effectively distracting resources from other things, right?

23:05You could be putting those resources towards other things and you could miss, if you pick this trend over that one and this one's the right one and you're investing over here, you can be in sort of deep -do. I think you're right that like startups don't get as much luxury of time And I think timing is this is as a climate investor a lot of the questions I ask is I can see what the future is going to look like in 10 or 20 years But in the time horizon of this company which is five or 10 years that is sort of the full self -sufficiency Will that market be there? And I think that's a really really key question we try to answer for a lot of these things is I love this technology I love this team.

23:35This is definitely going to happen Mmm, not sure about I'm not maybe too early maybe too late and I think timing really really really does matter You know, when I was at Mozilla in 2006 to 2008, I get pitched of startups wanting to start browser companies, right? And I was like Firefox 1 .0 when it came out. It's like big innovations were like tap browsing, pop up blocking, and plugins. And then the Chrome came out. It was like, if Chrome, you have Firefox, i .e. was like, as I start up, how do I differentiate there? And you see this in electric cars, right? Tesla was the first out in electric cars, built a lot of things.

24:07Rivian shows up, they're like, all right, we're gonna make high end pickup trucks. What is the next electric car startup go do? What's the market entry that they can do? It's a crowded market, it's hard. It's a bad time to start a new electric car company. So I think you need to figure out when the market's and I think this is what's exciting. I see a lot of disruption happening in the power markets. And so I'm really excited about this because disruption means there's a shakeup and there's opportunities for market changes and entrants and that's what you need to have a viable company. If the market's really static, it's very hard to start a company.

24:38So with respect, you know, you speak for the timing there and you know if companies need longer they need more cash Respectfully you fund some Non -conventional companies in other words companies that are not be to be procurement payments businesses that venture Investments on their love do you worry and think a lot about Financing pathways and who's gonna fund it next round and how that pathway is gonna look? Yes, and I think the the key thing that I apply here and learn is is how much capital do you need to spend to prove the core technical risk? And I think there's a huge variance in some of these.

25:13Some projects is like, I need to go spend $2 billion before I know whether this thing even works. And others, it's like, oh, this is actually a sell we're going to build. It's about the size of refrigerator. That is the core technology. We can build that with $10 million. And then a large -scale commercial facility that costs $100 million is 20 of those. And so when you go to finance that, you're like, oh, We've already built this thing. We know how to build it. You can see it. It works. We're just going to build a lot of them. You're not trying to scale it up or do something different. So I think efficient use of capital is really important.

25:45Time to revenue is really important. And I think the hardest thing that you didn't ask carry is I think in Climotech, like I spend a lot of time doing philanthropy and I spend time investing when I invest, I'm like, I'm a capitalist. I'm like, your pitch to your customers is we are cheaper or we are better. And they like, oh, by the way, we're good from the environment. environment is like the little asterix at the end. Because my thesis is like most people are busy, most enterprises are busy, you can't lead with the like we're better for the environment but we're more expensive with this or that.

26:11So look at all of our companies, their core pitch is like you want our product because it's a cheap performance of ethylene because we produce 24, 7 green energy and capture carbon because you don't have to take out your trash as much as a consumer and it doesn't stink and that's awesome. This is the pitch and then oh by the way, some massive climate impact on the backend. So in that to get to me excited is these technological and market disruptions mean that you like you have the opportunity to enter with a better product that then has all these co -benefits Tesla the reason they got successful in the girl is like the cars for confessed You're like check out my car.

26:43It's faster than yours, right? Like oh by the way, it's a lot right that sort of entry point works and that's what we look for Can you just talk to me about how you think about time to revenue and investing today because I worry always with on the investing in this space that a lot of things remain science projects. Talk to me about how you think about time to revenue and how that impacts your investing decision making. To me, it's a question of how quickly, I mean, and at each funding gate, you need to basically be retiring risks, right? We've got a core technical risk, we've got a core market risk, we've got a team building risk, whatever it is.

27:13And you set those with teams ahead of time. Do you identify them post -around? How does that work? I mean, that's part of the funding process. It's like, are you raising this money? What are you going to get to before you need the next funding round? and then what are you gonna do with that? Because you kinda need to pencil it out and say like, will that next round of investors invest, you know, based on if you succeed? It'll choke that like the worst way to fail is to achieve your plan and fail. So you need to set the right milestones and get a tongue. I think there are some businesses where you can get to revenue quickly.

27:39Mill is sold out the first run of 10 ,000 units. They sold over a thousand bucks at each, you know, and they're now on rev two that's cheaper to make and better in a whole lot of ways. You know, Docs like who's got an ethlean plant, they're negotiating off take agreements right now. They have producers who are like, we want to buy this so that we can use it to make our products. By the time they build their plant, as soon as they flip it on, they're making money. So, these are the sorts of businesses. This is years. This is not decades to do a bunch of crazy stuff. And I hope it happens. What's the hardest thing that climate tech companies face in those early years?

28:12I mean, you're in this too. It's never one hard thing. It's like, you got to build a business. You got to de -risk the tech. You got to get customers. There's this Valley of Death, which is like, I haven't built this thing. And so I don't totally know whether it works. Like maybe I built a small one on a bench or this or that, but I haven't built exactly what I'm gonna sell. And like who's gonna pay for that risk, right? Because a venture investor says like, ooh, that's $30 million to build that thing. And if it doesn't work, we lose it. A bank looks at that and says like, I'd be happy to finance it once you have a customer and three examples of one running.

