Uncapped #12 | Marc Andreessen from a16z

19:24Like, conflicts, conflict policy, conflicts, that's the single biggest issue by far. So if you had 50 kill, if you had all the great GPs all wanted to work here and you had like that would still be the issue. Yeah, there would be issues, there would be issues for sure. Yeah, point that would come with the what's the conflicts thing? The conflicts thing. So the conflicts thing is the main line venture firms forever, meaning meaning the firms that do series A, series B, series C, especially series A's and B's. Yeah. The relationship with the founder is just so deep. So it's too deep. Yeah. And if you as a venture firm invest in a direct competitor, it's just it's a giant issue that the founder you're already invested in will be extremely upset with you.

20:00By the way, do you think that's practical? Do you think it's all emotions? Like do you think it's correct that that firms shouldn't do conflicts? I would say when we were startup founders, we felt this very deeply. It's just it's okay. So when you're a startup founder, I'll channel the other side of the other side of the nearest startup founder, the whole thing is so tenuous, right? It's just like, is this thing going to work? There's like 18 ,000 things going wrong. Yeah. People are telling you know every day, no, I'm not going to come work for you. No, I'm not going to invest in you. No, I'm not going to.

20:23And then your board member invest in a competitor and you're like dagger to the heart. Dagger to the heart. And then you literally what happens is the founder is you have to go to the all hands meeting and explain why your investor has given up on you. Yes. And then you go in there and you do some song and dance about it out of that. And they're just and the employer employees are just like, you're employed. And basically your employees look at you and they're just like you the founder are so weak and lame. Yeah. Right. You can't even get your board member to not invest in a competitor. Exactly.

20:45What about the marginal stuff though? Because like, you know, all these companies are near each other. They blend. They evolve over time. So like, how is this? How does this play out on a practical level for firms? It almost never plays out the way that the founders think it's going to play out. And I say that in two dimensions. Number one, the company is this historically what we've seen is that the founders who think that they're directly competing with each other generally end up not doing so. Could be because one or the other of them change their strategies and they they diverge. Which is which by the way is natural because it's like B .C.

21:12It's specialization. The company specializes in it and I competing. But the other thing that happens is two companies that we're not competing. But you're already invested in pivot into each other. Yeah. And then they're mad at you. And then they're very upset. You have to remind them that like that, you know, you didn't know that that was going to happen. And it's not your fault. And then they're still upset. And so, so I would say the founders are not the founders and also we have very low predictability of terms of where the cops are going to be. But that doesn't emulate any of the emotion at the time.

21:39So it doesn't actually help. It doesn't help for us to explain to the founder. Oh, don't worry about this guy who you think is directly competitive because he won't be any year. Yeah. Because you can't prove that. And the issue is the issue is in the moment. What does that leave your, how does that impact your strategy, meaning like, if you know conflicts or this huge issue, and you've got, you know, a big aggregate fund. And so it's very important to catch winners. And then you invested in, you know, blue origin, which is really good, but SpaceX is, you know, bigger or whatever happens. Yeah.

22:09What does that imply for your strategy when it comes to like, should we, you know, doing seeds and aes and things like that versus like say, you know what? Let's just wait till like the D, let's have D beer early stage. That's right. So the most obvious thing you do is you just like, always just need to wait because we need to wait for clarity. Just don't deal with this whole issue. Right. Just wait, just wait. Keep just keep, keep delaying and keep delaying until it's obvious with the, with the answer. If it's big, it's going to be really big so we can buy later. But then the problem with that is, all right.

22:32Now you're out of the venture business. Mm -hmm. Right. Because now you're doing as you get as you said, now you're basically doing serious deeds. Now you're a pure growth investor. And, and by the way, there are very good pure growth investors, but like our determination is to stay a top and venture investor. Yeah. Because we think that that's kind of the whole point. Why is it so important? Is it just because that's what you like or is there a strategic reason that it's important to stay doing early? So we've always wanted, I mean, that's the way we've always thought about it as we've always wanted to kind of be the founders best partner.

22:56And like to be, to be the one who's like the closest and the one that can really be relied upon, the one that's going to be around for the longest amount of time, the one who they can really trust. And it only happens early. Yeah. Yeah. Yeah. Yeah. It's your early guys. And so it's hard to insert after that. And then look, the other thing is like there are great growth firms that do invest later and have done very well, but I, we just think there's so much information at the early stage. Like, so for example, when we, when we make a growth investment, because we have the active venture business that we have, but the time we make a growth investment, you know, we have either invested in the company for several years or at the very least we've met with them repeatedly over time.

23:27And so we just, we end up with just like enormous amounts of information. And then the other thing, by the way, is, you know, there's, there's kind of time, time arbitrage, which is, you know, sometimes the right, you know, you're going to have a right, and the right answer is just like, okay, just invest in SpaceX or whatever. Later on, but sometimes the answer is no, there's actually a new thing, you know, totally to invest in the my space growth round, the, you know, the Facebook, Facebook, see round like. And if you, if you're not in the early stage, you won't know that because you won't see the, you want to see the early things.

23:50Yeah. And then by the way, the other thing I just say is financially one of the, one of the things people say that is inaccurate as they say, if you're running a big fund, you're not going to have the time to spend on the early stage opportunities because you can't justify it for putting the money. That's actually not true in venture because the aggregate dollar return opportunity on early stage is just as high as any growth investment, right? Because if you get the right venture investment and you can make $10 billion on the upside case, it's definitely worth my time to spend with your, so I spend as much time as I can with the early stage founders, you know, for that reason.

24:17So the barbell, there's, you know, there's big one in there's something sort of like me on the other end, selfishly, I'd love to know like, you know, I would assume you think it's better to be the big version. But, you know, if you were conditioned on needing to be me at the small end of the barbell, like how would you approach it? No, they're both good. They're both good. This is the thing is they're both good. They're both good. And if I were for some reason not doing this, I would immediately do what you're doing, right? So that's good to hear. Yes. 100%. And then I would say I actually invest this way.

24:42So my liquid assets are basically tied up in either a 16z funds on the one side or I run a very aggressive personal investment program in early, basically, Angelin and early stage seed funds. It is because I believe in the barbell. I believe in the barbell so much. And so, but the conflict thing I wanted, I wanted to explain because that's the issue. So the big for like we do seed investing is just we have this problem every single time we're looking at a seed investment, which is like, are we really fully convicted? If this is going to be the winner in the event, seed it creates a conflict. So for a board seat, there's debates.

25:11There's always debates on this is like, you know, do the seed ones care as much to the growth ones care as much to the group ones care as much. What I tell you is it's not a logical question. It's an emotional question. And we're just very sympathetic to the founder that needs to be able to justify their, you know, definitely can't ask while you're making, like if somebody asked me while they were making the investment, hey, is it okay if we invest in a conflict in a couple years, I'd be like, what are you talking about? You know, we've done these things. We tried, we used to have this thing. We used to have this separate brand of thing called a 16 C seed and we were like, well, we have a different conflict policy on this.

25:38And it's a great in theory. Yeah, I think so. It's a 16 C. So the way I think about it basically is like the more successful you are as a, as a venture firm, the bigger the issue, this is going to be because the more the people that you were investing in are going to care. Yeah. And so it's just, it's just, it's like the downside of success, but like success, yeah, right. Right. The only people who, like the only investors you don't care, but if they, if they, if they, if they, if they literally, if you don't care what they think about anything, right? If they, if they just don't matter at all and everybody knows that they don't matter at all.

26:02So, so, so, so, so, so, so therefore it can be simultaneously. Both of these things are true. Number one is we still, we, we definitely do lots of early stage investing and we will do, we will do, we do make seed bets, but it's just also true that we can't structurally for it for this week. We cannot do all of this in investments that we would like to do. In fact, we can't even do a tiny fraction of it. It's just like it's strategically, we just, structurally, we just, we just can't do it. And so, and again, this goes back to the barbell. So, so that means structurally, it's the same reason why Amazon can't give you the campaign, you know, experience, right?

26:32It's the same thing. They can't, they're not set up for it. They can't do it. It's not a scale strategy. And so, what has to happen is there has to be the other side of the barbell. There has to be the specialization and intense focus and deep relationship. Yeah. Right. Thing. And that's, and that's the role of the angel investor and the, and the seed investor. And that's, and of course, in startups, that's incredibly important because that's the most formative, right, plot time and the life of these companies is when they're first getting started, right? And as, as you know, right? Half the time, these are people who haven't, you know, they haven't started a company before, they haven't run a company before.

27:03Some of them haven't had a job before. Yeah. And so, like, they need to learn a lot and they need people to work with them on being able to do this and they need to figure out how to actually, you know, do these things. And so, there, there have to be, and there are, like, incredibly high quality seed investors, angel investors on that side of the barbell. The, the big firms, presumably, you know, if, if we succeed, we succeed by generating large numbers of aggregate dollars and a very good, you know, percentage return. The seed investors have this perpetual opportunity to just absolutely shoot the lights out.

27:29Yeah. Right on, on upside. And you can, you know, you know, there are seed funds that generate like 200 x 300 x returns, right? Yeah. And so, these are both good strategies. They're both adapted to the current reality market. There's just two things that fall out of that. One is the death of the middle, which is it just doesn't make sense to have the old fashioned, you know, series A, series B, six GPs, 300 million dollar fund, sitting outside the road, waiting for people to walk in the door. Yeah. Like, those days are over and those funds are, you know, those funds are shutting down, like that, that model is going away.

27:55And then the other thing that happens that causes some of the tension is this, what is a successful seed investor do, right? He raises more money and wants to become a venture investor. Right. Right. But then he goes, but then you're, you're, you're going from one side of the barbell back to the middle and you're creating that same problem again. And I think that's where the tension is coming from. I also feel like the mechanic that happens a lot of times is when you grow the fund, the only you, you know, you raise a huge fund. And then you start deploying it into things just because you've got to play at some pace.

28:23And so the threshold for, you've got to deploy 400 million this year. And I only see 700 million dollars worth of investible things. I'm going to do four sevenths of them versus, you know, presumably if you only had to do one seventh of it, you would, you know, you'd pick better, hopefully, which I think is a huge way to. So I think that's part of it. But I think the related thing is your competitive set has changed. Yeah. And what we, what we find with seed investors who migrate up and then we're going to later what we find is what they didn't realize was their competitive. So, right. Because now they're going for bigger, more competitive rounds against, like, you and Sequoia.

28:50Yeah. Yeah. So, okay. Now competing for three million dollar be good luck. Right. Right. And so it's just like, and look, like, I mean, market fundamentalist, if you have a better value proposition than Sequoia, you should go, you should go off for that. Right. But I just, I would not, I would not accidentally end up competing with Sequoia for Series A. Like I would just say that's a bad way to live. Yeah. And I think that's what happened. That is what has happened to a bunch of the seed funds that have gotten larger. Why is it so rare for somebody to break through and get, I mean, you did it.

