E59: Mike Maples Jr. on Disruptive Investing

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22:50Make sure they know that you heard about GiveWell from econ102 with Noah Smith and Eric Tornberg to get your donation matched. Again, that's givewell.org to donate or find out more. I don't want to take any credit from John and Logan or even Travis and Garrett. Would there be other teams that would have taken advantage of this inflection in your mind if it wasn't for Lyft and Uber? Was this something that had to happen given your theory? I think usually it does. DoorDash and Instacart also leverage the GPS locator chip and the iPhone 4S, but in different ways. There are multiple ways that an inflection can be harnessed to create empowerment.

23:25One of my favorite examples is the wheel. For over 500 years, the wheel was mounted horizontally to make pottery. And somebody figured that, hey, maybe I can mount it vertically to propel wagons and other types of things. But the ability for the wheel to propel things existed for hundreds of years before some entrepreneur had the insight to harness that empowerment in a different way. And so just because an inflection exists doesn't mean you know you have that empowerment, right? The thing that's in our pockets right now might have an empowerment that we don't see, but that occasionally an entrepreneur is an outlier.

23:56Occasionally an entrepreneur sees what we don't see. And in doing so, they break the pattern, right? They see an opportunity to break the patterns of how we think, feel, and act by implementing an insight that takes us to a different future. I think it's the television that was invented like seven times within two months, once a couple of technologies were produced. So Cynic might say that, you know, it's also this new invention is also with some missing piece that wasn't there previously. I like to say all of it will happen someday. The question is just when and why now? And the inflections are a good way to diagnose the why now because they help you understand the new thing that just happened that creates the conditions for a new thing that will happen.

24:36That's why the inflections are so important in all this. You believe that things like business models or distribution are not a good enough why now? It has to be a technological why now for it to be potential big business? Very often, the insight does embody something about the business model. Airbnb is a good example of this. Airbnb not just offered an empowering new product, but it was positioned differently. Hotels in the past, you know, Four Seasons in Paris, very similar to the Four Seasons in Austin, Texas or San Francisco. Brian Chesky forces a choice and not a comparison, right? He says, hey, you can go to the Four Seasons if you want.

25:09But if you're in Paris, wouldn't you rather live like a Parisian rather than be in the center hub of the city in Four Seasons that looks like every other Four Seasons? wouldn't you rather be like in a French apartment on the left bank that is from the 17th century for the same amount of money? Now, if you're Four Seasons, it's very hard to react to that business because like all of the work that you've done, the entire pattern of your business is predicated on providing a high quality, consistent experience across all of your properties. And so now all of a sudden what Airbnb does with their business model is they turn your biggest strength, they find the weakness in your strength, and then they turn it into a weakness.

25:43And so often the business model flows from the insight, And when you think about it, it kind of makes sense. If you have an insight about the future that's radically different, you're going to empower people in radically new ways. There ought to be a way for you to monetize that, right? If you provide a radical empowerment that people are desperate for, there should always be a way that they're willing to pay you. And you should always have at least the option to charge them in a way that's counter positioned to the incumbents in the market. We discussed Steve Lang's quote that a startup is a temporary organization seeking a business model to one day be a company.

26:14Tell me more about that. Steve and I are very simpatico on this, right? What Steve helped me understand is that a startup literally does start at zero and that a company has assets and advantages and moats and powers. And what a startup needs to do in order to create a breakthrough, there's what I call a breakthrough sequence. The first breakthrough is the insight. The insight answers a question. What do I know about the future that's powerful and not obvious? Most founders, unfortunately, skip that all together. They don't have a good answer to that question. And the problem is without an insight that's powerful enough, you're not going to offer a radically different form of empowerment.

26:49You're not going to be different enough. You're not going to force a choice. You're going to fall into the comparison trap. The next part of the breakthrough sequence is the product breakthrough. This is what everybody always talks about with product market fit. And the question we want to answer there is what can we uniquely offer that people are desperate for? And there's a force multiplier. If the insight's powerful, we're going to be more able to offer something unique because only us will have that insight. And if it harnesses inflections and it's a powerful insight, we'll be able to find desperate people more likely because the difference between what we can offer and what the status quo offers is so ginormous.

