How Impact Investing Quietly Took Over $40 Trillion—and What Happens Next | Sir Ronald Cohen (Fan Fav)

This is a fan fav episode. The word ‘capitalism’ seems to make some people happy, while making others cringe. The U. S. started as a capitalist society and has evolved into a mix of capitalism and socialism. As society and technology evolves, how should our economic system evolve in response? In this episode, Sir Ronald Cohen, “the father of British venture capital” speaks with Tom about the importance of social impact and what impact investing is evolving into and how it can change the social world for the better. Creating systems that support entrepreneurs, venture capitalists, and social responsibility of big companies is just the tip of a massive iceberg. Listen in to see how this all ties into our natural desire to evolve and strive for more than just money. Order Sir Ronald Cohen’s new book, Impact (all proceeds donated to impact charities): https://www.amazon.co.uk/Impact-Reshaping-capitalism-drive-change/dp/1529108055/ Original air date: 4-13-21 SHOW NOTES: Impact Investing | Sir Ronald explains what’s reshaping a new economic system [1:57] Coming to Britain | Sir Ronald reveals how he moved from Egypt and ended in Britain [4:48] Venture Capital | An overview of how venture capitalism came to be and what it is [7:23] Social Impact | Getting an accurate view of a company’s impact not just profits [9:41] Deciding | Sir Ronald gives tips on what to look for evaluating a company’s impact [12:47] Redistributed Wealth | Why redistributed wealth is needed, but it’s not enough [15:30] Poverty Problem | Sir Ronald discusses what’s been missing from solution [18:20] 1800 Companies | The $3 trillion environmental damage being measured [21:28] Capitalism | Sir Ronald breaks down capitalism driven by profit and social impact [28:05] Communism | Setbacks of communism and how increased prosperity redistributed is better [32:30] Turning Point | Recognizing social problems and having technology to measure impact [34:59] Striving | Sir Ronald introduces human nature to strive for money & quality of life [42:14] Re-Skill | Sir Ronald identifies why opportunities for new skills is part of the system [45:12] Learn more about your ad choices. Visit megaphone.fm/adchoices https://megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:00Tom Bilyeu?

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• 0:45Tom Bilyeu?

  Their dashboard tracks what comes next based on what your business actually needs. So EIN number, registered agent, licenses and permits, bookkeeping, business banking. I tell every founder the same thing. Just make it official. Click the link in the show notes to check out Taylor Brands and get started on your business today. This is a paid advertisement. Hey, everybody. Welcome to another episode of Impact Theory. I am joined by somebody today that I think you guys are going to find incredibly interesting. It is Sir Ronald Cohen. Thank you so much for joining me today. A pleasure to be here with you, Tom. All right, I am super excited to talk about your book, Impact. And I think so, obviously, with the title Impact Theory,

• 1:30Tom Bilyeu?

  people know I am obsessed with impact and what we can do in our own lives and at grand scale. You're coming at this as somebody who has built an incredibly successful investment firm. If you would walk people through exactly what impact investing is and what you see as the future of this movement. Well, Tom, we're all aware of risk when we make decisions.

• 1:54Speaker 01

  We're all aware of the return that we get when we make an investment. But to date, we've left impact out of the picture. And things are changing. We see young people in particular, like those joining us today, refusing to buy the products of companies whose values they don't share because they disagree with using child labor or they don't like the pollution they're creating. They also don't want to work for these companies. And this has become noticed by investors. So today, for the first time in history, we see massive sums, forty trillion dollars,

• 2:37Speaker 01

  being invested on the basis of risk, return, and impact. So what impact is about is improving lives and the planet. And what impact investment is about is generating profit as well as impact. And it's basically changing the world. We've had a technology revolution, all of us are aware of that. This technology revolution is being followed by an impact revolution now, where companies just making money isn't good enough. They've got to make money and they've got to make a contribution to solving some of our big challenges,

• 3:22Speaker 01

  improving lives, improving positive opportunity, reducing racial discrimination, increasing diversity, reducing environmental damage. And I'm glad to say that technology enables us today to measure the impacts of companies. We can measure the products they have and the impact that they create. We can measure what impact they create through their employment and their operations. Their operations influence people and the planet. And so we begin to have a different type.

• 4:03Speaker 01

  Of economic system creating a much better world than the one we've become accustomed to.

