#377: Geoff Lewis on The New World We Live In

Geoff Lewis is a Founder and Managing Partner of Bedrock. In 2019, Geoff was named as one of the Top 100 Venture Capitalists in the world by CB Insights and The New York Times. In this conversation, we discuss narrative violations, inflation, resurgence of religiosity, serological test agreements, 3 paths to live in the West, solopreneur platforms, and Fortnite vs Apple. ============================ Bybit currently has over 300,000 users, with the number growing in double-digit percentages monthly. The exchange has no overloads during volatility and low latency trading plus 24/7 customer live support. At Bybit, we listen, care, and improve to provide the best possible trading experience and create a faster, fairer, and more human trading environment. Visit Now! ============================ Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Jeff Lewis is a founder and managing partner of Bedrock. In 2019, Jeff was named as one of the top 100 venture capitalists in the world by CBI Insights and the New York Times. In this conversation, we discuss narrative violations, inflation, resurgence of rigilosity, serological test agreements, three paths to live in the West, solopreneur platforms, and Fortnite versus Apple. I really enjoyed this conversation with Jeff, and I hope you do as well.

• 0:39Anthony Pompliano?

  Before we get into the episode, though, I want to quickly talk about our sponsors. First up is Bybit. Bybit currently has over 300,000 users, with the number growing in double-digit percentages monthly. The exchange has no overloads during volatility, and low latency trading plus 24/7 customer live support. At Bybit, they listen, care, and improve to provide the best possible trading experience, and create a faster, fairer, and more human trading environment. Go check out Bybit using the link in the description to this podcast. 300,000-plus users, Bybit is here to serve your trading needs. Also, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance.

• 1:19Anthony Pompliano?

  I break down complex topics into easy-to-understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. Alright, let's get in this episode with Jeff. I hope you guys enjoy it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions, and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment, or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes.

• 1:59Anthony Pompliano?

  Alright guys, bang, bang, Jeff is back for round two. This time, we don't get to do it in person. Thanks so much for doing this, man.

• 2:07Speaker 01

  My pleasure. Good to be back.

• 2:09Anthony Pompliano?

  Absolutely. For those that didn't watch the first time you were on, maybe give us a quick kind of 30 seconds on your background and a little bit on Bedrock and kind of what you guys are doing from a venture standpoint.

• 2:20Speaker 01

  Sure. So founder of Bedrock, we're a technology investment firm that I founded a little, a little under three years ago now. We manage around half a billion dollars, really invest across all stages, all sectors, you know, frankly, all sorts of different asset classes within, within technology as well. Some of our more well-known investments include Rippling, RigUp, The Athletic, Lambda School, Cameo, and we're investors in some crypto stuff as well. Before starting Bedrock, I'd been a partner at Founder's Fund for a number of years, where I led early investments in companies, including Lyft, Wish, New Bank,

• 3:03Speaker 01

  Canva, and a number of others that have ended up being really successful. So my passion in life, sort of finding these, these counter narrative companies, these companies that are somehow overlooked or underestimated by, by, by folks that, that sort of determine what the popular narratives are and backing those, backing those entrepreneurs. And we've been at it for a while now and I love what we do.

• 3:29Anthony Pompliano?

  So when you guys first started Bedrock, you wrote this epic letter that basically was like, here's who we are, right? And part of the messaging that you guys have really kind of championed is this idea of narrative violations. And there's a lot of people who I think was like, oh, that's cute marketing. What the hell does that mean? But now we live in a world where over the last six months, it's become very obvious, some of those narrative violations. And one that you've talked a lot about recently is this idea that all tech is good, or all tech can kind of build a better world. Talk a little bit about why you put that in the category of kind of being a narrative violation and what the implications of that are.

• 4:06Speaker 01

  So I actually did not say that all tech is good. So what I said is that the popular narrative. So the thing with narrative violations is they exist on this time scale. And so basically, you know, there's a moment that these narratives can go from being very popular to being sort of counter narrative very quickly. And so with technology in particular, you had this narrative in the eighties and the nineties that technology was building a better world. And that was sort of the consensus popular narrative. So if you looked at sort of the media elite, the business elite, the popular narrative was Silicon Valley's good. You then had Google launch in 2000 with the model, don't be evil.

• 4:51Speaker 01

  And then in the early 2000s, leading up to probably all the way up to sort of 2010, 2011, Google was sort of categorically perceived as the don't be evil, very good company. You had sort of the myth of Steve Jobs. And so there was this sense in which Silicon Valley technology was like, they were the good people in business. That was sort of the good, the good hearted, well meaning, saving the world way to be in business was to do something in technology in Silicon Valley. And that became the narrative on Silicon Valley. Fast forward to today, it's 180 and the narrative on Silicon Valley now today is tech destroying the world. We have to break up all of the big tech companies.

• 5:35Speaker 01

  They're all monopolies, the tech founders are all evil and they're destroying the world. And what we would argue at Bedouin, we argued in our letter, and what I believe is that neither of those extremes is true. And it's this company specific, company by company type thing. The problem for Silicon Valley though, is instead of sort of all along being like, actually, things are more nuanced, like Silicon Valley is not definitionally going to save the world, like tech could be good or bad, just like any other business. Silicon Valley writ large bought into this, yeah, we are the way to make the world a better place.

• 6:17Speaker 01

  And it was complicit with the narrative gatekeepers on the propagation of this narrative of tech is the way to make the world a better place. So the fact that it is now exposed to not be entirely true and somewhat more nuanced is a bit of a problem for Silicon Valley, to put it mildly.

