#94 Chamath Palihapitiya: Understanding Yourself

The Founder and CEO of Social Capital Chamath Palihapitiya sits down with Shane Parrish to chat about what it means to be an observer of the present, how to think in first principles, the psychology of successful investing, his thoughts on the best public company CEO’s and much more. -- Want even more? Members get early access, hand-edited transcripts, member-only episodes, and so much more. Learn more here: https://fs.blog/membership/ Every Sunday our Brain Food newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/ Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Speaker 00

  Being happy personally is the pathway to help everything else make sense. And that is around mental health. And I think the key unlock for mental health is just finding a resource to talk to. And when you first start talking, it's going to be just kind of blathering bullshit. And it's going to be imprecise and it's going to be super awkward. And you're going to feel like, what is this? And then over time, it's like anything, like when you start to get good at it, it's really good.

• 0:47Shane Parrish?

  Welcome to the Knowledge Project Podcast. This is Shane Parrish. This podcast and our website, fs.blog, help sharpen your mind by mastering the best of what other people have already figured out. If you're hearing this, you're not currently a supporting member and are missing out. If you'd like access to ad-free versions of the show, early access to full episodes, transcripts, and so much more, you'll have to subscribe at fs.blog/podcast. There you'll find our private RSS feed and other subscriber-only content. Check out the show notes for a link. My guest today is Chamath Palihapitiya. Chamath is the founder of Social Capital, part owner of the Golden State Warriors, and so much more. We talk about what it means to be an observer of the present, how to think in first principles,

• 1:29Shane Parrish?

  the behavior and psychology of successful investing, and so much more, including the best public company CEOs. Get comfortable. It's time to listen and learn.

• 1:45Shane Parrish?

  Chamath, man, I am so excited to talk to you. It's been a long time coming.

• 1:51Speaker 00

  It has been. We've tried to organize, I think, for many months, maybe if not a year. And I just, I think both of our schedules were a little tight. And but then I had to reschedule it once or twice. So I'm sorry about that.

• 2:02Shane Parrish?

  Oh, no worries. Originally, we were supposed to do it in Toronto and then all the world changed.

• 2:07Speaker 00

  The world has changed.

• 2:09Shane Parrish?

  Hey, every time I look around, you're on the news, man. What's up with that?

• 2:13Speaker 00

  Well, I think that it's sometimes valuable when you can actually just like speak the truth. Not sometimes, all the time. And I think that most people are pretty guarded because they have to be. I don't think they're necessarily always in a position to be as candid as they want to be. And I think that in moments of sort of just clarity, I have, you know, constantly just tried to say what I feel. And I think that that resonates with a lot of people.

• 2:40Shane Parrish?

  Oh, it definitely does. I tweeted out today that you were coming on the show. And I think we had like over a thousand replies and people, everything from like, asking what I should do with my life to how should I think about the future to what should I invest in? You're like everybody's guru, man.

• 2:56Speaker 00

  I mean, I think Naval is the guru, but I'm the brown brother from another brother. I think that I think that I've gone through a lot of, you know, kind of like ordinary people shit. And I think I talk about it in really simple, plain spoken terms. And I think that that's really useful to people because it demystifies a lot of things and just makes it kind of more normal. And, you know, that's been a real theme of my life is just realizing that a lot of the things that I went through is normal. And feeling part of a pack is really helpful, actually. It's been really helpful for me. Because it's helped kind of like regulate my sense of self-worth and lift it up in moments where I felt pretty crappy about myself. And that's just resulted in better outcomes.

• 3:41Speaker 00

  So I think like a lot of what I talk about, I think folks relate to because I speak to it from through that lens. And

• 3:50Speaker 00

  Yeah, I just think that's a really good place to be, actually. It's taken me a long time to get to that place, but it's a good place to be.

• 3:56Shane Parrish?

  Can we double click on that for a second? I mean, you've got an interesting background, right? You worked at AOL, you went to Facebook, you were a billionaire at thirty two. You were a sports team. From the outside looking in, you had the most amazing life. But on the inside looking out, you didn't feel that way.

• 4:12Speaker 00

  Yeah. I think a lot of people have to do things that are motivated by other people's perceptions of them and also motivated by the pressure that's exerted by the people that are very closely around you. That sometimes can be your friends, it can be your family. And I was very much of that category. So I was kind of just, you know, meandering through life. Now, that meandering turned out to have really good outcomes in some respects. The problem was that all it was doing was just sort of like, you know, avoiding the inevitable. And the inevitable is this moment that I think everybody goes through where they're asking themselves whether they've lived a completely fulfilling life the way that they defined it.

• 4:57Speaker 00

  You know, what I'll say, Shane, is that I think that sort of, not even necessarily millennials, but, you know, zoomers underneath them, they're the most honest of any generation about what makes them happy. And you see that in, you know, the way that they dress, the music that they listen to, the media that they consume, the way that they, you know, sort of like push back on kind of like a more corporate kind of, you know, tone and things. And they're willing to be happy in a way that they've defined for themselves. In my generation, I'm forty four, that's not how it goes down. The way that it goes down is you go to the best school you can. You take on as much debt as you need to. You try to get the most credential job after college.

• 5:42Speaker 00

  You know, you kind of just check the box. You, you know, find, you know, a reasonable person that you marry. You know, you have two point five kids, you buy a house in the suburbs, you save for retirement. And I just think for a lot of people, they've realized that that's not the path of maximum fulfillment. And that being happy actually generates also better outcomes. You know, you have better artists, you have better engineers, you have better everything if people are ultimately just happier. And I think that generation of people know that a lot more inherently than people in my generation or boomers in the generation above me do.

• 6:19Shane Parrish?

  What did you come out of that with? How did you define happiness? The end of this, you sort of went through this journey.

• 6:27Speaker 00

  There's a great article, it's not, sorry, it's not even an article. It's the obituary of Steve Jobs written by his sister. And she wrote it, Mona Simpson, she wrote it in the New York Times upon his death. And there's just a paragraph in there. But I think the phrase that he said was like, sort of like, oh, wow. And he just kept repeating, oh, wow, as he was passing away.

• 6:53Speaker 00

  And I've interpreted what that may have meant. I have no idea, obviously, because he's not around to tell us that that's what happened. But I have this idea, this sensation that he sees his family. He thinks about the totality of his life lived. And he was happy. But think of what that happiness was able to create, not just for his family, but for the entire world. And so I do think that, you know, on the one hand, you could say, you know, he was fanatical. He was a tyrant, he was hard to work for, you know, et cetera, et cetera. But on the other hand, maybe there's a different way of saying it, which is that he was very content. He had a family that loved him. He had a family that he loved. And as a result of that happiness, he was able to leave that sanctuary,

• 7:36Speaker 00

  go to work and take that happiness and channel it into doing amazing things for other people. That's a pretty cool idea. And so I think that what I would like to live through is that version of the truth for me. That, oh, wow, oh, wow, oh, wow, idea. And how do I define it? And I didn't even know that that should be a way to live my life earlier on. And, you know, when you're talking to me today as a, you know, forty-four-year-old guy, is I've learned that there are things that give me these, oh, wow sensations that I just absolutely love. I'll just name a couple. And they're, you know, even today, this happened.

• 8:18Speaker 00

  I, you know, I'm working a lot these days, just really kind of grinding on a lot of stuff. And, you know, these are high-pressure decisions that I'm making a lot of the time for me. And so they consume a lot of my mental mind with and bandwidth. And it's really exhausting and there's pressure. And, you know, sometimes, honestly, I just feel like, like I just need to just like cry. Like I'm just like, I feel really stressed out in these moments. And, you know, I'm fighting uphill, I feel like.

• 8:47Speaker 00

  And today I was driving to the office and I was having one of those moments and I turned around and I went back home. And I went to see each of my four children and I kissed them and I went to see my partner and I kissed her and um. I felt just this moment of just sheer happiness like. I felt like that's what I have accomplished. I built a sanctuary for my family filled with love. And then I got into the car and I came to the office and uh that's an oh wow moment. Every summer now I have these oh wow moments because um my partner's Italian and um. I you know had never really spent a lot of time in Europe, but in the last four years I spent obviously a lot of time in the summers and.

• 9:32Speaker 00

  My children and I have fallen in love with Italians. Uh I mean and uh what have we learned? You know. We've learned to like love the food, love the culture, the boisterousness, the loudness, the love, the intensity, the energy. I think about it now and I just uh it's like wow, uh I love it. So I I've learned to. Find things that I really appreciate. A a third one and I'll just I'll stop at that is I have a group of friends and we play poker together. And if I think about how happy it makes me, there's a thing that we do, which is we show up at four o'clock. We play until about six thirty and then we have a dinner together, like a family dinner and a long table. And then we go back and we play for a few more hours. That stopped.

• 10:16Speaker 00

  When the coronavirus pandemic started because we couldn't come together. Um we've we've been able to get a bunch of rapid tests. And so for the first time this Saturday, we're gonna come together and play. And I think about this and I'm just like, oh wow, like I cannot wait to see them. So. You know, and I think about this, Shane, none of that is about CNBC or a a good, successful company. Those are important and those are good demarcations of progress. Um but those aren't my oh wow moments anymore. And when I put too much pressure. And value in those being the oh how oh wow moments, I got distracted and I became unhappy. And as long as I stay centered on these other things, I have so much more energy to come and work on those.