29:14And that's one that happened in the last 15 years. Maybe there's a couple others. Maybe. But why is it as rare as it is? It seems like almost more rare than a new big company in a way. Yeah. That's true. In fact, our analysis actually when we started was there actually hadn't been, I think there had been two firms, Andy Reff, actually. I mean, thrive also. So the firm is, yeah, they're after us. Yeah. I mean, they've been great. But before, before us, in the, in the 30 years before us, we think that there were only two new VCs that actually punched through to become top tier. In other words, VCs that were not either firms that were built in the 60s and 70s or firms that weren't derivations of those firms.

29:49Founders fund? No, no, no, no. Founders fund started actually around the same time we did. Okay. They were a little bit earlier, but they were on the same time. Yeah. I mean, over the preceding like 50 years, seven Rosen. You won't even rip. No. This is the thing. You won't even recognize it. You need to read a book or something. So seven Rosen was the venture firm, the famously funded compact computer. That's the big, the big winner. And then they went on to become a successful firm, Sky Ben Rosen, early, early leader in this base. And then there was a firm called Hammer Windblad, which was a software specialist firm in the late 80s, early 90s.

30:15Those are the only two that punched him at the top end while they were operating. Wow. Neither one of them, you know, sustained it, but they got there. They got there for a bit, but that was like the success case. Right. So there's a little bit like Elon looking at history of the car industry and, you know, Tucker automotive. Yeah. In the 1950s. So rare. It's very, very rare. So two reasons I think it's rare. So number one, there's the, there's the intimate reason for it. And then I'm sort of macro reason for it. Intimate reason for it is just it like you're going to have this incredible, as the founder, you're going to have this incredible intimate experience, you know, very close trust relationship with whoever you're working with.

30:48And it's like, you know, can you reference them, you know, do they have a history of interact record of the kinds of behavior that you need and the kinds of insight, you know, that you need and it's just like it's very hard to do that from. It's very easy for an existing firm that has a long track or a success to prove that. It's very hard if you don't. So that's, that's like the close in reason. But then the other reason it goes back to the way the world is changing is we always believe the thing that you want from your venture firm is power. So the thing is a startup that you want is you want them to like fill in all the missing pieces that you don't yet have when you're starting a company that you need, you need to succeed.

31:19And so you need power. And so you need power. It means like you need the ability to be able to like actually build meet customers and have them take you seriously. You need the ability to go get publicity and like, you know, in major, you know, channels, you know, if you used to be media and I was podcasted and be able to like take it seriously. You need to be able to be taken seriously by recruits, right? Because there's thousands of startups recruiting for engineers. What makes your stand out? I sometimes describe it as venture firm is providing a bridge loan of a project. So you have your own brand that's big or big or real, you know, for your own space, then the VC you're borrowing your VC's brand.

31:48Exactly. And that has been very effective for a long time. And that was how we looked at it when we were founders. That's why you did media from the beginning. Yeah. Oh, that's one of the reasons. It's one of the reasons. Yes, but a very, very powerful one. Yeah. A very, very major one. Yeah. And then by the way, you also need a ability to raise downstream money, right? You're going to have to need to raise money again. And so they either need a lot of money or they need to be connected to a lot of money. Yeah, exactly. Right. Exactly. And so you just better if they just have it. Yeah. Also, like again, you think like tools companies just never got into like, for example, politics, right?

32:17Or just let's just like global affairs, global events, like what's happening with, you know, like what's happening with how do you navigate the world? Right. How do you navigate Washington? You know, the regular show when they want to kill you, like how do you navigate that? Or you're like it's again, and some, you know, just a giant fight with the EU. Like so, so the, especially these full -stat companies, they're, they're, they're getting involved in like very complicated macro political geopolitical situations, like much more early. And they have to like, in some cases, they have to like escalate up to like, you know, senior government officials have to state, you know, major heads of sovereign wealth funds.

32:48They need to get to, you know, the CEOs and major companies, you know, how do you get to the CEOs? You know, you're, you're a new AI, you're a new AI company, and you're trying to redefine, you know, visual production for movies. How do you get to the studio heads? Yeah. Right. And the studio heads just don't have time to meet with a thousand startups. So where are they going to meet with you? Right. So, so basically it's, it's projection of power. And this has been one of our, one of our, one of our theories, how we built our firm is, optimize for maximum amount of power in order to be able to give the startups access to it.

33:13Right. Both the startups that are already in your portfolio. And but also the startups that don't even exist yet. Right. And, and again, this goes to why the scale thing matters so much. It's just like, all right, there's just, there's a scale aspect of power. There's a big difference between being able to get to everybody who matters and not. Why is it rare for people to be able to accumulate power even if they were, like let's say everybody was trying to do it. It's not like everybody could do it. What's the cause of the rarity to be able to build enough power in that sense? In certain, if you have to want to.

33:39And so we met with the, we met with all the GPs of all the top firms, basically when we were starting out, because we wanted to, you know, see who we could be friends with. And it worked very well in some cases and not well in other cases. But one of them told us this is a GP at a top firm in 2009. And he said, yeah, the venture business is just like going to the sushi boat restaurant. All right. And so the sushi boat restaurant, so sushi restaurant where they've got the boats. Yeah. It's got like a, they've got like a water drop. Like a conveyor belt. Can be or, yeah. Right. And the little sushi boat comes by.

34:04Like a lot of them. And there's a tuna roll. And there's a shrimp roll and there's a this or that. And you said, basically, you just sit on Sanjo Road. And you're going to crush these guys. And the startups are going to come in. And he said, you know, if you miss one, it doesn't matter. Because there's another sushi boat coming up right behind it. And he's just like you just sit and watch the sushi go by. And every once in a while, you reach into the, into the thing and you pluck out a piece of sushi. And we've walked out and say like, what the hell? That's funny. Like in what industry is 2009 or 2009?

34:29Yeah. Like that was a very common. This again, this is the mid -sized venture. The reason when I, when I, when I came, like look, in 1994, I kind of didn't like that. It was. It was. When I came to Silicon Valley, I had never heard the term venture capital. I didn't even know the thing existed. And then as my business partner, Jim Clark explained it to me. And I was like, there are guys like, they're just sitting there waiting to give you money. But you see this and you're like, this is going to get this isn't alive. Of course, this is absurd. Like if there's none, anybody takes this seriously, it's not going to change.

34:53Yeah. And so it was this very clubby cartel, you know, basically kind of thing. And again, it was fine as long as the ambitions of the industry were constrained. And then again, look, the, the, the tools companies, they didn't, they needed some of the power, right? But they didn't need all the power. You know, they weren't dealing with like governments, right? Or, you know, these sort of big macro issues, you know, at least, you know, the early years. Well, okay. So here's another thing that's happened is just the world is globalized. Like, oh, so startups 30 years ago, you would spend your first decade just in the US.

35:20And then you would start to think about Europe and global expansion. And, and now you just, you have to think about being a global company up front. Because you're going to, if you don't, like you're, other people are going to do it. Yeah. Right. And so you, you just, you have to chin up like as an entrepreneur, like the expectations are much higher than they used to be. Maybe one final question on this topic of fund size. And then I want to go to AI. What do you think? And then you thought about this a lot. What do you think is the limiting factor for the creation of a lot more really big companies?

35:49Yeah. Do you think it's founders? Do you think it's capital? Do you think it's market maturity? Do you think it's underlying tech stuff? Like if you had to pinpoint the one or two things that you think would allow for there to be way more big companies, like what is it? So there's sort of the holy trend of venture startups, which is, you know, people market and technology. And I think the answer is sort of all three. And the way I would describe it is there's some limiting issue with just market saw, at just how many markets are there? How big are they? How, how ready is the market to take something new?

36:17Then there's the technology question, which is, you know, when is the technology actually? For the venture perspective technology moves in stair steps, right? And so things become possible in the world's smartphones that just weren't possible. You couldn't do Uber with, when everybody had a laptop, you had to wait until they had phones. Right? And so technology moves in a stair step. You get these paradigm shifts, platform shifts. And those just, they come when they come. Yeah. And until they come, you can't do it. And then the people side, you know, and this is the one that, you know, I say, you know, dexes me the most, which is like, okay, like how do you just get more great founders?

36:48Yeah. Right? And I think part of that is, you know, you, I think there is definitely a training thing that is real and getting people into the right scene in the right way. And like the thing that like commentator does is the thing that you'll follow is to like, those are real things. And those help a lot. But also, you know, there is an inherent, you know, they're just certain, they're not infinite number of people running around who have that. You probably figure there's a lot of people who could have built big companies who haven't though and hopefully a lot. A few. Yeah, I don't know. So I don't know, some number.

37:17But there must be people who are just like in academia or government or education, who are just doing something completely different, who if they were attracted to startups, would have built a big company. So yes, but then the other question is like, well, okay, why didn't they? Why didn't they do the things required to get themselves in that position? Well, it could have been then like 2001. It was just like too many people were too scared to do it or didn't know it or whatever. But what does that tell you about the people who didn't do it? Yeah. They were heard. I can tell you who didn't listen to that, right?

37:41It was Mark Zuckerberg. Are there more good? But let's just press this point harder for a moment, which is like, I was just described this as like, I always call this the test with capital B, which is like, okay. Like if you're not in position to do the thing, it's the fact that you're not positioned to do the thing that you've already flunked at that. Well, I guess the question would be, is there a subset of people who could build Facebook, who other than being too scared to do it, would have had all the other ingredients. And so when everybody's not scared, you get more Facebook's. You know, there's a line in the movie.

38:09I actually never saw the movie, but there's a line in the movie. If you could have built Facebook, you would have built Facebook. Yeah, there's a line there. Yeah, yeah, yeah, that's right. That's a good one. Right. And so this is the thing. It's like, you know, are there more great founders today than when you were let's say in that, like, do you think there are more now than there were 20 years ago? I believe there are, but like, I maybe there's how many more are there, right? Is it five times more? Is it like 50 % more? Or is it? Well, so the number of wins is increasing. Like so, so we used to talk about the 15, 15 year that matter.

38:37It's that number is probably, if you do the analytics, probably, up like 10X. I mean, there's like 150, 150 companies a year that like really matter. And the reason is because there's so many more sectors now. Right. So you get the industry maturation. So kind of by inference, they're kind of have to be like, you're saying the markets are better, more than you're saying the founders are better. Well, maybe a little bit of both. I'll look also that I think the founders are getting better. Part of the founders getting better is they have better training. They're all in me. Well, start with them just all online.

38:59So so when I showed up here in 1994, like literally, there's like three books in the bookstore right in which we're that great. Yeah, it's not that the DNA is better. It's that they're now the ecosystem is matured to teach people better. Yeah, and like people command and they watched every video, you know, they watched every episode, you know, your podcast. I'm like, right. And they just walk in knowing all this stuff. And then you look and then look, the white commentator didn't exist. And you know, that definitely helps. And you know, Tio Fellas didn't exist. And that definitely helps. Whether it's, you know, Brian, you know, has this great term, seniors, scene, you know, scene plus genius, right?