28:40And so you run into this like chicken or egg problem. And so this is why I think that a lot of what I look for is like you can complain about that or you can basically say, how do we find technologies that are fundamental eventually smaller, lower capital, easier to get to proof points where you sort of skip all that and say like, I've got one. It's not lap scale. This is commercial scale. Again, I just need to replicate it. You know, I go back, I looked at like what happened in data centers. It's like, it used to be giant, huge mainframes. And then we went to pizza boxes. Why did we go to pizza boxes?

29:08We put 48 pizza boxes in a rack. We could just build one giant rack, you know, all on our own. It's because chopping it up in those pizzas made it really easy to do it in increment. I only need three pizza boxes. You need 15. This person needs a million. But like, even when we get a million of them, we're buying them one at a time and you just get this awesome sort of de -risking decoupling of the risks. If you had to build a data center, you built one and you spent a million like that instead of a million pizza boxes, I'm building one machine. Just think of how much risk you're coupling together and all of that.

29:37Like, oh crap, we like, we missed a line this. We didn't have enough power. And so you just decouple the risks that way. So this sort of like horizontal scale, I think works really well for for heart tech because it's sort of decoupled all of these risks and then you can Imagine what happens from there. You shipped consumer hardware to millions of people in your time at master. How did that experience impact? How you invest and identify investments in consumer hardware that you like today? I was most humbled in two transitions. So like did software at massive scale, writing huge distributed systems, billion, you know, hundreds of millions of users, we start building data centers.

30:12Building stuff in the real world is different than building software. To my point earlier, you have to plan stuff out. You know, if you make a mistake, it's very expensive to fix. You just need to approach that problem differently. So like we kind of got good at that. And I kind of had an ego. I was like, okay, I can build hardware. It's super hardware, enterprise hardware. It's the same. Ooh, when you ship something to a consumer, A, they have to decide to buy it. B, if they don't like it, they just send it back. And as soon as they send it back, your business is toast. You lose a ton of money on every single return.

30:41And if your return rates above a certain amount, it doesn't matter how good your product is, your whole business is toast. Basically retailers are upset, consumers are upset, like you're in trouble. And that could, because they didn't like it, maybe they liked it, but it didn't work. And so anyone who's built consumer hardware, you know, if you know what a drop test is, but basically I'm building a piece of hardware. So we spend all this time building this exquisite VR headset and we hand assemble it and we try it all out. Awesome. Now what you got to do is drop it two meters and then pick it back up again and see where there works because that's what's going to happen with the consumer.

31:11They're going to take it out of the box and put it on whoopsie and like it's going to drop and you got to make sure it works nine times out of ten. And then you got to go to a factory and basically like, okay, I need like a million of these and like, oh, we're going to have to build custom molds and ejection and a whole production line, maybe multiple production line. We're going to build specific tools designed just to build your one thing. And so you're like, oh, again, you got to get good at capacity planning. Like do I need a million? Do I need five million? Do I do two lines or three lines?

31:37Do I make this thing thicker so it doesn't break when I drop it or do I make a thinner because it's lighter? It's just a world of Micro -trade offs and all of these things and so this is a place where experience really really really matters It had been seen people who've shipped consumer hardware and haven't you get to learn all these lessons for the first time You know this is why I talked what when I decided invested mill was like sort of later stage what I normally do and a little bit, a bunch of other things, but this is a team that knows what they're doing, and you can see it in the products they build, and the way they build it, and how they get it done.

32:07This is the last thing I say about it. Good thing about hardware is like, I think it's a little bit harder. The mistakes are less forgiving. You have to plan a little bit better, yet kind of to know what you're doing. The good news is, once you get there, you start getting a moat that's really deep. So if I'm building a product and shipping it, I'm at a five million unit scale, and you're at a 500 ,000 unit scale, I'm fundamentally cheaper than you are. And like, that's just going to compound as I sell more. And so, like, this is part of why I'm excited about this area. It's like, yeah, it's a little harder.

32:34You have to be smart about how you're picking. But like, once you get there, good luck catching. How much cash do you get to get to a sustainable mode? I mean, it depends on the company and what they're doing, but it's, you know, tens to hundreds of millions of dollars. It's not going to be a million dollars. No, I totally get you. You can ask, you mentioned kind of the risks this one's willing to take. Are there risks that you're very much not willing to take when investing? The risks in order that I worry the most about market risk is probably the biggest. If there's just people who aren't willing to buy it or aren't willing to buy it at your price, like it's an extrinsic factor that you have very little control over.

33:06I think the very next risk that's very similar is regulatory risk. If your business is premised on some future law being passed, that's a binary outcome that's completely outside of your control. Unless I have some information that makes me bullish that that's going to happen, we're probably not going to do it. Then you get to like technical risk. I feel pretty good about our ability to assess technical risk. So it means that there are some technical risks where I'll decide that you can't do it. You're like violating laws of physics, but like there's others that it's like, okay, well, maybe you can, maybe you can't, but like we're willing to take that risk.

33:33Probably in the top of that mix too is team risk is like, you know, there's old, old joke and investing that there's the three T's, there's team tech and Tam total addressable market. My joke is like, we have three T's too. It's it's team team and team. At the end of the day, the team is the one that's going to like figure their way out with some of these hard problems. So like we have to really believe that the team has the sort of run through walls, get those 30 -nose and people fall asleep in the pitch meetings, and then still keep going because they're just like, damn it, I have to build this.

