E228: Balaji Srinivasan: “The Dollar Is Already Dead” and What Comes Next

What if the U. S. dollar’s dominance has already ended—and we’re just living through the lag? In this episode, I sit down with Balaji Srinivasan, one of the most original thinkers in technology and finance, to unpack his boldest prediction yet: the death of the dollar and the rise of a digital, decentralized global economy. Balaji explains how inflation, weaponized finance, and technological sovereignty are accelerating a massive shift away from traditional monetary systems—and why crypto, AI, and network states could define the next reserve paradigm. We go deep into why he believes the internet will replace the nation-state, how founders can build parallel institutions from scratch, and why opting out—not lobbying—is the only path forward. This is not a doomsday take. It’s a blueprint for builders who believe the future is already here.

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

• 0:00Speaker 00

  You know, just like Rome succeeded Greece and Britain succeeded Rome and America succeeded Britain. I think the internet eventually succeeds America. And so how does that work? Let me be a little more specific. Right now, what's happening, when you think of democracy, there's different definitions of democracy. You can think of one definition of democracy is, let's call it blue democracy. And that is Democrat democracy. Republicans have their own version. They'll say it's not a democracy, it's a republic. Partly because, republic for Republicans, in fact, I'm sure that's some subconscious aspect. But partly because they say, oh, you know, for example, the Senate is important and the courts are important. It's not just populist majority rule and so on and so forth. There's a third, very important version of democracy in the world, and that's Indian democracy.

• 0:45Speaker 00

  That's like a dark horse that's kind of rising and it's becoming more and more relevant on the world stage. You know, India is that democracy is a really big word.

• 0:55David Weisburd?

  Balaji, you are the former CTO of Coinbase, a general partner at A16Z. You're also Wall Street Journal bestselling author of The Network State, which I did actually read over the Christmas break. So, welcome.

• 1:08Speaker 00

  Great to be here. And that's the network state, by the way, behind me on my shoulder over there. So you can kind of see it.

• 1:15David Weisburd?

  And you're working on the version two of the book? Tell me about that.

• 1:18Speaker 00

  I got the first version of The Network State out July 4th, 2022. Auspicious day, of course, for starting new countries. And just as a pure Kindle book, and I basically became a book publisher and had to figure out all the Kindle formats and so on and so forth. It's actually, it hit number two globally on Amazon and I tweeted that out at that time. You know what number one was? So it's one of the most popular categories on Amazon. It's billionaire romance. I was competing for the number one spot with the, I think it's like the most eligible billionaire. That book, I think, is, so it was a bestseller, but it really is sort of, I feel it's catalyzing movement. There's a lot of people talking about network state as a noun, as a phrase, or like Googling or Ubering or something like that.

• 2:04David Weisburd?

  What gets lost on a lot of people on network state is it's a little bit esoteric or a little bit in the clouds. Can you give us an example of a network state that you believe will be built in the future?

• 2:15Speaker 00

  Well, I'll give you one, an example of something that's close to a network state that was built in the past, and that's Israel. In the sense of it was a group of people without a land that got a country. Now, of course, I recognize that Israel is quite controversial and so on today. But the, there's other precedents for the network state, like, for example, Singapore, startup country founded by Lee Kuan Yew. Obviously, America itself, you know, maybe the original startup country. And actually, India, which got its independence nonviolently. So if you kind of add up those four precedents, where you have the Israeli concept of a diasporic group of people that then assembles on a piece of territory. The Singaporean concept of a charismatic CEO founder.

• 3:00Speaker 00

  The American concept of, you know, Bill of Rights and negative rights and all the amazing things that the founders of the US came up with. And then the Indian concept of independence through nonviolence. That starts to get at the concept of what I think of as a network state where, you know, in a sentence, we've, we've started new companies. We've started new currencies. Can we start new cities or even countries? And that, that's a premise.

• 3:24David Weisburd?

  How do you start a country, something like in Israel or Singapore was started historically?

• 3:29Speaker 00

  Sure. So they're, both of those are quite different, where Singapore was, you know, it got its independence involuntarily from Malaysia. Whereas Israel was something which started with a book. And Ger Judenstott, which was Theodore Herzl's book, was something that inspired a lot of people. And they thought Zionism was crazy in the late 1800s. And he actually didn't just do a book, he also did a conference and did a fund. And that conference is still going today, the World Zionist Congress. And he had a fund that actually today, the descendant of it, the Jewish National Fund, owns a big chunk of Israel. So he was, actually, if you go back and read The Jewish State.

• 4:08Speaker 00

  Theodor Herzl was like a startup entrepreneur, right? He was like a tech founder. He talks about the death of distance due to the steamships that were carrying people abroad and so on and so forth. He reads in a very modern kind of way about, you know, here's a vision of what's possible. Can I, you know, get the people and the capital to make it happen? I think that the amazing aspect of Israel going from a group of people to reviving an ancient language and building a land, there's something, there's something really interesting about that. And I'll show you a visual of how the network state might work. And if you kind of understand this visual, you basically kind of get the whole thing. So the whole network state book is online at thenetworkstate.com, right? And this is from the chapter titled or the subchapter titled The Network State in One Image.

• 4:52Speaker 00

  And do you see that zoomed in version?

• 4:54David Weisburd?

  Yes.

• 4:56Speaker 00

  Okay, so this is an example network state. What is it? It's like a physical social network. It's a social network with, in this case, 1,729,314 people, but they've crowdfunded nodes that they live in around the world. So little towns and cul-de-sacs and so on and so forth. Imagine if every Chinatown was networked together. If ever, every little India, if every, you know, Brighton Beach, you know, where the Jewish diaspora from the Soviet Union came. If, if those communities were not just physical communities, but were networked together, well, their collective population, annual income and real estate footprint could be greater than that of a legacy nation state.

• 5:42Speaker 00

  And the fundamental thing is that if Bitcoin was a decentralized currency, a network state is a decentralized country.

• 5:51Speaker 00

  It's spread out all over the world. Okay. But their hearts are in one place, their minds are in one place. All of these people could, in theory, be in the same Discord or in the same social network or in the same cryptocurrency, even if they're physically separated. And that's actually the opposite of what's happened in countries that have extreme polarization. If you have a lot of polarization, people's heads and hearts are in two different places. Like, you know, they're on Mastodon and Blue Sky for one group and they're on, you know, Parler or Truth Social for another group. So they may be in the same physical place, but their heads are separated. This is the opposite. People are aligned on the same values, even if they're physically separated. And so here's how you'd actually build something like that. So I'll refresh over here. This is like the gif version.

• 6:33Speaker 00

  You start with one person in Japan and they get 17, 172, 1,000, 10,000, 100,000, and eventually a million something people worldwide. And you notice the buildings that they're crowdfunding increase in sophistication. You know, you go to now like whole suburbs and then small cities and then you're networking them together. And one way of thinking about this, if you go and you look at the map of Indonesia, right? So you see how there's a group of islands that constitute Indonesia, but they're separated by ocean, yet they think of themselves as one country, right? So now imagine a group of piece of land that are separated by internet, but think of themselves as one country.

• 7:18David Weisburd?

  And shouldn't the purpose of every network state to be in one geographical area? Doesn't that simplify a lot of issues?

• 7:24Speaker 00

  Well, it also means you can get nuked and you can get invaded, right? And, you know, I know that sounds like dark or what have you, but if you think about, do you know why the internet was originally invented? The military wanted a communications network that could stay up in the event of a nuclear attack. Okay, so the internet was built to resist a nuclear attack. And so, you know, one of the things that's happening now is we're starting to get a breakdown of the postal order, you know? And I certainly wouldn't wish for it to happen, but basically I think that, you know, it's possible we actually do see, we came close maybe in 2022 and 2023 at various points to Putin's finger on the button or what have you, right?

• 8:08Speaker 00

  And we can't always rely on that, right? What percentage, for example, of your transactions and communications are done over the internet now?

• 8:15David Weisburd?

  Outside of real estate, probably over 90%.

• 8:19Speaker 00

  Over 90%, right? And probably communications might be even higher than that, right? Like WhatsApp, Signal, et cetera, et cetera, if you count every one. And yet, we don't have election. We don't have Internet native elections. We don't have Internet native legislation, right? I think people still aren't taking the Internet seriously. Reminds me of the period of like 1913. The British Empire was dominant, but World War I hadn't happened yet. And the monarchies were still around and all of the old world was still around. But underneath the surface, all this technological change was bubbling, you know? And there was Industrial Revolution and communism and all that stuff had been going on for decades. And then the whole old world just kind of collapsed in like four years, five years.

• 9:03Speaker 00

  And then we entered roaring into the modern era, right? Do you remember the Social Network movie? You know what's amazing about that movie is if you go back and watch it, it's a great movie. It's very well done, inspired a whole generation of entrepreneurs. Even if that wasn't Sorkin's intent, it was his, his result, right? If you go back and watch that movie, there's something that is very notable by its absence from our, you know, sort of 2020 hindsight. You know, you know what's missing?

• 9:25David Weisburd?

  No.

• 9:26Speaker 00

  There's absolutely no mention of politics in the movie, right? Social networking is portrayed as something which is like one young man's buildings Roman. You know, it's like his, um, it's, it's, it's, it's as if, okay, yeah, it's got 500 million users, but it's like saying Pepsi got to 500 million people drinking it. It's fine and it's great, but it's not like, it's, it's not like something of massive importance. Everybody else can ignore it. It's just like people poking and liking each other online. That's what was thought of in the early 2010s. And yet, at that time, in the early 2010s, the Arab Spring had happened. You know, Twitter and Facebook had helped cause revolutions abroad. Clearly they were of political importance.

• 10:09Speaker 00

  But if you had said in, you know, 2011, that 10 years from now, the most important political issue in the world for at least a few days will be whether the President of the United States of America is able to tweet. Right? No one would have believed you. Even those people who had seen the Arab Spring and so on catalyzed by these internet things, even those people who knew that these were massively valuable companies with hundreds of millions of users that were highly engaged. It was a limit of imagination where they couldn't project out that all politics would become social media in the 2010s, right? And my view is that we have something very similar happening where in 2021, if you take Bitcoin, every bank and government knows about it.

• 10:53Speaker 00

  We have hundreds of millions of holders worldwide. There's many billion-dollar companies that have been started either on Bitcoin directly or around it and so on. And you have El Salvador that's actually changed its laws to make Bitcoin the national currency of a legacy state. And yet, despite all that, if I was to say that there's a scenario 10 years from now where the United States government and every government needs to hold Bitcoin in order to remain solvent, just like the President of the United States of America would need to hold Twitter to remain in power, you know, that would seem like a crazy extrapolation from where we are. But that's what it means, in my view, to take the internet seriously.

• 11:35Speaker 00

  I think if in the 2010s, all politics became social media, I think in the 2020s, all politics becomes crypto tribalism. Let me pause here.

• 11:42David Weisburd?

  Is that because crypto is essentially diluting power from everybody so it's not as noticeable? It's not necessarily taking from Republicans or Democrats, it's diluting everybody?

• 11:52Speaker 00

  Diluting is one way to put it. Another way of putting it is, do you see that graph? Global currencies, 10-year returns versus the dollar, right? So this was actually, you know, a few months ago, like three months ago, so the numbers are actually even higher now because Bitcoin is higher than it was. But essentially, every fiat currency over the last 10 years has collapsed against the dollar. Some of them have been hyperinflated away and destroyed and so on. Others, better managed currencies like the Singapore dollar or the Swiss franc, have remained reasonably close to the dollar. But one way of thinking about it is lots of debt around the world is dollar-denominated. The US prints a lot of money, so therefore, everybody's sort of taxed invisibly or visibly by the money printing. Okay. So all fiat currencies collapsed against the dollar, but the dollar has collapsed against Bitcoin. So...

• 12:38Speaker 00

  Since the inception of Bitcoin, you can calculate this out, but you know, you know, the typical thing for inflation is supposed to be like 0.1% or rather 2% annual inflation, right? So that means between 0.1 to 0.2% a month. Okay, multiplied by 12 and you can, you can get the exact square root of 12 version, but you know what I mean? Right? So between, between 0.1 to 0.2% monthly inflation. And hyperinflation is thought of as 50% monthly inflation. But if you think about Bitcoin, it's definitely appreciated more or the dollar is depreciated more against Bitcoin. By it's not as much as 50% a month, but it's on the order of last I calculated about 8% a month for the last 10 years.

• 13:21Speaker 00

  So that's not 0.1 or 0.2% inflation. It's not yet 50% inflation month, but 8% a month for 10 years. What that means is since inception, the smart money has been exiting the dollar for Bitcoin. And Bitcoin has gone up by six orders of magnitude from one cent to like, you know, 30, $40,000, right? That's a really in, in historical timeframes, right? If you, if you zoomed out, that would just look like whoop like this, like a just total step function rise. You know, even though it didn't feel like that during, during the rise. And so what that, what that means, when we're thinking about it is all these people, rather than let's say, driving across the border to Switzerland and storing gold in Switzerland.

• 14:07Speaker 00

  They're taking a little shuttle up to the cloud and they're storing gold in the cloud. Okay. It's like, it's as if these cloud countries have arisen, or at least cloud jurisdictions, which have better property rights and rule of law for many people around the world than their legacy state. And so if you think about it, what cryptocurrencies are, is they're half of a government, the digital half, because they provide property rights, smart contracts, dispute resolution, monetary policy, identity, for example, if you look at ENS, the Ethereum name system, that provides like identity online. Okay. So ens domains. Okay. And so for example, if I go to, let's say,

• 14:51Speaker 00

  Vitalik.Eth, okay, and look at his ENS. This is basically like a domain name that's also a username. Okay, so it's got a lot of features about and it's a crypto address and so on. This is like what internet native names I think are going to look like. Okay. And so the reason I just bring all that up is I it, you know, I just don't think people really take the internet seriously enough. Here's one way of thinking about it. You know, like the omnibus spending bills, like the legislation that's passed. Right. Basically, it's like one giant bill and everybody shoves in their change at the last minute and it's passed. It's how it works in the US and other countries. Okay.

• 15:34Speaker 00

  Um, if you know how software engineering is done, it isn't like one giant change the code that's pushed through once a year, which is this huge political fight and so on. That then is pushed to affect 300 million people. If you have a user base, and we did at Coinbase, we had a user base in the hundreds of millions. At Earn, I had like, you know, a million something users. So I've managed and certainly invested in companies with large two sided marketplaces and social networks. You don't usually roll a change out to every user without some testing. Instead, you have a subset of them, like just 100,000 people, 10,000 people. And you test the feature there and you see if it's causing some dramatic issues.

• 16:15Speaker 00

  Like if you're going to hike, let's say Uber would test it in Australia first before they put out their new fee schedule to the rest of the world, for example. Okay. You gather the data there and you make sure your code changes are having the desired effect before you push it out to the rest of the world. That is just good government. Often you can have a change that is negative sum. Uber makes less money, the drivers make less money and the riders have a bad experience. Everybody loses. Or you can have a change with a positive sum. Everybody's happier, right? Like maybe a better rider locator thing and everybody's happier. Everybody makes more money, everybody gets their destination faster. Right? You don't always know and often, very often, there's a change that's unintentionally bad. It's a bug.

• 16:59Speaker 00

  Oh, we did this and we thought it resulted in this, but it resulted in that. Okay.

• 17:04Speaker 00

  Now compare that to how governments operate. Governments, you know, democratic governments will make changes to the law. It's a highly political process and it's just like something is pushed in there and then they figure out what they just throw it over the fence and they let the courts and the lawyers and the people all just fight it out. There's no provision for bug tracking or feedback or anything like that. There's no testing of what this law actually does on a 10,000 person population. Everything is just pushed live to prod if you used a, you know, a software engineering analogy. That's obviously now not how it should be done and I believe that's not how it's going to be done in the future.

• 17:42David Weisburd?

  Winston Churchill famously said, "Democracy is the worst form of government except every other one known to man." And, and I agree with that, but now comes, you know, digital currencies and digital truth. Do you think that's the next evolution of an optimal society?

• 17:59Speaker 00

  So I actually think that what we're going to see is cryptocurrency, crypto democracy, crypto country, right? Cryptocurrency puts capitalism online. Crypto democracy can put democracy online. Okay. And then with the fusion of those two, we actually get democratic capitalism 2.0 or 3.0 or 4.0. I think of, you know, just like Rome succeeded Greece and Britain succeeded Rome and America succeeded Britain. I think the internet eventually succeeds America. And so how does that work? Let me be a little more specific. Right now, what's happening, when you think of democracy, there's different definitions of democracy.

• 18:39Speaker 00

  You can think of one definition of democracy is, let's call it blue democracy, and that is Democrat democracy. Republicans have their own version. They'll say, "It's not a democracy, it's a republic." Partly because republic for Republicans, in fact, I'm sure that's some subconscious aspect, but partly because they say, "Oh, you know, for example, the Senate is important and the courts are important. It's not just populist majority rule and so on and so forth." There's a third, very important version of democracy in the world, and that's Indian democracy. That's like a dark horse that's kind of rising and that's becoming more and more relevant on the world stage. You know, India's a player in world events that it wasn't 10 years ago. And finally, there's techno-democracy or crypto-democracy. The reason I say there's at least four different versions, blue, red, Indian, and tech or crypto-democracy,

• 19:23Speaker 00

  is that democracy is a really big word. It's a word that can contain many things. It's like, if you think about Christianity, Christianity is a big word that contains both the ideology that tore down the Roman Empire and the ideology that buttressed the Holy Roman Empire. Okay, like communism contains both the ideology that caused the Bolshevik Revolution and the modified version, which is, you know, hammer and chicken on a Chinese warship in the South China Sea. Right, so you have this very different version. I mean, what Chinese communism is, is not what Marx envisioned, and Stalin is different from both of them, right? And this is similar to, you know, in religions, we understand that you can have, for example,

• 20:07Speaker 00

  Protestant and Catholic and Russian Orthodox, or Sunni and Shiite, right? And so, just like that, one realizes, okay, there's different flavors of democracy. It's a big word, and it contains a lot of things. Once we understand that there's no, like, there's not one definition of democracy, and there's can be different versions, just like different versions of communism, and different versions of Islam, and different versions of Christianity. These are huge, one way of thinking about it, these are social operating systems, right? And just like the Chinese did, you know, communism with Chinese characteristics, the, you know, the Indians have done democracy with dharmic developments. Okay, so they have their own fork of democracy, they've taken a different direction. And in fact, actually, if you think about it, that original British operating system,

• 20:48Speaker 00

  to take a metaphor, was forked by the Americans in one direction, the Israelis in another, the Singaporeans in another, and the Indians in yet another. All of them respect Great Britain, but they've taken it in different directions, with a Chinese, Israeli, Indian, or American flavor, right? So I say all of this to say, there's not just one thing of, oh, that's not democracy, oh, you're not doing it right, and so on and so forth. There's different versions of this that stress different things, but we recognize these as all having some origin in British common law, right? And people might say, oh, Singapore is in a democracy, or, oh, you know, this or that country, it's a eroding democracy. But let's at least say that they share some of the code base. Okay. So with all that said, what does the next version look like?

