#1123 Max Levchin On How To Be War Time CEO

Max Levchin is the Co-Founder of Paypal and the current Founder & CEO of Affirm. In this conversation, we discuss building a new credit score, how to navigate market downtowns, and building company culture in a remote environment, ======================= Arculus is the next generation crypto & NFT cold storage wallet that combines one of the world’s strongest security protocols with the easiest to use form factor and app. Arculus requires 3-Factor Authentication to ensure only you have access to your digital assets – something you know – a PIN, something you have – the Arculus Key Card, and biometrics. Learn more and buy it now on getarculus.com. Use promo code POMP to save 15%. Remember, with Arculus, it’s your keys, your crypto. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= With a Messari Pro subscription, you gain access to exclusive industry-leading long-form daily research reports, daily crypto news & insights in your inbox, advanced asset screeners, curated sets of charts and metrics and so much more. Try Messari Pro today! Get up to 25% off their Messari Pro membership by visiting www.messari.io/pro and entering promo code "POMP" at checkout. =======================

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Max Levchin is the founder and CEO of Affirm. In this conversation, we talk about building a new credit score, how to navigate market downturns, what exactly it means to reinforce culture in a remote environment, and whether Max believes in aliens or not. I really enjoyed this conversation with Max, and I hope you guys do as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by Arculus. Arculus is the next generation crypto and NFT cold storage wallet that combines one of the world's strongest security protocols with the easiest to use form factor and app. They have three factor authentication and

• 0:46Anthony Pompliano?

  you can use your PIN and Arculus key card along with biometrics. They don't compromise your holdings by requiring a USB port, charging, or browser connections. With Arculus, you're protected from hackers and institutions freezing your access. Learn more today and buy it now at getarculus.com. You can use promo code Pomp to save 15%. Getarculus.com, use promo code Pomp. And remember, with Arculus, it's your keys, your crypto. This episode is brought to you by LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of liquidity and they have 100% uptime track record through all the volatility spikes. LMAX Group's liquidity relationships and ultra-low latency technology means that LMAX Digital is the market-leading solution

• 1:30Anthony Pompliano?

  for institutions across crypto trading and custodial services. LMAX Digital, secure, liquid, and trusted. Go learn more at lmaxdigital.com/pomp. Again, that's lmaxdigital.com/pomp. This episode is brought to you by Messari. Your days of spending hours scouring the internet for quality crypto insights are over. Messari is your one-stop shop for all your crypto data and research needs. With Messari Pro, you gain access to exclusive, industry-leading, long-form daily research reports, daily crypto news, advanced asset screeners, and curated sets of charts and protocol metrics. You can try Messari Pro today, and listeners of this podcast will get 25% off the Messari Pro membership by visiting www.messari.io/pro

• 2:13Anthony Pompliano?

  and entering promo code Pomp. Again, that's messari.io/pro and use promo code Pomp. Navigate the market with confidence with Messari Pro.

• 2:23Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 2:46Anthony Pompliano?

  All right, guys. Bang, bang. I've got Max here with me. Max, I thought a great place to start would be this idea of a new credit score. Obviously, the idea of the old credit score, most of the financial system is built on. You've had personal experience and also built an entire company around this idea of creating a new one. Help explain what you think the problems are with the old one and why we need a new one.

• 3:05Speaker 02

  That's a rich question. Lots of, lots of fun things to pull on. Probably the most problematic thing with the old credit score is that it just doesn't really take into account that people's borrowing habits and approaches have changed. So this is very recursive, but BNPL itself, majority of the pay-in-for products that you see are just not included in the calculation of your FICO score or your Vantage score. And so that alone is a bunch of people's significant borrowing activity now. And even if you've paid every one of those loans back on time, the pay-in-for just doesn't

• 3:48Speaker 02

  even appear in your credit history or your credit score. And the Consumer Financial Protection Bureau recently sort of opined on it and basically said, hey, it would be really good if the industry would start reporting that. So I think it's going to change for the better relatively soon. But for this to really change, the companies that use those scores and compute those scores actually have to change their behavior. But even before BNPL, the FICO score, which is the traditional fair Isaac's company, the lingua franca of borrowing, just would update very slowly. I mean, these days, actually, I think it updates a little bit faster, but back when I had my own brushes with the credit scoring.

