#384: Erik Torenberg on Decentralizing Venture Capital

Erik Torenberg is a co-founder and partner of Village Global, an early stage venture capital firm. He is also the host of Venture Stories. Erik was the first employee at Product Hunt and has also co-founded various companies, including Rap.fm, Token Daily, and OnDeck. In this conversation, we discuss personal moats, individuals over institutions, hundreds of people on cap tables, decentralization of venture, student debt, and attributes of great investors. ============================== CoinList is where early adopters invest in, earn, and trade the best new crypto assets before they list on other exchanges. Sign up via coinlist.co/pomp and trade $100 and earn $10 in BTC and 10% of trading fees for 6 months. ============================== Athletic Brewing is re-imagining beer for the modern adult. We love beer. But we also love being healthy, active and at our best. No matter your motivation, if you want to keep a clear head and drink healthier, we are here for you. Athletic makes non-alcoholic beer that you don't have to compromise to enjoy. The beers are fully flavored, clean ingredient, and a fraction of the calories of full strength beer - they fit in any occasion. Check out www.athleticbrewing.com for more details and free shipping nationwide. ============================== Pomp writes a daily letter to over 50,000 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 https://www.pompletter.com

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

• 0:00Anthony Pompliano?

  What's up everyone, 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. Eric Tornberg is a co-founder and partner of Village Global, an early-stage venture capital firm. He is also the host of Venture Stories. Eric was the first employee at Product Hunt and has also co-founded various companies, including Rap FM, Token Daily, and OnDeck. In this conversation, we discuss personal moats, individuals over institutions, hundreds of people on cap tables, decentralization of venture, student debt, and attributes of great investors.

• 0:39Anthony Pompliano?

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• 1:21Anthony Pompliano?

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• 2:06Anthony Pompliano?

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• 2:51Anthony Pompliano?

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• 3:35Anthony Pompliano?

  I break down complex topics into easy-to-understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Eric. I hope you guys enjoy this one.

• 3:51Speaker 01

  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.

• 4:17Anthony Pompliano?

  All right, guys. Bang, bang. Long time coming, but finally Eric is here. What, uh, what's going on, man? How are you?

• 4:27Speaker 02

  It's a pleasure to be here. A long time listener, first time caller. Bang, bang is one of the best introductions to a podcast out there. Glad to be here.

• 4:36Anthony Pompliano?

  Wait, before we get started, you gotta do the intro to your podcast. I saw people tweeting at me. Come on, give us the quick intro.

• 4:43Speaker 02

  Hey, everybody. Welcome to another episode of Village Global Venture Stories. It's the everybody accent that gets people going.

• 4:51Anthony Pompliano?

  That's what people were tweeting. They love it, man. They love it.

• 4:56Anthony Pompliano?

  All right. So for the couple of people who are watching who don't know who you are, let's just start with with your background and kind of what you did before you got to Product Hunt.

• 5:06Speaker 02

  Sure. So I'm a venture capitalist and entrepreneur. I run a venture firm called Village Global and I'm chairman at a company called OnDeck. The backstory is I grew up in New Jersey. I'm a son of Israeli and Colombian parents. I went to University of Michigan. Started my first company, ran a college called Rap FM. It was like Zoom or Chatroulette for rap battles. We were trying to be Twitch for music. Started with rap battles, was solving a personal interest and did that for about three years. We had some traction, but it was just early in the in the live video space.

• 5:42Speaker 02

  And so it didn't take off, but learned a lot through that experience. I met Ryan Hoover, who was the founder of Product Hunt. And when I was leaving Rapt, I asked him, hey, can I can I help out? Can I can I think that I thought that helping him out would be the best way to figure out what I wanted to do next? And so I joined him. I offered to work for free. He said, no, I'll pay you. But my job title was hustler. So I was a hustler at Product Hunt and within six months it had gotten to Y Combinator, then raised $6 million from Andreessen. And then I said, well, I guess this is the next thing I'm doing for a while. And after Product Hunt was a two plus a year journey, fantastic journey.

• 6:24Speaker 02

  And I left, right before I left, I started OnDeck, which was a dinner series for event series for people who were looking to start or join their next thing. And backstory there is basically I started angel investing while I was Product Hunt, because I was just building my my network like crazy, seeing all these deals, sending to investors that, hey, I I should start investing too. So I started angel investing. I started scout investing. And I realized that Product Hunt was just this unfair advantage, this asset that I could have to discover deals and then to get into deals. And I wanted to build more unfair advantages or assets. Like, I'm not the the smartest person in the world. I I need to have. You know, I don't have other superpowers. I need to have these these assets. And so I thought, if I, you know, Product Hunt helps people with customers.

• 7:05Speaker 02

  If I could help people recruit or find co-founders, that would be an unfair advantage too. So I started OnDeck, event series later became a, you know, ten week fellowship. And and we'll go into, now it's trying to be a new university. And then I said, what would a venture firm from the ground up built, built from the ground up with the idea of unfair advantages look like? And that's when I teamed up with Ben Casanova and Anne Dwayne and created a network-driven venture firm, Village Global, which is a hundred million dollar seed stage venture fund.

• 7:31Anthony Pompliano?

  All right. So let's go to Product Hunt first. If anyone is paying attention to the tech industry, they they've heard of Product Hunt, they've seen Product Hunt, they've probably tried to get to the top of Product Hunt, kind of all of these things. You were very early, I think even maybe employee number one. Talk a little bit about like, you saw a company that not only scaled and ultimately exited to Angel List, but also a company that was right in the heart of Silicon Valley. Like, you had all those deals, you had all those products coming to you guys. Like, what were the biggest lessons learned or takeaways for you personally as you saw that business get built and and helped really helped scale it to what it became?

• 8:10Speaker 02

  Yeah, there's a few lessons. One, in terms of getting the the job in the first place. There there's this idea that young people are especially scared to to start.

• 8:21Speaker 02

  Funny, because they they will be a blemish on their resume, wouldn't be, it's it's something to be proud of. And there's a difference between job risk and career risk. Job risk is the risk that your job is there two years from now. Career risk is the risk that that it sets you back. Whereas being a founder, actually, it it it shows to other people that you know what it's like to be to be an entrepreneur, that you know how to recruit, you know how to Sell, you know how to take risks. And so, um, you know, one thing, also as a young person, especially if you founded something, you you don't necessarily sell, hey, look at all the things that I've done, uh, you know, in my life, sell your slope. Look, look at all the things I've done the last two months. Look at all the things I've I've done the last two weeks in the last year. I I started here and and here's where I got to.

• 9:05Speaker 02

  And, uh, Ryan, in seeing that, it, you know, this sort of entrepreneurial spirit in me that was able to handle ambiguity, uh, that that was a lesson learned in terms of, that's why I think people should be more ambitious and more willing to take what I call asymmetric risks. Uh, that's what I took while I was a product of this idea that your downside is capped. You know, if product didn't work out, I would have still built this incredible network. But the upside is is uncapped. If if it was, you know, if it turned into this monster business, I would have meaningful upside in it. So one lesson is pursue asymmetric risks, learn how to sell yourself with slope. And then the other is, I knew that I I wanted to be an investor and, um, you can't really, if you're getting into the game, you need to have some reason why people want to take your money over this, you know, sea of other, uh, investors out there.

• 9:50Speaker 02

  And so being able to have an asset or a structure that really helps them, uh, recruit or, uh, get customers or raise money, uh, that is sort of independent from your time. I mean, Product Hunt was this asset where I was giving or helping give, you know, dozens of founders game-changing traction every single day. There there like, there's, there's nothing that that can compete in my sleep. And so I I for aspiring investors out there, I really encourage them to think about what are other assets? And maybe it's, you know, it's a podcast like, like, like your podcast, maybe it's an event series, maybe it's a conference, maybe it's a forum, maybe it's some digital product that really just gives you, gives you an edge.

• 10:28Anthony Pompliano?

  And so when you think through that, uh, I think people now say like, oh, no brainer, Eric's so smart. Like, look at all the things that he's built to give him those edges. Uh, I'm assuming that while at Product Hunt, you saw people build, uh, lots of things, some that worked, some that didn't work. Any frameworks or kind of mental models that you came up with to to kind of think through, um, what actually was truly sustainable and and kind of gave advantages versus maybe things that, uh, they were shiny toys and and would, you know, be popular on Product Hunt for a day or two, but ultimately would kind of fizzle out. Like you, I feel like you just got a lot of reps in terms of not having to build the company. You just saw them and any lessons learned there?

