293: Josh Wolfe On Investing In Frontier Technology

Josh Wolfe is a cofounder of Lux Capital. His goal is to support scientists and entrepreneurs who pursue counter-conventional solutions to the most vexing puzzles of our time in order to lead us into a brighter future. In this conversation, we discuss finding the outcasts that build valuable companies, why science is not based on consensus, deflation vs inflation, how censorship can stop innovation, Elon Musk & Tesla, Ray Dalio, space travel & aliens, and Bitcoin. =============================== Pomp writes a daily letter to over 45,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at www.pompletter.com

• 0:00Speaker 00

  This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off.

• 0:11Speaker 00

  Josh Wolfe is a co-founder of Lux Capital. His goal is to support scientists and entrepreneurs who pursue counter-conventional solutions to the most vexing puzzles of our time in order to lead us into a brighter future. In this conversation, we discuss finding the outcasts that build valuable companies, why science is not based on consensus, deflation versus inflation, how censorship can stop innovation, Elon Musk and Tesla, Ray Dalio, space travel and aliens, and Bitcoin. I really enjoyed this conversation with Josh, and I hope you guys do as well. Don't forget, I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy-to-understand

• 0:53Speaker 00

  language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com, or go in the description and click on the link there. Alright, let's get into this episode with Josh.

• 1:08Speaker 00

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:35Speaker 00

  Alright guys, bang, bang. I've got Josh here. We've got a whole bunch of stuff to talk about, so thanks for doing this.

• 1:41Speaker 01

  Thanks for having me, man. Good to see you.

• 1:43Speaker 00

  Yeah, for sure. For those that don't know you, let's just start background, kind of where you grew up, and then we'll get into the founding story of Lux.

• 1:52Speaker 01

  Born in Cali, parents split when I was three, moved to Coney Island, Brooklyn, which I consider home, and grew up there, sort of a mix between a science nerd and a lover of all things basketball and hip hop. Went to Cornell, graduated, went to investment banking, wasn't even smart enough to collect my first year bonus, started Lux, and man, it's almost two decades. So, yeah, that's a story.

• 2:14Speaker 00

  Yeah. So, one of the things is you post music on Twitter all the time, which I appreciate, because I think there's an entire generation of kids that grew up relatively in the same age group. We all listened to hip hop, everyone loved the NBA, Allen Iverson, right? There's just like this whole generation. And then when you get in the professional world, like, nobody really talks about it, but you still post all the music and everything. And it's just like, look, like, that's who he is. That's literally the generation he grew up in.

• 2:42Speaker 01

  Right. Either that's a nice way of saying you're old, or, no, it's true. It's, I actually think for, you know, what we do when we do venture capital is very akin to trying to find, you know, the next new band or artist. You're looking on the outskirts. I've always been drawn to both, you know, art and music that was slightly off the beaten path. And so my wife is totally, you know, Casey Kasem, Top 40, you know, all the pop hits. And I've always been drawn towards weirder stuff that you would never hear on the radio. And so it's the same sort of thing in venture capital. I'm typically never drawn towards the stuff that everybody else is focused on. I want to understand what everybody else is focused on. So I will listen to, you know, all the top hits in music, but I like the weirder,

• 3:24Speaker 01

  fringe stuff. And there's a virtue of that, because when you discover it, there's sort of a, you know, a future status that you get when you're like, oh, I knew this, you know, I was listening to this before everybody else. So I think that's sort of the hit that, you know, you keep getting. But it happens to be that the music in my mind is just better, the tones, the discordance, it's sort of more emotionally resonant with my own psychology than, you know, Beatles pop music.

• 3:46Speaker 00

  How much of that do you think is like personal preference, right? So, hey, I just tend to like this type of music versus you actually actively made a decision to go seek out maybe music that other people didn't like?

• 3:57Speaker 01

  I think it was emotional resonance. So I've always had a chip on my shoulder. You know, I was like the short kid. I was the kid, you know, that would get beat up in Coney Island. You know, I just sort of always distrusting. My family was split and broken. And so I just always gravitated towards like darker hip hop, hard heavy metal, New York hardcore.

• 4:21Speaker 01

  You know, and there's like this emotional crescendo, you know, I love music. In fact, I just posted on Twitter like I think it was um Deftones and it was Rage Against the Machine, maybe it was Helmet, you know, now I get to indoctrinate my kids with this, which is really funny. Um, now they don't share the same emotional, you know, discordance that I had. My whole life was geared towards making them grow up, you know, in a pop music kind of world. But um, I love when, you know, it just gets like super mellow, mellow, mellow, and then just explodes with like rage and emotion. So whether that's a, you know, crazy riff in heavy metal or, you know, just dropping an insane beat in hip hop, it's the same sort of thing.

• 4:58Speaker 00

  For sure. And then um, obviously you went into uh, investment banking, kind of to start your career. And at some point, um, you know, you, you've said a number of times that you wanted to find that intersection between science and finance. Uh, and venture capital, uh, it feels like Wall Street was, I want to say late to the game, but, but it was definitely more of a West Coast, kind of Silicon Valley type uh, business and maybe some in Boston as well. Uh, what was kind of the thought process for you guys? I know people probably thought you were crazy to some degree, but, but kind of what was the really the genesis of wanting to jump into a venture?

• 5:33Speaker 01

  Well, part of it is probably intellectual ADD. I mean, the beautiful thing about ventures, you get to focus on a million different things. And uh, usually it's driven by the brilliant people who are constantly pursuing something new and cutting edge out of their own, either greed or quest for status or fame or money or whatever it might be. So, so that was sort of the, the driving impetus. Science for me is interesting because it's the endless frontier. So no matter what we discover, you know, every time that you expand the circumference of what's known, it just basically also expands the circumference of what's unknown as it touches the darkness. And so even the derivation of the word Lux, Latin for light, you know, was looking where other people weren't looking and shining a spotlight so that we could try to find interesting things that we thought the mainstream wasn't focused on. So at the time when we started Lux, everybody was focused on dot coms and optical networking. And those were the things which

• 6:16Speaker 01

  were front page news and had um, you know, dozens of top tier firms, which we could never hope to compete with and hundreds of also Rans. You had all kinds of incubators that were existing around the time for like dot coms and e-commerce businesses. And all of that would go on, you know, in like any field, 99% of these things would fail. 1% would go on and change the world and make fortunes. A priority, very hard to pick who that would be. But we said, let's focus on an area where other people weren't. And we basically looked at the cascading S curves throughout the history of venture capital, where every 10 or 15 years, some secular wave in a technology field. 1970s PCs, 1980s biotech, 90s telecom and TMT. And we said, the next wave might be the physical and material sciences. So let's go to the universities, the government labs, the corporate labs, where those breakthroughs were happening.

• 6:59Speaker 01

  And it happened to be at the time, mostly because everybody was focused over here, that most people were not focused on physics, chemistry, and material science. And so that allowed us to carve out a niche in this sort of emerging technology. And over time, you know, the rubric would change. It went from nanotech to emerging tech to, you know, now people call it deep tech. But it's basically just like hard science. The average entrepreneur's age is typically, you know, 25 to 35 as opposed to like 15 to 25. You typically have to have a PhD in some of these fields. You know, the average starting pay for a biotech exec is, you know, an order of magnitude higher than your traditional IT exec. And one of the really interesting things, I think, is that the range of what we do, because it's very interdisciplinary, multidisciplinary,

• 7:39Speaker 01

  means that we might be working on, you know, something for telescopes and astronomy on one day. And then it turns out that the guy who won a Nobel Prize for something in taking a technique like that is creating a new tool to be able to do real time imaging inside of cells in biology. And so you're sort of constantly flipping between these fields. And I just think that it's at these interstices between these different disciplines where the amazing breakthroughs happen. And it's just, you know, it's like a smorgasbord of intellectual excitement. Now economically, it doesn't always work, but intellectually, it's, you know, it's endless game.

• 8:17Speaker 00

  For sure. And when you guys started, did you or your partners, did anyone have kind of deep tech background or science background? Or were you guys coming at this and really having to immerse yourself and learn from scratch?

• 8:29Speaker 01

  So I had a background in molecular bio. I was a published scientist doing immunophology. I had watched a movie quite literally in the early 90s. I was an early teenager called "And the Band Played On", and it had this huge formative impact on me. It was about the AIDS crisis. And I was like, I'm going to go be a scientist. I'm going to literally cure AIDS. And this was the naive, absurd thinking. I ended up doing my Westinghouse in a small protein called Eurokinase and how it evolves and the progression of HIV into full blown AIDS, particularly in children. And I just banged on the door of a scientist in downstate Brooklyn to let me work in the lab, which I did for four or five years. And it was actually him. Who turned me on to finance because we would be spinning down a centrifuge of blood and he'd be making tens of thousands of dollars trading futures and options and I knew nothing, literally nothing. He gave me a Wall Street Journal guide to money and investing

• 9:13Speaker 01

  that I think he got, sort of like a football phone that they used to give you with Sports Illustrated when you got your subscription. And that was like my first foray into understanding markets. And I also remember I lost every dollar I had saved up, which was about like, I don't know, $1,800 over the course of a summer and a half of working at like TGI Fridays and, you know, shoveling snow during the winter and delivering menus in Cheapside Bay, Brooklyn, because I bet it all on a company called iOmega. And iOmega was like a hard disk drive. I think it might have been involved in fraud, but it was just, you know, absolute disaster. But anyway, so I had a little bit of a scientific background, just more on the biological science side. And Peter was journalist background coming out of Syracuse.

• 9:54Speaker 01

  I went to Cornell. He was at Lehman Brothers in Equity Research and I was at Soli in Investment Banking. We knew each other through a mutual friend that I'd grown up with. And yeah, then we started Lux and then just surrounded ourselves with really smart people.