• 4:33Speaker 02

  Problems, if you will, I think it took me something like 10 years to get rid of a black mark I had caused to myself in college by running out of money and not being able to pay my bills. So just a slow updating, lack of data sources that really should be included. Lack of familiarity with how younger generations use credit. And the fact that an enormous number of people, probably the most important, because I should have started there, something like 30 to 50 million Americans have something that's

• 5:13Speaker 02

  just not really reflective at all of how they behave and who they are. And there are many different reasons why the information is inaccurate, there are mistakes in reporting, their data doesn't get included correctly, et cetera, et cetera. But ultimately, there's tens of millions of people, literally, whose credit history and therefore credit score just doesn't actually reflect how they have behaved in the past when they borrowed money, or in fact, maybe just doesn't have any information at all. And they're completely excluded from a standard borrowing systems.

• 5:39Anthony Pompliano?

  So what's interesting about this is you're highlighting a disjointment, if you will. There's people who are doing activities, and then the old systems don't account for that. They're inaccurate, they're slow, whatever the problem is. What I'm fascinated with, and I've been talking about for two years now or so, is we see this across the economy. It's not just in the credit score. So think of inflation as an example as well, where we still have people going into the grocery store with like a pad and paper and writing down what the change in prices are. But it seems like whether it's a company like yours or other companies in the fintech sector, you have much more real time information at point of sale. You know what people are paying, you know what the cost of change month over month, year over year. When you zoom out, and so not just credit score, whether

• 6:24Anthony Pompliano?

  it's inflation calculations or whatever, is the market ripe for just kind of like, hey, we have to digitize, we have to modernize, and like, real time information should now be the foundation for all of these different calculations and kind of data points that are being presented and people are using to make decisions?

• 6:38Speaker 02

  Yeah, that's a very good observation. And I think about a decade ago, I had this thesis that

• 6:49Speaker 02

  The transition from analog to digital will create incredible opportunities for companies and a firm certainly one version of this idea in credit data. But the reality of analog data is just really irregular and error prone and fuzzy around the edges and highly likely to be inaccurate, even if it seems accurate. And so I think it's very, very hard to have a wholesale replacement of analog systems with digital systems. And so we're doing it piecemeal, which creates opportunities because if you figure out a clever way of accelerating part of the industry, a segment or just a flavor of analog and

• 7:32Speaker 02

  push it into digital wholesale, you'll suddenly be in possession of an information advantage, which again, at the 6,000, 65,000 view, just gives you an opportunity to arbitrage that. But I don't know if there's a way one can imagine to go from our still pretty analog lives to fully digital just really, really quickly. And I think we're just going to keep stumbling through it. In many ways, one of the things that makes China so interesting as a society, they came from a truly analog economy, so analog that transition to digital wasn't a choice, it was a sort of moral imperative. Like you can't have a country that big with that many changes, that many systems and

• 8:16Speaker 02

  just slowly move from analog to digital. You just have to do it wholesale and combined with a centralized government, in that particular scenario, I actually think it helped them. But when you, I talked to my friends in Shanghai, we talk about payments, of course, and it's shocking sort of the level of innovation they see there. And it's always falls right back into this idea, well, they have access to all this data and it's really accurate and everyone's on board with it. There's no cards, it just all comes from your phone and so on.

• 8:42Anthony Pompliano?

  What's fascinating to me about you specifically is that you're working on a very hard problem. There's like the problem in front of you and then there's the broader thing that we just talked about, but also you have been able to navigate good times and bad times over and over and over again. And so you 2000 tech boom and bust, then you've got the 2008 global financial crisis. We now are in this thing. I don't even yet know if people can really describe what it is, how long it'll last, how bad it'll be, whatever. What are some of the lessons maybe from the past market downturns that you now are implementing? Whether it's personally or at a firm in terms of actually running the organizations that other people could learn from?

• 9:17Speaker 02

  Definitely lots of learnings.

• 9:22Speaker 02

  You definitely have to be made of a certain high-density fiber to survive the ups and downs. I think that there's no getting around that. The knocks sometimes are very hard and sometimes they get even harder. And if you're not prepared to take the beating, get up and go back to fighting, you should stay on the floor. And it sucks to fail, and I failed enough times to know just how painful it is and how frustrating it can be to be on the floor and realizing you really aren't going to be able to get up. But I choose to get up every time, even sometimes it means a failed company or two. So that's sort of the hard knocks advice, I guess. Couple of maybe more practical ones.