• 11:06Speaker 02

  Yeah, if you think, I mean, what in terms of sort of like building this edge or building a- assets in the same way that I like the idea of seeing your career as a product and focusing. Too many people try to network right away without thinking about how to try to get coffee with somebody without thinking about how do I add so much value when I get coffee with that person such that they'll want to keep having coffee with me or add me to their network. And that's the hard part. Like finding Pom's email is not the hard part. It's being, getting in his rotation, having something to add. And so in the same way that products and companies think about building moats, I advise that people think about building personal moats. So your personal moat should be unique to your talents and interests,

• 11:48Speaker 02

  something that's easy for you to do, but hard for others, something that compounds over time, and something that's hard to reverse engineer, hard for other people to do. So some examples I give, Tyler Cowen has an encyclopedic brain and the intersection of economics and politics and history. And you see him talk and you think, wow, I would have to probably spend a couple of decades to get to where he's at. Another example is Eliot Gill, who's invested probably in a couple dozen unicorns. Angel investing is this interesting sort of inefficient market where it takes many years to be seen as good, even if you, you know, so if you start right away, you won't, you won't know until you're good for seven years from now. So for someone to match Eliot's unicorn count, again, probably

• 12:32Speaker 02

  have to spend a couple, couple decades. And then, and then you, Pom, building your audience over many years, a very loyal audience, for someone to say, how do I become Pom? I don't know. That's a really hard thing to do. And you want to build a personal moat that, that when someone's like, how do I reverse engineer this? They don't even know where to begin.

• 12:49Anthony Pompliano?

  And so for you, obviously, you learned a lot of this at Product Hunt. You saw people try things, what worked, what didn't work. Ultimately, when you went to start on deck, talk a little bit about kind of what that original idea was. And then it's really evolved over time, right? It kind of started out as this dinner series or event series, and now has very ambitious plans. So maybe talk just about like what pulled you guys in that direction?

• 13:15Speaker 02

  So one thing I really learned from Ryan is pursue side projects because you never know what they can turn into. Productant started from a side project. Ryan's documented how it was just an email list and then turned into a company. OnDeck 2 was a side project. I was looking for my next co-founder. It's actually kind of hard to find a co-founder. People say, oh, it has to be someone you met in college or someone you worked with. But there's a lot of potential people out there. And so I started this event series to solve my own problem, which is how to find a co-founder. And then if you, what I found is if you go down to your Dropbox, Facebook, Airbnb, Stripe, all these companies, and ask their sort of talented people, like, do you think in the next year you might want to start a company and might you want to be in a community to meet other potential co-founders? Nearly all of them will say yes. It's just, it

• 13:57Speaker 02

  was sort of an underserved opportunity. So we started doing these one-off events. It was a volunteer community for a couple of years. We had sort of, you know, 5,000 people attend events in dozens of cities around the world, all volunteer run. And then what we realized is that we weren't necessarily having the compounding benefits that we wanted, like someone in 2016 didn't have an easy way to connect to someone in 2018. And that's when we really started the fellowship, which sort of this accelerator model, this cohort model. We started last year, we've now had five of them. And accelerators are just so powerful for creating, creating long-term community, compounding benefits. It gets stronger, the more people that enter it. And we said to ourselves, hey, we really know how to do fellowship for founders. We then are about, we're just about to start this angel fellowship, but we realized like, hey,

• 14:42Speaker 02

  we're not just going after Stanford MBA, we're going after Stanford. And so that's the vision, is to sort of be a digitally native university, as if it was started in 2020, especially in the era of COVID. And so we say if Stanford is trying to teach people how to be citizens of functioning society, we're trying to help people become functioning citizens of the internet. And what is, what do you need to be a functioning citizen of the internet? Well, you might want to start a company. You might want to build an investment portfolio. You might want to write. You might want to have a podcast. You might want to build an audience. So that's our grand vision.

• 15:14Anthony Pompliano?

  And it's the thought process that basically it's kind of like a futuristic school where literally like I sign up and I'm with a class and I literally learn from teachers or kind of talk a little bit about like what is that experience look like for people who are participating?

• 15:28Speaker 02

  Yeah, so imagine so our founder fellowship is like a Y Combinator or a village global accelerator experience, but before you have a company. So you're looking for a co-founder, you're looking for startup ideas, or you really just want to be in that sort of accelerator ecosystem without giving up equity. We charge a fee and that's what we make money. And so imagine that model, the accelerator model, applied to for angel investors, for writers, for podcasters, for YouTubers, for designers, for product managers. So what makes that experience powerful is a few things. So one is you get speakers from top practitioners. Two is the sort of group experience and accountability. So a lot of people who are going to our writers program, they really just want to have this regular cohort. What YC and the other accelerators

• 16:12Speaker 02

  that goes do so well is every week you have to come and share what you've done, what you've shipped. And that public accountability that some people say that's like the best part of part of the accelerator is really just week after week in front of very smart people. That pressure puts puts positive pressure on you to chip and just get things done. So people really appreciate the cadence and then just up leveling the game. The same way you might go to fitness bootcamps to see other people who are beating your butt and oh, I have to really step up my game and then coming out with a finished product at the end. So we really think about how can we accelerate people's goals and then you start to build positive network effects. So you know, the first cohort of Y Combinator ever was Justin Khan, Alexis Ohanian, Sam Altman, right? They would go on to do incredible

• 16:56Speaker 02

  things together and they would benefit from the following cohorts that would one make the credential more impressive. So going YC is this impressive thing, but then also they'd be able to hire those people, invest in those people, team up with those people. And especially in sort of the COVID era, community is scarce. And so the power of a fellowship to provide that ongoing community that just gets stronger is really working for us.

• 17:20Anthony Pompliano?

  Got it. What's the biggest challenge with building the company? Right? So you guys have kind of grand plans and things have gone well and you started to scale the business. What are the biggest things that keep you and the rest of the team up at night?

• 17:33Speaker 02

  We want to get to dozens of fellowships in the next year. We see COVID as the biggest opportunity where people are just eager to have community, eager to have fun things to do that are meaningful and the opportunity cost is of their time is much lower. And so we're blitzscaling. We were, you know, I think 1 million, you know, run rate in May. Now we're five. We were probably eight people in May. Now we're 21. With the dozens of new fellowships, we'll probably, you know, quadruple the team in the next, you know, year. And so learning how to scale when we haven't scaled before is the biggest thing on our mind. And how to keep the quality high while you're doing it.

• 18:17Anthony Pompliano?

  Got it. And then when a lot of people look at this, I think that they'll say, this is a fantastic business in terms of all of the ancillary benefits, but how do you think of it as a business, right? What I mean by that is, is this something that looks more like an events business? And, you know, kind of a exit opportunity is there? Is it something that looks like, you know, consulting or teaching or education? Like, you know, part of the beauty of some of these businesses, they don't fit in a box. But when you, when you kind of think through it, like, where do you put it? Or how do you think about the intersections of maybe some of these disciplines and what you guys are doing?

• 18:51Speaker 02

  Yeah. This business has really actually humbled me as an investor because it broke all the rules in terms of what you're not supposed to fund. So a chairman with a majority ownership of a company who's not full-time, who it was a volunteer thing for a couple of years. In sort of this weird space, it's unclear if it's a technology business, if it's a services business. So many VCs passed on this business for all the right reasons. And it just turns out, you know, that it's working. It's so early, of course. But in terms of how we see it as a very big business, the Founder Fellowship alone is a $5 million business. So 2,000, 2,500 people a year will pay around $2,000 to be a part of this program.