• 6:36Anthony Pompliano?

  Yeah, and so one of the things that you've kind of laid out very clearly is this idea that you've got to live outside of these narratives, or live outside of these frameworks, because if you don't, then you run the risk of getting framed or labeled and kind of put within the narrative. Talk a little bit about like, how does somebody do that in practice?

• 6:56Speaker 01

  Well, the easiest way to do it is to be what I call digitally disengaged. So the easiest way to do it actually to be just not engaged digitally. Obviously, the ship has sailed for you, Paul. The ship sailed to a much lesser extent for me. You're a much bigger digital brand than I am. But certainly, the way to do this is simply not have any online profile, or to do it entirely via pseudonym. So that would be sort of the easy way to avoid getting framed by a narrative, would be to not have a persona that's public.

• 7:40Speaker 01

  And one of the things that, unfortunately, I've chosen not to pursue this strategy, and it's always difficult to commend a strategy that one's not pursuing themselves. But a strategy that works extremely well is to, certainly in a fund manager context, and even in an entrepreneurial context, there are a lot of phenomenal entrepreneurs. There are a lot of extraordinarily successful fund managers that just don't have a public profile, that just issue all press, that are not on Twitter, not on social media, like no one would know who they are, and they do phenomenally well. I think there's a lot to recommend that. In a world where these narratives are forming so quickly, collapsing so fast,

• 8:24Speaker 01

  and can run over anyone that doesn't conform with the narrative, there's a lot to recommend that digitally disengaged, or pseudonym-driven type online presence. Now, that said...

• 8:37Speaker 01

  As we know, there's a lot to be said for having a digital, for being engaged online. I mean, it can bring, it can open up a lot of doors. It can result in a lot of opportunities. Certainly, it's been very beneficial for me in terms of finding entrepreneurs, building relationships, getting access to opportunities. Probably the same is true for you. And so there are a lot of benefits to it. But then there's always this way in which you're exposed, you're exposed to the mob in all of these, in all of these ways. And I think that dynamic just intensifies more and more going forward.

• 9:15Anthony Pompliano?

  For sure. And part of this is, you said that Warren Buffett, we have more to learn about the narrative than the investing from him in some ways. What do you mean by that?

• 9:28Speaker 01

  Well, you know, I'd say the, the investing strategy, I'd say could be summed up as something like too dumb to fail. And that's a credit to Buffett. I really like too dumb to fail things. I think that's the type of thing that you want to invest in. But sort of like these sort of blue, you know, blue chip type assets than smaller, smaller companies with just really strong fundamentals that'll last for decades. Sort of this too dumb to fail strategy with enough capital to go get, get these really meaningful positions or own these, own these businesses over, over many decades. That, that to me is sort of a too dumb to fail strategy. So credit to him for pioneering it.

• 10:08Speaker 01

  But then I think more impressive is A, how he popularized and, and, and became synonymous with that, with that strategy. Quite frankly, it was a pretty obvious investment strategy that a lot of folks pursue at, at, at subscale versus, versus Berkshire. But certainly became synonymous with that, branded himself around that. And what's narratively brilliant about it as a, as a strategy is it's a strategy that anyone can tap into and execute on a smaller scale. And so it's like a, it's a, yep, Buffett's doing it, but I can buy these blue chip stocks also, VMI 401K or something like that. So there's a sense in which it's like. Something that's accessible to any person who's who's sort of, you know, middle class

• 10:51Speaker 01

  or or or more or more, which which which has a very populist type vibe to it. But the more impressive piece to me is how he's managed to to brand himself as a as just as as an everyday Joe who just wants to give away all his money. And and and it's, you know, if you Google, you Google Jeff Bezos' house, you'll see like fifty, sixty pictures of various thirty thousand square foot plus mansions in cities around the world, LA, DC, Washington, Seattle, you know, in various international destinations. You Google Bill Gates, he's a hundred million dollar thing in Seattle, these other properties.

• 11:34Speaker 01

  You Google these other folks, they've got various yachts, etc. You Google Warren Buffett, you see lots of pictures of his, admittedly nice, but it's a, it's like, you know, it's it's a pretty standard suburban house. It's not out of reach for, you know, if you're like a lawyer living in suburban, suburban Illinois, you could you could sort of afford the house that Buffett lives in in Omaha. And and there's, there's lots of pictures of that house. You know, he's, it's, he always mentions, you know, he drives, he's, he's known for being just very frugal and living this very modest life. That is a narrative. And the Giving Pledge, which which Buffett co-founded with with Bill Gates, again, credit, credit to them. I think it's great that they're giving away, pledging to give away the vast story of their

• 12:19Speaker 01

  net worth during during their lives. I mean, that's a wonderful thing, but that is also a narrative. And it was, it was, and so I'd say he is the master amongst ultra-high-net-worth billionaires. And but to be clear, like billionaire is like very separate from multimillionaire. And billionaire is very separate from, from like even like having a hundred or two hundred million dollars. It's like a totally different category in terms of like the degrees of freedom that you get when you're a billionaire. I'm not one, to be clear. And and but I know a few. And and to be able to brand yourself as as sort of not like the other billionaires, super generous, you know, just lives a really frugal life, you don't really care at all about

• 13:03Speaker 01

  money, I think that is like true narrative mastery. And Buffett's achieved that.

• 13:09Anthony Pompliano?