• 21:33Speaker 00

  I do believe, you know, I actually believe in both quote capitalism and democracy. But if you think about capitalism, there's a huge difference between the techno capitalism of today, the industrial capitalism of mid-century with General Mills and General Motors and in General Electric, and the agrarian capitalism of the 1800s, where it was all about the family farm. Right? Yeah, we use the word capitalism, but that again, it's a huge word, big word that contains very different eras. And, you know, if you had the metrics and the graphs in them, the number of transactions, the degree of decentralization, those things are very wildly among these things, even if there's a commonality in some ways of private property, things like, you know, the FDA or the SEC didn't even exist in the 1800s, yet we still consider that a capitalist

• 22:16Speaker 00

  country. So what does that look like for democracy?

• 22:21Speaker 00

  First, there's already, you know, that saying the future is already here, but it's not not yet, it's just not evenly distributed. Right? So there's different versions of democracy that are already out there that are like, you know, next gen versions or internet versions. One that's immediately recognizable is what Estonia has done. They have like crypto democracy, cryptographic democracy, where your your votes are cryptographic verifiable. It's a very, you know, that's a place that Sony gave us Skype, they gave us Transferwise. This is a very tech forward country, and they're real pioneers here. Right? Singapore has something that's also worthy of note. They have something called SingPass. And what SingPass is, is it's if your driver's license and passport were on your phone, and you could use it to log into

• 23:04Speaker 00

  websites. Okay. And I start to think, okay, that's what I, that's what identity becomes, that's what your password becomes, it becomes single sign on. That is to say, your your Google login, your key card for your home, your API key, your private key for your cryptocurrency, your your ENS name, your passport, your driver's license, all of those things combine into like one piece of digital identity that gains you access online and offline, and does your photo verification. Okay. Now, that's not just theoretical. If you go to a website, for example, like snapshot.org.

• 23:43Speaker 00

  Okay, so these are all these DAOs. These DAOs have, you know, in this case, that is 817,000 members, right? That's actually pretty big. You know, most members of the United Nations are actually small countries. Um, I can go and look at the exact numbers, but I believe 50% have less than 10 million people and 20% have less than 1 million people. Okay, so many countries in the United Nations are actually smaller than this DAO, right? And so you have these online organizations, you know, 800,000 members, 208,000 members. And what do you see in each of these? If you go there, um, you will see proposals and you'll see votes, right? And the vote starts in these hours. Who won the vote, right?

• 24:25Speaker 00

  These are like extremely consensus kinds of votes, right? But in other cases, um, you know, I'm sure I can find one where there's some, you know, argument or something like that. It may not be like totally, you know, 100%, right? See this one, option one, option two, they're holding an internet plebiscite. And, uh, it's not exactly 99, it's like 57 versus 31, right? And the thing is, you might say, oh, this is like, you know, just dumb people playing, you know, online, but they're allocating significant amounts of money here, right? I don't know exactly how much the Arbitrum Treasury has, but you can go and look at it. You know, $6 billion, right? Like, it's not nothing. Um, and is it $6 trillion? No, it's not $6 trillion.

• 25:09Speaker 00

  But again, this is larger than the budget of many countries and they're doing online binding votes to allocate that capital. That's pretty, pretty important, right? These people have all opted in to groups with governance and the internet and the code is governing their interactions, their disputes, their, their capital allocations. This is actually something that's very similar to like, you know, mid 1800s America where people would go and self-organize on the frontier in various new towns and cities popping up in what is today Minnesota or Missouri, except this is not happening in the physical world yet, it's happening on the internet in these DAOs.

• 25:51Speaker 00

  Okay, so this is what I mean by like techno-democracy.

• 25:55David Weisburd?

  Would you categorize a DAO as a form of network state? Is it a subset of network states?

• 26:01Speaker 00

  It's on the path to a network state. Um, it's like a, maybe a DAO is to a-

• 26:06David Weisburd?

  It's a network without a state.

• 26:08Speaker 00

  Yeah, exactly. That's right. There were basically, uh-

• 26:12Speaker 00

  It doesn't have the physicality that I think is important, but the digital part is a very important predecessor. Just the fact that people can self-organize into these communities with binding votes for very large amounts of money. By the way, remember, it's not some country's laws ultimately that is governing the allocation of this huge amount of capital. It is a blockchain, right? A blockchain is a digital government that is handling all of these flows of funds. And it's completely auditable, right? Everybody can see what transactions are happening and how much money there is there and all this kind of stuff.

• 26:51David Weisburd?

  What are some resolutions that are relevant that might be of interest as use cases?

• 26:57Speaker 00

  Good question. So first of all, they're definitely funding software development. And that's something all your listeners understand. Engineers are expensive. Testing is expensive, all that kind of stuff, right? So that right there is a big bucket. So they're investing in securing protocols. They're investing in making it more user-friendly to use. They're investing in all of that kind of stuff, right? Software development.

• 27:23Speaker 00

  A second thing many of them do is they invest in the community. And that is like, some of them are actually starting to do more meetups, like physical meetups. It's the Discord. It is bounties and prizes for the community. For example, there's one called SuperTeam. Basically, if you join their community, you can do bounties, prizes, all this kind of stuff. And so a kid in India or Nigeria or somewhere can just make money online by clicking buttons, right? And so here's like an example. Let me see. So here's like earnings.superteam.fun, right? And so they've paid out like $2 million for a thousand projects, like 2,000 bucks a pop.

• 28:08Speaker 00

  That's a good amount of money in a lot of countries around the world, right? That's like a year's salary that a kid with a phone or like a Chromebook or something can now just earn on the internet, right? And so some really interesting stuff. So that's the second big bucket. Let's call it community and bounties and crypto bounties and so on. Okay, so do these projects and they complete these projects and they make money. A third big bucket is content, right? And I think you're going to start to see a lot more high-quality You know, movies, films, that kind of stuff come out, but initially podcasts for sure. You know, content that's interesting to the community on cryptography, on distributed computing, decentralized systems, all that kind of stuff.

• 28:51Speaker 00

  Um, and finally, a bucket that's pretty interesting to me nowadays are things like, like Vida Dow, right? So this is something I invest in. So it's like, it's trying to do research outside of academia, right? Because ultimately, if you think about it, who's funding research? It's the public, right? So can we, rather than going from, you know, the public to tax dollars, to the government, to NIH, to the researcher, can you cut out some of those middleman steps? And you have people just back the research that they believe in, right? And so one that's definitely been working, at least, you know, it looks like it's working, Vida Dow, and it has researchers over here that get grants, okay, fund exceptional science,

• 29:35Speaker 00

  and supporters over here, and everybody who wants to, you know, target longevity can can now go and buy into this, right? And what's the business model? Well, many of these people will go and found companies, you know, maybe they'll found longevity companies or things related to that. And then that Vida token might be something which, you know, those people who did that get some shares in the company or what have you.

• 30:00David Weisburd?

  Somebody could take an ideological view about the FDA being too slow to procure drugs and to create some new framework where they could tie that into kind of funding research.

• 30:12Speaker 00

  Yeah, exactly. So here, like, here's the researchers tabs.

• 30:15David Weisburd?

  Try type of ecosystem.

• 30:18Speaker 00

  Exactly, exactly, right? So here, you know, these are grants over here, so, you know, $4 million in research funded. Again, look, is it billions yet? No, but it's just started like a couple of years ago, and it's, it's pretty good. And then, you know, it's a, it's an avenue for, you know, people who want to be, quote, principal investigators, but, you know, maybe they don't want to wait till they're 60 years old. And if you can, you know, do something good online, right? So here's on the supporter's side, there's actually a fair number of academics. Uh, so that's like a fourth bucket. Research, right? So those four buckets are software development, community, content, research. And I think as we start doing more in the physical world, some of these DAOs will start getting meetups and start buying real estate together.

• 31:02Speaker 00

  There's like a funny one called a Linkstow, which actually, um, you know, this is like the, you know, the early days of the internet. It was like, oh, pets.com. It's so dumb, right? But nowadays, Chewy works, right? Chewy's a big company. It's like a $9 billion public company. I mean, that's, that's legit, right? Even if the market is up or down, right? So, pets.com. Oh, it was so stupid. No, it wasn't. Pets.com wasn't stupid. It was just early and then it did eventually work, right? So I'll show you another one, which seems silly perhaps, but it's like, seems to be working and that is, uh, Linkstow, right? And these people just love golf and, you know, so on, have been using crypto to go and like crowdfund golf courses around the world, right?

• 31:45Speaker 00

  And, uh, you know, the thing about this is, um, whereas it's the links golf club, like private golf for everyone, you know? So you can basically join this and it's like a crowdfunded golf club, right? And that might seem dumb or what have you, but, uh, you know, when, uh, people came to the US in the early 20th century, um, a big motivation for people like, you know, a lot of Jewish people were locked out of country clubs, golf clubs, and being able to start their own was like a big signal of, you know, finally, you know, being accepted in society and so on. And so, you know, guess what? Now people can build their own golf club. I'm not a big golf guy or anything like that, right? Um, but the real point is that you can crowdfund real estate with crypto,

• 32:27Speaker 00

  even if it starts with a seemingly silly application or this thing you might think is, you know, not that important.

• 32:33Speaker 00

  And that's something where the cloud, all of this gigantic amount of money that's swirling around online starts descending on the land. Right? You're like printing out the cloud in real life in the same way that you'd like print out a document. Um, this is a general concept I have, which is obviously we know the concept of printing out a document. But when you go and order something from, you know, Amazon or Uber Eats, right? In a sense, you're like printing something out because you're hitting a button and a digital process then results in a physical process and that thing arrives at your door. Potentially that you could just have like a city just arise like this with the capital and the people just coming out from the internet. And the

• 33:17Speaker 00

  one of that, um, so something that was network state inspired is something called Zuzalu. Um, have you heard of that?

• 33:25David Weisburd?

  Yes. Yes, that's Vitalik's project.

• 33:28Speaker 00

  Yes, exactly. And, uh, Vitalik basically read the network state and he's written about it. And, um, he, uh, talked about how that was an inspiration for Zuzalu. Zuzalu, basically they rented out like a village in, you know, Montenegro, right? Essentially, so, you know, I wrote the network state, which said that communities defined by common interests can start off as purely on discussion forums, but then materialize into person, you know, hubs over time. What's cool about this is if you could do this and you could prove this, um, maybe we're just at the beginning of a new age of community formation and participatory democracy and opt-in capitalism and so on, right? Taking the best values that shaped

• 34:12Speaker 00

  America, not saying, oh, you know, I'm rejecting free speech or I'm rejecting free markets, but figuring out the version which people are opting into and which they like, you know? And you might have a hundred different or a thousand different of these communities. I need to update this. So it's a little bit out of date. Okay. But I have this thing, the network state dashboard, where I'm tracking all these startup societies around the world that are doing their own things that are kind of like Zuzalu. Okay. Did you see that dashboard? Yep. And I also had, uh, this conference, Network State. So this conference in Amsterdam, um, and this was a pretty big success, I think. Um, if I show you the audience.

• 34:54David Weisburd?

  Yep. I saw the selfie.

• 34:57Speaker 00

  Yeah, the selfie, there was selfie, and this also shows since the scale of the audience.

• 35:01David Weisburd?

  You just announced the fund, so maybe you could bring up the current investor base. You have one of the most prolific investor bases of any funds.

• 35:11Speaker 00

  Here is the, you know, the Bology Fund, Techno Capital for Techno Radicals. So investors, Novel, Brian Armstrong, and Emily Choi of Coinbase, Mark Anderson, Chris Dixon of A*Z, David Sacks, Gary Tan, Toby Lucky, Ron Conway, Joe Lonsdale, Tyler Cameron, Winklevoss, the Solana founders, Notion founder, Brian Johnson Blueprint, Steve Sinofsky, who's very senior at Microsoft, David Lee, who's one of the early people at SV Angel and also at Samsung now. And I could go through, you know, the list of names here, but you know, Ajay runs Mithril, Billion Dollar Fund, Jesse Powell, founder of Kraken.

• 35:50David Weisburd?

  And outside of being some of the most prolific investors, there seems to be an ideological barrier. Are you looking for a specific type of LP for your fund as well?

• 36:02Speaker 00

  Yeah, if you like all these people, you're going to like the Bology Fund. And if you don't, well, I'm sure there's plenty of other nice funds. It's really kind of that simple. What I think on balance, what these folks stand for is, you know, freedom. And in my view, the best of American values. And, you know, they stand for technological progress, and they stand for all of these good things. And, you know, that's, that's also the kind of stuff that I want to fund. Of course, it has to make money, and I think it will make a lot of money, but it'll also make freedom.

• 36:38David Weisburd?

  And the focus of your fund, you call it high-risk seed.

• 36:42Speaker 00

  Sure. Sometimes categories get named in retrospect, like, was there a category called an accelerator at the time Y Combinator started its thing, or, you know, TL Fellowship sort of created a category. A*Z didn't look like a normal VC fund when it was doing its thing, and so on. I look at investing as a tool to build the world that we want to build. And, you know, one of the things that I had in this were, you know, there's a bunch of these failing institutions, and I'm going to list some of them off, okay?

• 37:17Speaker 00

  So here are some problems, right? High inflation, privacy violations, lack of shared consensus, costly energy, election controversy, security breaches, loss of manufacturing capability, low impulse control, the declining postal order, falling life expectancy, eroding freedoms, internet disrupted institutions, inadequate education, blocked physical construction, clickbait journalism, lawfare, insufficient political choice, and above all, in my view, the inaccessibility of the physical frontier. And how do you solve these kinds of things? Well, for example, with privacy violation, zero knowledge proofs, other kinds of things, end-to-end encryption, local storage, those can go after those. Loss of manufacturing capability.

• 38:02Speaker 00

  Well, robotics actually has a lot of promise in, you know, bringing manufacturing to anything. And you can just, maybe you can turn a lot of labor into electricity, which turns labor into capital. Or other less obvious things like impulse control. So, you know, Mike Moritz, you know, one of the greatest investors of all time, he has this concept on the seven deadly sins. Do you know this thing?

• 38:25David Weisburd?

  Yeah, but the core needs.

• 38:27Speaker 00

  What he means is that it's like, you know, it's just so, it's so incredibly difficult to build a business that you need to have some visceral human need. You know, for example, Uber saves you time. So that's sloth. DoorDash gets you food. That's gluttony, right? Twitter raises your awareness of bad things. That's wrath. Instagram is pride. Match.com finds you a date, right? Robinhood facilitates your transactions, greed. Zillow helps you get a better house, envy. So in extremis, these things that are providing, that are meeting legitimate human needs can become vices. So that's why in a tongue-in-cheek way, he says, every startup serves one of the seven deadly sins. The problem is, though, that if those companies are no longer startups

• 39:10Speaker 00

  and they become really huge companies, I think they add value on balance. But there's some comments, for example, like Netflix once, maybe tongue-in-cheek, but they said that their goal was to.

• 39:23Speaker 00

  Was to make it so that you take away from a glass of wine with your spouse and just watch more Netflix. Remember there's like a famous quote on that, right? And because they just want to maximize your time spent online. Okay, now you start to get into maybe a vice of sloth, right? It goes from, you know, a human need of maybe entertainment to a vice of sloth, right? And so how could you possibly defend against something like that? When you're at the checkout counter and there's all of this very highly optimized, you know, stuff there that's sugary, that is maybe maximizing the profit of the guy selling it, but it's not benefiting your health. Well, maybe you have a different kind of business that actually boosts not vice, but virtue.

• 40:03Speaker 00

  For example, you have like a community where you have a membership to it and it's keto kosher. And so there's no sugary food even allowed in it. Very much like kosher itself, where there's dietary restrictions that are just put into the supply chain and you just kind of see that something's kosher. You just kind of enter this community and it's only salad and fresh fruit and fresh veggies and, and, you know, meat, if you're, if you're into that. But there's no processed foods, there's no sugar. You have to get in the car and drive outside of it to go and eat unhealthy. So your defaults are set to a good level, right? And that's like one of several creative solutions to try to have a corporate virtue as opposed to corporate vice.

• 40:47David Weisburd?

  And that's because the, the community is not optimizing on profit maximization. They're optimizing on other values.

• 40:55Speaker 00

  Or more precisely, that profit maximization is now aligned with the individual's values. It's a little bit like, you know, there was junk food, but now guess what? There's health food and there's companies that make money on health food. And there's, you know, there's now like results based gems, which don't make money on the subscription, but make money if you actually achieve your fitness goals, right? So it's a little bit like, you know, you probably manage a sales force, right? And not, not sales force, the company, but a sales force, like a, like a, right? And

• 41:27Speaker 00

  They will do what you incentivize them to do, right? There, the saying is coin operated, right? You set up incentives and they will run to those incentives. It's almost like a really powerful stallion and you point it in a direction and it's going to run in that direction. If you pointed off a cliff, or if you didn't realize that there was a bump in the road in the future, well, that's kind of your fault in that sense, right? You can do things where you incentivize salespeople with equity, but really what you want to do is just constantly monitor the incentives and change the incentives. And so capitalism is a very powerful maximizing function, but it can't set the objective itself, you know, you have to, and then some creativity comes out of, okay, well, we made a lot of money off junk food. Can we make a lot of money off health food? Well, probably we can. We just need to hit the right cultural moment, right?

• 42:08Speaker 00

  Anyway, so that's just like one subroutine of a subroutine of what I'm trying to do here. But really, what it is, is all those problems I listed, I think they're internet first solutions to many of them. There are ways that, and one way of thinking about that, if there's hope, it comes from tech. Okay, that's the one thing that's working. Why did I say this one thing is working? Well, you have drug addiction and you have failing life expectancy and you have, you know, military issues overseas and you have inflation. You have everything that the state is touching, which is real estate, it's healthcare, it's education. Those things are getting wildly expensive in price. Okay. And I can show you that graph. Do you know the graph I'm talking about?

• 42:52David Weisburd?

  I think education has been compounding by eight percent for like three decades.

• 42:56Speaker 00

  Yeah, and Ackman actually had this great tweet where he's like, how is this thing getting so ridiculous expensive and the number of students isn't increasing? Like what business has increased its prices?

• 43:06David Weisburd?

  At Harvard, you now have more administrators than students.

• 43:10Speaker 00

  Whatever the state props up rises in price, whatever technology drops falls in price, right? So this is like, you know, everything that the government touches, medical services, these are obviously related to education, right?