39:26And so it's just like, you know, the individual genius on his own is always, it's always, you know, it's hard just to get things done. Yeah. Some people do, but it's difficult. It's more often, more often in a profession where you're seeing creativity happen. Yeah. There's almost always a scene, you know, as you know, Silicon Valley is definitely a scene. And that way people come here and they just, they kind of get, I don't know, they just get better. They just, you know, they meet more people who are like them. They're able to aggregate together. They learn from each other. So yeah, so look, the founders are getting better.

39:51There's more of them. But is, is there, does that mean there's now 10 ,000 as opposed to a thousand? Yeah. I don't know. There's, and there's eight billion people on planet Earth. Why are we, why are we debating whether it's a thousand or 10 ,000? Yeah. Right. And so I, and I just, I, that, I don't know. Yeah. I would hope over the next, you know, years and decades, we'll all figure out a way to go make sure we get everybody who can do it and come to do it. That's a good segue into AI. Do you feel that we're now at the beginning of what is like the new next important, you know, paradigm like is this cloud, but on steroids?

40:21Oh, yeah, much, much, I think much, I think much larger. And I'll explain why. So, um, yeah. So, so I described, you know, I described it right, I described before, right. You know, the, the, the triangle people technology market. The, the technology is ultimately the driver is the technology, the technological, for venture, the technological step function changes drive, drive the industry. And they always have, right? And so if you talk to the LPs, you can see this is like when, when there is a giant new technology platform, it's an opportunity to reinvent a huge number of companies and products that, you know, now have become obsolete and create a whole new generation of companies, often, you know, generally end up being bigger than the ones that they replaced.

40:52And so, so, so, and the venture returns map this. And so it, they come in waves and the LPs will tell you it's just like, yeah, there was the PC wave, the internet wave, the mobile wave, the cloud wave. Like that was the thing. And then by the way, when, in venture, when you get stuck between waves, it's actually very hard, right? Because you've seen this for the last five years, like for the last five years, it's like, how many more SaaS companies are there to found? Like, yeah, just, we're just out of ideas. It's out of categories. Yeah, yeah, yeah. Right. And so it's when you have a fundamental technology paradigm shift that gives you an opportunity to kind of rethink the entire industry.

41:21It would have been very sad, by the way, if the AI breakthrough didn't happen, like the state of venture would be sad, I think. Three years ago, this was, I mean, so when we were talking about these three years ago, we're just like, basically, like, you know, we're in, you know, we're in, so, uh, Christyxson has this framing he uses, he calls it your adventure, you're either in, uh, uh, search mode or hill climbing mode. And in search mode, you're looking for the hill. And it was search mode. Right. And in three years ago, we were all in search mode. And that's how we described it to everybody, which is like, we're in search mode, and there's all these candidates for what the things could be.

41:46And AI was one of the candidates, right? It was like a known thing, but it hadn't broken out yet. Yeah. And then the way that it has now. And so we were in search mode. Now we're in hill climbing mode. Thank goodness. Yeah. Big time. Yeah. And then, and then, you know, look, like I, I, I said, on the technology breakthrough itself, I think a year ago, you could have made the argument that like, I don't know if this is really going to work, because, yeah, well, I'm, you know, hallucinations can, you know, these great that they can write Shakespearean poetry and hip -hop lyrics. Can they actually do math?

42:08Mm -hmm. You know, can they do, which they write code? No, obviously. And now they obviously can. Yes. This, I think, for me, the turning point moment, the moment for certainty for me was the release of 01. And so 01 from OpenAI, the reser, and then, and then deep -seek R1, the minute I, the, the, the, the, the, the, the, the, the, the, the, the, the, and those kept them kind of back to back. And the minute those popped out, you saw what's happening with that. And the scale of law that was around that, you're just like, all right, this is going to work. Because reasoning is going to work. And in fact, that is what's happening, like it's, it's, you know, and, and I was saying, just every day, I'm seeing product capabilities, you know, I'm seeing new technologies, I never thought I would live to see, like really profound.

42:38I actually think the analogy isn't to the cloud or to the internet. I think the analogy is to the invention of the microprocessor. I think this is a new kind of computer. Mm -hmm. And being a new kind of computer means that essentially everything that computers do can get rebuilt, I think. So, so we're, we're investing against the thesis that basically all incumbents are going to get nuked. Yeah. And everything is going to get rebuilt. Just across the board. Just across the board. Now, yeah, we'll be wrong in a bus. Yeah, yeah, yeah. Because some incumbents will announce. But power a lot of the things that are right will be super right.

43:04We'll be super right. Exactly. And then look, the AI makes things possible that we're not possible before. And so there's going to be entirely nuked. But as your mindset there that you should just bet on like obviously incumbents are going to win some percentage and startups are going to win some. But it's basically the dominant strategy as a venture capitalist to just plan to bet that startups are going to win it all and go for the parallel. Yeah, that's right. That's right. And again, the reason is to kind of remember two customer sets. The way the LPs think of us, the way the LPs think of us is as complimentary to all their other investments.

43:33And so RLP's all have like major public market stock exposure. Like they don't need us to bet on incumbent healthcare, whatever company. Right. They need us to fit a role in their portfolio, which is to try to maximize myself based on disruption. Yeah. And then again, and then just again, the basic math adventure, which is you can only lose one X. You can make a thousand X. And you just like slam that forward as hard as you can. So when you have a moment in time world view like this, do you, you know, as a firm leader, do you give a directive that's basically like, hey, everybody, we need to deploy in this kind of way right now?

44:08Or do you just build a system that's always picking birds out of the flock from like the bottoms up and you just like, well, they're smart. They're going to see that every opportunity is good. Like how much is it like a top down guidance versus, you know, the markets just obviously good all around. Yeah. So we don't do like I said, we don't do top down investment decision making. And so Ben and I aren't sitting saying, you know, we need to invest in category X. We need to invest in this company versus that company. And we don't run, we run, we have a legal investment committee, but we don't run a process where they come to us to get approval.

44:35Because you're letting the leader of each group sort of make that. And often in those groups, it's actually delegated for the further is still either the individual individual GP or check writer. And the reason for that is we just think that the knowledge of knowing what's going on and which ones like the to win is going to be focused in the mind of the person who's closest to the specific thing. But do you have like a risk slider? Are you like, hey guys, you get a nine right now? So this, this is the funny thing. So venture is the only asset class in which the leaders of the firm are in position of trying to get the firm to take more risk, not less risk on a regular basis.

45:02Exactly. Because right, because the natural orientation towards any kind of anybody who's in an existing business, there's a natural organizational incentive to try to reduce risk because you want you just want to like hold on to what you have and not upset the apple cart. Yeah. And so Ben and I are generally on the side of like take more risk. One of the one of the applications of this is the old Sequoia adage, which is they say, went in doubt, lean in. So for example, so you see this, I'm sure when you do it, it's just like, okay, there's this thing, there's this company that is like potentially very interesting, but like they're these issues, right?

45:31And it's just like it's too early and this and that, and we're guys got a weird background. And it's that bad and he's not, you know, whatever, I don't know the issues and you know, we have the hair, you know, there's hair on the deal. There's no hair on the GP. That's funny. That's good. But there's hair on the deal. The founders tend to have really good hair. There's no the deal and it's just like, all right, like what do you, how do you calibrate that, right? And again, the history of venture is, when you see something's very promising and there's a lot of hair on it, sometimes when you invest, it's going to go to zero.

45:57Yeah, because the hair is going to kill it. And then sometimes when you invest, it's going to be, but it's like something where you're like, I love that. I hate that is much better than, yeah, everything's fine. 100 % and this is the way we describe this is investment strength, not in lack of weakness. Or another way to think about it is, it's not good versus great. It's very good versus great. It's differentiating good from great is very straightforward. Differentiating very good from great is actually very hard. And again, the risk reducing way to try to do that is, as you kind of alluded to, would be kind of the checkbox thing, which is like, very good team, very good market, very good this, very good that.

46:30And then you have this other one where it's like, they've got six great things, nine like horrible things, right? Yeah. Okay, which is the better bet? Totally. Usually. Usually it's the thing with the greater strengths. Statistically, by the way, this shows up in the return data from the LPs, which is the top desile firms have a higher loss rate than everybody else, which is called in baseball, called the Babe Ruth effect, which is the whole run hitter strike, commoner often. Yeah. So the top performing measure firms, statistically tend to have a higher loss rate than the mediocre firms. Right.

46:58And it's for this reason, they're willing to invest in the thing that just looks like completely nuts, but has that magic something. Yeah. And so when Ben and I think about trying to get the team to take more risk, it's almost always, it's basically either that kind of thing, which is like, look, and what you're doing is, you're telling the person closest to it, go with your gut. Yeah. If your gut tells you there's something magical here, like, go ahead, it's okay, because we're going to have some losses. So it's okay to make the bad if it breaks because of the hair, that's fine. But then the other former risk we try to do, and I do this a lot, it's just, I am trying to push the firm constantly, it's like, go earlier.

47:30Yeah. Right. Because again, that, as we discussed earlier, the national inclination is to wait. Right. And it's like, no, no, no, go earlier. Like, we do actually want to make these, these, you know, we make some seed bets, but we definitely want to make like a lot of A bets. Yeah. And again, we're going to lose in a bunch of those. Like, we're going to screw those up and miss the winner or whatever, but like, we have to do that, because we have to get into some of these things, or really, we have to, you know, get the level of percentage, you get the A, that kind of relationship. Yeah, I mean, I guess there's risk that's of the flavor of like, do things that are more asymmetric, where there's hair, but also brilliance.

47:58Correct. There's also the flavor that's just like, well, sometimes something I struggle with is, the deals where I just barely said yes, and just barely passed. I'm like, I don't actually have that much confidence that I can tell that they're from between those. Yeah. There's another flavor of sort of be more aggressive, which would just say like, just do a higher percentage of those ones, where you're like right on the line. Do you give that kind of guidance? Like, do you think like that too, where you're like, it's not just do the more out there things when we're swinging for the fences, but it's also like, let's just do a little bit more right now in general.

48:27Yeah. So we used to run this process, we call the anti -portfolio, the shadow portfolio. And so the shadow portfolio was, we used to track this statistically for like the first five years, exactly on this point, which is every time we do an A, every time we do pull the trigger on an A round, let's put in the shadow portfolio, the other company we were looking at at around the same time that we didn't end up pulling the trigger on. And then let's build up, represent it, like build up the earth to portfolio. I'm so curious. Well, so the good news is it turns out, generally the main portfolio did better than the shadow portfolio.