27:24Right. And so that's the product market fit phase. So once we have the product breakthrough, then we want to have the growth breakthrough. And in the growth breakthrough, we ask another question, which is how can we grow at an extraordinarily rapid and predictable pace to dominate the new category that we're defining? And so then and only then do we become a company. But in the early phases, the insight, product market fit and growth, our value creation strategy is different at those moments in time. We're not creating value the way a company creates value. We're creating value by multiplying the effect of our ability to create this breakthrough.

27:59And it reminds me of like a Newton's cradle. You know, the insight transfers energy into the product and then the product breakthrough transfers energy into growth. Because if you have a great product that people are desperate for, you can grow by syndicating the truth. You can grow by teaching people rather than spending lots of money to persuade them to buy. The success in the prior phase begets success in the next phase. And energy transfers. So by the time you get to the growth breakthrough, you're just tearing into the market at incredible speed and rapid progress. And that's what you want to observe when a startup does the job right.

28:28When it comes to these disruptive businesses, are they all driven by word of mouth? Does that tend to be a pattern you see? For the most part. So part of a founder acting differently is we like to see them create a movement. Lots of people, when they think about marketing, they think about go to market. But a movement is a little bit different. A movement basically harnesses the passion of the minority against the tyranny of the status quo majority. And it creates an irresistible desire on the part of those early people to move to a different future. And movements are usually mentioned in the social arena, right?

29:03It's like Martin Luther King with civil rights. But we can learn a lot from these people who created these social movements. So Martin Luther King forced a choice, right? You can't be semi racist, right? You either believe that people should be judged on their content of their character, not the color of their skin, or you don't. There's no middle ground. But what Martin Luther King did is he found people who shared that belief with him and he got them to move with him to a different future. And over time, that movement started to accumulate more and more believers. It went from being a heresy or a controversial point of view to the mainstream point of view.

29:36Similarly, that's what startup founders do. So startup founders have an insight about the future that's contrarian. They find the people that are most likely to believe their insight and they co-create the future with them by persuading them to join their movements. and they form a dichotomy between the world that is and the world that could be. And they position the status quo as the problem. They make the status quo apologize for its greatest strengths, you know, in the way that Airbnb made Four Seasons apologize or hotel chains apologize for the consistency of their experience. What you want to do when you start a movement is you start by appealing to a higher purpose.

30:09You find the minority who's ready to move with you. You move with them to a different future. You co-create that future with them and you position the greatest perceived strengths of the status quo. you reposition it into weaknesses and you create a sense of grievance around those weaknesses and show a path to a better world based on your strengths and your radically different approach to doing things. Is that why you don't believe in this canonical great founder that the founder has to be aligned with his or her mission? Absolutely. Right. The affection term that I use for it is founder future fit.

30:39It's like, why does founder future fit matter so much? Part of the reason it matters is so that you know what to build. And so if you're more authentically living in the future than other people, and you're tinkering with the technologies before other people, and you're doing it in a way that is more creative than other people, you're more likely to know what to build. But equally important is that the future isn't created just by the founders. It's created, it's co-created by the founders and their early believers. And so an authentic founder, authentically matched to the future that people believe in, is more likely to attract believers.

31:10And so their authenticity creates signal that punches through the noise and causes the early believers to raise their hand, say, I want to join your movement. And so then that authentic match to the future, thinking different, combined with their ability to create movements by acting different, is the two major forces, thinking different and acting different, is what animates the path of progress to creating these radically different futures. In the financial world, you have many successful people, including billionaires, that seemingly do it just for the money. In startups, why is that not possible, especially given that some startups gain traction very quickly?