• 43:24Speaker 00

  Housing, even on this chart, it doesn't look that bad. In certain markets, it's like absolutely terrible, right? And whereas the stuff that technology touches like TVs or, you know, cell phones, Those fall relative to baseline, but these things rise. There's a bunch of people who say, oh, no, no, you're just, you know, that's baumol's cause disease. Those things that go up in price, it's because there's labor associated with them and you're, you know, you're, you're trying to blame it on the government. I'm like, well, ask yourself why they can't be automated. Why don't we have more automated medicine? It's because thanks to AMA and to some extent FDA and a bunch of other and HHS and so on. You have to have a doctor in the loop for things that don't require a doctor.

• 44:08Speaker 00

  For example, like you need a doctor to get your genome sequenced, you know, some in some places, you know, that that's considered like a diagnostic test. This is like saying you need a doctor to step on the scale, you know, to, to a doctor to look in the mirror. Why do we need to put that through the medical system and, and register billing event for everybody involved? That doesn't need to be like that. You want to push much more self-serve, you know? And similarly with childcare, there's regulations that say there can only be so many children cared for per adult. But you have a much larger number of children cared for by teacher in elementary school. And yet that, you know, you could have 30 kids in a class, but there's a limit on childcare. It's one of the reasons childcare is very expensive in some jurisdictions. Obviously, housing regulations prohibit you in a variety of ways.

• 44:52Speaker 00

  Some, there's, uh, there's also unions that, that make it tough. And I recognize, by the way, I'm sure some of the people watching this are like, you know, managing large, uh, you know, pensions or things like that. No offense to any of these folks, I'm talking about the systemic effects, the goal of having a high standard of living and, you know, a, you know, a job with decency for workers. Of course, one supports that. It's a mechanism, you know, that one can, can argue with. But anyway, my, my, my point is that when you start scratching on these areas that have supposedly baumol's cause disease and nothing can be done and so on and so forth. And then you go and look at construction abroad, you're like, why is this 100x or 1,000x literally faster?

• 45:33Speaker 00

  I'm not, I'm not saying that as like some figure of speech. I mean, um, you know, I've posted videos. Uh, I recognize that China is very unpopular. Um, I have, nevertheless, they, they've built a lot very quickly and there's, there's something one can learn from their prefab and modular construction. There's videos, for example, of, um, here, let me show you this.

• 45:52David Weisburd?

  What's the speed up here? Okay. So it's nine hour.

• 45:55Speaker 00

  Nine hours to build a train station.

• 45:57David Weisburd?

  If you were to unpack those scale efficiencies, what are those scale efficiencies?

• 46:02Speaker 00

  Seven trains, 23 diggers. They started at 6:30 PM. They're done by 3 AM. The reason I say that is that shows what's like, what's physically possible, right? And when you go from nine hours to three years or five years for a station, right? That is a greater than 1,000 X difference, right? You know, divide 9,000 hours, right, into 24 hours in a day, right? And, you know, that is

• 46:36David Weisburd?

  I think 2.5 times per day.

• 46:39Speaker 00

  Yeah, exactly. That's right. So if you go from nine hours to one year, that's, that's about 1,000 X, right? 9,000 hours roughly in a year.

• 46:48Speaker 00

  When you're 1,000 X off from the state of the art, from what's physically feasible, you're going to fall way behind. You're not in the game. And this is something, you know, Elon actually replied to a tweet of mine where he, I said, look, we're not, California isn't 10% off the state of the art. It's like 1,000 X off the state of the art in terms of speed. And if you've done any real estate, that compounds really fast. If you can build a building 1,000 X faster than the other guy, you can have it occupied and generating rent to build the next building and the next and the next and next. Your, your compounding rate is so much ridiculously faster than the other guy. You're just going to completely outrun them. So that's like a fourth bucket research, right? So those four buckets are soft development, community, content, research.

• 47:34Speaker 00

  And I think as we start doing more in the physical world, some of these DAOs will start getting meetups and start buying real estate together. There's like a funny one called a Linkstal, which actually, you know, this is like, you know, the early days of the internet. It was like, oh, pets.com. It's so dumb, right? But nowadays Chewy works, right? Chewy's a big company, right? Actually, I don't know what's actual valuation is nowadays, but before I, before I say it works. But what's, what's market cap? I don't know.

• 48:05Speaker 00

  Okay, it's like a $9 billion public company. I mean, that's legit, right? Even if the market is up or down, right? So Pets.com, oh, it was so stupid. No, it wasn't. Pets.com wasn't stupid, it was just early.

• 48:16David Weisburd?

  Same with Instacart. You know, Instacart was, you know, Webvan.com.

• 48:22Speaker 00

  Yeah, exactly. That's right. Webvan became Instacart. Exactly. That's right. Or rather, Webvan didn't become Instacart, but the most lampooned startup of Webvan became a very successful company called Instacart, or the concept, exactly. And so I'll show you another one, which seems silly, perhaps, but it's like, seems to be working. And that is Links Dow, right? And these people just love golf and, you know, so on, have been using crypto to go and like, crowdfund golf courses around the world, right? And, you know, the thing about this is, whereas it's the Links Golf Club, like, private golf for everyone, you know? So you can basically join this and it's like a crowdfunded golf club, right? And that might seem dumb or what have you, but, you know, when people came to the US

• 49:07Speaker 00

  in the early 20th century, a big motivation for people like, you know, a lot of Jewish people were locked out of country clubs, golf clubs, and being able to start their own was like a big signal of, you know, finally, you know, being accepted in society and so on. And so, you know, guess what? Now people can build their own golf club. As, I'm not a big golf guy or anything like that, right? But the real point is that you can crowdfund real estate with crypto, even if it starts with a seemingly silly application or this thing you might think is, you know, not that important.

• 49:37Speaker 00

  And that's something where the cloud, all of this gigantic amount of money that's swirling around online, starts descending on the lane.

• 49:45Speaker 00

  Right? You're like, printing out the cloud in real life, in the same way that you'd like, print out a document. This is a general concept I have, which is, obviously, we know the concept of printing out a document. But when you go and order something from, you know, Amazon or Uber Eats, right? In a sense, you're like, printing something out. Because you're hitting a button and a digital process then results in a physical process and that thing arrives at your door. Obviously, there's humans in the loop now. But many of those steps from delivery to growing the food, to cooking the food, and so and so on, individual versions of each of those steps you could imagine, and I can show you examples of robots for every single one of those steps from, let's say, you know,

• 50:28Speaker 00

  if you get tomatoes delivered to your door, there's agricultural robots, there's picking robots, there's robotic trucks, there's robotic packing plants. Every one of those steps could in theory be fully automated. And then you can imagine almost an electromechanical process where you hit a button and it goes vrr, vrr, vrr, and all these things spin to action and the tomatoes are delivered to your door, right? Someone could probably do that full stack right now, just to prove a point that it could be done. And then, what is that? That's like a printer on a larger scale, where when you hit print, there's, you know, a head with some ink and it moves around electromechanically after you hit Enter, right? It's that concept of building a complicated digital object online and hitting Enter and then just printing it out. We can do that for a document, we can do that for

• 51:11Speaker 00

  goods, and then we might be able to do that for ever larger things. So, the bad version of it is you print out a mob, the flash mobs and so on, in person. Somebody comes, you know, in New York, there was that Twitch streamer or something who held like a, like a thing, you know, a few, few weeks ago, and just caused this whole ruckus in downtown, right? And you're seeing more and more pictures of these gigantic internet mobs that materialize into real life, right? You've seen quite a few of those over the last several years. That's a bad version. The good version is potentially that you could just have like a city, just arise like this, with the capital and the people just coming out from the internet. And the one of that, so something that was Network State inspired, is something called

• 51:55Speaker 00

  Zuzalu. Have you heard of that?

• 51:57David Weisburd?

  Yes, yes, that's Vitalik's project.

• 51:59Speaker 00

  Okay. Yes, exactly. And Vitalik basically read the Network State and he's written about it. And he talked about how that was an inspiration for Zuzalu. And one of the things that I had written about several years ago, let me see if I can find this, here we go.

• 52:21Speaker 00

  So you see why I built Zizilou?

• 52:24David Weisburd?

  Yes.

• 52:26Speaker 00

  Right, so Zizilou, basically, they rented out like a village in, you know, Montenegro, right? And, you know, so essentially, so, you know, I wrote the network state, which said that communities defined by common interests can start off as purely on discussion forums, but then materialize into person, you know, hubs over time, right? And so what's cool about this is if you could do this, and you could prove this, maybe we're just at the beginning of a new age of community formation and participatory democracy and opt-in capitalism and so on, right? Taking the best values that shaped America, not saying, oh, you know, I'm rejecting free speech, or I'm rejecting free markets, but figuring out the version

• 53:11Speaker 00

  which people are opting into and which they like, you know? And you might have 100 different or 1,000 different of these communities. And so, one thing I have is something, the, I need to update this, so it's a little bit out of date, okay? But I have this thing, the network state dashboard, where I'm tracking all these startup societies around the world that are doing their own things that are kind of like Zizilou. Okay, did you see that dashboard? Yep. And I also had this conference in Amsterdam, and this was a pretty big success, I think. If I show you the...

• 53:48David Weisburd?

  I saw the selfie.

• 53:50Speaker 00

  Yeah, the selfie, there was a selfie, and this also shows since the scale of the audience. So let me see if I can...

• 53:56David Weisburd?

  It's amazing.

• 54:00David Weisburd?

  So let's transition to the fund. So I know you just announced the fund, so maybe you could bring up the current investor base. You have one of the most prolific investor bases of any funds, and let's project that.

• 54:16Speaker 00

  Policy Fund, Techno Capital for Techno Radicals. So investors, Novell, Brian Armstrong, and Emily Choi of Coinbase, Mark Anderson, Chris Dixon of AIC and Z, David Sacks, Gary Tan, Toby Lucky, Ron Conway, Joe Lonsdale, Todd and Cameron Rinkelboss, the Solana founders, Notion founder, Brian Johnson Blueprint, Steve Sinofsky, who's very senior at Microsoft, David Lee, who's one of the early people at SV Angel and also at Samsung now. And I could go through the list of names here, but Ajay runs Mithril Billion Dollar Fund.

• 54:49David Weisburd?

  And outside of being some of the most prolific investors, there seems to be an ideological bent here. Are you looking for a specific type of LP for your fund as well?

• 55:01Speaker 00

  Yeah, if you like all these people, you're going to like the Balaji Fund. And if you don't, well, I'm sure there's plenty of other nice funds. It's really kind of that simple. What I think on balance, what these folks stand for is freedom. And in my view, the best of American values. And they stand for technological progress and they stand for all of these good things. And that's also the kind of stuff that I want to fund. Of course, it has to make money, and I think it will make a lot of money, but it'll also make freedom.

• 55:37David Weisburd?

  And the focus of your fund, you call it high-risk seed. So tell me about that.

• 55:43Speaker 00

  Sure, sure, sure, sure. I mean, the thing is, sometimes categories get named in retrospect. Like, was there a category called an accelerator at the time Y Combinator started its thing? Or the T L Fellowship sort of created a category. A, C, and Z didn't look like a normal VC fund when it was doing its thing and so on. I look at investing as a tool to build the world that we want to build. And one of the things that I had in this were, you know, there's a bunch of these failing institutions. And I'm going to list some of them off, okay?

• 56:22Speaker 00

  So here are some problems, right? High inflation, privacy violations, lack of shared consensus, costly energy, election controversies, security breaches, loss of manufacturing capability, low impulse pulse control, the declining postal order, falling life expectancy, eroding freedoms, internet-disrupted institutions, inadequate education, blocked physical construction, clickbait journalism, lawfare, insufficient political choice, and above all, in my view, the inaccessibility of the physical frontier. And how do you solve these kinds of things? Well, for example,

• 56:58Speaker 00

  With privacy violation, zero knowledge proofs, other kinds of things, end-to-end encryption, local storage, those can go after those. Loss of manufacturing capability. Well, robotics actually has a lot of promise in, you know, bringing manufacturing to anything. And you can just, maybe you can turn a lot of labor into electricity, which turns labor into capital. Or other less obvious things like impulse control. So, you know, Mike Moritz, you know, one of the greatest investors of all time, he has this concept on the seven deadly sins. Do you know this thing?

• 57:30David Weisburd?

  Yeah, but the core needs that every company solves.

• 57:34Speaker 00

  Yeah, right. And what he, what he means is that it's like, you know, it's just so, it's so incredibly difficult to build a business that you need to have some visceral human need, you know, for example, Uber saves you time. So that's sloth. DoorDash gets you food. That's gluttony, right? Twitter raises your awareness of bad things. It's wrath. Instagram is pride. Match.com finds you a date, right? Robinhood facilitates your transactions. Greed. Zillow helps you get a better house. And so in extremis, these things that are providing, that are meeting legitimate human needs can become vices. So that's why in a tongue-in-cheek way, he says, every startup serves one of the seven deadly sins, right? With me so far?

• 58:17David Weisburd?

  Yeah.

• 58:19Speaker 00

  The problem is, though, that if those companies are no longer startups and they become really huge companies, you know, I think they add value on balance. But there's some comments, for example, like the, like Netflix once, maybe tongue-in-cheek, but they said that their goal was to, was to make it so that you take away from a glass of wine with your spouse and just watch more Netflix. Remember, there's like a famous quote on that, right? And because they just want to maximize your time spent online. Okay, now you start to get into maybe a vice of sloth, right? It goes from, you know, a human need of maybe entertainment to a vice of sloth, right? And so how could you possibly defend against something like that when you're at the checkout counter and there's all of

• 59:02Speaker 00

  this very highly optimized, you know, stuff there that's sugary, that is maybe maximizing the problem? Often the guy selling it, but it's not benefiting your health. Well, maybe you have a different kind of business that actually boosts not vice, but virtue. For example, you have like a community where you have a membership to it. And it's keto kosher. And so there's no sugary food even allowed in it. Very much like kosher itself, where there's dietary restrictions that are just put into the supply chain. And you just kind of see that something's kosher. You just kind of enter this community and it's only salad and fresh fruit and fresh veggies and, and you know, meat. If you're, if you're into that, um, but there's no processed foods. There's no sugar.

• 59:44Speaker 00

  You have to get in the car and drive outside of it to go and eat unhealthy. So your defaults are set to a good level. Right? And that's like one of several creative solutions to try to have, um, a corporate virtue as opposed to corporate vice. Okay. So.

• 1:00:02David Weisburd?

  And that's because the, the community is not optimizing on profit maximization. They're optimizing on other values.

• 1:00:10Speaker 00

  Or more precisely that profit maximization is now aligned with the individual's values. It's a little bit like, you know, there was junk food, but now guess what? There's health food and there's companies that make money on health food. And there's, you know, there's now like results based gems, which don't make money on the subscription, but make money if you actually achieve your fitness goals. Right? So it's a little bit like, you know, you've probably managed a sales force. Right? And not, not sales force, the company, but a sales force like a, like a, right? And, um, they will do what you incentivize them to do. Right there, the saying is coin operated, right? You set up incentives and they will run.

• 1:00:47David Weisburd?

  That's the best salesperson. People get upset at, at them for optimizing around the, the quote unquote, wrong incentives. But that's a sign of a very effective salesperson.

• 1:00:58Speaker 00

  Yeah, exactly. It's, it's like, it's almost like a really powerful stallion. And you point in a direction and it's going to run in that direction. If you pointed off a cliff, or if you didn't realize that there was a bump in the road in the future. Well, that's kind of your fault in that sense. Right? So now you can do things where you incentivize salespeople with equity. But really what you want to do is just constantly monitor the incentives and change the incentives. And so capitalism is very powerful maximizing function, but it can't. Set the objective itself, you know, you have to, and then some creativity comes out of, "Okay, well, we made a lot of money off of junk food. Can we make a lot of money off of health food?" "Well, probably we can. We just need to hit the right cultural moment," right? Anyway, so that's just like one subroutine of a subroutine of what I'm trying to do here.

• 1:01:41Speaker 00

  But really, what it is, is all those problems I listed, I think they're internet-first solutions to many of them. There are ways that, and one way of thinking about that, if there's hope, it comes from tech. Okay, that's the one thing that's working. Why do I say this one thing is working? Well, you have, you know, drug addiction, and you have failing life expectancy, and you have, you know, military issues overseas, and you have inflation. You have everything that the state is touching, which is real estate, it's healthcare, it's education. Those things are getting wildly expensive in price, okay? And I can show you that graph. Do you know the graph I'm talking about?

• 1:02:21David Weisburd?

  Not that one specifically. And education, of course, as well. I think education has been compounding by 8% for like three decades.

• 1:02:29Speaker 00

  Yeah, and Ackman actually had this great tweet where he's like, "How is this thing getting so ridiculously expensive and the number of students isn't increasing?"

• 1:02:38David Weisburd?

  At Harvard, you now have more administrators than students.

• 1:02:42Speaker 00

  Yeah, exactly, right? And so, okay, so now, I'm gonna show you something that I've been thinking about for a long time.

• 1:02:51David Weisburd?

  By the way, not just Harvard. Most Ivy League enthusiasts.

• 1:02:54Speaker 00

  Yes, most Ivy League enthusiasts, that's right. It's like they all kind of hike price together. They also collude on admissions and whatnot, right? So whatever the state props up rises in price, whatever technology props falls in price, right? So this is like, you know, everything that the government touches, medical services, these are obviously related to education, right? Housing, even on this chart, it doesn't look that bad. In certain markets, it's like absolutely terrible, right? And whereas the stuff that technology touches, like TVs or, you know, cell phones, those fall relative to baseline, but these things rise. And now, there's a bunch of people who say, "Oh, no, no, you're just..." You know, that's Baumol's cost disease. Those things that go up in price, it's because

• 1:03:38Speaker 00

  there's labor associated with them and you're, you know, you're trying to blame it on the government. I'm like, well, ask yourself why they can't be automated. Why don't we have more automated medicine? It's because, thanks to AMA and to some extent FDA and a bunch of other HHS and so on, you have to have a doctor in the loop for things that don't require a doctor. For example, like you need a doctor to get your genome sequenced, you know, in some places, you know, that's considered like a diagnostic test. This is like saying you need a doctor to step on the scale, you know, to a doctor to look in the mirror. Why do we need to put that through the medical system and register billing event for everybody involved? That doesn't need to be like that. You want to push much

• 1:04:20Speaker 00

  more self-serve, you know? And similarly with childcare, there's regulations that say there can only be so many children cared for per adult. But you have a much larger number of children cared for by teacher in elementary school, and yet that, you know, you could have 30 kids in a class, but there's a limit on childcare. It's one of the reasons childcare is very expensive in some jurisdictions. Obviously, housing regulations prohibit you in a variety of ways. There's also unions that make it tough. And I recognize, by the way, I'm sure some of the people watching this are like, you know, managing large, you know, pensions or things like that. No offense to any of these folks, I'm talking about the systemic effects.

