Sam Hinkie, Boyd Varty, Charlie Songhurst - Trail Magic - [Invest Like the Best, EP.323]

Today’s episode is a little different. Rather than share a new conversation, I have put together a few of my favourites from the past six and a half years of doing this show. I often listen back to these for inspiration, energy, and their timeless ideas on life and investing. Each of these is a significantly shortened version of the original episode. The first conversation you’ll hear is with Sam Hinkie, the second discussion is with Boyd Varty, and the last conversation you’ll hear is with Charlie Songhurst. Sam, Boyd, and Charlie are all exceptional in their own way and I hope you enjoy these condensed versions of our conversations. Sam Hinkie - Find Your People Boyd Varty - The Art of Tracking Charlie Songhurst - Lessons from Investing in 483 Companies For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:04:40) - (Sam Hinkie) (00:05:55) - The most amazing thing he’s seen from someone he has worked with (00:09:51) - His interest in finding “digital breadcrumbs” on his pursuit of knowing a person (00:13:18) - The impactful story of meeting the assistant GM of the Houston Rockets (00:17:22) - Strategies he has developed to avoid transactional people (00:19:22) - How he shapes his career and optimizes from an investment perspective (00:24:06) - The strangest things he has come across in early-stage investing (00:29:47) - (Boyd Varty) (00:33:04) - His early experiences with tracking wildlife and how it applies to investing (00:44:46) - What can be learned about life goals and paths from the experience of tracking (00:47:59) - The influence of culture on decision-making and goal-setting (00:50:39) - His concept of “the ordering of chaos on behalf of others” (00:54:41) - The importance of moving towards the unknown to start approaching goals (00:57:15) - His most memorable tracking experience (01:12:40) - (Charlie Songhurst) (01:15:10) - His diverse career highlights (01:16:29) - His analysis of why startups succeed or fail (01:21:21) - What founders can learn to enable and maintain productivity in their company (01:25:21) - Nature versus nurture as it applies to adept founders, and the controversial “alien founder” concept (01:30:10) - The importance of good recruiting from an early stage (01:33:32) - How founders can make their companies attractive to prospective talent (01:35:53) - Why he is interested in investing in highly boring and highly complex ideas

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

• 0:00Patrick O'Shaughnessy?

  I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount and more risk. RidgeLine offers a better way forward. One unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. RidgeLine is revolutionizing investment management, helping ambitious firms scale faster, operate smarter, and stay ahead of the curve. See what RidgeLine can unlock for your firm. Schedule a demo at ridgeline.ai. This episode is brought to you by Tegus, the modern research platform for leading investors. I'm a longtime user and advocate of Tegus, a company that I've been so consistently impressed

• 0:42Patrick O'Shaughnessy?

  with that last fall, my firm, Positive Sum, invested $20 million to support Tegus's mission to expand its product ecosystem to unify and streamline investor research processes. In addition to the library of 55,000 transcripts, Tegus now combines at-cost, on-demand calls with a full suite of financial workflows. Whether it's quantitative analysis, company disclosures, management presentations, earnings calls, Tegus has tools for every step of your investment research. They even have over 4,000 fully drivable financial models. Tegus's maniacal focus on quality as well as its depth, breadth, and recency of content makes it the one-stop end-to-end research platform for investors. Move faster, gather deep research to build conviction, and surface high-quality alpha-driving

• 1:26Patrick O'Shaughnessy?

  insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick. Before we transition to the episode, I want to highlight the Founders Podcast, which is part of our Colossus Network. David Senra, who hosts Founders, has devoted his life to learning from history's greatest entrepreneurs, and every week he distills the lessons of a different founder. If you want an entry point, I highly recommend starting with episode 136 on Estee Lauder or episode 288 on Ralph Lauren. I hosted David on Invest Like the Best last summer, and it's hard not to walk away insanely energized after listening to any episode with him. You can find a link to Founders and those episodes in the show notes of this conversation.

• 2:08Patrick O'Shaughnessy?

  You can also search all past transcripts on our website, joincolossus.com.

• 2:16Patrick O'Shaughnessy?

  Hello and welcome, everyone. I'm Patrick O'Neal and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolossus.com.

• 2:41Speaker 02

  Patrick O'Neal is the CEO and founding partner of Positive Sum and the CEO of O'Neal Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum or O'Neal Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum or O'Neal Asset Management may maintain positions in the securities discussed in this podcast.

• 3:13Patrick O'Shaughnessy?

  Hello, everyone. Today's episode is a little different. Rather than share a new conversation, I have put together a few of my favorites from the past six and a half years of doing this show. I often listen back to these for inspiration, energy, and their timeless ideas on life and investing. Internally, we call these forever episodes because they'll likely still be as relevant and popular a decade from now as they were when they first aired. Each of these is a significantly shortened version of the original episode. The first conversation we'll hear is with Sam Hinkie. Sam worked for more than a decade in the NBA, helping pioneer the use of data and analytics, originally with the Houston Rockets and finishing off as the GM of the Philadelphia 76ers. In life after basketball, Sam has launched his own venture capital fund, 87 Capital. Sam's

• 3:56Patrick O'Shaughnessy?

  approach to everything is about finding great people, and he has taught me more about that topic than just about anybody else. The second discussion is with Boyd Varty. My original conversation with Boyd way back in 2017 had a huge impact on me, and I'm sure you'll hear why. He grew up in the South African wilderness, living amongst and tracking wild leopards. He talks about the art of tracking and how the same strategy for pursuing animals in the wild can be applied to all aspects of our lives. Rather than following well-trodden paths, we should all explore and look for original experiences. Listen for it because he might still have the best answer I've ever heard on the podcast. The last conversation you'll hear is with Charlie Songhurst. Charlie is the former head of strategy at Microsoft and a prolific investor, having personally invested in nearly 500 companies through his career.

• 4:41Patrick O'Shaughnessy?

  Within one minute of meeting Charlie, you can tell that his mind is sparkling with ideas and curiosity. It's no wonder he was among the most commonly requested guests. Charlie would always come up when I asked top investors and CEOs who I should have on the show, and he often still comes up as people's favorite guest. Sam, Boyd, and Charlie are all exceptional in their own way, and I hope you enjoy these condensed versions of our conversations. You'll find links to the full original episodes in the show notes. Enjoy and please share them with friends and loved ones who you think will benefit from these great and original thinkers.

• 5:14Patrick O'Shaughnessy?

  I think one of the things we agree on is that you kind of keep digging on anything and you ultimately come back to people, that people drive just about everything. And I know at the Rockets, you told me before, that if you weren't spending your time on finding a great player or finding a great personnel or staff member to join you in the center office, you're kind of annoyed. So talk about how back then, you shaped your life so that it was always as focused on people as humanly possible.

• 5:41Speaker 03

  I'm a deep believer that people are a power law too. Whether you're running a small company or whether you're running a big company, like your ability to attract the best in the world, I think is so incredible. Even right now, like one of the things I sort of watch the most closely, sort of deal in politics at all, but what I watch the most closely is how welcoming are we to the best in the world to come here and do the thing as a country? I think that's terribly important. Awesome people bring you more awesome people. They compound over time. They sharpen your own thinking and they materially add to what it is you're trying to do. I've yet to find advantages that overwhelm that. I'll give you one example. Sometimes I say this and it gets me in trouble, but I believe it. I think I care about the value of recruiting more than almost anyone I know.

• 6:26Speaker 03

  I think getting in amazing people at the start, in the middle, at the end, all the way through, having an ever-raising bar that someone has to clear, it's not quite everything, but often it's close.

• 6:39Patrick O'Shaughnessy?

  What's the most amazing thing that stands out in memory that you've seen somebody do in the first couple of months of either working with them or having invested with them?

• 6:47Speaker 03

  So maybe this is a strange story, but it's one that comes to mind. When I was in Houston at the Rockets, we traded for James Harden and he was 20. Two, almost, maybe he's 23 years old and we traded for him three days before the regular season. He came in, our team had sort of been somewhat gutted to get him at the time. And so he came in and I went to the very first practice and he was sort of lacing his shoes up and so were the other guys and he had met everyone, he'd met them hours before. The coach like blows the whistle and was like, hey, you know, it's time to get going, everyone come down here. All the players get together and coach gives his little thing for a minute. Here's what we're gonna do. Here's the first station we're going to, et cetera. And everybody goes to put their hands in and James says, tuck

• 7:29Speaker 03

  your shirts in and tucks his in. And 14 players tucked their shirt in. And from that moment forward, it was like the new alpha is here in a whole bunch of ways. And at the time you're thinking, I hope we can back it up and I hope this goes well and I hope he's gonna be amazing. And you're not sure. There was a little bit of uncertainty, think of it like a sort of a power vacuum, a little bit of uncertainty that lasted for about 45 seconds. And at the end of that, it was like a signal sent that there's a new way to do things and I have ideas about what those would look like. Quite forcefully said, do it. Maybe that's where he's cute in hindsight because James has turned out to be an amazing player. But that combined with, he balled out his first game and the next night he

• 8:12Speaker 03

  went for like 45. That combined with amazing performance out of the gate was not hard to imagine. You were on a new trajectory.

• 8:20Patrick O'Shaughnessy?

  It reminds me of the episode in that incredible Jordan documentary when they play the Olympic pickup game and he sort of bests Magic's team and there's this incredible tension and Magic relieves it in the bus, basically handing the alpha crown over to Jordan. What are the different brands of leadership that you saw and learned from in sports at either the executive, central office level, coaching level, or player level that you still carry with you?

• 8:47Speaker 03

  The way I think about coaching is very much how I think about parenting. And I think translates in lots of other places, that your ability to drive change is about the quality of your relationship, not your hierarchy. We used to talk about this with our kids. When your kids are two years old, you're like, don't do this, do this. You're hopefully a benevolent dictator, but there's a bunch of rules. Don't touch the stove. Don't put that in your mouth. They have to listen. If they don't, there are draconian consequences. Now draw some line out in the future. They're 25. How much authority do you have over them? Not that much. You can guilt them into some things. Maybe if you're still supporting them in one way or another, there's some ramifications for their behavior.

• 9:29Speaker 03

  But most of your ability to influence them, which isn't that what we all want, is to be able to influence the people we care about, particularly for their own good, is about the quality of the relationship you've built up over time. I think about it that you're sort of pouring yourselves into people you care about so that they will call down the line when they don't have to do what you say at all. When they're their own people, but they still respect your opinion and think, he might be able to help. Coach might be able to help me in this situation. Dad might be able to help me in this situation. I think that notion is critical. I tell founders this all the time. Sorry, you might be working for the CTO. The CTO might be the most valuable person here. She might be. And if you don't know that, better to get your head around it quick because she leaves,

• 10:13Speaker 03

  this all falls apart. Your ability to sort of influence her and influence her towards the kind of vectors you want the company to go towards is going to be everything. So start investing in the quality of that relationship right now. It's never too late, but you better get going.

• 10:26Patrick O'Shaughnessy?

  One of the coolest things that you and I have discussed often about the modern world is that many times we can run this process of feeling your way to the bottom of someone's experience or thinking without actually having to talk to them. You're able to follow breadcrumbs, digital breadcrumbs, we'll call them, whether they intended to leave it behind or it was sort of a natural course of their behavior. Can you talk about what your interest is in digital breadcrumbs and how you use them?