34:03Those teams do surprising things. Again, I use the show as a great testing mechanism for myself. I'm looking at this pre -seed now. It's the CPO who scaled the company to $1 .5 billion, which in matters world is tiny, but normal world's a $1 .5 billion company, scale to millions and millions of users, as they said, hundreds of millions in revenue, and they're starting a new company in the sales productivity space. And you're like, ugh, sales productivity, it's the worst market, it's a sucky, like horrible, you're just in a sea of shit, but they're an amazing CPO, and they are great, great product leader.

34:41I don't see many of them. Do you just write the $1 .5 million check? $1 .5 at 15, you get 10%. Do you just write the check even though you hate the market and hate the product? You're always doing deal review on these podcasts. We get it with this like our meeting on Monday. Sure, I've got you on the line. Why would I not leverage this opportunity? You're gonna hate my answer now, which is it really depends. I think maybe is the answer. I think the first question is like, I think of like my deal memo is like, what do I have to believe for this company to be wildly successful? And it's usually like a one, two, three.

35:15It's like, I have to believe this. I have to believe that. I mean, this happens. This is a multi -billion dollar company. That is the key. My question to you would be like, great. Okay, team four to four, three out of four, whatever your ranking system, like fantastic past, flying colors, market, you're calling, ooh, what is their take on why they think they have a unique angle in? What do you have to believe that maybe you're like, I don't see it, but like I'll trust them because they think they have a unique product angle, they have a unique market angle. There's something where it's like, and I have to be like, if you're right and I'm wrong, this is a huge business.

35:45You have to fundamentally believe that customers are fundamentally frustrated with the unbundled infrastructure that we have today And they want to go back to a bundled environment. There's too many tools and they want one platform to sell with Yeah, maybe do you outcome scenario plan think about what the exit could be Project hey, this could be a strategic acquisition for X this could be an IPO. This could be a bifur in video You name it again. I like to think everything we do can be a multi -billion dollar business otherwise with the math just doesn't work. And I like to think they can be independent businesses.

36:18So my first plan is like, you're gonna make a lot of money. And if you're making cash flow and money, there's a lot of options for you in the market. So I don't do anything where I think the most likely exit is acquisition. Cause I just like, I think that's just like, not where I have not played. Now we do have to say like, again, can you make money? Where is this market? Where is it going? Is it, you know, I've passed on things that like, I think your technology's really cool. You're fundamentally attacking a relatively small market. So if you take 50 % of that market, you're still a pretty small business.

36:46So like from a market sizing standpoint, I will do that. You said about kind of being a capitalist very much in terms of how you think about investing today, and it being different from philanthropy. Did you take a certain amount of assets and put them in a fund structure? Like how did you structure that kind of capital allocation question? Well, yeah, two things, yes. I have put, we're putting a bunch of money to work philanthropically and I am putting a bunch of money to work in the fund. But I think more philosophically for climate specifically, I'm very much like outcome derives the tool and approach rather than the other way around So it's sort of like this path through where you know I started this during COVID in 2020 which is like climate crisis.

37:24I got to do more I got to do something here that like it's too big. It's too hard isn't the right answer to like Why am I not doing anything which is kind of my answer to that date? And so I was like I'm gonna start directing a bunch of our philanthropic efforts towards the climate crisis because I can do that on nights and weekends and as well I do my day job at Meta. That's where I started. And we started deploying a bunch of philanthropic capital. And we're still doing that. And we're funding a lot of early stage science and policy work. And I think it's a really good tool for like high risk early stage stuff that's just like not commercially viable.

37:54But along the way, I sort of, as I learned more about climate, I'm like, this is a $10 trillion problem. This is not a $100 billion problem. A $10 trillion problem, philanthropy and governments can't solve. You need markets. Markets can solve this. Why can't they? The US federal government budget is $2 trillion a year, ish. If you took the entire US budget and you put it on the climate crisis for five years, you could do it, but you're just not going to do that. But what does work is we spend trillions of dollars a year on lots of things. Like if you have capitalist markets going and people making money and clean energy being cheaper than dirty energy, then you just sort of start aligning the forces of the market in that direction.

38:32You're starting to see this with solar, where in many places around the world, like solar the cheapest form of power generation by large margin. And so people are deploying the record amounts of solar, not because anyone's telling them to, it's because it's like the economically rational thing to do. What we need to do is move more things into that category, which is like, oh, this thing's like cheaper, so we're gonna do that. And then it's just gonna pile on investment. So that's why I sort of moved into the like, huh, we just combined with, as I met entrepreneurs, it was like, it's just on a selfish level.

38:59A lot of fun for me. It's like, I've started a company. I've worked at three or four startups, of grown companies from like zero to 35 ,000. And so like the entrepreneurs wanna talk to me about, how do I hire an executive? How do I run a board meeting? How do I cite our first plant? That's fun for me. My Sundays are taking calls from our entrepreneurs, you know, and I'm like excited to talk to them and ADM on a Sunday. That part's fun. I think when you look at kind of the excitement around AI and then you take a step back and you look at the requirements that that needs in terms of data centers and what they need in terms of energy.