• 10:04Speaker 02

  As a leader, I've realized that everybody approaches kind of the punch-in-the-face scenario differently. And sometimes the punch-in-the-face is like, this happened and now we have to deal and we have a day left and et cetera. Sometimes it's kind of the dread of, oh, wow, the recession is really coming and people are going to have a harder time paying their bills and well, that's going to be interesting. And in both of those scenarios, you kind of realize that this is going to get a lot tougher. Whatever hard you think you're experiencing right now, the future is not going to be easier. And the only way to cope with that is you kind of have to step back and try to get through the first two stages.

• 10:48Speaker 02

  You know, why is this happening and why is it happening to me? And quickly get to, all right, what does the solution look like? And in the ideal world even, okay, is this an opportunity? If it's really difficult, it's probably really difficult for everyone. So am I going to be able to extract a competitive advantage? Or something might change for the better for us more so than our competitors? And as a human, you can't completely shake off the, why is this happening? Why is it happening to me and why is it happening to me now? What do I do to deserve this? You have to develop skills to cope with that moment. And everybody does it differently. In my case, I trained myself over the years and decades to sort of say, all right,

• 11:32Speaker 02

  just do nothing for a few minutes. Just let the information sink. It is not going to be good, it's not going to go away, it's not going to get better. But any emotional reaction in the moment isn't going to fix it for you. And so just let it wash over you for a moment or two. It's probably the case you're missing some information anyway. Give yourself a chance to absorb it and you'll move right on to the what's the solution? And might this even be beneficial? And so that's a really important skill that I actually have to train myself for. Cause in the past, certainly being the personality of entrepreneur is that this happened, jump into action and you may well miss a piece of data that will later on prove crucial.

• 12:14Speaker 02

  In terms of just practical advice for how do you cope with downturns?

• 12:19Speaker 02

  Assume they're always coming, raise enough money, deal with the realities of unexpected loss of revenue, loss of growth, whatever the metric you care about rationally. You can't allow yourself to be emotional, can't allow yourself to wallow in, you know, the sort of looping on why is this happening to me now is the worst thing you can do because then you're not acting.

• 12:41Speaker 02

  And two other most important things. People are the most important thing in the world by far. And so if you compromise your relationships with people you care about in the moment of impact or as you deal with impact, you're ultimately going to regret it very much. And so that is just a really important thing. It doesn't mean that you can't and won't have to make hard choices. But if you do it by putting aside your feelings and thoughts about humans that surround you, your team, people that you work with, your partners, you're absolutely going to regret it very badly. And so that that's just a thing to be very mindful all the time. Most people don't need reminding of that, but some people feel like they need to act extra tough and ruthless in moments of difficulty.

• 13:26Speaker 02

  And you have to be tough and you have to be ruthless, but you have to continuously remember that you're not the only human on the planet. And two,

• 13:39Speaker 02

  you have to.

• 13:45Speaker 02

  Try to ask the question, what does it look like if I compromise any of my values to accomplish the whatever survival goal I have? And nine times out of 10, the answer, you will deeply regret that. And so in sort of my absolutist rulebook, people and values are immutable, can't change them. I think that's maybe too maximalist of an advice. And so you have to, you have to ask the question, you know, what am I doing and why am I doing it? But ultimately, if you're poking around your core values and thinking like, might I relax one of those things? That's a real problem and I strongly advise against that. It's a very long-winded answer.

• 14:25Anthony Pompliano?

  No, it's great. And I think that you've learned a lot. One of the most interesting parts of these market downturns is you have to transition from like, what many people would call it the peacetime CEO to the wartime CEO. And you're hinting at this a little bit. What do you do inside the company itself? Like, is there like a day where you declare, okay, I'm now a wartime CEO? And everyone's like, hey, we're going to war, you know, essentially? Or is it somewhat more of a slower transition as you realize things are getting worse?

