#163: Marc Andreessen -- Lessons, Predictions, and Recommendations from an Icon

Marc Andreessen (@pmarca https://twitter.com/pmarca) is a legendary figure in Silicon Valley -- and worldwide. Even in the epicenter of tech, it's hard to find a more fascinating icon. Marc co-created the highly influential Mosaic http://www.ncsa.illinois.edu/enabling/mosaic Internet browser, the first widely used graphical web browser. He also co-founded Netscape https://en.wikipedia.org/wiki/Netscape_(web_browser), which later sold to AOL for $4.2 billion. Then he co-founded Loudcloud, which sold as Opsware https://en.wikipedia.org/wiki/Opsware to Hewlett Packard for $1.6 billion. He's considered one of the founding fathers of the modern Internet, right alongside pioneers like Tim Berners-Lee https://www.w3.org/People/Berners-Lee/, who launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and early HTML standards. This all makes him one of the few humans ever to create software categories used by more than a billion people. He's also one of the few who's established multiple billion-dollar companies. Marc is now co-founder and general partner of venture capital firm Andreessen Horowitz http://a16z.com/, where he's quickly become one of the most influential and dominant tech investors in the world. In this interview, we dig into some fun things Marc has not discussed in many places, including: His epic debate vs. Peter Thiel Rules for investing The future of bitcoin Artificial intelligence Favorite books, documentaries, and movies And much, much more We had an extremely detailed and rich conversation, and I hope you enjoy it. Please do say hi to Marc -- he's very active on Twitter at @pmarca https://twitter.com/pmarca. Enjoy! Show notes and links for this episode can be found at www.fourhourworkweek.com/podcast http://www.fourhourworkweek.com/podcast. This podcast is brought to you by Audible http://audible.com/tim. I have used Audible http://audible.com/tim for years and I love audio books. I have two to recommend: The Graveyard Book http://www.audible.com/pd/Teens/The-Graveyard-Book-Full-Cast-Production-Audiobook/B00LXHQO22/?tag=offsitoftimfe-20 by Neil Gaiman Vagabonding http://www.audible.com/pd/Travel-Adventure/Vagabonding-Audiobook/B00GCHWZHG/?tag=offsitoftimfe-20 by Rolf Potts All you need to do to get your free 30-day Audible trial is go to Audible.com/Tim http://audible.com/tim. Choose one of the above books, or choose between more than 180,000 audio programs. That could be a book, a newspaper, a magazine, or even a class. It's that easy. Go to Audible.com/Tim http://audible.com/tim and get started today. Enjoy This podcast is also brought to you by 99Designs http://99designs.com/tim, the world's largest marketplace of graphic designers. I have used them for years to create some amazing designs. When your business needs a logo, website design, business card, or anything you can imagine, check out 99Designs. I used them to rapid prototype the cover http://99designs.com/tim for The 4-Hour Body, and I've also had them help with display advertising and illustrations. If you want a more personalized approach, I recommend their 1-on-1 service http://99designs.com/tim. You get original designs from designers around the world. The best part? You provide your feedback, and then you end up with a product that you're happy with or your money back. Click this link http://www.99designs.com/tim and get a free $99 upgrade. Give it a test run.

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

• 0:01Speaker 00

  At this altitude, I can run flat out for a half mile before my hands start shaking.

• 0:06Speaker 01

  Can I ask you a personal question?

• 0:08Tim Ferriss?

  No, would this seem inappropriate to me?

• 0:12Speaker 01

  I'm a cybernetic organism, living tissue over metal endoskeleton.

• 0:22Tim Ferriss?

  This episode is brought to you by Audible, which I've used for years. I love audiobooks, and I have two to recommend right off the bat. Number one is perhaps my favorite audiobook of all time, and that is The Graveyard Book by Neil Gaiman, the only audiobook I've wanted to immediately listen to a second time as soon as I finished. It's amazing, you will thank me, The Graveyard Book. The second is Vagabonding by Rolf Potts, which had a huge impact on my life and formed the basis for a lot of what became The Four Hour Work Week. So, all you need to do to get your free 30-day trial is go to audible.com/tim, and you can choose one of those two books, The Graveyard Book, Vagabonding, or more than 180,000 audio programs.

• 1:07Tim Ferriss?

  So that could be a book, that could be a magazine, that could be a newspaper, it could be a class. It's that easy. Go to audible.com/tim, that's audible.com/tim, and grab a book. Enjoy.

• 1:21Tim Ferriss?

  This episode is brought to you by 99designs. 99designs is a great partner for creating and growing your business. It's a one-stop shop for all of your graphic design needs, whether that's a logo, website, business card, or anything else. I used 99designs to get book cover prototypes for The Four Hour Body, which went on to become a number-one New York Times bestseller. I also use them for banner ads, illustrations, and other things. With 99designs, designers around the world compete to create the best design for you. You give feedback and then pick your favorite. You end up happy, or you get your money back. It's very simple. You can check out a few of my own designs and those of yours, meaning Tim Ferriss Show listeners, at 99designs.com/tim.

• 2:03Tim Ferriss?

  And right now, my listeners, you guys, will get a free $99 upgrade on your first design. That's 99designs.com/tim. Check it out.

• 2:15Tim Ferriss?

  Hello, my friend Lil' Magui, this is Tin Ferris and welcome to another episode of the Tin Ferris Show. I'm very excited about this one, folks. I've wanted to do it for a long time. It took about a year, year and a half to set up. And of course, every episode is my job to try to deconstruct world-class performers, to tease out the perspectives, habits, routines, favorite books, etc., that make them as good at what they do as they are. This episode, we have Marc Andreessen, @PMarca, P-M-A-R-C-A on Twitter. He is a legendary figure here in Silicon Valley, and indeed worldwide. Even in the epicenter of tech, it's hard to find a more fascinating icon. Marc co-created the highly influential

• 2:58Tim Ferriss?

  Mosaic internet browser, the first widely-used graphical web browser. He also co-founded Netscape, which later sold AOL for $4.2 billion with a B, and then co-founded LoudCloud, which sold as Opsware to Hewlett-Packard for $1.6 billion. He is considered one of the founding fathers of the modern internet. This all makes him one of the few humans ever to create software categories used by more than a billion people, also one of the few who's established multiple-billion-dollar companies. He's now a co-founder and general partner of the venture capital firm Andreessen Horowitz, where he's quickly become one of the most influential and dominant tech investors in the world. Now, I want to try to keep this short, but it's hard. And I think you'll enjoy at least what I'm about to read. So,

• 3:42Tim Ferriss?

  we refer to an email in this conversation, and our conversation took place at the Sandhill Road offices of Andreessen Horowitz. We refer to an email from Marc to Ben Horowitz in exchange. And this is how it reads, because we don't dig into it in the interview. This is page 13 in "The Hard Thing About Hard Things" by Ben Horowitz, which is a great book. "To Marc Andreessen," this is after a media interview where Ben felt that Marc disclosed the company's strategy prematurely. "To Marc Andreessen," from Ben Horowitz. "Subject: Launch. I guess we're not going to wait until the 5th to launch the strategy, period. Signed, Ben." Within 15 minutes, I, this is Ben, received the following reply.

• 4:27Tim Ferriss?

  "To Ben Horowitz, CC, bunch of folks, from Marc Andreessen. Subject: Launch." Apparently you do not understand how serious the situation is. We are getting killed, killed, killed out there. Our current product is radically worse than the competition. We've had nothing to say for months. As a result, we've lost over $3 billion in market capitalization. We are now in danger of losing the entire company and it's all server product management's fault. Next time, do the fucking interview yourself. Fuck you, comma, Mark. So, we get into some really fun stuff in this interview that I don't think Mark has discussed in many places. We talk about his epic debate versus Peter Thiel. We talk about all the usual questions.

• 5:09Tim Ferriss?

  Favorite books that he's gifted to other people, favorite documentaries, movies, morning rituals, what he would put on a billboard, et cetera. Talk about rules for investing, what he does in partner meetings to make people defend ideas or propose ideas. We talk about AI. We talk about the future of Bitcoin, drones, who to watch. We talk about what he would teach in a ninth or 10th grade class, advice to his younger self, what he misses about the mid 90s internet and how he might recreate it, how he thinks about or handles FOMO. It goes on and on. We really had an extremely detailed and rich conversation and I hope you enjoy it. And please do say hi to Mark.

• 5:50Tim Ferriss?

  He's very active on Twitter, @Pmarca, P-M-A-R-C-A. Without further ado, please enjoy.

• 6:00Tim Ferriss?

  Mark, welcome to the show.

• 6:01Speaker 03

  Thanks, Tim.

• 6:02Tim Ferriss?

  I am so thrilled to be here. I've been hoping to make this happen for quite some time and I figure we'll just jump into it. So, the first question is, strong opinions loosely held? You're associated with that expression. Can you explain what that means?

• 6:20Speaker 03

  Yeah, so it's kind of a mentality. It's a mentality around how to start a company, for sure. And it's a mentality of how to invest, for sure. And I think it's a mentality that's probably helpful in a lot of other areas of life. And so, it's kind of this, I'm drawn to paradoxes. I'm drawn to kind of, you know, was it the philosophical term? It's like a thesis, antithesis, synthesis kind of thing. And so, because a lot of people, a lot of people in the valley have very strong theories and then the problem is they carry them too far. Because there's always, there's a countervailing theories, right? So, you kind of yin and yang kind of thing. Strong views, so strong views is very important, right? So, most people go through life and basically never develop strong views on things, or specifically go along and basically buy into the consensus. And so, one of the things I think you want to look for is both a founder and as an investor

• 7:03Speaker 03

  is you want to look for things that are out of consensus, right? So, you know, something very much opposed to the conventional wisdom, which sounds easy, you know, hard to do, but you want to try to do it. And then, if you're going to start a company around that, if you're going to invest in that, you know, you'd better have strong conviction because you're making a very big bet of time or money or both. The problem is, okay, it's a strong view, great, okay, what happens when the world changes, right? What happens when like something else happens, right? And basically, the way, right, the way the world works kind of in business and investing and other places is just when you think you have everything figured out that everything changes, right? So, the sort of system evolves and things happen. And so, what do you do when, what do you do when the world changes? And there, what you just see everywhere, I think, in the world and everywhere in business, everywhere investing are people just hate changing their minds.