• 10:49Speaker 03

  If I can't find breadcrumbs sort of in the wider world, I'll often ask them for them. I'll often ask people like, send me an awesome book or send me something cool to read or send me something really influential to you or send me something you've written. So I end up reading lots of. Senior theses from college, or old things they wrote, or old posts, or one of the recent investments I made is in a company I'm really excited about, obviously, just happened a few months ago, called scoutapp.ai. And I got deep into the founders there, deep. I'm watching videos of their parents talk about their life journey. I'm reading the Medium posts of one of the founders over the last several years and reading all of his Medium highlights. And it's not hard to say, like, in this case, his name is Trey. If Trey's thinking about

• 11:32Speaker 03

  this topic at this age, and this topic at this age, and is deeply curious about this, and sort of gave the clap on Medium for this, that this was interesting, and his GitHub repository looks like this, that's all super interesting. Likewise, one of the other founders, he had been producing these YouTube videos for the last seven or eight years, going through one thing after another, showing how he's doing his own thinking. And so you could see him at a very early age, he's quite young, you could see him at a very early age criticizing the larger system and thinking about what his expectations were and how that matched. I often think of it the other way. If you wanted to understand me better, I'm 42. If you went back, call it for the last 30 years until I was 12, and just found one person

• 12:15Speaker 03

  per year, and talked to them about me, and asked them a set of questions, that's all me. The middle of that distribution is me. You'd find a hater, you should discount that. You'd probably find my mom, you should discount that. She'd be too nice. Everybody else would be like, oh, Sam is awesome at this, and sucks at this, and is frustrating at this, and is amazing at this, and we love him for this. True, true, true. That's roughly true. And I've changed plenty, but the sum total of all that is useful. And so, to the extent people have written blogs, or posted things on Twitter, or created some artifact that I think of, they've sort of buried in time, that I can go find, that's often amazing, because you get a chance to see people over a long period of time. Doesn't mean you agree

• 12:58Speaker 03

  with all their ideas. No one would have agreed with all my ideas when I was 25 or 35. We all change a lot, but you see sort of where they are, and you can kind of watch them grow throughout it. My favorite version, by far, is when you find someone on Twitter or something you like, and then you realize they have a blog. And you'll find the blog and you're like, oh my God, it's like a diamond mine, the whole thing. This is the first time I, when I found Patrick McKenzie's blog, I was like, what? I have to read all of these. I've known him enough on Twitter to know I respect the way he thinks. I love the way he writes. And so I have to read all of these, then I have a new problem. How do I read all these? What order should I read them in? Where should I start? Who knows more about his essays than I do? I felt the same way when I found sort of Paul Graham's stuff. I need to get into the good stuff as fast as possible.

• 13:41Speaker 03

  And I will probably read it all, but in case I don't, I want to make sure I've read all the good stuff, even if I only read two thirds or three quarters. I want to make sure I got 95% of the value, even if I did, only did 80% of the work.

• 13:52Patrick O'Shaughnessy?

  There's an example you've told me before that I'd love you to recount here of how you first came across the person who I believe now is the assistant GM still at the Rockets back in your sports days. Cause I think it's a great example of this breadcrumb concept. And I'm kind of harping on this because I just think it's like a strategy that's mispriced. I don't really know many people that do enough of this. It's typically not the way that people or deals or investments are approached. I think the world is making it more and more valuable to do this. So could you tell us that story?

• 14:21Speaker 03

  The assistant GM of the Rockets right now is Eli Whiters, who I got to know in must have been 2008. At the time, he had just started a blog, but prior to that, there had been a sort of a message board, an open forum where people would post all sorts of interesting analysis. Back then it was called APBR metrics. It was the way in which people communicated, sort of think of it like hacker news or something today, in this space at the time. And there was a prolific poster who was quite good under a pen name. And after a while, it became clear that that person sort of doxed themselves. Think of it like someone like Slate Star Codex or something where Eli said, you know what? I'll go ahead and say that was me. That was me that's been doing it all this time. It's like, oh, that's interesting because there's this trove of information. It's him. And then at the same time, he started this blog and the first blog post for years, I've told people,

• 15:05Speaker 03

  I tell people now, if you see something awesome, send it to me. I'd love to read it. He has his first blog post and by the end of the first day, four or five people sent it to me and it's amazing work. And I'm like, oh, that's wild. And I'd heard a little bit about him from another friend of mine. And I was like, oh, that's super interesting. A week or two passes and there's another blog post and by noon, four or five people have sent it to me. And I'm like, oh my gosh, this is massively good. And the primitives you would have to understand to do this kind of work, not to mention alone, are massive. Another week or two passes and here comes another blog post. And by now I've got it like hooked into an RSS feeder back then. I read it quickly and I just printed it out and walked down to Daryl Morey's office. And I said, I'm about to hire this guy. I haven't met him yet, but I'm about to hire him today. And he said, why? And I printed off what he had done and he said, I get it. Let me know how it goes.

• 15:50Speaker 03

  The truth is, we did real interviewing and we spent a bunch of time with him over many, many weeks to try to understand him better. We did hire him based on that. I like processes where you hire people where you run a tournament, where there's an actual tournament, but he was a number one seed in the tournament. To be clear, based on his prior record and that that was massively influential for how we would think about him. So because of the amazing amount of work he had done, it was clear to us that we needed a couple of things to happen. One, we needed him to join forces with us. And two, we needed him to stop leaking this stuff out to the internet. He was bleeding away, small amounts of competitive edge for us. That was a half percent here, 1% there. It wasn't huge, but I didn't have great confidence that he wouldn't leak out 10% of it in one big post. That might only be 10 more days away. He's been now, what is it?

• 16:36Speaker 03

  2020, he's been at the Rockets now 12 years and he's done amazing work there. But much of that was on the backs of his early writing where he could show what he knew. He didn't have to say, oh, I learned fast. It was obvious he learned fast. He didn't have to say, oh, I'm hyper passionate about this. It was obvious he was.

• 16:52Patrick O'Shaughnessy?

  You've told me this story before, but I've never actually then asked, what was he writing about? That post one, two, three, whichever one really stood out in memory. What was he writing about and what was so impressive about it?

• 17:03Speaker 03

  Things that were mispriced in basketball at the time. How to think about shot location data? How to think about defense at large? These were the kinds of things that even back then that were wildly misunderstood. One obvious example is if you get an open three on the wing and no one's within 10 feet of you and you make it, well, fine, we should give you some credit, but it's not that hard a shot. You're pretty open. We should probably give the passer and the coach and the screener a bunch of credit. We should probably dock the defender. If you've hit an amazing shot, call it Kyrie Irving at the end of game six or game seven, I guess. An amazing shot that's quite difficult, you should get an amazing amount of credit for that. There's some luck in that, but there's a ton of skill in that, too. Those were the kinds of things that he was adjusting.

• 17:44Speaker 03

  But to do that, you had to have an underlying set of data that was quite robust at the time. And then the skills and abilities and sort of at that time, industry know-how to be able to build on top of them.

• 17:56Patrick O'Shaughnessy?

  What are the best ways that you've learned to avoid transactional type people?

• 18:01Speaker 03

  Slow down, slow down in a whole bunch of ways. Drives transactional people nuts. Fine with me. I'm trying to learn that. I'm trying to learn that. So you read a book, I'll read a book. You don't read a book? Cool. You read a book, I'll read a book. We don't have time to read a book. You gotta know by Friday? No problem. I'm out. I'm out.

• 18:17Patrick O'Shaughnessy?

  You did this to me.

• 18:18Speaker 03

  Yeah, yeah, for sure. I'm accused of being on occasion, you know, heartless or a data wonk or ruthless. And to be clear, I can be in a bunch of ways. I am super big hearted for the people in my drive. It matters a lot to me, but shouldn't there be a high bar for who you trust? If you trust them, shouldn't you be trying to play a more infinite game where everyone trusts each other more and more? And you're trying to compound that trust over time? The very notion of that, a lot of people are uninterested in. No problem. That's totally fine with me. But yeah, I would say slowing down is a common technique.

• 18:53Patrick O'Shaughnessy?

  What was the thing that you did along the path ultimately to a GM job? That increased your odds of ultimately getting one of those jobs the most? Where did you pick up the most probability points on that journey?

• 19:05Speaker 03

  Thought hard about what other people are trying to accomplish. And I tried to shape my language in a way they could hear it. That's half of what I talk to founders about. It's just that, how to build the API to the other person's brain. Doesn't matter what you say, it matters what they hear and it matters how they feel. That's not a way to manipulate someone. It's a way to deeply understand their set of problems. And to the extent you have edge, and you won't always, to the extent you have edge, define it clearly in a way that aligns their incentives with that solution. That's mostly it. All of the people that I talked to along the way that gave me more and more scope,

• 19:48Speaker 03

  more and more leash to be me and to lean into the kinds of things I want to do. Almost all of those conversations started just that way.

• 19:56Patrick O'Shaughnessy?

  How have you thought about shaping, I'll call it the game? You're in a new game now, and I think your interest is in spending as much time as humanly possible with the sort of exceptional people that we've outlined in a number of different ways. But that's hard work. Like, there's a lot of people out there. You gotta kiss a lot of frogs typically in a process like this. You mentioned 500 deals down to maybe five investments, something like this. How do you think about designing the game itself into which you are now placing yourself for the next big chapter of your career? What are you optimizing for? What are the rules of that game that you're trying to make different than the normal way things are done that you observed in the venture ecosystem when you stepped into it?

• 20:35Speaker 03

  For sure, the way I thought about it was, could you design a world where you could spend nearly all your time with amazing people? That's one. And where you could get leverage on seeing around the bend a little bit? That mattered to me. And where patience and temperament are rewarded. All three of those things mattered, but they matter because I believe those are areas to spend time in, and they're areas I enjoy spending time in, that I sort of take energy from. So, I love being around incredible people. That ought to be obvious. I'm a sucker for the old sort of Netflix parlance of stunning colleagues. I thought about, could you design something where 70% or 80% or 90% of your time were just those people? By the way, at 87 Capital, I can very much do that, in that anyone I hire into the firm

• 21:17Speaker 03

  is a part of that, and any entrepreneur I choose to spend time with is a part of that, and any entrepreneur that I pledge to spend bukus of time with, I chose. So, if I chose them poorly, shame on me. I get to decide if they're stunning colleagues that take up my Tuesday or not. Secondly, I think in decades by nature. Like, where's this thing going? What are people thinking about? What are the second and third order effects to this shift that we're seeing here? And I want there to be leverage on that kind of thinking. Not momentum trading for this week versus next, but leverage on trying to see around the bend. And then lastly, some of this is a, we call a personality quirk, I think, which is, I'm super steady, sometimes annoyingly so. I'm hard to fire up. I don't mind being alone, in my opinion, for a very long time.