• 10:09Speaker 00

  Yeah, one of the concepts that Paul Graham recently talked about is like this whole idea of like learning to unlearn. And I think that you guys specifically, given how multidisciplinary the types of companies you look at, right? It's not like most of these companies that are on that frontier are only using one piece of technology. Many times it's multiple pieces. How do you actually think about getting up to speed on a piece of technology or an industry that either you don't know a lot about, or you just haven't had the time really to spend to be able to ask the right questions, to diligence the right things? And do you guys do that? Or do you actually go to outside sources to help on that diligence?

• 10:48Speaker 01

  Most of it is outside sources in the forms of both what you can read, you know, somebody else is publishing something, synthesizing what they may know or may have learned. And, you know, I mean, the internet is amazing, right? The ability for you to learn something today versus, you know, 20 years ago is just insane. So the synthesis of what other people are putting together and you know, obviously there's you know, every degree from like deep science that's being published to journalists to laypeople that might you know, tweet something or put something on Medium, but nobody really has a you know, a monopoly on really interesting insights and ideas and truths and frameworks. So you know, you can get those from anywhere. It sort of gives me information anxiety, which is why I'm constantly reading every source I can. We can talk about that too, just sort of where I read and what I read and you know, in the same way as looking for bands or music or startups. I think you have to find information

• 11:32Speaker 01

  that is off the beaten path. And then the other piece is talking to people. And so over time, you build the network, obviously, and we went from you know, talking to you know, pretty crappy startups to more serious startups to Nobel Prize winning scientists and heads of academic departments. And so most of the time now, we're able to triangulate and understand as somebody for real or full of it. And in pretty cutting edge new areas, you know, we could do a six month deep dive and we could have a whole set of views. I mean, I'll give you a perfect example. We started up a company around this crazy thesis that sort of bordered on science fiction for X-Men, which was finding genetic mutants, people that have really rare phenotypes that exist in the real world and there's some genetic basis for that. And so there were a whole set of people when I first started looking at this, was there an opportunity for a new company to focus on that that I

• 12:16Speaker 01

  thought were like the people. And over time, you triangulate and you start talking to you know, five other people and then you get some negative references about this guy and then she's not really you know, legitimate. And so you sort of build your own mosaic of like whose advice or information or insights you're going to weight more heavily and who you think is just you know, utterly you know, full of it. And that takes time, you know, particularly if you're totally ignorant. So most areas, both by preference and almost by definition, we enter with a very high degree of ignorance. And then our job is to reduce that ignorance, get as smart as we can, ultimately develop a confidence that we think we're smarter than somebody else because either we found something that they haven't found yet or we know more than them. And then when we feel advantaged, we write a pretty big check.

• 12:58Speaker 00

  Yeah, and I think that you're really talking about kind of the collision of a couple of trends here. So recently I saw on Twitter that you were talking about this idea that like science is not consensus driven, right? That's kind of the whole point of science. But then how do you balance that in your mind with things like content moderation and censorship, where there are accepted norms, there's accepted pieces of information, and sometimes actually the people who end up having the breakthrough are coming from a place that was previously thought to be taboo or false even. And like, how do you sift through that as you're taking all this input of information and trying to really kind of come up with a, maybe not a conclusion, but actually like a thesis as to how you think the world will move in the future?

• 13:42Speaker 01

  So a few different things. So on the sort of institution of science itself, where there's actually a lot of negative things about institutionalization, but science as a process does not depend on consensus. It just depends on a conjecture. There's evidence, you know, based on observations from a hypothesis, conjecture, and then you can make a reasonable conclusion, basically tentatively held. Nobody ever says with certitude, this is what is. And oftentimes, old ideas get replaced by better explanations, or bad explanations get replaced by good explanations, and that's how science progresses. You know, I think it was Linus Pauling, I may be messing up the attribution, who said that science proceeds one funeral at a time. And so a lot of the old guard who gets famous and, you know, gets a chaired department and has all the postdocs that want to work for them and gets

• 14:27Speaker 01

  the fame and gets the appointments and gets the board of directors at engineering companies, got famous in many cases for, you know, flawed or bad explanations that were widely accepted until some young hotshot, you know, full of piss and vinegar, basically is like, no, I don't think that's the way it works. And then, you know, they overturn it and this process repeats. So there's a predictability to the unpredictability of how science itself advances. When it comes to, you know, policy, whether it's

• 14:54Speaker 01

  You know, for a city, or for a company, or for how somebody runs their family, or the choices that you make of what you put in your body, you know, that that is less about science itself as a process, and more about prescriptions and advice and risk management. When it comes to, you know, sorting through everything that you might read online, and you know, recommendations and, you know, criticisms, you know, that's just all sort of analysis based on, you know, what everybody's putting out there. But but science itself, I feel, you know, just sort of absolutist about it, is is a process that is just constantly trying to come up with better and better questions and better and better explanations. But it's an endless process, because whatever we hold to be tentatively true today, is very likely to be overturned in, you know, some point in the future by somebody that's just come up with a better explanation.

• 15:39Speaker 00

  Yeah, and I guess part of this is, the science community is is pretty aware of this, right, as part of the process, they're almost trained and have the experience and those around them that have gone through that. The rest of society doesn't have that mindset, right? It's kind of like there is a truth, and that truth will forever be true. How, when there's things like coronavirus, for example, right, where at the time, given the information that somebody has, there are certain conclusions or beliefs that are held, they get either disproven or proven over time, how do we kind of navigate that as a society, understanding that the majority of people don't have that scientific type bent, or, you know, thought process as they're ingesting information?

• 16:22Speaker 01

  Broadly, to me, this falls under sort of two pieces, one of which is leadership, and there's all kinds of techniques of leadership and persuasion. And the other one is psychology and network effects, you know, why some ideas catch on and spread, just like a contagion, why they're believed, and why, you know, some are outright rejected. You know, so whether you look at it in coronavirus, which you could say, you know, we'll have the post facto explanations of this, we're all easy, you know, Monday morning, quarterbacks and armchair. But, you know, I consider Gates an authority on this, not because he's an expert in infectious disease, but it's a topic that he cares deeply about. And he has said, look, I think it was January, February, he published in the New England Journal of Medicine, saying this is more serious than the flu, and the signs are alarming. Five

• 17:05Speaker 01

  years ago, he called for, you know, sort of a coordinated global effort in making sure that we had the capacity to deal with something like this. And it sort of fell on deaf ears. Or maybe people thought that he had the money and the willpower and would, you know, sort of handle it himself or something.

• 17:19Speaker 01

  But these kinds of debates, you know, they've existed from everything from global warming and climate change. You know, there's quote unquote a scientific consensus on the one hand. There are actual scientific facts about what's changing. There's other things that you would say directionally lend itself towards a natural decarbonization of the economy. And you have things like the vaccine movement and the anti-vaxers. And so there's clear evidence which would suggest that there is a prudent course of action. And there's always a minority or a majority of people that will ignore that evidence and choose not to take that behavior. I am, you know, outspoken in my non-religiosity. I'm an atheist. I don't believe. But, you know,

• 18:04Speaker 01

  there are billions of people that believe in an invisible man in the sky that, you know, directs things and no amount of evidence, you know, to the contrary, or the absence of evidence of a presence would would sway them. That has to do with, you know, early indoctrination, inheritance, psychology, you know, and leadership. And so I think it's the same thing. Any, any, any topic where, you know, you can't look at something with an absolute truth and people have sort of varying opinions is going to be a function of, you know, groupthink, psychology, leadership, or the absence thereof.

• 18:40Speaker 00

  Yeah, I guess going on that leadership thread for a second, there's probably an overhype narrative that we've got lots of really, really smart people that are going into fields that don't produce lots of materials, you know, products and services, or aren't hard science driven, right? So it's kind of the whole like, hey, everyone's going to build photo apps. Why do we keep funding this stuff? There's probably some grain of truth there, but also some exaggeration. How do you think about solving, getting the smartest people in the country from an education basis into more hard sciences and more kind of production type roles rather than either wealth redistribution or things that are more nice to haves than need to haves?

• 19:21Speaker 01

  Okay, so let's take this maybe three ways. One is, Economic incentives, and this is a raging debate that my wife and I have. The second is the sort of moral prescription of what people ought to be doing.

• 19:34Speaker 01

  And then the third is sort of the unintended consequence. And so these will sound sort of mutually exclusive because,

• 19:42Speaker 01

  you know, like Fitzgerald said, the test of a first rated intellect is the ability to hold two opposing ideas in your head at the same time, so retain the ability to function. So I have opposing ideas about this. So let me give you one idea, which is the moral prescription, right? We ought to have more people pursuing more serious things. You know, we even talk about in sort of a, you know, self righteous way that we like to fund matter that matters. And we're not funding trivial video games. But the reality is a lot of the investment in what we consider frivolous or trivial ends up becoming critical. I mean, there is no doubt in my mind that the reason that we are able to do real time protocol right now or video conferencing is in part because of, you know, frivolous stuff that people did for video gaming and Twitch streaming and all that kind of stuff that we would, you know, mock and be like, oh, my God, what are these people doing?

• 20:25Speaker 01

  But, you know, proverbially, thank God that that all this stuff was invented. Same thing, you know, video compression, codecs, you know, people wasting away like couch potatoes on Netflix. You know, it is enabling this at the moment and a priori, none of that was predicted. So I always like to say that, you know, the detritus from one former wave becomes the commensarial fraud for the next. And, you know, until we look at it post facto, it's not predictable. So a lot of the silly, seemingly trivial or absurd or wasteful things that people are doing today end up being useful later on. You know, a few years ago, I talked about how the most dangerous words in markets often are considered, you know, this time is different.