• 4:10Tom Bilyeu?

  All right, I think there's two key pieces that make your story incredibly interesting, and those are you as a refugee. I think people getting a little bit of background on that would be incredibly powerful. And then the other part is how you came to this impact investing, specifically when the government, the UK government, reached out to you. I think those two pieces will help contextualize you.

• 4:33Speaker 01

  Well, I consider I've been very lucky in my life, but it didn't always look that way. At the age of 11, my family and I were kicked out of Egypt because some of you will know of the Suez Crisis, where Israel, Britain, and France tried to take back the Suez Canal, which the Egyptian leader, Nasser, nationalized. And as a result of that, I find myself at the age of 11 with my parents and my younger brother, leaving with 10 Egyptian pounds in our pockets and a suitcase each, and clutching, as I mentioned in my book, my stamp collection under my arm.

• 5:17Speaker 01

  But it turned out to be a blessing in disguise. We ended up in Britain because my mother had a Jewish passport as well as an Egyptian one. We were welcomed in Britain. I went to state schools. My education was baked for. At Oxford, I got a scholarship called the Henry Fellowship to go to Harvard Business School. And when I arrived at Harvard Business School, I discovered venture capital, which was just beginning. This was the end of the 60s. And I sensed that this idea of young people.

• 5:56Speaker 01

  Creating new companies that can innovate better than big ones was really the right idea. And I thought, wow, this is going to be big. And I had an obligation to bring back something of value after the terms of my scholarship to the UK. And I brought back venture capital.

• 6:20Tom Bilyeu?

  Okay, so you make a, I heard a joke that you made in one of your interviews where you were saying, you know, this was a time where there was a kid, I think it was an older kid, somebody in college that was saying, oh, my dad is an adventure capitalist. And you were like, nobody knew what this was. One thing that I took away from your book, which I found really interesting is the sense that some of these things are pretty new. And so you've got, in 1929, you have this sense of like, hey, we have a problem here. We've got no generalized, general recognized accounting practices. So even that is in the last 100 years. In the last 50 years, you've got the idea of risk. So walk people through some of this stuff.

• 7:02Tom Bilyeu?

  And then if you can sort of end with what venture capital is, so that people understand how these things work.

• 7:08Speaker 01

  Okay, so venture capital is about putting money behind people, usually young people, who want to create huge businesses. And they have a good idea of how they can do it, and they can recruit a team to do it. And so by putting money behind them, you give yourself the opportunity to make a great gain if they become successful and they IPO or sell out.

• 7:39Speaker 01

  At the beginning, people thought it was very risky, Tom. Like when I started out, it was so difficult to raise money for this. It took us years. But then, as you saw the Bill Gateses and the Steve Jobses and others, who were dropouts from university, built companies and became bigger than the established leaders like IBM. The idea caught on, and today, it's a trillion-dollar pool. It funded the tech revolution, basically. What I didn't realize, which I think is what you're getting at, Tom, what I didn't realize is that I happened to be at business school in the US

• 8:24Speaker 01

  at the time of the birth of venture capital, and something else very important, which was, people were beginning to measure risk.

• 8:34Speaker 01

  Now, everybody invested with risk in mind, as we were saying, but nobody had ever measured it. When you began to measure it, people began to realize, hey, this new game, venture capital, well, it may be riskier, but it makes more money than it brings risk, so it's worth investing in. So, you began to see venture capital and then private equity and then hedge funds become very important parts of portfolios. Today, taken together, these three different ways of investing probably account for a quarter of a sophisticated institutions or families, wealthy families' portfolio.

• 9:20Speaker 01

  So, venture capital came because we could measure risk. Now, what's happening is we're beginning to measure impact. And impact investment is coming because we can measure impact. And as you were saying, in the 30s, after the great crash of 1929, when the stock market collapsed, the US introduced

• 9:49Speaker 01

  Generally accepted accounting principles. So every company had to report its profits in the same way, which until then they didn't have to do. And the use of auditors who basically said, these figures are right. They had a legal obligation going with making that statement. Now that gave transparency on the profit of companies. And today, I believe we're on the threshold of getting transparency on the impact of companies. So we can look at the profit and the impact, and we can have an accurate view of what this company is actually achieving.