• 19:32Speaker 02

  We think that we could do dozens of fellowships. They're also multimillion dollar businesses on themselves. And then we think, once we've done a lot of fellowship businesses, we can do a fellowships as a service product where we can enable other people to sort of build, you know, passionate communities, almost many cults around themselves and give them the tooling and infrastructure to do that. There's a sort of saying that social networks are You know, come for the tool, stay for the network like TikTok and Instagram or Musically, but others are come for the network and stay for the tool or data that that network can generate. So Producta is one classic example. LinkedIn is another classic example. Quora is another example. And I think we're doing something pretty interesting here too, where if you have,

• 20:15Speaker 02

  you know, tens of thousands of founders, of writers, of podcasters, like, why couldn't we compete with Substack? You know, what's defensible about Substack is the relationship with the writers, but we're going to have these incredible relationships with writers. So that is a platform for different technology businesses that you could build on top of it is what gets me really excited. But even still, the services business, the fellowships is what allows us to hire, to scale. We're profitable. We don't need to raise any more money. At least that's the plan right now. And we, and the reason why I think people are willing to pay right now, partially because we've, we've sort of established a strong community. And these businesses are very hard to disrupt. Like, once you have a Y combinator, once you have an accelerator that has, you know, a few cohorts under its belt and people love it, it's very hard to compete with.

• 21:00Speaker 02

  And in the COVID era, that people are willing to pay, they maybe have more money because they're doing less other things that we think we could bootstrap a lot of these cohorts in different categories.

• 21:12Anthony Pompliano?

  Got it. And so obviously you've taken a lot of these lessons around building moats and advantages into the venture space with Village Global. You have probably one of the most impressive lists of LPs. You've told the story before, but kind of give us the 60 seconds on just how the LP list came together, whatever names you're able to share publicly, and then we can talk a little bit about the actual model that you're employing.

• 21:36Speaker 02

  Sure. So we asked early on, how do we build unfair advantage or a network at every level of the firm's DNA? And so part of that was the LP base where

• 21:48Speaker 02

  You know, Ben Casanova is a former Chief of Staff to Reid Hoffman, and is just amazing at working with Reid and other luminaries. And us three, combined with Reid and a couple others, were able to sort of paint a picture of what sort of a new Allen and Company could look like, or a new Allen and Company meets a Y Combinator, and sort of sell them, you know, Mark Zuckerberg, Jeff Bezos, Bill Gates, and their teams, a vision that this was going to be really strategic for them, that we were going to have, like a Y Combinator, we were going to have hundreds of startups a year that could be potential partners for them, potential acquisition targets for them, and just keep them sort of fresh on what the latest and greatest is in venture.

• 22:32Speaker 02

  And so it was really a combination of luck, and then selling them a vision that this was, this more than any other venture firm was going to be, one could be successful, but two could be a really strategic asset for insights and network intel. And when we're there at that stage in their career, obviously, sort of the incremental dollar is not as important as the incremental edge that can help, you know, Facebook, or Amazon, or Microsoft. So that was one fair advantage we thought about was the LPs, and we spent a year and a half working with the various teams to make that happen. And then we also thought, how could we really decentralize venture? So we had this thesis that venture is way too centralized. Sort of this irony that venture capitalists are supposed to be capitalists, but sort of operate their business like they're socialists.

• 23:15Speaker 02

  Like, it's one central planner saying, this is what the price of bread is. I know it better, you know, across every geo, across every sector, across every network. And we just saw that there was this explosion of complexity, that there aren't just, you know, one person used to be able to cover the entire internet. John Doerr used to just clean up, right? But now, you don't have just subsectors like crypto. You have subsectors and sub niches within crypto, like privacy coins and DeFi, all these different areas of expertise and networks that are cropping up, that there's no way that five people on San Jose Road could be masters of the universe and have expertise into all of them, and that you need to decentralize power decision-making to the people who have the most knowledge. And so we have this network of 30-plus angel investors

• 23:56Speaker 02

  that we empower with our capital such that they can express their local expertise, whether they're a key network, or key sector, or key geography, and make investments on our behalf.

• 24:07Anthony Pompliano?

  Got it. And so as you've built this out, obviously, you guys have had a lot of a success finding companies very early. Is that mainly dependent on kind of this scout-like network where those individuals have that industry domain expertise or experience and they're kind of finding it and you guys are using that system? Or these things where maybe you've built other systems or advantages where you're getting some sort of deal flow so early, right? OnDeck is an example, or other things like, just talk a little bit about, it's one thing to find good companies or to find good founders, it's another to find them before they've started a company or literally, you know, in the early days of the starting of the company, not waiting till the Series A or later.

• 24:49Speaker 02

  Yeah, a lot of it is competition over who can get there first and who can add value to the entrepreneur such that they're the first person they go to when they're fundraising, because it's, as you know, it's incredibly competitive market. So it's a few things. It's, it's a scout network that is out there. We have scouts that are embedded in different companies that we think have, have, you know, strong mafias and looking for the best people to come out of there. That own, some of our scouts own specific conferences or have specific assets themselves that enable them to, to be first call. And one key thing that we do relative to other venture firms is we empower them to make the decision, often without our, you know, our screening it. We, by decreasing the friction, they can, they feel more empowered

• 25:31Speaker 02

  to work with us than to send it to some other firm. But then also, you know, as I mentioned, unfair advantages, not just in being able to, to, to win the deal, but also in being able to evaluate. One thing, at the earliest stage, so much of it is people bet. And one thing we like to do is, is yeah, put them in on deck. Let's see them, how they work over 10 weeks or for three months. What do they ship? Who do they team up with? How do they engage in the community? You know, we pulse the community for, you know, who are the most compelling entrepreneurs here? And that just extra data gives us an advantage when we decide to pull the trigger or not, relative to another firm seeing that, you know, seeing them for the first time. And that time is accelerated. I think first round had this stat that a few years ago, it used to be 90 days between the first touch point

• 26:16Speaker 02

  and term sheet, and now it's nine days. So these processes are so competitive. Founders are often going to other angel investors or founders before they go to VCs. And by the time they go to VCs, it's sort of like YC demo, it's a bidding auction.

• 26:29Anthony Pompliano?

  So obviously, every investor wants to avoid the bidding auction. Talk a little bit about what you're seeing with investment round dynamics. So you just talked a little bit about timeline going from 90 to nine days. Talk maybe about the idea of firms versus angel investors versus kind of the solo capitalist trend. And then also what you're seeing in terms of check sizes, right? You know, if you talk to somebody from Angel List, they would say, hey, it'll empower somebody to invest and then kind of syndicate the rest of the deal. If you talk to an investor who's got kind of a very large capital pool, they'll say, you know, we're trying to take out entire rounds or whatever. So kind of what are you seeing at the earliest stages of investing that might not be as obvious to those who aren't in the trenches doing this every day?

• 27:14Speaker 02

  Yeah, a few things. One, I have this broader belief in that it's individuals, not institutions. And that people always, and that's not just in venture, but it's in, it's in media. It's in a variety of different industries that people just identify with the authenticity of it and the specificity of an individual versus, versus, versus institution. And you sort of ask, why has it been that way? Well, it's sort of, it's always been that way, but now individuals are just more empowered than ever, as you know, as you've covered in this podcast, to have direct relationships with their audience, to be able to monetize directly from their audience. And you can sort of cut, you know, and it's just, it's just so much easier to create a living and create an audience individually. And that's no exception in venture. That's why you're seeing so many people go with a loan.

• 27:58Speaker 02

  So many people prefer to take money from operator angels or solo GPs. They can just move faster. They have more specificity to them. And I think it relates this broader trend within venture, which is the decentralization of venture. Instead of, this is my prediction for the future of venture, instead of, you know, a couple dozen people on a cap table, you have hundreds or a thousand. And that way you could really unbundle the capital with, with, with advice and get to people who are world-class in different positions. It's sort of, this is the increasing specialization and thus decentralization. And we're already starting to see it. I'm seeing a lot of firms just open up space for small checks. You know, we just had a company. That is doing, is raising a monster round and is leaving a million dollars.

• 28:42Speaker 02

  It's one of the most competitive rounds in the valley, but leaving a million dollars for their audience and doing it on WeFunder. So I think we're already seeing the sort of rise of individuals over institutions. And I think we're going to see a lot more individuals coming onto cap table. Now, for sure, this is at the earliest stages is at seed. At, you know, at A, at B, these individuals don't have the capital yet, but I think we'll start to see solo capitalists go later stage as well.

• 29:10Anthony Pompliano?

  And so explain maybe the psyche of a founder who says, hey, you know, I have a really hot round, a bunch of investors are all fighting over getting in, but I'm going to save this million dollars for that audience or the user base. Is it simply, I want them to have some feeling of ownership and that will lead to more usage and they'll go kind of be ambassadors for me? Is it something else? Like, why would they do that?