39:29And you look at that kind of as a chain of regression back to the kind of source, so to speak. Suddenly the focus becomes energy. And then you look at that and go, huh, it's some altman right that like, energy is kind of, I think it was the currency of the future, I think he said, or aligned to that. Or is most of us, so do human right, that we'll see abundant energy free for everyone. And I'm looking at it going, I don't know. I think part of why I switched it, like I said, I think I'm decently good at calling to, AI 10 years ago, two or three years ago, like, um, energy transition seems like a big deal.

40:01like I think a pretty good at calling the trends. I do think availability of cheap clean energy is probably the biggest rate limit or the human progress right now. Why is it such a rate in them as it just sounds? Because it enables absolutely everything. There's a whole stack of technologies when you look at them and you're like, huh, 80 % of the cost of operating that is electricity. If I lower the cost of electricity, all of a sudden that technology becomes really viable. We know how to make jet fuel from CO2 and electrons. We can suck CO2 out of the atmosphere and make jet fuel. Technology exists.

40:31It's just like four to five times more expensive than drilling for oil because primarily the amount of energy that we put into it, there's a whole bunch of industrial processes which burn, to make steel, to make concrete. We have the technologies to do all of those things. They require clean energy or energy at a very low cost. You know, if you've ever, you know, consumer here is like trying to replace a gas heater or gas water heater in their home. Gas is so cheap in the United States and so if your electricity is expensive and gas is cheap, you're like, hmm, maybe I'll just get the gas one because it's cheaper.

41:01You kind of want the electric one to be half the price. There's just so many things out there that are enabled by cheap and available clean energy. And again, this is where people forget things. We've had about two decades of relatively flat to declining energy demand in the United States. So we've got an entire industry that's meant like two decades basically going like, what's next year look like? Kind of like last year. Cool. And now all of a sudden, everyone's freaking out over like, oh my god, a 5 % increase in like energy demand. I lived in industries where we were like getting 100 % increase in usage year every year.

41:31And it's like, you just got to go build a lot of stuff. I'm so sorry for asking dumb questions. Why did we see continuous energy demand decreasing? Mostly because of energy efficiency. So we saw a lot of energy efficiency gains in the in the in the last 20 years. Honestly, the other thing in the United States is we had kind of not been doing a lot of manufacturing here. So we had sort of offshoring a lot of manufacturing. And what you see is I think there's 200 plus new factories underway. We've got battery factories. We've got chip factories, we've got car factories, and then you've got AI data centers.

42:00So you've got that, you've got electric vehicles. So you've got this like all of a sudden a bunch of new sources of electricity demand. Okay, so we have kind of this confluence of new technologies combined with ensuring meaning that the energy demands bites again. Are we able to produce it at that level and going back? Is Sam right that it's like energy is the currency of the future or is must offer right that actually very quickly it will be completely free and abundant? I think the next couple years are going to be messy because what you have is a massive spike in demand in a relatively static industry and The ability to ramp clean energy right now is growing but still limited.

42:36I don't think in the next few years We will have like unlimited clean energy. I think in the next decade We have a really good shot at it. If you look at the growth of solar you look at all these charts You kind of see this exponential curve at the very bottom with solar It's like all sources of power generation like solar is like down here, but it is on this definite exponential curve China last year installed more solar in 2023 than exists in the United States. We're just deploying like it is just in front of everyone if you actually look Texas on an average there's a cut which is the Texas power grid shows their power mix go there on a 12 o 'clock today And you'll see it's about 50 % wind and solar now what's missing for renewables wind and solar super cheap is storage because it's cloudy at nighttime, you don't get that.

43:22Storage prices, battery prices are on this just like precipitous decline. And what happens with technologies is there's like, there's always this like, I call like breaking through the surface of the ice moment where it's like it's too expensive, too expensive, too expensive, too expensive, too expensive. Oh shit, it's like cheaper than everything else out there. We're kind of seeing that very quickly happen with solar plus battery storage. It's all the sudden going to be cheaper than installing a gas turbine power plant and sort of generating 24, seven power that's totally clean. So we're in this really messy transition where it's hard to tell exactly how it's gonna go, but if we can continue to deploy solar, continue to get cheaper storage, and then we've got this X factor of like, I like to have lots of shots on goal, and the extra couple shots on goal is fusion.

44:05I think we've got a couple credible shots on goal on fusion, and I'm like, that shows up in the 2030s, then all of a sudden you're in a world where it's like, hey, do you have 40 acres? Because if so, I can basically make you unlimited clean power. What are the short -song goal on fusion? Why are you optimistic about fusion as an alternative? Because we've got 45 plus startups out there going through what is now really well understood credible science There's probably a dozen different designs for a fusion machine several of them are based on fairly well understood decades of plasma research I'll highlight two you've got Commonwealth fusion systems is based in outside of Boston, Massachusetts I went and visited their facility where they're building right now their first generation fusion machine and they set the world record for most powerful electromagnets using superconductors.

44:51So they had built the world's most powerful magnets, which is called a tokamak, which kind of makes a donut shaped like magnetic field, which then you basically burn a plasma at hotter than the center of the sun, and that generates energy that you can recoup. And their whole thing is this like the more powerful the magnet, and kind of squish it with a magnetic field, and if you increase the power of that magnetic field, it increases the efficiency of the fusion reaction. We have built these sort of things. There's a thing called ether and others that have been scientific consortiums that have built this sort of fusion reactor that, you know, works.