• 21:07Speaker 01

  And I think that the most valuable words in my markets can be, it will rot your brain. Because every time that that phrase was uttered, you know, if you look through the decades, it basically passage the next $10 billion industry. So you had rock and roll music, literally, you know, generation of older parents saying, this is devil's music, you know, Elvis shaking his head. You had the same thing with jazz. You had it with TV in the 60s and 70s. You had it with online chat rooms in the 80s and video games in the 90s and 2000s. And so anytime a parent says it will rot your brain. You know, when you see it now, right? My generation of parents with kids that are sort of tweens or younger. We all amass screen time, you know, you gotta do this digital detox and you have to be in the moment and present.

• 21:52Speaker 01

  But again, look at our current absurd situation. And these kids are digital natives. They're fluent. They're teaching parents how to connect, you know?

• 22:02Speaker 01

  And I actually think that the mediums that they use today, whether it's TikTok or Marco Polo or whatever, actually very creative artistic mediums that, you know, we're going to express genius through. So that's the argument for why we ought not try to redirect and just let the frivolous happen because the geniuses will end up repurposing the frivolous for the useful over time naturally. The raging debate economically that my wife and I have is I always say, you know, do we really need another marketing major, you know, going to school, taking on debt and just coming out with no expertise? Don't we need more computer scientists and engineers and people? Well, the market already sort of sets a price because your graduating salary, if you were going into nuclear engineering or you were going into hardcore material science

• 22:44Speaker 01

  or you were going into CRISPR for biotech, you know, would be much higher than if you were coming out with like just a liberal arts degree or some, you know, marketing degree. And so you're already sort of a subprime credit if you're pursuing the latter. And so I've made the argument, why not lend, just like we used to, you know, during the last housing crisis? There was prime credits based on, you know, your likelihood to pay and subprime credits. Why not, based on the major that you're electing to choose to pursue, have lower borrowing rates? So you might be a better credit if you were pursuing computer science over the past 10 years and you should borrow 1% or 2%. Well, that would lower the cost of access of capital. It would increase the number of people that were potentially applying for it.

• 23:25Speaker 01

  And over time, it would end up increasing the supply of labor, which would then bring down the price and wages in the marketplace. And so you'd have a natural sort of, you know, filtering function, just letting the market based on salaries dictate where there was need, you know, five years ago, four years ago. Insane demand for artificial intelligence researchers. You know, people that had come out of the nuclear winter and deep learning and convolutional neural nets were suddenly the hottest in demand. And somebody that was making $50,000 or less as a postdoc was suddenly being offered half a million to a million dollars at Google and Facebook. And, and so that was just insane. And it created a scarcity of labor, which was a signal to the market. And now, you know, every computer science program is like, you know, flooding the zone with, with future AI researchers at a time when it will probably bring down all the wages.

• 24:10Speaker 01

  And then, you know, the next area that's totally scarce will become, you know, the hot demand. Same thing in an area, you know, where you're an expert in crypto, right? There's anytime there's this sort of information arbitrage and ignorance. And that's reflected in the prices of wages of labor. Um, I think it's a signal. And so if you want to redirect where useful resources of humanity goes, um, you know, prices today are still the best way that we have to signal that to the masses.

• 24:37Speaker 00

  Yeah, and I guess part of this is, um, how much of that is driven by the individual, right? Understanding that, like I always joke, whenever I talk to a college kid and I literally say, you know, why do you want to go do X? And they'll give me some, you know, usually, uh, non-financial driven reason. Uh, and I say, do you know what that person earns? Have you talked to anybody in that industry? And there's just a lack of, um, I think, education and information. Uh, and it's more of like, I want to go do what makes me happy type situation. Uh, and so do you think that that disconnect is, uh, when you're younger, they care less about the financial outcomes? And so there might be some dislocation there? Or do you think ultimately it all falls back to the financial incentives?

• 25:15Speaker 01

  Well, there's definitely an ignorance about income. I mean, if, if, you know, my oldest is, uh, my, my daughter's 10 years old. Um, sorry, one sec. Um, my, the oldest of my, of my kids is 10 years old. And, uh, you know, if I ask her, oh, what do you think, you know, that person makes or, you know? No idea, you know, I don't know, like a hundred dollars a year, you know? It's like, not quite that absurd. But so, so there's a general ignorance, um, where it's just, you know, what's more interesting? Um, over time, of course, you have a signal of like, what are other people valuing with their attention? And so a lot of people, uh, you know, take where I grew up in Coney Island. Most people wanted to be ballers or rappers because that's what was being celebrated in the community. As a culture, you get what you celebrate, you know, both in a local community, in a small ethnic

• 25:57Speaker 01

  or demographic group, and as a country at large. So if we were to celebrate engineers and entrepreneurs and people that were scientists and not, you know, just celebrities, you would get more of that. And so, so I think there is a virtue of a culture celebrating something so as to give status to it and to elevate it. And, uh, and you know, you're starting to see that. I think, you know, whether it's in the fictional world, you know, when you had movies like, um, uh, The Martian, um, you know, or Gravity, or in the real world, as you know, I'm very critical about what I consider to be the ethics and the mendacity, but Elon Musk is a tremendous boon for the, the, an entire generation of people that look to both the stars and a brighter future and say, I want to be like

• 26:39Speaker 01

  that. And so to the extent that figures like him can encourage people to want to pursue science and engineering, it's a beautiful thing.

• 26:46Speaker 00

  Yeah. So obviously I want to spend some time talking about him, uh, but, but I guess part of this is, uh, you are probably one of the more outspoken people who I believe separates, uh, what I'll call the promotion and marketing and, and kind of the outward message from the science that's being done there. Uh, and just so people understand, um, I think your position is a big believer in the science and kind of the ultimate visions of those companies, but the way it's being executed is, uh, the best way to describe it might be, uh, there, there's better ways to do it. Is that fair?

• 27:18Speaker 01

  That's diplomatic. I mean, I've, I've been blunder online. So, uh, let, you know, let's, let's list the things, you know, sort of in intellectual honesty, the things that I would admire. Um, I think the pursuit of going, um, uh, to another planet, you know, or, or to the moon, uh, again, is, is a brilliant thing. Uh, what we will discover and learn as the, uh, sort of entropic exhaust from that, that will be useful for society will be huge. Um, it gives people both a sense of purpose and meaning and society generally needs that. So that's a virtue. Um, the talent that has, um, flooded into places like SpaceX and Tesla and Boring and others, uh, are brilliant engineers and they're motivated by somebody who speaks to

• 28:02Speaker 01

  them, you know, as a, as a, as a good leader of this is a future and I want to take you there. And so I think all of those are very virtuous things. I think the design is brilliant. I think the renderings, I think there's an artistic aesthetic ethos to all the companies that are quite brilliant. And a lot of people say, well, you're really critical about the stock or the valuation. And I'm actually not so critical about stock. I mean, people can, you know, it's a free market. You can own something, you make money or lose it if it goes up or down. And if you think it's fairly valued or undervalued. My main criticism is the, what, again, what I would call the mendacity, the relationship with the truth. This is something that, you know, people can't understand. They say, why do you hate Elon? I don't hate Elon. It's not a personal thing.

• 28:44Speaker 01

  It's a feeling that there's a knowing manipulation of the masses in the same way that I would look at a Sunday preacher. And there are some people that would look at a Joel Osteen or a Kreflo Dollar or Jim Baker back in the day and say, this guy's amazing. And I'd be sitting there being like, are you serious? Like, you don't see this guy is literally trying to fleece you for your money and bullshitting you? And so there's elements of that where I understand why it has to be done. The show has to go on and the showman must do sort of like the Simpsons monorail man to get people to part with their money. But I also truly believe if you ran the counterfactual, that he would have absolutely been able to raise

• 29:26Speaker 01

  tens of billions of dollars necessary in a loss-making enterprise and do it honestly by saying, we are going to do some of the most ambitious thing that man has ever seen, and we are going to lose money for a really long time. And if you don't want to be part of that journey, you should not invest. But if you do, you know, I promise it's going to be a wild ride. People would part with their cash, they'd be part of it. And maybe some people have already rationalized that that's what it is. But when you're saying like, we're going to be cash flow positive and we're profitable and you're playing with the numbers and you're trying to induce, you know, certain institutional investors and retirement money, when the stock's going up and everybody's fine, it's great. But, you know, when things get revealed and it may take a long time for that to happen, it's, I think, going to be tragic.

• 30:06Speaker 00

  Yeah. And I guess part of this is like, there's a separation almost from setting the vision and the ambition on the science and engineering side and really having to motivate people, right, to want to work on something that's really hard. And it almost seems impossible when you talk about, hey, I want to go launch a rocket and reland it. Or I want to build this, you know, super sexy sports car on the electric vehicle side. That can actually be a huge benefit in science and engineering. When you then turn to financials, it's almost like the gift on one side is the curse on the other to some degree.

• 30:38Speaker 01

  Yeah, I think that's right, but I think that there are other models of people who, you know, do amazing things that are worth celebrating. I mean, I truly believe that Bezos, you know, and he's not without his moral transgressions and labor mispractices and there's lots to criticize, you know, nobody is infallible, but I truly think that his, his kind of thinking in building an enterprise, it goes beyond just commerce and pricing, it goes deep into technology. I mean, he's somebody that says, you know, I can't predict five years out what technology is going to matter, but I can predict with very high certainty, people are going to want more convenience, they're going to want more choice, they're going to want their stuff faster, they're going to want lower prices. And so all the technology investments that he makes from

• 31:21Speaker 01

  robots and automation to inevitably self-driving cars for 24-hour delivery are just very systematic and thoughtful, and I find frankly inspiring. Now, of course, he's going to space also, but he's finding it out of his own pocket from profits and cash flow that have been generated from a business that has never raised equity capital, you know, since their IPO, in the case of Amazon. So I admire that much more, because I feel like it's rooted in sort of a grounded ethics and execution that is really rare.