• 1:04:58David Weisburd?

  Well, there, speaking of pensions, there's this really interesting thing where basically the largest pensions in the world are, of course, unions. And they've been, they have political pressure to drive up their returns. So they're going into private equity and hedge funds that are then systematically going in and downsizing.

• 1:05:14Speaker 00

  It's so, I mean...

• 1:05:17David Weisburd?

  The marriage is a two-way marriage. And as you mentioned, it's largely driven by politics and not the end goals of the individual members, which is where the, you know, that delta is essentially the corruption or the politicization of the process.

• 1:05:36Speaker 00

  Right. I mean, the thing is, like, the, you know, the goal of having a high standard of living and, you know, a job with decency for workers, of course, one supports that. It's a mechanism, you know, that one can can argue with. But anyway, my my point is that when you start scratching on these areas that have supposedly bowel mules cause disease and nothing can be done and so and so forth. And then you go and look at construction abroad, you're like, why is this 100x or 1,000x literally faster? I'm not I'm not saying that as like some figure of speech. I mean, um, you know, I've posted videos. I recognize that China is very unpopular. Um, I have nevertheless, they they've built a lot very quickly. And there's there's something one can learn from their prefab and modular construction.

• 1:06:20David Weisburd?

  If you were to unpack those scale efficiencies, what are those scale efficiencies?

• 1:06:30Speaker 00

  It's only 30 seconds. Just watch the seven trains, 23 diggers. They started at 6:30 PM. They're done by 3 AM.

• 1:06:48Speaker 00

  So the reason I I say that is that shows what's like what's physically possible, right? And um, when you go from nine hours to three years or or five years for a station, right? That is a greater than 1,000x difference, right? You know, divide 9,000 hours, right? Into 24 hours in a day, right? And, you know, that is um,

• 1:07:17David Weisburd?

  I think 2.5 times per day and then a year, 1,000.

• 1:07:25Speaker 00

  From nine hours to one year, that's that's about 1,000x, right? 9,000 hours roughly in a year.

• 1:07:32Speaker 00

  When you're a thousand X off from the state of the art, from what's physically feasible, you're going to fall way behind. You're not in the game. And this is something Elon actually replied to a tweet of mine where I said, "Look, California isn't 10% off the state of the art. It's like a thousand X off the state of the art in terms of speed. And if you've done any real estate, that compounds really fast. If you can build a building a thousand X faster than the other guy, you can have it occupied and generating rent to build the next building and the next and the next and next. Your compounding rate is so much ridiculously faster than the other guy. You're just going to completely outrun them, right?

• 1:08:10Speaker 00

  And so my point is that we're so far below capacity on this. And the reason is because of, in part, in large part, these regulations that are requiring either humans to be involved or new technologies to not be adopted or all of the above. And that's why the cost of construction, the cost of housing and so on goes up. It doesn't have to be like that. We could build way, way, way faster.

• 1:08:39Speaker 00

  So the point being that, how do you do that, though? You know, let's say we've diagnosed it that the cost of housing and the cost of education, the cost of healthcare, all these things have skyrocketed. Everything touched by technology has dropped in price. Well, you know, there's that famous Alan case thing, which is if you're serious about software, you've got to build your own hardware. That Steve Jobs quoted, right? So I feel if you're serious about technology, you need to build your own sovereignty.

• 1:09:11David Weisburd?

  Because the problems are upstream of the technology.

• 1:09:15Speaker 00

  Exactly, exactly. And let me give some concrete examples. The city of San Francisco and the current state of it, that's not something that you can solve by hitting keys on a keyboard in at least in a trivial way, right? That's a governance problem. Newsom and Lend Abre could click their fingers like this and clean up the city, and they admitted it. They said, "It's true." They cleaned it up for G to visit, okay? Another example is when Cruise was taken off the streets, a self-driving car was taken off the streets. That's a political thing, not a tech thing. When AI is getting the 640K compute is enough for anyone ban, right? Like, you know, there's a recent executive order that's banning AI compute. When you have crypto being attacked by the government, right?

• 1:09:57Speaker 00

  And so you have AI, crypto, self-driving, any technology, you can, obviously, social media is being attacked, right? Any technology you can imagine is something where if it actually is increasing human freedom in some way, if it's giving people more ability to speak, more ability to transact, more ability to do X or Y or Z, that's undercutting several traditional power centers, and they want to clamp down on that because they think of it as rocking the system or causing instability, either directly or indirectly. And you can see that more clearly all the way over in China, where even though, you know, they had done some, I think, some good things. I hesitate to ever say China's ever done anything.

• 1:10:35David Weisburd?

  Why are you so focused on trolls and people criticizing? I think one of the things in our search for truth, we must be brave in stating things that are factually based.

• 1:10:48Speaker 00

  I'm not like really focused on it, but it's more like defensive driving.

• 1:10:51David Weisburd?

  Yeah.

• 1:10:52Speaker 00

  You know?

• 1:10:53David Weisburd?

  Conditioning. It goes back to the power structures. Somehow you're being influenced by the implicit hands of online criticism.

• 1:11:01Speaker 00

  Well, yeah, I mean, in the sense of, I want to state things precisely enough to deny an out-of-context clip.

• 1:11:09David Weisburd?

  Yeah. And you also want the audience to be able to absorb the learning without being triggered.

• 1:11:16Speaker 00

  Yeah, sometimes, right? I mean, but look, is it true? Look, you know, if, to really understand where China is, let's just talk about China for a second as a subroutine pop right up, okay? Or, all right, here we go. People are just totally, totally, totally unrealistic about, you know, where China is right now in terms of how strong it is on some.

• 1:11:41David Weisburd?

  And I think the very basis of Sun Tzu art of war is to know your enemy. To know your enemy.

• 1:11:48Speaker 00

  Yeah, exactly. Yeah, exactly. Like, if you're, you know, if the whole thing is sort of, in my view, cope, that says, of course, they're just going to fall into a ditch and win and so on. That wasn't like the US had to during the Cold War. It took the Soviets very seriously. But anyway, so China's number one steel, number one trade, number one shipbuilding, number one high-speed rail, right? So here is the steel, okay? And then people sometimes say, oh, it's just like the 1970s and so on. Okay, in the 1970s, here was the US in terms of steel production, there was China, okay? It's basically about, that's about a 10x ratio. Today, it's 10x the other way, and China's the number one steel producer in the entire world, and that's just a proxy for lots of physical stuff. I'll show a few more graphs. Here, back in the year 2000, the US was, you know, these are all the blue countries are

• 1:12:33Speaker 00

  trade partners of the US in this graph. By the year 2020, only really North America was mainly a US trade partner, had the US as number one trade partner, and some countries in Western Europe. Most of the world has their number one trade partner being China. So if you tell countries, you must choose between America and China, they, you may not like, they may, they may not want to choose, but you may not like their choice. You know, knowing these facts governs what tactics are likely to work, right? You can't sanction China. China's like making the essentials for much of the world. And also, people think it's all about a high-tech competition with China. That's not actually true, or not only that, it's also a medium-tech and a low-tech competition. China can screw you on the screws, because they make all the screws and the nuts and the bolts, too, you know? They deny

• 1:13:18Speaker 00

  the screws, as it's saying, you know, like the, for want of a nail, the battle was lost. You know that old, old saying?

• 1:13:23David Weisburd?

  Yep.

• 1:13:24Speaker 00

  Yeah, so like, for want of a nail, like, the horse didn't get its shoe, and for want of a shoe, the horse didn't ride, so the messenger couldn't get to the king, and couldn't tell them that, you know, the troops were there, so for want of a nail, the entire battle was lost, right? So China can screw you on very low-tech things by just denying them, or, you know, having them sent, you know, mistake, you know, we didn't, we didn't understand your instructions. There's many different ways that they can sanction the countries that are hostile to them, that they haven't really sort of flexed it. The micron sanctions are just like V1 of that. The worst the US can do is sort of keep China in a box, maybe, for a little bit, in terms of denying the very highest-tech stuff. The worst China can do is to undercut your very standard of living and cause very significant

• 1:14:07Speaker 00

  inflation by, by a sanctions weapon. So just understanding the state of the world is important, right? So, okay, so that's, you know, who are you going to call, trade-wise? Here is a slide from the US Navy itself, by the way, okay, that shows, you love this illustration? It's saying China has 200x greater shipbuilding capacity than the USA.

• 1:14:25Speaker 00

  That's a somewhat alarming slide, I think.

• 1:14:29David Weisburd?

  Is that civilian vessels?

• 1:14:33Speaker 00

  No, military vessels. Or rather, okay, sorry, I think they're not making, sorry, let me be more precise. The US Navy, the head of the US Navy is saying China has more capacity in one shipyard than all American shipyards combined, and many of those shipyards can be modified for military purposes. Do I know the exact breakdown of military or civilian production? I don't. Okay, but I do think that if you look at history, people can turn plowshares into swords, and the US turned a lot of its domestic, you know, car production, for example, into tank factories and whatnot. So the fact that China has all the shipbuilding capacity is cause for worry if you're going to get into an extended conflict, which I think would be a disaster for the world, but it's worth actually understanding.

• 1:15:17David Weisburd?

  So let's talk about, there's a whole, there's a whole trend of American dynamism.

• 1:15:24Speaker 00

  Yes, let me talk about that one second. I'll show you one more. This is how China built the world's largest high-speed rail network, right? Now, while China is doing this from 2008 to 2022, California High-Speed Rail, they haven't laid a single line of track for $100 billion spent, right? Like, they, you know, it's like, I want to find the thing that says, no track laid, or it's like, it's a very abortive kind of thing. So meanwhile, here's what's happening. Can you see this tab?

• 1:15:58David Weisburd?

  Yep.

• 1:16:00Speaker 00

  Billions spent, still no track built, and still no trains 14 years on what happened to HS2, okay? So you have China and the US basically starting 14 years ago, and China's built out this giant high-speed rail network for their entire country from scratch, and the US has a lot more money, seemingly, and all the resources in the world hasn't gotten anywhere in one state, whereas, by contrast, this is what's happening in China and the entire country. Here's a graph, 2008 to 2020. See that?

• 1:16:33Speaker 00

  Okay. The, you know, when I, when I see this kind of stuff and I, and I point this out to people, I get a few reactions, right? The first reaction is, you, you're China shill, you're, you know, you, you love China so much, why don't you go? And I'm like,

• 1:16:51Speaker 00

  I'm, you know, you can't get better. The, the greatest strength is knowing your own weakness, right? You can't get better unless you know that you're actually behind and why you're behind, right? If, imagine if Block, maybe they did, by the, imagine if Blockbuster called everybody who's pointing to Netflix's growth a Netflix shill. Okay? Perhaps that's what happened. Maybe BlackBerry called everybody an iPhone shill. Okay? Like, that's something where you just lose to the competition if you deny the competition actually has any advantage on you, number one. Okay? The second reaction is, people will say, oh yeah, but it's all shoddy and it's going to fall apart and it's low quality and so on and so forth.

• 1:17:33Speaker 00

  And the thing is, the Chinese have ascended the value chain. They've gone from making plastic stuff at Walmart to like assembling phones and, and things like that, all the way up to DGI drones in glowing cities, you know? Also, by the way, if you looked at our engineering programs in, in the West, a very large percentage are, you know, graduate students of Chinese descent and of Indian descent and from other places.

• 1:17:58Speaker 00

  They aren't dumb people. They, they work hard and they're smart and to always think that they're only going to make plastic stuff, I think, doesn't give sufficient credit to, you know, what was one of the world's great civilizations. Do I agree with communism? Of course I don't agree with communism. Do I think that they have executed phenomenally well in some ways over the last 40 years? I think that's undeniable. Otherwise, they wouldn't go from an agrarian nothing to, to what they've become because they've built up their whole country, they've shipped goods all around the world, and they own, you know, it was about a trillion dollars of US debt. So they're also, you know, they're a creditor nation, right? They're extending credit to the world, they're not going into debt. If any one of those things wasn't true, if they hadn't built up their country, if they hadn't exported the goods, if, for example, if they were a net importer, right?

• 1:18:41Speaker 00

  You could argue, you know, that that was actually what was causing it. But they're building up, they're exporting out, and they're building up their cash reserves. So this massive unlock of just domestic production happened.

• 1:18:53Speaker 00

  And that doesn't mean that, you know, all is lost or something like that. But it does mean that it's worth actually taking them seriously. Now, the funny thing is, in many ways, what's been happening over the last five years, seven years, 10 years, is that the US has actually been copying China without admitting it. Most of the time, people say China's copying the US, right? Like, oh, Xiaomi is copying, you know, Apple, or, you know, they're cloning Twitter or something like that for Weibo. That definitely does happen, absolutely does happen. But that's like admitted, you know? What I think is not admitted is China copying, the US copying China. And what do I mean by that? Well, obviously, COVID lockdown, okay? But it's more than that.

• 1:19:34Speaker 00

  It's, you know, restrictions on free speech and rejections of free markets. It's coming from both the left and the right, where it's saying, we need to ban this because China's banning our stuff. We need to ban this because it's influencing the minds of our youth, right? And what that is, I can go down the list also. You know, China has a term for cancel culture. You know what they call it? Human flesh search. Very evocative, right? It's like you find somebody online, you're like, who's that guy? And then the whole internet tries to dig up and find that person or what have you, right? One of the things that also happened was, you know, for example, China would censor the name of, or, you know, if you sent $64.89 on WeChat, that would get censored because

• 1:20:19Speaker 00

  it's 6489, like, you know? But if you gave the name of the whistleblower on Facebook, you know, Sierra Melo, this is like five years ago, nobody cares now, but Facebook would censor that, right? So aspects of the same thing are kind of getting reinvented in parallel on these systems. People are copying China without admitting it, and it's the, that's bad, right? Because if you're copying without admitting it, you know, people are, for example, trying to copy Chinese industrial policy with things like the TSMC plant, right? Are you familiar with this whole thing, right? So TSMC, just for background for those people who, you know, weren't following this, the US used to be the world leader in chips. Then Intel lost a bunch of steps, and somehow TSMC...

• 1:21:02Speaker 00

  TSMC has rocketed out to leader and they're located in Taiwan. So that's a national security vulnerability for the US arguably and from one standpoint if China takes Taiwan. And how do they take Taiwan? People think they're going to invade Taiwan. Maybe they invade Taiwan. Maybe they just win a cultural victory in Taiwan. They're also Chinese speaking people. There's multiple parties in Taiwan and not all of them are sympathetic to the US. Some of them want reunification with China and so on. Okay. But let's say that's a risk. Okay, fine. The US allocates $50 billion. That's a lot of money, by the way. That's $50 billion venture capital funds to become the largest venture capitalist in the world. Okay, the $50 billion is allocated towards bringing TSMC to America and building, you know, having our ally give us the technic transfer. Okay, do you know what's happened with that?

• 1:21:45David Weisburd?

  No, I don't know enough of it.

• 1:21:48Speaker 00

  Okay, remember this thing, $50 billion, it's supposed to prevent like a giant conflict with China, it's supposed to be a huge national security thing. You'd think all the stops get pulled out. Okay. So what's actually happened? Well, so first, the, and it's very sad that this is happening, but it also shows, you know, what is, what's going on. Like first, the unions were annoyed because basically

• 1:22:14Speaker 00

  the, they weren't doing the work that the, you know, Taiwan has a certain work ethic that is different than where America's work ethic is nowadays for at least some people. So the unions weren't, didn't want to do the work in the way that the Chinese or the Taiwanese wanted to do it. And so the, you know, TSMC said, okay, can we at least bring in 500 people from Taiwan who will work in the way that we're accustomed to working? And the unions opposed those visas and to my knowledge, those visas still haven't been granted. Okay. So the foreign, the decision to bring foreign workers to Arizona, slap in the face. So these guys are treating this as if it's like some jobs program or whatever. Can you imagine like?

• 1:22:57Speaker 00

  You know, the scientists of the Mahan Project involved a lot of European Jews, right? People who had been pushed out. Putting Einstein. Imagine, yeah, Einstein, like, imagine that these people for, like, if, I don't know exactly what happened there, but if you, if you said, oh, we couldn't process the visa, and you brought that to FDR in the middle of, like, an actual conflict, he probably would have looked at you like you had four eyes and be like, why are you bringing this to my desk? Obviously, bring them into the country and figure out the paperwork, I would think, right? And, and so, this is, this is where we're at. We're like, you know, even for a national security thing, these folks can't get visas into the country, and it's fought, right? And that's not, that's not the end of it. There's so much more, like,

• 1:23:38Speaker 00

  the, uh, uh, Morris Chang recently fired the, um, or, uh, TSMC head seems to have had issues because of Arizona. Rumors, TSMC chairman Mark Lew forced retire of Arizona fab debacle. So it comes out in this article that the US hasn't yet paid TSMC for, um, this gigantic fab investment. And that's why, uh, TSMC's founder was very skeptical of the attempt to build a fab and the fact that they didn't get paid yet. Um, you know, so, because the company hasn't yet received subsidies from the federal government, right? So, we have something which the optics of it were, let's bring manufacturing back from

• 1:24:22Speaker 00

  Asia, you know, build American again, and so and so. The flag was waved, and money's reallocated, and everybody, you know, blew their kazoo's, woo, yeah. And, and now, what's actually happened? Project is foundering, the, literally can't get visas to get people into the country, the unions are holding it up. All the reasons you don't build in America are now being encountered. And it's not just about money, it's about basically alignment and coordination. And this brings us back to my very original point about, when you have disaligned people, when you have people who just do not see things the same way, it doesn't matter how much money you throw at it, it'll get, like, you know, dispensed and burned in lawsuits and lawfare and environmental union reports and, like, strikes or whatever. When you have people who are really aligned and locked on to a simple, single purpose,

• 1:25:07Speaker 00

  you can get a lot done with a very small group, right? And so, the question is, how do we rebuild that consensus? And by the way, I'll just show you one more graph to quantify the, the level. To which there isn't consensus. Then remind me how I got on this. It was something related to China and so on, right? You know, it's not one country, it's two parties. Okay.

• 1:25:26David Weisburd?

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• 1:26:10Speaker 00

  So that's, this is, you know, each of these are congressmen. In the 50s, people of one party, another party, used to vote together quite a bit on bills. By 2011, these had come apart into two totally separate graphs. And this is not like a one-year thing. This is like a 70-year trend, right? And this is something which has been happening for many years. And now it's reflected in a totally different graph. And this graph I'll show you next is a graph of social media in 2017. So this is rather than congressman on both sides, it's individual users. And it's like publications. And these are Democrats and Republicans. And they mostly follow each other. There's a few in the middle over here.