• 7:46Speaker 03

  People just like, it's just like people get locked, or you know, you see it in politics all the time as well, people just get locked into a point of view on things and then you get this, all this, you get all these biases like confirmation bias where people feel like they have to... Well, it's the thing in, in, in politics where flip flopping, right, is viewed as bad, right? Right, right. So, take, take it as an example, politician who flip flops is viewed as bad and, and sort of weak and probably, probably evil. Actually, it's interesting, if you talk to the world's best hedge fund managers, they're the exact opposite, they love changing their mind. Like, like, I'm, I'm one of the few people who will openly admit, I love spending time with hedge fund managers, I think they're awesome, I think they're... I, I feel the same way. They're fantastic people and they, they are the most open minded people I know and they, they love when you tell them that they're wrong. They get all excited, their eyes light up and they're like, oh, why? Why do you think that?

• 8:29Speaker 03

  And they're genuinely interested because if, if you're right and they're wrong, they will change their minds and they will, you know, they're hedge fund managers, they'll literally reverse the trade, they'll, they're long on a company, they'll flip around and go short on it, they're totally fine with that. And that's how it works. And so, so what I carry away from that is it's, it's the weekly held part, which is convicted, convicted, convicted, new facts, change, right? But, but it's a paradox, right? Or it's, it's a tension because those are, those are, you know, it's determination coupled with flexibility like they're, they're, they're antithetical. What you see in the startup world is sort of these two kinds of advice then that express this. And there are people who with a straight face will give both of these forms of advice without ever acknowledging that they're in conflict, right? One of which is fail fast, right? You know, you want to fail fast. Like, it's gonna be, it's great to fail. You want to discover what's wrong. You want to fail and do something different.

• 9:14Speaker 03

  And then the other is you have to be determined and you can't give up. Okay, like, how do you possibly reconcile those? And my view of that is that's where you get to strong views weakly held.

• 9:23Tim Ferriss?

  So how do you advise in that particular example, for instance, or assess which tact founders or a company should take potentially? Because you look at some examples, let's just say Uber or something like that, where the model as it began is very much similar to where it is now. Then you have other companies, let's say, like a Twitter or others where they pivot into a goldmine effectively. And then, I mean, then obviously, other things have to be laid on top of that to make it successful long term. But having been in the valley now myself for 15, 16 years, you see a lot of people who change their mind almost too frequently.

• 10:00Speaker 03

  That's right.

• 10:00Tim Ferriss?

  With inconsequential facts, perhaps. How do you think about advising a company that's struggling as to whether they should stay the course or pivot, as they would say?

• 10:12Speaker 03

  Yeah. So we have, we see both cases. We see both, we see both cases, both failure cases. We see companies that are just, they're almost, this fail fast thing is frankly, completely out of hand. And I'm old fashioned. Where I come from, people like to succeed. Like, it's like,

• 10:26Tim Ferriss?

  Great.

• 10:27Speaker 03

  I like to say, like, we, before this word pivot, like, we didn't have, like, when I was, when I was a founder, when I first started out, we didn't have the word pivot, right? We didn't, we didn't have a fancy word for it. We just called it a fuck up. So like, I'm old fashioned on this. Like, I like to succeed. I think succeeding should be the goal, not failing, and certainly not failing fast or slower, any other form of failing. So, so I get really kind of cranked up about this. But, but we do see companies that literally every time we meet, every time I meet them, they pivoted. Like, and so every time I meet them, they're off to something new. And they're, it's like, I don't like watching a rabbit go through a maze or something. They're just never, they're never going to converge in anything, because they're never going to put the time into actually figuring it out and getting it right. But then you do see the other case. And this is what the, where the fail fast thing came from, is you do see their case. You see people who just absolutely are determined, that will just pound their head against the same wall for

• 11:10Speaker 03

  years and years and years and years. And it's at a certain, and you admire them for their determination. And then at a certain point, it just becomes obstinance, right? And then you're just, and at some point, it becomes self-destructiveness. It becomes Don Quixote. You're just tilting against windmills, you know, kind of arbitrarily. And so. Those are polls. We do see behavior at the polls. You know, the question you're asking is, of course, the key question, which is like, okay, what's what's in the middle? How do you know? And frankly, I don't think there's an answer to that. I think that's the answer is judgment. I think I think that's the test. Basically, there's a couple of key tests for founders, or for that matter, for investors in these kinds of decisions. I think that's one of the really core tests is, you know, do you fundamentally have the judgment to be able to make that call, knowing by the way that either either way could be a big mistake? Like, you know, nobody's going to tell you, you're not going to get any confirmation from anybody that, oh, yeah, you made the

• 11:55Speaker 03

  right call like that. You're not you're not going to realize, like, if you change and then succeed, it's all great. But by the way, you might have succeeded at the old thing even better. If you change and fail, you know, you'll never know whether the old thing would have worked. Like, you know, the counterfactual, like, you know, science, they call it the counterfactual, you never know the counterfactual. The way my brain is wired, I'm always thinking in terms of the counterfactuals. I'm always thinking in terms of the way things could have been, right? The world evolved in a certain way, kind of as a consequence of people making all these decisions on the fly. People could have very easily made a different set of decisions. The world could have ended up in a very different place. And so the idea that you're ever going to know the consequence of your decision, I think, is probably a fallacy, or what the alternative would have been.

• 12:30Tim Ferriss?

  Right.

• 12:30Speaker 03

  Like, the relative, relative result of your decision. And so I just think you basically have to fall back on judgment, and you have to fall back on some sense of the intangibles.

• 12:39Tim Ferriss?

  And when you're looking to say stress test ideas, and if we look at it in, say, the case of a partner meeting here. So you mentioned hedge fund managers, and I read a profile of Ray Dalio at one point, I guess it's Bridgewater Capital, and they talked about his, his meetings, and how they stress test ideas, and, and how people need to defend ideas. How does a good partner meeting go? If someone, say, proposes, I was going to say a trade, an investment.

• 13:10Speaker 03

  An investment.

• 13:12Tim Ferriss?

  That is a substantial investment.

• 13:13Speaker 03

  Yeah.

• 13:14Tim Ferriss?

  What then happens from that point to a yes or a no?

• 13:18Speaker 03

  Yeah.

• 13:18Tim Ferriss?

  Decision?

• 13:18Speaker 03

  So we don't get to, a hedge fund manager can reverse himself. A hedge fund manager, bad trade, the next day, he can turn around and take the opposite trade. We, we don't get to do that. Right? So when we invest, it's with, it's knowing that we're in for 10 plus years, basically, is our assumption. So it's into, and by the way, when we make an investment decision, it's a, it's a commitment of dollars. It's also a commitment of somebody's time. And by the way, the organization's time and bandwidth. And there's only so much of that. And then the other thing we have in venture is when we make a decision, we then become committed to that company in that category. And so we can't invest in their competitors. Including, by the way, their competitors that don't even exist yet. Right. And so, you know, for example, the investors in Friendster were more likely than not completely not only maybe unwilling, but also unable to invest in Facebook when it came along because they were conflicted because the founder of Friendster would have said, you know, you can't,

• 14:02Speaker 03

  you can't invest in a competitive company. And so, so our decisions are big decisions and they have serious consequences for the future of the firm. So on the one hand, it's very important to us to have a full discussion and get all the facts on the table and really kind of vet these things out. On the other hand, we're trying to preserve, we're trying to preserve the, the contrarianism of kind of at the core of what we do, the, the, the strong non-consensus views. We're trying to be able to invest in the things that really are unusual and odd that other people aren't taking seriously. And one of our theories about venture capital is that, so everybody thinks like in investing, it's like you either make a good investment or a bad investment. I actually think that's not the big issue. I think the issue, at least in venture capital, is whether you make a good investment or a great investment. And I think good is the enemy of great. We see many companies that are just fine and that are, you know, yep, you know, founders

• 14:45Speaker 03

  are good and the market seems good and the product seems good, the customers kind of like it and they got a little revenue and it's kind of all fine. But those companies tend to never go anywhere. And then every once in a while, we'll see these companies that just have some extremely strong strength, some extremely kind of, you know, special, wonderful thing going on that, by the way, may have all kinds of problems and issues, but there's something at the core of what it is that's really special and magical. And those are the ones that we want to do. What we're trying to do is basically stock our portfolio with just investments like that. And so to capture that, you can't have, you know, it'd be very easy in a conversation about the weaknesses of something to beat the idea to death and you never invest. And so the, the rule that we have, and then, and then you would only invest in the consensus ones. You'd only invest in the very good ones as opposed to the great ones. And then you would fail as a firm. So, so we have

• 15:28Speaker 03

  to kind of, we have to do, again, both things at the same time. We have to, we have to try really hard to encourage the strong non-consensus thinking, but also have the full discussion to make sure that we really stress test that thinking. So the way we do it is basically each of our GPs has the ability to pull the trigger on a deal without a vote or without consensus. And, and, and this is what we say is if the person closest to the deal has a very strong degree of positive, you know, commitment, enthusiasm about it, then we should do that investment, even if everybody else in the room thinks this is the stupidest thing they've ever heard of. However, you don't get to just go do that yourself completely on your own without stress testing your own thinking. And so it's the responsibility of everybody else in the room to stress test the thinking. And if necessary, we actually create a, we create a red team, right? We'll actually formally create sort of the countervailing force and

• 16:10Speaker 03

  we'll designate some set of people to counter argue the other side.

• 16:14Tim Ferriss?

  It's like a debate team.

• 16:16Speaker 03

  Yeah, basically. Right. And then, and then, and then the way that we try to, you know, and this is fraught with like, there's all kinds of ways this can go wrong. Cause like, what if I bring in a deal or what if Ben brings in a deal or what, you know, versus the new person bringing a deal or whatever. And so what Ben and I try to do is we, we, we do this to each other. Right. And so whenever he brings in a deal, like I just beat the shit out of it. Right. Just like, and I might think it's the best idea I've ever heard of, and I'll just like trash the crap out of it. Right. And try to get everybody else to pile on. And then at the end of it, if he's still pounding the table saying, no, no, this is the thing. Then we all say, okay, we're all, you know, we're all in, we're all behind you. Right. And then, and then it's a, it's a, it's a disagree and commit, you know, kind of culture. By the way, he does the same thing to me. Right. And so we, we basically, it's the torture test.

• 16:56Tim Ferriss?

  What are some of the keys to fighting well in, I think it seems key to many different types of relationships, personal business or otherwise, the ability to conflict resolve or just fight well and then make up. So it seems like you and Ben have, not my words, but like fought like cats and dogs, but you always kind of get over it.

• 17:18Speaker 03

  We prefer old married couple.

• 17:19Tim Ferriss?

  Old married couple. There is a story, I don't know if it's accurate, about Netscape, early days, something related to an interview with a journalist. Do you know the story I'm talking about?

• 17:30Speaker 03

  It's in Ben's book.

• 17:31Tim Ferriss?

  Okay. So right. That's okay. Here we go.