• 22:00Speaker 03

  Can you get to a place where that kind of steady temperament is rewarded? And build an ecosystem with that kind of trust? Where people say, yes, we too believe in this kind of approach. And that we can first slowly and over time with more and more leverage, turn this wheel that generates the things that you're interested in. And then for me personally, it's quite easy to sort of design a vehicle like this, because the things I'm actually after, I'm trying to compound wisdom and trust. And try to figure out life better and try to figure out business because I'm deeply curious about it. And to try to understand how to compound trust with a very small set of people, very small, meaning hundreds, not thousands.

• 22:43Speaker 03

  And how to sort of compound trust with them over a very long period of time? Because I think that builds a snowball that is amazing. And one that's, to be clear, deeply fun for me. One quick story I'll tell you on that. Mark Andreessen has this line that I love, that sometimes he says, he's like looking at his phone and people are annoyed. And he's like, of course I'm looking at my phone. The best of seven billion people on the planet. This is the best they can muster. So yeah, it's interesting. I'm looking at it. I would say I'm kind of like that, but different. I told you, you know, we sit in a meeting like I'm into you, fully into you. I'm not looking at my phone at all, for sure. My phone is filled with people in my life that I've invested in over a long period of time. And invested in with a lowercase i. These are my friends and people that I care about. Some of these people I've spent 15 years with, some of them 15 months with.

• 23:28Speaker 03

  And they're sending me awesome stuff. They found a read, they're telling me incredible insights they've come across. It's a freaking treasure trove. When I wake up in the morning, I'm so excited to look at my texts, which is maybe not super healthy, but I am because for someone like me that likes being dependable, for those folks in your tribe, it's intoxicating. Here is said person that I love, that I chose, that I very much led into my life, eight years ago or eight weeks ago. And here they are with a real question. They're not asking me piddly stuff. They call me with big stuff. And say, I'm thinking about this. What do you think? This just happened. What should I do? Here's my approach. Please beat it up. I'd love that.

• 24:10Speaker 03

  That only came from the way I've tried to live my life for several decades now, which is to really pour into a, again, a relatively small set of people. I often sort of think about is like fewer, deeper relationships. I very much want that. I don't have any need to run an organization with tens of thousands of employees, because I very much think about it in my mind's eye, the 10 or 20 or 50 that I spend the most time with and that I sort of get the most energy from and that, that honestly are the most rewarding personally for me.

• 24:40Patrick O'Shaughnessy?

  What are the strangest things that you've seen thus far in your time really focused on? Early-stage investing? Extra points for things which just persist, but seem crazy to you on the investor or founder's side?

• 24:54Speaker 03

  Of course, I believe the way I'm going about this has some inherent edge, even if small, that has some inherent edge in it, which is why I'm doing it. That I think I see the world in a certain way that will persist and will compound over time. I say that, that's my like intro to say, the notion that in seven or eight minutes, you'd say with a founder, that's it. I'm done. I got you. I want to do this. I find very strange. By the way, I might in those first seven or eight minutes say, this is amazing. I really like her. She is wicked smart. I'd like to learn more. I don't say I'm done. And that race, I find a little strange that others think about it that way. Now, maybe to the extent, maybe if something comes along that's very much in my wheelhouse

• 25:39Speaker 03

  that I've looked at not two companies, but 50 companies, and I'm looking for it to be a certain way, maybe I'll be that aggressive too on something when I meet someone with a unique approach that I've been looking for. But I think it will be rare. And I much prefer the sort of getting to know someone. Doesn't have to be months and months, although that's ideal. Years and years is even more ideal. But the notion that 10 minutes in, you turn your brain off. I think people do that in interviewing, I think is a huge mistake. Huge mistake that you ask a set of open-ended questions and make a set of unconscious judgments two minutes in and call it a day. That's how we end up with some of the silliness that we do sometimes in hiring, where a bunch of unconscious biases creep in.

• 26:21Patrick O'Shaughnessy?

  I want to finish the conversation, basically where we started, which is with this idea of breadcrumbs. One of the reasons that I love doing this podcast, especially with friends like you, is that these are breadcrumbs, right? We're putting something out for hopefully founders out there to listen to and be attracted to a certain set of attributes, which are different and distinct and unique, and that's a very cool thing. I think what you've highlighted for us today is how powerful those things can be planned or unplanned to create the right kind of serendipity in someone's trajectory. How would you suggest people listening to this that want us to throw out some of their own breadcrumbs begin to think about doing that?

• 26:59Speaker 03

  Write, write and put your thoughts out, particularly if you're proud of them, particularly if you want to make them better. This is something I really only come to understand, I think, in the last several years, last couple of years, which is the returns to writing well and the returns to getting better and better at writing. I love the way, I'm a Stripe fan in a whole bunch of ways and their business and their founders and all of that. I love the way Patrick talks about that they're in some ways kind of writing to the unborn employees at Stripe. You can have a meeting and you can have an all hands meeting and Stripe must have 2,500 employees, maybe 3,000 employees these days. They could do an all hands Zoom meeting and it would capture all those. What do you do about the 3,001st employee? What do you do about the 6,000th employee? What do you do about the 30,000th employee?

• 27:44Speaker 03

  And one of the ways to do that is to write, is to write down what you were thinking at the time, to write down where you thought the thing should go, to write down why you made the decision you did, so that someone that starts on the job next week or next decade could learn from it in a way that is useful. I'm a, most of the writing I do is sort of among my friend group and I share things I've written and documents and things with a small set of friends around me. I don't do a whole lot of that publicly to date. I just think it's terribly critical as a way to sort of put your mark in the sand about what it is that you believe. And by the way, people may not agree with you, you may get criticized massively about it, but over time it ends up being a selling point where many people will sort of come your way if they resonate with it in one way or another.

• 28:27Patrick O'Shaughnessy?

  You just made me connect two dots, which is so interesting. A friend of mine and the CEO of a company called Bottomless, in which I'm an investor, has this idea that the internet is the space of infinite possible actions. And that a lot of what's so magical about technology and software is making stuff that was not readable to software, legible to software. Basically, what you're describing is a human making themselves legible to the internet. When you do that, weird, cool stuff just starts to happen.

• 28:56Speaker 03

  Your people find you. I'm smitten by all these examples. Imagine being Charlie Munger and meeting Warren Buffett over dinner. And it's like, yeah, of course they were rude to everybody for 90 minutes. Of course, they ignored everyone. Of course, they got deeper and deeper into a private conversation in the middle of a large dinner. I don't want to overdo it. Soulmates or something, but close intellectual sparring partners that in some crazy world, both worked for whatever Warren's grandfather or vice versa, however it works. You come across this person and you can't find the bottom. And you're like, oh, my gosh. I don't know if either one of them went home that night and said, I want to call this person every day for the rest of my life. But it's believable that they would.

• 29:40Speaker 03

  And it's believable that they would say, finally, there's someone else out there that I can shadow box with and pressure test my thinking with. It's surely been an amazing feeling in my life when I've come across those people. And of course, there are not hundreds of them, but dozens of them or more. It's an awesome feeling.

• 29:56Patrick O'Shaughnessy?

  I think it's such a wonderful place to close this awesome conversation. I sometimes think about what will I title these things as I'm having the conversation? And this one might be called Find Your People. Everything you've done, the way you've architected the conversation and your activity has been to find the right people and develop incredible relationships with them. So I think it's a wonderful place to close. Sam, as always, thank you so much for the time and a great conversation.

• 30:18Speaker 03

  Thanks, Patrick.

• 30:21Speaker 04

  Maybe a really fun place to start would be, there's a story in your book about an experience with your dad with a black mamba.

• 30:29Speaker 05

  Yeah.

• 30:29Speaker 04

  To give people a sense for what your childhood was like, and then we'll use that as a springboard for everything else we'll talk about.

• 30:35Speaker 05

  When I was about nine years old, I went to hunt an impala with my father. And we had sussed out the terrain and the land sort of fell away. And there was a termite mound, which would have been, which was a perfect position for us. And so we creeped up onto the termite mound and we were laying with our chests on it and our legs sort of, and the mound kind of rose up. So we were leaning up against it. And I looked over the top of the mound and down the clearing, I could see the impala. And I was waiting for the shot. And eventually it presented itself and I took the shot. And as I took the shot, the herd kind of scattered, but they didn't run away. They scattered and then they stopped, which sometimes they do when they get a little bit stunned. And so my father said to me, just keep looking through the sight and see if you can just be certain that that impala's gone down.

• 31:20Speaker 05

  And so we're lying there and I'm looking through the sight and I just felt this movement on my leg. And I remember like just taking my eye away from the scope and just peering down. And immediately I saw this coffin shaped head and moving over the back of my leg was about a two and a half, three meter black mamba. And I knew snakes, I was passionate about snakes as a kid. So I immediately knew this is as bad as it gets. If it bites you, you know, it's a couple of minutes and you just, you're gone. So I grabbed my dad, I said to him, oh shit dad, there's a mamba. So he starts looking around, like, like where, like it's somewhere around us. And I said to him, no, it's on us, look down. Then he looks down and I felt him start to shake and I knew we mustn't move.

• 32:04Speaker 05

  So I said to him, don't move, do not move. So we stayed there really still and it just perused all over us. And then at one point it turned and it started like coming up the mound towards where our sort of heads were. And I thought, God, if it gets like up around the face, that's going to be a little bit too much. And I look over at my dad and I can see blood coming out of his mouth. And he has bitten the inside of his cheek with so much tension that he's bitten a cut clean into it. And then the snake turned and it started to move away from us. And I remember the way that the mound was shaped, there was... The sort of direction to go directly away from the snake had a thick buffalo thorn that had kind of scraggled over the side of the mound. So we watched it get away and its tail was still on my foot and my dad grabbed me and said, "Let's go."

• 32:49Speaker 05

  And he pulled me and I remember he tucked me in behind him and he put his head down and he ran through this buffalo thorn. And when we came out the other side, he had a piece of the thorn and the branch broken off like in his head, it looked like an antler across his face and thorns in his jacket and blood coming out of his mouth. And I was completely unharmed because I had been behind him and we got away and we stopped and I remember he just hugged me. And then my sister, who had been waiting for us in a vehicle, we like walked up. She said, "What the hell happened to you?" Both of us were completely white. And then we got home and I thought I would tell my uncle about it. I said to him, "You know, I had this crazy experience. He was a wildlife documentary filmmaker. I was hoping to get some sympathy." And the only thing I got was, "Did you manage to film it?" I was like, "Come on."

• 33:33Speaker 04

  A little bit different experience than, you know, my Saturdays, go to a soccer game or something like that. Can we go back a bit to your early experiences with tracking? So in reading your book and thinking about this conversation ahead of time, this was the topic that I was most excited for because I think it's the most pervasive. And actually, I think it applies very directly to investing. And what I would say, the overarching truth is, is that anytime you're trying to do something via a playbook or a pre-written set of rules, you're toast. Emerson has this great line that I have pasted, I pasted up quotes places to remind me. And this one is maybe a top five one, which is simple. It's that imitation is suicide.

• 34:17Speaker 04

  That if you are trying to just do what made someone else successful, maybe you'll have some nominal success from the external standpoint, but you won't really do anything interesting or maybe true. So the idea of tracking is, I think, one that we can explore. And I'd love to hear the early stages of this. I don't know how old you were, who you were with, how you learned. Can you learn? Can you even teach tracking or do you just have to kind of watch it and do it yourself? Let's jump off from your early experiences.