• 1:26:54Speaker 00

  And this is 2017 when they're all, you know, in one social network. And now you have Blues on Mastodon and Blue Sky and Threads. And Reds are on, you know, Parler and Gab and Truth Social and so on. And so not even fighting anymore. They're like already divorced and they've digitally split apart into their own apps. Okay. So that's, um, the reason I say all that, pulling it all the way back up. I got into this topic because we were talking about how prices had risen and how construction had become impossible in the US. And as an example of that, that it didn't need to be impossible, I showed how fast China builds. And I also showed how the US's

• 1:27:35Speaker 00

  attempts to build recently with TSMC and so on, weren't working. And so what can work? Well, one answer is just double down on all the government processes that are obviously not working. The government processes, US government processes are leading to the TSMC debacle, the California high-speed train debacle, to the AI regulations, to the crypto regulations, to the state of San Francisco, to high inflation, to too many other things to name. Right? You can just keep doubling down on that, try to reform that system, right? Or you can build a better one. And the fundamental question is, we know how to do that for things that look like companies. You can build a competitor to Blockbuster

• 1:28:15Speaker 00

  Video. You can build a competitor to Ford Motor Company with Tesla. How do you, now we know how to build it with currencies. And so you can build a competitor to the Federal Reserve with Bitcoin. You can build a competitor, in a sense, to the judiciary with smart contracts. Okay, at least a part of it. Okay. Elon has figured out how to build a competitor to NASA, a government agency with SpaceX. Okay, you start extending the domain of the kinds of things that you can build competitors to. And so then the question is, how do we build a competitor to Harvard? How do we build a competitor to the New York Times? How do we build a competitor to the Senate? How do we build a competitor to, you know, FDA? And to NIH? And so on and so forth. And we're starting to get versions of that, like Vida

• 1:28:58Speaker 00

  Dow that I showed you. It's very early. But that's the kind of thing which had a few billion dollars a year, you know, and crypto can go very fast upward when it, when it works, that could start to become a competitor to NIH, and maybe a small amount of money, but on really aligned people does better. Okay. So this is where my head is at, is how do we build internet-first replacements to those failing institutions, which we haven't yet been able to build competitors?

• 1:29:21David Weisburd?

  Your thesis is the ethos of Silicon Valley. It's based on the Innovator's Dilemma that's written by Clayton Christensen, which basically says that it's much Easier to start new organizations with first principles thinkings than it is to reform previous organizations due to all the entrenches that you mentioned. So tell me about your funds. So what do you have outside of being a high risk seed fund, which I think is a great way to to frame it. What are you looking to fund? What specific verticals are you looking to fund from your seed fund?

• 1:29:52Speaker 00

  What's the verticals? Anything that is building an alternative to a failing institution. For example, internet homeschooling to replace broken K through 12. Internet education like synthesis or replit to replace failing either higher ed with AI tutors or professional training with like online crypto bounties and online training like that.

• 1:30:21Speaker 00

  If you have failing medicine, well, can we do medical tourism? Can we do AI diagnostics on your phone? Right? And if we have issues in manufacturing, can we do robotic manufacturing? So I'm essentially looking at these extremely valuable institutions that are in decline. And even an imperfect solution that gets you even 20% of what they were is so valuable in many senses of the term economically, of course, but also societally that people will use them. And so crucially, it's not really necessarily about novel technology. Sometimes it is AI tutoring is using novel technology. Crypto is novel, you know, robotic construction

• 1:31:03Speaker 00

  will be novel. Sometimes it is, but it's really starting first with a societal problem that's happening and trying to address that with a focused technological fix in that area. You know, so like AI tutors are not a solution for the manufacturing crisis and so it's but they do really improve homeschooling so that you can get a very high quality homeschooling experience better than any K through 12 school, but it's also customized to your child's needs.

• 1:31:29David Weisburd?

  Something that really resonates, as you know, at the seed stage, it's all about power loss. It's not about how many wins you have or how many losses you have. It's about how big your wins are. A lot of times people have difficulty.

• 1:31:44David Weisburd?

  Conceptualizing that, one example that I like to give people is a $10 billion outcome is better than seven $1 billion outcomes. Something that resonates with your strategy is you are not looking for incremental. You're not looking for a SaaS company that grows at 30% versus 20%, which may lead to a 10x or might lead to maybe even a 15x return. How are you going about building out your portfolio?

• 1:32:09Speaker 00

  Great question. One comment I want to make on the previous thing is I have nothing against enterprise SaaS and stuff like that. In fact, many of the techniques to build those businesses may be applicable here. You're still going to need to know about churn. You're still going to need to do all the basic stuff like HR and so on and so forth. Being ambitious doesn't mean you don't, you know, do the blocking and tackling of, you know, having a CFO or whatever when you need one, right? So I'm a pragmatic ideologue. You have your eyes on, you know, the prize, but you are nailing all the details all the way, right? So with that, like, for example, with SpaceX, Elon wants to get to Mars, but there's a lot of details to make sure a rocket launch is pulled off, you know?

• 1:32:49Speaker 00

  So I'm not at all negative or disdainful of, you know, boring SaaS businesses or stuff like that. In fact, they may be components of what's done. However, I do believe going after important societal problems could yield outsized returns, both societally and economically in many senses. Now, to your second point, what does portfolio construction look like? And the short answer is I'm just, you know, betting on the smart, young, early founders. And not always young, sometimes actually they're in their 30s or 40s or 50s, they're serial entrepreneurs, but they, they're, they feel energetic, right? They, you know, their past wins were just prologue to what they're about to do. Okay.

• 1:33:29Speaker 00

  And there's a group of folks that I sort of, I think I attract a few different demographics. Being of Indian descent, a lot of Indian people like me from India. Now, why is that? It's kind of like, I don't know, it was a poor country and it's just recently leveling up. And so for a lot of those kids, I'm, you know, somebody that they, you know, could aspire to be like, right? And I hope to invest in some of them. And actually Indians are the single most common immigrant tech founder and the other, the second is Israelis, right? And so There's a lot of Indian tech talent. I mean, maybe obviously, right? And so that's like one important channel.

• 1:34:10Speaker 00

  You know, if you want to say like, I sort of hate talking in like VC LP terms, but let me, let me, let me talk in those terms. So the unique deal flow is that so A, I think there's a, there's a lot of, you know, Indian kids, Indian founders and so on, who I think I could be the first check into. Very high IQ, people who just got on the internet. So, um, you know, we, we can tap like a giant goldmine that just opened up. Because I do believe that India in this decade will be, or let me be more precise. Indians in this decade will be what China was last decade. And why do I say that? China had a miraculous 2010s. It was WeChat and Weibo and just a giant build out of their entire tech economy.

• 1:34:55Speaker 00

  I do believe though, that it's more about the Indian network, whereas it was about the Chinese state. China's development is very much focused within China. Their internet is air gap from the rest of the world. It's got the great firewall. It's all in Chinese. Their apps are all controlled by the Chinese state. So it's its own island. India is opposite where, because in English and its internet is connected to the rest of the world. Most of your followers will probably soon be Indian. Most people on the English internet will soon be Indian. So India is a totally different phenomenon on the internet than China was. And it's almost like a mirror image in some ways. It's as open and connected as China was closed and siloed off. Right? So that is a lot of interesting phenomena. One, one impact of it is, um, there's a lot of visa restrictions are being placed on Chinese nationals.

• 1:35:39Speaker 00

  And if you remember my comment about engineering departments like Stanford Electrical Engineering, when I was there was on the order of 30 or 40% Chinese, 30, 40% Indian. I forget the exact numbers on that ballpark. With the Chinese talent basically dropping off, Indian talent is sort of surging to compensate. So very large, so a lot more immigration of Indians to many tech roles around the world, just as India itself is rising. So that means it's not just about Indians in India or India the country, but Indians globally. So I'm extremely bullish on Indians, moderately bullish on India. Okay. And so that means is you can get Indian founders out of India and you can place them into vehicles. And they don't necessarily have to come to the US. They're global founders. They can be placed into vehicles and they can just crush it on a world stage.

• 1:36:24Speaker 00

  Let's call that one, like, uh, you talk about portfolio construction. I'm just talking about deal flow first, right? That's one stream. The second stream, of course, is all of the crypto folks and so on. I've been in crypto for a long time. And that's, I do think, by the way, crypto isn't just finance, parallel finance, it's parallel financiers. Okay. At a certain price of cryptocurrency, a certain market cap, depending on how you calculate it, around $200,000 of Bitcoin, if it hits that, around half the world's billionaires become crypto. Okay, thousands of new billionaires are created. If that happens, that means that we actually have a third global pool

• 1:37:04Speaker 00

  of capital that is distinct from, albeit interacting with, the American and Chinese pools. Like that is, say, I think of crypto as, you know, people talk about Web 3, and it is also like a third pool, because it's like totally globally unlocked capital. One of the attractions of cryptocurrency and smart contracts is that they treat a Brazilian, a guy from Boston, and a guy from Bangalore equally. Right? Even as the rules-based order is breaking down, the code-based order is rising up.

• 1:37:38David Weisburd?

  There's no gasoline in crypto.

• 1:37:41Speaker 00

  There's no gasoline, yeah, exactly. I mean, look, look, there's like, people say, what about all the hacks and the scams and sort of stuff that happened on chain? Absolutely, those stuff, those things happen. But it's like the Wild West, where what's coming out of that is actually a generation of combat veterans in cybersecurity. Right? All of these, like, you know, in Israel, David, Unit 8600, all these ex NSA guys, all these amazing cybersecurity people are getting really good in crypto, because, you know, just being one byte off can mean the loss of millions and millions of dollars. It's a very different kind of trial by fire than the sort of bureaucratic checkbox process that typical security consulting

• 1:38:22Speaker 00

  is, right? Typical security says, oh, you know, did you follow ISO 9000 or whatever guidelines for, you know, check this? Do you have a chief security officer? Do you have a security at email? It's just like a checklist of things. Crypto security is like, here's a billion dollars, do you still have it tomorrow? Right? It is 24/7 unlimited internet warfare to try to capture the flag. As such, it's actually taking cybersecurity for real. So what crypto is, is it's another stream of talent besides the Indians, but it's more than just finance. It's cybersecurity, it's smart contracts, it's a pool of capital, and now it's funding things that those other two pools of capital are maybe more risk averse about funding. For example, we're funding things like longevity,

• 1:39:08Speaker 00

  or funding things like startup cities. And what those have in common with crypto is not that they're about moving money online, but they're about a parallel system.

• 1:39:17Speaker 00

  Right? Longevity is like parallel medicine. Startup cities are like parallel San Francisco, just like crypto is like parallel Wall Street. Right? Okay. So one, one stream is Indians, one stream is crypto. And certainly, I actually, my, my background is in biology and genomics and whatnot, right? And so certainly I have those folks. And, you know, for example, I was an investor in Benchlang, which is a multi-billion dollar company that, you know, when I was at ACQZ, that's done very well. That's like laboratories for, for managing your clinical lab, all this. That's actually like a SaaS company, by the way, but it's like a multi-billion.

• 1:39:49David Weisburd?

  You talk a lot, but you don't talk a lot about your own success. So what are some other power law type outcomes that you've had in your personal portfolio?

• 1:39:58Speaker 00

  Sure. So I'm early on just about every coin, Bitcoin, Ethereum, Solana, Chainlink,

• 1:40:08Speaker 00

  so many, Avalanche, Near, Protocol.

• 1:40:12David Weisburd?

  Those are your non-ideological, Ben?

• 1:40:15Speaker 00

  Yeah, no, I mean, I basically, because all of these are smart founders and, you know, like if, if one of them works, then it's really worth it. You know, one of the funny things is,

• 1:40:27Speaker 00

  crypto tribalism, I understand why it exists, and that's a whole topic we can get into. And I can, I think I can speak the language and understand many of the arguments of, and in fact, I was probably one of the, I'm a person that people would mistake for a Bitcoin maximalist, but I do believe that we're going to need more financial assets than just Bitcoin. Even somebody who lived in a world where there was only gold, where gold was a, was a reserve currency, didn't believe that gold was the only asset, right? So I think we need different tools for the job. You don't just have a hammer. You need wrenches and screwdrivers and so on. So, okay, so first is many, many, many of the crypto assets and crypto protocols out there.

• 1:41:03Speaker 00

  A, B, um, at A and Z, Benchling, Digital Ocean, um, you know, I did that deal and Peter Levine, uh, you know, that was in the early, early 2014. Um, then there was, uh, Omata and OpenGov. Those are both at billion dollar valuations, you know, knock on wood.

• 1:41:23David Weisburd?

  A lot of health.

• 1:41:24Speaker 00

  They're doing well. Yeah. Omata Health and OpenGov. Um, and, uh, there were, uh, some early investor in Superhuman, early investor in Replit. Um, and, you know, here's a nice comment, you know, Replit's a multi-billion dollar company. And, um, I'm shot had a nice comment about me.

• 1:41:45David Weisburd?

  Do you share your, your track record?

• 1:41:48Speaker 00

  Do I share my track record? Uh, I mean, I can, but, but like people kind of know, I mean, Mark.

• 1:41:56David Weisburd?

  If you know, you know.

• 1:41:57Speaker 00

  Well, I don't know. I don't know. I don't know what I can say about this because of the regulatory blah, blah, blah stuff, right? So, so what I can say is I invest in those companies and they're currently at that valuation. And, you know, a bunch of the best investors in Silicon Valley have invested in me. And so I think I've been a positive some contributor to the ecosystem over time.

• 1:42:17David Weisburd?

  So, so in those companies, you have a unique thesis around check size. A lot of people say your fund size is your strategy. I say your check size is your strategy. So tell me about your check size and how, how are you strategic about it? What's your min check? What's your max, max check? And tell me about how, how that's evolved over time.

• 1:42:36Speaker 00

  I'll give a short answer, then the long answer.

• 1:42:40Speaker 00

  So I tend to do a constant investment in every company that's above my bar. And so you're making only one decision, the zero one of invest, and then you put in, let's say, a hundred K or 250 K. Okay. Now, you don't do too much. Why? As a seed fund, you have a different strategy than a VC fund.

• 1:43:02Speaker 00

  As a VC fund, you want to gobble up 20% because you need to have 20% of a, you know, $5 billion company to get a billion dollar exit, right? You want to get double digit ownership. Percent ownership is the thing you're constantly optimizing for, and you're doing everything to get that. What that means is you have to elbow everybody out at the table to get the biggest chunk for yourself. Every other point of allocation is very precious and makes a big difference to your returns. As a seed fund, it's very different. You just essentially want to be part of lots of winning deals. And if, for example, you saw a space early like cryptocurrency in 2013, a very good strategy was to just simply invest in everything that was above your bar. Right? If you just took the top 20 companies, you would have gotten Coinbase,

• 1:43:45Speaker 00

  you would have gotten Shapeshift, you know, a little bit later, would have gotten a bunch, a bunch of other things, right? Blockchain at Info, these are multi-billion dollar results. And you would have gotten a pretty good chunk for very little money. Right? Like maybe for a few million bucks, you could have gotten on the order of a point in many of these companies, right? And crucially, you're playing nice with everybody. Okay, you're not, you know, nobody dislikes you. You are in every deal and you're helping people in general. And of course, there's limits. You can't, you know, you can't go all in on one company that's a total competitor of another and so on and so forth. But in general, you can be an ecosystem wide kind of player. You get very high ROI on a relatively small amount of money.

• 1:44:30Speaker 00

  Now, that doesn't scale up. If you go to a very large fund, then you need new tactics. But if you keep your fund on the order of a hundred mil or less, you can actually get very large ROI multiples, in my view, relatively easily, by basically just being in a lot of these great companies. Does that make sense so far? I can talk about it. And a couple other things. And this strategy has worked for me personally. So I've just been investing 100% of my own money for many years. I'm basically just doing exactly what I was doing personally. But now I've just got like a fund and some ops and stuff around. Right? So the reason, by the way, to not like, you know, try to dial check size up and down and so on

• 1:45:10Speaker 00

  on each investment is it's actually kind of, when I go back and back test it,

• 1:45:18Speaker 00

  what you find is often you can diligence intelligence, but you can't diligence diligence.

• 1:45:26David Weisburd?

  I understand that.

• 1:45:28Speaker 00

  So in a, with a founder, I can very quickly usually figure out kind of how smart they are, how polished their app is, how polished their website copy is and so on. What's much harder to tell is where they have the grit and staying power and consistency to grind it out for 10 years. And often, not always, but often I've found that people who are above my minimum intelligence bar actually have much higher grit than you might think and outperform people who are smarter, but have less grit. And so if you just allocated, you know, more money to the, I mean, this is one of those things where it's a neural network that's trained and it's hard for me to fully articulate

• 1:46:12Speaker 00

  it in a few words, but that's, that's the short version, right? By investing in those people who are above your minimum intelligence to invest bar,

• 1:46:21Speaker 00

  the remaining variance is explained by variables that you're not as good as assessing. Right? Because it's like long-term performance. And I don't want to name individual people, but there's specific people I'm thinking of that are not that showy in a conference room, but they're just marathon runners. You know, because in a conference room, when your people are giving a pitch or something like that, you're seeing their top speed, but you're not seeing their Endurance.

• 1:46:44David Weisburd?

  I'll name a couple. Brian Armstrong was not the hottest company in YC by a long shot. It's a well-known. Neither was Apurva in the same class of Instacart.

• 1:46:56Speaker 00

  These are both good friends of mine.

• 1:46:57David Weisburd?

  Yeah, I'm calling out your friends. Also, Vitalik, Peter Thiel had a chance to invest a lot of money into Ethereum. And being a genius, he was not able to maximize that either. And a lot of people did not see that happening. Also Dylan from the Thiel Fellowship, I think he spent, took five years to launch. And those two are the two biggest outcomes so far on the Thiel Fellowship. So I think there's something there. And I think it's, it shows your humility to show that you're not able to assess that potentially. And you want the asymmetric exposure to everybody.

• 1:47:31Speaker 00

  All four of those people are my friends and I think they would, you know, they tweeted nice things about me and I think.

• 1:47:38David Weisburd?

  And I say it as a compliment to them, by the way, as their genius was not, was not known early on.

• 1:47:45Speaker 00

  I will say one thing. They both got into, Brian and Apurva got into Y Combinator and Vitalik and Dylan got into the Thiel Fellowship. So if you had just said they're above my bar and I'm going to index in everybody, that's essentially my strategy. If you had just said they're above the bar of getting into this organization and then you index in them, that actually, actually turns out to work very well empirically.

• 1:48:07David Weisburd?

