20VC: Slow Ventures' Sam Lessin on How VC Forces Certain Companies To Exist and Makes It Difficult To Finance Others, Why Cities Won't Let Scooter Companies Be Profitable and Why Dapps Are A Concern and Where Emphasis Should Be Placed In Crypto

Sam Lessin is a Founding Partner @ Slow Ventures, one of the leading early-stage funds on the West Coast with a portfolio including the likes of Robinhood, Gusto, Pinterest, Casper, Postmates and many more incredible companies. Sam is also the Co-Founder & Co-CEO @ Fin Analytics, the startup that provides precision measurement and coaching for high-performance operations teams. Before founding Fin and Slow, Sam spent 4 years at Facebook as a VP of Product Management following their acquisition of his prior company, Drop.io. In Today’s Episode You Will Learn: 1.) How Sam made his way into the world of venture with the founding of Slow following the acquisition of his company and 4 years in product at Facebook? 2.) How does Sam think about the difference between investing small personal checks vs managing institutional funds? What is the subsequent effect on mindset when investing? How does one prevent an increased conservatism? What does Sam mean when he says "VC forces some businesses into existence and makes others hard to fund? 3.) Why does Sam believe that man + machine must have a symbiotic relationship in the future? What does this look like in reality? When comparing today to the industrial revolution, is Sam concerned by the increased rate of adoption today? What does this mean for different categories of work? Why does Sam believe we will need more philosophers? 4.) Why does Sam believe that too much emphasis in the world of crypto is placed on Dapps? Why is he concerned by Dapps? What are of crypto does Sam believe is most exciting and investable today? Does Sam agree with Elad Gil that we will see the re-centralisation of talent back to the valley with the scaling of crypto co's? 5.) On governments, why does Sam not believe that both local and national governments will allow scooter companies to become meaningfully profitable in the future? How does Sam think about the balance and trade-off between privacy and security that faces many governments today? Items Mentioned In Today’s Show: Sam’s Fave Book: Lessons of History Sam’s Most Recent Investment: Fetcher.ai As always you can follow Harry, The Twenty Minute VC and Sam on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

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

• 0:00Harry Stebbings?

  We are back and it's my favourite time of the week, release day here at the 20 minute VC with me, Harry Stebbings. It'd be awesome to see you behind the scenes, where we're cooking up some really fun projects and so I'd love to see you there. On Instagram at H Stebbings 1996 with two Bs. But to the episode today, and I love doing the show for many, many reasons. But building friendships with incredible people who I really respect and admire has to be the single biggest joy. And that's the case with our guest today. I met him over three years ago. And so I'm thrilled to welcome back to the hot seat Sam Lessin, founding partner at Slow Ventures, one of the leading early-stage funds on the West Coast with a portfolio including the likes of, check this out, Robinhood, Gusto, Pinterest, Casper, Postmates and many more incredible companies.

• 0:39Harry Stebbings?

  Sam's also the co-founder and co-CEO at Fin Analytics, the startup that provides precision measurement and coaching for high-performance operations teams. And before founding Fin and Slow, Sam spent four years at Facebook as a VP of Product Management, following the acquisition of his prior company, Drop.io. I do also want to say a huge thank you to the wonderful Mr. Matt Mazzio, who made this intro over three years ago. Matt, you're a hero and I really do so appreciate that. But before we dive into the show with Sam today, and we mentioned some incredible companies in the intro there, and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required,

• 1:24Harry Stebbings?

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• 2:10Harry Stebbings?

  Continental continents, so they really know what works, but don't take my word for it. Take the words of Eventbrite, former 20 VC guest Hymns, Dialpad and more, all customers and lovers of Terminal. And you can find out more today at terminal.io. And finally, I've always been a big history man, and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world. With more than 50 years working with VCs, they help VCs form and manage funds, make investments and handle the myriad of issues that can arise throughout a fund's lifecycle. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com and also go to Cooleygo.com.

• 2:53Harry Stebbings?

  But enough from me, so now I'm very excited to hand over to Sam Lessin, founding partner at Slow Ventures.

• 3:04Speaker 01

  You have now arrived at your destination.

• 3:07Harry Stebbings?

  Sam, it is such a pleasure to have you on the show today for what I know will be a very special round two. So thank you so much for joining me again today.

• 3:14Speaker 02

  Thanks for having me again. So it's always great to hear your voice, Harry.

• 3:18Harry Stebbings?

  Oh, well, you're far too kind. How flattering. But I want to start the episode with a little bit of recap. For those that maybe missed our first episode, Sam, talk to me. How did you make your foray into what I now know to be the wonderful world of venture and really come to found Slow?