• 14:51Speaker 02

  So it turns out, I am actually much better as a wartime CEO than a peacetime CEO. I've found over the years that if it's really peacetime, I start getting very restless and I kind of look around for war. And it's a little bit of a samurai complex. I'm a big fan of samurai genre and stories and et cetera. The noble warrior is something that I at least pretend to identify with. But there's lots of stories from medieval Japan where samurai would get restless and they would have to go find an enemy because otherwise they'd just start slaughtering each other. And I don't slaughter my team or certainly self-destruct, but I'm definitely more restless in peacetime than I am in wartime.

• 15:35Speaker 02

  It's actually a really important skill for CEO. So the thing that happens in peacetime is the team becomes comfortable with the level of crises that they have to deal with kind of at a retail level. Different than peacetime and wartime is fundamentally just the frequency of crisis and the wholesale nature of it versus the retail nature of it. And so if... Most CEOs I know really struggle in this transition where you're like, hmm, more and more hits on the side walls of the ship. Is this a crisis? Is this a war? And for most of us, I think the tendency, even if you sort of enjoy the wartime intensity, say, well, okay, this is problematic, but we're not really quite declare DEFCON 5

• 16:20Speaker 02

  or whatever the number is. And I found over the years that it's actually much healthier to just say, okay, things have changed. The pivot to wartime mentality isn't going to be careful and deliberate. We're going to have to declare that this is in fact wartime. We're fighting for our lives. There's lots of problems out there and we're gonna beat the enemy or survive the storm. But it's happening now. It's not, it's not happening slowly. And I've experimented with messaging over the years. I found that if you try to peanut butter it a little bit more carefully, you just ultimately get very frustrated. Not everybody's on the same page. So you kind of have to bring everyone along. And as a wartime CEO, the number one thing you have to do is communicate and communicate clearly, communicate well.

• 17:03Speaker 02

  And so long as you're clear about why certain things are no longer true and certain behaviors are no longer going to fly. Some people might say, well, that's not what I came here to do. But those that thrive in kind of this sharp black and white scenarios will probably appreciate you for, for being clear and appreciate the moment to, to shine and embrace the, embrace the struggle ahead.

• 17:29Anthony Pompliano?

  As you're doing this, you're a publicly traded company. And so there's, everyone and their mom has an opinion. There's plenty of critics out there. They're looking at a stock price that moves hour to hour, day to day. Your reaction alone is kind of, hey, that's very antithetical, I think, to like, somebody who has a long-term vision, trying to solve a big problem. How have you, as a public company CEO, really balanced? If I was just building a company or building a solution, you know, there's this long-term mentality, but you do have to manage the public expectations and the critics and all of that. And so like, what lessons have you learned there over the years?

• 18:07Speaker 02

  Been public for less than eight quarters and so it's probably a little too early to ask me for a rulebook of how to be a public company CEO with a with a great plan.

• 18:23Speaker 02

  I think probably the most important thing as a public company CEO anyway, is to understand who your major shareholders are. I think I'm still my own, one of the larger shareholders, for sure. And so ultimately, I have, if not the most, quite a lot to lose or gain from the performance of a firm as a long-term investment. I think my heart goes out to day traders that lose or make money on a firm, but I spent less than a nanosecond actually thinking about them. I very much care about making return on investment for my long-term

• 19:05Speaker 02

  shareholders, of which I am one, of which many, most of our employees are. And so

• 19:13Speaker 02

  the notion that, well, I got a vision and I just got to go there and I don't care about the stock price, I think is disingenuous. This is a capitalist enterprise. We've raised quite a lot of money. A lot of those shares are still owned by people who gave us the money to build this company and it's my duty and job to give them an excellent return. And that's, I certainly intend to do. The good news or the comforting news is that when we raised the money, we told them the same story over and over again. The very vision that we put in our S1 was in our first financing deck. It's actually sort of insane. I don't think I've ever run a company that did not pivot, except for a firm. Every single project I've ever had, and this is, I lost count, but this is in the teens of companies that I've started, and everyone except for this one, at some point said, ah, we're really

• 19:58Speaker 02

  not going to do this. We're going to do this something else. And not a firm, a firm has always been in this honest financial products mission and we continue to do so. So the story has never changed. People that bought our shares in Series A through the IPO have all heard the same thing. We promised them that we will do our absolute darndest to make an exceptional return on their investment and that is the plan. And they have seen the plan and have seen the story that we think will get us there. We keep on growing. We keep on printing really good results. The vicissitudes of the stock market are sometimes frustrating in a sense that.