• 29:32Speaker 02

  You know, this, this concept of value add or even founder friendly, it's a, it's a cliche now, but it's a fairly new construct and it's telling in the sense that venture didn't need, used to sell themselves to founders. Founders begged them to take their money, but then capital became a commodity and more people started to have it. You started to have a little bit of unbundling between capital and value add. And so now people really need to differentiate and it's still incredibly inefficient. The people who can often add the most value to your business, often other entrepreneurs, other execs, they don't have the capital, they're not leading the series eight. Like investors are usually generalists, they're rarely the person that can offer the most value for your company relative to the stake that they take up.

• 30:16Speaker 02

  And so if you're building a community product or a product that really relies on evangelists, you know, one of our companies, Rome is incredible, sort of productivity, a product, a personal knowledge management product and has the Rome cult. And for a community like that, who's so invested in it, also to feel more invested via, via ownership is just very powerful in expanding its moat. And I think part of the dynamic is sort of questioning, hey, you know, VCs, what value are you really adding relative to the people who can evangelize the product? And this was something that crypto was, it was and is trying to do with tokens, you know, ways to disrupt these sort of network effects businesses is just incentivizing orders

• 31:00Speaker 02

  of more magnitude people to use your product and to identify with it and want to see it grow.

• 31:05Anthony Pompliano?

  So one of the interesting trends for me, not only is one, the social capitalist thing, obviously, but, but two is this idea that many times founders or their operators are the most helpful. Today, they don't have the capital like you described, but it doesn't seem a stretch to me for those people to eventually have very large pools of capital. And, you know, do you see a world where, you know, there's been a couple of companies that have raised rounds where there's been no institutions, right? It's been all individuals and quite large rounds. Or we're not talking about a half million dollar round. We're talking about literally tens of millions of dollars. Like, is that a trend that is accelerating? Or are those kind of outliers and, you know, they're cool to talk about, but they probably won't become the norm over time?

• 31:47Speaker 02

  Yeah. I, generally, I abide by the rule of whoever owns the customer demand gets to capture the value. And founders would rather work with other successful founders than VCs on average. And right now, there's, you know, every industry is held back by regulations and, and venture is, is no different. One of them is that VCs have long vesting schedules such that it's very difficult to switch. You saw when Keith or Boyd joined Founders Fund, when Sarah Tavell joined Benchmark, there's a sort of question of like, is this about to become NBA free agency? This like Kevin Durant, you're going, going to the Warriors? And the answer for right now is no, because the vesting contracts are just too long such

• 32:29Speaker 02

  that they're giving too much to do that. But I expect, I expect GPs, because they capture the value more so than the institutions that they work at, if they're stars, will be able to renegotiate those contracts such that they're more fair and flexible. And it also accreditation, of course, prevents many, you know, entrepreneurs or many execs from being able to, being able to invest. But I think this is a, a trend that will only continue is right now held back by, by certain regulations or practices. But once sort of value capture reorients to the value creation, which sort of inevitably happens, even if it's a slow process, I think we'll continue to see it.

• 33:10Anthony Pompliano?

  You've talked before about generational theft and this idea that it seems like everyone's becoming a socialist. And I've talked about it from like every capitalist on Wall Street in time of crisis becomes a socialist, right? Everyone's looking for bailouts, all this crazy stuff. Yeah, I think you're talking about something a little bit different. Maybe describe a little bit what you mean there by generational theft and the relationship to socialism.

• 33:32Speaker 02

  Yeah, well, I want to first say that one reason I'm so excited to build a university right now is because universities are just in a really tough place. And I think that they are sort of ripping off their customers. I mean, think about an industry that has increased 300% in terms of costs since 1980 without any verifiable increase in quality. College debt is now $1.7 trillion. It's kind of like a Ponzi scheme. We have a federal loan program funded by the taxpayer, so students go into debt and then keep paying taxes to fund other people's debt. And then that's just the financial situation. In terms of the product itself, colleges, we used to sort of outsource IQ test and conscientious test to colleges such that they were good filters of talent.

• 34:15Speaker 02

  But now we're getting rid of the SAT, we're getting rid of the GRE, we're getting rid of all these standardized testing. So it's unclear what it actually means to get into a university anymore. On top of that, professors are miserable, they're underpaid, students are in tremendous debt, and all of this is separate from COVID, which is sort of showing that the emperor has no clothes and that people are still paying the same amount of money for Zoom University. It just shows that you're really just paying for the piece of paper. And which we said, if they, you know, stop serving as a good filter of talent, it's unclear what that piece of paper is going to mean. And that sort of begs the question, how can they operate this way? And it's because without any competition. There's been no university that's cracked the top 10 in over 100 years, and that was Stanford.

• 34:57Speaker 02

  Any other industry that has terrible, you know, product for its customers or just costs way too much, you get competition. And it's because it's a cartel, basically. It's a government enforced monopoly that where they run the accreditation process, which allows them to sort of give federal loans, federal subsidies, it tax shelters on an operating level and on an endowment level. I mean, Harvard has a $40 billion endowment. That's a tax shelter hedge fund. When we talk about generational theft and socialism, part of it is education in terms of the average person, I believe, is $29,000 of debt, but nearly half Americans have under $2,000 of liquid assets. And this debt is non-dischargeable and bankruptcy.

• 35:41Speaker 02

  So that's on education. On housing, we have a massive structural shortage. Between 2017, you went from about 11 million units of low-income housing to about 7 million. Every year, you're seeing 330,000 units of affordable housing shortage. There's something like 17 million people who can't afford housing right now. So that's education, that's housing, and then there's healthcare. Like I said, people have like, you know, under $2,000 in liquid assets, and yet deductibles for individuals are like $1,500. So any health issue you have, it means you're basically financially ruined. And so it's no surprise that when somebody says the system has screwed you, it's young people, and we, the government, are going to fix everything, whether it's, you know, the right-wing sort of populism of Trump or the left-wing populism of Bernie or even Elizabeth Warren, it's no surprise that people

• 36:25Speaker 02

  resonate with that because, you know, what's the point of capitalism if you can't acquire any capital, if you can't get a house, if you can't get healthcare, if you can't pay for good education. So that's why people are so skeptical about it, and it's the worst time for that to happen.

• 36:39Anthony Pompliano?

  Well, and I also think what's really interesting is if you look at some of the non-financial metrics, like I saw a stat today that said between the ages of, I think it was 18 and 29, I believe, for the first time since the Great Depression, anyone between the age of 18 and 29, 52%, so we're over 50% now, live at home with their parents.

• 37:01Speaker 02

  Yeah.

• 37:02Anthony Pompliano?

  And I was just like, look, you know, there's the kind of cliche, oh, the millennials live at home, you know, all that kind of stuff. Obviously, there's data that's supporting some of this. What we don't know is how many of those people are COVID, you know, they let a lease expire, they move home with their parents, and then they'll move out, you know, maybe the start of the year or whatever. But I think you get to is there is a very different relationship with capitalism, with money, with assets, with, you know, buying a house. All of these things that I think are kind of like memes in terms of people talking about them, but they're funny and they resonate because they're True, right? And that's basically what you're describing here is there's almost this like self reinforcing

• 37:41Anthony Pompliano?

  system that guides people on this journey between the ages of, you know, I don't know, 10 years old and 30 years old. And very few people kind of recognize, hey, there's traps along the way. And I love your framework of like the asymmetric career risk, right? And so what I guess, what are the attributes of the people that you see maybe break out of that, you know, track that they're on? Or kind of what are the things that you see people do, whether their actions or maybe some sort of attribute that does allow them to realize, hey, wait, this isn't the only path in life. There is something else that I can go do.