  So let me play a contrarian thesis to you. One thing that I've noticed in Thiel Fellows versus YC is they do seem to have another standard deviation on average of intelligence. They are, from a purely IQ standpoint, they have that bar. And the returns on the Thiel Fellowship have been phenomenal, as I'm sure you know. One thing that was not obvious to me is that IQ actually plays a very large part, especially when you account for highly parallel outcomes, like creating Ethereum. You seem to have a different thesis, which is IQ, once you get to the top 1% is kind of like table stakes and then it's hard to do. Isn't there an argument to be made for the opposite?

• 1:48:50Speaker 00

  So yeah, so Camilla Benbow has actually collected some of the data on this. There isn't a diminishing return to IQ. In fact, to the extent that you can measure it, it just keeps becoming more valuable. However, I think what I'm saying is just for academic pursuits, right? I think, you know, there's multiple variables that go into great founders. Two of them we just discussed, which are intelligence and diligence. I feel I have much, I'll put it like this, diligence, I have much higher error bars on measuring in the short run. You know, the kinds of ways, by the things that might correlate with diligence, physical fitness to some extent, right? That's like, you know, to how consistent somebody is. You'd have to study that, but I think that's a hypothesis.

• 1:49:33David Weisburd?

  Mental health.

• 1:49:33Speaker 00

  That's really, yeah, maybe, maybe.

• 1:49:36David Weisburd?

  In both directions, there's a, there's a, there's a, there's a book.

• 1:49:41Speaker 00

  Yeah, they might, they might be crazy consistent. Go ahead.

• 1:49:45David Weisburd?

  There's a book called Hypomanic Edge that showed that some.

• 1:49:48Speaker 00

  Yes, I was going to say that.

• 1:49:50David Weisburd?

  Bipolar bipolar disorder actually helped founders. It's pretty wild.

• 1:49:54Speaker 00

  That's right. It's like, it's like, gosh, it was by John, something, something. And he wrote in the early 2000s. It's funny, I was just going to mention that book.

• 1:50:02David Weisburd?

  You know how I know about that book?

• 1:50:05Speaker 00

  Did I mention on a podcast?

• 1:50:07David Weisburd?

  A dear friend gifted it to me, which I didn't appreciate at the time.

• 1:50:12Speaker 00

  He's like, he's like, I'm not saying.

• 1:50:14David Weisburd?

  What other factors? So you mentioned physical, I would add mental health. What other kind of non-trivial factors have you found leads to success?

• 1:50:24Speaker 00

  So there's intelligence diligence. And then the third is maybe the most important for what we're doing, risk tolerance. And, you know, it's called contrarianness or whatever. But for example, early Y Combinator had a really impressive list of people there, right? There's a founder of Reddit, you know, there's a founder of, you know, of Twitch, there's Sam Altman. Like that group of people in those early photos with Paul Graham includes some very, very, very impressive people, you know? And that's kind of like, you know, the TIL Fellowship's first class. I mean, Y Combinator still attracts a lot of great folks and, you know, it's, you know, Gary's, Gary's also an investor in the fund, by the way. And Gary's a friend and, you know, I think they're doing great.

• 1:51:09Speaker 00

  Yeah, incredible CEO and they're doing great. That first class of Y Combinator is like the first few classes of the Thiel Fellowship, which pulled out Vitalik and Dylan Field. And actually, there's other people there in that, in those, in those classes that aren't as famous, but they've made also billions of dollars. There's like multiple unicorn founders there 10 years later. Those are smashing successes. And part of it is that I think what they selected for was not simply IQ, but a willingness to do unconventional but good things, you know, or unconventional things that would be proven smart later. It was absolutely not, nobody knew what Y Combinator was. It didn't give you a status increase in the mid 2000s, right? It wasn't

• 1:51:52Speaker 00

  like I'm YC06. That didn't mean anything back then, right? The Thiel Fellowship was hit and attacked by so many people at the time that it was launched, if you remember that. This is the stupidest idea ever. Peter Thiel needs his head examined, all these negative articles, right? Recently, the Washington Post admitted defeat. Michael Gibson, who founded the Thiel Fellowship, spoke at the New York State Conference, again, longtime friend of mine. And he took a victory lap recently in his book on the paper belt on fire, right? Which is actually named after-

• 1:52:19David Weisburd?

  Higher education isn't doing itself any favors. It's not really-

• 1:52:23Speaker 00

  Yeah, it's a great, like Peter was 10 years, 12 years ahead of that. I mean, people saw that, but he really, you know, he started to build at least a prototype of what the alternative would be with the Thiel Fellowship. So my, my point on those is, so then, what, what then attracted a bunch of talent that was very non-consensus five or six years ago? Crypto did, in my view, right? Then also AGI, people until ChatGPT, people didn't really take it seriously. And now a lot of people then took it seriously, right? And so, and of course, what Elon did with SpaceX, he turned space into an investable category. Nobody thought that was an investable thing. They're like, why don't you get back to-

• 1:53:02David Weisburd?

  What do you think the distinction there is? So the early YC people did it for the love of technology and later on it was a status-seeking kind of MBA-type activity? What's the distinction?

• 1:53:13Speaker 00

  Frontier mentality.

• 1:53:16David Weisburd?

  What does behind that frontier mentality? Is it just to build great things? Or is it the absence of something?

• 1:53:22Speaker 00

  So it's funny, you know, there is this great article, let's see, I'm gonna find this one.

• 1:53:35Speaker 00

  Okay, so "The Triumph and Terror of Wang Huning", okay, this is a great article that made the rounds a while ago, okay? And you should, you should read this because this guy is a very important theorist in, in China, and he's been around for a long time, and he's, he's important intellectually there, and if he's not very well-known to the West. What's the point of citing him? He wrote a book a long time ago, and it's amazing how well-holds-up now. And somebody said, you know, Americans, because of capitalism, they're very practical. But there is something that is, you know, spiritual about them, and that is, or still spiritual,

• 1:54:17Speaker 00

  and that is futurism, their vision of the future. That is something which is powerful enough to overcome the short-term dollars and cents, and focus on the long-term future. Now, of course, techno-capitalism marries the two, where that long-term future still has to have some possible payoff, but it could be distant, right? And that turns, quote, you know, you've heard the saying, I don't love it, but the saying, that turns short-term greedy into long-term greedy, right? You're still going to make money, but you're taking such a long-term view of it that you're not like jostling for position to the same extent. You're not as short-term oriented, right? And so that pioneer mentality, that frontier mentality,

• 1:55:00Speaker 00

  is very different than the day trader, right? It's very different than the arbitrator. I have nothing against those kinds of people, they're making a living, whatever, right? But that's not the spirit of the frontier. That's not the risk tolerance and the vision of what can be, and the boldness to do something when it's low status. I actually believe that people are more willing to tolerate low money than low status. You can argue with that, it depends on, you know, like, but in a, in a sense, those people who join early Bicamenter or the early Teletel ship, were not simply saying, "Okay, I'm going to go if..."

• 1:55:43Speaker 00

  Few years of living on ramen and you know, uh, not starving, obviously, but living way below what they would have lived at as an engineer at Google. Okay. But not simply taking the money hit, but taking a status hit because at that time that was not cool. Right. Today, you know, yes, Y C or T L F ship is almost like an alternate of M B A. And that's fine. And that's good. It's good that these things grow up and become like that. Right? They become institutionalized and you know what? Everything has to become institutionalized eventually if it's successful. The pirates become the Navy. I totally get that. That's fine.

• 1:56:16Speaker 00

  However, the, uh, there's always the next frontier, right? What's the next level? What is the crazy thing out there that might just be technically possible? And I do think that we're going to go, as I said, from starting new companies like Google and new communities like Facebook and new currencies like Bitcoin and Ethereum to starting new cities and even new countries. We're already actually at the city level like culdesac.com in Arizona, investor in that. Prospera in Hunter's cabin. We're starting, these cities are now on the scale of hundreds to thousands of people. And you know, it's like crypto was at a billion dollars, Bitcoin was a billion dollars in 2013 and it's close to a trillion dollars today.

• 1:56:57Speaker 00

  Okay. And so that's a thousand X growth in 10 years. Do I think those things could go from hundreds and thousands of people to hundreds of thousands of people? I do think they can get there in 10 years or so, maybe 20 years. I don't know. Okay. Um, I think it's possible. I think we can make that happen.

• 1:57:12Speaker 00

  I think also, you know, here's a funny comment, right? In tech,

• 1:57:18Speaker 00

  you know, Elon wants to build a Mars colony. Okay. Sam Altman and others want to build a machine god, A G I. Brian Johnson and others want to live forever. I just want to start new countries. That's been done hundreds of times in the past. Right? In a sense, I actually am the boring enterprise SaaS founder that you talked about. Like I, this is the boring enterprise SaaS of crazy tech in a sense, right? Being able to start new, new cities, new countries, new jurisdictions.

• 1:57:50David Weisburd?

  Yeah, absolutely. And you mentioned Israel and Singapore. And I would even argue Dubai and Abu Dhabi.

• 1:57:57Speaker 00

  Yes.

• 1:57:57David Weisburd?

  Fascinating.

• 1:57:58Speaker 00

  Very important.

• 1:57:59David Weisburd?

  Cities.

• 1:57:59Speaker 00

  Yep.

• 1:58:00David Weisburd?

  I call kind of Dubai run, if you create a city run by an LLC, there's a lot of alignment. Their police is responsive. It's really a fascinating, fascinating place to go.

• 1:58:11Speaker 00

  Yes.

• 1:58:13David Weisburd?

  I do want to triple click, I guess, on the on the frontierism. It's essentially an optimization. The premise there is that it's people that are optimizing on wanting to actually create change. So instead of doing a SaaS startup, which make make them rich, they're doing something so groundbreaking that might actually change things, not because they want to do something groundbreaking, but because they want the eventual change, they want to improve society. Is that a fair characterization?

• 1:58:41Speaker 00

  I think that's right with a couple of edits, which are their improvement of society is constrained by the fact that all the people are opting in to their vision.

• 1:58:54Speaker 00

  That's the big thing, right? With communism or other kinds of ideologies, people have maybe wanted to improve the world, but everybody's forced in, right? That's different. Whereas let's say something like Chat GPT or Dropbox or Tesla or, you know, Coinbase, like people are opting into that. No one's forcing them to sign up, set an account, put in their information. It's consensual, right? So it's a vision of the good that is constrained by the fact that other people need to buy into it, but not necessarily right away. You know, at the very beginning, they might think it's totally crazy and you get more proof points. You convince 10 people, 100 people, 1,000 people, 10,000 people, and eventually you you get there.

• 1:59:35David Weisburd?

  People people forget how weird online dating was and how normalized it is today.

• 1:59:40Speaker 00

  Oh, oh, man, I mean, everything, everything is.

• 1:59:43David Weisburd?

  Or going getting into somebody else's car. I remember in San Francisco, people like, what? You're going into Lyft? You're going into somebody's random car? It was one of the most absurd things a lot of people and two years later it's completely.

• 1:59:54Speaker 00

  Yes.

• 1:59:56Speaker 00

  Completely, exactly, right? And so that is why you have to tolerate some status loss at the beginning to do things that seem weird, but that are actually interesting, you know, and to to shift social norms in a hopefully positive direction.

• 2:00:14Speaker 00

  There was something else that you said that I just wanted to address. Oh, so the frontier, right? You mentioned Singapore, mentioned Dubai, mentioned Israel. More recently, there's El Salvador, there's Malay in Argentina, there's the head of Bhutan, who's actually doing Bitcoin mining, right? And all of them are powered by the Internet in a really fundamental way. We're not necessarily seeing that, but it's sort of like they're gaining power from above from the cloud because their Twitter is huge, right? They're posting videos online. They're getting their message out to English-speaking audiences, okay? Like Bhutan, for example, is doing Bitcoin mining. You're gonna hear big things from them. They just announced a new special economic zone on the border of India. They're just like putting themselves on the map, just like El Salvador,

• 2:00:56Speaker 00

  put itself on the map. And no one was talking about El Salvador before Naib Kelly became like the startup CEO of a country, right? And so what's sort of happening in a sense is the cloud is like, imagine like sunlight coming from the cloud down to land and patches getting opened up on the land that are now being turned into frontier areas that weren't. And one way of thinking about this is, I have a few macro theses, and one of them is that history is running in reverse. So, starting in like 1950, if you go backwards and forwards in time, 1950 was peak centralization. You had one telephone company, AT&T, and you had two superpowers, US and USSR.

• 2:01:36Speaker 00

  You had three telephone companies, CBS, ABC, NBC. And everybody watched I Love Lucy, and they, and it was a very centralized world with like less than 50 UN member countries. Everybody had been rolled up into these giant nation-states like China and India and the USSR, and actually Germany and France and America. That'd been a process that had taken hundreds of years. Before the Civil War, people used to say the United States are, and after they said the United States is. Before Bismarck, all the German, you know, the things that we now think of as Germany were independent like countries or principalities, and they got merged together. Before the French Revolution, lots of little, you know, French, or things that are in the area we now think of as France, that got rolled up into France. Even within living memory, India

• 2:02:21Speaker 00

  was a bunch of princely states before it got independence. The British had delegated power to a bunch of princes that got rolled up. So... 1950 was like massive centralization. The world maybe had never been this centralized before in history with just a few people holding sway over the entire world. Okay. And then as you go forwards and backwards in time with the invention of the transistor, things start to unwind. You go the transistor, you have the personal computer, you have cable news, you have, you know, the internet, you have mobile phones, social media and cryptocurrency, and you start radically decentralizing technologically. And then you have decentralized AI so you can have an intelligence on your, on your phone. But if you go backwards in time, it also decentralizes and lots of things are happening

• 2:03:06Speaker 00

  today in the opposite order they did in the past. Example, you go backwards in time to 1890, the frontier closes. Forwards in time to 1991, the internet frontier opens. Okay. Backwards in time, you have the robber barons. Forwards in time, the tech billionaires. Okay. Backwards in time, you have COVID-19, or backwards in time, you have the Spanish flu. Forwards in time, you have COVID-19. Okay. And this holds for lots of interesting political events. You go backwards in time, and you have Russia, the senior partner in the Russia-China relationship. You go forwards in time, China is the senior partner in the Russia-China relationship. Backwards in time, there's a British guy running India. Forwards in time, you've got an Indian guy running Britain. LOL. Okay. Right?

• 2:03:49Speaker 00

  And so, I mean, there's, I compile many examples of this in the Network State book. There are so many examples. And why is that even happening? And one way of thinking about it is, you know, have you ever seen those sort of like origami things that people do with their hands where like the complicated, you know, yeah. And imagine you fold it and you unfold it and you, and you get the same complicated thing in reverse. Right? All of this centralizing technology of mass media and mass production resulted in like the centralization of these like iron-fisted, you know, guys like Stalin and Mao and so on in mid 20th century, Hitler, et cetera. And then decentralization, like especially for, the fist just started loosening, the

• 2:04:30Speaker 00

  ability of states to control reduced, and it's happening faster in reverse than it did. It took maybe 500 years to go up and we're taking like 50 years to go down. And so in many ways, I think of our future as more similar to the 1800s and maybe the 1700s than it was to like the recent past.

• 2:04:51David Weisburd?

  The way that I look at it is, human beings have two paradoxical drives. One is for order and one is for freedom. And you talk about the history in reverse. I would use a SAS term of bundling and unbundling. Yeah, these bundling and unbundlings. And I think what we might be seeing is the crypto centrality is essentially a new type of system of control and order that satisfies the needs of both having a central truth, but also having maximal freedom. That would be the thesis, I think, on the crypto future.

• 2:05:30Speaker 00

  And you know what's interesting about that is, there's a third word. Actually, that's funny, that is exactly the thing you're talking about. I discussed in the last chapter, the network, maybe the most important culmination of it, which is it's bundling, unbundling, rebundling. Centralization, decentralization, recentralization. This comes from like the famous Chinese epic where it starts with, "The empire, long united, must divide; long divided must unite." Right? The cyclicity of this is because we have a lot of order, it's too much control, I want to break free, now you've got freedom, okay, it's anarchy, oh my God, someone bring order, right? And so that's the loop that keeps happening in history. It's not to say, by the way, that's only a loop and we just come back to where we are. One of the things I talk about in the book is the helical theory of history, where it's

• 2:06:15Speaker 00

  like cyclic in a plane, but you're ascending on the z-axis. So our technology, and in a sense, our progress keeps getting better, even if there's certain very human things that we just keep doing, you know? And so to your point, you know, for example, you had bundling in CDs, you unbundled into MP3s and you rebundled into Spotify playlists, right? You had the bundling in newspapers, you unbundled into individual article URLs, and you rebundled into Twitter feeds and you follow those people. Right? So you had the bundling into countries. We have the unbundling of like internet anarchy and social media and so on, which is kind of happening now. And I think we have the rebundling into opt-in countries, what

• 2:07:00Speaker 00

  I call network states. And that's going to be so messy and so crazy, as crazy as everything that's happened over the last 20 or 30 years. But I think that at least it's better than just being in the state of total anarchy. You have some vision for rebundling and recentralization on their side. You know, we didn't start the fire. Okay.

• 2:07:19David Weisburd?

  And I think the airplane, the opt-in nature of it is very powerful.

• 2:07:22Speaker 00

  Yes.

• 2:07:23David Weisburd?

  It's giving people, people the freedom to choose and to vote both with their time, money and, and energy. You know, one way to look at money is, is, is how you accumulate and spend your energy.

• 2:07:35Speaker 00

  And the reason that's so important is actually, you know, people talk about Elon, for example, as a strong leader. And he is a strong leader. Okay. Zuck is a strong leader. But why are they strong leaders? Yes, in part because they're a CEO and they have total control and authority over the whole thing. But in part because every single person who works for Zuck opted in to be there and can opt out. It's mutual opt-in. Every single person who's got an account there has opted in to be there and can opt out. Now, you can argue with me at the limits, right? Like somebody did an experiment. Can you actually block facebook.com on the internet and still have a normal internet experience? At a certain scale, you can argue these networks get so big that it's hard to practically opt out. Fine. Okay, there's, that's a different, then I would argue, yes, we need to fund competitors

• 2:08:20Speaker 00

  and so on to that to preserve practical choice. Still, the moral legitimacy comes from the fact that people consented. And you can, the fine thing is, is you can opt into constraints. That's what signing a contract is. You give up some freedom, in a sense, in order for mutual benefit for you and the other party on their side. Opt into constraints, right? So you can actually get order out of that anarchy. But the moral legitimacy of it comes from the consent.

• 2:08:48David Weisburd?

  The Republican, Democrat, and Libertarian. In today's world, you know, Libertarian has become almost just pseudo-conservative, but ultimately Libertarian borrows ideas from both Democrats and Republicans, which is about maximizing on freedom.