• 20:33Speaker 02

  You feel disoriented by the dizziness of we post a great quarter, the market penalizes it for it. There's some other random signal and suddenly the market rewards it for it and like, well, did I do this or did some external factor have had a hand in this? And ultimately, I keep myself focused by being frustrated with features that are not shipping fast enough or conversion rates that are not as good as I want them to be and pennies that we leave on the floor when we should be picking them up, things like that. And so I'm very, very internally focused and goal driven for the company in the service of the strategy that comes from the mission.

• 21:15Speaker 02

  It doesn't hurt to have total conviction that what we're doing is important and believe that we're pursuing the mission with the right strategy. I think, once you start losing faith in your strategy or your mission, that's when you get really, really tail spun. Like, at that point, you really should rethink everything. And that's when you start listening to the voices outside or screaming at you, saying you should do X or Y because obviously you're an idiot. And I'm pretty far from feeling that way, so I'm quite tanguine.

• 21:47Anthony Pompliano?

  So, as you built this business, one of the things that I've seen talked about publicly is a focus on building the right culture. And I think of culture as something that attracts the right talent, it kind of rejects certain types of talent. How do you think about building that in today's day and age, right? It's 2022, there's all kinds of chaos going on. Like, how do you kind of stay true to what that culture is over years where many people, I think, would argue, just like, society has been changing as well, right? So, kind of, everything's moving around you. How do you keep a culture that attracts the people you're looking for to help you on this mission?

• 22:19Speaker 02

  It's a great question. And, by the way, I think, in that particular domain, I'm still very much in learning mode. And everything I thought I knew changed with the pandemic, and everything I know changes with every 100 employees, maybe every 500 employees that we add. When we were tiny, it was really easy to enforce the culture. And I built the Affirm Car culture very, very deliberately. I had, obviously, lots of experience with building teams in the past. Some I thought were spectacular, others were less so, and I had to fix culture. It's really, really hard to rewrite your culture. It's basically a mess.

• 23:01Speaker 02

  Lay off if you end up thinking, my God, the culture is way broken, more than half the people are not the way, interacting the way that you think they should be. And so I was very fortunate, a firm was very deliberately built. We wrote down our core values before we incorporated the company. We wrote down our mission, which has never changed. So all of that, the foundation is right. As you get larger, you have to over communicate it. You have to continuously reiterate what it means. And the amount of drift in interpretation of the core values and the mission is staggering. Like you literally look away and people say, well, you said this in our core values and here's how I interpret it. And when you're a hundred person company, you can say, no, no, that's just silly. Like, that's not actually what I mean.

• 23:46Speaker 02

  If you have 2,600 employees, which is roughly where we are, you don't get to hear that. You don't get to say, oh, wait, hang on a second. That's just not right. And so you have to over communicate as much as possible. What do you really mean? And a lot of times it comes down to, all right, so here's a situation in front of us or in front of an employee that you may have never met, or I have never met. And they're thinking about making this really tough moral choice. And they think they fully understand what it means for the backbone of our company to stay straight and narrow. And I think those, we have done an exceptionally good job just hammering like, no, we will never screw our consumers. There's lots of ways to make money in this world and there are things we will not do.

• 24:27Speaker 02

  And some others do it and others even have really good explanations for why they do it and we will not. We just don't think it's right and that's off limits. And I would be shocked if people within a firm were like, well, but like one day we'll do those things. Like, no, we won't. Like I think Pitchfork will come out as soon as somebody suggests that and they'll be carried out from their Zoom room. But in more subtle matters, like.