• 38:15Speaker 02

  Yeah, the, I mean, just to put a bow on your point, millennials were told that they'd be better situation than their parents financially. And they're not, they're living with their parents and they see their parents doing much better. And so that's sort of the generational theft is this this lie that they see of what they envisioned was this was this American dream. And so now they now they blame the system, especially when other people are are providing them, you know, with sort of what I think are faulty solutions or recommendations. In terms of people who get out of it, well, first, it's it's don't walk into the traps to begin with. Now, if you can get into Harvard, I'm not going to necessarily tell you not to get into Harvard. But if you're going to some third rate university and about to take out quarter million dollars in

• 38:56Speaker 02

  debt, maybe reconsider that. Think about why you're going in the first place. Think about and the crazy thing about the university is that there's also this sort of anti well capitalist bent at the university. And so not everywhere, but in a lot of places and a lot of departments. So you go to the university, you get quarter million dollars in debt, and then you're told that the reason your quarter million dollars debt is capitalism's fault, when capitalism is the thing that's going to get you out of the debt. So you're both like financially ruined and also like sociologically, you know, just less likely to produce a big outcome if you think, you know, or to get out of that debt in a flourishing way, if you think capitalism is the is the enemy.

• 39:37Speaker 02

  I think there's this new movement called progress studies that Tyler Cowen and Patrick Collison have started alongside others, Jason Crawford. We're picking up the work and what they're really doing is they're one they're trying to fight back in on the university level in terms of providing viewpoint diversity. We it's great. It's great to have multiple perspectives, including the one that exists currently. But then also what they're really focusing on is retelling the story of basically, how did we get such a better standard and quality of life? How did we get billions of people out of poverty? And the answer is basically markets, you know, capitalism.

• 40:13Speaker 02

  And so by sort of creating this this appreciation for for for for capitalism, for for markets, for for the power to get people out of poverty, to in in invent new things, to to change people's lives. I think so. One way I see people doing is is really appreciating the the tools that are going to get out on an individual level. But then also be able to tell themselves a story that once they get out at an individual level. I mean, see all the great things that people like Bill Gates and and Elon Musk are are able to do for for society that they can, you know, not not just help themselves, but also help society at large.

• 40:50Anthony Pompliano?

  Where do you see the biggest opportunity for young people today? Right? So young people are in this situation, kind of from a generational standpoint. Is it to go into tech and build companies to go work for technology companies? Like if you're, you know, seventeen years old, eighteen years old, you're graduating high school. What is that blueprint that you think is is just the better way?

• 41:12Speaker 02

  Yeah. So, you know, what's interesting about crypto in twenty sixteen, twenty seventeen, when it was really popping off. And you see a lot of the the funds that emerged out of it, or even just the people who are leading a lot of the projects, is a lot of them were were young people, were people in their twenties. People who didn't necessarily have a lot going on beforehand. And that's not because they're smarter or because they're more accomplished. They're not. In in fact, but the reason was was that they were more comfortable taking asymmetric risk. Because crypto looked stupid, you know, and it like Bitcoin looked dumb before. Now we sort of, you know, normalize it. We have all the industry around it, you know, but it it really was the career risk for for people. And this is where we go back to job risk and career risk.

• 41:55Speaker 02

  The the less you have going on, the more you should be willing to take asymmetric risks because. One, you're only known for the things that you succeed at, not the things you fail at. I failed at Rapt FM, a week later I was at Product Hunt, no one cared anymore and no one's cared ever since. Reid Hoffman, Marc Andreessen, immensely successful people. Reid Hoffman started a social network dating site that was a total failure, social net, no one knows about it. Marc Andreessen started Ning, a social network for dogs, like total failure, no one knows about it. So you're known for your successes and you want to take big swings. You really have very little to lose if you're in an okay financial situation and a lot to gain. So crypto was that in 2016, 2017. Today, what is that?

• 42:38Speaker 02

  What looks dumb, but if it works, could be enormous. I'm really intrigued by income share agreements. There's a community that's working in charter cities that, you know, building startup societies. That's incredibly difficult, but could be enormous. Virtual reality is always just around the corner. So whether it's starting something or joining something, I would look for where are things that other people think are dumb, but you don't think are dumb because that's where the arbitrage is. I would join something like OnDeck or Y Combinator or Village Global Accelerator. I would try to put yourself in networks such that even if your startup doesn't work, you've just built this incredible network.

• 43:20Speaker 02

  But yet, nothing is better than doing in terms of learning. So if you don't have to be in college and you don't particularly want to be and you're compelled by the idea of potentially starting a company, there are communities out there for you that will support it and I would recommend it.

• 43:37Anthony Pompliano?

  Geographies to do all of this. You have spent a good portion of your career in San Francisco. Long or short San Francisco and then where else would you be long on?

• 43:49Speaker 02

  So this is the

• 43:53Speaker 02

  The best time to live anywhere. I started talking about living on the internet. You know, we used to say it was never less important to live in San Francisco, but you had more important to be connected to San Francisco. And a few years ago, you had to be in San Francisco. But now, most of us are living on the internet. Most of us don't even know where we are when we communicate each other. Most of our communication is online. So it's less that San Francisco decreases in power or the rest rises in power. It's just that location matters less and less together, physical location, especially as companies go more remote because they've learned how to do it recently. And what I'm really excited about this is that it's an equalizer. You don't have to move to San Francisco or go to Harvard to get your education,

• 44:36Speaker 02

  grow your network or build your reputation. You want to be at the locus point of where all the activity is. Now, by all means, if you can move, sure, go to San Francisco, San Francisco, great. But you don't necessarily have to. What's more important is what group chats are in, who you follow on Twitter and who follows you, what Telegram chats you're in, what is your digital ecosystem look like? And you could do that from anywhere.

• 45:02Anthony Pompliano?

  So I asked for questions from people on Twitter, and they sent a whole list of obnoxious, ridiculous questions. I chose my favorites and I figured we could do some rapid fire and you just throw out answers as we go. The first is, I think on a 20-minute VC episode, you talked about from no one to VC in that path. What is the blueprint for somebody who is literally a nobody? Nobody knows who they are, but then they can very quickly break into venture capital?

• 45:29Speaker 02

  Yeah. So the first thing, and this is sort of contrary to what people will want you to think, is you have to get numbers on the board. You have to start writing checks and building a track record. And it's because VC is incredibly inefficient asset class. It takes seven to 10 years to be great and not just because of the skills that you gain, but just because of the feedback loop to even know how you're doing. You can invest for two, three years, go in a coma for seven years, come back out and be one of the best investors in the world. There's no other industry where that's the case. And VC is so reflexive where if you're known to be the best, then you get better deals. And so it just sort of becomes true. And so

• 46:15Speaker 02

  You need to build that early. In basketball, for example, you could find the Bron James at 18 and realize, oh, my God, this person's not only going to be incredible, but incredible right now and can dominate. It's obvious. There's no equivalent of a young person. Yeah, maybe they have a network and stuff, but you don't really know if they're good at picking for years. So my advice to people who want to get into it is find a way to write checks. And there are these things called scout programs. We're venture capital firms. We have one. Give people checkbooks to write on their behalf. Now, they give people checkbooks to write on their behalf to people who've built a long-term relationship with these venture capital firms and have sent numerous deals. This is what I did at Product Hunt. I started sending all these deals to ventures firms and over time, they were saying,

• 46:58Speaker 02

  hey, this is inefficient. You should just write them directly. You have good judgment. You have good deal flow. You just do that. So you want to add so much value such that they can't ignore you and it just becomes more efficient for them to take a bet on you. And then it goes back to building the asset, building the reason that you have access for founders in the first place or why they'd want to take your money. And it could be something like products or on deck or some sort of product that helps people get customers, recruit, hire people, get expertise, but could also be an event series, a Telegram group, a podcast. There are all sorts of these little different assets or products that you can build to get noticed and to get respected.

• 47:38Anthony Pompliano?

  You are a very, very big fan of rap. Everything from the first company you started to literally hosting Zoom freestyle battles. Where did that love for hip hop and rap come from? And then what is your favorite instrumental to rap or freestyle over?

• 47:56Speaker 02

  When I was younger, I wanted to make the NBA. I had no chance making the NBA.

• 48:02Speaker 02

  You know, most people give up that dream when they're like in third grade. I was like in 10th grade. I was like, I could still do it. I was delusional. I've always been inspired by doing. I've been inspired by agency, just the power to to change your circumstances. And I've been inspired by the idea of doing something that people think you have no business doing or don't have natural skill set doing and showing them that you through agency and hard work, you can get kind of good at something. And so rap, I'd always been a listener and a fan. And so what I just said, the agency combined with, I was a very shy kid in college. I was in school in Michigan, in Detroit, I made a bunch of friends in Detroit. And I sort of saw people doing it and said, wow, I'm a really shy person.