  Yeah, one of the institutions in in society that is very dependent on the narrative and the confidence game is the Federal Reserve and kind of this belief in money, belief in their ability to be able to manipulate interest rates and the money supply in order to keep an economy moving in the direction that they want. Obviously, they've been making a lot of decisions and taking action and a fear from that is inflation. What are your thoughts in terms of does it happen, does it not happen? How do you think through it? What's the impact on both early-stage and late-stage companies? Just kind of what are your thoughts on inflation in general?

• 13:47Speaker 01

  Sure. So with the caveat that I'm not an economist, so I definitely don't view this as any sort of expert, not an expert on this stuff, but I have a few thoughts. One is, we just had the announcement today from the chairman of the Fed, Jerome Powell, that they're now targeting, they're targeting higher inflation for the next five years, I think, than than than historical. So certainly, the Fed now is explicitly, now, just today, there's now a major policy shift that they're going, they're explicitly announcing that

• 14:27Speaker 01

  they're going to allow inflation to run, run higher than normal. And so the fact that whenever you have a sort of announcement, an announcement of saying, hey, this is like Ben, and positioned as this is this really good thing, we're going to let inflation go up. It's like really positive. It's five-year new, new, new thing that we're doing. It's really good for everyone. It's just be slightly higher inflation. You always want to be skeptical in a questionable way. So like, it's like, oh, cool. Like, that's helping us out by increasing inflation. Certainly would want to be a little bit skeptical about that. And so the fact that they, the fact that they felt they needed to make an announcement about it, to me, means

• 15:08Speaker 01

  that like, we are just, it is just going to be this extraordinary, extraordinarily inflationary environment, because they're really, for years to come, because there really is, at this point, No other option. Um, you know, the money printing that's gone on, the trillions and trillions and trillions of stimulus. Um, there is just no other option than to, than, than to pursue a, a monetary policy of, of inflation. And so, you know, there's, there's, there's this question on, um, there's this question on whether that macro dominates micro, um, for, for asset classes. And so when you talk about, uh, technology stocks specifically, and this is private

• 15:49Speaker 01

  market companies, public market companies, just talk about technology stocks specifically. In theory and, and in practice to date, in a, um, in, in a, in a hyperinflationary environment where digitization trends are being accelerated by a global pandemic, um, the macro would, would, would, would point to, um, you know, you, you obviously can't be in cash in a hyperinflationary environment. So you want to be in the, in the, in the, in the, in the equities that are most linked to sort of, um, the future and, and have the, sort of the most expected value in the, in the future, and that would be technology. So there's a very strong macro story for, for technology investing, whether you're at the early stage, even in the public markets. I mean, would have done phenomenally well just investing in the public markets and

• 16:34Speaker 01

  in, in, in technology companies over the last seven, eight months. Um, and then, uh, and then you have to juxtapose that against, um, uh, against, I actually don't think COVID's impact has, has actually flown through on a micro level, uh, uh, um, into the numbers, uh, for a lot of these, uh, highly valued SaaS companies. So excluding the, excluding the e-commerce stuff, I think the e-commerce stuff, the, the, uh, you know, things like Zoom is an exception to this on the SaaS side, social media, all of those are, are, are probably just phenomenally accelerated by, by COVID. But on enterprise SaaS specifically, I think the upticks in churn have, have really only started to hit these companies over the past few months.

• 17:19Speaker 01

  And, um, and ultimately you're going to see the SaaS, uh, people aren't going to hit their, their Q4 numbers for a lot of these large enterprise SaaS companies. And I think the multiples might get, might get signed accordingly. So I'm much more skeptical of the micro story on, uh, on tech investing. I think the macro, hyperinflation, uh, you know, where, how do you get a return on one's capital in the future bodes well for, well for technology.

• 17:45Anthony Pompliano?

  So you came up with these five predictions a couple of months ago. Let's just go right down the list and and kind of check in on how you think that they're going. The first is the death of Dr. Lee as the Franz Ferdinand moment in society.

• 18:03Speaker 01

  Yeah, so you know, in World War, you know, so there was in a in a in a in a so it's early where I'm at, I can't, I think it was World War I, yeah, Franz Ferdinand. So in World War I, retrospectively, the historians looked at the assassination of this of this Austrian Austrian Duke Franz Ferdinand as being sort of the initial domino that fell that sparked that sparked World War World War I. And and I would argue that I would argue that that this death of Dr. Lee, this this this Wuhan doctor, he was this Wuhan, I believe he was actually an ophthalmologist, who's

• 18:45Speaker 01

  an ophthalmologist in Wuhan, very early on in in sort of in in in sort of December, between Christmas and New Year's, he was he was sending warning messages. He saw he was alarmed by by by some of the cases that he was he was seeing even as just an ophthalmologist, and he was sending WeChat messages, trying to warn people of of this as being a very serious risk of pandemic and ultimately contracted coronavirus while treated treating a patient at his hospital and died. And I believe that that that death, that death of Dr. Lee, historians 100 years from

• 19:27Speaker 01

  now, if we have historians, it's very unlikely we'll even have historians anymore in the future, but if we even have historians, they will look back on the they will look back on that death of Dr. Lee as a Franz Ferdinand moment for a new major global conflict over that will that will unfold over the next number of years. And and, you know, I'd say maybe the initial domino was, you know, his death is emblematic of the initial domino being. You know, this COVID outbreak not, this COVID outbreak being underplayed by the Chinese Communist Party. You know, Dr. Lee trying to warn about it, dying of the virus he was trying to warn about. The virus then escapes from Wuhan, spreads globally.