• 2:09:08Speaker 00

  Yeah, so you asked about like, for example, American dynamism, right? And I like Catherine Boyle. She's also friends, all these people are friends of mine, right? So the one way of thinking about it is technology is sort of forking into Silicon Valley and the Internet. Okay, where Silicon Valley is going more nationalist, right? Military stuff, right? Double down on America and wave the flag and so on and so forth. I totally understand where that comes from. Comes from a good place of turning the thing around. There's another direction you can take it, though, and that is to go more internationalist. And that is blockchain, that is crypto, that is, you know, international capitalism as opposed to ultra nationalism.

• 2:09:53Speaker 00

  Right? And again, these don't necessarily have to be completely at odds, but they're just different ways of thinking. And the way of thinking is for the international capitalist, guess what? Eighty percent of the world is neither American nor Chinese. Right? How do we build a rules-based order that works for them and that also benefits American and Chinese people? Because, you know, that's not something people are thinking about. They're thinking, oh, it's just a fight between the US and China, or they're thinking it's still a unipolar world or something like that. They're not thinking about everybody else except as bystanders. They're thinking it's going to be like, you know, the Cold War where it's just the US and USSR. But it's not like that, actually. Most of the GDP is actually outside of the US and China, even even now, as big as both of those are.

• 2:10:37Speaker 00

  And the reason I say that is because if you have an American, they certainly don't want to be involved with the Chinese court system nowadays. So you can't make money in China, you can't invest in China. Nowadays, for a Chinese person, it's the reverse. After there's a lady from Huawei who was like arrested in Canada, a lot of Chinese nationals are kind of scared of coming to the US or to US allied regions. And and perhaps for good reason, because, you know, lots of people are suspected of being spies. There's lots of, you know, sanctions and so on and so forth. You don't want to get caught in any of that stuff. So Americans and Chinese no longer trust each other's legal systems. That's bad, given That that was like the engine of the world for like forty years, you know,

• 2:11:21Speaker 00

  lots and lots of deals were based like Apple is straddled between America and China. They're still making a lot of stuff and a lot of tooling is over there, right? So, and all these people who built all those companies, you know, in 2012, you're doing a deal for ten years and you don't know that the US and China are going to fight in the future. Maybe you can guess they might, but certainly wasn't on the radar there. And you'd be called a paranoid crazy person if you did it then, right? So it's my point, if Americans don't trust Chinese courts and Chinese don't trust American courts, what can anybody trust? Well, there actually is something, a forum, that hundreds of millions of people globally, including certainly tens of millions of Americans and probably hundreds of millions of Chinese, all trust. You know what that is?

• 2:12:05David Weisburd?

  Bitcoin.

• 2:12:06Speaker 00

  Bitcoin. And that's a more profound statement than we might think, right? Amidst this era of deep fakes and fake news and political strife and back and forth, there's a lot of Americans and a lot of Chinese people and a lot of people who are neither American nor Chinese that all like Bitcoin.

• 2:12:27Speaker 00

  And similarly for Ethereum and similarly for other coins, this is, in my view, it's hiding in plain sight, the next, the base of the next rules-based order, the mammals that will eventually succeed the dinosaurs. Or that could, right? And that are fair, right? The thing is, an American knows that the Bitcoin blockchain will not favor them or a Chinese person against each other. The rules are constant, they're written in code, they're enforced by cryptography. And if you don't speak either English or Chinese, you can diligence them, they're in the language of code. Okay, maybe code is often in English, but you know what I mean? People even who don't speak English can read code, right?

• 2:13:05Speaker 00

  And that's globally fair in a way that the rules-based order isn't. It's globally wealth creating. In a way that declining rules based order isn't because it's about contracts that you're abiding by and now guess what a Bangladeshi or Brazilian can be on the same plane as somebody in Beijing or Boston, right? That's really important because you know, in a sense, right now, by the way, like, you know, I'll say something and I'm kind of exaggerating, but kind of not like international law for like corporations kind of doesn't exist. And what I mean by that is, take that example of Bangladeshian Brazilian. If you're, if you're a guy in Brazil, you're trying to acquire a company in Bangladesh, which by the way, could increasingly happen because Internet has made all these communications across borders. Okay.

• 2:13:50Speaker 00

  You're trying to acquire that. Who speaks both like Portuguese and Urdu or Portuguese and Bengali, right? Very, very few people. Who knows what the tax and whatever obligations are between those two countries? Nobody knows that, probably. Instead, what you do is you set up like an adapter company in the USA and then that has enough deals with the US and Brazil and the US and Bangladesh that you can make that deal probably happen, right? So you have like a hub and spoke. Or China also nowadays does enough trade with both of them, you could probably make it work through China. But what that means is like, does international law even exist, right? Because everything is actually hub and spoke. When you come back to it, you go back to the hub and spoke of the US or the newer hub

• 2:14:33Speaker 00

  and spoke of China to do these international deals until the blockchain, which actually gives a system of property rights where that Brazilian and Bangladeshi can at least do a transaction today, they can do a contract today. And I think in the future, you won't just have on-chain transactions, you have on-chain accounting and on-chain companies. That's kind of already happening for these DAOs, right? Many of the features are there and all that is required is some backwards compatibility like, you know, the Wyoming DAO law or the, or the Tennessee DAO law. People are starting to recognize these Internet objects as being important in legal code. This is what I mean by Internet first law. So what I'm describing there is complementary to, I think it's another great part of America.

• 2:15:15Speaker 00

  It's not just, you know, the military and nationalism and defending US. I get where that comes from. I think it comes from a good place. But there's another, you know, strain, which is the Thomas Jefferson, Ron Paul, you know, line of things, which is peace and trade and, and so on. That's more my vibe.

• 2:15:32David Weisburd?

  And I think also, we've been, we've been criticizing America quite a bit, I think with, with good reason. But one, one of the secret sauces and one of the most powerful things about America on a relative basis is America's private property and security.

• 2:15:48Speaker 00

  Oh, yeah.

• 2:15:49David Weisburd?

  Personal property. I think, you know, few countries in the world over the last 250 years or 300 years have the track record of securing personal property like the United States. I think that's a very big aspect of our, of our economy.

• 2:16:03Speaker 00

  I, I hope if you look at the whole transcript and so on in context, you know, like, there, there's many aspects of the US that I admire. I'm talking about the ability to do, it's really Washington DC and, and the kinds of regulations and rules that have, that have strained the whole thing. But there's still that strain of the tech American, the pioneer American, the frontier American, the, the American that builds stuff with their hands. Of course, you know, that, that I respect, that one, that one should respect. And the private property rights that you described, I mean, interesting question, you know, sort of maybe a provocative question. Is Bitcoin American?

• 2:16:40David Weisburd?

  Say probably no.

• 2:16:43Speaker 00

  Well, it reflects many of the best values of America. It's, you know, it's, it's certainly property rights. It is freedom of contract. It's freedom of association. You can argue it's freedom of speech because you can use the blockchain to write things. And some of the concepts come and you can encrypt things with them. But I would argue Bitcoin is about as American as America was British. It takes those things and then, you know, America took a lot of the great things of Britain and then it had the new world to apply them. Right? So there's a continuity, but then also an innovation. And the new, new world is the internet.

• 2:17:27Speaker 00

  And so like, you know, Bitcoin is just one of the first forms, maybe the most important, but an internet need a form that is the next in this lineage of Greece to Rome to Britain to America to the internet, in my view.

• 2:17:41David Weisburd?

  So let's tie that all together. So you are raising a fund, it's 506C, so it's a general solicitation. So tell me a little bit about the form. A lot of people might not know about a rolling fund. Tell me about that and then tell me about the type of investors that you're looking for in terms of connectivity, ideology, value add.

• 2:18:01Speaker 00

  Great. So the kind of investors that I'm looking for and also the people that I have, and you know, to be clear, by the way, I have, I have enough capital to do what we need to do. One of the awesome things about rolling funds is you can just accept new investors at any time. You don't have, oh, the fund is closing today and so forth. There's a fund close every quarter and if you want to be in, you can literally go to balaji.com. Zoe, maybe you can put that on screen. Balaji.com. No, no, no. No, but yeah.

• 2:18:34David Weisburd?

  1-800-BALAJI.

• 2:18:36Speaker 00

  Right, right, right, exactly. No, it's funny. No, but, um, you know, it's, it's like literally my first name.com. So you, if you can spell my first name, uh, which, which I grant is somewhat challenging for, you know, but B-A-L-A-G-I. If you, you go to that domain, it's an angelous landing page. Um, I'll put it, I'll put it on screen for a second. Hold on. Let's see here. Have you got it up? Yeah, there you go. That's right. Yeah, that's it. So go to balaji.com and you land there, right? And, um, you can literally just click down there to apply. Okay.

• 2:19:21Speaker 00

  And, um, you can take it off screen and I'll just comment on it. Okay. Um, and so.

• 2:19:28Speaker 00

  What is, what's the premise of the fund? So we are, A, it's a rolling fund, so you can just kind of click online. And so what kind of investor? It's the kind of investor who wants to do it self-serve. I mean, I can talk to them if they really need it, but you know, the kind of person who wants to go there, click, wire, and just basically be done with it on the same terms as everybody else. And that's how you know it's fair. This is what I was talking about, like the rules-based order, right? And there's one kind of person who just wants to haggle and negotiate over everything. And there are persons who's like, I'd like to click and be done with it. And it takes me 10 minutes and, you know, go with God and make me money and so on, right?

• 2:20:12Speaker 00

  And it's very modern because you can just refresh your dashboard, see your investments, get your K1s or what have you, right? So it works for high net worth, it works for entities. Angel List, the platform, takes care of all the compliance, it takes care of the wires, it takes care of distributions, it takes care of all of that kind of stuff, right? So you don't have to send 40 emails, you don't have to ask for anything. It all just gets pushed to you in a dashboard, right? Which is so much more efficient than emailing a bunch of people. So that's since very modern. Now, I recognize there's some conservative LPs or folks who are bound in certain ways that can't do that. And that's fine. I mean, like maybe, hopefully you can update your thing to be able to do something on Angel List.

• 2:20:53Speaker 00

  Then in terms of how the fund is structured, we're using fees to hold conferences, publish books. We're going to professionalize the podcast. We're going to generate a lot more content and we're basically just going to generate a ton of deal flow this way. And this is kind of, again, I've got proof points on all of these things. I've got, you know, I've got a bestselling book, I've got a million-person Twitter feed, I've got a sold-out conference. I'm just saying, whatever, I have prototype versions of each of these things where I've just been like tweeting from being in the line at Starbucks. I have, I've done zero optimization of any of that, really, right?

• 2:21:32Speaker 00

  Maybe, okay, I did, I did set up like a camera or something here, or let's say 0.1 optimization of what could be done, okay? And so like a small team that actually just goes and does that. And also, many of those people who will be on that team will be folks probably who we fund as future CEOs in two or three or four years, right? They're like fellows, okay? And so that itself is like a meta version of deal flow, okay? So, A, the kind of investor is the kind of person who, or entity, that can self-serve on Angel List. B, are we using fees for, you know, they're used to basically hire people and build things? Okay. C, we already talked about what we're going to invest in.

• 2:22:16Speaker 00

  D, they have to be basically qualified purchasers, all investors, because there's just like, we very quickly hit the cap on the number of accredited investors there.

• 2:22:27David Weisburd?

  And the minimum is $1,000. So this is made to be really accessible by a large network.

• 2:22:33Speaker 00

  Well, $10,000 for 10 quarters. So it's $100,000, right? So, yeah, but a qualified purchaser is considered by the law to basically be a big boy. You know, they have $5 million in investments. And I believe that also includes like a founder who has $5 million in equity and thereabouts. But you have to go and check that. Angel List takes care of the accreditation. And so the big thing about it is, you know, there's different kinds of investors. And some types of LPs are like, they're like activists, or they want to get lots of reports and, you know, lots of personalized updates and they're offended if you say, if you don't

• 2:23:16Speaker 00

  reply to them right away and, oh, I put in my money, why don't you give me a report right away and so on and so forth. And then there's another kind of investor, and this is more like what I am for the companies I invest in, where I make the decision of where not to invest. And then I realize I'm putting in capital, I'm not putting in labor.

• 2:23:35Speaker 00

  Right, so I'm putting in capital and being a backseat driver doesn't improve results. Right, so if my companies ask me for help, if they WhatsApp or signal me and you know, it's a, it's a, it's an acquisition or it's a serious inflection point for the company, I will respond, you know, if I, if I had the time and usually I do. Sometimes it'll be 20 startups, they'll ping me in a day and I have to triage a little bit. But basically, if it's an important thing, I'll get back to them. But I, but I won't like actively interfere. They're going with God, you know, you add value by quote not adding value. This is actually closer to the founder's fundamentality of pick the founder and then let them go with God.

• 2:24:13David Weisburd?

  I have found that I experience the people that phrase things as you do are the most value added investors by a long shot. And the ones that, the ones that are humble and actually responsive, that's like not top 1% of investors, but, but I didn't want to cut you off, go ahead.

• 2:24:30Speaker 00

  Sure, yeah, well, so I, I hope, I, I think, you know, I mean, look, can I say that everybody, you know, here is, I thought this was a pretty nice.

• 2:24:41David Weisburd?

  Yeah, I would look at your portfolio, I think, I think you would very quickly see how much value you've added.

• 2:24:46Speaker 00

  I'll show it just a tweet or what have you.

• 2:24:51Speaker 00

  Here, this was a nice.

• 2:24:57Speaker 00

  This was a nice tweet by.

• 2:25:00David Weisburd?

  You know, one thing that we interview a lot of billion dollar funds and one thing that was very interesting is a fund that went off record, they have an acknowledgement letter for anybody that invests less than $10 million. And what does this acknowledgement letter say? It says, I will not go to the annual meeting, I will not respond to emails. This is a very large private equity fund. And as I mentioned, every time I talk about this acknowledgement letter, if Benchmark or Balaji ever wants to meet, gives me allocation, wants me to sign acknowledgement letters, I'm very happy because the worst thing in investing is not actually getting up to date from, from the GP, it's backing the top GPs that are going out there and executing for their founders.

• 2:25:45David Weisburd?

  So there is an inverse relationship to people that are building LP relationship protocols and those that are actually going out and, and funding groundbreaking startups.

• 2:25:55Speaker 00

  That's exactly right. And I think that, of course, that's not to say that one, you know, shouldn't treat LPs properly and so and so forth. But the dashboard, I think Angelus is a good reconciliation of that, where you can get whatever information you want at any time, day or night, quickly through a dashboard that goes out to all LPs, all tax filings, all that kind of stuff. Here's just like, you know, a couple of nice comments that I thought were nice or whatever. So, so this is Amjad, you know, CEO of Replit, a pretty nice comment. Maybe you can, can you see the screen? So, you know, I feel embarrassed to read that, but it's a very nice comment. Okay. And here's, you know, like Julie Fredrickson. And so, you know, I believe Slade's our Codex,

• 2:26:39Speaker 00

  this is Scott Alexander, was to academic online cultures, biology has been to tech. So early with the vibe shift, they were given hell. And now so mainstream, people don't recognize the source. Meaning, like, I'm sort of like the fish, you know, the water in which a lot of these things swim.

• 2:26:53David Weisburd?

  Like the idea, you created the concept of the idea maze, correct?

• 2:26:57Speaker 00

  Yeah, that's right. And, and so like, I think I am.

• 2:27:01David Weisburd?

  What about Russell conjugation? Did you create that? You popularized.

• 2:27:07Speaker 00

  So Bertrand, well, Bertrand Russell created it. And Eric Weinstein has also cited it. And I think I have been one of the people to popularize it. I think I came up, I know I came up with this concept of the idea maze. And this is like an old lecture where I gave that. And whatever, I hate kind of thumping my chest or whatever like this, you know, in the sense that if you, if you like me, if you like biology, if you like what I tweet, if you like the companies that I've, you know, built, if you like Coinbase and crypto, if you like the network state book, I think you're going to probably like investing in the fund. And if you don't, there's a lot of others out there. And, you know, like,

• 2:27:45Speaker 00

  I won't feel, I won't feel badly about it. The, gosh, there was something else you said. Oh, yeah. In terms of, oh, here's one thing I will say. You know, the famous phrase, how can I help? Right? The VC phrase, like a VC catchphrase. Now, this is a catchphrase that, that's a Suarez thing, right? Okay. This is a funny phrase because.

• 2:28:15Speaker 00

  First of all, it's become a cliche, right? On their hand, "How can I help?" is way better than, you know, the Wall Street style, "How are you trying to F me?" Kind of thing, right? Like, in general, it's like, it's better to be, have like a friendly culture, even if it's fake-friendly in some ways than unfriendly, I think, right?

• 2:28:37Speaker 00

  "How can I help?" sometimes is said sincerely, which is, "Can I make an intro for you?" or something like that, or whatever. Sometimes it's said insincerely. Sometimes it's a pain for the founder to like, break out a task for the investor to help. Because it's like, uh, okay, will you take on a task that actually takes you a minute? Or will you do something that's like an hour? Or will you actually help me recruit somebody that's like a whole day?

• 2:28:59David Weisburd?

  There's no productization of it.

• 2:29:02Speaker 00

  Yeah, exactly. And founders are often badly calibrated on how investors should help. Okay, so I actually think there's two models of investor help. There's a founder's fund model, which is, the help is that they just don't interfere with you at all. You can take extremely risky decisions, and because you're the founder, and because they're in the business of variance, they'll never veto that.

• 2:29:24David Weisburd?

  Who else could you put in that camp?

• 2:29:27Speaker 00

  Me? In the sense of like, that's my kind of thing. I'd say, Novel is kind of like that. My friend, you know, Novel Ravi Khan.

• 2:29:40Speaker 00

  Let's see, who else is like that?

• 2:29:46Speaker 00

  Fair number of crypto investors are kind of like that.

• 2:29:50Speaker 00

  But I can't speak for everybody. I'd say those three are kind of like that. First, do no harm, and go with God and crush it, and...

• 2:29:58David Weisburd?

  If you're not gonna succeed, you weren't gonna succeed anyways.

• 2:30:00Speaker 00

  Well, yeah, exactly. It's kind of one of these things where it's like, they're smart enough to know that what they want is effectively the brand endorsement. Because a brand endorsement is scalable. You don't have to be, like, Novel, or me, or, you know, we don't have to be in every single meeting on the call. That person could just say, "So-and-so invested." That scales our presence. Right? It's like, you know, and that's a non-up...

• 2:30:26David Weisburd?

  How do you deal with a three-standard deviation founder that's always asking you for things?

• 2:30:33Speaker 00

  That's a great question.

• 2:30:35David Weisburd?

  The squeaky wheel.