• 31:54Speaker 00

  Yeah, and so one of the questions somebody sent me that I thought was fantastic was, if you took over a CEO of Tesla, what would you do differently?

• 32:03Speaker 01

  I would, I would hire Elon, but I would put, you know, a ring around him of controls. You know, one of the things that's interesting is you can name a lot of great people at Microsoft, you can name a lot of great people at Amazon, you can name a lot of great people at Apple. It's very difficult for you to name a lot of people at Tesla. And the turnover has been, you know, pretty insane and well documented. But I think Tesla needs Elon to be able to be a visionary, you know, and I wrote this letter, which he sort of, you know, semi-famously farted at right on Twitter, which was, were I on your board, this is what I would do, and it was mostly give him the permission to fail, meaning let him restructure, get rid of the debt, raise the

• 32:48Speaker 01

  capital that he needs, take a breath, be honest, and And I think that would just be a wonderful reset. And I said, you know, in that letter, then I would be table poundingly long Tesla. You know, which was such a weird thing to say. So I think it's just really restore integrity and honesty and stop the, you know, the magician show. It's just not necessary.

• 33:13Speaker 00

  Yeah, it's a super nuanced view. And the reason why I think it's so interesting to kind of hear you talk through this is, it's not like you haven't invested and spent a lot of time with people who are doing other really ambitious things in science and engineering.

• 33:25Speaker 01

  Right. No way. Look, every one of our entrepreneurs, right, is basically telling us a story when they come in. Right. I mean, they're telling us something that doesn't yet exist. And then we have to hold them to task and accountable. How much capital is going to accomplish what in what period of time? And then we put more money in. And the ambitions of what some of these guys are doing is just, you know, insane. Right. I mean, we have people that are launching rockets. We have satellites up in space. We've got autonomous systems that are routed rogue 100 foot waves in the ocean. I mean, people are doing crazy stuff. But most importantly, they're doing it honestly. And the day that they lie to us about something to try to induce us to part with our cash is the day that they're dead to us. And so I just think that the quality of the investor, you know, companies get,

• 34:06Speaker 01

  I think Buffett famously said it, that companies get the shareholders they deserve. And when you have a largely retail investor base over time, I think it says, it says something about the quality of your company.

• 34:19Speaker 00

  So I want to switch gears for another, possibly showman in another industry, which is Ray Dalio. And kind of the thought process there where it's less about science and engineering and it's much more kind of the, let me impart my knowledge and I've got this great, you know, financial returns. And we've kind of seen some similarities, both that ended up being fraudulent and some that actually ended up being perfectly fine. Kind of how do you think through, you know, evaluating a situation like that where there's tons of rumors, but nothing that's necessarily concrete data or proven? And it's unlikely that anyone will ever see the actual return date or anything like that

• 35:03Speaker 00

  until it either is an issue or it isn't, right? It's kind of like, we're all guessing until there's some big event and it's either revealed that it's what it says it is or it's not.

• 35:12Speaker 01

  Right. Well, look, the positive thing here again is that, you know, I think there's 1,500 plus brilliant people who work there producing research. And I think that they're all extremely highly pedigreed, really smart people. I think they understand everything that they're writing about, whether it's global macro currencies or relationships between fixed income and a variety of different asset classes, portfolio construction, risk. I think they understand all of that and they publish it brilliantly. I think the vast majority of them, if close to all of them, have never seen a P and L and are involved in anything in actual execution of trades. My basic view is it has been a levered long bond scheme that has benefited from a generational decline of interest rates.

• 35:55Speaker 01

  And I think the cult of personality and a little bit of red velvet rope and high minimums created this. And so I think that you have sort of a McKinsey-like front end and a very questionable back end. And, you know, people again are free to invest and if they get great returns, then, you know, more power to them and people are free to raise eyebrows and questions. Jim Grant came very close, you know, a year and a half or so ago. He ended up with a footfall, you know, stepping over the line on a few things and they went after him pretty hard. My view generally is when somebody is criticizing you, you know, being open kimono or just, you

• 36:37Speaker 01

  know, putting up the numbers, you know, generally shuts up the critics and that's true of Elon. It might be true of Ray, I don't know. But when you attack critics, you know, it's generally a red flag.

• 36:50Speaker 00

  Yeah. And so I guess part of this is going back to this idea of like science not being consensus. A lot of what you do is you're basically finding people who believe in a vision of the world that is not popular or a lot of people don't agree with. And then you make an investment and over time that becomes kind of the consensus view. How much of that do you guys worry about, hey, we are getting sold a vision that just isn't possible, right? Or is that an understood risk as you're investing because you're able to triangulate with a lot of that diligence process that you went through?

• 37:25Speaker 01

  Well, you know, the fringe outlier reject who has a view that is different from the consensus, to me, is like, super attractive, right? I mean, it's, it's, again, going back to art and music. It's, it's the underdog. It's the person that nobody's really listening to. And we like to say that we like to believe before others understand. Now, that doesn't mean unconditionally. You know, credulity is a great master that leads to fraud. And so, you know, we're all washing our hands, you know, wearing masks because of a madman, or somebody that was deemed to be a madman in the 1800s in Vienna, which was Ignaz Semmelweis, who said, you know, "I actually think that when doctors are going from opening and teaching in a, in a rectory with cadavers and then going and delivering babies,

• 38:09Speaker 01

  that they're spreading disease." And people were like, "This guy's insane." He was actually committed to an insane asylum and was beaten to death by guards, basically because of severe depression and that down. So now, but, but that theory of hygiene was correct. And we all know that this part of the germ theory and being able to wash our hands to stop the spread of disease was absolutely correct, but, you know, this guy nearly 200 years ago, 150 years ago, you know, was committed to an insane asylum and beaten to death. So, we like the outsiders because when they are right, now, of course, there's tons of crazy people, right? And they're just wrong. But if you're an outsider and you're rejected by the mainstream, and particularly if the mainstream has something to lose that they're threatened by, that's a really valuable proposition. So, we're constantly looking for that. Now, sometimes we've made bets on people who are a little bit fringe and they're a little bit out there

• 38:53Speaker 01

  and they're just wrong. So, how do we protect ourselves from that? It's, of course, funding to milestones. If we fully fund a company, you know, then all of our incentive is to believe that they're right and not want to lose our money. And that is how you get into situations like Theranos and some of these other frauds, where people never stop to ask a very simple question: "Does it work?" So, you fund, how much money accomplishes what in what period of time? You turn over the next card, you know, you ante up again, just like in poker, and then you flip the next card. We like to say that these sort of two intersecting arrows for us are the perfect situation. One is where you have a directional arrow of progress that feels like it's inevitable. And there's lots of examples of this, whether you think about lighting, that we went from fire on torches to incandescent bulbs to LEDs.

• 39:38Speaker 01

  We are not going back to offices with sconces and torches. We're not going from horses to horse-drawn carriages to cars to electric vehicles to autonomous vehicles to have horse shit in the streets again. It's just not gonna happen. So there's an inevitable directional arrow of progress. Same thing in computing, going from mechanical spinning drives to solid-state drives. And when you can identify those secular arrows of progress that leads to the inevitable, it doesn't tell you who the company is, it doesn't tell you the entrepreneurs, it doesn't tell you the specific person, it doesn't tell you there's gonna be a hundred of them, but it leads you in a direction. So I like finding those directional arrows of progress. And I can share one that I'm obsessed with at the moment. But the other arrow is this perception of impossibility. And that's not our perception of impossibility.

• 40:22Speaker 01

  If we believe, and everybody else is like, there's no way that that thing will ever work, then it's perfect, because what it's basically saying is the market doesn't believe, and whereas you pay a high price for a cheery consensus, you also get a very great deal when nobody else believes. And so if you take a company like Control Labs, this was something that to us felt like a directional arrow of progress, where you had what I call this half-life of technology intimacy. Fifty years ago, you interacted with a giant mainframe, you physically went up to it. Twenty-five years ago, you had a laptop, or rather, a desktop, and you tickled the keys, and you touched the button on the front monitor, and you flipped the back beige box to turn it on. Twelve and a quarter years ago, you had a laptop and you're tickling the keys, and you replace your mouse with a trackpad.

• 41:06Speaker 01

  Six and a half years ago, it's your iPhone, and then three and a quarter years ago, it's your Apple Watch, and then AirPods with compute and voice recognition inside. And so that directional arrow of progress is more and more information density and access, and it's becoming more invisible, and it's getting more intimate with you. So what's the next logical thing? Well, voice, of course, and we have Siri, and we have Google now, and we have Alexa. But gesture is the next thing. I'm sitting here and I'm talking, and I'm wildly gesticulating as I speak. Most of what is capturing gesture today are three-dimensional cameras, which, going back to part of the things we discussed earlier, came out of the video game movement, with Microsoft Connect and Dance Dance Revolution.

• 41:48Speaker 01

  And so when I got introduced to Riordan, who was the founder of Control Labs, here was a guy that's building a brain-machine interface without any implantables, and was going to detect from the surface of your skin what the roughly 15 muscles in your hand, innervated by roughly 15,000 neurons, were doing, and could detect every single neuron down to what was being triggered in the spine. And so I was sitting there typing on a computer, and he pushes the laptop away, and I'm still typing in there, and the words are popping up on the screen. And I'm like, this is magic. Like the Arthur Clarke quote, you know, "Any sufficiently advanced technology is indistinguishable from magic." This was magic. And so I was convinced that I had seen the future, that there was an arrow of inevitability, that the way that we would be interacting with our computers would be first by gesture,

• 42:33Speaker 01

  that I would be able to swipe in free space like a sorcerer's apprentice, and then soon, without even having to actually make a gesture, just by thinking of moving, I could be able to control my devices. Well, most of the people we spoke to said, "Oh, that's got to be like 20 years out. Like, there's no way that'll work." And then, once you see that this thing is working, you know, "Ah, I've got information arbitrage. I know something that the rest of the world doesn't know, and they won't know until we tell them," kind of thing, is the perfect setup. So you have inevitability with a perception of impossibility, and when those meet, it's perfection.