• 48:44Speaker 02

  But if I learned how to do that, I bet I could public speak. I bet I could pitch. I bet I could sell. I bet I would just be so much more confident, so much more outgoing. And plus, it just looks like the most fun, fun, fun thing ever. So I've been doing it for, for, you know, almost a decade, a bit over a decade. And, um, you know, I'm not like a pro or anything, but you know, I could, I could hold my own uh, in the, in the Zoom open mics. And, and we brought the open mic back. So Rap FM ended in 2014. We got the same crew that we were rapping with in 2013. Seven years later, you know, some of them were like 15 at the time. Now they're 22, 23 on Zoom every Tuesday night. And it's, uh, it's been, you know, enormous amount of fun.

• 49:23Speaker 02

  In terms of beat to, to rap over, um, Nas' State of Mind is, is just a classic. Uh, but, uh, Drake has a lot of amazing beats. I mean, there, there, there's so much, so much great stuff out there.

• 49:36Anthony Pompliano?

  I always joke, I think you're about the same age as I am. And, uh, we used to like run home and watch MTV and like the, some of the early rap songs I remember was like Nelly's Country Grammar or Nas, like Illmatic, right? Like all, all these things where you're just like, man, that what, or, uh, no Nas One Mic, uh, where like the breaking of the glass and the police sirens and just like, for whatever reason, man, music just makes you super nostalgia, right? When, uh, when, when you listen to it. Uh, what do you think that, or what do you wish that your smartest friends were doing more of today?

• 50:09Speaker 02

  I'm really inspired by people who who think in public. I'm in some of these private group chats where there's I would pay so much money to be in them because I just learn so much from them. And I sometimes ask like, why can't this be on Twitter? Like, it used to be on Twitter. And, you know, for some of them, it's for job risk or whatever. And it's unfortunate that it is what it is. But I people benefit so much when when when you think in public and you help them sort of, you know, think of ideas on their own or they they take frameworks and build on top of it. I sometimes think Twitter is like a GitHub for thinking where people are constantly putting building blocks out there and inspires other people when it's not civil war, of course.

• 50:54Speaker 02

  It's sort of, and so I wish some of the smartest people or all these people who are having all these fascinating private conversations, that they had them in public so that other people can can can learn. And when we create the systems that prevent or sort of the cultural norms that prevent people from having those conversations in private, we don't or in public, we don't see the loss, we don't see the dead weight loss, but it but it's really powerful. Paul Graham had a post on this a few years ago, or maybe it was Jessica Livingston, the sound of silence. And so that's that's something that comes to mind because I've benefited so much from from people I'd never met, you know, Tyler Cowen, who we're now friends with, but for a decade, I was reading marginal revolution and just hearing, reading him think out loud just gave me framework to think about so many things and inspired so many thoughts. And so I wish others did more of that.

• 51:39Anthony Pompliano?

  It's a great answer. In terms of the political impact or political instability, there was lots of questions around how does that impact VC? How does that impact company building? Just talk a little bit wherever you're comfortable in terms of how you foresee just the chaos that's going on, I think, across the political spectrum and how that impacts some things around tech and business building and investing.

• 52:02Speaker 02

  Yeah.

• 52:04Speaker 02

  I want to talk about a couple of frameworks I've been thinking about recently, which is basically in sort of wealthy liberal societies, there's this fundamental contradiction between the politics of safety. We want ourselves to be safe. We want murder rate to be low. We want people to have comfort, safety, equality. And then, at the same time, we're interested in the extremity of experiences. Our media and entertainment is about like Fifty Shades of Grey or Serial Killer. Like, we're so interested in this phenomenon where the car crash effect. We can't stop looking at the car crash, but we don't want to be in the car crash. And so, the way that America solves that problem, that contradiction,

• 52:46Speaker 02

  is kind of interesting, actually. It solves it at the level of virtual reality, but not at reality. So, an example of that is Trump. You know, I don't want to get too much into Trump, but it gives us the perception of an incipient fascist regime without actually delivering on the fascist regime. So, we're all sort of like LARPing that we're in this fascist state. And similarly, on the other side, CHAZ and all this stuff around some of the riots like Seattle and protests, you see videos and you're like, wow, is this a Maoist cultural revolution? No, it's not a Maoist culture. It's LARPing. It gives us the excitement of it without actually having to suffer the consequences. And there are some consequences, don't get me wrong, but it's not what people suggested it is on either side.

• 53:31Speaker 02

  And the real way you tell is by the body count. Like, real fascist regimes, communist regimes have body counts in thousands, millions. This is just in the low dozen. And most of the war takes place on Twitter. And Twitter makes you think it's the French Revolution, but it's not. Even the worst of cancel culture is a cakewalk in comparison. And so, in this sort of crazy time, I came across this framework recently of reality entrepreneurs. Reality is up for grabs right now in a big way. And what people refer to as community building, content creation, what you do, that's a euphemism. Sometimes, it's literally people defecting the shared sense of mainstream reality that has existed for centuries and creating new

• 54:13Speaker 02

  And at the same time that trust in institutions, in all institutions is crump like who do you trust in WHO, the CDC, like the New York Times, who do you listen to? It's it going back to individuals, it's it's people like yourself, it's people who are creating sort of their own sort of realities and communities and almost mini cults. And and and there's just a huge opportunity right now to to do that. And it's more important than ever because there's sort of this explosion of information, explosion of intensity. And so people are outsourcing their sense making to to these reality entrepreneurs. And so what does that mean? What does this all mean for investing and and startup stuff?

• 54:55Speaker 02

  Well, one is any startup that helps people navigate uncertainty or ambiguity. So reality entrepreneurial individuals or institutions or just chaos, I predict just more chaos. It's going to get worse before it gets better, whether that's private security, whether that's you know,

• 55:16Speaker 02

  communities that that are sort of COVID specific that help you do sort of the equivalent of NBA bubble, but in private, I'm looking into that. But then these sort of like almost new religions, and I don't mean religion and sort of the belief in God, but religion is sort of like a community that helps you make sense of what's happening, gives you a vision for the future and then gives you practices and rituals around it. And maybe the 1.0 version of that was things like SoulCycle and Barry Bootcamp and, you know, Daybreaker and all these sort of communities. But the next level is going to be a bit more of a rebundling of what we used to have. It's it's going to look unlike anything we've we've had before, but those are some some ideas.

• 55:57Anthony Pompliano?

  I think that you're dead on in terms of this like rise of religions, but the religions aren't necessarily what you and I consider religious. Right? There are kind of these other things around community identity, etc. That that people just, they don't recognize them today as that, but I think in hindsight, we'll see they kind of replace religion. There's a lot of questions around attributes. And so maybe the question to ask to kind of answer the most in the most succinct way is just, what are the best attributes on a founder perspective? What are the best attributes that you see in investors? And then Are those attributes shared? So if you are a great founder, you have certain attributes that also make you a great investor and vice versa?

• 56:40Anthony Pompliano?

  Or do you feel like there's different attributes that make a great investor and a great founder?

• 56:45Speaker 02

  I feel like they're significantly different. I think a lot of people make the mistake of saying, I want to be a great investor, but I'm going to be a founder first to figure out how to be a great investor. Or I want to be a great founder, but I'm going to go work at a VC firm and figure out how to be a great founder. Often, the best way to learn to do something is to do the thing directly. So some people believe this, but I think you don't have to be a great founder to be a great investor. And you certainly don't have to be an investor to be a founder. They're significantly different things, operating at different levels of resolution. One of my favorite things in investors is epistemological modesty.

• 57:22Speaker 02

  Sort of the knowledge of what their knowledge is, of how much they actually know about a topic, about a person, about an opportunity. And the answer is often not as much as you think. And so how can you shore up your weaknesses in those areas? And so what sort of systems and processes can you build around it? I'm really interested in evolving this concept of venture for something that is just a craft to just something that is a platform and a product and a business. And something that isn't just sort of relying on great man theory, but really just leverages networks. So I'm excited about investors that know how to do that, that want to do that. And that might be different at different stages, certainly at seed.