• 34:46Speaker 05

  Yeah, I mean, tracking is really the thing that has become central to me now. And I think of myself as trying to live as a tracker, trying to step away from actually following the footprints of animals and apply those principles to my life for sure. So I got introduced to it at a young age. And there were, there were two brothers, and then they had some half-brothers who grew up south of Londo Lozi, their names were the Mchlongos. And my uncle was very close with this man called Almon Mchlongo. And Almon was a true naturalist. He had grown up hunting and gathering, and he had, from a young age, fed himself off the land. He knew where to get water. He knew how to get a warthog out of a hole. He knew how to rob a beehive.

• 35:31Speaker 05

  He knew how to find a mokabe. I mean, just an incredible naturalist. And so my early experiences were with him because I used to go out every morning. Four AM, my uncle would wake me. We would get in the Land Rover, we would go out, and we would go and track leopards at that stage because he was a documentary filmmaker. So my first experiences were with Almon. And what struck me was this kind of openness with which he approached every morning. There was a paradoxical openness because he wanted to find a leopard. But in order to do that, he had to drop the idea of finding a leopard and work with what was presented to him, work with the track, work with an alarm call, work with some birds calling.

• 36:10Speaker 05

  And so he was, it was this weird state of incredible rigorous dedication and yet complete fluidity and openness. And that was very formative. And then when I was, when I was about nineteen, I had sort of this introduction to tracking and I, and I had a sense of it, but I wanted to take it to the next level. And then I spent a year with this well-known local bush poacher. He was, he was, the reason I wanted to be with him is because he had some of these old-school skills, and he had fed himself off the land for years. And so I spent time with him, and that was, that was my tracking when it took a huge step forward because he would put me in the front and he would, he wouldn't help me. He would say, go.

• 36:52Speaker 05

  And sometimes it would be days and days of, you know. Losing the track, going back, and he would just look at me. And I would say to him, okay, can you just give me the next track? And then, no, work for it. And then I'd walk tight circles for a while, and eventually I would get it. And then occasionally, he would track, and I would drop into his rhythm and get a sense of the process. Because some of the great trackers, they follow, and then... So they go track for track, and then they leave the track and they cut ahead. And they'll walk a half-circle loop up ahead and just try and cut the track again, and they trust themselves to see it. And so then they start to jump ahead on the track, and they'll walk big arches, seeing if the animal hasn't cut this way, hasn't cut this way, okay, cut the track again. And they speed up, or they know there's water up ahead, or they...

• 37:37Speaker 05

  So they have this very... The process is always evolving, it's not just one thing. Sometimes you're following, sometimes you're using speculation, sometimes you're cutting ahead, sometimes you're using local terrain, sometimes you hear an alarm call. So I really got a sense of that from him. And then finally, these two trackers, who have now become my real mentors, this guy called Alex Van den Hef, and Almon's brother, Renias Imshongo, they've become the people who I'm now out with all the time. And they are probably two of the best trackers in the world. I would say they're in the top five or 10 in the world. And my tracking has again gone to a different level, just being out with them for hours, and being put on the track, and being... And being shown what the level of things they're noticing,

• 38:22Speaker 05

  the details they're noticing, the thought process that they bring to it. And so it's this kind of, as I said, like, it often begins with sitting around a fire and just listening. And then somewhere out there in the wilderness, a lion roars. And the first act of it is, it could be anywhere out there, you try and get a sense of it, but it's this willingness to go, you know, it's this willingness to try. It's thousands of hectares out there, but we're going after that lion. And even that, you know, that's a threshold in itself. The decision to know, knowing that it's... There's an impossibility to it, and yet, if we go and try and we use our skill, there's also a chance. And as you practice it more, it becomes more and more likely.

• 39:07Speaker 04

  I would love to hear about this concept you have of a full day on the track. Like from morning to night, the transitions that matter, sort of the archetypal movement throughout a day. Because I just think that's a beautiful kind of concept. And I know it's one that you've been thinking quite a lot about recently. So maybe tell us a little bit about that kind of perfect day of morning to night on the track.

• 39:30Speaker 05

  Yeah, I mean, and one of the things we've tried to do on the Track Your Life Retreat is I wanted it to be an experiential space. And I wanted it to be a metaphorical space the entire time. So everything that we do throughout the day is talking about the dynamics of creating, the dynamics of finding your way back onto being on track, the dynamics of finding what you're looking for. And so the first thing is waking up. You know, literally, we wake up earlier than anyone else at 4:30 in the morning. And one of the things that I've realized, working with people over the last 10 years, is that if you're a human being, as a matter of course, you will fall asleep in your own life.

• 40:15Speaker 05

  It will happen. It's part of being human is there'll be a place where you sort of, you go off track and you fall asleep in your own life. And I've had a lot of men say to me, I just, I feel like I've been automatic. I haven't even been awake in my own life. And so the first dynamic of tracking is, okay, waking up. And we literally wake up really early. And we wake up really early, get in the vehicle, it's 4:30, the stars are still out, the night is still still. And we head out for the next metaphorical movement, which is waiting for the call. And in the hero's journey, the call is always the first thing, but there's a kind of preparation that has to happen for the call. And so we get ourselves out into the wilder parts of the park.

• 40:58Speaker 05

  And the guys get off the vehicle and we make our coffee and we sit. And usually waiting for the call is actually being in stillness and the act of tuning back in. It's actually, we sit there in the dark, we drink our coffee and we listen and we pay attention to what's going on around us. And inevitably, what happens if we're doing that is that we will hear the call because we've prepared ourselves. Now we tuned in. We're actually on the lookout for it. And attention is a kind of magical thing. Part of waking up in your own life is saying, I want to wake up in my own life. Part of hearing the call is just saying, okay, it's time for me to start listening again. It's time for me to tune in. And if that happens, that's where attention is magical. Something will cross your path if you turn your attention back on.

• 41:43Speaker 05

  And normally we'll hear a call or we'll hear the movements of animals. Something starts to speak to us in that space. And then the call for me is also like the thing you know that if you don't do it, you'll go out of integrity with yourself. So if you're sitting there in the darkness and dawn is just starting to break and we hear a lion call nearby, if we don't go look for it, there's something off inside of us. So we know it when we see it. And then if you get the call, that gives you something to aim at. We now have an intention. We heard rhinos moving in this area. We heard a lion roar. We've got a broad idea of what to aim at. So that's sort of like the broader vision. Then we've got to move towards it. And what we'll need then is a first track. We need a place to start.

• 42:29Speaker 05

  And the first track is, you know, and it's so magical when you're driving around and you you want to get on a trail, then boom, there's the track of a rhino that's crossed your path. Boom, there's the track of a of a lion that's moved through the area. And like on that first morning, we tracked rhinos. And you know, the park is huge. Somewhere out there is the rhinos. But if we have the first track, we have the first small movement towards what we're looking for. And what I say to people all the time, this movement towards yourself is going to start with the smallest thing you can do to take you more towards yourself. Most people want to say like, okay, well, you know, I want to move to being the best version of myself or when I know exactly what the next move for me is, I'll do it.

• 43:12Speaker 05

  But actually, you've got to break it down into a series of much smaller moves, things that take you a little bit closer to what you're looking for. And if you can identify enough small movements, enough first tracks towards what you're looking for, it's going to start to take you. And so that rhino out there could be anywhere and we dial that infinite possibility down to a first track and then a next first track and then a next first track. And then we start to string that trail together. And as you saw, guys like Alex and Renias and the trackers we were working with and yourself and the other guys in the group. At first, you don't know what the trail is because you're learning the characteristics of the track.

• 43:54Speaker 05

  And then, you know, in the space of a few hundred yards, it starts to pop. You start to know what you're looking for. And that I call track awareness, where you're actually training your brain, you're training your eyes, and you're training yourself to see the subtle signs of your trail. You're training yourself to see your path forward. And that's why body tracker, one of the exercises we do is so important because in the metaphor, you've got to train your body to feel when it's on track and it will speak in emotions and sensations. When you run into a feeling of expansion, you've got to know, that's my track. When you meet someone who's inspiring and you have that feeling as you're talking to them, like you, you, you, you, you've got to see that track.

• 44:39Speaker 05

  And you can train yourself to feel how life is speaking to you. So that becomes the next movement, developing track awareness, and then we start to follow.

• 44:47Speaker 04

  It's remarkably true, and it's actually a good excuse to get back to the morning hours that we spent trailing the rhino because, first of all, there's all these different kind of states, and we would take turns as lead tracker, meaning it's on us to find the next track and follow this thing for all sorts of weird, different little environments. And that's a profoundly different feeling than being at the back of the line, where it honestly feels more like a walk, a beautiful walk, than something where your attention needs to be incredibly focused. And it's amazing how quickly you can pop between those states, kind of like the dogs we talked about at the beginning. Talk a little bit about that experience where, and I'm thinking here specifically about this obsession with goals that we all have. And in this case, the goal is, you know, a rhino.

• 45:31Speaker 04

  And the important point here is, in the morning, we didn't find them, right? Like, we had to stop because it was getting really hot and we had to go eat and, you know, we were on the trail for five hours or something like this and we didn't find them. And you had some interesting thoughts at the end of that, that despite the lack of, you know, achievement or whatever, to take a look back and realize what happened. So talk about like the side effects, I guess, of what happens on the track.

• 45:53Speaker 05

  The one thing is, is that once you start tracking and there's an intention, you're not just walking through the woods, you're moving forward with intention. And then, and every person who gets on the front feels that. It's like... There's a story that's being told on the ground. And every time you see a little bit of the rhino's side toe, a little bit of its front toe, where it's turned, where it's cut, where it laid down, the story continues to unfold. And up front, there's this amazing feeling of you're being led forward. And your eye scans the ground, boom, there's the track. You move forward in that direction and your eye scans the ground. You don't see anything and then suddenly you see it and you move forward. And then you see where the calf had walked close to the mother.

• 46:35Speaker 05

  And then you see where the mother had rubbed her nose on that log where she had scratched. And there's this whole narrative and you are being led. And you'll remember we dropped down into that little Tamburti Grove. And it was just this beautiful area, the trees, the way, the steep banks of the riverbank and the way they had moved down there and they'd slept for a while. There was no ways in a thousand year that you could have just walked there. There was this really strong feeling that the rhinos were taking us to places that we could never have gone.

• 47:03Speaker 04

  And by the way, a place that a car could never have reached. So that's something I've been thinking about it as well, which is we're here, there are paths, there are well trodden paths, and then there are smaller game trails. And it's interesting to see the sizing of the paths. And obviously the Range Rovers form these, these big paths. But in, in certain ways, that limits you so much to what you can see. And I, I can't stop thinking about that because we never would have seen that little grove in a car.

• 47:30Speaker 05

  Yeah, and the metaphor is so strong because in life, there are big pathways. You know, when, when Joseph Campbell says, if you can see your whole life laid out before you, it's not your life. The culture presents us with the roads of where we should go, but the tracker goes somewhere else. The tracker is guided by a different set of trails. And they let themselves go where they don't know to go on the track. They go where the track takes them. And so if you can identify your inner tracks, what really speaks to you and follow those, it's going to take you somewhere totally unexpected. And that's why I believe people who live like trackers, they innovate. They create new ways of living.