31:44Why is that such a narrative in the startup ecosystem? I think it varies. Some founders that I know kind of are in it for the money. I found that different people have different motivations, right? So some people, almost all of them are motivated by some obsession they have about the future. I'd say that that's pretty common. But like Justin Kahn, for example, is kind of a thrill seeking personality, right? He just likes to stir the pot and see what happens and try things and shake things up a little bit. Whereas somebody like Kasser Yunus is like really passionate about cars and the future of cars and grew up with cars, loves cars, couldn't imagine himself doing any business other than a business that's car related.

32:23And so like it does vary, I find, you know, sometimes people talk about mercenaries versus missionaries. But what I find is that what really matters is obsession with the future they're pursuing. Are they intrinsically motivated to pursue it? And, you know, intrinsic motivation, right? It can come from making money. It can come from being famous. It can come from being interested, you know, all kinds of places. Yeah. You look for that motivation, especially early on pre-product market fit. It makes a lot of sense. You know, what keeps you going and what keeps you going for many years before there's financial outcomes.

32:54At the other end of it, you see, you know, people that own sewage companies, are they passionate about sewage? Maybe they are. But my sense is that it's a little bit overly dogmatically applied. When it comes to LPs, you mentioned that you can't make anybody love you. You could only let yourself be loved. Tell me more about that. Yeah, that's a saying that I read somewhere. I think like when I was a kid, I read it at Sunday school or something. Here's my thing is that like one of the things I think I learned, and I'm grateful for this, that I learned it early. In my relationship with LPs, I learned that I should not think of it as a sales cycle.

33:26And so at the time, I was trying to convince the world and even myself that you could have an institutional seed fund. That's hard to believe now, right? There's so many. But in 2006, there wasn't really a thing. There was myself and Josh Koppelman and a very small handful of people pursuing this. And so when I talked to original LPs, I would say, OK, look, here's what I believe is true. There's angels who invest small amounts. There's VC firms that invest$5 million or more. and there's this thing happening. It's called Lean Startups and 500 ,000 is the new 5 million. And somebody is going to create an institutional seed fund.

34:02And it's going to be a permanent fixture of the landscape because if I'm Peter Fenton at Benchmark, why would I leave Benchmark to start a seed fund? So the only people are going to want to start a seed fund who know VC are mediocre VCs. And then angels don't really know how to even spell LP, right? And so they don't understand how to think about LP as a customer. So I believe that there will be this new thing, seed funds. And what I would say to people is, if we disagree, that's okay, but I just gave you your time back because nothing else I'm going to say for the whole rest of this time is going to make any sense to you.

34:30What I learned was that if they had an objection and they said, I don't believe seed funds will happen, I didn't take it upon myself to convince them they were wrong or to anticipate it as an objection or add a new slide to my pitch to counter that objection. I said, I need to find people who believe what I believe. And we're going to co-create that future together. When I started to get to know Judith Elsie at Weathergage or Phil Horsley at Orson Bridge or a little bit later, Dave Swenson, the way I tried to approach him is I believe that there's going to be a new category of funds in this world.

34:58I believe we can be one of the first and the best at it, but we need to co-create this future together. We need to all collectively believe that set of beliefs. Don't do this just because you want to buy low, sell high, because I'm going to come back to you and I'm going to, because we have this shared belief about the future, I'm going to always be trying to learn what you're seeing, how your belief is being animated potentially in different ways than mine is. And so startups are a lot like that too, right? It's like people are animated in early innings by shared belief in a different future.

35:26It's a very different way of approaching LPs, right? So like I never meet a new LP when I'm fundraising ever. I only want to raise money for people who've already decided they want to invest. And when I meet new LPs, it's never under the pressure of fundraising because then I can just talk to them about how I see the world. And we can see if we have a values match or not. And if we don't believe the same things, that's okay. You can't make everybody love you. You can only let yourself be loved, right? You want to find the people who have similar values to you. And so you're not selling them on investing.