48:55But the shadow portfolio, it was a good book. Yeah, really well. Yeah, right. Exactly the point. And so, and then you're, okay, so then you're just like, okay, you know, that's smart. You're just like, okay, obviously what does that mean? It means do them both. Right. And again, this goes to the thesis of like, how big should these firms get? It's just like, well, if you had the opportunity to do both, the portfolio of the shadow portfolio should do them both. What's the constraint on that as we discussed is complex. But generally speaking, you should try to do both. And by the way, this is the, this is the, I don't know if it was Joshua, the other podcast that they were talking about this.

49:22But, you know, at least I saw reference to like a statistical analysis of like wind rate or whatever, return a percentage returns or whatever or percentage of winds. It's just like it doesn't, inventor math. It doesn't matter. It doesn't matter. The thing that matters is where you end the next big thing, as early as you could get in and buy as much as you did. Like that's the only thing that matters. Because if you don't do that, you miss out on the thousand x gain. The one x losses don't matter. They wash right out. Yeah. And so this idea that somehow there's some like virtue to being like a, you know, small, you know, we only make a few vets.

49:52We have a higher percentage. It does. How much is that? I'm glad people think that that's a, I would like to encourage people too to think that that's a virtue that they should shoot for. It seems like it's very hard to assemble lots of, you know, very good productive GPs into the same firm. It's just objectively rare. Yeah, that's right. You've done it, but it's like doesn't happen very often. Do you, I guess my first question on this is, do you think of just finding greatness and then you can't really teach it much, you know, so you're basically just going to like hire people and see how it goes?

50:23Or do you think that it's about creating the system and conditions in which people do great work and you can actually create good investors? Yeah. So I think it only works if there's a point, like if there's a reason why you would have an aggregation of GPs in the first place. And our answer to that is power, right? Our pitch to GPs is to why they should join us as opposed to go to a smaller firm or start their own thing is, if you come here, you just like plug into this engine. This is just like massively powerful. And so everything that you do, the effects of it are going to just be like blown completely out.

50:52Therefore, you're going to have a much higher win rate on the deals you want to do, which is much more satisfying and you're going to be able to actually help the companies a lot more. And you'll probably see more companies anyway. Yeah, so everything probably gets better. Yeah, that's right. And by the way, you know, some people want to have colleagues. Some people don't want to have colleagues, some people do want to have colleagues, and you'll be working with people you like, who care about the same things you do. So, but there has to be a point to it. And of course, it's on us to keep proving that, right?

51:13Because the devil's in the details of whether they'll actually, you know, buy that. But so far, so far a lot of really good people have. And then yeah, and then the second part of the question is like, okay, who do you put in those roles? Historically, we had a, history, our old model was basically we only hired GPs. We don't, we were not developing. And we could go through why that was the case. We changed that like eight years ago. We now develop our own GPs. We've evolved to where I think that's working quite well. I think the answer to your question is, it's a two part question is there's some level of just objective.

51:41You know, are they, are they, are they good? Are they good at doing the job? Yeah. Oh, here's a big thing we focus on when we evaluate them, which is, you know, it's fine to invest in a category like five years early or like whatever, something goes wrong. Like that's fine. What's not fine is you invest in the wrong company and you could have invested in the right company. Yeah. Like at the moment you made the investment, you could, you made the wrong decision in that moment with which one you should invest in and you, you could have known. And so it's like, did you do the work to fully address the market?

52:08How do you handle the fact that like you don't know that until like six years later and now you're going back and you're like, hey, you made this mistake six years ago. This isn't going to work out now. So we, so that is a giant problem. And when we started actually when we talked to our friends in the business, what they said basically was they said number one, you don't know if somebody's a good GP for 10 years because you don't know their return data. And then they said number two is nobody ever wants to admit that they made a mistake. And so they never actually fire anybody. Yeah. So what they do is they just keep them on the mast head.

52:33And they just kind of gently like, you know, retire them out. But they, they sit and pollute. One of the guys running one of the big firms, 2015 years ago told me his, he said they hired a partner. Is that they heard of partners older firms? They hired a partner in 1984, who was like a big deal at the time in the industry. And you know, the LPs were very fired up about it. And he said he then proceeded to just like nearly ruin the firm over the next 20 years. That's crazy. Because he said he wanted to say all of his investments were bad. But then it was even worse that he talked them out of all the other good investments they called it.

52:57And he said we couldn't get him out, you know, the refutational damage was too great. So this is a long run. And then by the way, a lot of these firms are partnerships. Yeah. The problem with the partnership is, my partnership sounds good. Yeah. The problem is you end up with lots of internal decision and then you can't make decisions. Yeah. So this is a big issue. I guess what I would say is like, for example, the thing I talked about, it's just like it's, it's not a, it's a, it's a, it's a, what I just described is a process issue, not an outcome issue. Right? Which is like, are you doing the work?

53:23Yeah. Right. Like it's an actual job. Like you're, are you doing the work? If you're not doing the work, it's relatively clear. You're not doing the work and you're probably not doing the work. Not just on one thing. You're probably not doing the work. So you do try to really look at the inputs. Oh, yeah, very much so. Yeah. We value it at the inputs just as much as the outputs. What, what do you do with an investor? I'm sure you've had this at some point where the inputs are not particularly good. They hit this one outlier thing. The outputs are objectively now good. Yeah. And so you're looking at that situation or the inverse.

53:48So this is the other side of the other part of it. The other part of it is I think there's just a subjective criteria for venture, which is just, are you good at it? Yeah. And like, do you have taste? Yeah. Which is unquantifiable. There's one of the nice things about your model too, where like you, somebody gets to make a call versus in these partnerships, I think it would be very hard when nobody gets to make calls like this. Because at some point, someone has to just like make a determination on the stuff. Yeah, that's right. And then even, you know, and even who even made the call, you know, gets gets lost.

54:15Yeah, so, so, so I think there's a taste thing. And then look, I think there's also just like a net, there's like a network cohort branding thing, which is these startups come in waves. And it's not just new technology, it's also new people. And they, you know, they're new, these new scenes form. And like, are you in the scene or not? Right? And if you're not in the scene, like, I can't fix that for you. There's also a ton of paths, dependents. It seems like we're like, you make an investment that gets you in the scene. Now, other founders want to work with you because you invested in this really cool company.

54:41Right. And then it just snowballs. And you're like, well, I can't go back and, you know, change history and get you into the snowball. Yeah. Yeah. Like, and again, this is what I'm going to call this. This is the test for the cavity. Yeah. So it's just different versions of the complaint. Right. So you, you, you wrote up the one of the founders who's like, well, I could have done this, but I was in a position to it. All right. That's your own fault. Yeah. Um, there's another version of it, which is this is sort of anti -VC narrative. Is these VCs are so arrogant. They don't see my unique genius.

55:03Right. Right. You know, the, you know, the VCs are only as a critique. They are like, fly against the program. As you know, he wrote this post on pattern matching and he always gets attacked. It's like, right now, he pattern matches. He's not looking for quality. He's just looking for pattern matching. And like, you know, it's like, I did a founder, so master patterns like, the thing was at least raising is very important for founders to understand. Raising money from venture capitalists is the easiest thing you will ever do as a startup founder. We are sitting here with checkbooks waiting to write checks.

55:28Yeah. We are dying for the next person to walk in the door and be so great that they convince us to write the check. We don't care where they come from. We don't care where country they're from. We don't care what, like, doesn't, none of it matters. It's just like, do they know what they're doing? Are they going to be able to do it? We're just dying for that. Everybody else they're ever going to deal with candidates and customers and downstream investors and everybody else is going to be much harder to deal with than we are. And so if they can't pass the test of raising money, like, they're not going to be able to do it.

55:57And it's the same thing with the GP. If you can't network your way in and make good investments, that's the job. Yes, totally. Okay, on that point, because there's going to be, I completely agree with what you just said about how it's, you know, the easiest part of building a company. There's going to be a lot of frustrated founders hearing that who are like, oh, I can't everybody. But, you know, what's going on here? One of the things that I'm really, you know, you've done this for enough time now, when founders, you know, get a pass note, it's usually about something that's related to the market or the product or whatever.

56:29And a lot of times it's what you just said, which is that like, I just want the founder to be great. Yeah, right. But nobody says that. Nobody says that. And so they don't get the actual feedback. And so I guess this whole dynamic of like, people aren't giving yet because it's, you know, what they're saying is not, you're not great. But it's, I didn't perceive you as great or something like that. Is there, is there some way for there to be a more honest, useful back and forth around this? Or is it just one of the impossible structural things and founders just have to go around frustrated that people are saying their markets too small or it's too big or whatever?

57:00And really what it is is they're just not landing as great. I mean, that's like, yeah, I mean, I think you think your baby's beautiful, but I think it's really ugly. Right? Yeah. Yeah. So you know, this kid's going to have a really hard time with life. Man, it's really, really attractive. And it's really hard. It's really difficult. And by the way, you embedded two things in there. One is like, you know, one is, do they come across as good, in which in theory is fixable. But the other is like, yeah, some people are better than other people doing this. Definitely. And some people should not be start.

57:23Some people should actually just like, yeah, a team. Yeah, sometimes it's a correct assessment. Sometimes it's incorrect. There are some people who in the early days can't write, you know, there's a lot of great people who now we all know are really great, but they couldn't raise a lot of money. So they must have shown up in sick TVC meetings. Look, VCs. And they get, yeah, it's exactly. It's like, we don't know. Yeah. And we make lots of mistakes of a mission. You know, so we, like I said, most, even the great VCs, most of the time are screwing up. And so that's all true. The thing I always tell founders is the, it's the Steve Martin was asked this question about becoming a great stand -up comic.

57:52And he wrote this whole book, a great book called Standing Up, which he talks about this. And he says, the secret of being a great, he said, the secret is, be so great, the can't ignore you. Yeah. If your business gets good enough and you prove they're really good, you don't have to show up in the one hour with the VC. It's very impressive. You just proved it on the field. We're dying for people to come in and just be like, wow. Right. And just be like, I cannot believe how good this is. I can't believe how good this product is. I can't believe how much the customers love it. I can't believe how much this person has gotten done in a very small amount of money.

58:18So it's the same thing about my talent. And I'm just dying for the young community to get a stage and make me laugh. I also think the founders who really struggled to raise a round or two. And then the business got working. I think there's a real strength that comes out of that. So it's not the worst thing that ever happened. No, no, look, having said that, like, there's breakage along the way. Like there are also it sucks. It's like really unpleasant. It's right. Yeah, I had to have it. It sucks. Yes. Yeah. So like, you know, like I just say, like, I, you know, having been a founder, like it's an incredible privilege to be in a, in an industry, in a world, in a country at a time when you can actually do this.

58:50Yeah. Like, so, you know, most of history in most places, you just kind of think, can't happen. And then, you know, we are genuinely trying to find the anomalies. Right. Like our business is to find the anomalies. It is true. The thing you said about it, it's like an audience that wants to laugh. It's totally true. So it does for it. Yeah. I can't wait for somebody to finally tell a good joke. So on AI, I want to talk about not just the startup side, but maybe like I'm just a mere takes on like the broader lens of AI. I guess my first question is around AI going wrong. And I know this is like a very hard thing, but I'm just sort of for fun, really curious what you think.