• 24:53Speaker 02

  One of the really interesting things to debate is one of our core values is people come first. And it's really tempting to say it's all the people and then you have a sorting function. Well, so I'm a people and you're a people and we have some employees that are people and most of them, all of them maybe. And then we have consumers and lots of others. And the original meaning of the core value people come first is very, very, very clearly articulated in the first set of writings that I did about Affirm. And that is, we put our borrowers ahead of ourselves. We will not take advantage of them. We will not make money when they are

• 25:32Speaker 02

  in trouble and so on and so forth. And just explaining that very, very clearly and making sure people really understand very deeply that ultimately we are a service organization. We are serving a consumer that has needs and we choose to place their needs ahead of our own. That's just how it's meant to be. And that's not the easiest thing to absorb for some. I think you have a... And on the other side of this is actually this notion of, all right, well, if that's really true, like, why aren't we a nonprofit? And I have some very strong words to describe why we're not. And so, anyway, so these are all kind of maybe very low level

• 26:13Speaker 02

  examples of how this stuff gets harder and harder as you get larger in size, because inevitably, these conversations occur when you're not in the room. And so, it's my job to teach all of my directs and their job to teach their directs and so on. And so, so long as the conversation keeps going and the messages are repeated in consistent ways, then it does really well and survives. And I think we've done a good job. I think it's a lot harder in Zoom rooms because you just don't quite have as much interaction in real time.

• 26:41Anthony Pompliano?

  I was just gonna ask, I worked at Facebook for a couple of years and what has now become somewhat of a joke, but there was literally posters, you know, move fast and break things, done is better than perfect. Like, you would walk down the hall and it was like an indoctrination of certain, whether they were actual values or like certain phrases that kind of reinforced what the company was about. That's great when you actually have hallways, but if you're on Zoom, I don't see any posters behind your head that are like reinforcing the company values. So, how do you do it?

• 27:12Speaker 02

  I think that's a, I was gonna show you my virtual background. Early days of the pandemic, but I think that this is a different laptop. When pandemic just began and we suddenly went into the Zoom land. I was like, what do I do to sort of tell people something? You know, this, this is all these pixels behind me. And I had the Hitchhiker's Guide cover with the big Don Panic on it as my, as my background for quite some time. It's been long enough in the strange world of Zoom that I don't even have the file anymore. I'm not sure where the, the image map went.

• 27:49Speaker 02

  So I think the couple of thoughts on how do you, how do you preserve the culture or amplify the culture in a world where you don't have always? Which I think is, is pretty, pretty great, important question.

• 28:05Speaker 02

  It's easier, the cheat code on preserving the culture is you make it very explicit in your interviewing process and your recruiting process. That there's a certain flavor of how we do and do not do things here, that we really care about certain decisions a lot. And maybe you don't care about others as much. And you self-select or you pre-select the people who join to understand what this is, this place is all about. Like we are building a profitable capitalist enterprise. We take great pride in it. And yet we also are very, very hell bent on treating a borrower's rights, delivering value to immersion partners

• 28:45Speaker 02

  and not cheating by creating fees and hidden charges, the way the industry has sort of chosen to cheat. And you have to go through the trouble of explaining that. And for some people, I think it might be a, well, maybe I don't want to work here because you want maximize profit by any means necessary. And that's outside of my core values. And or, and maybe it's equally the problem for people like, well, wait a second. Why are you insisting on making profit? And we insist on, on that. So.

• 29:19Speaker 02

  Making sure the culture is self perpetuating through the interviewing process is one of the ways you can maybe make it a little bit easier in a world with no hallways. The other way in a world with no hallways is, has been certainly my, my play for the last several months since the pandemic has been a little bit easier to navigate, is you travel. We have a lot of offices around the world now. My next week will be in Poland, where we have an office, which will be really exciting. I haven't seen that one yet. But the week before was in Chicago and the one a couple of weeks prior was in New York. And in, even in the world where most people are in their office sort of Tuesday through Thursday these days as opposed to a full week, it's just really, really great to have a

• 30:03Speaker 02

  moment to interact with real humans and to do, do my part and help them reinforce the culture. And I don't know if we will ever have too many posters, just because not, not enough time to, to look at them all. But conversations are more valuable than, than posters and walls, in my opinion. So we encourage people to travel, we encourage people to get together in person. We have lots of offsites where teams get together and spend as much time interacting, just kind of reinforcing the culture with each other as they do working. So I think that you, in aggregate, I don't think it's an impossible task, but it's certainly something you have to be very deliberate about.

• 30:38Anthony Pompliano?

  One of my last questions for you. You are incredibly intelligent. You're very kind of thoughtful, I think, in a lot of your public appearances and our conversation here. And you have been part of a number of different teams that I think people really look up to and they say, hey, you guys have been successful. You've been able to attract other smart, intelligent, hardworking people. What do you personally do to learn? Are you reading books in your free time? Are you listening to podcasts? Are you doing, you know, something that no one's ever heard of before? Like, what are you doing, given that you have this day job that obviously has all this pressure associated with it? But what, how do you learn on a day to day basis?