45:22We've got really good modeling on it. So that's a very serious company, 700 people, lots of plasma physicists. Then you've got, for example, the National Ignition Facility NIF in the United States as a national lab. And they do a different thing, which is a drop a little target, and they hit it with a whole bunch of power all it wants And it creates so much energy that it uses the atoms and creates a fusion reaction We've done that. We know it works. It releases more energy out than we threw at it So like that works. We've done this many times actually in the United States in a variety of different ways And so it's not a question of like, hmm, can we make it?

45:55It's a question of can you make it commercially viable? Which means you need to be able to do all of that cheaply enough and get enough power out to absolve the power in So there's a variety of companies looking at that. What do you think is the timeline for commercial viability? I know that's a really hard question. 23. 20 .30s. Yeah. By the way, this takes me back to kind of 11th grade math class in algebra when I kind of just thought, fuck, I'm out of my depth. But I'll progress anyway. I got a solid B minus, which was a real win, don't laugh. And I know you've managed 35 ,000 very smart people, but that was a win at the time.

46:32When you turned out okay, I've yours been fine actually my question to you is I had John door on the show And I actually spoke to him I had a show and my question that he kind of poses He said the sanitary thiz was important to do we're too late the environment We're global warming is happening too fast and we we cannot stop it fast enough How do you respond when you when you hit that I would say he's like both right and that's not very helpful In this sense of like, yeah, we should have been doing dealing on this 30 years ago, and we have a bunch of positive feedback loops in the environment that are baked in, unfortunately.

47:07And so for example, glaciers and the Arctic and Antarctic are moving and like they're going to cause sea level rise. And even if we stopped all our emissions today, that's probably still going to happen. And scientists are debating about how and when and how big, but you know, there's somewhere between a foot to six feet of sea level rise projected between now and 2100, which is lifetime of our children. So six feet of sea level rise is pretty catastrophic. So, and even like a couple of feet is real bad. Yeah, that's bad. There's a bunch we don't understand because we just, like, we haven't run this experiment as early.

47:38So I think there's a question of like, yep, there's like, we should have been doing this three decades ago. But then there's a kind of like, great, what do we do with that? And that's where I agree with John, like a speed and scale thing, just like, we just need to do a lot more really quickly. And it's a little bit of everything. It's wind, it's solar, it's efficiency work, it's electrification of everything, it's carbon removal, it's sort of adaptation, and we need to do it all, and humans can move very quickly when we need to. And that's the thing that gives me optimism. You know, people kind of just like, ah, we don't really know how to build things anymore.

48:09It's like, build 10 million square feet of data center in like less than 10 years. They're going on trajectories above that. If you could like go back to like one of my favorite charts is like ship building production in the United States, It's 1939 to 1945. It's like 10 ,000 chips a year to like 100 ,000 chips a year, and like a year or two. That was a war of course, but like, that's an example of like, when we go like, man, this is a problem we need to go solve. It turns out you can solve, solve things. So I think getting people oriented towards concern because it's definitely some bad stuff happening, but like, great, what do I do with that concern?

48:42I've vector my energy into trying to make it better. Get more clean power, more electrification, more efficiency, more car removal. The more we get deployed, the better we have a shot at like where we're at, which is reducing the harmful effects, not eliminating. I mean, that's the reality where we are. I love the way you say about the speed of humans moving. I don't know if you know anyone from Europe. But at last, we do not move so fast, Shrepp. We will have an espresso before we address this climate crisis. My question to you, and sorry for the hard questions, friend of mine, Constantine Kissin says that she is almost arrogant of us in the West to expect Brazil, India, China, the largest nations who will control the future of this climate in terms of global warming, to expect them to align to us.

49:26They have fought for years to have any form of life out of poverty, and to say, well, you know, actually you should forget economic growth and you should prioritize climate is almost naive. Do you agree that the future of climate change will be decided by Brazil, India, China? and how do you think about Xi Jinping prioritizing climate over economic growth? I think the climate crisis is fundamentally humanitarian crisis. I think this is the thing that people get wrong. It's like, it's not about the planet. The planet will be fine. It's going to outlive us. It's about how many people are are suffering and are going to suffer because of the climate crisis.

50:02And I think the answer is prosperity, energy availability for everyone in the planet. I don't like this either or scenario. And I like the thing that I like about technology is it is the one thing I know that shows up and changes the Rules of the game. Do I want to have this or that? And then I show up a decade later and go like actually Turns out these batteries are now a tenth the price they used to be and the solar cells that were more expensive They're now cheaper than this other thing. We shouldn't be asking people who are affected by this to make sacrifices We should be investing our time, energy, and money into making them not have to make sacrifices because we're going to deploy technologies at a scale that makes it easy for them to cheaply get access to clean energy, clean water, and like a place to live.

50:46And that is a future we can have. If we continue to deploy solar, batteries, fusion, electrification of everything, it's like, that's the future I believe we should make, and it is, I think, compatible with the entire world. When you think about venture investors, say, like me, I worry that we're going to see a, I think we might see a load of venture investors lose a lot of money investing in hard tech or spaces that they're not used to. How do you think about advice, this wave of venture investors who's now moving into this for the first time who are not used to investing in this category? How do you think about that and advise them?

51:18We need a lot more money in this space. So I'm not a negative person on these things, I'm much more of the optimist and so we need thousand X venture investment, we need a thousand X startups, we need more people switching from other careers into clean tech and we need that to be a job that's good for them from an economics standpoint. So I'm excited about more people. So I'm more on the fence of like, how can I help educate people to make sure that that we do this well? And I think it just basically boils down to, you know, everyone has something to bring to bear on these problems. Harry, some of the best tech investors were techies.