• 48:12Speaker 05

  They're original because they're moving forward on a different guidance system. And it's not one where the culture is presenting to them. And it will take you to unknown places, just like every track we followed here took us to a place we could never have thought we should drive there to check. There were no roads to the places we went. We went to parts of the reserve by following the tracks that no other people will go to.

• 48:34Speaker 04

  Can we expand a little bit on this notion of culture and the role that it plays in our decision and our living and how you think about it? That was one of the more interesting topics that we covered kind of again and again. And the contrast, because there's positives to culture.

• 48:47Speaker 05

  Yeah, absolutely.

• 48:47Speaker 04

  And I think we all kind of know those. But maybe talk about the negative aspects to culture and how it kind of stands in conflict to this way of living as a tracker.

• 48:56Speaker 05

  Let me sort of maybe lay down my sort of core principle, which is like really the center of the tracking metaphor. I believe that inside of you is a wild self. And the wild self, it's coded into you almost. It's like a part of your DNA in some ways. And it knows what you're here to do. It knows your purpose. It knows uniquely for you, and it's different for every person, what brings you to life, what nourishes you, what inspires you. So that is in us. It doesn't have to be created. It's there. Overlaying the wild self is the social self. And we need some social self because we're social animals.

• 49:41Speaker 05

  But in a heavily consumeristic culture and in the structuring of modern society, the social self becomes so dominant that it overwhelms the wild self. And we find ourselves trying to be all the things that the culture tells us to be. And it's so pervasive from the time you're young, you know, whether it's media, whether it's how to live a good life according to the culture, what's valuable, what's meaningful. And you'll know the social self because it's full of shoulds. Well, I really should. This is what I should do. And it's full of have tos. Well, you have to do that. And as I said, we need a little bit of it, but most of it has overrun the wild self. And the wild self, it has tracks.

• 50:24Speaker 05

  And those tracks are in sensations in the body, things that make us forget about time, the feeling of expansion, joy, peace, or the way it speaks.

• 50:37Speaker 05

  And we have to shift our attention onto those tracks and learn those tracks and begin to follow the tracks of the wild self and it will start to take us to unexpected places. It will start to guide us away from all the rationals of what we should do to a deeper dimension of what we're here to do. And that's how I think you really find your way to your own tracks and the understanding that you actually know, you actually know what's calling you. If you could shed the roles, if you could shed all the things that the culture told you to be, there would be something else inside of you that could guide you.

• 51:14Speaker 04

  One of the things, the phrases that we used a few times through the week and something I think a lot about is the ordering of chaos on behalf of others. And it makes me think of another term we've used, you and I, which is like funny Venn diagrams or goofy Venn diagrams where you have these weird intersection of interests or of talents or whatever that might be another way of thinking about tracks. I think people, they feel that they should be doing a certain thing, but I'm curious what you think about what happens when that person is not good at that thing. How much of this pursuit do you think needs to be the intersection of those two things? Not just your wild self and what you're interested in, but what you're actually like naturally inclined to be good at as well?

• 51:51Speaker 05

  I think that there will be a correlation though. I think that there will be, if you listen to that thing that is speaking inside of you, it will be something very fundamental to you. So it won't be a case of like, let's take you for example. I don't believe that what calls you from the inside, you'll have an inclination towards and you'll, you'll tend to be good at it. This podcast, for example, you love connecting with people, you love learning, you're naturally interested, you're naturally curious. So it pulled you into something that was a correlation of all of those parts of yourself. And because you're naturally into it, I mean, you're gonna get better at it continuously, but because it's your natural inclination.

• 52:33Speaker 05

  So I don't think the wild self will pull you into something that is not, you're naturally not inclined to. That's more the social self that says, okay, here's what you should be good at. The wild self will not pull you into something that is not in you. Does that make sense?

• 52:46Speaker 04

  It does. I, I'd love to take the position of a cynical listener out there. And maybe talk about the most common objections that you think about yourself or that you hear from others. That are like, ah, you know, this sounds great, but like, it's not realistic, it's not pragmatic. Culture is culture, society is society, we've built up this massive edifice and this is what we've got. Not everybody can go do this. So what are the sort of the most cynical takes that you've heard on some of these ideas? And how do you respond to them?

• 53:13Speaker 05

  The most classic thing is 100% of the time, well, I would do that if I had the money, if I could. That's like the base level. And that's where I, I think the design element does come in. Okay, fine, stick with that then. But how do we find, is that fulfilling you? No. Okay. Well then, how do we find what is, what would be a little more fulfilling? Well, you know, I like being outdoors. Okay. Well then, let's start by bringing a little bit more of that in. But yeah, I mean, here's the bottom line is in my twenties, I was like a zealot. I would convince everyone else that it was possible. Now I don't, you know, I, I maybe don't try and convince the cynic. I, because, you know, fine, be cynical, do what you want to do.

• 53:59Speaker 05

  But if something else is calling, if you have another longing. And if you feel that there is something else you're meant to be doing. Well then, why not start? If you don't, and you're like, this is how it is, and this is what it is, cool, I'm not gonna try and convince you. You know, I mean, I'm, I think what I'm saying is that we begin these journeys.

• 54:22Speaker 05

  When we decide to begin them and not a moment before. And sometimes a catalytic event will start it. You get sick, you have a heart attack, you get divorced, you get fired. And suddenly it's like, okay, well, what now? And sometimes that will, suffering will start the journey. Sometimes you just have a calling inside of you. And if you have the calling, then you may as well start tracking. You know, you may as well start tuning your attention. You may as well start trying things. You may as well start going out there into the unknown. You may as well move into the wilderness of life. Start to find something that's more fitting to you. And if you're a total skeptic and you don't believe it and you're happy, then cool. You're not gonna, you're not, if you're happy, you're not gonna be inclined to look.

• 55:07Speaker 05

  If you're a total skeptic and you're unhappy and you're just in the grind and it's eating you alive. Well, then that's on you.

• 55:16Speaker 04

  You mentioned money. Having done this a few times, I think everyone would agree like, wow, great. I wish I could flip a switch and, and be in a, you know, better alignment or higher integrity. As you say, what are the other major excuses or barriers that you see as most common? To letting this happen. So money is a big one, you know, I don't have the money. If I had the money, I would do it. What are the other like big excuses that you see?

• 55:41Speaker 05

  I'm not sure I would call them excuses, barriers. I mean, one is that we live in a culture that people really wanna know. So when I know what I'm meant to be doing, then I'll make a move. That's when I'll take the big leap. You know, everyone's always talking about the big leap. And that's, that's not how it works. You've got to be willing to move forward into the unknown and make the space and be in a state of unknown for a while. Because that's where you're gonna find, you're gonna find a first track and a first movement. And great entrepreneurs know this, you know? They know you, you find out one thing, then you find out another thing, then you don't know how to do it for a while. Then you do know how to do it. So that's one thing.

• 56:24Speaker 05

  The other thing is, is people wanna know every movement. They wanna know all the pieces that they'll have to do before they do it. So like, once I was coaching a guy, I remember, he said, I'm totally burnt out. So I said to him, but he said, you know, I've got all these responsibilities. I've got all these, I've got family, I've got all this stuff. So I said to him, okay, cool. What, and he's like, I don't know what I, I don't know how to move forward. I don't know what it is. I said to him, okay, cool. Just go quiet for a moment, go inside yourself and just feel for one thing you need. One thing you need. So he's like, oh, man, I don't know if I wanna do this. So I said to him, just shut up, go quiet, just, and, and here with me, tell me one thing you need.

• 57:08Speaker 05

  Goes quiet for a few minutes, he looks up and he says,

• 57:12Speaker 05

  I need some time completely by myself.

• 57:18Speaker 05

  You know, but how does that help me? I mean, that, that's not gonna take me anywhere. Where's the, and I said to him, you know, that's the first track. You gotta go and get some of the, the one thing you know you need. That's the, that's one track. And then because you go and take some time,

• 57:36Speaker 05

  another thing will arise out of that. And then another thing, but you can't know the whole, you can't know the whole process. But if you can know the one thing you need and go and get it, the next thing will open up. The next thing will open up. That's the whole process.

• 57:49Speaker 04

  What's the single most memorable tracking experience that you have?

• 57:53Speaker 05

  Well, I have one with Alex and Renias. We tracked, we tracked a single male lion. We tracked him for three or four hours. And he, he got to a place where the lion's tracks teed onto the tracks of a herd of buffalo. And right there, he laid down next to a pile of buffalo dung. And this is the track telling you. And he rolled over into the track, into the buffalo dung. And he was covering himself in dung. And he said, he's gonna go hunt those buffalo. It's amazing image, you can see where his tail's shrifted. It's all laid out in the sand on, on the ground. Then he stands up and he starts walking. And Renias was picking his tracks amongst the track, like the ground had been churned up by the hooves of the buffalo.

• 58:36Speaker 05

  He was picking his track and he was walking zigzags and he'd get one track, then he'd get a second track. And he was charting a course and then he would, where he saw the track, he would look up at a tree and he would use the tree as a marker. That's generally the line that the lion is moving on. And then he would get the, cut it again. And he was just saying, I just keep trusting myself. Just keep trusting yourself. And then there was a place where the tracks of three lionesses came in and joined him. So suddenly you saw the male's track and then the track of a female and then a second female and a third. And lions are the only sociable cats. On the ground, suddenly you can see where the tracks are all touching each other. They're walking next to each other and they're rubbing each other as the pride has joined up. And then about

• 59:20Speaker 05

  maybe a kilometer ahead of us, a battler eagle dropped down. And Renias stopped us and he said, you see when that eagle drops down, it means one of two things. Either a buffalo has given birth to a calf and the eagle is eating the afterbirth or these lions have killed. So we went up ahead. And when we got to where the eagle had landed, it flew up and we, the ground, the ground had given way to like scrubby grass. It's very difficult to see tracks. Alex and I were walking around, looking for the tracks everywhere. We couldn't find it. Renias stood very, very still. And it was interesting to me, when he lost the track, he became still for a moment. And because he was standing still, he saw these flies going past him.

• 1:00:02Speaker 05

  And then he started to follow the flies. And then he put his nose up and he started sniffing and literally he caught the scent of meat. And he walked us in on the remains of a small buffalo calf. And immediately as he saw the carcass, the lions that obviously move off, I saw him doing, it's a kind of calculation, but it's in his body. He's not thinking about it rationally. He, he felt the sun on him, so he feels the heat building. He sees the size of the carcass. It was a small calf. He knows that there are four lions, one male and three females. And as he was doing it, I realized I was thirsty. So if I'm thirsty, that lion is probably getting thirsty. So it's very alive. And Then Alex and I continued to look for the tracks.