• 31:14Speaker 02

  It's a great question. Probably the single most.

• 31:19Speaker 02

  Useful predictor of success that I have discerned in my decades hanging around this planet is curiosity combined with intelligence is just a really, really good predictor of success, maybe more so curiosity than than than anything else, really. And I am naturally curious. So it's helpful. I don't have to work too hard at wanting to learn more. I do do a fair amount. I read quite a lot. We used to used to publish what Max is reading newsletter to firmers, just to keep them guessing what the next book will be. I'm

• 32:03Speaker 02

  fairly omniverse. When we did have hallways, we had a bookshelf where it would be a couple of copies of whatever it is that I was gorging myself on. I tend to read multiple books at a time. One cool pro tip. So if you read books on Kindle, you should buy the Kindle plus Audible bundle because Kindle plus Audible tracks where you are reading digitally and you can literally go from I'm reading this on my phone. Now I have to drive. I'm going to flip it over to Audible and have it read to me. So you can go through a book very, very quickly. Of course, listen to things on one and a half time speed and or faster if I can help it. I found that there's an incredible amount of really great content

• 32:45Speaker 02

  on YouTube. So I watch tons of lectures on YouTube and other sources, but YouTube is mostly free. I listen to a lot of podcasts. I actually quite enjoy the genre. I thought I would hate it, but it turns out that it's quite nice. Good work there. I definitely rabbit hole into Wikipedia way too often. It's a pretty fun pastime. And then I tend to try to find creative outlets for myself that require learning. So for example, I studied music as a kid and I hadn't really gone back to it in quite some time. And then

• 33:29Speaker 02

  recently I decided that to sort of exercise the other side of the brain, I have to go deep into music. And so I've been learning how to use various. Digital audio workstation software and reading and watching music theory lectures and all kinds of stuff, which there are only so many minutes per day to do it, but it just forces you to exercise a learning muscle in the other part of the brain that is not related to things like discounted cash flow and machine learning based underwriting and like all the stuff that I do day in and day out for work. And that that seems to help. You can sometimes draw parallels where you say, oh, I saw this really interesting random thing about music theory and it's nothing like underwriting, except there's some similarity. Maybe I should go pull on that for a little while.

• 34:14Speaker 02

  And so that I I try to learn as much as I can every day. I highly recommend it. Being curious is really good.

• 34:24Speaker 02

  Maybe the other one, one last random bit of advice. And this is applicable to every question you ask, perhaps.

• 34:34Speaker 02

  Maybe two parts. One, being cynical is just a loss proposition. It's like a lose lose proposition. There's no way to win if you're a cynic. The Greeks had it right. Cynic means dog like. And I there's, there's nothing good about being cynical. That said,

• 34:53Speaker 02

  cynicism is kind of an approximation for evaluation of risk. We sort of look at the world and say, oh, man, nothing's going to work out. This sucks. Like, we're already done. And like sort of the ultimate cynicism, you know, like where's the nearest bathtub? I need a razor blade and that's a terrible way to live. And I strongly advise against it. That said, you have to be eyes wide open, like when you're looking at the world and you're saying, a big iceberg is floating in the water. You can't say full speed ahead. You have to figure out a way to get around it. And so I found that the posture of short term

• 35:25Speaker 02

  risk averse, trying to figure out how to not hit the iceberg that's right in front of you, while being extraordinarily optimistic about the future and taking outsized risk bets on the future outcomes has worked really well for me, where you basically just assume that your job today is to survive and your job tomorrow is to win in a really, really big way that hopefully benefits the world. That combined with curiosity, you can get reasonably far.

• 35:52Anthony Pompliano?

  I love that in a way you've basically made learning a hobby. Like you're to do all of that, right? You're just constantly learning. I tend to find myself doing the same thing. And it really upsets people in my life who are like, I don't want to watch YouTube anymore. And I'm like, no, no, but like, why would we watch the other thing? Like the other thing is making us dumber. I do, I have a young daughter and I'm trying to train her. Like, why don't you also watch YouTube rather than cartoons?