59:21You know, the downside case that people are very afraid of would be something like AI embodies, humanoid robots, and now we have a terminator situation on our hand at its agency. We have a big problem. Right. You know, that's one end of the spectrum. The happy path is that it's just like the sick of software that anybody's ever seen. And like it's a tool that humans use and everything's great. Do you think about this? If so, do you have any opinion on it? Or are you just like it's going to be what it's going to be? Just start by saying it's an important new technology. Any important new technology is what they call dual use.

59:50It can be used for good things. It can be used for bad things. The shovel. It can take a well in say your life. You can bash somebody over the head with it and kill them. Fire, you know, the computer, airplane, you know, airplane can take you on a most marvelous vacation with your new spouse. It can also bomb, you know, Dresden. Right. And so it's just a top, I mean, a top power was the big one because the time it power could be a limited clean energy for the entire world or it could be new bombs. Right. As it turns out, there we just got the bombs. We didn't get the unlimited clean energy. And so like that, that's just like generally true.

1:00:21These things, these things are double -edged swords. The question is like, all right, like what are you going to do about that? And are you going to like somehow put it back in the box? So you're going to somehow like try to constrain it and control it. The nuclear example is really interesting because the, you know, there was a very big concern around obviously nuclear weapons. And then nuclear, there's kind of big moral panic that helped around nuclear power. I mean, we kind of messed up with that. No, it's very badly messed up with that. And what happened was the green movement in the 60s and 70s created something called the precautionary principle, which is now there, which the same kinds of people are not trying to play AI, which basically says unless you can prove that any technology is definitely going to be harmless, you should not deploy it.

1:00:55And of course, that literally rules out everything, right? That's just like no fire, no shovels, no cars, no planes, no nothing, no electricity. And so, and that is what happened as a million nuclear power, which is they just, they killed it. The story I tell on that is President Nixon in 1971, the year I was born, he declared, he saw the oil crisis coming, at least, he declared something called Project Independence. He said the American used to build a thousand nuclear power, civilian nuclear power plants by the year 2000 go completely clean, carbon, carbon zero, completely electric, cut the entire they had electric cars a hundred years ago.

1:01:28So it was just obvious you just cut over to electric cars at some point. And basically we need to do that. And then we're not entitled to the Middle East, and we don't need to go do all the stuff there. He then created the EPA and the Nuclear Regulatory Commission, which then prevented that from happening. Absolutely killed the nuclear industry in the US. And then the Germans are going through the New Jersey of that in with Ukraine, which is they keep shutting, Europe X France keeps shutting down the nuclear plants, which just makes them more dependent on Russian oil. And so they end up funding the Russian war machine, which invades Ukraine.

1:01:55And then they were now going to be Russia. And so the social engineering, I would say the moral panic and then the social engineering that comes out of this, the history of it has been quite bad, like in terms of its thinking, and then in terms of its practical results. I think it would be a very, very, very big mistake to do that in AI. And then to regulate early. Yeah, absolutely. A hundred percent. To try to offset the risks in order to, like, and then cut up the benefits. So start with that as number one. Number two, I just say, look, we're not alone in the world. And we knew that before, but especially after Dvesick, we really know that.

1:02:28And so there is a two horse race. This is shaping up to be the equivalent of what the Cold War was in the Soviet Union. In the last century, it is shaping up to be like that. China does have ambitions to basically imprint the world on their ideas of how society should be organized. Another world should be run. And they obviously intended fully proliferate their technology, which they're doing in many areas. Yeah. And the world's 50 years from now is going to be running on, you know, 20 years from now, is going to be running on Chinese AI or American AI. Like those are your choices. You think that's how it'll basically play?

1:02:59Yeah, it's going to run on one or the other. How will that play out? Like, let's say it's one or the other. So AI is going to be the control way or for everything. So my view is AI is going to be how you interface with the education system, with healthcare system, with transportation, with employment, with the government, with law. Right. It's going to be AI lawyers, AI doctors, AI teachers. Okay. Do you want your AI teacher, you want your kids to be taught by a Chinese AI? Really? Like, you, you, you, you, you're like, they're really good at teaching your Marxism and she's in pink thought. Like, it's like, you know, like the cult, the other way to put it is the cultures and the weights.

1:03:31Yeah. Right. And so like how these things are trained, and like they're trained by like really, really deeply matters. And so, and by the way, this is already an issue in lots of countries because they're like number one, they may not want Chinese AI, but number two, do they want, you know, super woke, or the California AI? Right. It's another open question, right? Yeah. There are big questions on this. And so I just think like there's no question. Like if you had a choice between AI with American values versus the Chinese Communist Party values, I mean, for me, it's just crystal clear, where you'd want to go.

1:03:55Yeah. By the way, there's also going to be direct military, there's a direct military version, a national security version of this, which is, okay, do you want to live in a world of all CCP controlled robots and drones and airplanes and cars? Yeah. I mean, is, is, is, is that really what you want? Warfare and Defense, I guess, just is going to fully go AI over the next 20 years or something. I think that's very much true. And I think this, you know, robots plus, I basically, there's these signal, these signal may probably saw the Ukrainian attack on the Russian airplanes. You know, so those are, no, those are autonomous drones.

1:04:23And then they were doing AI targeting of structural, the right structural points to be able to attack the planes and destroy the planes. Yeah. Right. And so yeah, 100 % that's happening. You know, this is a major issue with our defense doctrine with respect, for example, to, you know, potential invasion of Taiwan, you know, air, aircraft, Ukraine has been fielding AI piloted jet skis. So they take a jet ski, take a jet ski, put an autonomous pilot on it, and they strap with explosives. And, you know, you could send out 10 ,000 of those against an aircraft carrier, right? And by the way, you can just keep sending them.

1:04:51Right? Because there's no, there's no loss about you just keep sending them until you get through. And so yeah, so the entire, I think the entire, the entire supply chain, the entire defense and industrial base, all of the doctrine of warfare, all changes, you know, the idea of human being some planes or on submarines just doesn't make any sense. It's all going to change. And then they, it's a symmetry or asymmetry between defense and attack is going to change. You use the word dual use. Yeah. And obviously with like previous technologies, you know, they got used. At some point I'm wondering, does it blend from getting used to being the user?

1:05:25Like if, like a business, a benign business example would be if you could tell an AI, hey, I want you to, you know, hey, prompt, I want you to build me a software company, you know, make it roughly do this, serve these users, and run that for the next five years. And just wire me the money to this bank account. Go. And if, you know, if that worked at some point, you know, in the middle of those five years, like, you know, what's how is it doing its own thing? Are you telling them what to do? Does that also happen, you know, in like a warfare scale? I guess that's maybe like the thrust of, to me, where, you know, where it turns into something scarier, particularly when you get into, you know, the embodied version in warfare, where it's just like, you know, the prompt is like, hey, just, you know, fight this, fight this war for the next year.

1:06:07Yeah. That's right. That's right. So the good news, the mastery version of it is straight forward. I think which is we have, you know, US law, Western law has a concept of a responsibility accountability. If you use a machine to do something, it legally is your fault. It's your, that's your problem. But by the way, if the machine goes wrong for reasons having to do with not with you, then it's a manufacturing. It's a product liability issue. The manufacturer is liable. But if you use it, you know, if I buy a shovel and I bash you over the head with it, right? It's my, you know, yeah, the shovel killed you, but like I'm to blame.

1:06:36And so I think that your, your example of the autonomous corporation, I think legal legal, the legal system is perfectly prepared to deal with that. Which is, yeah, you, that was, it was your, your bot, you set the whole thing up. It's your fault. Yep. And so there's, there's a natural, there's a natural constraint. I think there's a natural constraint on that. The, the most obvious version of the military version of the question is autonomous targeting and trigger pulling, right? And so, and this has been, this has been an issue in Drone Warfare for the last like 15 years, which is, is there a human in the loop on pulling the trigger, right?

1:07:04So predators flying overhead, dah dah dah dah dah dah dah, sees a bad guy. Okay, how is the decision made for the predator to launch the missile on the bad guy? Yeah. And, and by the way, the way that worked for a very long time was, it actually had to be an Air Force combat pilot who would actually pull the trigger on the drone, very specifically. Even if he was otherwise responsible for like operations of the drone, you'd still get somebody who's job at west to make those decisions in the loop. There are a lot of people in the defense field who are like, it's absolutely mandatory that in all cases, it is required for the human being to make the kill decision.

1:07:32Yeah. And, and, and maybe that is the, maybe that is the correct answer. There's a very powerful argument as to why that should be the case, because it's the biggest decision that any human, that anybody can make. And even if you don't believe in like the Sky Net scenarios, just the idea of a human being not being responsible for that decision sounds ethically morally very scary. There is a counter argument which is human beings are really, really bad at making those decisions. Yep. Right. And so any self -driven car thing, if it's safer than a human driver, than like who's, you know, should, yeah, there will be accidents, but there's still.

1:08:00Correct. And so every post analysis of any combat situation that you read or any war later on, you discover all these shocking things. So one is friendly fire. Like there's just huge amounts of task -wise, we're friendly fire people shooting at their own groups. Just because they're confused. Number two is, you know, the fog of war is just like it turns out that commanders have very little idea what's going on. They had some battle planted immediately coast sideways. They don't know what's, they literally don't know what's going on. They're not making this, they don't have the information to be able to make decisions.

1:08:25Everything's confusing. Number three, the physiological impact of stress adrenaline. It's like one thing to be on a shooting range, making these decisions. It's another thing to be like, you know, have like a severe leg wound coupled with, you know, adrenaline, you know, overloads, you coupled with two hours of sleep tonight before and like, is the human, is even the highly trained person making the decision right? Yeah. And then there's just like a more basic thing, which I think this is like a world where too retrospective. It's something like in a lot of combat situations. It was estimated only like 25 % of the soldiers even fired their rifles.

1:08:53Like just generally a lot of people just like don't act. Right. And so anyway, so you, the more you look at this, you're just like, wow, the human being is actually really bad at this. Yeah. And then all these other issues around collateral damage, you know, and they should, you know, actually should civilian. And so, yeah, you're back in the self -driving car situation, which is like, all right, if you had, if you could, if you could, if you knew you could get better outcomes by having the machine make the decision, better, safer, less loss of life, less collateral damage. And so I would say I don't believe I have an answer to this.

1:09:18But I think that is a very fundamental question. I guess this kind of actually feeds into the, the next topic, which to me is, I think like tech has now gotten to a place where with the government and politics, like it's sort of now undeniable it used to kind of be an underdog. But now for reasons like this and a bunch of others, it's just like too important to like not be in the mix that like the national stage now, which I think has really like changed the dynamic even in solarally for Silicon Valley. Because now, you know, people are, you know, looking at what people are doing, not just like impact, but pretty broadly now.