• 17:33Speaker 03

  Including the email you're about to reference.

• 17:35Tim Ferriss?

  All right. So could you, could you, could you describe this for people who are unfamiliar?

• 17:38Speaker 03

  I really think you, for that, you gotta read, you gotta read, you gotta read Ben's book. Let's just say we started out our relationship with vigorous disagreement. And we've continued that to this day.

• 17:47Tim Ferriss?

  And but how do you?

• 17:50Speaker 03

  This is a family podcast. I don't want to use it.

• 17:52Tim Ferriss?

  Oh, it's not a family podcast.

• 17:54Speaker 03

  If you want all the bad word, that's book, the hard thing about hard things. It's in the book.

• 17:58Tim Ferriss?

  And I'll put it in the show notes. The, how do you, I mean, you guys got off to a very aggressive start. How did you identify that Ben was someone worth having those types of disputes with? That there was a value in what he brought to the table as opposed to just another person that you were butting heads with? Who is not worth keeping at the table?

• 18:23Speaker 03

  So honestly, there were, there were three, there were three things. So one is he would, he would talk back to me. So he would like argue right back at me.

• 18:28Tim Ferriss?

  He wouldn't just go into the field position.

• 18:30Speaker 03

  Just roll over like he would argue right back and a lot of, a lot of which you see this. And if you just observe a lot of companies over time or investment firms or whatever, you know, everything, you know, there's, there's a temptation, everything must have become a hierarchy. And then the people always don't have trepidations about speaking truth to power. And a lot of what I've always found the really sort of wise and smart leaders are trying to do is they're, they're trying to actually find the people in the organization who will actually talk back. It's actually, you know, it's one of the ways to really get ahead, you know, there's certain organizations where the way to get ahead is to talk back to the leadership. Right? That's how you get noticed. By the way, there are other organizations where that doesn't work at all. And I would recommend getting out of those as fast as possible. We, we try to be, at least Ben and I want this organization to be one where people will actually speak truth to power and, and argue back at us just like anybody else.

• 19:12Speaker 03

  And so, which is why he and I argue so much is because we, we want to set the, set the model and set the precedent. So that was one is he would talk back to me too, is he was often, if not always right. And I wouldn't say always just because nobody is, but like, he was very smart and, and very clear thinking. And then the third thing is I saw something early in him that he was just amazing working with people. Which is not something I think has ever been necessarily true of me. But he was just like, watching him in front of a group of people was just routinely magical. In terms of how he could get people out, how he could communicate with people in a very clear way, how he could be very fact based, but he could really make people feel. You know, kind of in a really fundamental way. And so that, that combination, you know, made it clear that he was somebody very special.

• 19:52Tim Ferriss?

  So we mentioned Ben's book, which is one of a handful of books that many, many of the best operators, founders I know in Silicon Valley routinely reference. There are a handful that come to mind. Aside from that, Four Steps to the Epiphany, I guess, would be one. This one here, that was right in the lobby of your office, High Output Management, with a new foreword by Ben Horowitz, is another which went out of print and then came back into print because it became a bit of a cult classic in here in Silicon Valley. Are there any books that you would prescribe to, say, a would-be entrepreneur coming out of college, just

• 20:34Tim Ferriss?

  to give them, to increase the likelihood of them succeeding? Are there any other books that come to mind?

• 20:38Speaker 03

  Yeah, so High Output Management is one of Andy Grove's books. It's the best book on management ever written. He wrote another book called Only the Paranoid Survive, which is one of my favorite topics. And so that is also a very good book. We recommend. Ben's book is good. I think Peter Thiel's book is self-recommending and is an excellent book. Zero to one. And then there's a bunch, you know, there's a bunch of others. There's a bunch of others that are good. Really, though, I think where I got a lot of my education from was history, reading history. And so I would go back, like, I would go back and read, rather than reading a lot more about the contemporaries, I would go back and read about Edison. I would go back and read about Ford, Rockefeller, JP Morgan. I just for, I don't know, maybe it's just me, but like, I find the period of, kind of call it 1870

• 21:19Speaker 03

  to 1920, 1930, really interesting. So you have sort of the arrival of many of the technologies that kind of built the world that we live in today.

• 21:27Tim Ferriss?

  Disruptive period.

• 21:28Speaker 03

  Yeah. And histories, I always find histories is where, like, I didn't really study history in college or anything, but I find histories this weird thing where the way that you're taught history, like in school, like in high school, you know, is like, it's all these legendary people and they're kind of all, you know, Olympians, the founding fathers, and these great generals or whatever. And it's like, you know, you got the names, you got the dates, and they did these amazing things. And they're kind of these great, like, they feel like unrelatable. Like, you couldn't possibly, like, even, at least where I come from, even think that you could have ever have anything in common with these people was just like a non, was not something that ever occurred to anybody. Like, they're like, you know, the pantheon of kind of the legendary people who have lived. And I just found, like, with the really well-written biographies that get you inside the heads of what it was like to be Walt Disney at age 20, right? Or what it was like to be, you know, I don't know,

• 22:11Speaker 03

  Carnegie or Mellon or Ford, or what it was like to be, you know, for that matter, William Randolph Hearst, or, you know, these, you know, people we've all heard of, like, The really good biographers are really good at getting inside the head of what it was like to be them then, before they became, right before they became the people who ultimately made it into the history books. And honestly, a lot of stuff, like, a lot of things have changed, but a lot of things haven't changed. Like, people haven't changed a bit. And so, I always find, like, in those histories, you can always kind of see, okay, that personality type, like, yep, I know, you know, 13 people like that, you know. And so, I find that there's actually a lot more to template against, and a lot more to kind of think about than people give, than people kind of give history credit for.

• 22:48Tim Ferriss?

  Oh, definitely. I mean, I had Cyrus the Great recommend to me, I guess, at Xenophon. And people don't change. I mean, you see the same archetype. You're like, oh, that's Bob, my coworker. He does the same thing. And the biography mention made me think of Walter Isaacson's book on Ben Franklin, who was always sort of untouchable in my mind. And but it included all of his foibles and challenges and self doubt. And it really humanized it in a way that actually made me aspire to do bigger things. If you wanted to get someone hooked on biographies, is there any particular book you would recommend?

• 23:23Speaker 03

  Oh, there's a bunch. The Walt Disney biography, I'll just mention it because it's a great, our, one of our founders, Brian Chesky, the founder of Airbnb, has sort of, Walt Disney is his hero. And so, he's gotten me even more deeply into that. So, the author Neil Gabler, who's written the best biography on Walt Disney, and it's a phenomenal book. I actually like, another one I really like, coming out of kind of left field, but there's Charles Schultz is the creator of Peanuts. The Schultz biography is amazing. And basically, the case that he makes is that, he basically makes the case, biographer makes the case that Peanuts was the longest continuous work of American art ever made. It was a 60 year art project with deep foundations in American history and psychology and philosophy. And through, and so it was a reflection of the life, you know,

• 24:08Speaker 03

  of the person who made it. And of course, it was also a great, Peanuts is a great entrepreneurial accomplishment, because, you know, it was this very personal thing, but at the same time, it became this gigantic business success. So I think that one is great. The Wizard of Menlo Park is a great biography of Edison. And Edison is very much, Edison was kind of proto Silicon Valley. In a lot of ways, and I think he's really interesting to his, his, his record of sustained innovation in many, many different areas and how he then went out to try to commercialize things. Good news is we are much better at the commercialization part now than, than, than people were in those days. We know how to build the companies much better now, but the pace, you know, he would just

• 24:49Speaker 03

  routinely invent things like the phonograph, like just, it's just obvious, right, to him.

• 24:54Tim Ferriss?

  Yeah.

• 24:55Speaker 03

  And so, and he did that, you know, for decades. He, he was a fountain of innovation and I, it's a very inspiring story.

• 25:00Tim Ferriss?

  The Netscape story, we touched on it very briefly and there are many places people can read about that, so I don't want to take up too much time, but on a related note, I wanted to ask, is there anything you miss about mid 90s internet?

• 25:15Speaker 03

  Oh, yes.

• 25:16Tim Ferriss?

  And what, what would it be?

• 25:17Speaker 03

  Yeah. So when I got to the Valley in 1993, 1994, I thought I had missed the whole thing. Cause I thought the PC, I had studied, you know, studied the history and I said, I've used all this stuff and I thought, you know, the PC, I knew, I knew, you know, Apple and then Microsoft up in Seattle, but Intel down here. And then all these great, you know, the, all the big software companies at the time, you know, Novell, Lotus, and all these companies, the game, you know, EA, the gaming companies. I, the, the great PC companies had gotten built in the 70s and 80s, right? And by the 90s, by the time the 90s arrived, like it was, the PC was done. Like it was, it was finished and like you could go buy one and it was great, but like it was done. And, and in fact, the overwhelming mood in the Valley when I arrived was that it was done. Like the, the PC was done and by the way, the Valley was probably done because there was nothing else to do.

• 26:02Speaker 03

  And then there was this moment where I and, you know, various people and then more people and then more people, for whatever reason, it was kind of like, we really wrapped our heads around the implication of the internet, which today seems obvious, but at the time was a very contrarian. When I got to Silicon Valley, if you had said the internet will become a mainstream consumer medium that 3 billion people are going to use worldwide for all forms of human activity, you would have been laughed at, like you would have been institutionalized like here, like people would have laughed at you. And so as we figured that out, then what happened was it was like, okay, new frontier, right? It was part of the, it goes back to the kind of history thing, like, you know, for a long time, the development of like, you know, the United States, the new frontier was whatever was further west, right? And then eventually they got all the way to California and then they have the gold rush and like, and then there was famous thing, you know, famous kind of theme in American history is the closing of the frontier.