• 11:01Speaker 00

  First order set of you know, business priorities and get things done and I and I and I'm trying to. Achieve something that is at the very early stages, which is not done yet.

• 11:10Shane Parrish?

  Yeah, I want to talk about that, but before we get there, there's a couple of rabbit holes that I sort of want to explore there.

• 11:16Speaker 02

  How about a latte?

• 11:17Shane Parrish?

  Maybe dark roast?

• 11:18Speaker 02

  Vanilla?

• 11:19Shane Parrish?

  Caramel?

• 11:19Speaker 02

  Blueberry?

• 11:20Speaker 03

  You could get them to agree on one flavor, or give everyone what they want. With Keurig, there's over 500 K-Cup pie varieties of fresh, flavorful coffee. No effort, no grind, no settling. Great coffee without the grind. Keurig.

• 11:43Speaker 04

  There is so much NFL on ESPN right now. Monday Night Football, plus pregame and postgame. NFL Live, NFL Primetime. Everything you need to stay on top of every game, every week. Unbelievable. And now, NFL Network is on the ESPN app. More football, more coverage, more ways to watch. Football's on, all season long, on ESPN and streaming on the ESPN app.

• 12:12Shane Parrish?

  You mentioned Zoomers were willing to speak truth, their truth, pretty easily. And it was harder for our generation. But you're also, you know, you're full of controversy sometimes. It doesn't strike me that you have a problem speaking your truth, or you've ever not said what you felt.

• 12:32Speaker 00

  Well, it's not that I've always not. I think that I learned to lie at a very young age, because lying, I think, is one of the most simple coping mechanisms that we all have. And lying manifests in all kinds of very subtle corrosive ways. You know, when I was growing up, I had a, I have a, I have a family who fundamentally, we all love each other. But it's a very complicated, contorted form of love, because it's punctuated with, you know, some mental health issues, you know, alcoholism, you know, depression, poverty. And so, you know, when I was a young person, the way that I coped is to lie.

• 13:16Speaker 00

  "Are you okay?" "I'm fine." "Did you do that?" "I didn't do that." You know, "Where were you?" "Nowhere." "How did you do on that test?" "Fine." I learned to be evasive. And what that created was a deep-seated pattern of lying and avoidance. And you know, people can say maybe lying is not what that is, but at the basic, you know, kind of just to simplify it, you know, I learned to lie, uh, to cope. I think that at some point, um, I think almost sort of at a very, you know, physiological, biological level, that's not what any of us want to be. And so I think that I had almost this form of organ rejection.

• 13:57Speaker 00

  And so I had to almost, you know, go to the other end of the spectrum, almost in a way of atoning for all of the years of lies and all of the accumulated mistruths or half-truths or evasiveness, whether that was in my personal life or my business life. And the first moment of clarity around that was actually when I went to work at Facebook, because for the first time I was unbelievably candid. And it was such a cathartic release, because I could be, you know, almost curmudgeonly in my candor. Um, so much so that at points probably I was a bit of a caricature, because, you know, there was this guy, me, who seemed very, you know, almost acerbic at times, um, just a little rough around the edges.

• 14:42Speaker 00

  And I took it to an extreme there. And then in the early parts of, of social capital, I actually think I reverted. And, uh, I was lying more again, because I was, I was filled with a new level and a new kind of insecurity around, you know, I felt like an imposter in venture capital. I felt like, you know, I didn't earn the right to start a fund. I didn't, and I gave myself all of these hurdles that I put in front of me mentally. And my solution was to, you know, try to be evasive and to lie my way through them. And then in two thousand sixteen and seventeen, again, I think I had an even much more cathartic form of, uh, organ rejection grounded, and I had to sort of recalibrate, uh, the life around me so that I could stop lying. And, um,

• 15:27Speaker 00

  I think in that, I think you you're finding a person that tries to be truthful as often as as I can. And oftentimes, what that means is saying the uncomfortable thing, but it's the thing that needs to be said. And I think that there's a lot of people who appreciate that because they themselves feel like they're sometimes caught in positions where they have to be evasive or they have to lie in order to cope. And, you know, if they themselves aren't in a position to do it, I think they appreciate when others can be. And I think that a lot of people have a very positive reaction to that. And I think that's in part what what I think people get a sensation when they interact with me sometimes. So I'm not sure I'm necessarily controversial.

• 16:08Speaker 00

  I do think that I'm behaving in a way that I think a lot of folks would love to be in a position to do as well.

• 16:16Shane Parrish?

  Right.

• 16:17Speaker 00

  I I don't think it's actually correlated to money. I think that it's more correlated to self-worth and the comfort that you have with yourself, the limitations that you have, and then the ability to love yourself despite those limitations. That's a process that too few of us start. A- and it's, like I said, it's not a a money thing. It's a it's a happiness thing. So, closing the loop on how you started, I think that, you know, Zoomers in this interesting way see all these generations, you know, of folks that are older than them, you know, thirty-year-olds, forty-year-olds, fifty-year-olds, sixty-year-olds,

• 16:59Speaker 00

  seventy-year-olds, eighty-year-olds, and we live long enough now where they see multiple generations of evasiveness and unhappiness, really.

• 17:08Shane Parrish?

  Yeah, yeah.

• 17:09Speaker 00

  Uh, and and they see similarities in all of us that they're smart enough to decide that they don't want to exhibit. Because, you know, it would it would be one thing, Shane, if you saw an eighty-year-old. Well, you could say, oh, I'm not going to be like that person. But then you see a seventy-year-old and you're like, wow, that's just a junior version of the eighty-year-old. And then you're a sixty-year-old and you see that, and a fifty-year-old. And because we're all alive, you know, the twenty-year-old sees eight generations of people ahead of them, and they're like, wait a minute, something here is wrong. And they're smart enough to say, what are the commonalities of all these folks? And they choose to be different.

• 17:45Shane Parrish?

  Do you still deal with imposter syndrome?

• 17:47Speaker 00

  All the time.

• 17:48Shane Parrish?

  What do you tell yourself in those moments?

• 17:50Speaker 00

  First of all, I I talked to my partner. She has been my spiritual partner, my kind of like co-pilot. Because she really has an enormous level of empathy and care around her own mental health and, you know, uh, the mental health of our family. So we talk a lot, you know, and we talk about nonsense and serious things and everything in between, but we just talk. And uh, I've found that as a man, I was taught that talking is weak. Uh, I also found that as a immigrant man, I was taught that talking about emotions was doubly weak.

• 18:34Speaker 00

  And then I was, you know, sort of taught as kind of, you know, like in this industry that, um, you know, talking is awkward. You put all these things together and, you know, the biggest thing that I found that has helped me is just talking and being open. And it starts with her. My kids, I'm really open and, you know, transparent with my kids. They think I'm a, you know, basically a fucking loser. Uh, I think that that's really cool. Um, you know, they they just, they just roll their eyes every time I start talking because it's like some stupid diatribe, but all of these things helped me stay really connected to the goal of being truthful.

• 19:14Speaker 00

  That helps me stay connected to the goal of being happy to celebrate these oh wow kind of moments in my life. That helps me, but to be honest with you, that has to be an active process for me. Because the that thing that you just said, Jane, is overpowering for me. The the sense of being an imposter is overpowering. And it's like this dragon that I've been trying to slay my whole life and I haven't been able to. And the more, I don't even want to say success, but yeah, I guess like the more like notches up the ladder I go, the more severe it feels, um, and the harder it is for me to fight it back.

• 19:55Speaker 00

  So, you know, I had this conversation with Matt yesterday and, you know, I said to her like, yeah, I feel like this is why so many people just give up because it's easier to do it than to fight and to solve the real root cause of what allows you to get to the next level of success. That's really why, you know, you have to look at folks that have really overcome the stuff in however way they've done it and achieved a level of success and really celebrate them because they're they have a level of mental fortitude that is exceptional. But yeah, I'm, I'm, I'm dealing with it right now, this imposter syndrome and I, I, it's, I think it'll be a battle I fight my whole life. You know, some people, other people have different battles, but that, that is definitely mine.

• 20:35Shane Parrish?

  What keeps you going? I mean, you could just fold up, walk away, live an amazing life, you and generations of your, your heirs. What, what keeps you sort of pushing through this, confronting this dragon?

• 20:48Speaker 00

  I, I do think that I get a level of enjoyment from it, you know, this idea of like, uh, you know, can I beat it? I like how I feel when I'm more connected to the things that make me happy. I like how I feel when I think like, when I think that I am doing things that the younger version of me would be proud of. Not the older version. It's, it's interesting. Like a lot of people think like, you know, like at your deathbed. And I think the exact opposite. I think like, you know, with the 22 year old self, you know, interacting with this person, you know, with the 16 year old person, like think, wow, that guy is, uh, that's a legit human being. Like he's, you know,

• 21:29Speaker 00

  he's putting himself out there trying. So I'm motivated to keep kind of grinding and getting better, just seeing what the upper bound is.