35:55You're engaging them in a shared call to a venture, you know, to change the future. That's kind of what I look for in the LPs. And I think most managers would be better off if they looked at it that way, if they looked at it, not as a sales funnel. How do you reconcile that? There's a saying, there are no dumb students, only bad teachers. I might be butchering it. So how do you reconcile? You're advocating for this entire new asset class. Certainly not everybody's going to get it right away. What's the nuance there in terms of how much are you willing to be a missionary for a new idea versus how much do people have to have those views already before you sit down and talk to them?

36:30I think quite often I find that early believers kind of had an intuitive sense of it before they met you. Usually, you know, usually they've kind of got a feeling in their bones that something needs to change. They've seen things that are unsettling to them. So I think when I met Phil Horsley, in hindsight, I realized he was looking for new ideas. He felt that venture had stagnated. He felt that, you know, it needed to be reinvented in some ways and that we kind of needed to get back to what venture was good at, what it had succeeded at in the 90s. So I do believe that most people have a sense of what they believe.

37:04And so a lot of times it's the founder's job to put a voice to that belief and sort of animate that belief in a new way to unlock it. I don't think this is unique just to myself, but like what I've learned is that there can only be one you. If you are your most authentic self, it's a little bit like founder of FutureFit, right? If you are your most authentic self that you can possibly be, you can't be any better than that. Like you can't do better than your best. And so like what I've sort of come to realize is that the way to be hard to compete with is to be the best version of you and to do the best you can at what you do and to just be real about that with people.

37:39And it's like they either gravitate to what you can do and what your comparative advantage is or they don't. But I don't think you're going to convince people by trying to be something you're not. You're almost always better off saying return to being your best self is the true north and being self-aware enough and humble enough in many cases to know what that looks like. How do you operationalize that? You know, you're creating a new asset class. There's only so many people with those unique insights you mentioned. Phil Horsley, he was on the ground seeing so many deals. Dave Swenson, arguably one of the greatest LPs in history.

38:12It might have been very intuitive to them, but maybe there wasn't that. That was certainly not thousands, but maybe not even 100 people like that. Hey, we'll continue our interview in a moment after a word from our sponsors.

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39:26How would you advise new VCs to operationalize your strategy? Yeah, and it's the same advice I give to founders. I'd say when you're early, you have an advantage or you don't. Let's assume that you do. If you don't have an advantage, you have no business raising money because you're going to waste your LP's money, right? So in theory, you should have an advantage and you should know what it is and it should be real. If you have an advantage, there's two kinds of people in the world. There's people who value your advantage and there's people who don't value your advantage. You only ought to be spending time with people who value your advantage or are prepared to value it and not waste any energy on the other people.

39:59Wasting time on the other people is bad for two reasons. One is they're not going to do anything. They're not going to give you money. It's not going to be a good use of your time. But even worse, they're going to give objections to your strategy that aren't valid. And you're going to modify your strategy according to their feedback. and their feedback doesn't matter in the early days. The only feedback that matters is the feedback from the believers. Because if you're right, you want to find the people who believe that you're right because their feedback has a better bearing on a correct future.

40:24So like what I say to people is only spend time with people who either value your advantage or prepare to value it. And don't sweat it if not everybody does, right? And it's like, it's nothing personal, right? It's just they just don't value your advantage yet. Maybe they will someday, maybe they won't, but it's not your problem. And there only needs to be enough people who value your advantage in your business. And if nobody values your advantage, then you gotta ask some broader questions about whether you have one. But if you have a true advantage that's compelling, there will always be people who value it.

40:54And that's who's worthy of your time. It's kind of inspiring when you think about it because then you realize that there's always an opportunity for those who have the advantage. It's interesting. One of my masters in psychology, if I was to put on that hat, I would say a lot of people subconsciously focus on the people that don't believe in them. They have this need to be liked by people. And then they give a pitch to someone. Someone's like, yeah, that makes total sense. And they lose interest. It's kind of like, you know, a romantic realm where people are just chasing, you know, women or men that aren't interested in them.