• 26:47Speaker 03

  Like there's, it's a theme of like every Western, right? That every revisionist Western that gets made is like, there's no more frontier. You know, the radicals can't go any further west. They just built around the ocean. So instead of what we have, we have kind of virtual frontiers, we have intellectual frontiers, right, or we have creative frontiers, or we have entrepreneurial frontiers, technological frontiers. And so the internet kind of represented the opening of a new frontier. And once we recognized that, it was like, ah, ha, brand new. And then at that point, and that was where all the enthusiasm came from, because it was that point of like, okay, if that's going to happen, then, you know, what do we have to do? And at that point, right, the list becomes very exciting. Like, we have to do e-commerce, we have to do online publishing, we have to do transactions, we have to do, you know, social networking, we have to do auctions, we have to do, right, all of the big franchise companies that came out of,

• 27:32Speaker 03

  you know, the next, you know, 10, 15, we have to do search, right? All the ideas kind of immediately materialized. And then people, you know, it was off to the races. Is there anything comparable right now for you? So I think, in my view, there always is. The thing is, these things look like cults and fringe activities until they break mainstream. And so for me, it's not, I mean, so like, for example, the mobile rush in the last 10, you know, basically since the release of the iPhone, the mobile rush qualified for this, the social networking rush kind of post-Facebook qualified for this, and those are kind of known and well-understood. And it's just straight entrepreneurial opportunities, probably, you know, generally, kind of reaching some level of saturation, right? Slight digression, we don't foreclose the possibility that there will be another

• 28:14Speaker 03

  mobile killer app or another social killer app, but it's getting harder and harder and harder, because more and more people have figured out that you can do these things, and then the winners have now got very established, right? One of the ways we think about it is to have a, you know, first you had Facebook, and then you had Twitter, and then you had Instagram, and now you have Snapchat, and those all became big winners. Okay, now, what would it take to make the fifth one? Well, it's got a, there's only so many icons on the home screen of the phone, right? The fifth one has to knock something off, has to knock one of the other ones off. And so it's become, as these markets saturate, it becomes more of a zero-sum game. Or even smartphones, you know, smartphone, smartphone's a giant industry, but like, unit volumes globally are now expanding at like, single-digit percentages. And so the smartphone industry is becoming one that's mostly, people competing

• 28:56Speaker 03

  directly with each other, not, not creating new things. And so, we would say, like, those opportunities, those businesses are gigantic, and those companies will get much bigger, but there's not as much entrepreneurial opportunity. The opportunity is more likely to be in the areas that people think are cult and fringe. What would be some examples? We call this, we call our test on this, what do the nerds do on nights and weekends? Right. Their day job, like the day job is I work at Oracle, I work at, you know, I work at Salesforce.com or Adobe or Apple or Intel or one of these companies, or I'm, or not, or I'm just, I work in insurance company, or I work at a bank or whatever, or I'm a student, whatever, that's fine. They go, they go do whatever they need to do to make a living. It's the question is like, what's the hobby? What's, what's the thing at night or on the weekends? So then things get really interesting, right? So then you look at like things like cryptocurrency, Bitcoin.

• 29:39Speaker 03

  You look at things like a lot of the new advances, there's a whole, the whole area of kind of health hacking, you know, quantified self is a very interesting new area. There's food, you know, there's kind of, you've, you've actually been, been part of the catalyst for this, but there's this whole kind of area of like scientific food and food hacking that's emerging. There is a revolution actually happening, I think, in robotics, because robotics, robotics has finally become something tractable, where people can do it at home. There's AI. Deep learning is right on the tipping point. You, you can now, as a hobbyist, you can now download this thing called TensorFlow from Google. TensorFlow. TensorFlow, which is a deep learning framework. It's a, it's a framework for doing AI. It's in the field of AI. It's a, it's for how computers can kind of deal with the real world and do things like self-driving cars or, you know, self-driving, you know, self-flying drones or all these things.

• 30:24Speaker 03

  This is technology. It was so, five years ago, it didn't really work. Two years ago, you would have had to have been an employee at one of three or four big companies to have access to this technology. And then Google just open sourced it. And so now anybody in the world can download it, run it on their own computer. So all of a sudden, like AI is like a tractable thing that you can just have on your own laptop and you can build, you can build new things on top of it. You can build, you want to build a bot, you can build a bot. You want to build a self-trac- We back to founder, we back to founder who literally built himself his own self-driving car. I read about it. Right, George. And by the way, you should, him, you should interview. But like literally, like one guy can now build a self-driving car. Right. 10 years ago, this is like a DARPA-funded, like grand challenge, like research project. Five years ago, this is a, you know, team of a thousand at Google, and now it's George.

• 31:06Speaker 03

  Right? And so that, that's an example of the kind of thing where it just looks like it's going to tip. And then, you know, there's one George today, there'll be a thousand Georges tomorrow.

• 31:14Tim Ferriss?

  Do you think the dangers of AI that some people talk about are overblown?

• 31:20Speaker 03

  Completely, 100%.

• 31:23Tim Ferriss?

  Yes. Can you elaborate?

• 31:23Speaker 03

  All the many things I worry about, the machines rising up and killing us.

• 31:27Tim Ferriss?

  Luddite fallacy.

• 31:28Speaker 03

  It's not, actually, it's very, it's related, it's related to the Luddite fallacy. It's sharply related. It's the, it's the, it's the, it's the Promethean fallacy. There's something deep seated in human psychology where we are always going to invent the thing that's going to kill us. And at one point, or we're gonna, or we're gonna, we're gonna unlock, fundamentally, we're gonna unlock the power of the gods, right? It goes back to the Promethean myth. It's like the, it's, it's, it's almost like the concept of original sin. It's like fire, right? The big, the big moral of the Promethean myth was like, fire, fire is the thing that enabled human civilization is also the thing that's going to burn everything down and kill us all. Right? And so this is very deeply embedded in our, in our psychology. Frankenstein. Frankenstein, the subtitle of Frankenstein of the novel, the subtitle was the modern Prometheus. Right? It was directed, Frankenstein was a reinterpretation of the Promethean myth, except in this case,

• 32:13Speaker 03

  it was literally the monster that was stitched together and then brought back to life through unholy, literally unholy science. And then there was, there's even religious versions of it. Then in, in, in Jewish literature, there's a concept of the Gollum, which is the, the creature made out of mud that, that rise, rise up out of the, it's really like the Getus of Warsaw or something to kill all the enemies and then come back and then they kills, kills all the people who created it, right? So this is very kind of core. John Henry, the steel driving man, right? John Henry is the famous, it's a, there's a song or the, the sort of story about the railroad worker and there's the machine that can like, can, can hammer in the railroad spikes faster than a human can. And John Henry's famous showdown between him and the machine. And of course, he wins and then drops dead of a heart attack. Right? And it's critical in the myth that he drops dead of a heart attack, right?

• 32:58Speaker 03

  Because technology has to get its revenge. And so it's just that projected forward. And the reason I'm so confident on this is because it's just every single era of technological advance, this has always been the response. There's always been this line of thinking. And then it turns out, it's a tool. It's a technology. It's a tool. It's something that helps us do things in a better way. It's overwhelmingly to the benefit of mankind. And then we wonder why everybody got so worked up over it.

• 33:19Tim Ferriss?

  So if we, if we put aside the existential threat piece, you know, the summoning. Of the demon conversations, we put that aside entirely. How would you answer someone who worries about job displacement?

• 33:33Speaker 03

  Right.

• 33:33Tim Ferriss?

  Of AI? And because there are some, I think reasonably smart people who are very fearful of what will happen to society when people are massively displaced. How would you encourage them to think about that?

• 33:47Speaker 03

  Yeah, so let's crystallize the concern. So the World Economic Forum came out with this thing last year that kind of made, freaked a lot of people out. And they said there'd be 5 million jobs destroyed in the next, by 2020, by AI. Right? So let's run the numbers on that. So that sounds like a lot of jobs, like that's a lot of people, that sounds like a lot of jobs. So then you look at the American economy just this year, 2016. And we don't quite have this AI thing working yet, so we can't blame what I'm about to say on AI. This year, the American economy will destroy 21 million jobs and create about 24 and a half million jobs for a net add of about 3 and a half million jobs is about the pace we're on. And that's this year. Right? And so we will destroy in the next three months, we will destroy more jobs than the World Economic Forum project will be destroyed by AI over the next five years.

• 34:33Speaker 03

  Why don't people know this? Why is this not obvious? Because whenever you read news stories about job growth, it's always, the numbers quoted are always net numbers. So last month, 200,000 jobs, 230,000, 250,000 jobs got created. And so, but those are net jobs. Nobody ever reports the gross numbers. The gross numbers are, you either go back numbers. We destroyed more than 5 million jobs a quarter and we create more than 6 million jobs a quarter, basically quarter in, quarter out. And so, one is people just dramatically underestimate the size and complexity and churn in the American economy as it currently exists. Another example would be there's about, it turns out there's about 5 million people who drive professionally in the US. And so, one of the questions with like self-driving cars, right, is where this, what's going to happen to the truck drivers and the taxi drivers and everything, and everything else? Again, 5 million jobs. We can redeploy, we redeploy every quarter, we redeploy 5 million people.

• 35:18Speaker 03

  Like, this is not, in the scope and scheme of the American economy, it's a totally doable thing. The other thing that people don't appreciate and understand, I find mind-blowing, which is, would you, would you guess, based on everything that people say, would you guess that the rate of job creation and destruction in the American economy is rising over time or falling over time?

• 35:36Tim Ferriss?

  Oh, this seems like a test I'm bound to fail. Uh, I don't have an informed opinion.

• 35:42Speaker 03

  Well, you would, you would, I think most people would guess that it's rising. The view would be technology is having ever greater impact, right? And so, and change feels like it's accelerating, right? It's the big theme in the political season is it feels like the world's kind of getting away from us. Technology is getting away from us, trade is getting away from us, you know? Something is, you know, basically dramatic changes are happening that are historically unprecedented, right? It's kind of the feeling. So, almost everybody believes, if you do a poll on this, almost everybody believes.

• 36:06Tim Ferriss?

  It's definitely the perception being created.

• 36:07Speaker 03

  Right, almost everybody believes that change is increasing, change is accelerating. It actually turns out in the American economy, the reverse is happening. The rate of both job destruction and creation are falling and have been falling for decades. Have been, like, over the last 50 years, they're not dramatic lines down, but they're basically very slow lines down. So, basically what's been happening is, in fact, every year, the American economy gets less dynamic. Right, and you might say, oh, that's good, because that means that you'll have stability. That means people won't have to change jobs, all that stuff. I would argue that's bad, because what that means is we're not creating enough opportunity. Right, and if we're thinking about the future, I think we want to think about opportunity. We want to think about what we're going to be able to do in the future, and we want to think about what our kids are going to be able to do in the future.

• 36:46Speaker 03

  Right, what will be the new, the new fields, the new sciences, the new forms of art, the new industries, the new businesses, the new companies, the new jobs that will get created? Right, every job that we all have, and everybody listening to this podcast has, got created as a consequence of the process of change. Right, which is very, has been very positive to literally everybody on planet Earth. Like, this is, these have been very, very positive changes in terms of increase in human welfare and opportunity. And so, the idea of living in a world where change is becoming less rapid, which is what's actually happening, to me, is, to me, that would be the problem. Like, we should, we should want more change. We should want, we should want more change, because we should want more advances, because we should want more opportunity to get created.

• 37:24Speaker 03

  We should want more products and services in our lives, we should want more industries created, we should want, you know, more medical advances, we should want more advances in art and science and every other field of human activity. And, we, basically, the way I view it is, we have to fight to get that. As opposed to what everybody thinks, which is we have to fight, fight to prevent that.