• 10:30Speaker 01

  Because making money at the expense of the environment or poor people, it isn't the way to do business. And it doesn't help solve the social and the environmental issues we face.

• 10:45Tom Bilyeu?

  So the reason I bring that up is I really want people watching this to understand that these systems are created by people and they are not immutable. That changes happen with frequency. And when somebody has an insight, because you've talked about the people at, I think it was Chicago University, had the insight around risk and it was an insight. And the new insight that you're bringing forward is, hey, you can actually measure some of the things that the companies do that have a knock on effect, we'll call that impact. So whether it's deforestation, whether it's pollutants, whether it's, you know, like you said, child labor, whatever. Like you can actually start looking at this stuff, measuring it.

• 11:26Tom Bilyeu?

  And that key insight gives you the tool with which to change the system and begin to shape. Because I am so worried that people just get terrified that these systems are so big that they can't do anything.

• 11:37Speaker 01

  Yeah, you're right. You're right.

• 11:40Tom Bilyeu?

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• 12:25Tom Bilyeu?

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• 13:56Tom Bilyeu?

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• 14:01Speaker 01

  And we wouldn't have been able to talk in these terms about measuring impact 10 years ago, Tom. Big data and computing power enable us to do this. Previously, we couldn't have done it. It's the first time humankind can begin to measure what a company does to people and the planet, as well as the profits that they lose.

• 14:27Tom Bilyeu?

  Yeah, that, the, the timing of everything and understanding what the underlying insights are, I think will help people see how they can plug into the system. So, one thing that I wanna um talk about is, so as people are looking at the companies that they wanna support, they're looking at the companies that they want to um work for, or whatever the case may be, what are the elements that you think people should be paying attention to?

• 14:54Speaker 01

  So you should be paying attention to the products of the company. Is this a product you're comfortable consuming? Does it do more harm than good for that company to produce it? Soon you'll be able to hold up your phone to the barcode of the product you want to buy, and you will see the environmental and people uh impact of that product and of the company that makes it. The second thing is its employment practices. If today it's a great company with a great product, but it doesn't have enough diversity, doesn't pay the same amount for men and, and, and women,

• 15:37Speaker 01

  people of color don't advance in the same way through the organization, despite the fact that they have the skills, then it's your obligation to change it. And finally, if its operations are creating huge pollution, if it has a, a huge fleet of lorries running on, on petrol.

• 16:02Speaker 01

  Then get the company to shift to electric vehicle. These changes are happening all over the world now. Their examples are very successful companies doing just that. And convince your company that doing good and doing well is in its best interest. If it wants to make more money, the best thing it can do is to do good and do well. Because it will attract talent like you, consumers and investors. And it will avoid getting taxed and regulated. And young people get this.

• 16:44Speaker 01

  Older people have got used to the old system and begin to find a million reasons. Often, not all of them, a million reasons why this isn't going to work. But with forty trillion going in this direction. In E S G investing with a trillion as much as the whole venture capital pool in the world. Of impact investment proper where you measure the impact as well. Already in in in existence, that is the future.

• 17:17Tom Bilyeu?

  Okay, so if I am putting myself in the shoes of somebody watching this who may be inclined towards cynicism. Uh, I think, well, why aren't we just taxing the rich? Just redistribute the wealth, tax the rich, get them like a ninety percent tax bracket. They'll still have plenty of money. Uh, why aren't we suggesting that?

• 17:36Speaker 01

  So I'm not saying that you don't need to tax those who are better off. Governments need to redistribute wealth and income. Each country picks the extent to which it's comfortable doing that. What I am saying, Tom, is that won't solve the problems that we face on earth. Because it's not big enough. However much government stacks, it's a tiny proportion of what companies produce through their products and through their employment and through their operations.

• 18:15Speaker 01

  It's tiny. So however much distribution you take care of, you're not going to solve these issues. But if companies begin to compete with one another on the basis of diversity, of equal pay, of low carbon emissions, then investors bring that change about for you. Because the money would go to the companies that are doing a better job of delivering profit and impact. And those that are left behind, like ExxonMobil, for example, will see their share price fall by two thirds in the space of three years because they're doubling down on fossil fuels,

• 18:59Speaker 01

  which investors think is a crazy thing to do. Yeah, you look at ExxonMobil, it creates thirty nine billion dollars of damage a year from its operations stock. Compare it with BP, thirteen billion. Shell, twenty three billion. As an investor, are you wise investing in ExxonMobil? It could get taxed and regulated. It may not attract the talent anymore and its customers may leave it. No, so you go to those who are doing a better job. And I think just bringing this transparency, which I view as a human right, transparency of the good and the harm that companies do is a human right

• 19:42Speaker 01

  for everyone who is an employee, for everyone who is a consumer, and for everyone who's an investor.