• 1:00:46Speaker 05

  Where had they gone from the carcass? Renia stood up, he just started walking. We said, where are you going? He said, I'm going, I know where the water is. So we were about three or four miles from the river. And he walked down through the clearings. He completely forgot about the tracks. Went down to the edge of the river, cut a game path on the edge of the river, and we started walking along the river's edge. Walked like that for maybe ten or fifteen minutes. And up ahead of us, through the reeds, we saw this beautiful canvas. Elephant bull was walking towards us. And they kicked the ground, and a little puff of smoke came up and drifted. And Alex and Ren stepped in the direction that the sand had drifted, this little puff of dust. They're stepping downwind. They stepped downwind and they got in under a little palm tree.

• 1:01:31Speaker 05

  And this elephant bull walked past us maybe two or three metres away. And for a moment, I remember, he towered over us. His shadow was on us. And on the game path, he smelt where we had walked. And he picked up the sand and he was smelling our footprints. And I just felt this incredible energy, kind of sensory awakeness. And then he walked past us. As he moved away, we got back on the game path. And now there's these big, beautiful elephant sort of huge tracks on the game path in the soft sand. About a hundred metres down the track, the lion tracks come back onto the path. And now, on top of the tracks of the elephant, are the tracks of the lions. And we've just seen the elephant.

• 1:02:15Speaker 05

  So we now know we are close. And Renia said to me, come up to the front. So my job now is to follow the tracks. And he's putting me on the tracks because he wants, him and Alex, wanna look over my shoulders into the brush ahead so that they can see the lions before the lions see us. And we start to follow in the beautiful lion tracks in powdery sand. The whole pride walking in a line along this game path. And up ahead of us, two hundred yards, a monkey starts to alarm.

• 1:02:45Speaker 05

  We know that, and I can see the monkey looking down into the river. We know those lions are moving ahead of us. Keep going, get to where the monkey's over our head. He's still looking down the river, shouting. And then... An nyala starts to alarm, one of these antelope. Bah, bah. So it's this incredible feeling of being in the story, the narrative. You can see the tracks. Everything is talking to you. The monkey's talking to you, the nyala is alarming. Beyond that, a squirrel starts to call and you're immersed in this unfolding story. And it's like the sense of you and the tracks start to collapse and it's one story. And it also occurred to me that you could walk down that trail as a non tracker, someone who was completely shut down and all of that could be going on and you could miss it.

• 1:03:27Speaker 05

  You know, this incredible information, language, this whole scape is guiding you. There's a, it's telling you and you could miss it. We go for about another 50 metres and then there's this amazing thing. All the tracks are going away from us and then suddenly on top of all of the tracks going away from us, there's one set of tracks facing back towards us. And what's happened is the, the female at the back of this line of lions moving, she can't smell us, she can't hear us, but as we're tracking her, she's starting to get a feeling. Something behind her is saying, there's something there. And I, and I think it's because we're dropping into the resonance of the lions. We're moving like them, we're starting to connect in some way.

• 1:04:11Speaker 05

  She's feeling something, so she stops and she turns and she looks back down the path. And she doesn't see us, but it's just a beautiful moment in the tracks. You know, she's starting to get a sense that you're back there. And then the, then the tracks cut off the riverbank and they went down into thick reeds. And we had a little bit of a, we called it an ndaba, a bit of a meeting. We said, are we going down there? And Renia said, let's just take a little look. And so we went down on a hippo path where the hippos come in and out of the river. And it made like a tunnel in the reeds. We move, we like crouch down, we crawl through this tunnel. And then it opened up into a little sandy beach. And if you see it, I should tell you, if you see lions on foot, one of two things happens.

• 1:04:53Speaker 05

  One, they get a fright, they run away from you, they take cover. Or two, and particularly when they have cubs or meat, you start to hear a growling.

• 1:05:05Speaker 05

  It sounds like a dirt bike. And then you see one of the females, or one of the males, usually it's a female if there's cubs, and she just locks you in the most intense, I'm going to massacre you gaze. And slowly, she starts to walk towards you. And there's like an intent to the walk, and the head is down and the tail is lashing. And she starts to walk faster and faster and faster. And then it becomes a trot, and then it becomes a full-on charge. And the whole time she's growling.

• 1:05:36Speaker 05

  She comes in and at that moment, your only hope is to stand your ground. Everyone grabs each other, you start shouting, and usually she'll come and stop two or three meters. The sand flies up, you get sand in your teeth, in your eyes, it's terrifying. And everyone stands and you shout, and then what's happening is while she's got you there growling at you, the other female's taking the cubs away. So you stand, my uncle used to say to me, lions are afraid of your courage. You have to stand your ground, otherwise you'll get eaten. So she turns and she moves away, and then you get away. So this is all going through my mind as I crawl through a hippo path in a thickly reeded river. And we come out onto this open beach. And um, and we go over to the little stream of water, and I can see where the male lion has come in to drink.

• 1:06:22Speaker 05

  And then the first female, there were three females with him, and the second female, and the third female. And this is all in the tracks telling you, and this is how it can help you. Then, then a fourth set of tracks, fourth female. And then I saw tracks of what I thought briefly as I glanced at was a civet. A civet is like a small raccoon-like creature. I saw the tracks of the civet, and then the three of us, all looking at the civet track, realized at the same time, that's not the tracks of a civet, that's the tracks of a cub. And Alex looked, Renias, who's a, who's a black Shanghan man, went completely white. And Alex looked at me and he, he mouthed a profanity. And he grabbed the top of his head, and we realized now we are down in the river, and the pride has joined up with a female with cubs.

• 1:07:08Speaker 05

  And all of us just sank down onto our haunches. And we, and we sat there incredibly still because we know the lions are now very, very close. And you don't want to be in between the mother who stashed the cubs somewhere in the reeds. Now we're in her way and it's because it's terrifying situation. And I saw Renius, and this is, this is experience. I saw him listen very intently to the soundscape around us. And he was listening for subtleties in bird calls that, that I don't know, that he knows. Little indicators of where the lions might be. Because birds, birds have a, a very unique language, but it's subtle. Some of it is very obvious when they're alarming.

• 1:07:52Speaker 05

  But some of it, when the lions have laid down, when they're not moving, is much more subtle. And he heard, he heard, he got a sense that they had moved a little bit away from us. And he, he clicked once and he pointed us back up the path. And, I mean, our hearts were in our throats. We stood up and we moved up the path and we got to a tree on the riverbank and we looked down and then we saw them down in there with the cubs. And we didn't get charged, no one got bitten, no one got mauled, but the experience of it again was just this incredible aliveness. And in some ways, again, his experience, there's a chance if we had been by ourselves, we would have blundered on and we would have got badly, badly charged.

• 1:08:36Speaker 05

  But, you know, I watch all these Discovery Channel things and everything is like, death week, deadly snake week, get, like, if you actually are listening, if you're actually aware, if you actually take the time to learn about the wilderness, it talks to you and it doesn't wanna, it doesn't want to tear you up. That's not the animal's natural inclination. They're actually, if you learn the language, it can be a very, very safe environment.

• 1:09:04Speaker 04

  So I like to just pause and recognize the single best answer to any question that I've ever asked anybody. That was incredible. Perfect bridge into my last and always my favorite question that I ask everybody, which is, what is the kindest thing that anyone's ever done for you?

• 1:09:20Speaker 05

  Wow. Well, I had this guy who I used to track with. His name was Sully and he was he was just a tremendous human being. If you drove past Sully out on the reserve, you just, he was in his car, you in his, you drove past each other on a dirt road. You just kind of waved at each other. You look up in your rearview mirror, he stopped the car and he's waiting there just in case you need help with anything. And you decide like you might want to come back and ask for some. We had that one guest who said, he would, he would look after people on safari so incredibly well, everything they needed. He was, he was so attentive. This guy said to him, Sully, you are pathologically helpful. But in 2001, we were tracking a leopard together and the tracks ran up the side of

• 1:10:02Speaker 05

  the river. And it was a hot day and because it was hot, I went into the water. I'd rolled my, my sleeves up and I was walking in the water. And the, it was clear water, sort of knee deep, running over sand. And as I walked upstream, this little sandbank sort of fell away. And there was a place up ahead where a branch, a tree had fallen over and it was, the branches were in the water and it was a little, there was a little rapid there. And, you know, if it had been a horror movie, people would have been like, don't go in there. But I sat down just on the edge of that rapid. And Sully was on the far bank and the croc was, the crocodile was in this little depression, came out, grabbed me by

• 1:10:44Speaker 05

  the leg. When a crocodile bites you, just the force of the bite is the first thing. It's just like you immediately, I immediately knew I was in trouble. And it tried to pull me down into the water and I reached up and I grabbed this branch and I started shouting. And it couldn't get me all the way and it bit me a second time. My foot went down its throat. Spat me out and I started and I kind of pulled myself up into the tree. And then over and I looked down at my leg, my leg was mangled. And then I kind of got over onto the bank and I was in a, I was in quite a dangerous position on the bank. I think it probably could have grabbed me again, but I was trying to like sort out how to get my leg to stay together. And Sully, who was on the far bank, saw me, he saw me come out of the water. He saw the mangled leg.

• 1:11:29Speaker 05

  And so he knew that between him and I in this deeper channel, there was a crocodile. And he just booked straight in. He came straight towards me, went straight into the channel. I knew there was a croc in there, he waded across it and he, he got to me, he grabbed me, picked me up. He's a freakishly strong guy, picked me up and he carried me up onto this bank. And he took his shirt off and he wrapped my leg in the shirt, got me back to the vehicle. And yeah, got me to, to safety, but just not, not the, not the blink of an eye, you know? And when I, when I talk about that to audiences, sometimes I'll, I'll say to them, I don't know how many people you know, who come into a deep channel of water that they know has a crocodile in it that's just tried to eat a person.

• 1:12:14Speaker 05

  Um, but that's, for him, it didn't even blip on his radar that there was something exceptional about it. And it was like, that, that to me is the core of the more collective psychology of Ubuntu. It's just if you're in trouble, I'm in trouble.

• 1:12:30Speaker 04

  I love the heuristic from prior guest Peter Attia, where you measure wealth by the number of people that you would give a kidney to.

• 1:12:37Speaker 05

  Yeah.

• 1:12:38Speaker 04

  So maybe we'll change that to the number of people you would, you would dive headfirst into croc infested waters to try to save. And a great heuristic for the idea, the closing thought on the idea of the village, that people within that village are those kinds of people for whom you would do something like that. And this has been just, just a total blast, what a, just chock full of, of fantastic stories and lessons and fresh perspectives on the world. Um, so I, I deeply appreciate your time. People are going to love this one. Thank you.

• 1:13:08Speaker 05

  Uh, thank you. It's so great to be with you and, uh, yeah, I appreciate your time.

• 1:13:14Patrick O'Shaughnessy?

  Charlie, I like starting these things in a unique way. And one idea that you've had is to have people stack rank their vices of power, money, and fame. I'd love you to begin by explaining why you're interested in this idea and what you've learned from the answers over the years.

• 1:13:29Speaker 06

  So it's a two-part question. One is the virtues, which is working with people you like, working on amazing problems, and having impact. And then the three vices, power, money, and fame. And you can't avoid them. They have to be stacked ranked separately. And it's really trying to get at the differences between, there's no good answer, but there are definite good, fit answers. So someone who's interested in power tends to be better at execution. Someone who's more interested in money tends to think more about some capital efficiency. I tend to avoid people interested in fame. But if you are doing something in showbiz, it would presumably be the number one criteria. If you think about the difference between sort of impact, intellectual interest, working with people, you really get the impression of where people are going to be happy and where they're not going to be happy.