• 3:31Speaker 02

  Yeah, so I mean, the quick answer is, is I started out angel investing, as I think a lot of venture capitalists do. I was always very excited about technology. When I lived in New York, I had the fortune of being able to invest in some of my friends' startups, like Venmo and Birchbox and MakerBot. And I loved investing. I thought it is a really fun way to be able to have great conversations and, you know, just an incredibly great way to see different views of the world. And so, you know, over time, a group of us got together and started investing more. Slow became a thing where we'd each be doing our angel investments. And then we'd also wanted to cross invest and have things, investments in common. So we'd also have Slow invest alongside the deals we were doing personally. And then the last few years, we formalized it. So Kevin Collard, who's kind of the managing director of Slow, basically stepped out and said, look, I think we should turn this into a formal fund and raise outside capital

• 4:16Speaker 02

  and, you know, not just have this be kind of a group of friends doing this. And so that was several. Years ago now, we raised two wonderful funds, getting investing them out, been great.

• 4:24Harry Stebbings?

  Now, I expected to go off schedule, but I didn't quite expect to go off schedule quite this early. But I am too interested to ask. So you mentioned that obviously like the formalization, so to speak, of the investing. But I asked Andy McLaughlin this and actually Ron at GovTech recently, and it's one I'm super interested by. How did your investing mindset change when moving from angel to institutional? Andy said he became a lot more conservative. Did it change your investing mindset?

• 4:48Speaker 02

  Okay, well, that's gonna be a whole podcast in and of itself. Look, I think the the quick version is there's a huge difference between doing small personal checks and having LPs. And I wouldn't necessarily say maybe more conservative, but I do think that it really changes the economics so dramatically. I mean, if you do a $50,000 investment yourself and it does really well and, you know, great fortune, you end up with a few million dollar outcome. If that's your money, that's an amazing outcome, right? And so you can kind of do these tiny, tiny, tiny baby checks with friends in like a very casual way and work now. The problem, once you start scaling up, is all of a sudden a $5 million exit to an individual is great. A $5 million exit to a $200 million fund is basically irrelevant, right? That's actually a failure in a lot of cases. You only have so many shots on goal.

• 5:33Speaker 02

  And so, you know, it does put interesting pressure on the types of investments you can do. How big can they become? And really like, are you able to put enough money to work in order to make the economics work from a fund perspective? I mean, I think there are real challenges with this from an institutional capital model perspective. It ends up forcing certain types of companies to exist and making it very hard to finance other types of companies. It might be very good companies, but can't provide the type of venture economics. But yeah, I mean, it's a very long conversation about how angel investing and kind of more institutional investing is different. And it's one that's happening all across the valley in all sorts of ways, as I'm sure you're well aware.

• 6:07Harry Stebbings?

  No, absolutely. Our final off schedule one before we dive into the schedule itself. I had Danny Reimer at Index on the show recently, and he said the biggest mistake that VCs make is they underestimate the size of niche markets and just how big a market can be. You mentioned there about kind of the backable versus non-backable and kind of the market sizing element. How do you think about market sizing today? And is that a dominant thought for you?

• 6:27Speaker 02

  Look, I mean, whenever I'm doing an investment, the first question I ask myself is how does it become 10 times larger? How does it become 100 times larger? I think after 100 times larger, you get into a little bit silly territory in terms of like how big things can be. Every once in a while, something might be a thousand times bigger than when you invest. But man, that's like a once in a career, twice in a career type moment. I do think you can do 10x, 100x model. I agree with Danny that I think people systematically underappreciate how large the world is. And therefore, especially in a globalized environment, how big niche markets actually can be when you blow them up and scale them up. But I think it's an interesting calculus. I tell a lot of people professionally, do what you love, because if you do what you love, it's just an economics argument. The reality is you'll probably do it best and get deepest in it.

• 7:08Speaker 02

  And the reality is if you love some esoteric comic book thing, or you like reenacting the Revolutionary War, thinking my brother right now. The reality is the market of those things is much bigger than you realize. But market size still matters and the world is not infinitely large.

• 7:21Harry Stebbings?

  Listen, I totally agree. When I started the 20 minute VC, I thought there'd be about 10 people and my mother. And now there's 250,000 who like VC podcasts. So I mean,

• 7:29Speaker 02

  Which is fair, but you still only have one mother.

• 7:32Harry Stebbings?

  I do still have one mother.

• 7:34Speaker 02

  Your market size of mothers was correct.

• 7:36Harry Stebbings?

  She doesn't even listen anymore. I do want to start today, Sam, back to the schedule before we move too far off it. We spoke in our last conversation two years ago about the man versus machine relationship. Time's now gone on, as we said, two years. So I have to ask, what have you and what have we learned and observed over the last two years? With regards to that human versus kind of computer hybrid system relationship?

• 7:57Speaker 02

  So I just don't think it's computer versus human. I think that's what you and I talked a lot about in our first podcast. Was this was the time when like Facebook M and things like that, people were very excited about this idea that you could do a bunch of tasks. And you'd have this magical black box AI that would learn from the humans and the data set. And then voila, you wouldn't need people anymore. I mean, how wrong has that proven to be as a model? To my own horn, as I was trying to push years ago, and we still push. Um, you know, the real model, I think, is you have to think about AI and people as symbiotic. And you have to think about the real transition in the industrial revolution of knowledge work we're going through is going from, we have a new piece of technology. We need to change how work is organized and focus humans on the most human tasks and kind of productionalize factories.