41:22There's some deep subconscious issues there. This is where I think Peter Thiel is really on to something. Peter Thiel would talk about Rene Girard and mimetic theory, right? Right. And is Rene Girard's theory was that people tend to form their opinions based on the desires and interests of other people rather than their intrinsic, personally formed desires and opinions. And so part of being your best self is to avoid mimesis. Right. Is to avoid the patterns of mimetic wiring that we all possess. And instead to say, hey, look, your time in this world is limited. You don't have much of it. You don't know how much time you'll have.

41:54Honor the gift of your time every day by doing your best and being your best self and always returning to that as true north. And what you find is that if you're your best self, there's nobody like you. So you'll always have an advantage, right? No matter what you're doing. And there will always be people who value that advantage. And so that's what's inspiring about it to me is that like why avoiding mimesis can always be a path to the light no matter who you are. And that's why he has this theory on why there's so many great autistic founders that it takes almost a irregularity to be able to not succumb to the mimesis.

42:25Yes. Yeah. There's reasons that we engage in mimetic behavior. We want to fit in. We want to be part of the community. Harmony matters sometimes. But I also think that it's always good to ask, how are you going to show up in the world in your best possible way? You talk a lot in pattern breakers in general about being non-consensus, right? And it itself has become a meme in the venture ecosystem. Could you explain as a fund manager, would you have been as successful if you had consensus view on institutionalized seed? Was that a big part of your success? I think it probably contributed to it. I'm always prepared to admit that it was lucky all along, right?

42:58So that may be a part of it. But like, why is non-consensus so important? Well, it's like the only way you can make a difference is to be different. If you're doing what everybody else is doing, you might perform well, but you won't perform extraordinarily better than the rest. If you and I buy stocks, we have a choice. We can buy the index or we can be stock pickers. If I buy the index, the stock market may go up. I may do well. I may make money. But I'm not going to do better than everybody else who bought the index. It's just going to be a function of the average. If I buy a stock, let's say I go buy NVIDIA, I'm either going to outperform the index by making that decision or I'm going to underperform the index.

43:36There's no in between. And people say, well, NVIDIA is a great company. You should buy the stock. But, you know, the problem with that is that NVIDIA is priced based on supply and demand. There's a set of people who think it's optimally priced, even though it's great. And so anytime you buy a stock, you're departing from the consensus. And there's an equal number of people who think you're wrong, an equal number of people think you're right. And it's your willingness to be wrong. It's your willingness to underperform the index that gives you the opportunity to outperform it. So that's always true in any given field of endeavor.

44:05It's your willingness to fail that lets you succeed. When you're non-consensus and right, you don't know that you're right at first. You have instinct that you're right. All you really know at first is that you're non-consensus, but you have to risk being wrong to be right. And so that's why I think non-consensus and right is so important in all of this, right? Like you can't, as an entrepreneur, you're never going to create a breakthrough by pursuing the consensus because your profits and your opportunity to get arbitraged away by the incumbents and by other startups in mindless competition, because it's a mimetic way of showing up in the world.

44:34Only by departing from the consensus can you create the extraordinary breakthrough. Just to play devil's advocate, is the converse also true? Something that sounds good to a lot of people is automatically bad to you as a startup idea? For the most part, yes. And the reason is that human beings are conditioned to like things. So if everybody likes a startup idea, it's too similar to what they already know, which means it's probably too similar to the consensus. It's probably too much of a projection of the present rather than a radically different future. And so it's kind of a weird, yeah, it's kind of zen, right?

45:01But like when you think about it, it makes sense. The distinction there for somebody, something like Twitter, that to me still doesn't quite make sense. I would have definitely passed on Twitter. But at the time, it was consensus among the super intelligent VCs because they understand this natural bias towards non-consensus. How do you explain something like a Twitter at the time it was hot? At the time of Twitter, it had already blown up. Got it. So the metrics were already... Yeah, everybody already knew Twitter was a thing by the time Ev decided to raise money. It was just kind of like, did you believe he was going to turn it into a business was really the only question.