• 20:11Speaker 01

  There's questions about whether the virus was, was actually, you know, a bat borne coronavirus from a wet market? Or was, was, there was, there's this, a lab, or was it a lab leak? So there's all these things that they're very weird about the origin story on the virus. And then all of the dominoes that have fallen since in terms of how this epidemic is, is, is, is just, is impacting every facet of geopolitics and every facet of the way we, we live around the world. But I believe we'll, we'll look back on that as, as a transfer and end moment. So firmly stand by that prediction.

• 20:46Anthony Pompliano?

  The resurgence of religiosity, or basically the, the popularization again of religion?

• 20:54Speaker 01

  Well, we're already, we're definitely seeing it. There's, there's new religions that have really sprung up. And they're too dangerous to name, so I'm not gonna name what they are. But there are certainly new, new religions that, that lots of people are really passionate about every night on, on various city streets. And, and, and that's fine. And, and you know, if they wanted, that's, that's totally cool. You know, and, and so there's new religions, religions that have sprung up. I think that people are turning more inward, becoming more, more, more sort of spiritually centered. Certainly, even though a lot of the churches have been intermittently closed. If you talk to friends of mine who are Christians, they're like, the turnout for the online services,

• 21:39Speaker 01

  the digitally streamed services is like higher than ever. And I think people are searching for, for meaning, because the, basically the frame that we had for, sort of a basic, stable framework for like how a reality, sort of what reality is, I think has been somewhat fractured by like the global response to the virus over the past, you know, seven or eight months. So, so yep, still stand by that one.

• 22:06Anthony Pompliano?

  Uh, hyperinflation and maybe caveat this one with US or not US and any sort of idea around timeline.

• 22:16Speaker 01

  So we're already seeing inflation, so we're not at hyperinflation, we're already seeing inflation. And then, you know, I always like to be a little bit hyperbolic with predictions. So it's possible that I was hyperbolic in predicting hyperinflation. Perhaps I should have just been predicted inflation, but that would have felt a little bit too boring. You know, I think it'll flow through over five years. So it sort of began, the prediction was time, time, time. You sort of have to have, it was time, time, it was a five-year time scale. And in theory, it should be worse. And in theory, it should be worse. And, you know, there's all these Southern European countries that, where in theory, it should be a lot worse.

• 23:00Speaker 01

  The number of these developing countries, so probably worse in other places than in the US.

• 23:07Anthony Pompliano?

  This one is fascinating to me, which is remote work as a narrative mirage.

• 23:13Speaker 01

  Yeah, so I don't know like what it's going to look like, but I don't think this like working from home indefinitely thing for all white collar jobs is actually like the new, is actually the way it's just going to be going forward. So I don't think we're returning to like suburban office parks. And certainly that's done, so I'm very short suburban office parks. I'm short the skyscrapers in Midtown Manhattan. I am, I don't think it's going to look like it looked before, but I do think people want to be, want to have interactions with people that they're working with.

• 23:53Speaker 01

  And I actually think that there's something fundamental about building a company where you, you kind of have to have some real sort of in-person interaction. So I think maybe the one way in which this prediction could be wrong is if VR for, VR just gets so, so good on a fast timeline that like we have these immersive virtual offices that we all just put on our headset and we're in this immersive virtual office. Maybe that's the way in which the prediction could be wrong. But if that doesn't happen, I think there's some sort of new way of, of, of working together that's not fully remote. And I think that ends up being. Something that we're not expecting. And so on the extreme end, on the extreme end

• 24:35Speaker 01

  of the way in which this prediction would become true would be actually if AI automates all the white collar jobs that we're now doing remotely. So that would sort of be the, and I do think that's possible on a five-year time horizon. So I think actually you have a possibility of AI automating just a lot of the white collar Zoomer jobs such that just, you know, you're still going to need a plumber, you're still going to need a landscaper, but you're not going to need a, you're not going to need a, you're not going to need an accounting clerk. And all of those Zoomer white collar jobs are just going to go away. They'll be automated. That's one way in which this remote work thing's a narrative mirage. Two is, I don't believe it's a just permanent change. So I think

• 25:19Speaker 01

  once the pandemic is solved, which again, I think it's going to take a lot longer than most people think it is. I think it's going to take many years, but I think it's going to take less than five years. And once it's solved, people are going to be desperate to engage again in person. And so I do think it is a overhyped narrative and likely to be a mirage.

• 25:43Anthony Pompliano?

  Does Zoom count as part of that VR experience?

• 25:48Speaker 01

  Well, my thing with Zoom is I think that Zoom is like sort of Yahoo. So I feel, I look at Zoom as Yahoo. So like, you know, Yahoo was like the breakthrough sort of web portal and search engine. And then it was disrupted by Google. And the main thing with Zoom is that I think it makes, at least I feel like it makes me look really ugly. And so I don't like to do the Zoom things. I think it makes my room, the room look ugly. It makes me look ugly. It's not a very good, it's quite kludgy. As a, that's a word we'd use in technology of like, it's a, it's not a super slick product experience. So I think there's room to disrupt Zoom. Maybe though, maybe it's the new VR. What do you think?

• 26:32Anthony Pompliano?

  I mean, it's possible, but I just think that I find it hard to believe that the first iteration of the solution for something that was such a shock, right? Like, everyone just scrambled and basically said, how do we do this? Solution one is Zoom. It wasn't necessarily a purpose built for this. And so, you know, you got to believe in kind of technological progress that there will be other iterations that are improvements off of this. Now, that could be from Zoom or could be from, you know, other companies. But it just feels like sitting and staring at each other on video while we like type on our computers probably isn't the solution if remote work ends up being the kind of standard, right?