1:09:51Yeah, that's right. Yeah, so I was like, I deeply agree with that. I believe it is mostly our fault. Like the current situation is mostly our fault in tech, which is there's an old Russian a little Soviet joke, which is you may not be interested in politics, would politics is interested in you. Yeah. And so I think we, we, we, and I would include myself in this, I think we all got complacent or a lot of us got complacent between like 1960 and 2010 that basically just said we could just sit out here, we can do our thing. We can talk about how important it all is, but like it's never gonna, you know, these are never going to be big social or, you know, cultural or political issues.

1:10:22Yeah. And we can just kind of get away with not being engaged. And then I, for all the reasons we've just got here, you're saying then once it was undeniable, we weren't prepared. And then we weren't prepared. And we weren't even, I would say remotely prepared. And then there used a metaphor of the dog to cut the bus and the dog is being dragged behind the bus, the tailpipe in his mouth, doesn't know what to do with the bus. And look, you know, geography, I think has a lot to do with this, where 3 ,000 miles away, you know, it's just hard to get there. They don't come here very often. And, and yeah, so I guess I would say like, like it worked.

1:10:48Like we, we actually, we always wanted to build important things. Yeah. We actually are building important things. There are obvious political cultural social consequences to them. If we don't engage, nobody's going to. Yeah. And then by the way, the other thing I'll say is, you know, it's not like there's unity even in the industry on a lot of these issues, right? And so there's, you know, I would say two giant divisions right now, about big companies versus small companies. Yeah. You know, there's, often do not have align incentives right now and align to genders. And then the other is, you know, like just on AI, obviously there's a big dispersion of views even in the industry.

1:11:18I guess this probably goes to why it's important for, to some extent, at least some VCs to have relationships with the government. Because Big Tech has the resources to it themselves. Small Tech can't. And so if this is the state of the world, we actually as an industry need somebody to be doing that on behalf of little tech. Yeah. That's exactly right. That's why we're doing what we're doing. Yeah. On media in particular, I thought it was really interesting. I can't remember how many years ago, but biology many years ago started talking about like some fracturing, about, you know, the sort of relationship between tech and the media was going downhill.

1:11:53I think this was mostly talking about media and inside tech. I think probably also at the major publications and at sort of a larger scale. From my read as often, you know, I think this was right. And from where I said it seems like it did kind of continue to degrade the relationship. What's interesting to me recently is I've seen a little bit of life, you know, in the sort of tech publication stuff, but it's actually been from the inside. And so like, Eric, who you just brought on as GP is awesome. And he's been really going to do in this. TPP on's really cool. And I don't think I've seen something like that pop up, maybe ever inside tech.

1:12:28What's your read, I guess, within our bubble of like the sort of tech media relationship and where it's been? So my background in this is I, you know, I have a weird kind of history, because of what happened in the 90s. But, you know, I started dealing with the National Press and the Tech Press, Business Press in 1993 and 1994. And I did an annual press tour of the East Coast, you know, probably a week out of each year, usually in the spring. And, you know, what that means is you kind of go around and you meet with all the publishers, editors and reporters, you know, cover everything. And I would say basically the stretch from 94 to 2016 was generally like, I thought it was like a quite healthy normal productive relationship, you know, like they would run, you know, they would do investigative reporting and they would run stories that don't like.

1:13:09But generally they, you know, the major publications in each of those categories were trying to understand what was going on. And we're trying to kind of be, you know, honest brokers and trying to, you know, kind of represent what was happening. And so that's, that's the means for like super interesting. They always wanted to learn. They always set tons of questions. They were super curious about everything that was happening. That was great until 2016. It was the spring of 2017 that I went on the press tour and it was like, somebody had flipped a light switch. And they were like across the board, like unbelievably hostile, like unbelievably, like completely, and across the board, like 100 % sweet.

1:13:40Do you know why? Absolutely. I think the obvious answer is Trump, Trump, Trump got nominated and got elected in the memory blank tuck for both of those. Now, the way there's a bunch of other factors, including that that was when the, that was when the, it's actually the, there's a business side to it, which is there was the fear that the internet was going to eat the news business in the 90s. It actually didn't happen. And actually 2015, I think was the best year in history for like revenues to like news papers. And then it was really after 2015, social networking went big and then their businesses started to collapse.

1:14:10And you know, they started having lots of layoffs. And so that didn't help. And then, you know, look, they would say, look, that was also, you know, they would say, hey, smart guy, that's also when you started doing all these things that actually matter more, right? And so, you know, everything we've been discussing, like the tech industry changed. And so, you know, you're going to get a different level of scrutiny because you deserve it. You're doing different things now. The political thing was just a giant swapping factor. And they, and you know, this is a big, you know, I don't want to get into the politics per se.

1:14:34But if you just, you know, it's, it's, it's, it's this whole thing ran in parallel with everything. It's like in Jake Tapper's book about, you know, like, so it's just like they just, they just, they got locked in on a mode of, of interaction. They just became very polarized. Yeah. And very polarized and very locked step. And, you know, from the outside, you just, you read it and you're just like, wow, these people, they're all like really wrapping themselves around an axle. Well, I think one of the other hard things is as the truth has become more accessible by other people, you more often see something in the news that you know about and you're like, wait, that's super backwards.

1:15:05And then somebody posts about how backwards it is. And now, you know, you see a clip of, you know, some major publication. And, you know, here's the truth and everybody can tell. And it's like, okay, so should we just believe the rest of it or not? I think the truth fact checking went way up to a social media. That's right. And I would say there, you know, the cliche has been and there's some truth to the cliche that social media is where lies spread. And there's some truth to that. Yeah. There's a lot of lies. There's a lot of social media. But the other side of it is what you're saying, which I think is right, which is the truth spreads on social media.

1:15:31And so the way I describe it as the social media is an extra machine. And exactly to your point, like anytime there's, and you see this in any domain of activity right now, is anytime there's a thing and there's just like evidence that it's just not the way it's being portrayed. It is going to show up. People are going to see it. And that is there's a guy, Martin Curry, who wrote this book called Revolta the Public in 2015. And he was a CIA analyst who did what's called open source analysis for 30 years, which was studying basically what was in newspapers and magazines for the purpose of political forecasting.

1:15:57And his prediction in 2015 in his book was that basically, the social media was going to completely destroy the authority of all incumbent institutions. And the way that it was going to do that was it was going to reveal through this extra effect that basically none of them deserve the credibility of that kind of happened. And I think that's exactly what's happening. Yeah. And I think there's statistical evidence that's happening. Gallup polls, they do an annual poll now for 50 years on trust and institutions put every different kind of age institution, including the press and all the numbers are collapsing.

1:16:24In light of widespread social media, what would be the correct sort of function or role of like journalism? I mean, look, I'm a believer in like the original, I like the original idea, right? I don't know. I'm a romantic. I like what journalism says that it is. I would like it to be like that. I like what the university say that they are. I would like it to be like that. I like what the government says that it is. I would like it to be like that. Which should be just to name it. Yeah. Well, for journalism, it's just like, all right. Number one, tell us correctly and accurately what's happening.

1:16:53Well, actually, there's a conflict with the heart of the journalism question, which is that journalists say two different things. Just one is they say, you know, basically be fair and objective, right? And then the other thing they say is they say like hold power to account. Or they'll sometimes say they have this phrase. They'll say a comfort, they afflicted and afflicted and comfortable. And like there's there's an inherent like are you are you are you an objective truth tell? Well, yeah, because they had nothing to do with the truth. It's just unbelievable. Exactly. So there was already a conflict at the heart of the industry.

1:17:18And there's a there's a selection process where the people who go in a journalism tend to be critical by nature, right? They tend to want to be on the outside looking in to be critical because they wouldn't be journalists. They would write. And so there is an issue there, but look like do we need people to tell us the truth? Yes, we do. Do we need people to hold the powerful account? Yes, we do. Like I would like them to do that. Do you think they can be like for profit corporations? And it worked because I mean, I think another problem is they're getting all their distribution on social media eyeballs or what drives the revenue.

1:17:47People want to, you know, stay in pull. You know, so that also is unrelated to the truth. In fact, it's an ethical to the truth a lot of times. Yeah. So there's two two mentalities come out of that one is yeah, the profit and incentive warps it. And you want it to not have a profit incentive so it could be true to itself. The other argument is if you don't like for profits, you're really not going to like nonprofits. Yeah, but because at least for profits have like at least for profits have like a market test. Yeah, at least there's like some discipline. Non -profit just becomes somebody's sort of like this is my agenda.

1:18:13I'm going to do what I feel like. They go arbitrarily crazy. Yeah, they go arbitrarily nuts. It does sound worse. It yes. And they're completely unaccountable. They're completely unaccountable, right? They're in fact, in fact, in fact, it's the opposite, it's the opposite of accountability. Because of the tap because of the text break, you were actually paid. Yeah, as a donor to invest in the things that are the most unaccountable. Interesting. Right. And so and then they can spend into like crazy land. Yeah. And they and they and they don't come back. They don't come back. Yeah, there's a history here.

1:18:38Yeah, they don't come back. And so it's weird because like the citizen journalism thing is like a helpful fact check. It's like good to have and sometimes it but it does feel like it's not quite sufficient to tell the full story on everything all the time. So I do think that there's an important role. I just feel like it's it still feels like it's very in limbo right now. So here is a theory that would be a reason for optimism. Which is the last eight years where basically it was basically the human animal adapting to the existence of social media. It was basically the assembly of the brain and you slam eight billion people in the chat room together and like it's just like we're not used to it.

1:19:12We weren't wired for it. We're not at all for it and just like oh my god, everything goes bananas. Martian McCluwen actually the great media theorist he talked about this. He had this term called the global village is what happens when everybody gets that work together. And actually when people miss about it is he didn't mean in a good way. Is it because the nature of a village is basically gossip and innuendo and deep -seeing and reputational destruction and the civil war. Yeah, like that's what happens in a village. Yeah, right. And so which actually functions in a certain size. Yeah, like after 150 people you can kind of deal with that.

1:19:39Yeah. You know, at the size of like New York City and actually gets quite complicated. Yeah. It's the scale of the world. It's like disaster. It's a disaster. Yeah. But you could say look like we went through this eight year period where like we everybody went and did just say everybody went nuts. Everybody went nuts in like a thousand different ways. And then but maybe that was just we had to get used to it. Right. Maybe we just had to adapt to it. Like if you talk to, I don't know if you talk to like young zoomers now, you know, a lot of the time we're going to tell you, yeah, we don't take any of that stuff seriously.