• 8:40Speaker 02

  Of machines around them to get them as much leverage as we possibly can. So it's very similar to how the industrial revolution happened. Steam alone actually doesn't get you massive increases in productivity. There's an incredible study about electric engines and when the electric motor was invented, how factories were reworked, it didn't have this immediate improvement. What you had to do was reorganize the factory floor, change how work was done, change what parts of work people are focusing on. And then you get the unleash of like massive productivity gains, you know, massive increases in quality, et cetera. So, I mean, that's what I've been working on for a long time.

• 9:11Harry Stebbings?

  You mentioned the industrial revolution there. The one thing that strikes me as very different now to then is simply the speed of adoption. How do you think about the speed of adoption? How does that maybe change or alter how you think about the relationship and symbiosis?

• 9:24Speaker 02

  Well, look, there's a great paper that I read recently, it was referred to me about when the electric motor was invented. And before you had these factories that were based around steam or water power, and they were all based on central drive trains. So electric motors invented, it takes about forty years for the electric motor to be adopted into factories. And initially, people didn't really know how to get leverage from it because they were just retrofitting old factories. You had to rip the factories down, totally change how they were organized to take advantage of this idea of modular power, right? And distributed motors throughout a factory environment. It's going to be faster, maybe it's twenty years, right, for AI or fifteen years for AI to be adopted. But it's also not tomorrow. I mean, I think there's a famous Bill Gates line that's something to the effect of, people tend to overestimate how quickly things change year to year

• 10:08Speaker 02

  and underestimate how much they change over decades. And I think that's kind of where we are yet again.

• 10:12Harry Stebbings?

  Speaking of where we are, you've spoken before, and this was a brilliant phrase, about the coming of the human knowledge work cloud. Now, Sam, what did you mean by this? And how do you foresee, I can't believe I'm going to ask this question, but the future of work itself?

• 10:26Speaker 02

  Well, look, I think there's two, the kind of idea of a knowledge work cloud, it kind of dovetails with the idea of a compute cloud, right? Which is, it used to be that if you wanted to have a web service or do some heavy computational tasks and you were a company, you racked some servers in your basement, you had to order them and wait for them to be delivered and set them up and get to provision them and maybe you'd have too few and maybe too much. And, you know, it's an incredibly decentralized, laborious task.

• 10:50Speaker 02

  When Amazon came along and says, look, guys, like, we can centralize this for Unicloud. We'll run your compute jobs for you. We'll run, you know, we'll storage for you. It's far more efficient in this kind of cloud metaphor where you can buy on demand. And if you think about how work currently happens, most knowledge work, most firms, you know, they're employing tons of people running processes inside their company and they're hiring them and training them and manage them and all that type of stuff. And I think the future of work probably looks a lot more like this kind of cloud metaphor, where you have kind of the ability as a firm or as someone who needs to get a task on a turn on or turn off capacity. Um, utilization can go up. You know, you have all these benefits of kind of the centralization and management of human beings doing the work they need to do

• 11:30Speaker 02

  with incredible tools around them to be much more efficient than they could possibly be in a decentralized environment. The factory part of it, the knowledge work, is just this idea that like right now, almost all work is done piecemeal. Factory work, when you're making a thing, there's a process, it's measured, each step is done by a different, you know, specialized unit. But knowledge work, I mean, most of it's done completely ad hoc in any which way with very little measurement, with very little tools. And so I kind of think the other piece of this is going to be that knowledge work is going to kind of go from this pre-industrial putting out system in a lot of ways to kind of a much more structured system where human beings can focus on the most human parts of tasks and machines can kind of pipeline and build the infrastructure around them to make them more efficient and higher quality.

• 12:11Harry Stebbings?

  You mentioned one crucial word to me there, which is measurement. How do you think about the importance of measurement in this forthcoming stage of that transition?

• 12:18Speaker 02

  So I didn't tell you this, but you walked into my favorite thing, which is we're actually right now in the process of opening up a lot of the measurement technology we've built. Because when we started, we realized, you know, we have, we're building these kind of knowledge work factories to do administrative tasks. And the biggest challenge is you might know what the machines are doing, you might know what the algorithms are doing and how they're functioning. But then you get to the human side of like, okay, we need to complete this task. What's your process? Why is this person twice as fast or half as many errors as this other person? How do we effectively coach effectively each person individually to be as good at their job as they possibly can be? And then how do we spot issues across people that helps us kind of optimize the system? And so we've built a whole measurement framework around this. It's kind of like new relic for people that were just. Starting to open up to other people because measurement is the key.