45:32You alluded to it. You knew David Swenson. Presumably, he was an LP. Yeah. Yeah. Yeah. And the show we've we've met a lot of his former friends and colleagues. What are some things that you learned from David Swenson? Oh, man, there's so many things. I mean, he was just a great man, a great, great strength of character, just a great human. If I had to reduce it to one thing and it relates to his impact as well, is that patience is a form of arbitrage. So like most people used to think that liquid assets, all things being equal, are more valuable than non-liquid assets, because with a liquid asset, you can trade in and out of it.

46:08But what Dave understood is that your willingness to hold an asset for a very long time eliminates competition for that asset. And so as a result, if you're prepared to be patient, if you believe, you know, liquidity doesn't matter, only success matters. You need to be right about the investment. If you're right about the investment and it happens to be a liquid, you might even be more spectacularly right because there are going to be fewer people with a trading mindset that are going to engage in that trade. because they can't trade in and out of it really fast. So that's what I always think about that with what I learned from him.

46:42Because like, for example, I've worked with Ann now since 2008, so 16 years. And part of our advantage is we just have a temperament advantage. We just know each other. We know each other's tendencies and things like that. We don't feel pressure to invest in every hot AI deal because we'll look at each other and say, this is getting a little bit crazy right now. Maybe we shouldn't, we're not in any rush to do anything. We don't have anything to prove this year. You know, let's just spend the money wisely, invest it wisely. And it kind of comes back to this idea of Dave's, which is the more patient you're willing to be in the pursuit of valid excellence, the fewer competitors you'll have in that pursuit.

47:19Because, you know, most people won't do that. Most people are impatient. Most people do want to trade. I would say there's so many things you can learn from him. His books were really good. But I'd say that that's the high order bit. You mentioned and your partner. is that part of a good partnership, somebody that is able to be strong where you are weak, so that together you guys kind of bolster each other? And talk to me about that. Anne is probably more disciplined than I am, probably more focused, probably more horsepower smarts-wise, better at analysis than I am. I tend to be a little bit too optimistic, but sometimes I'll have really good creative ideas.

47:53But the thing I think that we have in common that's more important is I think we just have very similar values. I think that we care about similar things, both in our professional and personal lives at our respective homes and stuff. And our kids are friends. And I've appreciated the fact that, you know, one time we closed a fund and it occurred to us, one of the lawyers said, hey, you know, you haven't written down your carry split yet in the documents. And so we'd closed the fund before we'd agreed on how we were going to split the carry. And so we were just texting each other, what do you think it should be in this fund?

48:25We've never argued about that stuff. We've never, you know, we've never had some type of a issue under the surface that caused problems between us. If we argued, it was just because we disagreed about something. It wasn't because we had a difference of values or different ways to go about something. I invent a new word. I call it reversion of negotiation, where the best partners I've had, actually, we start negotiating against ourselves because we feel like the other party kind of deserves more. It's happened to me multiple times in my career. It's a great feeling all around. This is one of those businesses where if things go your way, you get overpaid.

48:56And so all of us can get what we need. It's just crazy. You see some of these firms blow up because partners argue over compensation. It's just the dumbest way to fail, I can imagine. It's just crazy that people could let that happen. Do you see that as a lifestyle kind of benefit of working with a partner that you like, given? I think a lot of people underestimate how much time they spend with their colleagues. Do you consider that a lifestyle enhancement of sorts? I think so. I think that there are some very smart people that wouldn't really fit at Floodgate, right? Because we kind of, we don't want to succeed by just being conventionally smart, right?

49:32We always want to have some new idea to kind of some angle of attack, some type of advantage, you know, to go after seed. And so you have to have a little bit of quirkiness to do that. That's another thing I learned from Swenson, actually. Howard Marks wrote about it, too. You want a portfolio that is, I think he called it uncomfortably idiosyncratic. And you actually want a partnership that's uncomfortably idiosyncratic, because if the partnership is too buttoned up, you start making consensus decisions. You need to have a partnership that is able to pursue the non-consensus idea, but not just non-consensus, wacky, stupid for its own sake, right?