• 21:37Shane Parrish?

  It's interesting. A lot, a lot of people are like, oh, if I just had like $10 million or something, I'd just walk away. And I'm like, well, that's probably the reason you might never have $10 million, right? Because the people that achieve that keep pushing and keep struggling and can't actually walk away in some way.

• 21:53Speaker 00

  I think that money accelerates the point at which you can declare yourself free.

• 22:01Speaker 00

  And feel emancipated, like I do think that money is a, it liberates people, it gives them freedom, but going back to what we were saying before, it doesn't make you happier. And if you are ill-equipped to then run that race, the happiness race, um, and you do it with money, it's destructive, it's, it's more destructive than if you do it without money. Because, you know, if you're unhappy and you're unconstructively trying to find your happiness and you have cash, you know, you'll end up, you know, gambling broke, dead high, you know, like i- it's all the typical cliches, and they, they played themselves out over, you

• 22:44Speaker 00

  know, many generations and they'll continue to do so. Yeah, I, I think that like, this is why I think people can separate these two paths and actually work on them concurrently. One is the path to freedom and the second is the path to happiness. I think the path to happiness is an internal process, but the path to freedom, that I can help with, you know, because uh, I think I've learned an accumulated amount of knowledge here and uh, it's readily transferable. The happiness path is not because e- each of us have our own lived experience, which is so different from everybody else's. And so all you can do is kind of listen to other folks and decide you're going to start for yourself, uh, but the answers are non-obvious and it's all iteration.

• 23:29Speaker 00

  But the path to freedom is easily copied and I think that, that, that's sort of, sort of what, uh, what motivates me as well, this idea that I can sort of, you know, all that accumulated knowledge base, I can just hand it off to folks and if they can benefit from it, that would be great.

• 23:45Shane Parrish?

  What is the path to freedom?

• 23:48Speaker 00

  Um, well, sort of financial freedom. So I think, I think, um, I think that if more people believe that they could be economically self-sufficient, I think that it would solve a lot of the societal implications of inequity. You know, today, we have kind of like this very polarized body politic really, where on one hand, there are folks that um, have over sort of indexed on.

• 24:23Speaker 00

  What I would call absolute freedom and intent, but it has no plan. And on the other side, it's sort of over indexed on an anti-state with no plan. Both of them are very much the same in that neither of them have a credible plan. And in the middle, there's a plurality of people that are just exhausted. And that's a, that's a perfect boundary condition for, you know, a lot of the inequity that, that exists today in society and a lot of the frustration that people feel as a result of it. So to me, if we can give people a more reasonable roadmap where they can execute it, they can

• 25:06Speaker 00

  learn, and they can have a community of other like-minded folks that can put in the time and the work and help each other over, you know, five, 10, 15, 20 years to compound capital, no matter how small, but just to start. I think you'd be surprised at how many people are intellectually capable of achieving financial freedom on their own. And in that, I think that there's, um, there's a path out of this kind of like very depressing kind of state that we're in. That that I think is the opportunity is. So, you know, I'll give you an example. In 2015, I think we started to really pay attention to Tesla and we bought these convertible

• 25:49Speaker 00

  bonds and, you know, we thought they were really great, you know, risk adjusted because, you know, we weren't sure whether the shorts were going to win and drive the company into the ground, but we were really sure we wanted to bet on Elon. Long story short, it all kind of worked out and now you look back and you're like, my gosh, this is incredible. But there was so much knowledge that helped us feel like we were making the right decision that existed in this long tail of people who took it upon themselves to build a community of people that wanted to understand the company, not necessarily just to be a blind cheerleader. But they would really go and double click and they were doing a level of work that was incredible.

• 26:32Speaker 00

  And I thought that was so interesting because I thought to myself, you know, typically what would happen is you would put your money into a bank account, you would open up a brokerage account. Maybe you would get access to some research from one of the banks. You would read it, or maybe an advisor would recommend something to you. Or maybe you'd end up on some random community and read some random forum and buy something. But instead, these were like physicists and, you know, chemists and, you know, financial people all coming together to understand these things. They were writing research notes, they were putting out, you know, YouTube video clips. And if you took the time to understand it, that community was helping you understand something really important that was happening in the world.

• 27:17Speaker 00

  And you could have financially participated because you could just go and buy that. Uh, and it would have worked. Now let's extrapolate that idea. Forget Tesla for a second. There's this incredible thing that's happening, which is that we are starting to financialize everything. Right? We're starting to create financial increments attached to anything you could imagine. Meaning, you know, it used to be the case that you would only buy sneakers. Now you buy and sell sneakers and, you know, the marketplace that, that, that is the leader in that, you know, GOAT. Um, today just announced that they raised, you know, $200 million at an almost $2 billion valuation. So is it a, is it an e-commerce marketplace?

• 28:02Speaker 00

  Maybe. Uh, I look at it as a financial market. They fractionalized shoes essentially. Um, and they fractionalized, uh, and they wrapped a financial transaction layer around taste and tastemaking. You know, there's, there's a company called Pike, there's a company called Rally Road, all these folks, you know, are, you know, uh, fractionalizing ownership of all kinds of things. There's crypto, obviously. There's stocks. There's, you know, specific bonds. So the point is the surface area, the investable universe is growing. Some of it is still very regulated, some of it is really unregulated. But the trend is obvious. So we're going to financialize everything.

• 28:44Speaker 00

  And we're gonna fractionalize ownership of probably everything. And so what there's an opportunity now to do is to curate and cultivate a community around that to help people. And that's really what I would like to do. I think that it would be a really useful thing to level the playing field so that whether you're, you know, mom and pop schoolteacher with five or 10K, you're a new grad with, you know, a thousand K that they had saved up, or whether you're an accredited investor, I don't judge. I would like to treat them all equally. And I would like to say, look, I've made some mistakes, I've had some winners, I've really learned how to allocate capital, here's how I see the world, and here are ways in

• 29:27Speaker 00

  which I think that you could participate beside me as my partner, and if you want to, you can. And I'll always put, you know, my money on the line so that you know that I am not trying to surreptitiously become an agent, I am a principal. And I think that if we can organize that in some useful way, I think that we can help a lot of people achieve freedom. And if they're concurrently working on happiness, I think you'll really fuck some shit up and fix some stuff. It'd be really good.

• 30:01Shane Parrish?

  You said in a previous, I think, interview or maybe on Twitter, that your job was to be an observer of the present. I was wondering if you can double-click on that.

• 30:10Speaker 00

  Yeah, I'll give you something that may, you know, drive your listeners and viewers crazy. Let's look at the 2020 election from first principles. Let's really look at it from first principles. Well, let's think about foreign policy. And foreign policy, I think, are really four things, but it really comes down to three things. So number one are sort of like nefarious state actors, right? Let's just use an example illustratively, Russia. I think most people feel like, you know, Russia is pretty sketchy and, you know, they're generally quote-unquote bad. Okay, well, let's... Let's let's think about another state actor, you know, North Korea.

• 30:52Speaker 00

  I don't think you're gonna see a lot of people jump up on either side of the aisle supporting North Korea.

• 30:58Speaker 00

  Let's think about China. I think that we've all realized that, you know, the bloom is off the road, off the rose and that, you know, we've allowed globalization, a strain of globalization that has put America strategically on our back heels, and that doesn't make any sense. You know, we may not have access to our own semiconductors. We don't have access to critical, you know, rare earth metals to drive electrification. We, you know, have outsourced critical parts of our healthcare infrastructure to folks that, you know, can dictate whether we can take care of our own people. That that doesn't make any sense, right? Everybody believes that now. Let's take the Middle East. You know, the Middle East was incredibly critical because, you know, a handful of Western countries coming out of World War II essentially

• 31:42Speaker 00

  divvied up and and built some artificial maps essentially to make sure that we had access to this precious resource, oil. Well, you know, in 2020, we now have, you know, a 20 or 30 year shot clock where we've decided that we're we're gonna stop burning oil. You know, we've essentially already stopped burning coal and it's just a matter of time till we stop burning fossil fuels. Well, at that point, the strategic relevance of the Middle East decays significantly. So think about that now. So from a foreign policy perspective, both sides basically see the world in the exact same way, Democrats and Republicans. They both hate Russia, they both hate China, and they both think that energy independence means that the Middle East won't matter. Wow, that's observing the present. Let's take a different example. Think about monetary and fiscal policy.

• 32:28Speaker 00

  Whether we like it or not, we used to be in a world where fiscal policy and monetary policy were separate. Sometimes they would be along the same lines, but they were separate bodies acting independently.