• 13:03Speaker 02

  I mean, you know, you get what you measure and you really can't do very much with any hybrid system until you understand what's going on inside the system.

• 13:09Harry Stebbings?

  You mentioned productivity there and maybe how it differs between individuals. I think it's always super interesting, our tendency to paint a picture of evil machines taking our jobs and what that means for us. But it was actually your own partner who wrote a phenomenal piece on the declining productivity in males and never seen before in terms of kind of lack of productivity. How do you think about this and almost to what it's done? Human apathy is to blame.

• 13:32Speaker 02

  So it's a really interesting set of conversations and Cortina's writing on it is quite good and you can link to it in the podcast. I think here's the way I think about it. There are two elements. One is in the West, if we want to maintain and keep having jobs, we're going to have to increase our productivity, right? And we're going to have to use technology to do it rapidly because the reality is a globalization, the way you fight globalization is not by trying to say no one else should get to play or we should cut off the global environment as some might believe. But in my mind, it's saying, look, let's get better at what we do so that we are actually comparatively better off the technology and tools and productivity we have at completing a given task or doing a type of work. So I think we have to be very, very focused. I mean, I would argue that technology and productivity is the only path to having jobs. So I think that's one part of the equation.

• 14:15Speaker 02

  Now, the apathy thing that Cortina is talking about is something we talk a lot about, which is, you know, you ask the average person, they say, I work a 40 hour work week or, you know, in technology or banking or we're pretending they they might say, I work an 80 hour work week. But then if you sit down and actually measure what they're doing, say, okay, are you like, how much time are you actually engaged? The answer is, is it's way less than that. And that's because people are micro breaking, they're at the water cooler, they're on Facebook, there are all these scenarios that kind of take you away from actually being productive. And, you know, we're not to say that you shouldn't by any means be taking breaks. I just think we have to be honest about the measurement of how much we're actually working every week. And the answer is in the West, we work very little. And so for me, the question is, if you're going to work sometimes and then do other things and these are activities other times, my view is you should be as efficient at work as you possibly can be.

• 15:00Speaker 02

  And then you should have as much good, healthy free time, you know, where you can go out and be with friends or have great experiences, not kind of be stuck in this middle state where you're technically at work, but you're stuck. To the internet because that's you know you have to be there but you're not being productive.

• 15:13Harry Stebbings?

  Yeah, no, I couldn't agree with you more in that challenging middle state. I do have to ask you, Sam, you're you're a father yourself and kind of thinking forward with the AI future and AI driven years to come. Where would you maybe like your child to become very cogent? Is it the development of the technical systems themselves? Is it kind of creativity, maybe, which is the highest of high fruit for AI to try and capture? How do you think about that?

• 15:34Speaker 02

  I mean, I want my son to do what he loves. And I think there'll be opportunities to do that. I mean, I'm very optimistic about kind of the future and giving people the ability to focus on and like sell ad and have pride in their work. So I'm macro very positive on this stuff in terms of whether it's designing systems or philosophy or math or painting or doing a thousand other things. I think there's no question there's there's going to be abundance of opportunity. It'll just be different. I think the real thing is going to be challenging is that I think it'll be harder to find steady, repeatable, trusted work that's always there to rely upon. You know, creativity, creating things, coming up with new ideas, there'll be lots of opportunities. But it is kind of the can you have a job as an accountant and count on exactly a certain amount of work all the time?

• 16:19Speaker 02

  And that people will always need exactly what you do, you know, with no creativity. I think those are the jobs that will be threatened. And I'm hoping that as we as my son grows up, he'll be less interested in repeatable tasks.

• 16:29Harry Stebbings?

  No, I couldn't agree with you more than that. But I I do want to move to another area where I know you've spent a lot of time being crypto. So tell me, you've written a fantastic children's book, Beers for Bitcoin. You made many investments. We've seen like massive hikes, massive lows in the crypto ecosystem, probably in a lower ebb right now. How do you think about the current state of the environment and assess today's landscape?

• 16:50Speaker 02

  Yeah, I mean, I think to me, as as you point out, the two things I think are important about the future that are playing out today are one, this hybrid future of work and AI or artificial, artificial investment. And the second is crypto. And the reason crypto is important in my mind is when you scope all the way out. I see it as basically us fixing the internet or completing the internet, which was never really created as a project in the first place. You know, if you unwind 20, 30 years and look at how the internet started forming and where it came from. It was this vision of kind of a decentralized. System that allow people to globally communicate with whom they want, how they want it instantly, securely, for free. And that's an amazing vision. I mean, if you think about the superpower that I can speak to anyone on Earth instantly for free in a private way, that's a pretty amazing thing.