51:48We talked about Mike Moritz, he was a journalist, he was a computer scientist, and a legendary investor. So I think it boils down to always having a humility. And I actually think this is a place where techies like me can really get ourselves in trouble, which is like thinking more too smart about a problem, about the market, about an entrepreneur. And so like I constantly have to remind myself to like eat humble pie every single day and be like yep, yep I don't know this ask questions don't talk to people and so I do think it's a question of just like intellectual curiosity I'm learning a market and understanding it and some humility about what you know when you don't know and just like learning from others The beauty of this is like the number of times I've asked people question Be like I don't know what that means or like what's that acronym or like I guess I should know that but I don't I've got laughed at exactly zero time saying that.

52:31I just try to run that. It's like, hey, plus my physicist, like you just said three things I don't understand. Can you walk me through it? And they're just a punk to tell me, and that's the best part of my job. It's like, I'm getting a private education on like how this fusion thing works. I just think you need to approach it with like humility and intellectual honesty and like figure out what it is you bring to bear. So like, okay maybe you don't have the physics background, but you really understand people or you really understand markets or you really understand the sales motion. All of these companies are companies.

52:55They need to sell stuff. They need to hire people. Like the hard nerdy physics is usually a part of it, but it's not the whole thing. What do you know now about investing that you wish you'd known when you started Kigga scale? Oof. How much time do we have left? I have learned a lot of humbling lessons. It's called the 400 hour VC. Yeah. What a fancy. I think it comes back to what I just said. I think the biggest mistakes that I have made is getting too excited about a technology. And saying like, ooo, this technology is definitely the one that's better. and not thinking enough about the market and the entrepreneurs.

53:27It's like, well, who's gonna buy it and who's gonna pay for it? Because the world is full of, this thing is cheaper, better, faster, but there's a whole bunch of reasons why people don't wanna buy it. And that has been the real humbling, is just not trying to outsmart the market and how great this new technology is and paying a lot of attention to that. I think that the biggest, like, misses I've made, is sort of trying to outsmart the entrepreneur, and that's basically, I love that entrepreneur. They're so good, but I don't really like the market they're in and then they pivot into a different market that I really like and I was like oh should have invested like and now they're in the hot market and everyone's trying to throw money into them so the definitely mistake I've made that I try not to repeat is like oh my god you're working on climate problems and you're amazing and you're thinking through these problems like I'm gonna go ahead and get behind you like I've definitely missed out on on some where I just I should have gone in and again try to not outsmart both of these basically are meeting a lot of humble pie like trying to either outsmart the market or outsmart the entrepreneur.

54:22Shrap, given it's your money, you don't have the kind of rules or barriers or constraints that a traditional farm manager would do, which is like, well, I said to my LPs that I'd invest and get 10 % ownership. I said that I'd only do seed, and now I'm doing B. How do you think about the constraints that you have around you? Do you have any? How do you think about that and when you break them and when you don't? I think the best part about it, and I spent a lot of time talking to a lot of friends to figure out, like, should I just raise out of the gate or should I do it this? And I I went here because my life is basically my, like my North Star is high frequency learning.

54:57It's like high frequency experiments. How quickly can we learn things? And I think the problem with all of those things is you like to sign everything up from. We're gonna be this stage, this amount, like I have all these boxes and it's like, and then a deal comes in and you're like, I can't do that because it doesn't fit this. But I'm like, but that's an amazing deal. It's like well, but you know blah, blah, blah. I was like, that drive me crazy. Fundamentally, we're gonna put money to work against great companies that are gonna affect the climate crisis. And then we're going to make a bunch of money from that and cause a bunch of FOMO from everyone else who can be like, why the hell didn't you let me into FOM2?

55:25That is the game we're playing. And so it allows me to try lots of things. So like we've done super early stage. We've done some really late stage. So we've done unannounced, but we've done some series EF companies pretty close to exit. And so it allows us to look across the whole spectrum of companies and understand it. And then really understand a dial in, where is it that we are uniquely advantaged, where do we provide the most value? where we think the opportunities are on the market, I get to run all those experiments rather than just pick a strategy and execute it. What did you learn from those experiments?

55:56Now you've done that full gambit from very early to me a series of EF would have been the takeaways. Oh, come on, you're going to let me get away all the secrets to everyone else. That's why the show is so successful, dude. This is why, because we monetize your wisdom. Come on. But, okay, well, I believe in open source. So, again, all humility, it's not like I've been doing this for 20 years. So, I think a couple of things. I guess the first is, this is fundamentally a game of outliers. And like, you have a bunch of rules of thumb to try to get you there, but you're like, you're trying to find the company that's going to be this huge, huge success.

56:28And like I said, from early meta days, my, you know, my experience is even the best company is go through some significant period of time where everyone thinks they're crap. And common wisdom is, like, it's a pile of junk. And so I think there's this notion that, oh, we'll spot it and we'll know, it's like, no. And so I think that setting up your opportunity to be lucky to some degree is like, how do I have enough investments, enough meetings, enough things, even if I'm wrong, we still have a shot at being lucky at these things. Like I said earlier, I think the entrepreneurs, everything, who are the best entrepreneurs who are running through walls, like when in doubt, back the entrepreneur sort of over the market and other things.