1:20:01Yeah. Like I just, of course you don't believe what you see on, you know, whatever ticktock. Yeah, which is wild. It's just all of us. Like of course it's all of us like whatever. Yeah. And they just have like, they're, they're, they're, I'm glad people know. It's just like that's a crazy state of the world. Yeah. Yeah. Yeah, exactly. Is that probably how people feel about like the news too? Well, so this is the thing on the news. So then this is the other thing on the news, which is, was the news ever as we were told that it was. And so my favorite example of this is people always cite Walter Kronkite as being the great truth teller and the thing that they cite for you young people he used to be on TV.

1:20:29I've heard of them. I have not. He was this guy where you would show up on TV. Everybody would say, oh my god, he's going to tell you the truth. Like he was like, he was like the voice of the truth. And the way that he built that reputation is because he, he went negative on the Vietnam War in 1968. In 1968, he came out and he said the Vietnam War is unwindable. And we needed to call out of this. And he, they, they, they are in all these reports that show that that was happening. Everybody said he's the guy who told the truth and pulled power to account to tell, you know, tell the truth. Well, it's just like the problem with that is he went negative.

1:20:52The fact that he went negative on the war in 1968, right? He was positive on it before that. Right. Exactly. Right. What did he know the day before he said that that he wasn't checking? Yeah. And like, and then by the way, what else happened in 1968, which is the White House one from a Democrat to a Republican. So the Vietnam War was created by Kennedy and Johnson. And then it was inherited by Nixon in 1968. And isn't it convenient and interesting that he went negative on it when it became Nixon's war as opposed to being Kennedy's, Kennedy's and Johnson's war. And so then it's like, all right, like what was actually going on there?

1:21:18What was happening in the preceding five years? And is was he actually outside the whole time? And then there's just the reality of it, which is I grew up in a rural Wisconsin. We always thought the press was out to get us. Like we always thought the press was like the coast's basically passing sneering judgment on the center of the country. Like we never believed like the stuff to start with. And we were always like bear people where I grew up, people are like super resentful of the stuff in the media than how it portrays them. And so I think there's also like a more fundamental underlying issue here, which is, you know, objective truth is a hot.

1:21:44Like objective truth is a high bar. Yes, people have agendas. Yes. Maybe we just need to get all this out of the table. Particularly in politics, objective truth is not really how long. Like he like, oh, that's a lie. I mean, both not a lie. It's just like an interpretation of a situation that like I wouldn't characterize, but like sure. It's like that. Confluent, these are complicated topics. You know, ordering a society is a complicated topic, right? And the function of the economy is a complicated topic. And it's just not so easy to understand. And so I think part of it might, the optimistic view would be humanity adapting to being in the global village is basically just taking on a little bit of a more humble attitude, basically saying, all right, look, there's not going to be, we're not going to have a lot of objective truth running around.

1:22:21We're not going to have, but also at the same time, we don't want to be in a complete panic by everything all the time. And we need to kind of be able to, you know, take a deep breath, touch grass, be a little bit more skeptical, be a little bit more open, be a little bit more understanding. Right. And so it's a maybe we're starting. And by the way, I think that's happening. I mentioned that Jake, without getting into partisan politics, but the Jake Tapper book, I would have to add to it an event that he did this weekend out here. And like it's a, like that book and the reaction of the book. And if you watch the interviews on YouTube and the crowd response that book, like it feels like people are just like, oh, like if we just take a step back for a moment from like all the intense partisanship of it all, like there's actually some, like maybe we can get back a little bit more.

1:23:00I thought it was that book is a very positive step forward. Yeah. It's just a little bit of a call her approach on these things. And then by the way, the other book I'd promote on that is the Ezra Klein book on on abundance, which I think is I think is a, you know, somebody who's supported a lot of Democrats for a long time. I think it's like the most positive, you know, kind of manifesto that's come out, uh, basically saying, you know, like we need, you know, whether you're on the right of the left, like we need to actually build things. And I think that's also a healthy moment. So sort of related to this topic, a little bit of Jason, but I saw you talking about preference falsification recently.

1:23:27And I think this is like a super interesting topic in general, but particularly in the last, I don't know, called it five -ish years. I think a lot of preference falsification became made apparent. So I'd be curious first to hear a little bit about what you think happened over the last some number of years where these changes happened. Maybe we can start there and then I've got to follow up on it. Yeah, so preference falsification, just a sketch and outline, it's when people, um, it's actually there's two different, definitely there's two different elements of it. It's when people are required to say something in public that they don't actually believe, or they are prohibited from saying something in public that they do believe.

1:24:02Right. So again, so commission or mission, uh, issues. And then the, the theory of it is a great book by Timor Karan the theory of it basically is it's easy to think about what this happens in the case of a single person, which is, are you telling the truth? Or is there your public statements mirroring what you actually think or not? The thing it is complicated is why that happens across a group or across a society. And the thing that happens is if there's widespread preference falsification of society, you not only have people lying about what they actually think or hiding it, but you also, everybody loses the ability to actually know what the distribution of views are.

1:24:32Yeah. Right. And any, and he says, basically, if you look at the history of political revolutions, the political revolution happens when a majority of the country realizes that a majority of the country actually agrees with them. And they didn't realize it. Right. So that whatever system they were in had convinced them that they were in a very small minority. And then you get a, at some point there's, you know, the boy who played like a catalyst. There's a catalyst catalytic moment. And then, and then basically there's a, it's called a preference cascade. Right. Um, and then, um, and then all of a sudden, it's like the correct prisoners still in this box to live in all the sudden flips.

1:25:00Everybody realizes that it wants. Yes, exactly. And he said, you can see this in, um, you can see this like in a crowd with like a speaker, controversy, or a speaker where basically like you'll have a controversial speaker. And then there'll be silence in the crowd. And then one brave person will start clapping. Uh -huh. And that person is like, it's severe peril. Because if they're the only asshole standing up clapping, like, that's yet they might get killed. Yeah. But then if the, if the, if a cascade is then a second person starts clapping. And then a third and a fourth and a fifth. And then you get the snowballing effect.

1:25:24And then the entire auditorium is clapping. And then, and then that's everybody realizing that they actually are on the side of the majority, which they didn't realize. Yeah. For, by the way, this is what comedy, this is actually why, why comedy so much. It's what comedy does well. Because people can't control the involuntary response of the actor. Yeah. Exactly. So when you get in a terrible group of people in a room laughing out loud, it's something that individually they will all swear. They can't help that. They can't help that. They can't help that. Yeah, that's a great point. And then the stress relief from that, because they all know that they're part of a, they've rebonded the community, right?

1:25:50You're actually back in being a part of a community. And it's just such an incredible, incredible, powerful feeling. Yeah. Yeah. Okay. So it's very easy to apply this theory to like the Soviet Union, right? Or like the, you know, the, the, the, the, the Eastern Europe, you know, in the Cold War or whatever. Yeah. You know, I was China. Yeah. It's a lot, you know, trickier to apply this theory to, you know, your current society. I believe that, you know, we've lived in an era of like intense preference falsification. I think the last five years, yeah, probably the last 10 years, were like way more intense, preference falsification than the preceding.

1:26:20Yeah. 40, at least, you know, probably going back to, I don't even know. I mean, you have to go for sure back to the 60s, if not like the 1920s or something to find a, an analogous period. I think this period is characterized both by people who were saying things they didn't believe, but critically not saying things they didn't believe. Yeah. I think there are many reasons this happened. And I look, this has happened many times in history. And so a lot of people want to say this is caused by social media. Right. Well, when you phrase it the way that you said, it actually makes a lot of sense when it's just if people are going to be in a part of this prisoner's dilemma matrix, it actually just gets caused by nothing other than itself.

1:26:54Like it doesn't really need an outside catalyst for people to get into the wrong box. That's true. Although there needs, I know it's a good question. Or does there need to be some kind of oppression? Does there need to be some kind of motivation for the, for the cascade to have started where people end up in that box? It's a social pressure. So yeah, specifically, I think the thing that happened the last five years was, I guess it needs to be a high stakes enough issue for it to matter. Otherwise, it's just like who cares whether you think like the clouds are pretty or not. Yeah, that's right.

1:27:19So at least has to be that. Yeah. And the way I think you keep, keep your crime of describing is it needs to have like political social cultural salience. Yeah. Like it needs to get to something fundamental about how the communities are organized. We call that politics, but this predates even the concept of politics. And so, by the way, look, like you don't even necessarily want to say that all preference falsification is bad. Because I don't know that you want everybody out telling the truth, but everything. I don't think you do, I think at least in like a social, like a lot of social graces come from people saying, it's great to meet you when I don't feel like saying it was great to you.

1:27:48Your baby, I believe your baby is very different. Exactly. So some of it is right. Yeah. So yeah, but yeah, you as your point you get wedged in this box. And so I think the specific thing that happened, so the good news is, preference falsification in a lot of totalitarian societies was administered at the point of a gun. You say the wrong thing, they shoot you. That for the most part is not what happens in our society. What happens in our society is the sort of nonviolent version, which is ostracized, canceled ostracized, reputation has ruined, fired, become unhirable. Usually your friends and usually your family can't ever work against.

1:28:18Still really bad. Still really bad. Yeah. At least that's pretty bad. Very bad. And so, and it just turned out, I think part of, you know, the optimistic view would be part of adapting to these, this is a social media, what social media just turned up to be, among other things, a very effective channel to destroy people reputationally. Right. And this is the social media mobbing effect. Right. We're now all familiar with it. And you think that helped create basically more false preferences. Yeah. Yeah. Big time. Do you think it also unwound them? Well, so this is the thing. And so maybe the thing that happened in the 2024 election, which is just like, oh, okay, like we don't have to live this way anymore.

1:28:50You know, certain certain views become sacred to say out loud. This also the censorship regime, like we lived under a very specific censorship regime. Even in tech for 2024 election, verse 20, 2016, yeah, regardless of what you think, you know, who you wanted, at least everybody can agree that it was taboo to support Trump in 16 and it was not taboo to support Trump in 2024 in tech. And so something changed there. Something changed. Peter had this great line in 2016. He said, because he was one of the only people, you know, maybe the only person in tech who was actually pro -Trump in 2016. And he said, he said, this is so strange.

1:29:19He says, this is the least controversial contrary of the thing I've ever done. He's like half the country agrees with me. Yeah. He's like, I've never had a point of view on anything else in my entire life or half the country agrees with me. And yet somehow, this is such a heresy that I'm like the only one. Yeah. Right. And so, yeah. So, so there was that, that definitely changed. And then I just think in general, like I said, I think they're optimistically, you can just say there's a process of adaptation. Right. Where it's just like, all right, we're just like, if we all just decide that we're just not gonna like live life by mobbing, then scapegoating, and personal destruction.

1:29:48And just because somebody's offended by something, doesn't mean it's gonna destroy it. You know, if somebody says one thing, it's gonna destroy their lives. Like, we don't, you know, you don't have to do that. Do you think it's basically been unwound? Now, or do you think there are still a lot of falsified preferences? I would say it's radically different than it was two years ago. I would say there's still a lot of falsified preferences. I would, but again, I would say, and I think probably in any healthy society, there's lots of falsified preferences. So, do you have any guesses for something that is currently falsified that will become un -falsified?