• 17:34Speaker 02

  The problem is, is that communication requires more than just speech. It also requires memory and it also requires identity. Effectively requires secure databases. And the Internet never distributed those. And so as a result, what happened is you have these like major centralized systems, the fangs of the world, et cetera, that are really important infrastructure for our current worlds, but are also highly centralized. And, you know, I think the world kind of revolves around cycles of centralization and decentralization in all sorts of forms. And I'd like to see the Internet completed. And so to me, what crypto really fundamentally is, that when you really strip it all away, it is that secure ability to have security, centralized private memory and security, centralized private identity. And I think there's almost nothing more fundamentally important in the long term.

• 18:17Harry Stebbings?

  Can I ask, do you not just think that we'll see similar to the Internet with the layering on of centralized apps? Do you not think with kind of crypto and the blockchain, we'll see the layering on of centralized ecosystems and apps, be it Coinbase, so to speak, and centralized networks?

• 18:29Speaker 02

  Yeah, I mean, the question, this is kind of the great thing, which is all decentralized things end up centralizing, right? You talk about Bitcoin mining, people have stories around that, or Coinbase, or things like that. Look, there'll be some of that, there's no question. And I don't think that's a problem. I mean, I think there's this kind of layer cake to most systems, you know, where you further you go up the layer cake, or the further down, based on the system, you're using it's more centralized and less centralized in different layers. I just think that at a fundamental level, it's really important to be able to revert all the way back from a human society standpoint to a level, which is kind of far more how the real world works, where, forget writing, think about how human beings interact. We each have local memory, we each, in the human case, have a shard of that memory, we each have identity locally of the people around us, and we're very good as a species

• 19:13Speaker 02

  at using that to manage our information environment and our interactions with each other. And as we've seen, you know, when you centralize all this stuff and don't have an estate attached to other systems, you know, things can get pretty scary. And you can think about that in terms of kind of this question about information manipulation and, you know, centralized. Social services, I mean, I think about this a lot in terms of China. I have incredible amount of respect for the Chinese, but they are very clearly taking the decentralized all the data approach in a way that's incredibly powerful, but is unprecedented in human history. They're really trading in a lot of ways, freedom for security. I think it's important with crypto that there be a base layer where you can trade towards freedom and away from security in a lot of places.

• 19:50Harry Stebbings?

  I couldn't agree any more. Before we dive into that kind of privacy and China argument, I do want to stay on the theme that we're on. I had Adam Goldberg at Lightspeed on the show. He said that the underlying infrastructure can't support mass market DApps. I think we saw that with kind of CryptoKitties. How would you respond to this? And where does it leave your thinking and standing as to maybe the nearer term potential?

• 20:10Speaker 02

  Well, look, I spend most of the time looking at investments in the crypto space in, you know, third generation protocols. There's no question, Ethereum cannot support anything of scale. I also think we have to be careful about DApps and like even their role in the system. I am much more interested in sorting out the database layer first, right? Which is how do I have a system that works at scale where we can all agree that the records are the records and no one entity can undermine the records? So before you get into smart contracts and DApps and this kind of ecosystem people want to build, I think we have to start off by saying like, is there a globally secure decentralized database I can trust? And that works at scale. You know, in a lot of ways, if you think about what a cryptocurrency is, it's kind of the simplest database, right? It's just a series of keys and balances. It's not exactly how it works, but just not too far off.

• 20:55Speaker 02

  We need to be able to store obviously more than like a key and a value and do it at hyperscale before you can start building a lot of the ideas people have in their minds.

• 21:03Harry Stebbings?

  Yeah, I do get you there. I do have to say though, the hard thing for me as an investor today is like, how on earth do you price it? And so we had Abhijit Allen Electric on the show and he agreed suggesting the way that DApps and kind of the majority of blockchain based investments, pricing is fundamentally challenging. For you as an investor evaluating it today, help me out here, Sam. How do you think about and approach this?

• 21:24Speaker 02

  Well, I think I'll give you a few angles on it. First, we, I generally don't invest in DApps. Again, like we're much more focused on protocols. There are very few exceptions we would make to that. In terms of pricing, I mean, there's a few ways to price anything. One is you price things based on what the market will bear and that's kind of. Like fundamentally how you know the price of Bitcoin is set by supply and demand, pretty simple. The second thing that I always go back to is this 10x 100x math, right? Which you say, okay, if this works, is there a line of sight to how it's worth 10 times as much? And if you stretch your imagination and this really works, where can you end up? Again, I don't think it's that different than the other type of venture math from that perspective. The difference is, is that a lot of people believe that if you get this stuff right, it is so fundamentally important, right? But the the 100x case, it might actually be a thousand

• 22:08Speaker 02

  x case in some cases, you know, unless of course the things are priced so highly that you're back to 100x case. So, you know, we we treat it like any other venture investment. I mean, you have to think about competitive dynamics. You have to think about the open source nature of it and what's really defensible versus not. But it's fun. And I would argue that in a lot of times, it is for sure the Wild West and lots of money will be lost, just as I think a lot of money over time will be made as well with really important fundamental breakthroughs.

• 22:32Harry Stebbings?