• 43:04Speaker 00

  A lot of investors talk about betting on a product, a team, a market, and everyone has kind of a different viewpoint as to what works. But there's definitely a subset of investors who believe just betting on the right market, even an okay team or average team, will still be successful. Do you subscribe to that? Or are you more the team, regardless of the market, if it's the right team, can end up being successful?

• 43:28Speaker 01

  I would say that the number one thing that I've changed my mind over time, and I give total credit to my co-founder and partner, Peter Ebert, is people. I always thought the primacy of technology, which to me is the interesting thing, like, can you do something or purport to do something? Have you invented something that is like the secret sauce? That has the castle with a moat around it, with knives and sharks and bombs that nobody else can attack? Because if you've got this thing, everybody else is like, "Oh, it's so not fair. They've got that thing." But the thing that I've learned over, you know, nearly two decades now is it's people. Because if you don't have the thing, if it's not working, the people are able to find the thing that is working. They're able to, we banned the word pivot at Lux, but pirouette into the next thing.

• 44:11Speaker 01

  And so Peter was always about the primacy of the people, the two-legged mammals that we are betting on, who are the ones that really, I mean, technology doesn't move itself. You need a person to be able to raise capital, convince people to part with their jobs and join you on a mission, convince their spouses to let them do that, to move across country, you know, and start anew, to convince investors to part with their capital, to convince journalists that their scarce ink is deserved to be spent on you, to convince a big company who's going to take a risk on a no-name, no-reputation startup to become a contracted partner. I mean, that all comes down to the people.

• 44:48Speaker 00

  Yeah, it's super fascinating. You guys were very early, obviously, to nanotechnology, deep tech, whatever you want to call it now. What do you think are the next areas? So that next generation of investors that are coming up, that are sitting there saying, "I think that I know something that the mainstream doesn't." Where do you think they're looking right now?

• 45:07Speaker 01

  Well, I can tell you where I think smart people are moving to. Because again, it's like, you know, we all read voraciously and we come up with interesting ideas and we kick around our partnership. But most of the time, it's somebody coming in and us being like, "Wow, like, we never thought about that." So over the past few years, we have definitely seen a big thrust of really smart people at the intersection between biotech and computer science, sort of computational bio. And so whether that is modeling in silico and then being able to produce drugs or design proteins or shorten a drug discovery cycle, the tools that you have computationally, developed mostly for other IT purposes, reaching into the biotech realm is just absolutely accelerating that in a really interesting way.

• 45:49Speaker 01

  And it turns me on because you have some proprietary technologies. And the markets happen to be huge because if you can repurpose an old drug more quickly or get something through FDA trials more quickly or better target a potential patient, you know, all of that is really accretive. So that one's a little obvious and it's been done over the past few years. An area that I happen to be personally obsessed with right now is, and this sort of fits with a broad theme across Lux, is the gap between science fiction and science fact that keeps shrinking, is the gap between simulation and reality. And so when I look across our portfolio companies, often what happens is I start to see a pattern amongst a bunch of companies. I'm like, huh, you know, if you sort of extrapolate amongst these companies, there's some interesting pattern that has emerged. And the interesting

• 46:32Speaker 01

  pattern, when I look at a company like Matterport, Matterport was taking 3D scans, cameras from Microsoft Connect, basically assembling them into a module, doing a rapid scan of a physical space, and then using software on the backend to stitch these things together so that you could basically have a video game, you know, Doom-like walkthrough of a three-dimensional space, and then extrapolate into a dollhouse view. And it was just like this beautiful, cool thing. Okay, what's the big deal? Useful for real estate, static images, you know, not dynamic. Combine that with Unity, the gaming engines that are letting you to render, you know, in virtually real time with ever higher precision and resolution. And so I am seeing across our companies, you look at Zooks and Ava that are doing autonomous

• 47:16Speaker 01

  vehicles or solid-state LiDAR to be able to look at the environment and capture with ever higher resolution what is actually happening. You look at some of our companies that are doing this inside of bio, in biotech, to be able to image inside of a cell. On the one hand, the ability to capture reality with technology and tools is getting better and better than ever before, with higher resolution, higher speed. So that is sort of point number one. Point number two is the ability to model and simulate what you have captured. Now, when you have these two layers, the capture and then the model and simulate, then you have a computational layer between these two things that are talking to each other. And this turns me on because it's this basic idea of consciousness and

• 47:59Speaker 01

  how we navigate the daily world. You have a memory prediction framework. If I see you, and you're wearing a Yankee hat, or, okay. So if I see you and you're always wearing the Yankee hat, or if you know me, I'm always wearing my skull vans. When you see those vans the next time, or I see your Yankee hat the next time, and then, you know, I didn't see your face, if you look up, I'd be like, oh, that's Pomp. Or you might be like, oh, that's Josh. You're making a prediction based on a part of the whole from the memory. If suddenly you were wearing a Boston Red Sox hat, I would have emotional surprise. I'd be like, oh, I wasn't expecting that. And so I update my priors in like this Bayesian inference. And so a lot of our computers in the machines from autonomous vehicles to cell drones to drones in the sky to defense systems are doing that.

• 48:44Speaker 01

  They have a model of the world based on capture. They're making predictions when they're in, interacting with the world based on sensors, and then constantly iterating between these two things. That feedback between the hardware of capture, the software of simulation, and the compute layer between them is seeing a flood of really interesting talent. And so there will be people pulled from experiments that went into augmented reality and virtual reality, which in a form is that it's capturing what you see in the real world, putting a layer on top of it, making predictions that will go into all kinds of new industries that we never anticipated. So that at the moment is something that I'm really excited about.

• 49:22Speaker 00

  Yeah, and it goes back to, I think, a lot of the AR initial applications were thought of as games or kind of frivolous to some degree, right? And obviously, you're talking about much more what people would consider important. One area of biotech that's super interesting to me is genetic editing. What are you guys seeing there? What kind of work have you done or found that that's where people are working on?

• 49:41Speaker 01

  So two things that we've done. There's a new code that my partner, Adam Goldburn, who's a PhD stem cell biologist, has stood up with one of our venture partners, Ian Pacon. Ian was a founding scientist of a company in the Lux portfolio called Caliope, which is focused on the gut-brain axis. And he built an incredible team and then wanted to go off and start more companies. We said, come in house to Lux and do it with us. And so together, they started a company that at the moment is called VNV. It's a virus non-virus. But the key thing about CRISPR is there's no effective mechanism for delivery to a very specific part of the body. And so what they've done is teamed with a bunch of scientists who are working on

• 50:23Speaker 01

  that, having the vector, in part from viral delivery, to be able to deliver to a very specific organ or cell segment inside the body. So that's one area that I think is very interesting in genetic engineering, because even if you can prove that you can use CRISPR or a variant of it in the lab, or in Petri dishes, or in mice, it doesn't really extend to humans, and you're going to need the delivery vehicles and vectors to be able to do that. Second area, which I alluded to before, which again was really inspired by science fiction, is going to the outlier regions of the world and trying to find outlier individuals, quite literally mutants, people who have very rare traits. So you're not just, in this case, looking for the genes, you're not looking at large-scale

• 51:06Speaker 01

  databases and trying to find some interesting statistical variant, you're quite looking for the variant in something that they physically can do. So it might be acute eyesight in very dark conditions, the ability to hold your breath underwater for long periods of time, people get into an accident and their bone stone break, people whose hair just grows very thick or long for a long period of time, their nails grow, people who never get facial hair, people who have very low cholesterol even though they eat a very high-fat diet, people who only need one or two hours of sleep of metabolism, people who have very high oxygen saturation rates but have very high altitudes like the Sherpas. And so we put together a team in a company called Variant that is focused on going to

• 51:48Speaker 01

  these outlier regions, particularly people that are not pale, male, stale, white Europeans, so not people that have been sequenced by 23andMe and Regeneron and Genentech and Roche. And they're going to Pakistan, they're going to New Zealand with the Maurories, they're going to Nepal with the Sherpas, all these weird regions to find these really interesting traits with the idea that if there's a monogenic condition, meaning a single gene might make the protein that leads to that trait, then that gene might be a target for a drug for the masses. And that is really inspiring because it's right out of Professor X, you know, in X-Men.

• 52:20Speaker 00

  Yeah, and so like on that specific example, how do you go from, hey, those Shoppers have incredible oxygen capabilities that others can't? Is it something where you're actually taking, you know, DNA sequencing and trying to come back to a lab? And then the thought process is how do we now scale this to to bring to other humans? Or is it something where you actually start with, no, let's go find people who have very low oxygen capabilities? And like, let's solve healthcare issues before we get into things that would be considered more like nice to have, like almost cosmetic type applications of genetics?

• 52:54Speaker 01

  Yeah, well, I think the the moral underpinning is how do you reduce human suffering? And so the bias ought to be, you know, how do you take something from some sort of superhuman and apply it to people that are suffering? Inevitably, it will raise moral and ethical questions about, you know, people doing genetic enhancement and people, you know, doing the equivalent of genetic doping for sports and more, you know, trivial things if you, you know, put a moral value on it. So i- in this case, it's it's really a combination of genetics, population genetics, computational genetics, looking at family histories. Then you're looking at ethics and partnering with some of these local communities. So the thing about this particular company that I really admire is the first two people were computational geneticists that were founders. They came out of Cold Spring Harbor.