1:30:16Or is it too hard to call it? Sure. Yeah. Sure. Okay. Great. But it's far too dangerous to say. All right. Hold on. Yeah. Dang. Gosh. But again, when you ask that, that is a very key question. Here's what I encourage. I'm break the fourth of all. Yeah. Great. Here's what I would encourage people to do. Here's the thought experiments to do. Just write down two at least in middle of the night with nobody around, doors locked. Write it down in a piece of paper. Let's put it out in 10 years. Write down a piece of paper. Two lists. One of the things that I believe that I can't say. And then what are the things that I don't believe that I must say?

1:30:46And just write it down. Yeah. And I bet, you know, if you're a reasonably introspective person, you know, the quote unquote NPCs can't do this. Yeah. Like if you're a reasonably introspective person. You know, most of us probably have 10, 20, 30 things on both sides of that ledger. Right. And again, most of those are things where you've got it, you know, I don't know, like, you don't want anybody ever see that piece of paper. Maybe five or 10 years from now we'll be back and everybody can reopen their papers and we'll see. And it'll be safe to say whatever people wrote down at that point. Exactly.

1:31:10Okay. A few final topics I wanted to ask you about. One is, you're probably in a spot to be giving just sort of life or career advice to young people a lot now, both in general, but also maybe specifically with like AI and like the current set of tech, you know, changes right now. What do you most often find yourself repeating to a really smart, you know, recent grad about, you know, if they're like, what should I be doing with my career if they get the chance to ask you that? Just start with, I never took any advice. So, advice is yeah, there's something there, but a lot of people do. So maybe, maybe fair enough.

1:31:46That's like the, you know, if you could build Facebook thing. Maybe, yeah, maybe there's something like that. Maybe the best people probably shouldn't take any advice. Okay, but, the rest of us. But, um, I would just say, so especially for young people, I, you know, and again, I say this, like people are very different. Like I, I believe very deeply, some people, some people are very happy being the middle of chaos. Some people are very unhappy. I mean, I said, some people are very unhappy being middle of chaos and they will actually get themselves out of a chaotic situation as fast as they can.

1:32:10Other people love chaos so much that they don't have any, they will create it. Right. So like you have to, you know, there's true. There's a level of understanding here. You know, like, not everybody should be in like a high, grow high risk tech company because it might just be two nuts. So I don't think there's a one size fits all, you know, kind of thing. Yeah. Um, uh, at all. Having said that, let's narrow it. So young, the young person who wants to kind of be in tech, I think a big part of it is, I think it's, I was saying, it's like run to the heat. Like, or the, the, the seed thing we were talking about.

1:32:35Like, where, where are the interesting things happening? And that's a conceptual question. And it's also like a place question in the community question, network question. Yep. And so, you know, run to that as fast as you can. And it doesn't mean running to the fads, but it means trying to identify, trying to get into those hot network or ideas or projects, basically. Yeah, yeah, yeah, exactly. And look, there's a geographic component to that. And I think we all kind of wish it wasn't the case, but there really is. Um, and, and, and, and AI, AI, I think has very successfully unwound the geographic dispersion of what was happening in tech.

1:33:05In a huge way. In a huge way. It's kind of slammed everything back into the California. I don't think that's good. Really, um, for a lot of reasons, but I think it just is the case. And so I would say like, if you're going to like do AI, get here. Yeah. And then look at the, and then the other thing is it's this D Martin thing. Be so good to kind of ignore you. Like time spent on the margin, getting better at what you do is almost certainly better that both of the other uses of time. The, the old adage of you are the average of the five people you spend the most time with is also true. You want to do that.

1:33:31Uh, so you want to, you know, pick, pick, pick that carefully. And then I guess what I would say is, uh, when I talk to, you know, people about like what kind of company to go to, um, there are certain people who should only be in a raw startup. And there are certain people who should only be in a big company. I think the general advice is the, it's the high growth companies. It's the companies that we would describe as between like, being between like, series C and series E probably or something. Yes. Where it's like, they've hit product market fit. They've hit the knee and the curve and they're on the way up.

1:33:54On average, that's going to be the best place to go. Because you're not going to have the downside risk of a complete wipeout usually. Yeah. Um, and then people who get into that position, like at those high growth companies, if you're talented, you can pick up new responsibility for it. Yeah. Yeah. Okay. Next is, um, your Andrew Heberman thing that I see on Twitter. Like what's, I actually can't completely parse what it is. What's going on with that? So we have a completely fake beef. We're good friends. We're very good friends. Um, and they're actually neighbors in Malibu. And I've been on his podcast and like we're very good friends.

1:34:22Um, but, um, but you don't follow his protocols. I don't do anything that he says. I don't do a single thing that he says. Um, I, with one exception, we'll talk about, but yeah, I don't, I don't do any of it. You know, he says maintain a regular sleep schedule. I, there's no way. You're all over the place. I love to the place. He says always get up, you know, he's to see, get up, you know, I want to do and I wake up to see some light. You don't bring caffeine for the first two hours of the day. It's like, and it, it sounds like torched. It sounds like being in a North Korea. That sounds like bad.

1:34:47Like I can't even imagine. You're doing a lot of coffee, a lot of coffee, hot plunge, cold plunge thing. I'm not, the cold plunge is miserable. I'm not doing any of that shit. Yeah. You think it's good for you though? All the time. Oh, I'm sure it's, I'm sure it's good for you. I'm just not, I'm not going to do any of it. It all sounds just completely miserable. It's good. Um, the one thing that, um, he says that I, I do is, uh, stop drinking alcohol. Um, and I would say I am, uh, I am physically much better officer result, and I am, but I'm very bitter and resentful. It is, it seems specifically.

1:35:13Why'd you, why'd you do that one? Because it's much better for you physically. Yeah. It, it, it really is. Like, it fixes lead for an energy problem. So is the most tolerable of all these new, like, final two one? Well, notice, completely intolerable. It's horrible. No, okay. I don't recommend it. Like, I think it's a horrible way to live. Yeah. Like I'd much rather be drinking alcohol. Does he think even like a glass of wine at night's bad? He does, yeah, just all of it. He did one of the great, he's actually had him. I think big influence on the culture. And this is very, in seriousness, this is very positive.

1:35:36Yeah. I think, um, at least for health, um, see, did this big, big thing out. There's all these, so what happened is there's all these alcohol, there's all these fake alcohol studies. Basically, um, the, you know, it's like red wine, and then it's like all out, you know, it's hard protective and all this stuff. And it basically, it basically turned out that really sick people either drink a lot or nothing. And then it then healthy people tend to drink a little. Yeah. Right. So, so, so one is healthy people tend to be very well disciplined. Right. And then I guess is that correlation or causation?

1:35:59That is a, it's all the sample set. So, so, so it turns out there's no health benefits to alcohol. Yeah. That was all completely fake. Uh -huh. In other words, just because I see healthier people drink a moderate about alcohol does not mean that drinking a moderate amount of alcohol makes you healthy. I see. Michael Brighton called this wet streets cause rain. Yeah. Wet streets rain. Yes. Right. So for some reason unhealthy people stop drinking. I know people stop drinking because they're like in the hospital. They can't handle this. They can't. Their doctor says if you keep drinking, you're going to die.

1:36:25Yeah. Or by the way, they drink a lot. Right. Because they're, they're right. And then there's this, there's this fundamental thing, which is healthy people tend to be very disciplined. But, but discipline is not discipline is there's like a big inherent component to it. Yeah. Right. And so people who are, people who are disciplined, who drink a moderate about alcohol also do moderate amounts of exercise also experience moderate amounts of stress also, you know, you go to the doctor at a regular basis, they, they take the medication they prescribed. They leave all aspects of their, their health in it.

1:36:49I guess it'll take a while to see, but it feels like it should be a good thing that Andrew and other people have gotten so many more people interested in health. It's good for, it's good physically. Right. Yeah. I think mentally, no, I'll try, I'll be funny again. It's, it's, it's, it's catastrophic emotional. Yeah. It's, it's maybe a much less happy person. Do you think, are you actually, do you think that? Well, so I really, so it's the, it's the, it's the alcohol is a time, thousands of years, people have been using it. Number one, to fundamentally relax. Yeah. And then, and then there's a very important social lubricant component to, Um, you know, it's like, um, and the de -stressing could be healthy.

1:37:23So let's just say, maybe, maybe it's not accident. The birth rate is crashing. That's the same thing. I don't think Andrew would argue, you should not live your life purely maximizing for just physical health. That'd be a miserable way to live. I mean, it's like, what are you going to do? Just like, ever leave the house. Yeah. Never take a risk across the street. Um, and so, you know, he certainly doesn't judge people for drinking modern -rots alcohol. He just looks scientifically. You have to understand it as a poison. Yeah. No, having said that, as you know, um, speaking of scenes, um, as you know, the, the displacement thing that's happening is people are, you know, like our world, they're not entering alcohol.

1:37:53Instead, they're like doing hallucinogenic Jansk. Why is that? Yeah. It's not necessarily a present. As you jacuzzi, very well. Yes, yes, yes. Tell us about your latest Iowa. It's good to have. Yeah. So, um, you're first, you're so much different than you were last time. That's right. I mean, your personality is clearly completely different. Yeah, I do feel different. So, so the other theory would be there's a law of like conservation of drug use, which is every society is going to pick some drug. Probably right. And abuse it. And apparently, in our case, it's going to be like LSD and mushrooms.

1:38:17Which is a good one. Uh, yeah. Yeah. Okay. Um, okay. Um, okay. My last question. When I tweeted out a request for questions, I got almost ratioed by one question. So I'm going to ask this one like nearly verbatim. It was by a non, uh, named signal. If you were frozen for a hundred years and you woke back up and you looked around, what would be the piece of data that you'd want to know that would tell you whether or not you are a dominant world view turned out to be correct in the fullness of time? Yeah. So I will pick a very unfashionable answer to this. And I would say United States, uh, GDP just like straight out US GDP.

1:38:54Because I would say embedded in that is the question of technological progress, which is if you have rapid technological progress, you'll have rapid productivity growth, which means you'll have very rapid GDP growth. If you don't, you won't have rapid GDP growth. So you'll see that in the GDP numbers immediately. You know, number two is, you know, well, I've, number two would be just like our markets like we're going to organize. Yeah. And the US is the best market. And so, you know, is that, is that going to keep working? And then third is, is, is the US going to be a great country? And you are along all of this?

1:39:19I am very long all three of those. Yeah. I am very convicted on all three of those. But, yeah, if I'm right about something big, it's, it's going to be something in there and it will show up in that number of years. Mark, this is amazing. Thank you so much again. Good. Awesome. Thank you, Jack.