  No, absolutely. And we mentioned Avichail there. We mentioned 1000x's. 1000x's in the past generations have tend to happen and be produced from the valley. Avichail said on the show recently that crypto companies in large part will re-centralize to Silicon Valley. With your experience and kind of hindsight that you have, would you agree with this, Sam?

• 22:50Speaker 02

  I don't know. I mean, I know the beach pretty well. I have to listen to this episode. The reality is the world is far more global than it's ever been. You know, my wife runs an application called The Information and I would argue the news coming out of Asia and China is read very heavily by people in Silicon Valley in a way that wasn't historically true and cared about a lot. I do think Silicon Valley is a powerhouse. I do think that just like New York is for finance or fashion, the valley still is a self fulfilling prophecy where it is the valley because it's the valley, because people want to be here and because basically a lot of great people want to come here. But look, New York is a real center of finance and the intersection of crypto and finance, stuff's going on there, stuff's going on in Israel that's incredibly exciting. And then, you know, there's a huge amount of a market in Asia for it as well, obviously. So crypto is by

• 23:35Speaker 02

  far the most globalized tech revolution or boom we've seen in my mind to date. I think the valley has a very important role to play, especially from a technological contribution standpoint, but it's not clear to me that this is where the answer is and the way that it has been for other

• 23:50Harry Stebbings?

  You mentioned global boom, Sam. So before we move on to the element of news cycles and fake and real, I do have to ask, everyone in Europe is chasing the lime and bird competitors that exist here. However, you said before, you don't think this is a good business. Can I ask, why is that, Sam?

• 24:05Speaker 02

  Look, I really enjoy the experience of electric vehicles. I ride my boosted board all over town. I've loved the scooters as a consumer, using them, not necessarily as a consumer, being near them when other people are using them. To me, the argument's quite simple. It's kind of a fool me once, shame on you, fool me twice, shame on me. I don't think the cities are going to let the scooter companies be profitable or be meaningfully profitable. And the reason is really simple. It's like, it's because of Uber. Uber kind of spoiled it for them. Which is Uber and Lyft, kind of that ride sharing, I would argue, really haven't gotten an incredible deal out of global cities. They were able to build consumer love and demand and incredible service kind of around the sides of most cities. Cities don't really benefit from them financially, despite the fact that cities are supporting their roads, cities are supporting the traffic,

• 24:50Speaker 02

  the cities are supporting everything that they kind of sit on top of. I think that was kind of a one-time opportunity from a profit perspective. Does that mean there won't be scooters? No, there're gonna be scooters, and I think they'll be pretty good. But I think it's gonna be much more controlled. The governments are not, local governments are not gonna let them get away with the level of growth and power that I think the ride-sharing companies got away with. And so for me, it's, my view is, as a consumer, I like it, but I'm not a big believer as an investor.

• 25:14Harry Stebbings?

  Can I ask, do you think it's a winner-take-all market, or do you think it's kind of geo-fragmented?

• 25:19Speaker 02

  No, I don't think it's a winner-take-all market. I mean, I also think this is a secondary issue. It's gonna end up being effectively, well, you know which scooter I'm gonna use, it's literally the one that's closest to me. If there's a scooter five feet from me and a scooter that's 10 feet from me, I'm taking the five-foot one. And I'm totally happy to have eight apps to, in order to like not walk an extra block. Which I think also makes it difficult from an economist's perspective. People argue, they say, well, the value will come in recharging scale and stations and positioning. And I'm sure there are some advantages there, but I think it's gonna be highly fragmented unless the cities regulate it in a way that they only allow a few competitors, which is starting to happen. But then it's gonna be highly controlled in terms of the profits that the scooter companies will be able to take versus the government saying, look, this is Great, you're using our sidewalks in our capacity and we all need revenue.

• 26:04Speaker 02

  So thank you very much for increasing our budget.

• 26:07Harry Stebbings?

  No, to be fair, I've never actually thought about the precedent set by Uber and by Lyft. So no, I think that's a brilliant point. And do you have to also, Sam, before we move into the quickfire, we've touched on it a couple of times by mentioning the security versus freedom and the China argument. You recently tweeted about, I have been stalking you, yes, about the terrifying element of algorithmically generated fake video. Compounding this, you said for the first time, we need to explicitly choose between security and freedom. So how do you view the current landscape and perception towards fake news today? And what's that dichotomy imbalance between security and freedom?

• 26:38Speaker 02

  I mean, this is again, a whole, we could talk about this for two hours, but I think this is the challenge of our time. Is that we have in the physical world of the high friction environment, built societies where we make choices about how free we want to be and how secure we want to be. And that's worked really well. But like in the US, we strongly believe in freedom of speech, but there's a limit, right? It's not completely universal. The thing about technology is because you're encoding things in binary, in yeses and nos, and kind of stretching into the limit. The reality is that you have to make pretty fundamental choices as society about where you want to sit on a spectrum. And I think the Chinese have made a sensible choice for themselves and they continue to kind of do a great job with it. Which is choosing extremely high security at the cost of freedom. Saying we're going to centralize everything, we're going to manage everything, et cetera.