57:04And the one thing I agree with is, it is difficult to look across many stages at once because you're just comparing unequal objects. And so if you're like looking up two PhDs at a lab who like literally haven't talked to a customer yet and a series F company, you know, with 50 million revenue, it's just like hard to compare those two in a meeting on a Monday and decide which one to invest. And so I do think that like figuring out ways to sort of sub -segment these things is really important. The other thing I'd say is the best part of the experiment that I'm excited about is like assembling this little band of operators around us that I really trust.

57:36They really know what they're doing and everything from marketing to HR to recruiting and like applying those to our companies has been You know, it's kind of a question like doesn't matter is it just like free services? It's been sort of transformational because it means that like we start referring our teams out to the companies They're like well, we tried three or four other people and they kind of sucked but yours is great And like it means our launch was really good. We got all this feedback Oh, we hired this great candidate or like now we did this and so that's the fun part for me is like Oh, I know how to build company I can pick people, technologies and build companies.

58:05That is what's going to be written on my gravestown. Hopefully below was a great father and family member in trim. That part has been really fun because I wasn't sure. It could have just been something everyone does, but I think we're doing that particularly. The final thing before we do a quick fire, you mentioned that kind of great father. I do just want to ask, I think parenting shaped so much of how we think. If you could call yourself up before you had your first child and say you should know this, What would you tell yourself? Don't miss a moment. You don't get it back. So, like, I think it's not that once a year of family vacation it's that, you know, driving the kids to sports, driving them to school, walking them to school.

58:43I mean, this was a respect trip. You managed 35 ,000 people and the engineering infrastructure for one of the largest companies in the world. Did you miss a moment? I mean, there were always trade -offs. I had to take business trips, you know. I was the coach of the softball team. I, like, volunteered on Friday as a school for lunch duty. Like, I have been very fortunate to sort of carve out some time where I'm like, I'm there and just present. And it's something I've decided to like really invest into my time. And like, that's where I'm like, hey, at a clock on Sunday, I've got older kids now they're sleeping in.

59:13So at a clock on Sunday, I can do my calls. I'm not talking to her. I ain't missing a thing. My kids are busy. When they, you know, want to walk to school or want to go get coffee or go to a sporting event, like, I'm there. And I'm there because I love it, not because I feel like I'm going to get like an award for it. But like, it's your chance to have this tight group of people that you care about and build a relationship with that hopefully spans your lifetime. Why wouldn't I want to invest in that above everything else? So as someone said to me recently, you know you've been successful as a parent when your children grow up and they choose to spend time with you.

59:43I think it's a very nice one. I love that. And I'm going to do a quick fire with you. We've had a very, very, I love this. You see why it's like the best job in the world for me. Yeah. Anyway. Anyway, so the quick fire first one. What do you believe that most around you disbelief that solar and storage are gonna? Just be a massive part of the energy grid and fusion's gonna work. What would be the biggest barrier to that happening? Incomments basically making like messing up the economics on it. How did you deal with the insane stress of leading end for Facebook? I was shouting to a mutual friend of ours, I was like, Shrap must have like not slept for years.

1:00:24I mean, if it goes down in a country, it's like big problem Shrap. You're the dude who was responsible when it goes down and it's trending on Twitter. Like you're the one who gets the coolest like fucking Shrap. There's a couple apologies for me out there on the service of being down. I have to write more than one apology. I mean, look, I just acknowledge it is hard and I don't think it's perfect and there are times when I dealt with it better than others. I should write notes to the whole company about how to manage stress and like I think it basically boils down to exercise and sleep and then having something you do that is fun that is your decompression and can be different for you.

1:00:58It could be painting, could be hanging out with the kids, could be playing a sport like whatever it is and then trying to find that time to block it off. The biggest mistake I would often make is when things would get really stressful I would throw off the boat everything that felt selfish and discretionary which is often sleep and exercise and so like the times are always the worst is like, I don't have time for this, but it's actually a negative feedback with it makes you less productive, less smart, less less risk resilient. So like there are times when you have to do that, site down, I'm not going to go to be over the class.

1:01:27Right? Like I'm online. We're here to deal with it. But over a multi week, multi month period, you got to be careful to not stop yourself from doing those things that you're sort of burning yourself out. I would just love that Facebook .com down. So where's Shrap? He's in an aerial yoga right now. I'll hear you guys. I got high. Don't get 11 guys. I'm going to have a wrap this up. No, don't get to do that. What's your relationship like to money? Does money make one happy? I mean, I think the research on this is pretty clear that if you are struggling with money, if paying the rent, if you are one car break down away from trouble, then it's like a massive source of stress.

1:02:07And so I think for most people in the world, money is a massive source of stress and and getting above a sort of subsistence level is like a great way to sort of absolve stress. Above that, I don't know that it's the biggest determinant of things, like I'll have to do some fun things, but I know plenty of very successful, happy people and plenty of successful, miserable people and plenty of like not successful, very happy people. I think some of the early teachings are sort of some of the most lies that the happiness and fulfillment is fundamentally inside. and that when you try to externalize it is like a great, great path to unhappiness.