• 32:43Speaker 00

  Now, the Treasury and the Fed are inexorably intertwined. And it's not just in the United States. If you look at this problem in, you know, Western democracies in Europe, it's the same situation. This is crazy, right? We have inexorably brought together fiscal and monetary policy. That's just the facts. Now, let's look at spending. Whether you call it the Green New Deal on the left, or the infrastructure bill on the right, we are going to spend in the next decade, tens of trillions of dollars, to

• 33:20Speaker 00

  try to dig ourselves out of this unemployment and GDP hole that has been exacerbated by the coronavirus pandemic. That's gonna happen. Neither candidate will come to the American people and say, "We want to spend a trillion dollars on, you know, digging up coal from the ground and burning it." Coal-fired power plants. It's not gonna happen. One's gonna call it a Green New Deal, the other person's gonna call it infrastructure spending, but we're going to, you know, radically change the face of how America operates as a functional economy, okay? And it's relatively predictable, in my opinion, how they're gonna spend that money.

• 34:03Speaker 00

  So, if I'm a keen observer of the present, if I would put all of that together, and I'll say something very controversial, which is, we have an election that is now actually of style and not of substance. Now, that doesn't mean it's not important, but substantively, the positions on critical matters of foreign policy, domestic monetary and fiscal policy, and spending will roughly be plus or minus the same. It takes a lot of mental fortitude to think through it and look at it that way, and not let one's own biases jump in, uh, because it will tear you into, you know, into a thousand different mental pieces.

• 34:46Speaker 00

  But that's what I mean by being a keen observer of the present. So, okay, what does this election come down to? I think it comes down to political correctness versus cancel culture.

• 34:58Speaker 00

  If I had to kind of summarize it in a nutshell, that's what it is. And I think that people will vote on November 3rd about which outcome they want. Because substantively in action, the spending patterns, the policy decisions will roughly be the same. And again, see, it's such a controversial thing, and I think people can just go absolutely crazy to hear somebody say that.

• 35:24Shane Parrish?

  They're gonna go crazy when I don't ask you who you predict will win. But what I really wanna know is, how do you take that? And then what do you do with that in the future? You said it, okay, well, this is gonna be a predictable path of spending. How do you, as an investor, then take that knowledge?

• 35:40Speaker 00

  That's a fabulous question. So this goes back to what I'm trying to do, which is if I can observe the present in a reasonably unemotional and detached way, to your point, I can put a plan together. And when I have a plan, you know, that plan is specifically for me oriented around how I'm going to make sure that the ideas that I wanna see exist in the world win. And this is gonna sound, maybe turn people off the way I say it, but at my level of capital, that's what I can do. I can vote with my dollars to really make things come to life. And I think that that, I really take that job seriously. And I aim to do that now, which is like, okay, I'm learning how to be happy.

• 36:25Speaker 00

  You know, I've achieved a level of freedom, but now it's about change. And I wanna implement my form of change, and I wanna see that in the world. So I'm trying to figure out how my ideas have a better chance of succeeding. And then I wanna make sure that I implement a plan to make that happen. And then, that adds to my knowledge base. And then my hope is to share that with other people so that they can then learn from that as they will. And maybe they can, they can also do their version of the, of the same thing. So, you know, if I was really, I was six years old in 1980, no, four years old in 1980. But imagine I was 34 years old or 44 years old. I would have woken up and I would have said, read the paper, doesn't matter how much money I have.

• 37:07Speaker 00

  Okay, if I knew then what I know now, I would wake up in 1980 and say, "Oh, my God, the 30-year rate is at, you know, 15, 16% interest rate." Man, this thing, you know, if I had to take a guess, I really believe in the productivity and the ingenuity of America, I'm just gonna be, uh, I'm gonna take a guess that fifteen percent goes to zero before fifteen percent goes to fifty percent, and you would have been really right. And eighties, nineties, the two thousands, and now the two thousand and tens, had you just been levered long equities, right? Yeah, yeah, yeah. You would have made a fortune, and you would have been right, and you would have achieved freedom. It doesn't matter whether you started with a dollar, ten dollars, a thousand, ten thousand,

• 37:52Speaker 00

  ten million, you would have been unbelievably rich. And in many ways, you know, Buffett's simplicity, Warren's elegance of his mental model, and I'm not trying to diminish his skill by saying this, is, is a keen observer of this most important high-level order idea, which is that rates are going to zero, productivity is going to go up, ingenuity, the resourcefulness of America goes up, I want to be long that, I'm long equities, it would have worked. Now, Shane, where are we? Well, we're at rates at zero, right? So, okay, so let's take our all cumulative knowledge and look at today, let's just be a keen observer of the present. Rates are at zero, where are they gonna go?

• 38:36Speaker 00

  Are they gonna go to negative five or plus five? Well, now, the key question is, well, probably on the margin, you, your instinctive reaction will be plus five, and I would say, why? I mean, what, why is zero some artificial number, where everything starts and stops? This is not like temperature, it's not like we're saying it's absolute zero, right? It's not like there is no colder temperature than, you know, two hundred and whatever Kelvin, two sixty something Kelvin, or whatever it is, it's just zero, it's like zero degrees Celsius. Can you have negative one degrees Celsius? Of course, ask anybody that lives in the Midwest, uh, you know, or the East Coast. So, could rates go negative? Yeah. Could rates go positive?

• 39:20Speaker 00

  Well, I don't know, if I'm observing the present, what I would say is, you know, the overwhelming majority of the value in the last ten years has been about educating billions of people all around the world that things are roughly deflationary, meaning, as long as you wait tomorrow and delay gratification, somebody will show up and give you more for less, right? You know, I had a, I don't know, I'm making up a name of a company. I had a storage account on drive.com. All of a sudden Dropbox showed up and said, more for less. And then I was using Dropbox for a while and then Google Drive showed up and said, even more for even less.

• 40:01Speaker 00

  And I'm pretty sure that the next person that figures out how to do storage and scale will come up with even, even more for even, even less. Facebook did the same thing, you know, Spotify does the same thing, Netflix does the same thing. All these things that create so much value are training us psychologically to behave in deflationary ways, to delay gratification slightly, or to make the cost of switching so low that even if you don't want to delay gratification, you can just change your mind later and hop to the next thing that gives you more for less. So it is very conceivable that we are in a deflationary posture for a long time. Now, it's also possible that inflation could go up.

• 40:43Speaker 00

  So my kind of view is, well, I need to answer this problem in a different way. And the way that I would try to answer this problem is to say to myself, well, what sectors of the economy will benefit irrespective of whether we go to negative five or plus five? Because I don't know what the answer to that question is. It'll be obvious in hindsight, but it's not obvious today. And so I construct an allocation for myself to try to solve for that. Well, people are going to be buying things, so, you know, they're probably going to be buying things online, so, you know, e-commerce consumption, that's a big category that will win whether rates are minus five or plus five. People need to care about healthcare, right?

• 41:26Speaker 00

  So they're going to consume things and there's probably going to be pressure over time to do, you know, better and better things and more useful things, just because, you know, we can't keep spending the way we are with the outcomes that we're getting, right? Okay, so that's the second category.

• 41:46Speaker 02

  How about a latte?

• 41:48Speaker 03

  Maybe dark roast?

• 41:49Speaker 02

  Vanilla?

• 41:50Speaker 03

  Caramel?

• 41:50Speaker 02

  Blueberry?

• 41:51Speaker 03

  You could get them to agree on one flavor or give everyone what they want. With Keurig, there's over 500 K-Cup pie varieties of fresh, flavorful coffee. No effort, no grind, no settling. Great coffee without the grind. Keurig.

• 42:14Speaker 04

  There is so much NFL on ESPN right now. Monday Night Football, plus pregame and postgame. NFL Live, NFL Primetime. Everything you need to stay on top of every game, every week. Unbelievable. And now, NFL Network is on the ESPN app. More football, more coverage, more ways to watch. Football's on, all season long, on ESPN and streaming on the ESPN app.

• 42:43Speaker 00

  You know, we probably want to have a reasonable way of equipping ourselves with skills and education. So that's another big category. You know, we're probably going to need to have clean, sustainable energy. That's another category. We're probably going to want to eat in ways that are more constructively useful for us. That's another category. We're probably going to want to hedge just the chance that none of us knows what we're doing. So, you know, you need some kind of like alternative asset category. That's another thing. So you can kind of go down the line, you know, whether you use Maslow's hierarchy or something else as a jumping off point, and kind of say, look, the answers, the high-level answer, the framework is obvious.

• 43:28Speaker 00

  Healthcare, education, climate change, fintech, blah, blah, blah. And then you need to fill in an allocation. Then you need to figure out the mix of, you know, early stage versus late stage, or public versus, you know, some of these other things, and then you can construct an answer. So, you know, the way that I answer this is to say, well, I'm basically going to be long growth. Because whether rates are minus five or plus five, the thing that overcomes all of that noise is fast growth. And CEOs that can invest all the money they make today for the future, simply because

• 44:07Speaker 00

  I can now lazily let that person work on my behalf, because that's less of a problem that I have. If you, as a CEO, Shane, if I was an investor in your company, and you said, "Chamath, I generate 30% free cash flow and I'm going to give you a dividend," I would say, "Shane, fuck you." I don't want that money.

• 44:28Shane Parrish?

  Keep that shit.

• 44:28Speaker 00

  What am I supposed to do with it? Reinvest it, grow faster, please. I mean, one of the most incredible insights that that we figured out in twenty fourteen, I sold all Facebook, all my shares.