• 1:14:14Speaker 06

  You also start to understand why certain organizations do so well. So SpaceX, if you think about it, stacks high on all three. It's intellectually interesting, you're working with amazing people, and you have huge utilitarian impact in the world. Whereas if you're working, say, in fintech, you're less likely to sort of have that utilitarian positive impact.

• 1:14:30Patrick O'Shaughnessy?

  Any especially memorable or interesting series of answers that you've gotten on the two stack ranks that come to mind?

• 1:14:37Speaker 06

  A lot of people have negative utility from fame. A lot of people start with power, and then when you push them, it's actually money, but they don't want to say it. And that's more true outside of the US culture than it is in the US. It's particularly true with Europeans. And so a lot of it is trying to get people to actually say what they truly believe as opposed to say what they think they should say.

• 1:15:03Patrick O'Shaughnessy?

  I'm curious in what context, whether it be interviewing prospective founders, interviewing potential hires, or others, you find it most interesting and useful.

• 1:15:11Speaker 06

  All of the above. The founder one is fascinating because you actually end up going down different lines in helping them, depending on whether they answer the power and the money. Founders that answer with power tend to need help more on managing their startup capital efficiently. They tend to be the ones that spend more. They tend to be the ones that over expand. They're often too aggressive. Conversely, the ones that answer money tend to be very capital efficient, but often slightly too cautious, slightly under aggressive, sometimes not willing enough to stamp their authority on the company and make it the culture that it needs to be to be successful.

• 1:15:45Patrick O'Shaughnessy?

  I'd love to take a step back now and introduce you to the audience a little bit. One device that I've been using with people on the podcast is to ask you to give the thumbnail two-minute sketch of your life and career up until this point.

• 1:15:57Speaker 06

  Studied politics first with economics at Oxford, ended up very briefly at McKinsey, then at Microsoft, and then sort of bumbled my way into becoming an investor and do a lot of angel investing. So I think I've done about 500 angel investments. I think the actual number's 483 and about 300 in the portfolio at the moment.

• 1:16:17Patrick O'Shaughnessy?

  I believe you ran strategy at Microsoft. What exactly did that entail? And what is most memorable about that time?

• 1:16:24Speaker 06

  There's so many memories, working with amazing people. The hostile acquisition of Yahoo as an attempt was just unbelievably intellectually fascinating, trying to buy a company in a hostile acquisition for, I think it's $47 billion, and just the drama and the soap opera. And realizing how much path dependency matters in big deals, how much a casual comment misinterpreted by one side or the other actually changes the outcome. It's remarkable how little system theory there is in the sense of if you ran experiments again and again, I think you'd get a lot of different results in M and A activity. Whereas in things like product usage, good products and bad products would probably be the same in each experiment.

• 1:17:04Patrick O'Shaughnessy?

  483 investments is a crazy amount. I want to come back to your time at Microsoft, probably later on, and talk in more depth about strategy. But given the sheer volume of investments that you made, I think a great place to begin our conversation is your idea or your thinking around why startups succeed and fail. I'd love to begin by you outlining sort of what, if anything, is shared in common across those 483. So are there certain features that you're always looking for and sort of how your process works? And then we'll get into the success and failure of startups.

• 1:17:34Speaker 06

  In some ways, they're too tied together. So I think the dominant sort of failure mode for startups is the same at each different stage. So sort of pre-seed to seed, you basically have a failure to achieve labor productivity, which is only just a polite way of saying the team doesn't come together, doesn't gel and produce good output. Usually, a team that just produces good work will generate enough sort of kinetic energy to get continuing funding. Once you're sort of going from seed to series A, it's another single cause, which is failure to get product market fit. You're basically on the search for demand curve, and you either find one or you don't find one. And this is where you've got the highest element of pure chance in a startup. It sort of always feels akin to sort of gold prospecting in the California

• 1:18:18Speaker 06

  Gold Rush, which is you can be good or you can be bad. You can do the right thing, you can do the wrong thing, but there's some irredeemable amount of chance. The wisest prospector with the best maps and the most intelligent strategy sometimes just won't find it, and someone will just fall asleep, put the pan in a stream, and gold will come out. And there really is a little nexus of serendipity at this stage. Then, when you move to series A, it's really all about labor productivity, but in a different form. It's can the manager scale? And one of the fallacies is most early-stage startup founders think their managers, and they're actually not. What they have is a team that's actually managing them. Because when you're managing, say, 10 or less people, and you're spending time with them every day, what's actually

• 1:19:03Speaker 06

  happening is they're managing you by inference, because they know you well enough, and they talk to you enough to work out what your desires are. So as long as you're articulate and energetic Engaged, you actually don't have to manage, the team manages you up. But when you scale to thirty people, to ninety people or above, you no longer have those personal connections. You have to move to formal management techniques. And that's like a sort of firmly paradox great filter. It wipes out an amazing amount of startups. And the way that's divinced is a collapse in the labour productivity per person. There's a term in microeconomics called managerial dis economies of scale. And I think in some ways, the angle of the decline of productivity per person

• 1:19:46Speaker 06

  is the difference between the sort of the stripes, the great startups and the failures. And maybe if you're a great startup, as you go from ten people to a hundred people, output per person drops fifteen percent. And if you're a bad startup, it actually drops over ninety percent. With the result that often hundred people startups produce less than they did when they had ten people. Because the managerial collapse has been so extreme. And one interesting thing is if you look at the companies get very big, maybe there's a sort of interesting explanation where more of the shared attributes was an instinct for the sort of structures and processes of management that were shared between Gates, Zuckerberg, Bezos, the Collatons, all these sort of super pounded people. Because my guess is they didn't receive formal instruction on it, their VCs and advisors weren't that helpful on it.

• 1:20:28Speaker 06

  It may be either by chance or by skill, they just intuitively they're by threat. Then when you get beyond that sort of series B and beyond, I think it's institution building. And one of the interesting problems is the sort of people that become entrepreneurs are often full of energy and sort of flexibility. Almost a sort of combination of street smart and book smart. But there's a point where they've hit product market fit, where actually what they're doing is repeating a process at scale. And to repeat a process at scale, you need to build an institution. And often that sort of is almost anathematic to their personality. If you're going to take in revenue from forty two countries, you really need a well developed finance department. Once you get to a certain size, you will always be in court cases because of being sued by ex employees.

• 1:21:11Speaker 06

  You'll have patent infringement suits, you'll be debt collecting customers that didn't pay. Like this shift to sort of building an institution with institutional norms, institutional values, institutional culture. And all the boring stuff of building. Strong finance department, strong legal department, strong HR department. That again is a big filter. And so those are sort of filters by stages. What's interesting is some of those you can do when you meet someone in pre-seed. One interesting thing is I sort of close my eyes and think, can I imagine this person in a public company conference call? Remembering the, it's set in the Microsoft, some of the Microsoft earning schools. And I'm thinking, can I imagine them sitting as a sort of CEO next to their CFO, talking with all the sort of Wall Street equity analysts and the buy side on the phone? And just be incredible enough and deep enough and mature enough to pull that off.

• 1:21:55Patrick O'Shaughnessy?

  It's a fascinating set of framing. The one that jumps out is maybe most interesting to me is this idea of the declining curve of people's productivity. And in your experience, whether or not that is something that is typically innate to the founder, meaning they just handle that naturally and with aplomb, or if instead it's something perhaps that could be coached. And if it's really just a set of best practices that are fairly universal that founders just don't get.

• 1:22:20Speaker 06

  I think the irony is it is absolutely something that can and should be coached, but often isn't. So often the people that get it intuitively are the people that survive. But there's no need for that. It can just be coached in. And I think a lot of it is you get this very strong transition. When you're a very small startup, most of the people you're employing just come in and do their job and go home. And the drawback of that is you tend to end up having to do tight management, a lot of micro-management. And the beauty of it is you tend to get a very low level of politics within the organization. Then you get this transition to where you're hiring people that are sort of execs would be the sort of headhunters description, VPs, senior people. And the beauty of these more senior people is you can give them much more complex tasks.

• 1:23:04Speaker 06

  Build me a product division doing this. Go open European markets for me. And the drawback is it, anyone capable of those complex conceptual abstractions necessary to do that, tends also to be capable of politics. And because the world is not composed of saints, as an organization scales, the level of internecine politics increases exponentially. Someone once sent to me, the difference between a great company is one where the execs spend only 25% of their time on politics. And a bad one is where it's spent 50% of their time. Time in politics and that delta is the entire Gaussian bell curve from the best Fortune 500 company to the worst. And I think one of the things that really matters as a founder is acting as a dampener on politics.

• 1:23:46Speaker 06

  So reducing internecine warfare, reducing the tendency for marketing to try and take control of the sales funnel. Reducing tendency for the head of sales to want to take over sort of inbound marketing. Just trying to stop the CFO controlling spending so tightly that you don't get positive return on capital investments by sales. Trying to stop sales getting so much control over spending that your margins go out of control. All those boundary conditions between sort of VP leaders and functional heads. Defining those well and managing through that transition is just so important. And there's nowhere where someone learns that through the process of entrepreneurship. One of the things that's I think very interesting about people's careers in general is the early stages. And the personalities go into them often of negative correlation at the later stages.

• 1:24:31Speaker 06

  So if you look at a sort of McKinsey or Goldman Sachs analyst, often what they need is attention to detail. Strong work ethic, high diligence, high conscientiousness in sort of by factors, all those sort of things. If you look at middle management at those companies, they need good project management, good ability to abstract and structure problems. Good ability to pull a team together and create team morale and the sort of being close to detail and the technical knowledge matters less. And then if you look at the sort of partner level in those firms, often all that matters is relationship building and sales. And charm and the ability to empathize with the client and connect with them. And so it's very hard to find people that are stars in all three parts of those careers. And I think it's the same with entrepreneurship.

• 1:25:15Speaker 06

  The street smart entrepreneur at sort of pre-seed who can raise money with a good narrative. And get energy and recruit people and sort of create a sort of sense of momentum and a speed of core. Is often very negatively correlated with the sort of personality that wants to put in quarterly HR reviews. And QBR reporting and really make sure that the finance team is taking at a later stage. And then conversely, often the entrepreneurs that do very well later find the early stage capital raising hell and earth. Because in some ways they're so tightly gripped to reality and they're slightly pessimistic, which makes them very good at sort of avoiding chaos. Often makes them very bad at pitching.

• 1:25:55Patrick O'Shaughnessy?

  I'd love to hear your thought on this interesting concept that actually our mutual friend Graham and I have batted around quite a lot, which is this notion, the term we use based on a blog post by a guy named Rick Burton, is the idea of an alien founder. An alien here is used as the best possible compliment to a founder, where it's somebody that just has sort of what seems to be like an unfair and privileged access to some sort of underlying substrate, the thing that is going to build the business. And they just kind of know what to do. They have an incredible first principles mindset typically. And say, Bill Gates would be a great example of this. I think Bezos would be a great example of this, to use obvious ones. What do you think of that idea that in some ways, the absolute best founders are in some sense, alien and distinctly unique people?