• 36:17Speaker 02

  That's, I have a, I have an 11 and an almost 13 year old and they are unfortunate victims. I'm like, oh my God, I just saw this amazing obscure video that taught me something that you really, really have to know. Let's watch this together. It's this crazy chess opening you've never heard of. What are you talking about? There's Tik Tok.

• 36:37Anthony Pompliano?

  Yeah, exactly. My last question for you is a fun one. I'm always fascinated by people's belief. Do you think aliens are real? And not only yes or no, but like, how do you kind of think through that problem? Which we may never get an answer to, or maybe we're going to get an answer, you know, sooner than than we'd like. But how do you think about whether aliens are real or not?

• 37:01Speaker 02

  I can't say I spend too much time thinking about the binary answer to the question. So I'm a huge fan of science fiction and in my copious spare time, I read an inordinate amount of science fiction. I'm quite a big fan of quote unquote, hard sci fi where aliens are real and rocket ships travel from world to world. I think the world would be so much more boring if this all turned out to be not true. Like I just don't want to learn today, which fortunately I think it's impossible to really learn that there's nothing else out there. It's just us. The point of view that no, it really is, it's just us and there's no one, nothing intelligent,

• 37:42Speaker 02

  lots of cold rocks and elements floating around in nothingness. And we're in a very, very center of it all, sitting around trying to solve our petty little problems. It's very boring and I choose to, I choose to hope that it's better than that. I've obviously read all the various thought experiments, sort of how you convince yourself that at a certain scale, the probabilities approach 100% and on all of that. I'm not sure we understand.

• 38:14Speaker 02

  Are surrounding so well that any of those approximations are really to be relied upon, but from the sort of a, what would be more interesting, like what would satisfy my curiosity, you kind of want to believe they're real, right?

• 38:29Anthony Pompliano?

  I mean, yeah, it would be one, boring, but also two, it kind of feels like that's the last new world, right? Like kind of Earth is to some degree discovered. Yeah, sure. There's still maybe some pockets that we don't know as much about and things like the ocean or whatever, but it does feel like the frontier of space and whether there's life or not and other planets, all that kind of stuff. Aspiration is important for humanity and it gives us something to look forward to and build towards and stuff like that. So it'd be kind of depressing if all of a sudden it was like, hey, actually it's just like a wall, like you can't go past it or something. I think that would be a sad, sad answer.

• 39:08Speaker 02

  Yeah, there's also really good literature that shows that at least attempts to prove that what we've had here, assuming you believe in some version of evolution is just not that special. Like there's all these things that happen, but they're all kind of basic chemical reactions in lots of time and not even that much time. And so if you kind of subscribe to well-understood principles of basic physics, there's been enough time in all sorts of places to have variants of evolution take place. The fact or the idea, hopefully not the fact, that we are the one branch of the decision tree, the possibility

• 39:50Speaker 02

  tree that actually got to intelligent life is depressing and boring and would be a lot more fun if it were not the case. Now, there's all the obvious, well, and then aliens show up and they don't like us and we have to deal with Independence Day scenarios, the infamous movie.

• 40:09Speaker 02

  Nah, I think, this is another belief, but I think generally speaking, most intelligent species, even as they approach our intelligence, assuming at the moment, at least we are the smartest ones we know, they trend towards good. So if you sort of, the smarter you get, I think the more benevolent and you replace your aggression with curiosity. And if that's true, we're certainly not capable today of interstellar travel. And to do that, the energy you have to muster is roughly equivalent to sort of the planetary energy sources. Like we could probably travel interstellar if we could gather up all the energy on Earth

• 40:51Speaker 02

  and start propelling ourselves that way. So whoever shows up here, if they do so first, they'll have to be a lot more intelligent than us. And if that's the case, my guess and belief is that they will have progressed to being more and more benign. And so maybe they'll show up and, you know, will teach us interesting things, or we'll make great pets.

• 41:09Anthony Pompliano?

  One or the other. I love it. Max, listen, thank you so much for taking the time to do this. It is awesome to see what you guys are building with the firm. And then you have decades and decades of experience that I think a lot of people can learn from. So hopefully they got something out of this. And we will definitely do it again in the future.

• 41:25Speaker 02

  Thanks for having me.

• 41:28Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends and I'll see you all for the next episode.