1:02:43Is it difficult bringing children up in a very affluent financial environment? I think we are incredibly privileged and lucky. I think it brings a unique set of challenges that you know I think people worry about, the expectations that it sets for people, but I think that that is an incredibly, like I think almost anyone in the world would think that's right. Like let's just be honest about it. It's like how many people are like, yeah let's like solve this by like not having it. Like nobody does that. So I think it's a set of challenges. Everyone deals with a set of challenges. Like I think the other wisdom in life is like you never know what's going on with someone, right?

1:03:14Could be a healthy, could be lost of a parent, like could be kid sick. The idea that anyone is happier or better is like just wrong. They're like suffering is one of the fundamental common things in humanities. Like everyone suffers in their life in some form or the other. And so just having that humility and understanding that like everyone's gone through something or went through something or will go through something, you just got to know that and just like internalize it and like just be humble about it. God, you're annoying me humble.

1:03:43It's like you're just this like Kaila OG and just like so you're not really a traditional venture investor clearly. I'm probably going to be yeah. I'm not like my single my quarters zip in the other room. So like I need to put on a terribly humble next you're going to give attribution to someone else for work that they did. I mean, God, terrible. As a public market's Facebook investor, I practically founded it. I was that instrumental. Uh, thank you. Thank you. But, uh, Tommy, what do you know now that you wish you'd known when you joined Mesa? Honestly, I think it gets back to some of this balance stuff.

1:04:18Like, I think there were definitely periods where I, so burn the candle on both ends and like, just give up stress management, physical health, that sort of thing. So I wish I had sort of found a way to get more balance than I don't know if that was possible. So there were times when it was just so crazy. I just like couldn't do that. But I think it was that. What was the craziest time? I mean, the only thing I'd say is like, I always felt very fortunate because Meta was not my first job. It was not my second job. It was my third or fourth job. I'd started a company and been through lots of things at SeenThe .com, Boom and Bust.

1:04:49I kind of knew when it was crazy and special, I was like, ooh, this is real unique. Like this is not normal. And for people, it's the first time through. You're like, this is just the way things are. It's like, no, this is not the way things are. It gave me a bit of like, remove from it to basically like kind of sit back and appreciate like fully, fully crap. This is special and unique. What was the craziest moment that you think back to? So many. I mean, we talk about like every time the site was down, that was a crazy moment. The IPO happened and when you trading out halted the day of the IPO, like the switch to mobile was a really stressful time because we just built this business and started building a new one.

1:05:25It felt like every three months there was something going on in this great. Will you raise outside money with Google scale? I don't know. We'll see. If you were to co -founder company, who would you choose? JC or downrose? Oh, that's a mean question. Yeah, no one said I was nice. It's not fair. I've worked with Dan for 15 years, so I know Dan really, really well, but through a lot with him. So I'd have to go on depth of relationship and go with Dan. Thanks for getting me off several holiday card lists. Final one for you. 10 years out, it's 2034. You said at the beginning, and I wrote it down, but you said like you are fundamentally optimistic about the world being a better place.

1:06:04What, why, and talk to me about what you wanna see in 20th, pretty cool. I mean, there's just like so many things that are getting better. I mean, let's just talk about diesel school buses. We like drive children to school in a vehicle that we know affects their health negatively. And like, we're now getting the point where we're starting to replace them with electric buses, which are just like not only the better for the environment, like it means our children are not like inhaling diesel thumes every single day. I think in a decade, you're gonna wander around and be like, that gas car, like look at that.

1:06:32It's like a Model T. It's like, wow, that's weird. I can't believe we used to do that. That's kind of what you're gonna do. Maybe not in 10, maybe it's 15, but like definitely like gas vehicles, you're gonna be like weird. Self -driving cars, I have you been in a WEMO. I think self -driving cars went through a huge boom, and then like now everyone thinks they suck. They kinda missed that they actually work now. And so like, I think in 10, 15 years, it's gonna be like, whoa, you drive your car? That's weird. I think self -driving cars are gonna be huge. I'm not really about climate and energy, but I think it's something that's there.

1:06:58And I think that we will be talking about sort of deployment, hopefully, as we've been discussing of fusion power plants. And it's like a new thing that allows us to sort of build power out there. But fundamentally, I think this idea of burning something for energy or heat is gonna feel increasingly weird. It's gonna be like the gas stove is gonna feel weird, the gas car is gonna feel weird. But like anytime I have a smoke stack, and we're like, why do we have that? It's just gonna, like, we're gonna get to this point where like, that's kind of weird. And that's gonna be awesome. Because like, forget the environment for a second.

1:07:29All those things are bad for human health. They all pollute. That's like bad to inhale the fumes. So again, I think you can have this like, wow, this induction stove. It actually boils water faster than the gasto and it doesn't pollute my indoor air. My car is faster. The heat pump is like way more efficient and again, it doesn't pollute. I do think we have this opportunity to sort of like rebuild our industrial economy in a way that's like, I can't believe we did it the other way. as someone who doesn't have a driver's license. I'm thrilled to hear that we might actually have self -driving do well and replace me.

1:07:57That's a wonderful thing. Ah, so Shrap, listen dude, as I said I've heard so many good things. I love doing this. Thank you so much for being so open and this has been fantastic. Thank you, Harry. This is awesome. I love them. I mean, I literally think I just have the best job in the world. Having the chance to sit down with a mind -like Shrap and have that discussion is such a unique position which I am so grateful to have. If you want to see the full episode in video, you can check it out on YouTube by searching for 20VC. That's 2 -0 VC. But before we leave you today, as face it, your employees probably hate your procurement process.

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