• 27:13Speaker 01

  Yes, I'm inclined to agree with you on that.

• 27:16Anthony Pompliano?

  All right. Number five, serological test agreements, which sounds like it's out of a sci fi movie, but has got to probably be somewhat realistic at this point.

• 27:28Speaker 01

  Yeah, I think that one was generally in the right zone, but I think I got the specifics a little off. So rather than like an STA, and what I mean by STA is like just as you sign an NDA, when you have to walk into an office at a lot of companies, they have these digital NDAs you used to have to sign back when we walked into offices. I imagined a future in this five year timescale where you'd have to pledge that you had antibodies to the coronavirus or had recently tested negative to the coronavirus. I actually think that companies, not governments, are just going to scale up the rapid testing. Now that we have these rapid tests that you get results in five minutes, I actually just

• 28:10Speaker 01

  think that like you go to any workplace, you'll have to get a rapid test, you'll have to do a rapid test for energy. Like, you go to reception, you do a rapid test, you self administer it. Maybe, maybe you have to have a medical professional for the first few years overseeing the reception areas of these offices and workplaces. But I do think, certainly for me, before I'm ready to like host a big business event, or like have all of our portfolio companies come together for an offsite, I'm not doing that till I have rapid test results on myself and everyone else. Like, come on. So I do think that is going to be, that is going to be the future. And we're finally getting the testing capabilities are starting to come online to do that. And then ultimately,

• 28:55Speaker 01

  yeah, maybe it does transition to more of a serological test agreement, which is what I predicted.

• 29:01Anthony Pompliano?

  Yeah. One of the things I keep thinking through is just if this is persistent, what are the other changes to society that happen? So if you go back, like take New York real estate, for example, there was immense capital inflow from international investors in like the mid 2010s. Builders saw this. They all got super excited. They went and they started building a bunch of stuff. By the time they actually got the buildings built, there was more capital controls in Asia. A lot of that kind of capital flow got shut off. And now there's this overabundance of empty apartments all throughout New York. And it's just because by the time the demand actually, or also the supply got to the market, the demand had kind of dried up or at least lessened. And it feels like there's the possibility, to your point, even if this virus stays for another year to 18 months,

• 29:46Anthony Pompliano?

  people are making a lot of changes, whether it's to the way they work, to their locations, whatever it is. And by the time they actually get a lot of this implemented, we may be on the tail end of it. And therefore, it's kind of a lot of motion that ends up not actually leading to progress, because you almost got to revert back to the world, you know, pre coronavirus, right?

• 30:06Speaker 01

  Yeah. So your point being, a lot of these changes, it just ultimately just reverts back. So it's sort of pointless forward motion. Is that sort of the general point?

• 30:19Anthony Pompliano?

  Well, I think that you're basically trying to make permanent changes for what is probably a temporary problem. And so if you don't think of it as a temporary solution, you think of it as a permanent solution, you actually end up doing things that hurt you in the long run, because you basically reacted incorrectly, right? If it's only a temporary problem, then you should create a temporary solution, not a permanent type solution where, you know, let's say all of a sudden skyscrapers in New York started saying, you know what, we're actually gonna drastically change the way that the floors are laid out. And you can only, you know, now people have to go in and rent four floors rather than two because of the spacing. And then in 18 months, it goes back. Can you actually get back to the norm kind of as fast as you made the change? I just don't know.

• 31:01Speaker 01

  Right. Okay. So now I get what you're saying. So here's what I'd say on that. So I think there's a sense in which that's the exact right frame. And so I think there's a sense in which if

• 31:15Speaker 01

  There's a sense in which that's the right frame. And because I don't think it changes things in the way that people think it will change things. And so, and so it's sort of like, the obvious things that one, you know, that one would do, maybe, maybe don't make sense. So like, so it's sort of like if you were super long midtown Manhattan commercial real estate, it would sort of be an obvious move to try to liquidate your midtown Manhattan personal estate portfolio now, but then in practice, there are no buyers for that portfolio. And so it doesn't make sense to do that. You'd have to sell them for pennies on the doll, sell it for pennies on the dollar.

• 31:57Speaker 01

  So the obvious moves just financially don't, don't make, don't make sense to make right now. But then I do think there's a, I actually, I don't agree with you that it's, or I don't agree with the assertion that it's a temporary problem. Because I think that, what, I think that plagues, if you look, there's sometimes, there's certain moments in time where you actually have to really look back thousands and thousands of years and see how things have played out in historical context. And with plagues in particular, they really do change things. They change, even, they change who we are. And they, and they, and they change our, our nature as a, as a society. And if you look back as far as like the plague of Athens, which was an epidemic that devastated

• 32:40Speaker 01

  ancient Greece in like 430 B.C. And, and it was sort of came at this, in the midst of this Peloponnesian war. It led to sort of the fall of that empire. And, and there's a, there are all of these knock on effects. And second and third and fourth order effects of, of these, of these plagues that, that are only become clear retrospectively. And so I would imagine that a hundred years from now, again, people will be looking back and like, yeah, like sure, the coronavirus, like Manhattan, like yeah, people started working in midtown again and like that. But there's, there are all of these other ways in which, in which, in which it just

• 33:24Speaker 01

  You know, things just get really changed. So for example, um, you know, one, one way in which things get really changed in Manhattan specifically would be, um, you know, with, with the tax base flight out of New York, I don't know how, um, how they can, how, how the government's gonna be able to afford to maintain the, the cities really even at all. Or, and so, you know, maybe, maybe like, yep, there's still lots of skyscrapers in Midtown Manhattan, but they're all occupied by, by government agencies and sort of Albany extends to Manhattan and, uh, and sort of AOC's

• 34:01Speaker 01

  office is, is, is, is in the penthouse of the Empire State Building or something. I don't know, but I think, I think, I think things change. It's not the way we think they will.