• 44:41Shane Parrish?

  You went right into Amazon, didn't you?

• 44:44Speaker 00

  But the way we underwrote that investment, there's a guy that was working on our team who now runs a hedge fund, young guy, brilliant guy, who randomly emailed me and I ended up hiring, emailing inbox at socialcapital.com, this kid, Saki Adubu, great, great guy, he's not a kid anymore, he was a kid then. And we worked on this analysis and basically, you know, he said to me, "I think that Bezos is a better capital allocator than Buffett." And I was like, "What the hell are you talking about?" And we constructed this really elegant chart, which showed basically the P and L of Amazon, and it looked at every expense line. And he had taken every single expense line, created a product around it, and made it a revenue line.

• 45:29Speaker 00

  And I thought, "Man, this guy is a genius." And by the way, that deck is floating around, so you can see this chart out there in the wild, but that's capital allocation, that's really skillful. So you want that, you want you want a guy that's basically like, "Listen, guys, I got this, we're gonna generate a couple billion dollars, I'm gonna put all of it back in the ground for you, and it's gonna grow really well, and just trust me." And I think that those are the real high-quality folks you wanna get behind. So basically, my solution is you gotta be long growth, higher growth, the better, in the areas that matter for people, and I think that, you know, in ten years from now, that'll be a playbook that really works. By the way, that sounds kind of like he's not saying anything. I think it is, he's saying something, because like, you know, the historical model of how

• 46:13Speaker 00

  you would get freedom is, you know, sixty percent equities, forty percent bonds, you know, the sixty percent, you would say, ah, you know, you'd be long ETFs maybe? Okay, well, you know, long ETF is basically long FAANG, and I think that you want a little bit more uncorrelated exposure than just FAANG. Yeah, that's that's kind of like what I'm working through right now, is trying to really refine an approach that I think can work for the next decade, you know, fifteen, twenty years, and then share with Google.

• 46:41Shane Parrish?

  So it sounds like part of your process is to go through this and figure out what's not changing and try to allocate there. Do you also look at what you where you see massive change and how you could possibly take advantage of that, or is that a category you just don't evaluate?

• 46:56Speaker 00

  Not in that language. I kind of tend to think about things that are just, will they be more important? And if they're going to be more important, how can we accelerate the right outcomes? I think climate change is a really good example of that, where it doesn't matter whether you believe in climate change or not. I think that what we know to be true, we don't like, which is that, you know, the places we used to ski at, we can't ski at anymore. The places we used to go and bathe on the beach may disappear or not exist. And so if nothing else, just because of our own selfish desire to be happy, we should probably want to better control, at least to the extent that we can,

• 47:38Speaker 00

  our impact on, you know, taking our own happiness away. So, you know, I don't think people in the Midwest want, you know, hurricane season. And if there are experiments that we can run, where we can observe whether they help, we should run them. And so, you know, if you have all these gigatons of carbon being emitted, and you can run an experiment that takes them out, we should probably do it. And we'll know conclusively whether, you know, it'll change hurricane season. So why not just run the experiment in an unemotional detached way? But like, you know, if you view climate change in that lens,

• 48:18Speaker 00

  it's a multi-decade, multi-deca-trillion dollar opportunity. The world's first trillionaire will be somebody in climate change.

• 48:28Shane Parrish?

  Oh, that's interesting. Well, as you were saying that, I was sort of also thinking, there's things that we value today that are going to be massively under or overvalued in the future. You know, commercial real estate strikes me as something that maybe, maybe that's not going to have the same future as past. What do you think of that? And what are those industries for you?

• 48:50Speaker 00

  Yeah, I'll say something that actually makes me a little sad, but I think it's true. I would not view it, I don't view it as commercial real estate versus resi, residential real estate. I would say it this way. I think that architecture will unfortunately have a lot less value in the future because of climate change. Now, what does that mean?

• 49:14Speaker 00

  For example, if you look at some of the most progressive countries in the world, Europe, on the climate issue, and you look and, you know, again, start to go back to first principles. Where is the carbon emitted? You know, where are the greenhouse gases emitted? Well, it's overwhelmingly in cities. And then you start to look at, okay, well, you know, what are some of the things that we can do to electrify or to decarbonize? And one thing that you get to is you have all this incredibly beautiful architecture, but it's completely dated. And the amount of carbon that, you know, these heating systems, these water systems generate, you know, getting stuff into these very intricate, beautiful, you know,

• 49:57Speaker 00

  you, you, you walk by these piazzas, you think, God, these, these things have been around for 500 years. And on the one hand, you're like, it's amazing. But on the other hand, you're like, this is going to be really tough for, you know, the city of Paris, or Milan, or Amsterdam to defend historic architecture in the face of also wanting to be carbon neutral. And I think in the United States, it's also going to have some direct implications as well. So if architecturally, you know, we unfortunately have to replace some of this old, beautiful stuff with more simple, modern stuff, you know, we'll have a more utilitarian landscape. Or maybe you'll just have a bunch of variations of modern. But, you know, that's a direct implication of, of climate change, I think, that nobody talks about.

• 50:41Speaker 00

  So, you know, how will that affect people's happiness or people's creativity? Uh, that they're all living in these sort of like, I don't know if you've ever been to Shanghai, but if you cross from, you know, Pudong to Shanghai, and you go across this one monk bridge, it's, it sort of looks like this kind of like weird future state, where you just have these, you know, buildings rising up on every single, you know, to the horizon on each side, they all look the same. And you think, God, that's depressing if I had to live in that. But we may have to live in that, in a, you know, climate neutral world. Do you want that?

• 51:15Shane Parrish?

  You said successful investing is about behavior and psychology. Can you expand on that?

• 51:21Speaker 00

  I think that when push comes to shove, what you're always going to be fighting is yourself. Panicking, overreacting, underreacting, refusing to observe the present, living too much in the past, wanting too much to believe in the future. So it's all psychological traps because the data is there if you want to observe. And then just clinically re-underwriting how it sits, you know, as as part of your risk equation. You know, which bucket does it sit in? How big is that little bet inside the bucket? And so I try to really understand how to create an edge. And I don't think an edge comes from, you know, attending conferences or, you know,

• 52:06Speaker 00

  writing some crazy algorithmic software. Maybe a few people can do those things and find an edge. But what is a more kind of like mainstream accessible idea? And I think it is that if you define certain behavioral principles that protect you from the worst parts of your own psychology, that's a winning strategy.

• 52:30Speaker 00

  And so, you know, I have like a handful of these rules that I try to live by. And they, these behavioral rules around, you know, trying to think about things like buying companies versus buying stocks, trying to think about, you know, the quality of the CEO, the quality of the business, trying to think in long duration, not looking at the stock price every day, you know, reading annual reports, avoiding quarterly reports, you know, all these things that try for me to solve for my blind spots. And that's allowed me to take bigger and bigger swings because I feel like I'm practicing the things that will protect me from myself.

• 53:11Speaker 00

  So I think a lot of what, you know, you need to do as a person. Is, by the way, notice how all these things tie together. It's like, you know, nobody would have ever told you that focusing on your happiness would make you a great investor. But focusing on your happiness in part is saying, you know, you're exploring who you are as a person, you're finding what makes you happy. But the other part of that is you're finding out what blind spots are and your weaknesses, right? And you're finding ways to deal with them. Well, when you translate that that knowledge of those things into business, particularly, you know, in investing, it's enormously helpful. It's a money-making strategy. So I really, I really think that spending time understanding yourself and then translating

• 53:51Speaker 00

  that into actionable guardrails that you write down and you stick to is a really important thing.

• 54:01Shane Parrish?

  I, I love the idea of sort of creating these correct automatic behaviors that put you on the path to success by either addressing your blind spots or sort of like showing you more. Are there, are there sort of like personal rules that you have as well? Or are there, like, let's, let's go deep on that. Like, what do you do to overcome your blind spots in all areas of your life, not just investing, but personally too?

• 54:26Speaker 00

  I talk. And again, I go back to the same thing. I just, I just talk. I, and then when I feel, when I find that I revert into a comfort zone where I'm repeating past behaviors that I don't like, it's because I've stopped talking to Nat, to a couple of friends that I rely on, to, you know, to therapists that I talk to on a regular basis. It's all about my mental health. The healthier I am mentally, the more I'm able to overcome these natural inclinations to revert to comfortable patterns that have been very well-established and well-worn. They're not healthy, but they're just habits.

• 55:09Speaker 00

  You know, by talking, what happens is people who know me, they develop a pattern recognition and then they start to tell me, hey, you're being really insecure there. Hey, why are you, you know, talking in that way or talking about this thing? And now, what I can do, before I would get very defensive and insecure and I would attack the person when they would say that. So it also needs people who really deeply, at the end of the day, love you and care about you. And that's hard to find. I mean, it's not like those folks really grow on trees. I have two people, Nat, my friend Rob, and I really talk to them a lot. And then I have two therapists and I talk to them weekly.