• 19:49Tom Bilyeu?

  Okay, so now I want to go back to how you got into this in the beginning. So as, I'm not a born entrepreneur. So I had to learn about business. I had to learn sort of how to view a problem through an entrepreneurial lens. And when I heard that the UK government reached out to you and said, hey, look, we've really tried to address poverty, but it's proven to be a more pernicious problem than we could have imagined. And so help us look at this from an entrepreneurial lens. I want to know why is poverty so pernicious? And what is an entrepreneurial lens? And how does that help?

• 20:26Speaker 01

  So the first thing I realized when I began to look at poverty and everything it causes is we have governments and we have philanthropists dealing with the issue. Businesses are out of it, investors are out of it. I was involved in, luckily for me, being there at the birth of the venture capital industry and contributing to its development. It was a new way of funding people who want to make money. And I said to myself, "How can it be that we can't be imaginative enough to find new ways of funding those who want to improve people's lives?" Right?

• 21:08Speaker 01

  So far, I'm sure you agree with me, it's a good question. So then I said, "If you look at the way philanthropists work, they've led to a system where all the charitable organizations they're funding are small and have no money. Is that a sign of a system that works?" No. So I said, "This thing of just giving money away just doesn't achieve the results. The sums aren't big enough either. There's one and a half trillion pool of philanthropic money in the world, and you've got 200 trillion of investable assets."

• 21:49Speaker 01

  So then the question was, "How do we bring investment to those who want to do good?" And 10 years later, after that call I received from the government in 2000, a team of young people, 30-year-olds, and I, developed a social impact fund, where basically we said, "You can have an investment where your return depends on reducing the number of prisoners going into prison, reducing the number of kids who drop out of school, increasing the number of people who are off the street and need to jobs, etc."

• 22:30Speaker 01

  Now, at that time, I thought we found a new tool to help philanthropists because they can now attract investment money on top of the grant's limit. But then, with the passage of time since 2010, I realised the social impact bond really optimises, it tries to give the best balance of risk, return and impact, and that's the direction the world's going in. So what looked like an instrument that was clever to achieve a more modest objective now signposted the way forward to what our economists could do.

• 23:15Speaker 01

  Imagine if every company and its investors tried to optimise risk, return and positive impact rather than just risk, return. Imagine the change that this would create in pollution alone. I'll give you a number just to focus the attention. At Harvard Business School, I share an effort to turn these numbers, we're talking about pollution, lack of diversity, into dollars and include them in the accounts of companies, which is what's going to happen.

• 23:58Speaker 01

  We put out the figures for 1800 companies and all of you can go to HBSIWA, look up the dataset. You'll see 1800 companies from across the world with their numbers. They tend to be big companies because they make this information available under pressure usually from their shareholders or their boards or their customers. If I say to you, Tom, that 250 of these companies create more damage than they make profit in a year.

• 24:36Speaker 01

  Doesn't the light bulb go on in your mind? And I say to you, a third of them, 600 companies, create damage environmentally from their operations alone, not from, you know, their product or their employment. Equivalent to a quarter or more of their profit. And that together, the 1800 create $3 trillion of damage a year environmentally.

• 25:05Speaker 01

  You know, what does that do to you? Doesn't it immediately give you a sense of wow? By measuring, I can really begin to understand the scale of the problem and who's creating it and who's able to solve it.

• 25:20Tom Bilyeu?

  So I want to put a pin in this for people. So you are very aware that what you measure is going to become a huge part of this. You're very aware that it can create perverse incentives and people have to pay attention to that. The reason I'm not steering the conversation into that is, I think the, hey, we're going to iterate on this over time. It's just a question of can we agree that there is a metric that we should be slotting in here for impact? And so that makes a lot of sense to me.

• 25:50Tom Bilyeu?