• 58:05Speaker 02

  I think it's most important because it's, there's the least amount of data there. And it's also the widest aperture of potential opportunities. From a founder perspective, I mean, a lot of it is on founder market fit, right? Ev Williams is the perfect founder to do Twitter and Medium. And Travis Kalanick is the perfect founder to do Uber and Cloud Kitchens. But Travis would fail at Medium and Ev would fail at Uber. And so it's really just what's easy for, it's this understanding of what's easy for you to do, but hard for others. And I look for founders that have unfair advantages, whether it's key relationships, key expertise, or just key sort of distinct product sensibilities. But then also, one general skill set from a founder is this really just ability to just zoom in and out. And so the zoom in is like,

• 58:50Speaker 02

  You know, what's the perfect email to send in, you know, a marketing copy or that converts and here's why it doesn't convert and really just get into the nitty gritty of the details and then an hour later zoom out into a board meeting and say, hey, here's how we think about the next 12 months. Here's what the fundraising landscape is and to be able to communicate at that level of resolution to, to your team is inspires an immense amount of confidence because it's a very hard thing to do. The people who are doing the weeds work won't be able to understand the, the long-term vision, but or the big picture, but they'll really appreciate it. And the people who are doing the big picture, you know, won't really understand the weed stuff, but they will really respect that, that you understand it. So that, that's a way to differentiate.

• 59:36Anthony Pompliano?

  Uh, assessing talent, right? One of the things that you've done a, a great job of is on your podcast, asking over and over and over again, many people I've heard, just how do I find and identify great talent? What are the things that I think you've learned from either asking that question or doing it yourself?

• 1:00:00Speaker 02

  So yeah, I have this, this broader philosophy of don't play the rat race. Don't enter the rat race unless you're the fastest rat. And so don't try to play tournament level games unless you could really win. And I, I was never an A plus, I never won the tournaments. I always said, how can I make the game unfair, unfair advantage such that I can do even a B job and just, you know, win easily. And so on the talent front, Keith Raboy, who's one of the mentors, has this line that Peter Thiel told him, which is, if you're a startup, you're going to have to learn how to assess talent better because you're not going to be able to hire the same people that Facebook and Google are hiring. So you're going to have to hire people who they wouldn't hire, or they wouldn't even think to, to go to, or they wouldn't think to go there and,

• 1:00:45Speaker 02

  and, and work with them and have them be, be fantastic. I think that's very hard to do. So the, the trick I've, it's basically on deck. I, I, I want to build relations to people over a long period of time so I could see them in, in action. Another hack I did is I started this retreat where basically I wrote a long list of all the people I ever wanted to work with. And once you write that list, most of those people will be unrecrutable. They'll be starting a company, they'll be working at a company, they won't want to join. And what I did is I started this retreat, I would do it three, four times a year and I would invite all of them to retreat. And lo and behold, three, four years later, I'm now hiring a bunch of them.

• 1:01:26Speaker 02

  And the trick there is it's one, I became regular top of mind for them. I anytime they were thinking about a career transition, I became the person that they that they went to. And always with a sort of a positive, some spirit like, hey, I'm just going to put my friend hat on. What do you want to do next? And that really inspires trust that you're thinking about them for the long term. And then over time, once we end up by introducing to each other, they became friends. They started to build relationships. And then, once we hired a few people in that retreat community, now a bunch of other people are just sort of want wanting to join. And so I think it's really just treating recruiting as a as a long term game. You know, communities aren't built overnight, they take years in advance. And same thing with with great teams.

• 1:02:10Speaker 02

  It's the relationships that you build in advance and the structures that allow you to build these relationships with with a bunch of people over time.

• 1:02:17Anthony Pompliano?

  So I normally ask every guest the same two questions to end it. I'm going to add a third because I thought this was a fantastic question that was sent in, which is, what is your favorite pre podcast meal?

• 1:02:29Speaker 02

  The

• 1:02:33Speaker 02

  you know, I've really fallen in love with English muffins with peanut butter. I mean, it's it is what it is. It's just, it just pumps me up. What's yours?

• 1:02:46Anthony Pompliano?

  Ah, I don't know if I have one single one. You know what, actually, living in New York, you end up ordering food a lot for whatever reason, just because it's so so easy. And there's like, I don't know, four restaurants. And I was on a plane one time that like, it's pretty funny that we're at the point now where we don't even remember the names of the restaurants. Sometimes we just know like, oh, we want sushi. Okay, like just go and seamless and hit reorder, right? And you start getting to this world of instant gratification, which is probably not a good thing. But there's probably a rotation of four. I got like a Greek meal. There's a sushi meal. A couple of others that that I go on rotation. But I will say, here's a good one for you. My brother, when we were younger, Pop Tarts.

• 1:03:29Anthony Pompliano?

  He used to cook them in the microwave, not in the toaster, for whatever reason. And he used to walk around our house telling us seventeen seconds, seventeen seconds. That that's the perfect amount of time. And so we still do this to give him a hard time about that.

• 1:03:43Speaker 02

  Amazing.

• 1:03:44Anthony Pompliano?

  Two questions to end it. What is the most important book that you have ever read?

• 1:03:52Speaker 02

  Nonviolent communication is a really game changing book. It's a communication framework, not just for conflict negotiation, but for day to day life. They basically think of it like a fork of English, like a modified version of English. That just maximizes the chances that you're gonna not make anyone defensive. And you're just gonna say exactly what you mean. Because you know, sometimes you'll say something like is ninety nine percent what you mean. And then one percent can be interpreted differently, or maybe is a passive aggressive comment. And then people just focus on that one percent. This just makes sure that your communication is super clear. So you're getting across what you want to say. But then nothing else extra that is likely to make them defensive. That's been a total game changer. I recommend it to people.

• 1:04:32Anthony Pompliano?

  I love that book. Aliens, believer or non believer?

• 1:04:37Speaker 02

  I am a believer. I don't know how one could not not be a believer. The bigger question is, is, you know, do do we know their existence? Do they know of our existence? One thing I'm really curious about is why, you know, it came out in New York Times recently that there are some files that they're now opening. Why have the US government tried to hide this from us? Because I and I think they're just trying to prevent commotion or chaos. But I actually think we need this. You know, there's this saying, you know, me, me against my brother, me and my brother against my cousin. Me and my brother and my cousin against the neighboring family. So it just goes to show like, we're gonna have conflict. And ideally, it could be at the highest level of resolution possible. So we can go here.

• 1:05:20Speaker 02

  And as we're having this conversation, you know, there's never been more sort of internal chaos in our country that since since I've been alive.

• 1:05:29Speaker 02

  We need a common enemy and ideal, you know, ideally like aliens would be way better than China. And so I say, release the information on alien, you know, there's this great quote by Jonathan Haidt has this concept called asteroid club, which is if an asteroid was coming to earth in the next two weeks, we, we would just stop all of our conflicts and just focus on how to, how to prevent this and we would all cohere. And so I wonder if something similar could happen around aliens.

• 1:05:53Anthony Pompliano?

  While you were talking, I was literally thinking, yeah, like we have the common enemy of China. But I definitely agree that aliens would be much better. So all humans can, can come together rather than just the imaginary lines in, in a map. You could ask me one question to end it. What you got for me?

• 1:06:10Speaker 02

  Yeah, I, I had a couple, if you don't mind. So COVID could be the opportunity for, for crypto. I mean, you know, trust in institutions is at all time low. And so what is crypto all about? It's all about trust, trust, right? So governments have shown that they're incompetent, so it's an opportunity for charter cities. The media has shown that it's sort of cynical or can't really predict what's happening and won't even admit it. So it's an opportunity for prediction markets. And then we've shown that we're just print our way through anything. And so that's the opportunity for Bitcoin. How do you sort of think about the game plan or the opportunity for crypto in a post-COVID world? That's one question. The second question is sometimes I advise people to take the pomp for X career path.

• 1:06:53Speaker 02

  You know, you, you made a name, among other things, just going paying asymmetric risk on Bitcoin. You just, you know, there's this quote of, I fear not the person who said, you know, a thousand different things, but said the same thing a thousand different times, Bruce Lee modified quote. And that's you with Bitcoin. You were really early on that and made a big bet on it and it really paid off for you. And so what are other spaces that people can do that? And how do they sort of be the, the pomp for X? I see your brother doing that in sports and he's doing it phenomenally. So. Crypto in a post-COVID moment and then pump for X opportunities and what advice do you have for people who are looking to take your path in different spaces?