• 53:39Speaker 01

  And the CEO, which is going to be announced pretty imminently, has actually come from the Bill and Melinda Gates Foundation, ran a huge program there. And the second and third person that they hired after that was a computer, was a cultural ethicist, a cultural anthropologist and an ethicist. So the cultural anthropologist, because when you approach all these different, very diverse populations, you have to be really considerate. Some of them might care about financial remuneration. Some of them might just want better health access. Some of them might want to be partnered. Some of them might not want blood drawn. And so there's all kinds of unique, very idiosyncratic situations that each of these that you need cultural anthropologists. And then the ethicists to understand what is the right thing to do here?

• 54:22Speaker 01

  And so many of these indigenous populations have been exploited over time that their default stance when when approached is, you know, no, thank you. So I think these guys will end up with a competitive advantage because of just the approach of how thoughtful and considerate they are in approaching all of these indigenous populations.

• 54:39Speaker 00

  Yeah, and then something like that, like how much of it is, I'll call it simple, but that's frankly not fair to the team there. Hey, people in Nepal that are stripers have high oxygen capabilities. Most people would guess that's probably true versus there's somebody somewhere in the world who has great eye vision in dark circumstances and they don't even realize that that's actually a mutant or an advantage, right? They just have grown up their whole life knowing that they can see in the dark, right? And do you guys have to kind of go to both types of populations, places where it's a known fact that hey, there's an advantage this human has over others and then also do something to kind of get the serendipity or the exploration to figure out the unknowns to some degree?

• 55:22Speaker 01

  Yes, most of it starts with the former of trying to find the really interesting phenotype where somebody has advantage, but it really is critical to understand genotype, phenotype, and understand whether something is because of a monogenic condition or because of some interaction between nature and nurture, between the environment and the genetics. In many cases, it may be that something that exists in a particular region, you know, really is turned on because of the epigenetics. The gene makes for some proteins that are expressed because of something in the environment that doesn't occur, you know, if you were to port it somewhere else. I mean, you see this kind of thing, for example, very naturally sickle cell anemia. You know, many believe it was a adaptation to protect against malaria, but when you move people

• 56:04Speaker 01

  out of a particular region to a different continent, in this case because of the atrocities of slavery, then you have all of these people that suffer from sickle cell anemia. Same kind of thing if you take people who genetically were adapted to a particular latitude of the earth and you move them further north where they're getting less sun, you know, you have, you know, higher incidences of vitamin D deficiencies and all kinds of issues. So the interaction between, you know, biology, environment, where we are on the planet, the specific geography, it's so complex. The reason that some of these quote unquote island populations are interesting, when I say island populations, obviously the immediate thing that pops into your head is, you know, well, these people are in like, you know,

• 56:47Speaker 01

  Polynesia or on an island, but in Pakistan, for example, there are island populations, not because of geography, but because of close interrelatedness where cousins are marrying cousins. You have a higher probability of a monogenic condition, which is, you know, single gene makes a protein, makes the trait, and that's really the needle in the haystack that you're looking for.

• 57:05Speaker 00

  Yeah, the best example, as you were talking there about kind of environment is, I know you were on Eric Weinstein's podcast recently, and I listened to the episode with him and his brother. And this whole idea of like the rats and the telemers and actually, science had it backwards simply because of where the rats were coming from in the environment that they were basically being, you know, held captive in until those tests were being done.

• 57:25Speaker 01

  You know, and Eric's, I mean, Eric's absolutely right because he is lovingly angry at his brother for not saying, dude, like, why are you not pounding the table, saying like, I was wrong, I was completely screwed by a Nobel Prize winner who had the cloud in the status and basically took an idea that I had and sort of, you know, just, just hit it. And, um, uh, yeah, no, I mean, it has profound implications for nearly two or three decades of scientific research. You know, we've cured all kinds of things in mice, from cancer to, you know, repairing vertebrae to let them walk again. And the kinds of mice that we're walking, we're working on are, have been genetically, you know, engineered almost inadvertently.

• 58:07Speaker 00

  Yeah, I want to switch gears and talk a little bit about crypto, just so people understand, like, what have you guys done there, if anything, and kind of how does Lux think about that space, um, you know, in general?

• 58:18Speaker 01

  So, uh, two or three of the partners focus on it a little bit more intensively. We've made probably five investments, including in one fund, um, which was, uh, trading in cryptocurrency is mostly for sort of information and intel. Blockstack is one that is right above us in New York. Some of these were bets on people and philosophy, um, like in the case of Blockstack. You know, Muneeb and Ali, we just thought were sort of intellectually honest. They were critical of a lot of other projects. They weren't sort of part of a hype train. We had some good co-investors and we just thought that the way that they were thinking about distributed controls and access was, was rational.

• 58:57Speaker 01

  My general stance has been one of, um, true believer in the merits of distributed ledgers, of the mathematics behind it. And much more skeptical of the particular currencies, uh, over time, it would take a intersubjective belief, which Bitcoin, I think, has now become sort of runaway leader, whether it's, you know, 10x or 20x, you know, the number two. Uh, and I think that that will exacerbate, right? I mean, I think it'll be sort of runaway leader, um, you know, for some period of time between Ethereum and Ripple, three years ago, two years ago, you know, I mean, anything went. But um, you know, what the killer app is going to be, or how long, I, I, I think that this is one of those things sort of like, you know, science proceeds funeral by funeral. I think it's going to be a generational thing.

• 59:42Speaker 01

  I had thought, pre-COVID, that we were likely to see a 2020 fall uprising

• 59:51Speaker 01

  in an election year, driven by Trump pointing a finger at Powell in the Fed, and basically blaming him for a market-led recession. And so I had just hypothesized, speculated, with low probability but high magnitude consequence, that the market would tank, that Trump in an election year would point the finger at the Fed, and basically, people not really understanding the Fed and what they do, but seeing all of the symbolic markings of an institution and Washington, you know, columns and, and bankers and banksters, it would reignite and occupy Wall Street of 2009. But this time, instead of having, you know, sort of libertarians on one side wanting low government,

• 1:00:33Speaker 01

  and, you know, anti-banksters, you know, sort of Seattle Who protesters,

• 1:00:40Speaker 01

  you know, on the other side, that you would basically have the young and the old, the old basically rejecting fiat currency and going for gold, and the young basically saying, no, our medium is going to be crypto and Bitcoin. Both would be a rejection of the dollar. All of that was pre-COVID and pre the fiscal and monetary stimulus of unprecedented proportions.

• 1:01:03Speaker 01

  And, and I think, you know, I, I still happen to believe at the moment, as a measure of derivative belief, that gold is still the world's sort of,

• 1:01:16Speaker 01

  you know, protection against fiat currency being debased, which it has been for a century. But there's nothing that stops that from shifting to a generational view that crypto and particularly Bitcoin, you know, is, is a better alternative.

• 1:01:32Speaker 00

  So a couple of things in there. One, I'm actually of the same belief that like gold and Bitcoin are both going to end up doing well. And it's almost like you don't actually need the inflation to happen. It's more of like the fear of the inflation, right? People just say, hey, tons of printing. Of course, I've got to protect myself, right? And they kind of run into these other assets. And I definitely agree that there's this generational divide. You know, if you talk to kind of the gold bugs, like, I mean, they literally hate Bitcoin, right? They're just like, you guys are all idiots. How could you give up on the 2,500 years of gold? And also vice versa, right? I mean, you know, you kind of play into it from the Bitcoin perspective with gold being for old people, right? Or the boomer rocks is kind of what the terminology on Twitter. How has your opinion on that stuff changed with COVID happening and kind of all the Fed action, interest rates going to zero, all the quantitative easing that we've seen?

• 1:02:18Speaker 00

  Has it been materially changed? Does it accelerate that happening? Like, how are you thinking about it now?

• 1:02:24Speaker 01

  So, you know, in in in dollar terms, you've not seen a huge run in gold in other, you know, currencies you have. And so as relates to Bitcoin, you know, I forget whether it was a year and a half ago or two years ago when Korea had banned it. And, you know, you would have expected this sort of big thrust into it. You would have expected in COVID when news of the first phase or second phase or third phase that started to approach, you know, $4 trillion, that you would have had this huge buying. And, you know, some people were saying, well, you know, the sell off happened because you had liquidation and people needed to sell what they could. And this was a stopgap between, you know, bid and ask in a relatively still illiquid market meant that there was a big sell off, you know, that is relatively recovered.

• 1:03:09Speaker 01

  Today, it's at what 10, 11?

• 1:03:11Speaker 00

  It's actually just dropped recently. It's about 8,500, but it was at 10 a week ago.

• 1:03:16Speaker 01

  Okay. So, you know, the volatility obviously is a measure of just belief, right? I mean, and and, you know, I I have admired actually a deep value investor who I think presented the most cogent argument for the ownership of crypto and Bitcoin, particularly an opened, you know, several hundred million dollar, I think, mining operation, which was Murray Stall of Horizon Kinetics. I mean, this is a stalwart, you know, value guy who

• 1:03:46Speaker 01

  It rightly and is in total resonant criticism with me of passive indexation in equity markets and sees a variety of vulnerabilities. And, you know, is put out from the simplistic of, well, you know, I don't know, 16 million millionaires if everybody owned, you know, one or two Bitcoin, you know, that's the entire thing, to a more complex, you know, if the entire world of fiat currency shifted over, you know, what would be the value of Bitcoin? And so, you know, I'm generally of the view that it would be idiotic to say this is, you know, a scam, the math is real, the logic is real, it still depends on the intersubjective belief and more and more people, you know, basically owning it.

• 1:04:30Speaker 01

  I think that you're having a growing number of people, particularly of a wealthy institutional investor class, that say, you know, whether it's idiot insurance or whatever, why not 1% or 2%? Now, you know, 1% becomes a pretty big deal, you know, as more and more institutions do it and look to each other. And before you know it, that can become sort of a foundational basis for widespread ownership for no other reason than, you know, again, intersubjective, you know, ad infinitum, you know, you have it and I have it and, you know, and so on and so on, until everybody has, you know, some meaningful portion of it.