• 55:54Speaker 00

  And so that's really helpful for me. So, yeah, it's just pattern. It's just their pattern recognition. You know, talking is also really good because it allows you to vent. And so, you know, if you think about sort of like plaque, you know, flossing, it doesn't stop 100% of the plaque from building up, but it does prevent, you know, 90, 95%. So then when the dentist gets in there, you know, she's only, or he's only cleaning out a little bit of muck and mire versus like all kinds of just random shit. And so for me, venting is like keeping, you know, the plaque from building up, stripping away the plaque. It just allows me to get the negative energy out, to reframe some of the things that are happening in my life in a more constructive way.

• 56:36Speaker 00

  And then I can come back to the problem at hand with a healthier mindset and outlook. I just, I really think the big insight, the big unlock is it's not work and personal. I don't think these are separate worlds. They're deeply, subconsciously intertwined and interconnected. And being happy personally is the pathway to help everything else make sense. And that is around mental health. And I think the key unlock for mental health is just finding a resource to talk to. And when you first start talking, it's going to be just kind of blathering bullshit and

• 57:18Speaker 00

  it's going to be imprecise and it's going to be super awkward and you're going to feel like, what is this? And then over time, it's like anything, like when you start to get good at it, it's really good.

• 57:30Shane Parrish?

  You need to exercise that muscle. You mentioned pattern recognition. I thought that was really interesting. Like you've interviewed thousands of CEOs over the years. What are some of the questions that you asked and the patterns that you recognize? And how do you develop that pattern recognition to find the ones that are going to make the biggest difference?

• 57:47Speaker 00

  I've learned that my pattern recognition before was too brittle. It was too superficial. I would ask dumb, obvious questions for which any good CEO will have very good practiced answers. And so now I don't do that anymore. I'm trying to solve for something a little bit more elusive, which is two things, integrity and mental agility. The integrity one can't be defined by a question. It's about subtle observations over a long period of time. Because people take a long time to reveal themselves. And going back to how we first started, people are very good at lying and being evasive. Very good. And I don't mean to say that in a negative way, that you can't trust people. You absolutely can.

• 58:30Speaker 00

  And I actually think the way to overcome all of this stuff is to actually put your trust out there and just trust with reasonable guardrails, but to trust and just to assume the best intentions of everybody. I think that's a very healthy mindset. It just de-escalates a bunch of mental stress that you could otherwise have. But people reveal themselves in small, little ways over long periods of time. And when you can observe enough of those observations, you can pull them together to get a really good sense of integrity. So that, you know, for me, it's like a two, three, four, six month, nine month, one year journey. And every moment is an opportunity to just re-underwrite my integrity and theirs. You know, am I being completely whole and honest to them?

• 59:15Speaker 00

  And am I giving them my best? You know, so am I leaning in with a hundred percent of my integrity? And then are they giving it back to me? And it doesn't have to be in a business interaction. It could be in a personal interaction. It could be how they talk to the waiter at a restaurant. Random conversations you have and their reactions to things, their openness to different points of view. So that's one thing. And then mental agility is just more about what happens when you keep things open-ended. That's not what you would do if you were interviewing someone for a very specific role at a company like, you know, engineer or something, you know? There, there, it's about functional competence and these two things don't matter. But when I'm evaluating a CEO, those are the only two things that matter.

• 59:57Speaker 00

  And so it's about a bunch of open-ended conversations where you see how they think. And you know, when you see how they frame a problem. And when you ask kind of seemingly dumb questions. And if you're okay to ask what sounds like a dumb question. And what they actually hear is a very open ended question. And that's a great way to sort of figure out uh mental agility. Because it sparks them in how their mind works. And you hear an answer that you wouldn't get otherwise. And what you hear is a framework and a process. And uh and I really like that. You know, like meaning like when you frame questions like. So what do you think about? And you just say something like random. You know, just like random, you know, like Jim, what do you think about?

• 1:00:42Speaker 00

  The triangle office? And you'd be like, what the hell kind of question is that? Like that has nothing to do with what I know. Um, and then, you know, you just find people's mental agility. Uh, and I I honestly think CEOs are incredibly, the best CEOs are incredibly mentally agile people. They're kind of curious, they know, you know, a little bit about a lot. You know, that's how you have to run a company, you have to know a little bit about a lot. And uh you have to be good at engaging and understanding things, asking questions back. You know, what what about the triangle office asks? You know, makes you want to ask me that question? And then I would say, well, I I just think it's like, what do you think about sort of like, you know, structured approaches that have this sort of like dynamic allocation of like, you know, of resources.

• 1:01:26Speaker 00

  So like, you know, the triangle office to me is like this kind of like really cool way where you are like both have rigidity and flexibility. And then, you know, then you may say, yeah, you know, well, here's a way that I think about my business that way. And all of a sudden, you're having a completely random conversation. It required me to say something completely fucking dumb. And like what seems like a complete non sequitur to to the average person. And then the intellectually mentally agile person. It out of, you know, mostly out of kindness and curiosity engages you. And then you end up down a totally different path. That is a great way for me to gut check a CEO.

• 1:02:00Shane Parrish?

  I like that a lot. I'm glad you didn't put me on the spot with the triangle office.

• 1:02:04Speaker 00

  I mean, I was just making it up randomly, that that's David, but yeah.

• 1:02:08Shane Parrish?

  Talk to me, like a public company CEOs. Who who do you think is the the the sort of like top five public company CEOs? Not asking for investment advice here, just who are the best pure CEOs for the next 10 years?

• 1:02:21Speaker 00

  That's a great question, okay.

• 1:02:24Speaker 00

  Elon Musk. Jeff Bezos. Also, really, okay, you're really putting me on the spot.

• 1:02:32Shane Parrish?

  I love it. I get you thinking.

• 1:02:34Speaker 00

  I'm really thinking to try to answer this in a super thoughtful way. Toby, Toby, Toby Lutke. I think Toby's really, really exceptional.

• 1:02:45Shane Parrish?

  He's phenomenal.

• 1:02:46Speaker 00

  He's world class on the level of those two. My gosh, it's such a good, wow, never been asked it so well. Jack Dorsey.

• 1:02:57Speaker 00

  Exceptional. And I, I really owe him, actually, an apology because I had a very dismissive sensation of Jack. And I don't really know him that well, obviously. But it's just, just in my observations of sort of his decision making. Particularly at Square. Particularly around Cash App and, you know, the decision to, you know, the, the idea of moving to Africa is just so smart. So genius. I mean, just goes to show you the, the short term mindedness of these folks that, that overreacted, I think. But Dorsey. Yeah, that's four, right?

• 1:03:35Shane Parrish?

  Yeah, that's four.

• 1:03:37Shane Parrish?

  Elon Bezos, Toby. Jack Dorsey.

• 1:03:41Speaker 00

  Elon Bezos, Toby, Jack.

• 1:03:45Speaker 00

  Uh, me.

• 1:03:46Shane Parrish?

  Which company?

• 1:03:49Speaker 00

  Um, I will eventually have something that represents the totality of my intellectual capital, meaning like.

• 1:03:58Shane Parrish?

  You're gonna go public.

• 1:03:59Speaker 00

  I would, I would really like to. I would like to be under that pressure. And I would really like to work on behalf of everybody. Uh, everybody, meaning like, you know, if I can level the playing field and give folks. But I don't know what that is. See, that's the problem. Like, I don't, I don't know, like, how to answer that question, like. It's like some amorphous blob, like, well, what is it that I do? I don't know what I do.

• 1:04:24Shane Parrish?

  You could go public tomorrow, though. Why don't you?

• 1:04:27Speaker 00

  But I think I'm pretty good. I really do think I'm good, and I think I'm getting better.

• 1:04:32Shane Parrish?

  Oh, talk to me about that. How do you measure the difference between good and like getting better for yourself?

• 1:04:39Speaker 00

  We all like asymptote at some at some trajectory. And I think that I am now one to one and a half orders of magnitude away from my asymptote. So you can kind of see it, but it's very faint. Now I think I have a toolkit to implement a process that can get me close to my asymptote. And I would love for me to be able to talk to you in forty years, I'll be eighty-four, and say, I'm like within a couple of turns of the asymptote. So for me, it's it's believing in myself more.

• 1:05:23Speaker 00

  It's knowing how to take smarter risk, being risk on in larger quantum. So I can write, you know, hundred, multi-hundred million dollar checks now and feel okay about it. I need to be able to do that with billions and tens of billions. And it sounds crazy, but five or six people in the world really know how to do that well. It's not it's not a shot that a lot of people get a chance to take, you know, even if you're running like, you know, the largest private equity fund in the world, the the quantities of money that people are investing, that is that is of their own, is still relatively limited and small, even if the, you know, the headline numbers are big.

• 1:06:05Speaker 00

  So I want to learn to do that. I want to learn to feel like less of an imposter. The more I do that, I think the smarter I can get at distilling and observing the present, acting on that, and then passing that through to other people so that they can act on it, too. And so, you know, I don't have the skill to go deep in one of these things and, you know, build one of these platforms. I think my skill is slightly different, which is sort of to organize a lot of things together in a thematic understanding. This is where I think at, like, I can't be a CEO of a million dollar or a hundred, ten million dollar, a hundred, or even billion dollar company, because that's about functional competence. But when a company becomes ten billion dollar plus, it's all about capital allocation.