• 27:23Speaker 02

  And that's where we're going to sit. The freedom argument would be, I think, is the crypto story, which is going to be basically saying, look, it's actually really scary in a lot of ways, but it does choose freedom over security. You know, how it relates to fake video and this type of stuff is, look, I think a lot about the story about the Tower of Babel, Babel, I never know which one it is. You know, this in the Bible, but I think it really has some resonance in our time, which is you bring everyone together, you shrink the world to a dot. Everyone kind of starts speaking a global language on the internet. And then all of a sudden, things get super confusing, right? The natural filtration systems that are built into our society in a social way, about what you choose to pass on, what you choose to stop through natural human social filters breaks down. And all of a sudden, everyone's talking to everyone and no one can hear anything.

• 28:04Speaker 02

  And so to me, fake video is kind of the last step of that, which is truth has always been social for the last hundred and fifty. 200 years, we've relied on these physical media artifacts in order to bolster truth or share it more broadly. You might not trust the reporter, but you see the photo. But that trust is going to go away as soon as we have algorithms that can fake video and photos as well as, you know, we can tell with our eyes, right? We're really back to this kind of social distributed trust world, which again is fascinating, but it's going to be a really, really challenging transition, I think, for us as a global society.

• 28:34Harry Stebbings?

  Can I ask Sam, what are you most concerned about when you view it going forwards?

• 28:38Speaker 02

  I'm an optimist, so I would argue, I think there's a lot of challenges, but I'm mostly optimistic about where we can get to. The thing I'm most concerned about is that I don't think we're well set up to make these, to have these discussions and make these choices as a society. For instance, I think that things as basic as, you know, the constitution, et cetera, really are going to have to be reexamined in a lot of ways. And I don't think that we have the social structures to do that very well in the West. Simultaneously, I guess I am worried that the centralized authoritarian path for human civilization is a lot of ways I see the most straightforward, right? And it will be very powerful. I mean, again, I have a lot of respect for the Chinese and I understand what they're doing, but like take their approach to genetic records, right? Which basically says, look, we're going to get samples from everyone and centralize it and build a bunch of research. We could never do that in the West, right?

• 29:21Speaker 02

  Our privacy frameworks, our values keep us from doing that. That's going to be a really powerful data set. So how are we going to feel about kind of being left out of these revolutions? And how are we going to wrestle with that? I think as civilizations is going to be the challenge of our age. And you said, you know, what I hope my son will focus on, I think, you know, we're going to need more philosophers as much as we need more programmers. As we find, I think, through the issues that these kind of new technological superpowers are kind of bringing to our world.

• 29:47Harry Stebbings?

  I do agree with you. I'd love to see more philosophers. I do want to touch on one final element. Much of the blame, so to speak, with a lot of this content has been placed around the distribution channels of today, be it Facebook's Twitters. How do you view their role today? And do you think maybe the blame's misplaced?

• 30:02Speaker 02

  That's a leading question.

• 30:05Speaker 02

  No, look, I mean, I think that actually, I would argue a technological determinist. I argue that once systems exist or they're set up in a certain way, what kind of falls out of them. It's a lot of hard work by individuals and the details might be different, but the macro picture kind of results from what the systems. capable of doing. I would argue that if you read your science fiction or talk to people, people like to pretend as though what's happened on the internet is shocking to them and could never have been forecasted or foreseen. I mean, I think that's like, I'll use a Britishism, it's like a load of bollocks. Like, the reality is, is that people have been writing about this happening for twenty years, right? People have been discussing it for a super long time. And as a kind of emergent property, what happens when you build a net, when you build a network the way we've built one. So, look, I mean, I have a lot of respect for the teams at Twitter and

• 30:48Speaker 02

  Facebook. I think that they're in an unwinnable position in a lot of ways because society is simultaneously telling them, we want privacy and we want security. And as I said, you can't have both. You have to make some choices. So I think they're kind of like this incredibly centralized focal point of a lot of fear and confusion and anger. And I think they're doing the best they can and supporting really important services for the world in the process. So, the problems are real, but who to blame? I mean, I think, you know, you're blaming the wind. You're blaming this kind of like abstract concept of where technology is and where we have to go from here is the question I'd like to ask.

• 31:21Harry Stebbings?

  Well, I mean, I think that was a brilliant answer to my very deliberate and placed question. But I do want to finish that with a quick fire answer. I say a short statement, and as you know, you give me your immediate thoughts. Are you strapped in and ready?

• 31:32Speaker 02

  I'm ready. Go for it.

• 31:33Harry Stebbings?

  Okay, so I'm sure you've read it done. But what's the favorite book and why?