• 1:26:37Speaker 06

  I will maybe for the socratic sake of it, sort of take the opposite argument and say, I think one of the mistakes it's going into is just sort of seeing sort of evocent genius. Because you're seeing people at the height of their powers, you're not seeing them on the way up. There's that famous clip of Bezos, I think in 99, with Amazon sprayed in spray paint on the back of the office. It would be really interesting if you talk to him, whether he is similar to the Bezos of today. Because in the intervening 20 years, remember, you've got this incredible training program for the mind. They're working every hour in the startup. They're talking with the smartest people. They're constantly getting new information.

• 1:27:19Speaker 06

  They're hiring, they're filing, so their pattern recognition of executives gets so much better. They've got a million failed initiatives. So they have all these learnings of what not to do. They've got all the things that have worked and they've seen what scaled, they've seen the commonality. And so how much of that is sort of looking at an athlete at the peak of their performance and not seeing the 10,000 hours of practice that got them there? And I could almost argue, you could invert it and say, what are actually the causes of mortality? And how do we just avoid suffering that mortality this year? And if you survive long enough, maybe greatness eventually becomes you. So one of the things I think that sort of is perhaps underestimated is if you want to live forever, maybe don't start thinking about study centenarians.

• 1:28:05Speaker 06

  Work out how to not die of a DUI, like drink driving or any of the smoking twenty cigarettes a day. And to some extent, the same in entrepreneurship is, it would be amazing. And of course, the problem with sort of the observation of the world is people spend a lot of time studying greatness. They don't study failure. They study Muhammad Ali. They don't study all the heavyweight boxers that flaked out after losing their first match. But maybe if you study all of those, you can find a commonality in their mistake. Maybe they all, I don't know, offered their chin to the opponent or something. And in startups, I think there are common mistakes. There's an original sin about capital raising. I see so many startups, three to five years in, still haunted by a bad capital raise at the beginning, some investor they don't want, some valuation that was hopelessly dilutive and puts VCs off now.

• 1:28:50Speaker 06

  Often, one of the things that I see very well with success is how quickly they exit their first employee that doesn't fit. And I think what that's actually showing is, are they willing enough to be disagreeable to make the company what they want? And so the willingness to cross that chasm, and often you're dealing with young founders, that's a major inflection point. And if you don't do it, that often leads to a toxic culture and bad results. Then there's sort of more subtle maladies, like sort of turning things into an academic project, particularly with founders with very strong academic backgrounds, often in deep tech and PhDs. They're sort of like generals fighting the last, where they think prestige as the currency because it is in academia. And so they just think if we do amazing work and we tell the world about that amazing work, good things will happen.

• 1:29:35Speaker 06

  Because as a holistic, that did work, but it means they don't engage with revenue. They don't get quite product market fit. It's too much a sort of ivory tower intellectual exercise. Or conversely, do they just sort of think we get momentum, we get revenue, we get traction, it'll work? And they haven't really thought about the deep microeconomics and unit economics of a scaling company. And so I almost inverted and say, don't study greatness, study failure and work out how not to be that. If you're sort of thinking of history, trying to be as good a remnant as Augustus would be really, really difficult. Not being as incompetent as Caligula seems really easy.

• 1:30:12Speaker 06

  And so as a practical advice, not making the catastrophic mistakes and just surviving long enough feels like a good strategy. There was some general somewhere that said, it's not that good soldiers become veterans. It's that lucky soldiers become veterans, but veterans are good soldiers. Meaning just the luck of surviving the first few hours put you up an experience curve. And I see entrepreneurs transform in those first thirty six months of leadership and management. And half of it is just stay alive till you get good.

• 1:30:44Patrick O'Shaughnessy?

  We've talked a little bit about recruiting as someone that all of a sudden seems like half my time is spent just recruiting people in all different directions. Curious how early you encourage entrepreneurs to make that a major part of what they do and whether or not that effectively lasts the rest of their career if they're successful.

• 1:31:02Speaker 06

  So I think recruiting is way underestimated precisely because in an early company, people replicate themselves. So because people tend to hire, not so much in their own image, but with their own set of biases, all the initial people you hire will influence all their other hires. And so you can either get this sort of upwards iterating culture of excellence, or you can get this downwards iterating culture of excellence. So those first few hires are utterly critical. And I think people way underestimate just the sort of the maths of the return, which is it seems excessive to say spend a hundred hours hiring a person. But if you're only hiring ten people, that person is ten percent of the output of your company for the next seven years if they stay. But then if they

• 1:31:45Speaker 06

  hire as well, they may actually contribute to ten percent of the productivity of the company for the first decade, both by their own labors in the early years, but also in terms of the way they themselves recruit. So I think people just sort of underestimate the power of the math here and don't focus on bias that entrepreneurs often have of going for speed and the desire to move fast. And partly, this has sort of come out of startup culture because of the sort of synergies of network effect businesses where speed often really does matter. But ninety nine percent of startups don't have strong network effects. Eighty percent don't have them at all, maybe nineteen percent only have weak network effects. And in those, quality matters far more. And so going slower, spending

• 1:32:28Speaker 06

  an enormous amount of time picking exceptional people that are deeply synergistic, exceptional in and of themselves, and then have deep and meaningful synergies with the other team members, create. It's this thing, which is a sort of algebraic functional labor output. And I almost think that's how you have to think in the first year. How do I find amazing standard on people that are also synergistic? And so my net labor output of the firm is super high. And the biggest mistake I see is when they're panicked to hire someone because they need sort of a job done. And so they just go for the earliest person. And then it's like, okay, the pernicious mistake is the change in hiring rate based on the amount of capital available to the startup.

• 1:33:10Speaker 06

  So what you notice if you go after it is hiring is not consistent of a quarter by quarter basis. It bulges after each capital raise, pre-seed, seed, A, B. And then it's attenuated almost to nothing in the six months before the next capital raise. So the sort of entrepreneur is like the proverbial sailor coming into port who spends all their money and then doesn't have any months afterwards. But it's in hiring. And if you think about that, that's absolutely insane. Because what's the chance that you can find, say, they're hiring 10 people? What's the chance you can find eight in the first 90 days? That it's right to find eight in the first 90 days and then only right to find two in the next 540 days? Your chance of coming across the exceptional people is so much lower than if you space that out evenly.

• 1:33:54Speaker 06

  And because you'll know the existing people and see them working together. If you hire two in that first quarter, each next one you hire, you will understand their synergies with the existing team so much more.

• 1:34:06Patrick O'Shaughnessy?

  What have you seen successful founders do to make sure that when recruiting, they're able to win the best candidates out there? So it's one thing to be patient and spend the time to identify them. You also have to hold out an attractive proposition to those very talented people who presumably have other opportunities as well. So what have you learned about the best recruiters in terms of how they market the opportunity and market the firm?

• 1:34:30Speaker 06

  I'll give a sort of very cynical answer and then a more aspirational answer. The cynical one is just be in a labor market, sort of low competition. You really don't want to be sitting there in San Francisco trying to close your candidate when John Colson is trying to close the candidate as the alternative. Because John's going to win.

• 1:34:47Patrick O'Shaughnessy?

  Knowing John, I agree.

• 1:34:48Speaker 06

  He's one of the greatest executives. Age, but you see this actually happen. Whereas if you're hiring that person in Kiev and their other option is working in outsourced IT for Deutsche Bank, it's a much, much easier win. So in some ways, what you want to find is where are the incredibly qualified people in weakly competitive labor markets? And that is a much easier filter than actually being good at recruiting and a much more powerful one. You're much better being a heavyweight boxer who's not very good fighting lightweight boxers than you are getting good as a heavyweight boxer. And it's the same. You're better going and competing in a market where the other accusers are lightweight because they're boring industrial firms with tenure based promotions. So that's one. And then two, it's some combination of sort of painting a vision that people want to be part of,

• 1:35:33Speaker 06

  understanding what they themselves are motivated. So it goes back to those sort of early questions. Are they motivated by working with great people? Are they motivated by utilitarian impact? Are they more motivated by things like money and power? It goes back to just getting the impression that they want to spend time with you. Do they actually want to spend every day with you as a founder? Because these companies are small. It's not like you're accouted by a big company and the hiring BP you may be going to spend an hour a month with, you're going to spend a lot of time with this founder. So there has to be a natural desire to do this. And then third, I think there's just a sort of sense of being in a sort of gang that's going to succeed. A sense of we happy for you to quote some Shakespeare of just, I want to be with this because this is going to be something that changes the world and it's going to be an adventure and fun.

• 1:36:18Speaker 06

  And that cliche, the journey will be the reward will be true and the economic outcome will be a reward. And when I look back, the impact will have an award. And if you get that trip tech, you'll close them.

• 1:36:28Patrick O'Shaughnessy?

  I asked once a group of people, what if any specific sector or category of companies they would invest in if they could only choose one for the rest of their career? And one person said communications because you'll always have some monopoly to pick from, which is sort of a classic expression of the network effect idea.

• 1:36:43Speaker 06

  I'll go for, if you pick two axes, one axis is boredom and the other is complexity. You want highly boring and highly complex because everything in the universe is a supply and demand curve and you just get insufficient supply of entrepreneurs in the highly boring but highly complex space and therefore you get elevated returns. So if you go through the quadrants, you've sort of got the whole simple side, boring and simple and complex and simple. It's just too hard to get differentiation without enough complexity. That's when you get commoditization. If you go for interesting and complex, you get brilliant entrepreneurs. This is a problem, say, with space tech as an area of innovation. Every single person involved with space is basically a brilliant genius who's passionate about their work and loves it. And so very, very strong competitive dynamic.

• 1:37:26Speaker 06

  On the other hand, if you hang out in audit software, accounting software, you're sitting in an area that's complex, but no one wants to boast they do it at a dinner party and what you might call the sort of spiritual rewards of the industry are lower. And therefore you just get less buy of entrepreneurs. Therefore, the chance of every entrepreneur succeeding is significantly higher.

• 1:37:44Patrick O'Shaughnessy?

  Well, Charlie, I feel like I could do this with you almost weekly basis and be sort of endlessly entertained by your prolific interest in so many different things. I'll certainly remember this conversation as one that's a reminder that investing in business are complicated. And if you want to spend your career in those spaces, you better love it because there are so many variables and so many things happening and you have to develop your own niche and your own strategy. My closing question for everybody in each of these conversations is to ask for the kindest thing that anyone's ever done for you.

• 1:38:13Speaker 06

  Oh my God, there are so many. There are so, so many examples. I think it's probably a recurrent one of often my enthusiasm has been greater than my competence and it's the people that bet on the enthusiasm more than the competence. I'm internally grateful to them.

• 1:38:33Patrick O'Shaughnessy?

  I love that. Again, you're sometimes describing my life, so I know exactly what you mean and it is a wonderful thing. And a major category of these answers is betting on somebody early, seeing something in them and taking that risk is always a great kindness. Well, Charlie, this has been a highlight of my early week, even though it's just Monday. I really appreciate your time and I've loved all your insight. Thank you.

• 1:38:54Speaker 06

  Thank you.

• 1:38:56Patrick O'Shaughnessy?

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