• 37:41Tim Ferriss?

  What's the smartest way to fight to get that?

• 37:42Speaker 03

  If you were willing to go into politics.

• 37:45Tim Ferriss?

  Sure, I'm willing. This is, this is.

• 37:47Speaker 03

  When you run for office, when you run for office, I will help you put your platform together. Short of that, I think the thing to do, I mean, I think that the value of you, and I guess my view is, you know, do what, do what you can to directly contribute to it, right? And so do what you can, do what you can to either, either try to create the new things, try to create the new products, create the new, the new, again, art, science, technology, products, what consumer goods, create new things. Create businesses around those things, right? Create companies, or for that matter, by the way, nonprofits, like create organizations or models that can let things scale so that they can touch more people. And then, you know, a big part of our role is, is, is fund them, fund them and support them and help, and help enable them and train them and get them up and running.

• 38:26Tim Ferriss?

  You mentioned, for instance, when you first got to the valley, there was a feeling on the part of many people that it's done. PCs are finished. You missed the boat, kid. Now, in the venture capital world, there is a term used fairly often, FOMO, fear of missing out. How do you think about or handle FOMO yourself?

• 38:47Speaker 03

  Yeah, mostly we just fall right for it.

• 38:53Speaker 03

  Probably just total suckers for it.

• 38:57Speaker 03

  So the way we describe, so, so what from fear of missing out, where does fear of missing out comes from? It's like, it's clear and visible signs that something is happening that you're not a part of, right? And so it's not FOMO of something that hasn't happened yet. It's FOMO of something that's clearly, obviously happening.

• 39:10Tim Ferriss?

  So. Which, which for those people not in, in the tech investment world, comes in, in a concrete form, just as a, as a maybe mundane example, like an email from a founder. Hey, we'd love to squeeze you in, we're overcommitted, so and so, and so and so is in. Can you get us doxed by tomorrow if you're interested? Blah, right? I mean, there's a lot of sort of cult cortisol driven emergencies, some of which may be real, many of which are illusions.

• 39:36Speaker 03

  Yeah, yeah. And so the thing is, and so I guess there's kind of, there's kind of, you know, there's kind of a couple of ways to handle it. And one is you just like, one of those, you view that as a sign of success. Like you view that as like what it appears to be, which was like, okay, the train is leaving the station. And do I want to be on the train or not? That strikes everybody as like so clearly wrong, like that must be wrong, like that, that must be just foolish behavior, which is why it's been encapsulated into this term called FOMO. It's kind of designed, you know, designed to sound scary, like that, that must be a stupid thing.

• 40:02Speaker 03

  You know, a lot of people will at least say that what they try to do then is kind of take the cynical kind of counter, you know, theory, which is like, okay, then by definition, those are probably bad ideas because you're probably getting played or you're probably a sucker, kind of, you know, along for the latest scam. And so, or the opportunity's passed, or if it was a good opportunity, why would you be asked to participate in it? And then you go to the other side, the other cynical side of the poll, which is like, okay, now I'm not, I'm not, and there are certain VCs who do this, by the way. I'm not ever going to invest in anything hot because it's going to have that characteristic. So I'm going to, I'm only going to invest in things that aren't hot. The uncrowded trade. Yeah, yeah. The thing that nobody else is interested in, right? And so, you know, sort of, it's for old companies, we call that value investing. You know, for new companies, we just call that, you know, cold sectors. It's just an area in which nobody is interested.

• 40:44Speaker 03

  And, and so, and, you know, by the way, like, I don't think that that's, I don't think in any way that's a dumb conclusion. And there are investors who do that, and it works very well for them. My personal preference, what I try to get us to do around here is to just eliminate this as a variable altogether, and literally just like not think about it. And so, like, if it's urgent and we have to invest tomorrow, and then if it's, you know, they may or may not ever be able to raise money in five years, what I try to get us to do is just ignore that part entirely. Basically, just take that out, on both sides, both the hot and the cold. Just take it all out, and then, and then try to get to the, try to get to the actual thing, right? Try to get to the it. So what, what is it really? This specific company, right? Doing this specific thing with a specific technology, the specific people, at the specific time, what is that thing? And let's make our own

• 41:25Speaker 03

  evaluation of that thing, independent of whether it's hot or cold. And then, if it makes sense, we'll invest. If it doesn't, we don't. But we won't factor in whether it's hot or cold. Now, the challenge, we've actually, we've, we've worked on this over time, roughly on average, the things that are hot are priced somewhere between 2 to 4X higher than the things that are cold. At the extreme, from cold is cold, to hot is hot, is about 4X, right? And so, in, in, in investing terms, if it's super hot, it's could be 40 pre, if it's super cold, it's 10 pre. And for the same quality, right? For the same fundamental quality level. And a big part of our answer is, okay, fine. Like it's fine. If we're going to invest, we'll invest on market terms. If the market terms are 10 because it's cold, we'll invest there. If the market terms are 40 because it's hot, we'll invest there. But we've made our own decision about whether to invest.

• 42:10Speaker 03

  So we just try to strip it away.

• 42:11Tim Ferriss?

  Got it.

• 42:12Speaker 03

  Very, by the way, easy to say.

• 42:13Tim Ferriss?

  Easy to say, hard to do.

• 42:14Speaker 03

  Hard to do.

• 42:15Tim Ferriss?

  Yeah. The, are there any particular investors outside of venture capital who impress you?

• 42:23Speaker 03

  Yeah. So I spend most of, when I study other investors, I either study the people, I study the people we compete with and collaborate with very closely. I also, I particularly study the value investors on the completely other side of the spectrum. And it's a fascinating, and I've gotten to know some of them directly. It's a fascinating kind of thing. You know, sort of Warren Buffett is the archetype, but also there's now, you know, there's a lot of famous value investors, Seth Klarman and a bunch of others that have kind of, you know, written books and kind of built up.

• 42:47Tim Ferriss?

  Seth Klarman's smirk, hey.

• 42:48Speaker 03

  Yeah, yeah. This whole kind of theory of, of, of value investing that goes back to Ben Graham in the 19, in the 1920s, 1930s. And so there's this whole world of value investing. And on the one hand, there's no overlap between the worlds because I like to say, like, basically, anything Warren Buffett's worth, willing to invest in, we run screaming in the other direction and vice versa. Right? And that's as it should be. Right? Basically, everything he invested in, like Heinz ketchup, right? And the reason he invested in Heinz ketchup is because people have been eating Heinz ketchup on hamburgers for 100 years. And therefore, the best guess would be that they're going to continue to eat Heinz ketchup for the next 100 years. We run screaming from that because like.

• 43:22Tim Ferriss?

  You're not going to invest in Sees candy?

• 43:23Speaker 03

  No. No, we'd like, no, absolutely not. Furthermore, I'm, I'll, you know, every time I hear a story like Sees candy, I want to go find the new like scientific, you know, superfood candy company that's going to blow their mind out of the water. Right? So like, we're, we're wired completely opposite in the, in that sense. Basically, he's betting against change, we're betting, we're betting for change. And, and that's a very, very big, like, when he makes a mistake, it's because something changes he didn't expect. When we make a mistake, it's because something doesn't change, right? That we, that we thought would. And so, so they could not be more different in that way. But what both schools have in common is an orientation towards, I would say, original thinking of really being able to, kind of going back to the previous conversation, willing to really view things as they are, as opposed to what everybody says about them or the way they're believed to be. Like, value investors are always talking about like getting to the core of the truth

• 44:07Speaker 03

  of what's actually happening in the business. And then the other is long-term. It's the only other place, value investor, value investing is the only other place in the market anymore where you can find long-term investors. Like Buffett will actually invest in a company and he will hold it for 40 years. And that does not happen, you know, elsewhere in the market. It's only the deep value guys who will do that.

• 44:25Tim Ferriss?

  It's funny that at the extremes, they have that in common.

• 44:27Speaker 03

  Yeah, that's right. Yeah.

• 44:29Tim Ferriss?

  If you were talking about creating opportunity, if you decided to close a chapter on your career as a venture capitalist, a funder of ideas, a catalyst, and you had to teach a class. So let's just say ninth grade or freshman year in college, 50 students, what would you teach?

• 44:50Speaker 03

  I would be highly inclined towards teaching people how to build things. There's a book I've actually never read, but I love the title.

• 44:57Tim Ferriss?

  What's the title?

• 44:58Speaker 03

  It's called Smart People Should Build Things.

• 45:01Tim Ferriss?

  I do like the title.

• 45:01Speaker 03

  I almost don't even want to read the book because after that title, almost everything, almost anything it says is going to be a letdown, but the title is absolutely brilliant. It's one of my two favorite titles.

• 45:09Tim Ferriss?

  What's the second?

• 45:10Speaker 03

  The second one is Steve Martin. I have read this one. Steve Martin's autobiography is a fantastic book.

• 45:14Tim Ferriss?

  Oh, My Life Standing Up?

• 45:15Speaker 03

  My Life Standing Up. Actually, I'm sorry. It's not the title of the book. It's called My Life Standing Up is the title. But the main lesson of the book, he says, the key to success is, quote, "Be so good they can't ignore you." Right? And so, and I think it's just, I basically, if you just have those two principles, like if smart people should make things and be so good they can't ignore you, like, that's a pretty good way to like, that's a pretty good way to orient.

• 45:35Tim Ferriss?

  The autobiography is amazing. Also, just a side note, I listened to the audiobook, the Steve Martin audiobook. Yeah.

• 45:40Speaker 03

  Yeah, he's a, I mean, he's a comedy genius, but more than that, the level, it's like the Schultz thing. It's like the level of thoughtfulness that he put into how he constructed his career. Like, nothing about his career is an accident, which I thought was, is fast. Anyway, so I think it would be how to make things. And by the way, I don't necessarily even just mean new software and new computer programs, but how to make things more broadly. And so how to make, you know, again, it goes back to how to make, you know, how to make new art, how to make new science, how to make new technology, how to make a new company.

• 46:05Tim Ferriss?

  How would you teach that?

• 46:06Speaker 03

  I think projects. I think hands-on projects.

• 46:10Tim Ferriss?

  So you'd have, say, an art assignment, you would have a science slash engineering assignment of some type?