• 1:05:01Speaker 00

  Yeah, what you're highlighting is almost this idea of like money is a belief system, right? And the thing that I don't know yet is like what breaks the belief in fiat currency? And if you take the US dollar, for example, that is a very, very strongly held belief. It's backed by everything from kind of the full faith and credit of the US government to the military might and global reserve status. And there's a lot that goes into it, a very complex system. For that currency belief to break, it's not going to just be you and I wake up and we read a headline right now, all of a sudden, hey, I'm going to go move all my wealth out of US-denominated assets.

• 1:05:39Speaker 00

  Other currencies, obviously, we've seen them kind of fail very rapidly. And so I think that's the one piece of the analysis where if I understood that better or had a very strong thesis, I'd go put 100% of my assets, right? Because you'd say, hey, when this happens, everyone's going to kind of shift over. I believe it for everybody else, and therefore, when it's consensus, you know, I benefit. But to me, like, that is the one component here. And I was talking to an investor who recently said, it's all relative as well, right? Just as much as liquidity injection in the US is happening. Internationally, you're getting tons of liquidity injected in other markets as well. Could you see a world where, you know, the US dollar actually strengthens, all other currencies either suffer or fail?

• 1:06:20Speaker 00

  And those economies or populations start to opt into something like Bitcoin? And as you get a dollar and Bitcoin environment where both of those strengthen? And like, it's interesting. I don't know if that's actually going to happen, but I do think that that belief is a key piece. And what it really does then is says, hey, it might not be a technology problem, right? Like, money might not have a true technology problem, it may be a monetary policy problem. And, you know, that's where you've got to start to educate people and understand the benefits of Bitcoin versus fiat.

• 1:06:49Speaker 01

  Right. And so on top of that, you've got, you know, coordinated debasement. You have an entire camp of people that had a once-fringe theory that is growing steam, both in, it's interesting, because the more that people criticize it, the more it becomes sort of normalized as possibility, which is MMT. That, you know, a government that, you know, prints its own currency can't default and can just keep printing and printing, even though it's debasing it. By any measure, the amount of indebtedness that a country has, the best way out of that indebtedness is to inflate the debt away, basically borrowing, you know, stealing from savers and bringing wealth to borrowers.

• 1:07:30Speaker 01

  And so you have the MMT camp, you have the gold camp, you have the crypto camp, you have international monetary policy as both a tool and a weapon. You have the US, which I believe is less sovereign, stultifying than China, because I believe that China will be probably the earliest adoption of widespread nationwide digital currency, not to say Bitcoin, but I think that they will do it because they want to surveil. So it is super complicated and I think, you know, sort of the reasonable rational thing now is just a very small allocation.

• 1:08:13Speaker 01

  But, you know, on a speculative basis, what you're really betting on is again, the intersubjective belief that people will adopt this now. There's still debate, you know, will we see a deflationary environment or an inflationary environment? The case for a deflationary environment is you have mass amount of people that are out of work. You have spending that has gone down significantly.

• 1:08:32Speaker 01

  You have, you know, technology that if accurately counted in GDP really would show deflation in everything, except where things are highly regulated in, you know, education and healthcare and, you know, housing prices and others.

• 1:08:46Speaker 01

  Or you have inflationary environment where our supply chains have been constricted, our ability to produce has been hampered, pent up demand leads to an explosion in prices. People say, holy shit, in the same way that I never, you know, thought that toilet paper would be out, you know, in the, in the grocery store and people were bartering for, paying, you know, eight dollars a roll or paying twenty five dollars for, you know, a pack of Lysol or whatever. You could see that, that is all inflation. And so if you saw that happening writ large, we've been warned about or talking about meat shortages. And suddenly you were able to buy a lot more because Bitcoin, for example, or gold was holding its value while the dollar on a purchasing parity basis was losing it.

• 1:09:28Speaker 01

  You know, that would be a big shift too, where, you know, you could sort of see a crowd like phenomenon of people shifting. But again, you know, like, like you said, there's so many variables, it's so hard. It's much easier for me as an investor to be able to look at an entrepreneur. Even though we normally do it in a very multi-dimensional analysis and right now we're doing it often in a two-dimensional analysis on a flat screen void of all of the psychological aspects that you can do it when you're with somebody, but it's much easier for me to look at that person and look at the technology that they're building and see truth where it is independent of what everybody else believes, you know, ad infinitum.

• 1:10:03Speaker 00

  Yeah, I mean, look, I've been very fortunate to talk to a lot of these back row investors who they spend all day thinking about all that complexity. And somebody asked me, what's the number one debate right now? And it is that deflationary versus inflationary environment. And I think that once that is determined or there's some consensus view as to where that's going, kind of all of the other investment decisions will cascade off of it. And by the way, I think, I think it will be not quite as a mirror or as a proxy of the market, but you know, whether you think the market today is cheap or not, the equity public markets, some companies are rightly being punished. I mean, they're being destroyed down 40, 50% and their likelihood of prospects in the future might be accurately

• 1:10:44Speaker 00

  accounted for. The market itself obviously is very market cap weighted. And so, you know, the Apple, Google, Facebook, Amazon, et cetera, which are beneficiaries today, maybe rightly so. And so you could see the same sort of thing where certain companies will have inflationary outcomes and others will have mass deflationary outcomes and it's not going to be a universal, you know, correlation of one. Yeah, the other thing is somebody sent me a chart yesterday that basically denominates the S and P in Bitcoin. And as you would expect, it's basically, you know, a directionally 45 degree angle down into the right. And it's one of these things where, you know, you also have to balance, that's a cute chart to float around on Twitter and kind

• 1:11:26Speaker 00

  of get all of that attention. But is that something that is sustainable? And how do you think about that moving forward? So I think it's really interesting. The last thing I want to talk to you about before we finish up, I usually ask everyone whether they believe in aliens or not. So we'll get to that in a second. But you've obviously done a lot of work on space and a lot of the science and engineering needed to both do transportation, manufacturing, space travel, et cetera. Just maybe just talk a little bit at a high level of how you think about space exploration, where we are currently in our ambition to do certain things in space, and what you think maybe the next 10 years of space technology looks like.

• 1:12:07Speaker 01

  Okay, so do you want to save the aliens for after, or do you want to include that in here?

• 1:12:11Speaker 00

  Let's get to the aliens last, because I think the technology in space will help inform how you view aliens.

• 1:12:18Speaker 01

  Okay, so let me give you my own moral prescription, which is if I had a limited set of resources to invest, you know, for sort of the world, space would be on the list, but I don't know that would be top five. And this was sort of a debate that I would have with people about climate change, global warming, all of which is real. I have no debate about anthropogenic causes of global warming. My quip has always been that there are more important things to prioritize that are 10-year problems that should be solved in the next 10 years versus 100-year problems that could be solved in 50 years. Things like Alzheimer's, cancer, heart disease, where people today are suffering and deserve to be, you know, this is sort of the moral thrust of invention, creativity, talent, capital should flow to that first.

• 1:13:03Speaker 01

  So space to me is not one of those top five things. Now, it's inevitable, if you accept what I said before, that there's so much randomness and optionality of things in the pursuit of one thing that in the sort of exhaust of it fall off and, you know, end up being created, that I think, you know, you have all kinds of unintended positive effects. You know, missions to Mars or beyond, you know, to me feel like self-aggrandizing, more ego-driven stuff. Rather than trying to get us off the planet, I'd rather figure out ways to, you know, keep us healthy on the planet.

• 1:13:40Speaker 01

  On technologies in space, you know, we do have people that are doing launches. We have people that are launching satellites. We have people that are doing imagery from satellites. We have communication antennas that are beaming to and from satellites. In the near term, we will have constellations of low Earth orbiting satellites, and there will be a slew of companies that produce that. So you will have SpaceX, you will have some version of OneWeb reincarnated, its assets and vision adopted, whether that ends up being by IntelSat, some offshoot of SoftBank, or somebody else. You will have Facebook and Google and some of the big primes also trying to rain down internet. At bandwidth to be able to, you know, connect the world. So that to me feels very likely. Positioning technologies for the satellites themselves is something that's quite interesting.

• 1:14:25Speaker 01

  So today you launch something, you try to, you know, do it at a certain frequency and sequence, but the ability to discreetly position is very interesting. You saw for the first time a robotic apparatus actually go and do a refuel and repair of a satellite. So that's something that I've been personally obsessed with. I think it's a little bit early and premature. We've met with a lot of entrepreneurs and I find it quite interesting where, for example, on the ground, what they're doing is saying, let me raise some money to do a computer vision problem to prove that I can lock on to something that looks like a particular satellite. So entirely robotically, you know, basically with a black backdrop that mirrors space. And let me show that I can perform a function on a physical object.

• 1:15:06Speaker 01

  Whether that's adjusting a solar tile or removing a piece of debris. And so that to me is actually very inspiring. I think we will have autonomous systems with communication systems that are reporting and both repairing and whatnot in space.

• 1:15:21Speaker 01

  Of course, I think the biggest opportunity where the most money is going to flow is ultimately going to be in defense. And so quite literally, you know, the new space commander for our space fleet two or three weeks ago was mocking Iran for launching effectively webcam into space. But, you know, anytime you mock somebody, obviously, you know, strengthens their resolve, you know, and just look at, you know, Obama and Trump at the, you know, press dinner, but I, I, I think that when China blew up a weather satellite years ago to remove it, you know, it was not demonstrating that it could blow up a weather satellite. It was demonstrating that it could blow up anything in space.

• 1:16:02Speaker 01

  And so offense and defense in space for critical systems as we launch more and more things off the planet, off the surface of this planet, I think are going to be very critical. So.