• 34:11Anthony Pompliano?

  That would be epic. Uh, and I don't know if a good way or not. Um, but, uh, in terms of, uh, going back to technology world, uh, pro startup, anti big tech, that it's a very, very popular narrative today. I think you've said you can't really have that stance. Like those are contradictions to each other being pro startup and anti tech or anti big tech. How do you kind of settle that or balance that, that idea?

• 34:37Speaker 01

  Yeah. I mean, the, the whole idea of like what we do at Bedrock, what I do is we were investing in these super early companies. Sometimes it's just, um, a few, a few ladies in a, in a, in an apartment in Brooklyn where they're, where they're, where they're quarantined, uh, working on coding, something to get coding, something up. And, uh, and it's really just a bet on the people and, uh, and, and, and, and the idea and the, and the market opportunity. And implicit in doing that, you have to believe that it will one day be a big tech company. And so implicit in doing the early stage startup investing, uh, in order to, to have that be a profitable endeavor,

• 35:13Speaker 01

  um, one has to believe that some of the companies that you're investing in, when it's just a few, you know, uh, men, ladies, um, you know, uh, um, whatever, uh, for anyone who's identified, you know, their, their gender and a few people working together on something, um, uh, uh, when there's really nothing other than just their vision, them, their. Like raw abilities and a market opportunity and you're giving them, you're writing them a chat just based on that. You've got to believe like implicit that you you hope it one day will be a huge tech company. And so I find it like this very convenient, but like completely incoherent position. When I see technology investors who are just categorically like, we have to break up all the big tech companies.

• 35:57Speaker 01

  All the big tech companies are evil, but make their livings by investing in these early stage tech startups. Like that to me just seems like an incoherent position. And there actually are more than a few. Again, I don't view myself as a venture capitalist. I'm a, I'm an investor, you know, some people get to self identify as VCs. I just self identify as an investor. That's my personal identity and I'm, I'm weighing claim to that. But, uh, but, um, but certain VCs, uh, certain VCs out there are pretty vocal about the fact. They, they, they think all the big tech companies are evil and need to be government broken up by the government. But are, but are making their living off investing in startups and, and that feels very incoherent.

• 36:37Speaker 01

  Now that's not to say that some of the big tech companies have done bad things and deserve to pay a price for, for doing those things. But I don't think being categorically anti-big tech is a coherent, is a coherent position.

• 36:51Anthony Pompliano?

  Well, and it leads to this kind of thing that people forget, which is that every challenger or disruptor, if successful, becomes the man. Right? So I think that's kind of your point here and we're seeing this play out perfectly with Apple versus Fortnite. And Apple is, you know, they used to be the, the people in the garage, right? They were the ones who were going to go disrupt the, the tech world and, and kind of, um, the, the computer science and software world. Now everyone's pointing the finger saying you're the big bad person who's, you know, preventing me from running my business the way I want to run my business. And so how do you analyze Fortnite versus Apple?

• 37:31Anthony Pompliano?

  I know you've called Fortnite's, uh, thing, the, uh, the greatest corporate, um, propaganda ever. Uh, I tend to think when I saw it, that it was absolutely awesome that the way they kind of executed this whole thing. But, but talk a little bit just about that, that showdown between, you know, two really just heavyweights and, um, uh, over, uh, over the financial relationship that they have.

• 37:54Speaker 01

  Yeah, I mean, um, it, it is, uh, it's, uh,

• 38:00Speaker 01

  It was a brilliant move by Fortnite. You basically have this situation where you have Apple. You have Apple has been this just really important distribution channel for these companies, these games, these businesses. And the reality is that when you're generating the demand, as Fortnite's doing, when you're generating the demand,

• 38:34Speaker 01

  you're able to capture more of the value. And so there's this 30% tax that Fortnite has to pay Apple, that Epic has to pay Apple to have Fortnite on the App Store. And yet they're able to generate their demand for Fortnite via all these different paths. You know, they've got consoles, they've got other mobile devices, all sorts of ways people can engage with Fortnite. They are not completely path-dependent on iOS. And so there's a sense in which, you know, my partner Eric Stromberg has this, my partner at Bedrock has this great website, screenshotessays.com.

• 39:18Speaker 01

  And he would sort of, I think, term the App Store like it's becoming more of a dumb pipe for media companies like Epic, like Fortnite, because they just have the leverage to negotiate down the tax. They're not fully path-dependent on the App Store. And so, you know, as Eric says, Epic was the first to make a move here, but they're not going to be the last.

• 39:42Anthony Pompliano?

  Yeah. I also love the whole, it was such bait, right? It basically was like, let's negotiate, let's negotiate, let's negotiate. Okay, you're not going to cave. They just waited, and it's very obvious. They had the lawsuits ready, they had the marketing video ready. Like, everything was lined up, and they went ahead and they just said, we're going to do it anyways. And then, I didn't know this until recently, they actually sent an email to Apple saying, "We just did this." So they didn't even wait for Apple to go find it. Like, they basically, like, you know, said to them, you know, "We're putting the middle finger up." Apple took them off, and then that's when they kind of unleashed everything. And look, that's like, that's something you would have expected from Apple 30 years ago. Right? Like, that was a very Apple-esque move, not, you know, but today, they're just the man.