• 46:17Speaker 03

  Yeah. Yeah. Or you have an objective. You'd have a, you know, you'd be trying to construct something. It's very, it actually turns out, one of the reasons why computer science has advanced so fast in the last, you know, 30 years is because people can make new things on computers without anybody's permission. And so, you know, it lends itself very well to that. But, you know, people can also write books without anybody's permission, and they can also write music without anybody's permission. And they can also start companies mostly without anybody's permission in most industries. And so, it's basically just anywhere where you can actually, where you can actually yourself create something new, make something new. And then I find, you know, I'm actually a little, I'm very a little bit from folks like Elon Musk on this, like, I find making something new, for sure, there's part of it, what everybody wants to say is it's creativity. And so therefore, it's like you want to do something new, have an original idea.

• 46:59Speaker 03

  But again, that makes people feel like it's an unattainable thing. It's like, how am I possibly going to come up with a new idea in a field and where people have been working in it for 100 or 200 years? Like, it just seems implausible. So I also find, and I think the great artists and the great scientists and the great business people often have this in common. It just goes back to history, which is, okay, for whatever it is you're gonna make, learn about how things got made in the past and get inside the heads of the people who made things in the past and what they were actually like. And then realize that actually they're not that different than you. Like, at the time they got started, they're kind of just like you. Steve Jobs had a great, he said, one of his, I think in his famous commencement speech, he said, "Everything in the world around you was made by somebody who's no smarter than you are." Right? And so there's nothing stopping any of the rest of us from doing the same thing.

• 47:44Speaker 03

  And so I think that would probably be what I would try to do.

• 47:48Tim Ferriss?

  Maybe a boring left turn, but I'm interested to ask, and that is, what are the companies or who are the people you're watching most closely in AI, drones and cryptocurrency?

• 48:01Speaker 03

  Yeah, so I'm very proud of, we have a bunch of, we have a bunch of companies that we put our, like to say, we're conflict of interest or put your money where your mouth is, we have both. We have lived up to both principles. So we have two drone companies that I think are spectacular. So Airware was our first drone investment, commercial drones, which turns out is going to be just a giant market in industries, oil and gas and insurance and all kinds of implications. But the one that people are going to see, I think, in their day to day lives is going to be more the other one, which is called Skydeal, which is a company we back doing autonomous consumer drones. And this is going to be a very big advance on what you can do at the kind of hobbyist level.

• 48:40Tim Ferriss?

  What does an autonomous consumer drone do?

• 48:43Speaker 03

  Well, whatever you tell it.

• 48:46Tim Ferriss?

  Got it, okay.

• 48:46Speaker 03

  And so they haven't really, they haven't rolled out the product yet, and so I don't want to spoil too much of the surprise. But it's basically, it's a drone that can fully fly itself. It doesn't, there's no, it doesn't require a remote control. And so it can be given assignments and it will go carry out those assignments and it can fly through, it can fly through tree branches, it can fly through power lines, it can fly through underground parking garages without any collisions. It can just, it can pilot itself, which is if you've tried flying any of the current drones, they don't work that way.

• 49:13Tim Ferriss?

  Hard to do.

• 49:14Speaker 03

  Yes. It's exercise in how quickly you crash it. And so like that, that technology's about to tip and become very widely usable. And so that's very exciting. So there's that.

• 49:26Tim Ferriss?

  I'm sorry to interrupt.

• 49:27Speaker 03

  Yeah, sure.

• 49:27Tim Ferriss?

  Commercial drones for insurance.

• 49:29Speaker 03

  Yeah.

• 49:30Tim Ferriss?

  So for you, so be an example.

• 49:31Speaker 03

  Yeah, residential insurance, residential insurance, you get an insurance inspector, you're new construction, you're remodeling or building a new house and there's, you know, you're going to get the insurance company's going to insure it. They do an inspection. The inspection involves, you know, a person climbing up on the roof and hopefully not falling off, right? And taking a bunch of notes on a clipboard and writing up a bunch of stuff. And like, it's actually turns out to be a pretty, like, it's a fairly dangerous job. Or another example, cell tower inspection. Oh, there's all these cell towers, there's I don't know, 30,000 or something, cell towers in the US, they only need inspected. Inspection literally is a dude on cables, right? And some of these are big towers. And then you get to like oil and gas, like you get to a drilling rig, you got to inspect that thing. Okay, you know, try climbing up to the top of an oil and gas rig, right? Like, these are very, these are, these are, these are dangerous things.

• 50:15Tim Ferriss?

  Lethal profession.

• 50:16Speaker 03

  Right. These are, these are, yeah. And so if you could, but what if you could, what if you could just fly the drone? Like, what if you could literally do the entire thing by air, right? What if the inspector just rolled up to the house and just took the drone out of the backseat and just launched up in the air and the drone flies a pattern above the house, takes comprehensive 2D photographs of everything and then creates a 3D representation from the 2D photographs, which you can now do, and then does all the recognition, elevations, everything, materials, figures everything out. And then the guy's literally, the inspector's like sitting in the driveway in the car, you know, with air conditioning on. Like in no danger.

• 50:48Tim Ferriss?

  Safe and sound.

• 50:49Speaker 03

  Yeah, yeah. And so that kind of thing. There's another, I'll give you another, um, uh, this, nobody's doing this yet, but somebody's going to, um, so if you're, if you're a cop, if you're a cop on the beat, two in the morning, you get a call, um, that there's a convenience store and somebody's broken in the convenience store, you have to go do the check. The check involves going and seeing whether the, you know, the lights and all this stuff and broken glass, but you also have to check the roof. And checking the roof is actually a very important thing because if there's a bad guy and they saw the cops coming, they might have climbed up on the roof and they might have a gun and they might shoot at you. Um, and so you gotta go clear the roof. Um, and so what do you do? You get your flashlight and your gun and you climb the ladder and you poke your head up and you hope that nobody's on the roof.

• 51:26Tim Ferriss?

  Hope no one plays whack a mole with your head with a revolver.

• 51:29Speaker 03

  Yes, exactly. Right. And so what would be the, what would be, what could we do to help that? What, how about, how about every, every police car have a drone in the backseat and you just, you get to the thing and from a safe distance, you launch the drone and the drone does an infrared camera sweep, right, of the roof, right before you even walk up to the thing, right? And by the way, like if there's a bad guy on the roof, like what if the drone recognizes like, okay, there's a person on the roof. And what if the drone locks onto that person and then just basically follows that person wherever they go? And they rabbit, you know, they run, they run for it. And the drone is like right there 10 feet above following them the entire time, right? So all of a sudden, like just the job of be cop becomes a lot safer. And so, and this, by the way, even goes back to the question you asked, which is like, isn't AI, isn't AI a threat? And it's like, no, no. Like this is a case, the way those drones are going to work is with, those are powered by AI. This is all based on deep learning. This is this new technology.

• 52:13Speaker 03

  This new AI, it's the same technology, by the way, that was just used in that go in the, in the, in the famous now go thing where the, the Google AI beat the, beat the human player. It's the same technology and it's just going to use for, it's going to use for drones. And it's going to be, there's going to be things in our lives that we are just going to be able to rely on to be able to make our lives safer and better. Um, and we're just going to take them completely for granted and we're going to work in combination with them and we're going to be really glad we had them and we're going to be completely unwilling to go back to a world where we didn't have them. And it's just going to be obvious. It's just, we have to get it. But if we have to get this stuff in people's hands before they can, they can really, I think, really fully see it.

• 52:46Tim Ferriss?

  What do most people not understand about cryptocurrency?

• 52:51Speaker 03

  I think it's just such, well, so a couple of things. So this will not come as a surprise to you. Um, I thought I understood it and I really didn't. Um, money gets people really cranked up. Yes, does. The entire concept of money is probably the single, I don't know, maybe after God, it's like the single most emotionally loaded concept that we have in humanity, like money just because money makes people mad under any circumstances on any topic related to money, right? And it's just because I think it's just because it's such something that we all rely on. And it's something that we always think has been, you know, like there's always this sense of unfairness. And so money gets people really cranked up. And so I think that the there's sort of the idea of cryptocurrency and blockchain and this kind of new idea of distributed trust in the internet. And then there is this application of that technology, which is a very fundamental application, which is a, you know, a new kind of money.

• 53:36Speaker 03

  I think most people are unable to just simply objectively, dispassionately look at the mechanics of how it works without almost getting preemptively upset, like just angry, like how dare the nerds come up with some new form of money? Like this has got to be like, there has got to be something wrong with this, right? And I will now attempt to find, you know, the 30 possible things that could be wrong with this until I find one that basically proves that this can't possibly work because obviously it violates the laws of nature and government and, you know, whatever, whatever. And like somehow I'm going to come out on the wrong side of this. Like people just get, and by the way, I'm not even just talking about like regular people. I'm also talking like bank CEOs just are furious. Like you bring up Bitcoin and they're just like, they just get really upset. And I'm like, you know, did you get upset about your new toaster? Like, it's just a technology. Like, it's just a thing. And you can, you can study it and you can learn about it and you can think about it

• 54:21Speaker 03

  and then you'll either conclude it's good or not. But like, it's not going to bite you. Like, it's just a thing. Right? And so like, the way I look at it, it goes back to like, it's just a thing. It's just, we now have this idea of cryptocurrency. It's a, it's a fundamentally new and very important idea. We now have this ability to have this new kind of currency based on top, you know, everybody's had 18,000 theories why it's not possibly going to work. Bitcoin is still working today, exactly the same as it worked last year and the year before that, the year before that. System is completed by all the noise and all the stuff and all the crashes and this and that and the other thing. Like, it just continues to work. It just is. Like it's becoming, you know, it's becoming like air or water. It just is. Like it or hate it, it just is. And so anyway, we're still very excited. We're very excited and we're actually, well, we are going to continue to make new investments against it.

• 55:05Tim Ferriss?

  Are there, of your current investments or non-investments, are there particular companies that you you think are breaking new ground or doing interesting things in crypto?

• 55:13Speaker 03

  Yeah. So, well, so, I mean, Coinbase is our sort of our big, that most people have, as a company that most people have heard of, it's kind of the easiest way to buy and sell Bitcoin and they have a whole bunch of stuff they're doing. And then we have this company, 21, with a really brilliant founder, Balaji Srinivasan, who was a, actually was a partner here.

• 55:31Tim Ferriss?

  Very smart guy.

• 55:32Speaker 03

  Very, very smart guy. And he has, he has the, he has the highest output per minute of new ideas of anybody I've ever met in my life. And by the way, I mean, output per minute.

• 55:42Tim Ferriss?

  Oh, I've been at a few dinners with him and it's hilarious to just watch the outpouring after, especially after, you know, one or two glasses of wine. It's astonishing.