• 2:30:37Speaker 00

  Squeaky wheel. I set the expectation, I say, sometimes I'll say, here, let me do a screen share with you, and I'm just going to show you all the names, nothing else, of all the companies I've invested in, right, just like a long table, that's public information, all the companies I've invested in. And I'll just slowly scroll down that while we're on the call.

• 2:30:58Speaker 00

  And after about like two minutes in, he's like, okay, I get it. Because there's so many companies there.

• 2:31:03David Weisburd?

  Have you ever thought about productizing, to your point, saying, these are the three things I could do, I could introduce you to these.

• 2:31:09Speaker 00

  So, so that I'm coming to that, right? Basically, now, the other model, so the answer is yes, okay, and, and, and so I'm going to talk about ways that I think investors can help. So how VCs can help founders, and how LPs can help VCs. And then vice versa, right? But, though vice versa is less important, because you know, you're most important. So, Founder's Fund helps by not doing anything. Rather, by, they will hold some annual events and stuff like that, but it's all optional. You can come to them if you're busy, don't worry about it, go kill it, you know, we're with you, right? They'll never get political on you, they'll never, you know, do anything like that, they just will not interfere. Extremely helpful, right? And they're wealthy enough that they can just write off any check.

• 2:31:53Speaker 00

  So they can go through the rough ride and in tough waters and so on.

• 2:31:59Speaker 00

  A6 and Z, which, you know, I also, you know, Founder's Fund backed my, you know, first company, you know, we made the money. A6 and Z, I was a partner there, and I love all those guys, and Mark and Ben, or rather, Mark and Chris are investing in this one. And Mark and Ben and I, we've worked together on many deals over the years.

• 2:32:15Speaker 00

  They have a different model, which is, they actually help. Now, they don't say, how can I help? They say, we can help in A, B, C, D, and E forms, right? Now, of those different services they have, the most important two are, so most people don't know about exactly how A6 and Z works. They might know, you know, but I'll give a quick summary. They don't just invest in your company, they've used the fees to build a tank of all of these professional services. And they're the first ones really to do that. One of the services is what they call the Enterprise Briefing Center. And what that is, is it's that all of these VCs at A, Six and Z, all the partners are senior enough that they know, let's say, the CEO of Coca-Cola and the CEO of Johnson & Johnson, the CEO of Pfizer. And they can call them up and WhatsApp them or text them and be like, hey, you know, we've got,

• 2:32:59Speaker 00

  uh, we know you've got a problem in terms of dealing with X or Y or Z procurement issue. And we have a startup that's good for exactly that. Okay. And so they get their VP who has the decision-making power to come into Anderson Horowitz. And they sit through a briefing where founders come in and they basically pitch Coca-Cola, Johnson & Johnson and Pfizer on their product. Now, why does this work insanely well? First is, if you're a startup, it's very hard for you to even get that meeting with Coca-Cola, Johnson & Johnson advisor. Second, you're coming in endorsed by A, Six and Z. Third, sometimes, um, you know, this is something where there have been five deals like this

• 2:33:44Speaker 00

  that have been done before and Coca-Cola, Johnson & Johnson, Pfizer love A, Six and Z because it's like their shop where they can click like Amazon and just get, okay, let me upgrade this enterprise offer, this one and this one. I'll take five. Right? So A, Six and Z is a repeat player in the ecosystem that makes a deal close because it's like a two-sided market of enterprise SaaS vendors and enterprise SaaS buyers. And you have this scaled VC firm in the center that's putting those together, like a skilled matchmaker. And the reason it works is A, Six and Z is invest in these companies, of course, and wants to make money, but its reputation is on the line with these large institutional buyers. And so it wants to make both parties happy. Does that make sense?

• 2:34:24David Weisburd?

  Yeah, it's a marketplace.

• 2:34:25Speaker 00

  Okay. It's a marketplace. Right. Okay. So that's the Enterprise Briefing Center. The second thing that's, and that's really valuable for a founder because often a Series A, Series B founder just doesn't have the connections to, or what we call the distribution, to get to all of those Fortune 500 CEOs. Right? So this levels them up. They have, they have, you know, product is merit, but distribution is connections. They have merit, but not connections. Okay? So they sell some of their company and now they get a bunch of distribution and it massively increases the value. It's almost something where A, Six and Z, when, when a, when an enterprise SaaS company was working at A or B, they could almost deterministically level them up with like a hundred, you know, big brand names that they could just slot them into, such and such like this. Really great. Right? Um, so.

• 2:35:12Speaker 00

  That was EBC. The other thing that Ascenti did that worked is the corporate development. So they hired these ninjas there who knew everybody at Facebook, at Google, and so on, who buys companies for a living, right? Now, it's the event of a founder's life when Google knocks with a possible acquisition. It is Tuesday for the corporate development guy on the other side.

• 2:35:40Speaker 00

  This is a radically asymmetric thing where that founder is like micro-analyzing every period and sentence and comma and so on on this transaction that could be the most important thing in their life. And the corp dev person is like yawn, they could forget about the deal, it's in their inbox and so on, because they're not getting paid usually, you know, extreme amounts. Now, I'm not saying all corp dev people are like that, obviously, right?

• 2:36:01David Weisburd?

  Corp dev.

• 2:36:02Speaker 00

  But it's a job for them. Yeah, it's a job for them, and it is an absolutely life-changing, world-changing outcome for the founder on the other side, right? So Ascenti Corp Dev is in between these, where they know all of Google and Facebook and, you know, Dropbox, all these other guys, they know all the corp dev people there. They're on a first-name basis with them. And if they say, "One of our companies is at Google and it's got an offer of X, Facebook will you match?" Sorry, Meta, sorry. Alphabet is making an offer. Meta, will you match? Okay, right? I can't say Google or Facebook. So Meta knows that that's not a bluff, right? The founder has incentive to bluff.

• 2:36:45David Weisburd?

  It's a recurring game.

• 2:36:48Speaker 00

  It's a recurring game, exactly. So again, Ascenti Corporate Development is a marketplace, two-step marketplace of company sellers and company buyers. And it's not just buyers, it's also the next round, right? Series C investors, Series D investors. If Ascenti has the financials of these companies, these guys know that it's representing them correctly to them for the purpose of investment, right? So those are two extremely value add functions where the founder cannot be expected to, I mean, cannot be expected. Great founders can do anything. Okay. But it's hard for a founder to have hundreds of, you know, possible buyers or, you know, their enterprise software.

• 2:37:28David Weisburd?

  It takes years and, and.

• 2:37:31Speaker 00

  Yeah, exactly. It's not, it's not a function of, you know, there's certain problems that I call, you can just type faster and solve them. Coding, type faster, right? Content, type faster. Okay. Debugging, obviously it's not exactly typing faster, but you get my point. It's entirely within your control and the sequence of keystrokes that you input to your device is the quality of your software, the quality of your design, all the things like.

• 2:37:59Speaker 00

  Yeah, exactly. Right. Which is very important. Global equality of opportunity is this, you know, this, this device right here, this keyboard. But the, the, the relationships with LPs or with enterprise software buyers, that's not a type faster thing, or it's much, it's not easily reducible to that. Okay. So those two were massive, massive, massive value adds for A16Z that they just did better than anybody else and they made a more efficient marketplace out of it. Right. Um, there were other, you know, functions which are also valuable. Actually, one function that used to be very valuable was PR. And in the early days, A16Z did PR when no one else was doing PR and that was like phenomenally discussed with them. More recently, I think the right approach

• 2:38:42Speaker 00

  is to just for founders to go direct and build their own media organizations. That was not reasonable 15 years ago and is, I, I look at it as table stakes today. Right? So that's a technological shift where due to the rise of social media, the rise of podcasting and so on and so forth, many founders are actually not founding engineers, but founding influencers.

• 2:39:04Speaker 00

  Right? They they come in not with an amazing engineering background, but with an amazing community background. And then they hire an engineer to build a product. That is actually also a reasonable approach.

• 2:39:13David Weisburd?

  You know, everybody knows how you went from 100,000 followers to million followers. But how did you go from zero to one? And did you have to? Did you have to propagate less radical ideas when you were starting out to be taken seriously? And how did that evolution?

• 2:39:29Speaker 00

  No. How that how that happened? Well, I think that so I taught a MOOC on so first I had no public profile until 2013. I was basically just a career academic. I mean, like my nature is that of a math guy, right? Let's say, you know, basically my background briefly, BSM's PhD, electrical engineering, Stanford MS, chemical engineering, Stanford. I taught genomics and stats at Stanford for a few years after getting my PhD. Then I founded a genomics company, clinical genomics company that founders have invested in and was sold later for 375. So clinical diagnostics. Until 2013, I had no public profile. I was

• 2:40:14Speaker 00

  just like, like a deep, quiet, deep tech.

• 2:40:16David Weisburd?

  Doing work.

• 2:40:16Speaker 00

  I actually thought, I was, well, yeah, I was doing work. But I also thought, and I think incorrectly. So this is one of the things I got wrong. I was late to social media because I thought it was just a waste of time. I thought it was tweeting breakfast. I thought it was like, you know, sharing, you know, updates about, you know.

• 2:40:39David Weisburd?

  That is eco centric.

• 2:40:40Speaker 00

  But yeah, yeah, yeah. I was like, do I care about whether somebody went to Tahoe or not? I mean, good for them. They're friends.

• 2:40:46David Weisburd?

  At a restaurant. Great.

• 2:40:48Speaker 00

  Yeah, it's, you know, like how monkeys will like pet each other's fur and so on and so forth. And like, so I was like, okay, that's great. It's not my thing, you know? And I saw this chit chat, idle chit chat. Then one day, there was a friend of mine who had attended a genomics conference. And he posted a summary of the conference on Twitter as what we now call a tweet storm or thread or something like that. And he was, he was like, he was a professor. And so he included details like, here's how the BAM files were set up. And here's how they, what they were doing with fast queue and so on and so forth. Stuff that no journalist would ever have written up from that. And it was like getting a lunchtime conversation with a really smart friend of mine that saved

• 2:41:32Speaker 00

  me a plane trip out. And it just like distilled, it was like taking the juice of an orange and I could just slurp that up and, and learn what was at this conference, not in a week of time flying back and forth or four days flying back and forth, but in 30 seconds. Right? And I was like, Twitter is useful for me. Okay. That is, I mean, now of course, like who would, who would ever pitch that as the application of Twitter? Right? That's such a niche, niche, niche. You have to get to massive scale before you start getting that as the application Twitter. That's kind of though what Twitter has become, where whatever vertical there is, if you want to learn about real estate, you can really learn about it by just looking at the top,

• 2:42:17Speaker 00

  I don't know, 50 real estate people on Twitter and you learn cap rate, you learn all this stuff. At least you'll distill the language of the people in a community that you could really find hard to learn about how they actually talk about things outside of a textbook. Textbook presentation, one thing, the conversational presentation is another. Right? So that made me.

• 2:42:35David Weisburd?

  Are you on the for you or following setting on your Twitter?

• 2:42:41Speaker 00

  I switch back and forth between them. I think I probably, it keeps going back to for you, and I think for you is fine. Um, I don't know, I have to go.

• 2:42:50David Weisburd?

  I have found time and time again, the most successful people on the, on the following setting. And that's really binary.

• 2:42:59Speaker 00

  Yes.

• 2:43:00David Weisburd?

  That's one of the hacks. I had a viral on the Harvard situation that Bill Ackman literally retweeted and wrote an entire essay on what I wrote. And I started getting all the tech luminaries and I just started, now I realized they were all on their for you setting because they started to interact and my content hadn't improved.

• 2:43:21David Weisburd?

  But suddenly, it was actually being propagated on their form. And I found when I went from following to for you, my mental health significantly improved because I wasn't now. It was thoughtful, smart people versus whatever is like the most polarizing and antagonizing content.

• 2:43:39Speaker 00

  You mean from for you to following?

• 2:43:40David Weisburd?

  Yeah, from for you to following, yeah.

• 2:43:43Speaker 00

  Right. Yeah, no, I think I keep switching it back to following, but I think it keeps going back to for you or something like that. So I have to...

• 2:43:51David Weisburd?

  Even Elon Musk is susceptible to profit maximization.

• 2:43:57Speaker 00

  Maybe, maybe, right? Though I think on balance, he's on... I'm a big fan of what Twitter is today versus what was...

• 2:44:02David Weisburd?

  I'm a very big Elon fan as well.

• 2:44:04Speaker 00

  Yeah. So, but I want to answer your question, which said, how did I go from zero to 20,000 or so? So, the answer is basically, in late 2013, I gave a talk at Startup School. So I did a few things in 2013. But one of them I did mid-year, I gave a MOOC course, Startup Engineering MOOC, that that's where the Idea Maze lecture and other things were from. And it's funny, you know, the Idea Maze was just sort of, it was like one subchapter in a bunch of lecture notes that I think were well received at the time. And you don't necessarily know what is like is going to become really popular or whatever from that, right?

• 2:44:44Speaker 00

  But, but it put, I think, a finger on something that people were thinking of and, you know, then that propagates. So that course, which had the Idea Maze and various other concepts, actually totally organically just got to 250,000 students on Coursera. And I did no promotion of it whatsoever. It was just like, I think it was just quality of content and word of mouth and Coursera's distribution and the platform. So that course did fairly well, and that was in mid-2013.

• 2:45:16Speaker 00

  And then when I got on Twitter later in the year, like November, December, I also, by the way, somebody had been squatting Balaji S and I'd had Balaji S at this and Balaji S at that for a long time. And I was just trying to get that. And then when I managed to get the Balaji S handle, then I actually tweeted and it just ticked up quickly to, I think, like 10,000 or 20,000 followers pretty quickly. Because a lot of the kids from my startup engineering course followed me there, right? And so that was like my first like pump of, and then I didn't even, I didn't know what was good or bad or whatever at that time. I just kind of, then it was announced as a partner at A, C, and Z, and I got a few more. And then that's kind of how, what I was, you know, doing what

• 2:45:59Speaker 00

  I was doing. So I guess the answer is, I contributed a lot of value, at least in their perception. I, I think it was valuable. That was like, here, here's

• 2:46:07David Weisburd?

  So in many ways, you grew through offline, not necessarily offline, but off, off X and off Twitter accomplishments.

• 2:46:16Speaker 00

  Yeah. So here, if you want to see how early I was to certain things, right here, this is, this is not entirety of the course, but this is part of it. Do you see this headline from CoinDesk 2013? July 2013?

• 2:46:32Speaker 00

  Build a Bitcoin crowdfunding site, right? So what was Bitcoin's price? It was like 50 bucks then? It was like 1,000x smaller than it is today, right? So this was, you know, the course is given by Balaji Srinivasan, of course. So, of course, young entrepreneurs require to build a Bitcoin crowdfunding system, the inclusion of, you know, right? And guest lectures from a range of Silicon Valley startups. And, you know, I basically just had some of my friends, engineers and stuff, give talks. I wasn't as senior as I was at that time. But it was like, the kind of course which I wished I had had when I was first starting a company. It was just like everything that I, that I was fresh in my mind, that a PhD in engineering didn't know about the business of technology, right?

• 2:47:15Speaker 00

  So that proved successful. And also that, you know, that was like early to crypto, early to, I mean, very early crypto, that's 2013, right? That's like, you know, 1,000x less valuable than it is today.

• 2:47:27Speaker 00

  So, um, anyway, that shows at least I'm early to something sometimes.

• 2:47:32David Weisburd?

  Absolutely. You know what the most predictive of somebody that has a fund returner?

• 2:47:38David Weisburd?

  Based on data of eleven and a half thousand companies by David Clark, it's an existing fund returner. So it's fun. It sounds like a joke, but it is actually the most predictive to somebody that is able to find a fund returner. Somebody that has done it once. It's the most highly predictive aspect. So, so on that note, you know, I think biology, you're one of the most fascinating people certainly I've ever interviewed. But I think it's important to note that like Elon Musk, you are also accelerating people to improve themselves and to think bigger. It's kind of this meta thing where like Elon Musk is not only accomplishing these great things, but he's also inspiring people to accomplish great things.

• 2:48:17David Weisburd?

  I think you have that order effect that I think really inspires people such as myself and others who might have been maximizing on, on just capital to, to, to, to think bigger. So it's been a real pleasure to, to sit down and chat. How, how could people find you and, and how could the community help you in your pursuits?

• 2:48:41Speaker 00

  Well, um, if you want to help, uh, I'm at biology.com for the fund and twitter.com biology S for the feed.

• 2:48:53Speaker 00

  Oh, I will say one thing. This is like maybe a little extension of the end, but it's like a postscript. We had asked, how, how can LPs help if they want to help? Well, they don't have to help. They can just put in capital at biology.com and just call it a day. And that's totally good, right? We'll use the fees to hire people, build things.

• 2:49:12Speaker 00

  But if they want to help, there's four ways they can help.

• 2:49:17Speaker 00

  First, there'll be an annual conference at the Network State Conference in Singapore. You saw the video from the last one and how packed that auditorium was. That was on relatively short notice, thousands of people who came to Amsterdam. This one, I think, will be. I don't know, several thousand people. So it'll be pretty big. And I'm going to invite all my portfolio companies and all the LPs there. So we'll have a really great LP dinner, and you'll be able to meet lots of portfolio companies. So that'll be kind of fun. A. B is, of course, you can invest and so on and refer others online. C is, if I post about our portfolio companies, which I don't often do, I only do it when, A, they need the publicity, and B, the publicity can benefit them. And C, crucially, they're in a state where it's

• 2:49:59Speaker 00

  useful to followers, right? And that's the most important. You have to always add value to your followers, teach them something, get them something, and so on and so forth, rather than ask something of them. So in that event, then you can tweet, like, RT, et cetera, the portfolio companies. And then D is, of course, you can always refer good companies, and we'll have like a form for that, right? The reason those are good is, those are four very scalable ways to help, if you wanted to help as an LP, that are actually helping. They're not just asking time and so on and so forth, right? And I think other fund managers, who are sort of internet-first fund managers, could do things like that as well, right? So can basically say to your LPs, do X, Y, and Z if you want

• 2:50:40Speaker 00

  to help. Otherwise, you're putting in capital rather than labor. And, you know, let me spend the time on finding great deals and making all of you guys money.

• 2:50:50David Weisburd?

  Well, I think, I think this has been an incredible interview, and really appreciate your time. This has been, by far, I think, by order of magnitude, the longest interview I've done. I was strategizing on how to make this 30 to 45 minutes, and I epically failed. But it's to the audience's benefit and to my own benefit as well. And look forward to being at the conference in Singapore, and also always happy to host you in New York City or Miami.

• 2:51:19Speaker 00

  Great. Thank you very much.

• 2:51:20David Weisburd?

  Thank you, Balaji. Thanks for listening to my conversation. If you enjoyed this episode, please share with a friend. This helps us grow. Also provides the very best feedback when we review the episode's analytics. Thank you for your support.