  Now, I want to explain something fundamental to people. Because this, believe it or not, for me, like I learned this really late in life and it might be useful for people. So investing is basically, hey, we have all these people that have made money. Inflation is a thing. So if you put your money in cash, over time, your buying power goes down. So people want to invest that money to make a return bigger than inflation, so that they're getting wealthier over time and not less wealthy. Your parents are doing this with their 401K. You know, it's not just the ultra wealthy that are doing this. So now, the SIB, the Social Investment Bond, you've got something where the government participates, says, we take this money in tax and now we're going to pay for performance,

• 26:34Tom Bilyeu?

  which I think is so brilliant. So, hey, less recidivism in the prison system, for instance. So, dear investor, I'll give you, call it 3% back on your money. So if inflation is 2%, I'm going to give you 3%, so a little more. So now you can put money in and actually get a return that's making you more wealthy for making the world a better place. And I bring all of this up in the context of, I think it's Milton Friedman, who talked about the invisible hand of the market. And that notion that buyers are real people with hopes and dreams, things that matter to them, and that as an investor, what we're trying to create here is a way for people to get a return on their capital

• 27:18Tom Bilyeu?

  that actually moves the world forward. So just, I want to anchor people on that so they know you're not blind to the potential challenges, but that they really understand sort of where this is going. Okay, now I want to talk about capitalism. Are you a proponent of capitalism? It's getting a real ugly name these days.

• 27:39Speaker 01

  I think capitalism means using markets and capital to deliver growth and profits in the economy. I'm in favor of that. I don't think communism is better. I don't think very prevalent the socialism is better. So it's two tiers for capitalism rather than three tiers. But we can't let capitalism be driven by profit only. We must have markets trying to achieve profit and something good for society or the environment. Otherwise, capitalism creates problems at such massive scale

• 28:23Speaker 01

  that even governments can't cope with them, which is what's happening with our climate challenges and what's happening with lack of matter. Right? So I believe, as I say in the book, that if we bring impact to the center of our economies by measuring it, we begin to change the behavior of the actors in capitalism, who are primarily all of us as employees, and then all the companies we work for, and all the investment organizations and investors that are funding them.

• 29:02Speaker 01

  So I'm in favor of harnessing capitalism to achieve risk return and positive impact. And I actually think, Tom, it's the only way, the only way to cope with the huge social and environmental challenges we face. Governments can't do it. Companies have to do it. And companies won't do it voluntarily, all of them. Very few of them. A hundred, maybe a hundred and twenty have actually embarked on trying to measure their impact. It looks to them like some new idea that is going to make their lives even more difficult.

• 29:46Speaker 01

  But investors want it. And when half of all professionally managed money says to companies, hey, guys, you've got to start worrying about your impact. We want to know why you're causing so much deforestation. And two thirds of us shareholders vote against the management because of what you're doing through use of power. When that begins to happen, companies pay notice. And I think most company leaders would rather do good and do well than create problems and make money. But it's the power of consumers and employees and investors together

• 30:30Speaker 01

  that are going to get them to change their behavior. Now, you say, well, okay, so you don't need government. That's your next question, I can feel it. You do need government. Because if government doesn't say, hey, every company's got to report on its impact in the same way, just as we do with your financial numbers, then every company will pick its own numbers and you'll never be able to compare accurately. And investors will make wrong decisions because they don't have the right information. Fortunately, I think we're going in the direction of everyone recognizing that we do need to have standardized measurement of impact

• 31:11Speaker 01

  and that it needs to be, to go beyond paragraphs of words. It needs to go to numbers, numbers that you can compare to the profit you're making. That all makes sense to me.

• 31:24Tom Bilyeu?

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• 32:07Tom Bilyeu?

  My link gets you an exclusive 30 days free instead of the usual 14-day trial. There's no credit card payment needed. Just head to pipedrive.com/impact to get started. Again, that's pipedrive.com/impact and you can be up and running in minutes. I want to go back to something that you said about communism isn't going to do it. Deep socialism isn't going to do it. Why not? I want to get to the physics of this. Like, what is it? So this is the part of the reason I brought up Milton Friedman is you have this notion of, "Hey, guys, humans are a certain way. And while wildly complicated and oftentimes irrational, there are certain things that you can predict in their behavior."

• 32:52Tom Bilyeu?