• 31:37Speaker 02

  Oh, man, I have so many favorite books, but I recently read this book called The Lessons of History by Will and Ariel Durant. It's about a hundred pages. And I think for anyone looking for broader answers to the questions we're talking about today, it's an incredible primer by some great historians on the big topics like inequality and privacy and all these sorts of things.

• 31:55Harry Stebbings?

  Listen, a hundred pages, it sounds right up my street. How do you look to manage your attention, Sam?

• 31:59Speaker 02

  With as many screens organized around me as possible at the same time. Look, I'm a big believer in the black and white phone. I try to have one window open at a time, although I very much fail at that most of the time. But I don't have any brilliant hacks.

• 32:11Harry Stebbings?

  What's the hardest element of your role with Slow today?

• 32:14Speaker 02

  I was talking last night with my co-founder at Finn, Andrew Cortino. We were talking about how we both love, we get so excited about ideas. And I think sometimes, as you pointed out, separating out, I love this idea or I want this to happen from this is a good business. Sometimes I struggle with that.

• 32:27Harry Stebbings?

  You mentioned obviously Andrew there and you mentioned Finn earlier. What's the benefits and drawbacks of being both an investor with Slow and an operator with Finn at the same time?

• 32:36Speaker 02

  I'm a huge believer in investing and operating at the same time. I think being an investor makes you a much better operator and being an operator makes you a better investor. You know, investors can't go deep on anything and they really don't understand what's going on on the ground despite claiming to a lot of the time. They don't feel it, they're not in the flow of how things actually work. I think being an operator gives you incredible insight into what's working and what's not and how to actually do things that you can both use to invest and share with other entrepreneurs. And then entrepreneurs get so myopic because they're only focused on one thing. They don't see the broader picture, they miss what's going on. I think being an investor forces you to have that breath. So I believe it makes you, it makes you better at both.

• 33:11Harry Stebbings?

  Tell me, what would you most like to see change in the world of Silicon Valley and tech more broadly?

• 33:16Speaker 02

  I would love to see some form of consumer apps come back. I think we're at like a pretty boring place for consumer apps for the last bunch of years and I don't think we're done building them. That's kind of, I don't know how that would happen. I think you need a new platform or something to kind of unlock. You know, the distribution's too hard, the economics don't work. I'd be excited to see another consumer wave, but I don't see one coming anytime soon.

• 33:38Harry Stebbings?

  No, I agree. Peter Fensen and Jeremy Levine of Basma both said we're in a consumer downturn. So that was a cheery episode. But tell me, I want to finish today on your most recent publicly announced investment. And why did you say yes and get so excited, Sam?

• 33:51Speaker 02

  I'm going to go with, and I'm not actually sure this is true. Oh no, you know what it would be? The most recently publicly announced investment is a company called fetcher.ai, which is effectively AAI or artificial artificial intelligence for recruiting. So if you, you know, need to fill a role, they will effectively do a lot of the top of funnel where they filter through candidates for you and like basically start, write the email introductions for you so that you kind of get at the bottom, people who are engaged in the funnel that are in the right job and the right role. I think it's great. I think it's a great use of machines and people working together in a specific way to kind of augment and optimize a process.

• 34:27Harry Stebbings?

  I love it. And Sam, as I said, I knew this was going to be so special. Two years ago was the first one. I'm so pleased with the state. So thank you so much for joining me again.

• 34:35Speaker 02

  Yeah, thanks for having me. It's always a blast, man.

• 34:39Harry Stebbings?

  And I have to say a huge thank you to Sam. I really do just love my conversations with him. And if you'd like to see more from Sam, which you should, then you can find him on Twitter at Lessin, that's L-E-S-S-I-N. Likewise, I'd love to see you behind the scenes here at the 20 Minute VC. You can do that on Instagram at HStubbings1996 with two Bs. But before we leave you today, and we mentioned some incredible companies in the intro there, and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Yes, pretty incredible, I know.

• 35:21Harry Stebbings?

  And you can sign up for Brex today and get card fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of special, did you know that there are five job openings for every one developer in the US? No wonder hiring great engineers is impossible, and that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up, and support these teams. From little things like managing office logistics, to big things like benefits, legal, and community. And they've developed this proprietary and comprehensive remote team solution, based on decades of experience building remote teams across multiple continents. So they really know what works. But don't take my word for it.

• 36:05Harry Stebbings?

  Take the words of Eventbrite, former 20 VC guest, Hims, DialPad, and more, all customers and lovers of Terminal. And you can find out more today at Terminal.io. And finally, I've always been a big history man, and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world. With more than 50 years working with VCs, they help VCs form and manage funds, make investments, and handle the myriad of issues that can arise throughout a fund's lifecycle. So to learn more about the number one most active law firm, representing VC-backed companies going public, head over to Cooley.com and also go to CooleyGo.com. As always, I cannot thank you enough for tuning in, and I'm very excited to bring you another exceptional episode on Friday.