50:08You have to find non-consensus things that work, but you have to have an organizational culture that encourage finding those things. And if you're not careful, you'll create a voting system in an institution and you'll get bigger and you'll start implementing processes that drift you towards being the consensus. A lot of your colleagues have grown and raised these mega funds. What was your thinking around keeping it small, relatively? I think that's just what we can be the best at. And that's what we enjoy doing. And yeah, maybe we could have raised more money, but just because we could doesn't mean we should.

50:37We can be perfectly successful and happy doing it our way. And so I don't expect that to change. It is funny though. Sometimes when I talk to LPs, I'm like, yep, we're still a seed fund. Don't worry. We haven't done some major hard pivot to become some gigantic multi-stage kind of thing. We're still sticking to our knitting. Penultimate question. We discussed the advantage that occurs to people who know what they're looking for in the market. Tell me about that. And this is something that I think I learned from Buffett. Buffett has this idea that he calls your circle of competence. The circle of competence, if I had to reduce it to a statement, it's where do you know you have an advantage and actually have one?

51:13And so most people think they have an advantage where they don't, or they don't even know that they should have one. They just go chase, they chase hot deals and hope they get into their share of them. But like when you think about it in investing, if you're really going to have differential returns, you need to know something the world doesn't know. You don't need to know more than the entire world about everything, but there needs to be a specific thing where more times than not, you know more. Because otherwise, how are you going to depart from the consensus in a way that you get rewarded for doing so, right?

51:41You need to depart from the consensus because you know something the market doesn't know. So that goes back to your circle of competence. It's funny, the other day I saw this company. And I love the founder. It's called Endless Health. And I'm like, I really like this company. And it's got a little bit of a hardware component to it. And I'm like, Ann, can you check this out? I think you're going to like it too. And Ann's like, dude, I love this founder. This is amazing. And so we start talking about it a little more and thinking about it a little bit more. And Ann's like, I don't think I can lead this because it's not in my circle of competency.

52:12I've never made money on a project that looks like this before. And here are the attributes of it that I don't fully understand. And I don't know why I have an advantage. And as I heard her describe it, I'm like, she's right. We shouldn't do this investment. And now, will that investment make money? It may, it may not. But there is no differential reason for us to make money at it, other than maybe we had access that other people didn't have. But like, if you can't articulate on the tip of your tongue, the thing you know or have access to that the rest of the world doesn't know or have access to, why would you have any basis to believe that you're gonna have differential returns by making that investment?

52:45I think that knowing where you have an advantage and actually having one there is a big part of success in this. It's a very contrarian point. If you look at even Twitter's cap table or Slack early on, you had all these prolific founders from other enterprises that just had access to it. Why is access not a good enough reason to invest? It can be sometimes, but then you could say, okay, my circle of competence is I can get access to deals that everybody wants, but not everybody can get into. And then you just got to be clear about why that is. What makes you so special, right? And, you know, if that's true, that's fine.

53:17But like, I think it's always important to know where you have the advantage. If you don't know where you have the advantage, you have no business investing money because you have no basis to outperform the average. That's the key in all this. You need a systemic competitive advantage. That's right. You need a structural competitive advantage to succeed, you know, on any long-term basis. I know you didn't want to promote your book too overtly. I'm going to promote it. It's a pattern breakers. I've now spoken to you several hours on topics in the book. Where could people get it and how could people purchase your book?

53:47Well, yeah, I mean, it's just wherever you get books, right? Amazon or, you know, we have a website called patternbreakers.com, but probably the best way to do it is the way people always do it. I hope people like it. You know, we spent four years on it and rewrote it three times. I definitely did my best on it. We'll see if readers agree, but I gave it my best shot. Hopefully that'll be more than enough. It will be more than enough. Thanks again for jumping on the podcast and I look forward to sitting down live soon. All right, thanks, David. I appreciate the time. Turpentine VC is a podcast from Turpentine, the network behind Moment of Zen and Econ 102.

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