  To me, communism and socialism break down because of a fundamental misunderstanding of what motivates humans and how humans begin to game the system. What's your take on specifically why those things aren't the solution?

• 33:06Speaker 01

  So we've seen in Russia and in other places that communism, meaning by that that the state owns all of the... Production resources of a country where everybody is paid more or less the same salary and so on and so forth. Achieves much lower levels of economic growth and prosperity than companies that are driven by the profit motive. I think because of what you said, because of human motivation. Because if you plan everything for people, you kill innovation and entrepreneurship,

• 33:46Speaker 01

  the ability to think out of the box, the freedom to try to execute it. And investors are better judges of what's going to work than governments are. And entrepreneurs are better judges of what's going to work than, you know, the governments are. So what I have found is that if you're going to reduce the prosperity that you're creating, you might help as many people. What you have to achieve is that increase in prosperity being spread much more widely than it has been to date.

• 34:24Speaker 01

  And as we were saying earlier, you can do that by redistribution through tax, you know, of income and wealth, and we need redistribution of income and wealth. Different countries will give you different proportions, but there are very few countries where people say you should have no redistribution of income and wealth. If you happen to have got lucky, as I have done, and benefited from a great education at the expense of the state, and you've made a lot of money, you should pay more tax. It's fair that I should pay more tax. It's fair. I was given a hand up, I want to give other people a hand up too.

• 35:09Speaker 01

  But if you tax people so much, and we've seen it in the US and we've seen it in the UK and elsewhere, that you take away the incentive to innovate and to put in a lot of hard work and effort to try to build a company up, we all end up being worse off or less better off. Okay? So I believe that just as we've evolved as human beings from apes.

• 35:38Speaker 01

  Our system, our economic system evolves too. Up until a few decades ago, we seem to be able to cope with the consequences of capitalism. We didn't have the climate change problems we have today. We didn't have the inequality beginning to create rebellion and violence and dysfunction within our society and political systems. We seem to be able to cope. But now we no longer can. The scale is so great, the floods and the droughts and the fires are so great

• 36:24Speaker 01

  that they threaten the existence of the planet. So hey, we got to get going on being wise and creating a system which is capable of taking these consequences into account. Now, the key to all of this is that risk, return and impact will actually deliver, in my view, in my humble opinion, better growth and profits.

• 36:52Speaker 01

  Now, that may sound counterintuitive because we think of impact and we think philanthropy very often. But if you look at the changing values that are happening today,

• 37:06Speaker 01

  people not wanting to buy products, work for companies, invest in them and so on and so forth. If they're creating harm or wanting to go to those that are good, doing good, that's changed the rules of the game. And if you add to that the huge leaps in technology that can improve people's lives and the planet, artificial intelligence, machine learning, augmented reality, you know, the human genome and the life sciences.

• 37:34Speaker 01

  We've never been, humanity has never been in a position to deliver impact more widely and more deeply. And finally, if technology enables us today to measure the impacts of companies, then those three things together are changing our system. It's reflected in the trillion of impact investment, the 40 trillion of ESG, the millennials and Z-gen who don't want to buy products and work for companies and so on and so forth. So we are at a turning point in terms of our economic system.

• 38:14Tom Bilyeu?

  One thing that I want to sort of define for people that I think your work in the book Impact does is take this philanthropy. So my beef with philanthropy has always been it is not a self-sustaining economic engine. So for anybody that's ever looked at a philanthropic organization, they are constantly going to people who have figured out a self-sustaining economic engine and begging for money. And you talk about that in the book, you talked about it here, that you're keeping these organizations really small, they cannot take risks. And so it's sort of a terrible model all over. And the thing about capitalism that works is it, I don't mean this in a negative way, but I've always said, you want to align selfish desires.

• 38:59Tom Bilyeu?

  So I'm trying to align my selfish desire for what I'm trying to do in my life with my employees' selfish desires, with my customers' selfish desires. So I don't need them to be any more altruistic than their selfishness will lead them to be and find a way for this to perpetuate. And that's what I see is happening in what you're pushing for in this movement. Now, I think one of the things that you're going to be up against or we're going to be up against is this is the core of my existence, is there is pushback in the sense of communism and socialism sound a lot better than capitalism.

• 39:42Tom Bilyeu?

  So the fact that they have such good PR is it's very difficult. So I want to contextualize this. You're a refugee.