• 1:06:50Speaker 00

  And I really think I'm just, I'm an outlier in my just maniacal desire to be really good at that. So I would want to bet on myself. So, but that's not an accurate answer to your question because you said public company CEOs and it's not, so I'm not public.

• 1:07:03Shane Parrish?

  I thought you were just gonna break that you're going public right here on the show.

• 1:07:07Speaker 00

  No, no, no, I have no plans. But, uh, yeah, no, that whole, whatever. Okay, so let's take me out of the equation. That was stupid. Although, see, that's me being, feeling like an imposter. Uh, see, you know what I mean? Like, it's like, what a, it's, uh, it's.

• 1:07:21Shane Parrish?

  You're overthinking this.

• 1:07:23Speaker 00

  Yeah, it's a coping method.

• 1:07:24Shane Parrish?

  What, what, what is your decision process for when you're making a capital allocation decision? I know you've made a few recently, like, without any specific names. I don't want to get anybody in trouble, but what's that process in your head like? Like, how are you actually, what, what's, what are you talking to yourself about mentally to make sure? Because it's all on you.

• 1:07:44Speaker 00

  Yeah, I, uh, I, I really, I really love it. Like, you know, we do a lot of work. Like, I, I mean, I have great partners. I have a team that I work with who are just exceptional people. They are the most high integrity people I've ever worked with. And they give me enormous energy. I have, uh, some, some, you know, folks that I've partnered up with, um, who have their own organizations as well. Those folks are super high integrity. And so all these people that I spend my day with every day are just kind, good, earnest people. Each of us, I don't think are the smartest ones, but when we put ourselves together, we are really, really smart collectively. And that's, that's awesome. And so we all

• 1:08:26Speaker 00

  do different things and everybody's bringing different things to the table. And then what happens, it allows me to kind of synthesize all kinds of different inputs and learnings and, you know, variations on a model, regulatory research, market research, you know, consumer marketing research, all of this stuff, and learn about it, which is super fun. And in my mind, what's happening is basically like, here's how this can go right, here's how this can go wrong, here's how this can go right, here's how this can go wrong. And I'm bouncing back and forth. And all of these things are just oscillating. And if I had to characterize it, this is gonna sound nuts, but it's like a and then that oscillation goes faster and faster and faster. And then I find a point of equilibrium.

• 1:09:09Shane Parrish?

  Is that like the matrix moment for you? Or like all of this data, all of a sudden, just sort of like?

• 1:09:14Speaker 00

  Yeah, yeah, yeah, no. Yeah, it is like that. It's like, you know, I, I know that uh, leading into something, I become a little detached. I am a little all over the place. My mind's racing. My, you know, so sometimes I'll be saying non sequiturs on calls and uh, my partners are very patient with me in those processes.

• 1:09:41Shane Parrish?

  You've made like public calls. You did Bitcoin in 2012. You did Amazon in 2014. You did Tesla in 2015. Like you've nailed fairly, I would say controversial things at the moment. I mean, in hindsight, they've all worked exceptionally well, but at the moment, they, everybody thought you were crazy.

• 1:10:03Speaker 00

  Yeah, they really, really did.

• 1:10:05Shane Parrish?

  And, and that's awesome because it's like advantageous divergence, right? You're diverging from the crowd and you're right.

• 1:10:12Speaker 00

  Yeah. And, and, and what it does is it, it has given me confidence in my process. It's random. You know, it's about ingesting a lot of stuff. It's allowing yourself to be influenced, but then come back home. Right? That's another thing I love. Meaning, um, if I'm having a conversation or we're in a sort of a teach in kind of a situation where I'm learning about something, I allow myself to be seduced. I allow myself to sort of fall for the narrative. I allow myself to believe the totality of what that other person believes fully and completely. Because I want to really start to understand the nooks and crannies. Now, that process doesn't work if you want to be intellectually lazy.

• 1:10:55Speaker 00

  Or if you find yourself being intellectually lazy and you stop when you get, you know, confirmatory, that first confirmatory meeting or that first confirmatory article or, you know, you could joke, but like that first confirmatory Google link, ah, I'm done, you know? It doesn't work that way. But if you're willing to bounce around. And you know fundamentally be unoffensive in your opinions upfront. You find that people who have extreme opinions will talk to you in a very unguarded way. And I, I think I've, I've trained myself to let myself be seduced by those folks so that I can learn from them. Uh, but I always come back home. I come back to the center. I come back to no opinion.

• 1:11:37Shane Parrish?

  What, what's the trick for that? Right? Like there's this quote from Ender's Game that I was thinking, have you ever watched that? That movie or read the book where he says, there's this moment where I understand my enemy better than they understand themselves. And in that moment, I sort of love them and defeat them. And it sounds like you're allowing yourself to understand somebody else's opinion like so fully. But you don't get caught up in it. How do you avoid?

• 1:12:02Speaker 00

  No, I do in the moment, um, but I know to slow it down. And then I also know to come back home. So I think, I think maybe the, maybe the clarifying question. Shane would be like, what is your process of coming back home? Okay. So what I have to do is I have to go and then be again, it takes it. None of this is possible without an incredible team that has super high integrity. The anchoring principle of which is kindness. So I will come back to my partners. I'll be like, guys.

• 1:12:35Speaker 00

  And they're like, okay, uh huh. Okay. Okay. Okay. Good. And they, they de-escalated, right? So, you know, or I'll go to nap.

• 1:12:48Speaker 00

  She's like, okay, I got you. Okay. Okay. Got it. You know, or, or Rob or, you know, like all these. And so it's, it's wonderful. Um, and so then I go, hmm. Okay. I was getting a little excited there. Or I come back, can you believe this? I can't believe this.

• 1:13:08Speaker 00

  They're like, uh huh. Okay. Yeah. Got you. Got you. Uh huh. Good. Okay. Uh, and you know, I, I've learned that I do that. Uh, and so I can, I get back home faster. Um, and it helps me, but, uh, but I do that a lot. I allow myself. To live in the persona of that person and that opinion because it allows me to understand where they're coming from.

• 1:13:33Shane Parrish?

  That sounds like a superpower, man. Like, just to be able to understand at somebody's level without bringing any of yourself into it and just be like, I really want to see the world through your eyes. I want to see everything. I want to feel what you feel. I want to see what's valuable, all the variables. I want to see how they connect. But the way that you see the world and then coming back and then saying, now I can see the world through this person's eyes and my eyes. I have fewer blind spots. I have a more, more accurate view of reality, if you will.

• 1:14:02Speaker 00

  Yeah.

• 1:14:02Shane Parrish?

  Are you still, are you still high on Bitcoin?

• 1:14:05Speaker 00

  Yeah.

• 1:14:06Shane Parrish?

  Really?

• 1:14:08Speaker 00

  Yeah, I just think that, you know, I think that we are dismantling financial orthodoxy. And in that dismantling and in the leveling of the playing field, there will be moments of volatility. And to have a small amount of insurance that's uncorrelated to the orthodoxy, I think is just a smart risk management thing. I don't, I'm not super emotionally caught up in it. You know, it's not like I'm cheering on the failure of, you know, central banks and like, I'm not decrying all the money getting printed. I'm not that emotional about that stuff. But I just think it's a smart thing to have under the mattress, just in case.

• 1:14:53Shane Parrish?

  How do you think about all this spending? I mean, we're, every Western country is about to basically, you know, spend themselves into, I don't know what position, but they're going to spend more money in the next, you know, 10 to 15 years than they probably spent in the past hundred. And a lot of it on the surface, and I haven't looked into this as much as you have, but a lot of it on the surface seems like, we're going to prop up the status quo, instead of investing where things are going in the future, right? So I know some countries are writing checks to people to stay at home, but they're not requiring them to adapt to new skills that'll be valuable in the future. They're sort of just propping up the way the world used to be. How do you think about that?

• 1:15:34Speaker 00

  Yeah, I, I, I think that.

• 1:15:37Shane Parrish?

  Or chin check me, like, am I completely wrong?

• 1:15:40Speaker 00

  Um, I think in part, it's not totally true what you're saying. Um, meaning like, you know, if you look at sort of the EU budget, um, an enormous percentage of that budget is going to, um, you know, a carbon neutral EU by, you know, twenty, frankly, not even twenty fifty, they're trying to pull it forward and do it twenty forty in some industries, you know, twenty thirty. So I think the spending is actually going, uh, in, in reasonable places. I think that there are, there's always waste. And the reason is that, you know, politics and political bodies don't know enough to write specific legislation. So they get influenced by all kinds of folks and so that's what creates waste.

• 1:16:21Speaker 00

  And so you have to be okay with that. It's just the natural dynamic of democracies and, you know, the waste, we, we, we deal with the waste because in return we get freedom, you know, a different kind of freedom, right? Right? I mean, like, you know, maybe you can have the most, you know, efficient thing in country in the world, but if it's autocratic, you may not want that.

• 1:16:39Shane Parrish?