• 1:16:16Speaker 01

  So I think a lot of things are going to revolve basically around satellites and robots in space repairing, connecting, you know, suites of satellites and all of the sensor payload packages that are able to image and communicate back down. So.

• 1:16:31Speaker 00

  Anything in like the manufacturing space that you guys have seen that you think is interesting? Or maybe not even a company, just as you guys think through it. I know there's some people who think there's certain things around manufacturing in space that are either more cost effective, can't be done here, whatever it is.

• 1:16:45Speaker 01

  No, I mean, we've looked at the fringes, you know, from everything from like mining to manufacturing. And I think that will be inevitability, but I think it's a really far off period. I mean, I think the most important thing will be finding ways to capture or generate fuel beyond solar. So, you know, today, probably the most promising thing would be some sort of satellite that was a solar battery that could actually store it, turn it from a solid state fuel into something that approximated a liquid fuel or a battery that could be transported onto a satellite and basically refuel or repower it. You know, that would be magical today and we can't really quite do that. So, no, that would be sort of the near term practical extent. But, but yeah, no, there's going

• 1:17:28Speaker 01

  to be, you know, tremendous. I mean, if you think about all of our assets up there now, they're unmanned and there's going to be an insane amount of unmanned assets that are launched by competitors, you know, sovereign competitors, corporate competitors, and there will be accidents and there will be technology intended to both prevent and police and investigate those accidents. And I think it'll, it'll be a rich economy in space.

• 1:17:51Speaker 00

  Do we get autonomous space aircraft or do we get autonomous cars first and then driving on US highways?

• 1:17:59Speaker 01

  Well, technically we have autonomous space aircraft today. If you count satellites, you know, in the gravitational pull of the earth, you know, locked in geostationary orbit. And then low earth orbit, you know, is going to, you know, effectively be on. On its own autonomous path, but no, I'm more optimistic about autonomy, you know, terrestrially. I truly believe that you will see, you know, in the next few weeks, several big announcements. Waymo will announce, you know, several billion dollars may have already happened today, but this week it will be announced to probably three billion dollars plus for Waymo. You know, Zooks is a company that we have significant investment in. They will need to raise a lot of money and their biggest risk is capital, but incredible

• 1:18:42Speaker 01

  technology. Aurora, GM Cruise, you know, handful of others. Tesla is not one that I'm optimistic on for, you know, all that they purport about robotaxis and autopilot. That to me feels just like a really misleading grab of people's cash, but that'll get sorted out over time. But I'm absolutely convinced that before we see robotaxis, we will see 24/7 delivery of autonomous vehicles, where in the same way that New York ultimately put in a bike lane, certain parts of the city will have right-hand turn lanes. Right-hand turns are easier than left-hand turns because you don't have oncoming traffic that are basically running a physical world algorithm, the way that our routers run digital world bit algorithms and shuttling goods 24/7, groceries, pharmaceuticals, packages, you

• 1:19:26Speaker 01

  know, FedEx deliveries. And, you know, a place like New York would probably be amazing for it, particularly in these times. So I think you'll see that a big OEM partnered with a big autonomous vehicle company and somebody like an Amazon doing 24/7 autonomous delivery vehicles with basically a human to do the last mile delivery. Because even though people are making robots for that, it's there's still too many edge cases that are are hard for a robot to do homogeneously.

• 1:19:50Speaker 00

  Is that like a two, three-year thing? Or is that more like a 10-year thing? Like, what does that feel like on a timeline basis?

• 1:19:56Speaker 01

  I think that technology is there within the next year. I think the rest of it is going to be, you know, policy and economics. So, you know, if somebody wanted to put down a billion dollars, if New York City wanted to give a billion-dollar concession, I mean, most cities are not going to be in any financial, you know, situation to be able to do something speculative and long-term like that right now. It's it'll be neither politically popular or or palatable, or in some cases, will they actually have the capital to do it? But if you had, you know, a billion dollars from the city and, you know, a company that was able to put in billion dollars, two billion dollars share a city to create right-hand turn lanes and autonomous delivery, you know, you know, you can do that now.

• 1:20:32Speaker 00

  Got it. Aliens, believer or non-believer?

• 1:20:35Speaker 01

  Well, believer in the sense that, you know, we watched with our kids, you know, the Attenborough, you know, Planet Life series and this, and what they have been able to capture, subsurface, you know, the depths of the ocean, the alien forms of life that exist there, which exist, they're documented, are just insane. These bioluminescent, you know, fish that, you know, have a little dongle that basically captures, you know, something that swims by it. I mean, these are the strangest things, you know, that you could possibly imagine, and we've documented them. So in that sense, these things are aliens, right? I mean, by definition, they exist at the subsurface of the sea in the most harsh living conditions that no other life was ever

• 1:21:19Speaker 01

  believed to exist. So the prospect of something existing in space, you know, sure. Do I think that, you know, we have Rick and Morty-like aliens, you know, that, no. Is there sentient life? I have no idea. Is it possible? Sure. Is it improbable? Yes. Do I think that there's, you know, microbes or microorganisms or things that from the very basis of chemists, chemistry and chemical life and how life itself is a fight against entropy, you know, could that have evolved through basic physics and chemistry in some small form? Yes. You know, would I be shocked if there was some form of sentient energy acquiring autonomous organism?

• 1:21:59Speaker 01

  That, no. But do I believe in, you know, Rick and Morty, three-eyed aliens that, you know, we've imagined for 100-plus years? No.

• 1:22:09Speaker 00

  Yeah, there's, I forget the gentleman's name, so I apologize, but I think he's a Brazilian billionaire, and his goal, if I remember correctly, is to go to the depths of all of the oceans, and he's built basically a one-man submarine, and he's gone, I think he's gone to two of them, I think it's the Indian Ocean and one other. And it's just, to me, that would be fascinating, like, what did he see? Right? Because he's literally gone where no other humans go.

• 1:22:34Speaker 01

  Yeah, no, I mean, and then, you know, there was a movie, again, sci-fi, sci-fac, right, The Abyss, back in the day. The Abyss was just a brilliant movie, but, you know, James Cameron, The Mariana Trench, Bob Ballard, you know, is doing deep-sea diving, I mean, super-deep-sea, and the stuff that they're discovering, you know, is insane. And so I find that there's just so much... On this planet, on our surface, subsurface, in our bodies, that is just this great frontier. I mean, quite literally Fantastic Voyage, you know, or Inner Space, you know, if you ever saw either of those two old school sci-fi movies. That there's a much greater calling here, you know, before Ad Astra. So I, I hope that we solve Alzheimer's, cancer, heart disease, you know, and, and the things afflicting

• 1:23:19Speaker 01

  our planet and the people on it before we start worrying about, you know, intergalactic civilizations.

• 1:23:24Speaker 00

  For sure. Last question for you. I know that you read a lot. What is the most important book that you've ever read? It's not your favorite, but the actual most important.

• 1:23:34Speaker 01

  Well, the thing like, I'm reframing that to say what, what I want my kids to read. I'm, I'm going to give you two or three and they're sort of all the same vein. Poor Charlie's Almanac, I thought was just brilliant. Charlie Munger, I think is one of the most rational people and a true synthesizer and polymath. Renaissance thinker of all these different disciplines. And I think, you know, it, it's difficult if you read his speeches, particularly the 94, 95 USC speech on worldly wisdom. And you come away with that with not being a subscriber to this view of the world. You know, I'm like, I can't connect with you, you know. Second would be a variant of that, which I think is a great compendium, Seeking Wisdom from Darwin to Munger,

• 1:24:17Speaker 01

  which I think just has a lot of great, you know, interesting mental models. And then the other one, which played a huge role in my life in appreciating psychology was Cialdini's book on influence, The Psychology of Persuasion. And it was really a marketing book intended as a, at least frame as the defensive guide, you know, against predatory marketers. But I think it was adopted by many as an offensive guide, but all the principles from, you know, liking scarcity, authority. It, it just, it, it was to me, the early foray into behavioral science and our cognitive biases. And I've been very lucky to spend a lot of time with Danny Kahneman. And the one thing that Danny will tell you is you can document all of these biases and you can know every one of them.

• 1:25:02Speaker 01

  But it's like an illusion, you know, even though you know it's an illusion, you still see it or you still fall for it. And so the fallibility of us as individuals, as a species is, is both scary and inspiring.

• 1:25:14Speaker 00

  I have a friend who always says, people love magic, even though they know it's not real.

• 1:25:18Speaker 01

  Oh, I love magic. Love magic.

• 1:25:20Speaker 00

  Awesome. Listen, I really appreciate you taking so much time to do this. Where can we send people to find you on the internet or learn more about Lux?

• 1:25:28Speaker 01

  Well, definitely go to lux, luxcapital.com. And then we've got, you know, cool web series, Futura, which we've been doing where we take you inside some of the cutting-edge engineers and scientists and founders, a lot of them in the Lux portfolio, showing you everything from defense to space to cellular drone to brain-machine interfaces. And that's on YouTube. So I love what you're doing. Thanks for having me, man.

• 1:25:50Speaker 00

  Yeah, for sure. I will. I'll give you guys a big, big boost on Futura. I think you just did the Andarol one. And I haven't watched it yet, but I actually have it pulled up. So I'll link to that as well. And we'll do this again sometime.

• 1:26:04Speaker 01

  Cool, man. Thanks. Good to see you.

• 1:26:07Speaker 00

  All right, guys. I really appreciate you listening to that episode. I loved it. And hopefully you found it valuable. Before I let you go, don't forget to go and subscribe on your favorite podcast channel to this podcast. Leave a review. Leave five stars. Help me get more people listening to all this great information. If you also want, we publish these on YouTube in video format. You can just search my name, Anthony Pompliano, on YouTube and find the channel. Subscribe there. I hope you guys are enjoying all this. I'm loving making it. And so we will see you on the next episode.