• 39:54Tom Bilyeu?

  You had to start over from scratch. It's not so hard to believe an eleven year old doing that. I want to talk about your dad, who's forty-two, forty-three something when this is happening. What was he saying to you? Was he like, this is unfair, it shouldn't be? Was he, hey, we're gonna get a new skill set? Like, what was he saying?

• 40:15Speaker 01

  You know, uh, my dad, uh, never complained. He told me once, uh, when I was a little bit older, probably when I was eighteen or something, that he'd walked up and down the streets of London, uh, wondering what he should do. But he didn't, he didn't think of employing himself, uh, finding employment. He wanted to create a business of his own, which he eventually did with my uncle, who was a textile engineer. And the advice he always gave me is, don't work for others. You go out and do your own thing.

• 40:56Speaker 01

  And when it was tough and there were partners who didn't believe we'd be successful who left, he said to me, you just persevere, you know, you'll, you'll get that. My mom was equally important. My mom presented everything as a positive challenge, a positive opportunity. She baked a chocolate cake the minute we arrived in, in the UK for us to feel that life hadn't, you know, hadn't changed. I mean, you know, she told me that was why she did it, uh, subsequently. Um, she was very courageous about it and she too never complained.

• 41:38Speaker 01

  I mean, I guess you, you would say she was really a, a fighter. And what she drummed into me and, and my brother, and, and so did my dad, but she in particular, is education is the only possession that can't be taken away from you.

• 41:57Speaker 01

  So, having lost everything in Egypt, you can understand that I applied myself to getting a decent education. Now, when you talk in terms of communism and socialism and so on, sure, my dad could have ended up working for a company owned by the state and, you know, he would, you know, maybe wouldn't have done worse financially in the end because his venture wasn't a great success, but he had this urge to go there, create a company, do the best for his kids,

• 42:41Speaker 01

  encourage me and my brothers to do the same. And I think that's a more natural instinct, funnily enough, than the instinct to form everybody into organizations that keep them equal. Human nature is about striving, striving for survival, striving for success. It's all about striving, and our system encourages and enables the striving. The problem, as we were saying earlier, is that this striving has been purely material up till now with few exceptions.

• 43:24Speaker 01

  Obviously, you had the Quakers and you had other business leaders who cared about the way they made money and cared about the welfare of their workforce. There always were some. But it's only when you begin to think, why should it be striving for money alone? Why shouldn't it be striving for money and improvement in people's lives and the planet?

• 43:54Speaker 01

  And you realize that, wow, that's where the world's going. That's what the majority of us want. And that's what investors are showing, that we want and you know, and they want. And so it's changing, whether we're in favor of it or not. It's changing the role of companies for the better.

• 44:19Tom Bilyeu?

  I love that you have introduced this idea of striving. I think that the the recognition that sort of the the human brain is wired to incentivize striving, right? To go out to hunt, to survive, to fight, to live. Um, and recognizing that is whatever structure we put in place is going to need to take that into consideration. And when I think about uh the pandemic that we're living through now and coming out of that and how it's changed the way that people do business, companies have scaled back and realize, whoa, we can actually do this. They're going to want to hold on to that. So now you're going to have a lot of people that are displaced. Now here's where, when I was saying that communism has good PR. So there's a sense of um just it's unfair. It shouldn't have happened to me.

• 45:04Tom Bilyeu?

  Somebody should be looking out for me. And losing sight of that humans want to strive, I think exacerbates this problem. There's a whole meme around learn to code. I don't know if you've heard about that, but it's people's reaction to say, hey, you have to reskill. And when I first heard that, I I could not fathom that people were reacting negatively to the idea of reskilling. So how do you help people look at, like your dad did, the need to recontextualize yourself and not come with your hand out asking for somebody to take care of you?

• 45:41Speaker 01

  Yeah, you know, uh, we've gone through periods in history where whole industries have been made completely redundant. So just one example, the arrival of the motorcar killed the horse and carriage industry, right? Uh, you could no longer sell horsewhips or carriages. And human progress involves this type of disruption, as we call it today.