• 40:24Speaker 01

  Yeah, well, they're the man, they're the man acting like they're not the man, which is, which is, which is the right, the right way to do it in today's world.

• 40:34Anthony Pompliano?

  Absolutely. Solopreneur platforms, you've got a couple of tweets out there of these things just taking off, right, throughout the pandemic, kind of up 200% or more in many cases. We're talking about the Shopify's of the world, etc. Kind of how do you view that? Is that something that is a narrative violation and will kind of come back down to reality? Or is that a change that is likely to stay?

• 41:01Speaker 01

  I think that that is a new reality. So I think like, whereas before you would have opened up a, you know, you would have opened up a coffee shop or some, some sort of, you know, a comedy club or something like that in a city, these businesses are just going to be built online. And so the new way to build a small business is online, but different from, you know, that sort of platform dependency for these, for IRL SMBs, for like real world, small businesses, the platform dependency is basically on local government. So you sort of are dependent on local government, set of local government regulations to operate. So that is a platform dependency, to use tech jargon. And then

• 41:43Speaker 01

  you're dependent on like, you need a landlord if you have a physical space. So that's just sort of platform dependent on sort of real estate and energy infrastructure, you need sort of power and electric and, and, and that stuff. And now there's a new set of platform dependencies. If you're doing a Shopify store, or if you're doing a rolling fund, or if you're doing any of these new, or podcast business, there's sort of a new set of platform dependencies that you're, that you have as a solopreneur, whether that's, you know, Shopify, Plaid, Stripe, distribution for a podcast, you know, Spotify, App Store, whatever, like whatever you're, there's a set of platform dependencies. So I think the solopreneur thing

• 42:25Speaker 01

  Was always a trend. We just didn't call it solo. Being an entrepreneur, starting a small business as an individual or with with a loved one or with a friend. That's always been a thing. It's now just migrating very quickly to this this new set of platform dependencies online. And and I think what what you want to be very careful of is if you when you're going down one of these solo entrepreneur paths. Just be like thoughtful and strategic about what platform dependencies you have. And like Epic, like Fortnite, I ensure that you're not overly dependent on one platform for distribution. So like Fortnite was able to stick the middle finger up at Apple with this ad because they know that they can survive without the apps or distribution.

• 43:05Speaker 01

  You never want to make a threat unless you're actually willing to follow through on it. And so like they know they can survive without it. And so there's a lesson for every solopreneur from that Fortnite Fortnite's position where you never want to be too dependent on one of these platforms.

• 43:20Anthony Pompliano?

  Absolutely. And and do you feel like those platforms, they're the ones who kind of build greater and greater product suites? If you kind of look like a square, right? They've been able to build a whole suite of financial services versus maybe something like a Robin Hood just stay just in brokerage, right? And that's in the fintech world. But when you move to these platforms around these solopreneurs, will we see the Shopify's kind of build an entire product suite and kind of go full stack? Where somebody can just show up and just use Shopify and build out their entire business? Or will we see kind of multi-platform dependency? So I need Shopify, I need Stripe, I need Plaid. You know, I kind of need all of these different pieces to build my my platform rather than just I can go partner with one and just use that one platform.

• 44:04Speaker 01

  Yeah, I mean, I'm not sure. I I think the reality is that um it would be um it would be better for the well, it'd be more work and annoying for the solopreneurs to to have these different platforms after work. It's actually better for them because it you you don't have you're not giving any one platform like Shopify too much power. But in practice, I think what will happen is they'll all build out these full stack suites. And so you'll you will be able to just choose, yeah, I want Shopify for everything. You're doing an e-commerce storefront or like I or or one of the other options or I want Stripe or PayPal or whatever for for all of my my my payments rails and and all that. So I do think

• 44:45Speaker 01

  they increasingly end up just becoming directly competitive as they as they scale over over the next number of years. I mean, if you just think about like banks as an analog, like there are like lots and lots and lots and lots of banks in the United States with total assets, uh, you know, that are over a billion. There's like something like forty banks that have over a billion dollars in in total assets um in the in the United States and sort of um like, you know, like lots and lots of banks with multi-billion dollar uh market caps. And there should be lots of these enabling. Uh, and if you're a small business owner, you typically would only work with one bank. And so similarly, I think you would generally you'll have one of these platforms that you're more dependent on.

• 45:26Anthony Pompliano?

  Got it. What what areas are you guys looking at right now in terms of if there's entrepreneurs building uh in certain verticals you guys are uh would love to talk to them or or learn more?

• 45:36Speaker 01

  Yeah, I mean, it's it's it's it's always uh we're we're we're much more like we're we're much more just opportunistic. So we're we we feel like we're not really very good at coming up with ideas. So we tend to just be much more opportunistic and like to just see things in wherever. A few areas where we've been more active recently, I have been in in in uh the defense sector. I just given our view that um that global globally, things are becoming more unstable. It feels like there's more room for innovation in the in the defense sector uh and that we we sort of do need new new new technologies. There's that's an area that we've recently uh become become more active in. Uh, another one would be, uh, you know, we talked about uh one of my predictions resurgence of religiosity. So given I have, you know, we have a prediction there. People are sort of more

• 46:21Speaker 01

  interested in faith and meaning, trying to find it in new places. That's a theme that we're actively that we're actively pursuing. Um, and then we do actually think that these enabling infrastructure companies, you know, you have you have Shopify that help um sort of our, you know, you had this wave of um, you have this wave of like uh of um of uh of um. Of centralized sort of things, the centralized e-commerce thing with Amazon. There's a sense of what Shopify is the decentralized e-commerce thing. You know, there's sense in which Plaid is like enables, you know, any, any app to let you connect your bank account. I think these sort of core infrastructure type, type things, there's, there are more opportunities for that. So we're always interested in these new, new areas that are going to be core online infrastructure going forward.