• 55:52Speaker 03

  Yeah. He's, he's like an Edison, for me, he's like an Edison kind of character. It's just, it's just literally thousands of ideas. And then it's whatever percentage of the ideas that he can personally get to, right? And then he'll give the other ideas to everybody else and then wonder why they're not pursuing them, which is, which is, which is often a good question. And then the next time you meet him, he'll have a thousand new ideas. And so his, his company, he's, people can read about it if they want, but it's done a bunch of interesting things. He has a whole additional set of ideas he's pursuing now. I had a long, I went to this thing up, up north and I drove back and I was on the phone with him for two hours, you know, the middle of the night, driving, you know, on the freeway, biology in my ear, you know, idea number 38. I was like, this is awesome.

• 56:27Tim Ferriss?

  Could be worse use of time, you know?

• 56:29Speaker 03

  Yeah.

• 56:31Tim Ferriss?

  That's good food for thought. The, on, on food for thought, what, what advice would you give to Mark the 20 something at Netscape? And you can pick the time.

• 56:44Speaker 03

  You know, I've never even thought, I've never for a moment even thought about that. I don't do, so the thing I don't, I don't do replays well. It goes to this history, like I don't do replays well. I like the question I'll never answer is what would you do? What would, what would you have done differently had you known X? And I never, ever play that game because it's that you never, you didn't know X. Right. And so have you ever read, I was at the Elvis Cole novels? No. The great crime novelist, Michael Kreis, is his book, his novel, Elvis Cole is this kind of postmodern LA private detective. They're great novels. And he's got this partner, Joe Pike. It's my favorite fictional character, maybe of all time. Joe Pike. Joe Pike is a former Marine Force Recon guy. It's a lot like your friend Jaco. Yeah.

• 57:27Speaker 03

  And in the novels, Joe Pike has a, he's, he always wears the same outfit every day. Wears jeans. He wears a sweatshirt with the sleeves cut off and aviator, mirrored aviator sunglasses. Love them already. And, and he's got bright red arrows tattooed on his deltoids, pointing forward. And basically his entire thing is forward. So that's, that's. Forward. We don't stop. We don't slow down. We don't revisit bad, you know, past decisions. We don't, we don't second guess. And so, yeah, I actually, honestly, that question, I have no idea how to answer. I think you just did. Okay. Forward. When you think of the word successful, who's the first person who comes to mind and why? Oh, geez, that's a great example. That's a great, that's a great question.

• 58:10Speaker 03

  I mean, honestly, my father in law for one, who's a whole, could be the subject of a whole podcast. Podcast. Can you give us a taste of why that is? He's an amazing guy, John Ariaga. He is one of the small handful of people who basically built Silicon Valley. And so he, he has an amazing life story, but just to do the short version is he went to Stanford. He went to Stanford on a basketball scholarship in the 1950s, grew up, grew up very, in a very, very poor part of the country. Went to get a basketball scholarship, studied, got a bachelor's in geography from Stanford. You may have not ever in your life met a lot of people who have a bachelor's degree in geography. I have not. They abolished the major the year he got his degree. Abolished. That's a strong word.

• 58:54Speaker 03

  He became a real estate broker, a commercial real estate broker in like 1958, when the valley was all orchards. Within two years, he was making 10 times more money buying and developing properties as he was as a broker. And his boss fired him because he was making all the other brokers feel bad.

• 59:12Speaker 03

  So he, starting, it's basically continuously from 1960 to today, he's been one of the biggest developers in Silicon Valley. Uniquely, by the way, as far as I can tell uniquely, I've never met anybody else. After the first few years, he basically, he has not used debt on a project, I think, in almost 50 years. So he's a real estate developer who does it entirely.

• 59:28Tim Ferriss?

  Extremely uncommon.

• 59:30Speaker 03

  Entirely on equity. And, and basically it was he, he and there's a small handful of him and his contemporaries who basically built, literally, literally built the valley. And so, yeah, no, and I wanna, yeah. He's great. He's fantastic. I really love him. He's fantastic. He, um, he once sat me down and he's like, okay, he's like, you know, he's like, this tech stuff I understand. Like you guys think it's a big deal. It's fine. You should go do it for now. He's just like, I just want you to know the real money's in real estate.

• 1:00:00Tim Ferriss?

  Does have a lot of street cred.

• 1:00:01Speaker 03

  And I said, yes, sir.

• 1:00:06Tim Ferriss?

  Do you have any particular morning rituals that are important to you?

• 1:00:09Speaker 03

  Sleep in as long as possible.

• 1:00:10Tim Ferriss?

  Sleep in as long as possible. When do you usually wake up?

• 1:00:12Speaker 03

  Try not to blow through any red lights on the way to work.

• 1:00:15Tim Ferriss?

  When do you usually wake up?

• 1:00:16Speaker 03

  Oh, it, um, 45 minutes before I have my first meeting. It's, yeah, no, it's, I, I do, I do the, what do they call the hot docking?

• 1:00:23Tim Ferriss?

  Hot docking?

• 1:00:23Speaker 03

  Hot docking. It's like the, the controlled crash into the office.

• 1:00:29Speaker 03

  It's not, yeah, no, it's, you read these things, the whole 14 things successful people do in the morning. Like, I can't even imagine.

• 1:00:35Tim Ferriss?

  Do you drink coffee?

• 1:00:35Speaker 03

  A lot, yes.

• 1:00:36Tim Ferriss?

  You do?

• 1:00:37Speaker 03

  Yeah.

• 1:00:37Tim Ferriss?

  That was an emphatic yes.

• 1:00:39Speaker 03

  If it has caffeine in it, I drink it.

• 1:00:43Speaker 03

  I really think, no, the perfect day is caffeine for 10 hours, alcohol for four. Like I think.

• 1:00:48Speaker 03

  Balances everything out really well.

• 1:00:49Tim Ferriss?

  Sounds a lot like my day.

• 1:00:50Speaker 03

  I'm not shy for a second about that.

• 1:00:52Tim Ferriss?

  The Silicon Valley speedball.

• 1:00:53Speaker 03

  Yeah, that's right.

• 1:00:55Tim Ferriss?

  Do you have any favorite documentaries or movies?

• 1:00:59Speaker 03

  Uh, lots of favorite movies. Um, I don't know where to start.

• 1:01:02Tim Ferriss?

  What have you seen?

• 1:01:03Speaker 03

  Actually, you know, in the last 20 years, in the last 10 years, really, you know, it's TV even more than movies.

• 1:01:08Tim Ferriss?

  Okay. What? Any favorites?

• 1:01:09Speaker 03

  Well, the holy train, so, uh, Mr. Robot. Which I just think is absolute genius. If you can ever get it, you should get him sometime. The guy. He's great. Sam. I have never met him. Probably right about him. Yeah, so he's directing. He's written and he's personally directing all 10 episodes of the new season. So it's gonna be. I think he's that he's. He would be he would win. He has actually made a movie, but like he's he's definitely gonna win Oscars or whatever it is. People win. And then halt and catch fire. I'm not familiar with that. Catch fire is extraordinary. It's a very it's the best fictional portrayal of what a tech startup is actually like. Halt and catch. Halt and catch fire. So there was a it's a it's a the title is there was a mythic IBM mainframe days.

• 1:01:52Speaker 03

  There was a mythical instruction that is sort of a sort of an urban legend that there was a specific piece of code that you could write that would cause the computer to stop and then catch on fire. It's like the mission impossible command. Yeah, and I don't think it was ever really verified for sure whether or not it existed, but it kind of became this mythical thing. And so it's it's the story. Actually, it's loosely the story of the birth of the PC. And particularly, it's sort of based on how the company compact got built in Houston. It's set in Texas. But it's basically the birth of a new computer company. But it's a very and it's it's funny because the reviews. The reviews are funny, so it's a historical piece. It's very serious, very serious drama. So you know, it gets compared to Mad Men and shows like that. I said, you know, set in the office and the personal lives of everybody. And so and it's funny because the the critics reviewed it and they said, I don't you know,

• 1:02:35Speaker 03

  it all seems like it all seems super heated like it's all too like the melodrama is too exaggerated of like all the stuff that happens. And everybody I know in the Valley who's seen is like, no, that's actually what it's like. That's actually 100% what it's like. And like, I knew that guy and I saw that thing happen and I saw that person blow up that way. It's like Ben's book. Same. Yeah, exactly. Yeah, yeah, it's what it's actually it's what it's what so they really caught the it's fictionalized, but they really. For anybody who really wants to know what it's actually like to go through one of these things that that that show is tremendous. And then, of course, Silicon Valley. Yeah. Do you have a favorite scene or episode? So I've actually still only seen the first season. I'm not current. I'm starting to actually become culturally irrelevant because I can't I don't get any of the new references at all. You'll survive. You seem to be doing just fine.

• 1:03:20Speaker 03

  I have to I have to binge. The sesame seed scene in the first episode of the first season was probably the highlight. That the the let's just say loosely based on Peter Thiel. Scene.

• 1:03:35Tim Ferriss?

  Yeah, loosely or not.

• 1:03:37Speaker 03

  Or not, right, exactly, or not, or maybe very precisely, very accurately. You know, who knows?

• 1:03:42Tim Ferriss?

  If you could have one billboard anywhere with anything on it, what would you put on it? That could not be an advertisement for one of your portfolio companies.

• 1:03:50Speaker 03

  Outside Trump Tower.

• 1:03:52Tim Ferriss?

  Okay.

• 1:03:56Tim Ferriss?

  What would you put on it, though, if you wanted to convey a short message to as many people as possible?

• 1:04:01Speaker 03

  Oh, I've got one.

• 1:04:03Tim Ferriss?

  All right.

• 1:04:04Speaker 03

  Maybe this is a little, maybe a small scale for what you're looking for, but I've got one. I've actually thought about hiring a skywriter to do this one.

• 1:04:10Tim Ferriss?

  Let's do it, but okay.

• 1:04:11Speaker 03

  Right in the heart of San Francisco, a billboard with just two words on it. Raise prices.

• 1:04:16Tim Ferriss?

  Raise prices?

• 1:04:17Speaker 03

  Yes.

• 1:04:18Tim Ferriss?

  Can you explain?

• 1:04:19Speaker 03

  The number one thing, just the theme, and we just see it everywhere, the number one theme of our companies have when they get really struggling is they are not charging enough for their product.

• 1:04:28Speaker 03

  It has become absolutely conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible. And then, under the theory that if it's low priced, everybody can buy it, and that's how you get to volume. And we just see over and over and over again, people failing with that because they, because they get into a problem called too hungry to eat. They don't charge enough for their product to be able to afford the sales and marketing required to actually get anybody to buy it. Right? And so they can't hire the sales rep, they can't afford to hire the sales rep to go sell the product, they can't afford to buy the whatever TV commercial, whatever it is. They can't afford, they cannot afford to go acquire the customers.