• 46:17Speaker 01

  The thing is, it's happening now much faster and much more frequently within a person's life. So we have to build ourselves into people who are constantly sensitive to where the opportunities are and how they can put themselves in a position to take advantage of them. So in the old days, if you were a coal miner, coal mines had been there for a hundred years. The coal mines closed, where were you going to find a job? Today, I think we say to ourselves, look, technology is changing things so fast.

• 47:00Speaker 01

  Think retailing, retailing has been transformed now by the internet. Where are the people who used to work in shops going to find jobs in the future? What skills can they have? Are we going to keep moving towards a service economy? Where basically machines help us to increase wealth all the time, we can all share in it and we look after each other, after all, we have bigger aging populations. People are living longer, they have needs in terms of health and so on and so forth. So we begin to think of reskilling as part of our system.

• 47:43Speaker 01

  It's not unnatural that you should have several careers in your life. And so you begin to see the tools of impact investment now. Creating career impact bonds that teach young people who don't know how to code to code and to get into jobs where their coding skills enable them to make more money. I mean, I can give you an example from Israel where I sit as we talk today. Where you have young girls who are top of their class, living in villages in the Ruz community, which is a branch of Islam.

• 48:25Speaker 01

  And they can't go outside of the village for religious reasons. But we've created locations for them to work for tech companies remotely.

• 48:38Speaker 01

  About sixty of them will have been trained and got into jobs where they make four to five times the monthly salary they made when they worked as cashiers in the supermarket. These young women are becoming the bread earners of their families. You know, so the, you know, of course, here you're talking younger people, but it could apply to a fifty year old. There are lots of skills that, you know, that people can learn. And so we have to think imaginatively. If we see the fossil fuel industry going down and we see clean energy going up,

• 49:19Speaker 01

  we have to say, well, how do we reskill people so that they can find jobs in clean energy? What are those jobs going to involve? You know, is it, is it going to be in solar farms that are generating electricity? Battery manufacturers to store, uh, you know, that, that electricity.

• 49:49Speaker 01

  Is it going to be other forms of, of electricity generation that, you know, we're going to go, um, towards? What are going to be the ways of, of, of remedying, um, you know, fossil fuels? And similarly, uh, with the water. Uh, water is crucial to the development of the world. We can't just develop, develop economies and forget about emerging countries. You see what's been happening with refugees trying to get into Europe from Africa in search of a better life and in the U S from, from Mexico. Uh, we have to find solutions for them too. The solutions

• 50:33Speaker 01

  will involve education of these populations, which companies in the developed West uh, can create products for. As I was saying earlier, the ability to use technology to provide remote health, remote education and and so many other things remotely is greater than it's ever been. And so I think, Tom. When you think in terms of a system that can cope better with these challenges, which come from human ingenuity and innovation,

• 51:12Speaker 01

  a system like capitalism, which is dynamic and resilient and reactive, if it is channeled in the same way, will be better than a system where the government tries to plan everything from above. But we can wait and see. If we find communist systems that work in the future and do a better job of it, then we have time to look at their methods and adopt them.

• 51:39Tom Bilyeu?

  That is the perfect place to end. I love that you put a button on it of what I'll call the entrepreneurial spirit of what works, what actually works. All we care about is what works. So, once we agree on what we're trying to achieve, then it is merely what is the most effective path to get there. Sir Ronald Cohen, thank you so much for joining me today. Where can people connect with you? Where can they get the book? Which you should tell people that all the proceeds are being donated. I think that's important.

• 52:05Speaker 01

  That's correct. To impact charities, you can all get the book on Amazon. The ebook is only a couple of bucks, so that everybody can afford it. The hardback is also inexpensive. The paperback will be coming out in the United States in a month or so. All of the profits are going to, all the royalties are going to impact charities. Spread the word about it. It explains how all these pieces fit together. And you have, each of you, a major role to play in this impact revolution as consumers,

• 52:47Speaker 01

  as employers, as investors, as government officials. So let's all do everything we can to bring this revolution about the fates of billions of people and the future of our planet depends on it.

• 53:03Tom Bilyeu?

  I love it. All right, guys. Speaking of things that will influence the future, if you haven't already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do. You need consistent nutrition. We all do. You need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it. When your routine breaks, everything tends to break. And that inconsistency compounds against you every single day. AG1 is designed to solve the execution problem. One scoop, eight ounces of water, and you're done. You're getting 75 plus ingredients, vitamins and minerals, pre and probiotics,

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