  You also don't want super efficient countries, right? Like, you, you, we've learned this, we, we want resilient companies. We want resilient countries. We want resilient people. And I think this, this focus on hyper efficiency also had us, you know, manufacturing PPE in certain locations and not having a national stockpile. And, you know, we've done this in, in a lot of ways where we've seeded this, um, redundancy or, actually, we're taught this in school, like, business school teaches you, right? Like redundancy is a waste and you can turn that waste into capital. And so we've become hyper efficient.

• 1:17:18Speaker 00

  I, I agree with you, just with a small, business school as an example has taught you that redundancy is waste and waste can be converted into profit and profit is converted into compensation. And I think that is what people have really drank the Kool-Aid on. And so, you know, when they ran out of waste that they could convert into profit, they had these ultra quote-unquote efficient companies. And then they just redirected, you know, the the middle part of that equation to generate more compensation, which was like, you know, okay, well, we've eliminated all the waste. We've outsourced everything to China. We're generating more money than ever. Now what should we do? And then people said, oh, we'll just start to buy back the stock and that will also drive compensation.

• 1:18:03Speaker 00

  You know, these things, these things I think are cycles that that all flow from the incentives around comp, unfortunately. That I just, I just wanted to.

• 1:18:12Shane Parrish?

  Yeah, I know. I thought that was, that was excellent. Do you think governments should bail out public companies, industries? Which ones?

• 1:18:20Speaker 00

  I think that the government should really be plowing money into the next generation of industries. And I think that the government should always be on the bleeding edge of not needing to make money in in some critical, important industries for the future.

• 1:18:37Shane Parrish?

  Hmm.

• 1:18:38Speaker 00

  And so in the absence of doing that, we've lost touch with the things that have really propelled the United States forward. For example, you know, why was the space race so important? Uh, you know, on the one hand, it was about, you know, American determinism, right? Like, we are going to do this. This is going to happen. But it was also that it created an entire generation of industries that were derivative from the space industry because you were training people with a level of skill and precision and capability that they could then apply to other markets. So we always need to be in space, you know? We always need to be pushing the boundaries, you know? We need to go, you know, not just to the moon, but now to Mars and beyond. Um, it can't just be Elon's task. That's not fair, you know? You put him against the wall and he's got to raise an enormous amount of capital

• 1:19:23Speaker 00

  that, you know, if if we had government sponsorship for. We could have, we could have done a lot more sooner. In many ways, you know, that this deflationary super cycle really started in 1970 when we basically ended the space program in its, in, in the early version that saw us get to the. So I think that, you know, that's a really big thing. Um, that's where, that's where I think like, you know, governments should be spending their money. They should be making bold bets on other markets too, like, you know, uh, climate change, or they should be changing incentives around, you know, healthcare. They should be changing incentives around education. You know, if you were going to spend money, you know, why don't you just wipe out all the student debt? I don't think that's such a bad thing. And in return, make people, you know, join some sort of like American Peace Corps that

• 1:20:06Speaker 00

  kind of like does work and volunteers and, you know, there's all kinds of ways that, that governments can allocate capital probably a little bit more productively.

• 1:20:16Shane Parrish?

  I like that. I'm going to switch gears and start asking some of these Twitter questions so you can, you can answer rapid fire if you want. Of all the provocative and controversial things that you've said, which ones do you regret?

• 1:20:27Speaker 00

  None.

• 1:20:28Shane Parrish?

  What do you think future Chamath will disagree with? That you agree with today? Anything come to mind that you're sort of on the edge of it?

• 1:20:39Speaker 00

  No, but if I'm, if I'm evolving, I will have learned so much more that my thoughts today will seem slightly immature in my youth.

• 1:20:48Shane Parrish?

  What's the last thing you changed your mind about?

• 1:20:51Speaker 00

  Oh my gosh, I had three or four things just today.

• 1:20:55Shane Parrish?

  What do you think of the entire venture capital industry?

• 1:20:58Speaker 00

  Um, well intentioned, somewhat misguided, somewhat low integrity in certain places, misaligned.

• 1:21:09Shane Parrish?

  Is this work from home thing real and what are some of the implications?

• 1:21:13Speaker 00

  It's partially real. And I think the biggest implication is, um, belongingness, community, feeling part of a, um, a group. And so. I think when we can go back to the office, we'll want to.

• 1:21:30Shane Parrish?

  I think one thing that we miss on this is that we like to feel part of something larger than ourselves. And that's become harder, not only in our communities in some ways. I mean, in some ways it's easier because we're all going through this common struggle. But we're also, it's harder in our community and we don't feel like, even though you're working for a company or you're working with people, it doesn't feel as much. And I've noticed a lot of people have started saying, well, it's becoming really transactional now. I don't see people at the office and ask about their weekend anymore. It's becoming very sort of, I think that's really interesting sort of observation.

• 1:22:05Speaker 00

  I think that's well said. I think that's a really important thing. I completely agree with you.

• 1:22:09Shane Parrish?

  How do you manage risk?

• 1:22:12Speaker 00

  I mean, I have a, I have a framework. It's basically a barbell. You know, a big chunk of the liquid bets, a big chunk of very concentrated liquid bets, and then a slug in the middle that's just more kind of like random.

• 1:22:25Shane Parrish?

  Cash or the S and P 500 for the next five years?

• 1:22:31Shane Parrish?

  You had something about why men live less long. Do you remember that on Twitter?

• 1:22:38Speaker 00

  Yeah, I tweeted something out. What was that?

• 1:22:41Shane Parrish?

  Didn't it have something to do with like, we couldn't talk about our emotions or something?

• 1:22:44Speaker 00

  Yeah, no, no, it has to do with mental health and emotion. I really do believe that. I mean, I think that, you know, like, like, well, I mean, just ask the question like, why do women live longer than men?

• 1:22:56Shane Parrish?

  Why do women live longer than?

• 1:22:57Speaker 00

  Why? No, no, why? I mean, why? Why?

• 1:23:00Shane Parrish?

  I don't know. I, I think that there is something to the fact that they're able to talk about feelings in a way that is unnatural for men.

• 1:23:09Speaker 00

  100%. I really think people think this is like a crack of horseshit. I don't, but I think that your physiology is not just how your lower intestine processes blah, blah, blah. Like, that's not what it means. Like, the, the body is like a very complicated combination of emotions and, you know, cells and organs and all of these biological, psychological functions interacting. And we've all seen that play out. And so, you know, it's like, it's inconceivable that your mental health doesn't improve your health. I mean, right?

• 1:23:49Shane Parrish?

  Yeah.

• 1:23:49Speaker 00

  Like, you sound like an idiot if you said that. And I just think that dudes don't talk. And it's a little bit stigmatized than it is for women. And I think that that's a wonderful superpower that women can teach the rest of us. My, I mean, like I said, partners taught me how to talk. And I would be eternally grateful for, for having taught me that.

• 1:24:13Shane Parrish?

  Next question, what are some of the lessons you learned from the book, The Adult Children of Alcoholics, which you recommended a few times?

• 1:24:20Speaker 00

  The most important one is how I was normal. And it's again, it's pretty obvious, or not obvious, but may sound bland. But like, you know, to feel so deeply insecure and somewhat of an imposter my whole life, always the outsider, you know? That's the first book that said, hey, there's an entire group of people that will behave this way based on these inputs. And I was like, wait a minute, I behave in those ways? Wait, you're telling me that I'm not this deficient, broken person? That I'm a byproduct of this? And this is well studied? And it's like, it's actually normal? And you can improve where you are?

• 1:25:04Speaker 00

  Was, it was a profound moment.

• 1:25:08Shane Parrish?

  All right, last question. What's the most misvalued asset in the world today? Either high or low?

• 1:25:15Speaker 00

  Oh, wow, that's a really good question. Okay.

• 1:25:18Shane Parrish?

  You can pick most undervalued or most overvalued?

• 1:25:22Speaker 00

  Oh, my gosh, wow. See, I really take these questions seriously. Like, when you ask me that, I wanna, no, but I wanna give you like a right answer. And I don't really know. I had, I-

• 1:25:33Shane Parrish?

  You can just say, I don't know. I mean-

• 1:25:35Speaker 00

  Yeah, I don't know. I don't know. I don't know how to answer that question, to be honest with you. It's a really good question.

• 1:25:40Shane Parrish?

  I love the, the video thing. We just started doing this, but I can see the wheels turning in your head. I love it. This has been an amazing conversation. Jamad, I want to thank you so much for taking the time.

• 1:25:49Speaker 00

  Thanks, man. I really, I really appreciate it. Thanks for having me.

• 1:25:56Shane Parrish?

  Hey, one more thing before we say goodbye. The Knowledge Project is produced by the team at Fernham Street. I want to make this the best podcast you listen to, and I'd love to get your feedback. If you have comments, ideas for future shows or topics, or just feedback in general, you can email me at [email protected] or follow me on Twitter at Shane A. Parrish. You can learn more about the show and find past episodes at fs.blog/podcast. If you want a transcript of this episode, go to fs.blog/tribe and join our learning community. If you found this episode valuable, share it online with the hashtag The Knowledge Project or leave a review. Until the next episode.