• 1:04:57Tim Ferriss?

  Too hungry to eat.

• 1:04:57Speaker 03

  They're too hungry to eat, and then they sit there, they don't sell anything, and then they don't sell anything, and they get nervous and upset, and then they cut the prices.

• 1:05:03Tim Ferriss?

  And then it's a race to the bottom.

• 1:05:04Speaker 03

  Which just makes the problem worse. And so probably the single number one thing we try to get our companies to do is like raise prices.

• 1:05:10Tim Ferriss?

  Raise prices. So the last.

• 1:05:13Speaker 03

  And by the way, you know, it's like, okay, like, is your product any good if people won't pay more for it?

• 1:05:18Tim Ferriss?

  Exactly.

• 1:05:18Speaker 03

  You know, it's like.

• 1:05:19Tim Ferriss?

  Good litmus test.

• 1:05:20Speaker 03

  Good litmus test, right?

• 1:05:21Tim Ferriss?

  Last two questions, what have you changed your mind about in the last few years?

• 1:05:27Speaker 03

  That's a good question. So one is, we started, I'll just give you a very practical one. We started on, we started out, we didn't do any healthcare related stuff here, investments here. And we've now done a complete, almost complete 180 on that. And we're now very deep in health because we think a bunch of really interesting things are happening. And that was a response to like the hedge fund thing I was telling you, like that was response. We just, we just basically had very smart founders coming through here, basically telling us we were dumb. Like, and by the way, they were right. Like, we just hadn't figured it out yet. And so we got serious about it a couple of years ago. And we have this guy, Vijay Pandey, from, so former Stanford professor, running this program now for us. And it's extraordinary what's happening at the kind of intersection of healthcare and computer science. So there's a lot that's happening there.

• 1:06:10Speaker 03

  The thing that I'm probably think about the most that I am still trying to work out in my own head is that a combination of Peter Thiel, Larry Page, and Elon Musk, in different ways have provoked a fundamental crisis, a fundamental conversation in the valley around, you know, kind of the sort of moonshots, the big, the big, the big, the big, the big challenges. And so, you know, Elon, you know, why can't we build self-driving cars? Why can't we have new kinds of rocket ships? Why can't we go to, like, literally go to Mars? Why can't we cure cancer? Why can't we, you know, do nuclear fusion? Why can't, you know, long list of things that are like, you know, big, big things. We talked about earlier a little bit, like Silicon Valley has always viewed itself a little bit in the tools business.

• 1:06:54Speaker 03

  All right, or a lot in the tools business. Silicon Valley has been getting more and more assertive, entering more and more industries directly. Right? So like Uber, Lyft entering directly into transportation, Airbnb entering directly into real estate, fintech companies entering directly into banking. So our, our companies are getting more assertive at going into markets that previously they may not, you know, other founders may not have been willing to go into in the past. And then Larry, Elon, and Peter basically all say in different ways, like, we're still not doing enough. There are these much bigger things to be, to be done. And why are we waiting for either governments to do them? Or for large industrial companies like GE to do them? Or for, you know, I don't know, research universities to figure them out? Like, why can't we do these things? And, you know. There's one school of thought that says they're simply too hard. They're simply too

• 1:07:37Speaker 03

  hard. They're too daunting. They're too expensive. They're too different. You know, they're they don't have Moore's Law on their side like they're they're there's a reason we haven't been doing them is because they're they're too difficult. And then there's another school of thought that says, you know, that's just being a wimp and you should go try to do all these things. Because if we're not going to do it, really, who is? And then I'm trying to find is there something in the middle? Like, is there like, what are the shades of gray? Right? What's the line? Right? What's the line where, you know, Tesla? What's the line where Tesla made sense? But, you know, Tesla, Tesla that flies didn't make sense like, right? And there's a line in there somewhere, I think, right? Or maybe Peter's right. And maybe there isn't a line. And maybe and maybe maybe the next Tesla should be one that flies, right? And so it's, to me, that's the provocative thing is it?

• 1:08:18Speaker 03

  It's a question about stretching the limits. How far Icarus myth? How far can we stretch the limits of what we can do before our wings melt? Right? And

• 1:08:29Tim Ferriss?

  It strikes me also that, I mean, you mentioned Peter. So the we wanted flying cars and we got 140 characters. There were a lot of questions from from fans asking how to how would he suggest people entrepreneurs are be encouraged to say solve the big problems versus making social media networks, etc. And I think you made a point, actually, in a debate with Peter at one point, maybe it was at the Milken Conference, could have been elsewhere, that Twitter and I would agree with you as one example, 140 characters, has been world changing in a lot of ways. I mean, you look at political activism, you look at many different examples when you have adoption that that that is that wide, that global free with

• 1:09:11Tim Ferriss?

  the emergent properties are just unpredictable. I mean, you get some incredible use cases.

• 1:09:15Speaker 03

  Including political revolutions.

• 1:09:17Tim Ferriss?

  Exactly.

• 1:09:17Speaker 03

  Right?

• 1:09:17Tim Ferriss?

  Yeah. Last question. Oh, sorry.

• 1:09:21Speaker 03

  So that was it was a debate at the Milken Conference, which is one of my one of my shining moments is I prepared for weeks for that debate.

• 1:09:28Tim Ferriss?

  Yeah.

• 1:09:28Speaker 03

  Knowing Peter wasn't going to prepare at all. I bring that up because I think I was actually able to go toe to toe with him. But I had to sandbag him to do it. He was absolutely shocked that I had prepared for it.

• 1:09:38Tim Ferriss?

  I enjoyed the guy, I really enjoyed the conversation.

• 1:09:40Speaker 03

  That was one of my great debating moments is I could almost keep up with Peter. So it's actually funny, his whole thing, his whole slogan, that you know, the slogan of his firm, which is, as you said, we were promised flying cars instead of we got 140 characters. It's actually interesting, he will immediately concede that both of those are actually not the point. So first of all, he immediately concedes that flying cars probably don't make sense. And then he immediately concedes that Twitter probably is more important than like just being dismissed like that. And so he will, he basically, he just basically says the slogan, it was just to provoke provoke the conversation. But to your point, it does provoke the conversation. And I actually think you're, I think you're right. I think it provokes a conversation from both sides, which is, okay, why don't we have the other big? Maybe flying cars are not, but why don't we have nuclear fusion? Why don't we have like all these other things? Why don't we have supersonic flight?

• 1:10:22Tim Ferriss?

  Right.

• 1:10:23Speaker 03

  Like we had the Concorde, now we don't even have the Concorde. Like seriously, it takes nine hours to get to London? Like really? Right? I mean, I think that's, it's a very relevant question. And then, but I also think it provokes the thing on the other side, which is I think the computer stuff, communication stuff like Twitter and all these other things. If I'm Peter flatly says the iPhone doesn't count as innovation. And I just think that's, I think that's too far, right? I think it iPhone absolutely counts as innovation. I think it's one of the most important products ever developed. I think the impact on the world is absolutely enormous and growing. And so I think there's, there's a, there's a tendency to write off the stuff that built the valley. And I don't think, I don't agree with that. I think there's a lot more to do in the core of what we do.

• 1:11:00Tim Ferriss?

  The last question is, do you have any, any ask or request of my audience, people listening? Anything you'd like them to consider, ponder, do?

• 1:11:08Speaker 03

  So first of all, they should all for sure work for our companies.

• 1:11:13Speaker 03

  Please come to our website, a16z.com. We have jobs, we have job listings. We'd like to get everybody in our orbit. Anybody smart enough to listen to your podcast, we definitely want to work for our companies. And then, you know, I would say, you know, I would say build new things. And then if it's something that needs, if it's a, you know, if it's a business that's promising that needs money, you know, we're open for, we're open for business.

• 1:11:34Tim Ferriss?

  Mark, any last places you'd like people to check you out online? Where can they say hello?

• 1:11:39Speaker 03

  Oh, Twitter. Twitter's good. Twitter's good.

• 1:11:40Tim Ferriss?

  Twitter.

• 1:11:41Speaker 03

  At P. Marka. At P. Marka. P. M. A. R.

• 1:11:43Tim Ferriss?

  Is that from your Unix handle way back in the day?

• 1:11:45Speaker 03

  It's an old, old joke. It's a boss one time who was so important that he had both his real, he had his public email address and he has P. with his name behind it, which is his private email address. So we thought that was a little bit too much and so we all gave ourselves P. But nobody knew who we were.

• 1:12:03Speaker 03

  And then it stuck.

• 1:12:04Tim Ferriss?

  Perfect. Well, everybody say, check out the Andreessen Horowitz website. I'll put that in the show notes as well. You should also check out their podcast, which I've greatly enjoyed. You can start with, I mean, one that I really enjoyed was the sort of deconstructing Amazon episode. And thank you so much for the time, Mark. This has been a blast. Really appreciate it.

• 1:12:24Speaker 03

  Thanks, Tim.

• 1:12:25Tim Ferriss?

  And to everyone listening, you can find all the links and everything else in the show notes, which you can find at fourhourworkweek.com/podcast. And until next time, thank you for listening. This episode is brought to you by 99designs. 99designs is a great partner for creating and growing your business. It's a one-stop shop for all of your graphic design needs, whether that's a logo, website, business card, or anything else. I use 99designs to get book cover prototypes for The Four Hour Body, which went on to become a number one New York Times bestseller. I also use them for banner ads, illustrations, and other things. With 99designs, designers around the world compete to create the best design for you. You give feedback and then pick your favorite. You end up happy or you get your money back. It's very simple.

• 1:13:09Tim Ferriss?

  You can check out a few of my own designs and those of yours, meaning Tim Ferriss Show listeners, at 99designs.com/tim. And right now, my listeners, you guys, will get a free $99 upgrade on your first design. That's 99designs.com/tim. Check it out.

• 1:13:29Tim Ferriss?

  This episode is brought to you by Audible, which I've used for years. I love audiobooks and I have two to recommend right off the bat. Number one is perhaps my favorite audiobook of all time, and that is The Graveyard Book by Neil Gaiman, the only audiobook I've wanted to immediately listen to a second time as soon as I finished. It's amazing. You will thank me. The Graveyard Book. The second is Vagabonding by Rolf Potts, which had a huge impact on my life and formed the basis for a lot of what became The Four Hour Work Week. So, all you need to do to get your free 30-day trial is go to audible.com/tim and you can choose one of those two books, The Graveyard Book, Vagabonding, or more than 180,000 audio programs.

• 1:14:13Tim Ferriss?

  So that could be a book, that could be a magazine, that could be a newspaper, it could be a class. It's that easy. Go to audible.com/tim. That's audible.com/tim and grab a book. Enjoy.