• 47:07Anthony Pompliano?

  Got it. And then in terms of the current portfolio you have, you've got a bunch of businesses that end up appearing, at least from the outside, to be well positioned for a digital first world that we've moved to. So things like Lambda School in the education space or the athletic on the content side. Maybe talk whatever you can share in terms of like how the portfolio generally has been able to, to benefit from some of this shift as have many of the technology companies in the public sector, et cetera.

• 47:34Speaker 01

  Yeah, I mean, um, I would, I would actually sort of argue that, um, that, uh, that, uh, the, that, that some of the, the, the bigger positions, um, were maybe more exposed, more exposed to, to COVID risk than, uh, than, than, than I, than I would have loved. So, you know, for example, so for example, well, let's take the athletic. So you have a, you had a shutdown, the shutdown in sports. So right now we've got the NBA bubble, right? It's sort of, so it's a sports description media site. And then there's, there's no sports. And so, and so, so there's a sense in which like it is, um, uh, there's a sense in which, uh, that, that's not great for the athletic as a business when there's no, when there's no sports.

• 48:19Speaker 01

  So now all of that said, what I've been shocked by is how resilient that the companies have been, including the athletic. So like, you know, they've, they've, they've, they're still growing. You know, now you've got, you've got the, the, you've got the NBA bubble stuff is, is, is driving more coverage. And, and I do think sports are very much on track to come back and, and reopen, uh, more, more across the board. And so even that business has been quite, quite resilient. I mean, Lambda School, um, there's, there's sort of the sense in which it's like, um, There's it's like there's like gonna be there should be like unlimited demand for like a product that enables you to, you know, you don't have to spend anything upfront.

• 49:03Speaker 01

  Your your your risk is that you're putting in your time and they only succeed if they help you earn a lot more money, if they accelerate your income. So in theory, like if they can actually deliver on that promise, like to amass customer base, there shouldn't in theory be unlimited demand for that. Again, they still have a lot to prove, but in theory, it should be unlimited demand. And then there's this sense in which the one that I'm, the one that I'm actually, you know, the trend that I'm like most bullish on is I do think there are all of these like essential workers that have to work in the real world still and and do jobs for us, like the people who keep the power lines up.

• 49:46Speaker 01

  And and and those folks are actually really important and we it's easy to forget about them when everyone's locked at home on Zoom. And we have a company in our portfolio, Rigop, which is one of our largest investors, is a platform for those workers that matches them with jobs, provides them with a suite of services and benefits, sort of two sided labor marketplace for for for skilled trade workers, you know, renewable and renewables, construction, defense, energy, et cetera. And I'm very bullish on that area because I I do think somehow we we it's easy to forget about about all those folks. I think that plays a role for them as well.

• 50:26Anthony Pompliano?

  Yeah, that makes a ton of sense. And it feels like when you look at each individual business, I think your point about the resiliency, the one thing that as soon as this all started, I said to somebody that I don't think a lot of people outside of venture investing understood was like, these businesses are built in many cases to lose money for long periods of time. So in the non venture world, like going to zero revenue is absolutely catastrophic. Like you have no cash flow, you can't operate your business, you don't have big reserves, you know, small businesses, they have basically like three weeks of cash on average, all the stuff. Venture capital businesses are capitalized in a way where sometimes they're going, you know, 18, 24 months with burning the cash that they've raised.

• 51:08Anthony Pompliano?

  And so in some weird way, they were actually set up to withstand it a little bit better, right, structurally. But obviously, if if you cover sports and sports are gone, you know, that's not good either.

• 51:19Speaker 01

  Yeah, um, yeah. So there's, there's, I think in our portfolio, it's been a major accelerant for maybe 40% of the portfolio. It's been neutral for maybe, you know, maybe 30% of the portfolio, and then it's been pretty bad for maybe 30% of the portfolio, if I'm being honest.

• 51:39Anthony Pompliano?

  Yeah, I think that's a pretty, pretty fair distribution. All right. Any, any hot takes or last opinions in terms of where the world is going or things you're thinking about?

• 51:52Speaker 01

  Um, uh, the, um, the world's too dangerous for hot takes right now. It's my hot take.

• 52:01Anthony Pompliano?

  You're not wrong, my friend. You're not wrong. Where can people find you or find out more about Bedrock if they want to get in touch?

• 52:07Speaker 01

  Awesome. So I have this, you know, desperately trying to get subscribers for this nascent YouTube channel that I just launched a few weeks ago. Jeff Lewis TV, Jeff with a G, G E O F F on YouTube. Subscribe to me on YouTube. Follow me on Twitter, Just Glue, J U S T G L E W. Thanks so much for having me on, Pomp. Always a pleasure.

• 52:27Anthony Pompliano?

  What is on Jeff Lewis TV? I'm gonna, I'm gonna go tweet this as soon as we get done, but what is on Jeff?

• 52:32Speaker 01

  Dude, a bunch of my temperature checks. It's the new, I'm trying to make it one of the new distribution pipes. So we gotta get, and we're gonna be adding a lot more, a lot more interesting content. So we gotta get that, gotta get that out there. I appreciate any help you can offer.

• 52:47Anthony Pompliano?

  All right. We'll do it again in the future, Jeff. Thanks so much.

• 52:49Speaker 01

  Thanks. Bye.