• 1:07:30Anthony Pompliano?

  Yeah, so crypto, I think, is this weird thing where everyone wants to tap in now, right? And, you know, I'm always kind of careful now to say like Bitcoin is a multi-decade type thing, if it fully fulfills the promise of kind of next global reserve currency, etc. And, you know, people hear multi-decade and they're like, oh, yeah, yeah, yeah, sure. Like, I'm down for that. I'm like, no, no, just so we're clear, that's like 30-plus years, right? Like, that's a really, really long time horizon. And just humans are really bad at, you know, there's the Bill Gates quote of like, we overestimate one year, underestimate 10, now bring that out to like 30 years and it's, you know, very hard to kind of predict where we're going to be and also have the patience to do that. So I think that when you kind of zoom out and you look at where are we, it's like actually like we're way ahead, I think,

• 1:08:14Anthony Pompliano?

  of where most people thought we would be at this point. And now you've got this like macro tailwind right into a halving, there's probably going to be this, you know, really big price kind of upward movement in the next 18 months. And what's interesting to me is like pretty much every time this has happened in the past, there wasn't a lot of people paying attention. Like, the last one kind of brought people's attention right in 2017, where like the media started being like, wait a minute, like this thing is actually going to $20,000. Like, that's insane. And you saw kind of the articles and you saw the ICOs and kind of all of that, you know, hype and excitement. If it happens again, like I think it's going to happen, now it's like everyone's already paying attention, right? And so it's just going to be that on steroids, which, you know, there'll be a lot of bad parts to that, but I think really kind

• 1:08:57Anthony Pompliano?

  of thrust it onto a global main stage. So that'll be interesting. I definitely agree with this idea of like crypto in a post-COVID world being essential. Like, I talk a lot about like centralization now is becoming a business risk. So whether you look at it like, you know, TikTok being potentially banned from the United States, all the way to just trusting, you know, do you trust the cloud providers with your data, all that kind of stuff? Figuring out how to be efficient and decentralized is going to be hard for a lot of people across the technology stack, but I think that's just going to become a necessity.

• 1:09:31Speaker 02

  One thing on that real quick is fascinating. You know, the the conversation a few years ago when Chris Dixon had his post of why decentralization matters, it was really focused on sort of the the Zynga Facebook use case, which is the platform risk as a company you take on on somebody else's platform or a user when you don't own your own data. And it was really this this risk that the platform would screw the user. And it's so interesting because now we're in sort of the era of cancel culture. We're seeing platforms want to decentralize themselves to not have a risk of the user rooting their brand. And so i- it's like now they can cede responsibility a little bit and from having to make a really tough, you know, editorial decision or or being, you know, uh, sort of motivated by the mob. And so I think that that is fascinating transition.

• 1:10:13Anthony Pompliano?

  Yeah, and and look, I I actually think it just like Bitcoin is kind of different things to different people. Same thing here. Decentralization serves like different benefits to different people as well, right? So so it's always like we like to put things in a box and say like, oh, it's because this is why this is valuable. But at the end of the day, these are like very complex systems. So I think generally like that's the trend and and it only accelerated, won't uh kind of retract at all. Uh, in terms of the pomp for X, I think it's first of all hilarious that you you call it that. Um, I I really do agree with this idea of like taking a early bet on something that you truly believe in. Like like if you're not authentic about it, then you know, you're dead on day one. Um, but there is this benefit that I had, obviously with Bitcoin, kind of, you know, it going the way that it went. Uh, other people have done this in in certain verticals.

• 1:10:58Anthony Pompliano?

  Uh, my brother is definitely a great example. I think of just, um, you know, I joke with him all the time. Like what he's doing is not necessarily new, like Darren Rovell did this 25 years ago. It's just that like you and me are probably on the lower end of the generation that remembers Darren Rovell, right? When he was at ESPN and kind of all this stuff. But like some of the stories that my brother will tell, like literally Darren will like, you know, tweet out and be like, I told a story 18 years ago. Right? You know, I've I've written this article three times. And so it goes back to like, it's not necessarily just like having to do something new as much as it's like having a very specific focus, telling people like this is what I'm going to do. So I'm going to cover the, you know, in his case, the money and business behind sports and then just drive at it every single day and just like kind of just like beat people over the head with it, right?

• 1:11:41Anthony Pompliano?

  And what you almost end up doing is, um, who was it? Superhuman, I think, did a great job of this early on where they were like, I don't want as many users as possible. I want the right users. Like, that's basically what you do with that repetition is you end up like getting rid of everyone who was kind of like a half fan. And you just get the people who like, they can't, you know, soak up enough of the content. Uh, and that really builds kind of engagement and, and distribution, all that kind of stuff. Other areas that I think it's interesting, um, so one definitely in education, I think there's going to be this massive, uh, kind of, um, resurgence of all kinds of education. So you're talking about like, you know, what is a digital first kind of university look like? You can basically take every single subject that you would have in high school or in college. And somebody's going to be that person teaching millions of people on the internet, right?

• 1:12:26Anthony Pompliano?

  And that historically, like, it was kind of cheesy if someone was like, oh, like I have a YouTube show and I teach people American history. Like, nobody really cared. But actually, that, that can be built into a massive business now because the tools, um, and software are in place where you can do everything from subscriptions to advertising to physical products to, you know, virtual events, like all that kind of stuff. And so I think just go through your high school, like, uh, curriculum and every single course will, uh, turn into a business. Uh, another area I'm fascinated by is, uh, the, all of the technology verticals that benefit from taking supply chains and manufacturing facilities and bringing them back onshore. So if you've got to bring, you know, your manufacturing or supply chain back, uh, you can't use American labor because the cost is too high.

• 1:13:10Anthony Pompliano?

  It becomes cost prohibitive. So you've got to use technology. So there's like this resurgence of 3D manufacturing, um, you know, 3D printing, uh, all, all kinds of things around just robotics and automation, whatever. I think that's an area that we all kind of know is like, it's cool. It's going to be a thing. I couldn't tell you the first thing about it. And so like, if I knew that there was a person who was like, that's the 3D printing guy, right? Or, or that's the 3D manufacturing woman, like, You just naturally gravitate towards them if that's what you want to learn about. And so you can kind of own entire verticals like that. And then the last thing is I don't have enough thoughts to know what the answer is. But an area that I think is really interesting is creativity.

• 1:13:53Anthony Pompliano?

  And so creativity kind of cuts across all industries. Like you, you want somebody who is creative, but school is like the last place to teach you how to be creative. Right. And so like, I don't yet know what the solution is. Like, is it just some like revamped version of like an educational, you know, situation where like, I'm a teacher. You're all on Zoom and I teach you how to be creative. Probably not, but there's got to be something that people can do to like, how do I drastically pull you up? The creative like spectrum or curve so that you engage with this product, this, you know, service, whatever it is. And now you feel like you've become way more creative. My guess being that that's one of the most viral businesses in the world as well.

• 1:14:37Anthony Pompliano?

  Because if all of a sudden you start talking to me at a party and I'm like, dude, that guy's super creative. Like, oh yeah, I took this course, right? Like, it's something that like people want to brag about because creativity in our society is still put on a pedestal to some degree as well. Right. Like, it's like, oh, you're wealthy or like you're an artist to some degree. Whether you're musician of like a physical artist, whatever, like we still hold that in high regard. And so I don't, you know, first of all, if you have ideas or if anyone listening has ideas, would love to hear them. But, but I think that that's like the other area that's really interesting because again, it's also the thing that is the farthest away from being disrupted by automation, machines, et cetera. Right. It is got kind of this like inherent moat that we at least like to believe that we are, you know,

• 1:15:21Anthony Pompliano?

  the most creative animals, but after GPT three or whatever, maybe not.

• 1:15:26Speaker 02

  I think part of it is just doing it. Of all this old tweet of the desire to, it's not the desire, it's not the education that is scarce. It's a desire to learn and similarly with, with, with projects. And that's what, you know, on deck is really trying to have project based cohorts where you've said you wanted to have a podcast for a long time. You said you want to YouTube channel. You said you wanted to do a startup. You said you want to start. Angel investing, what are all the bottlenecks that have prevented you from doing it? Here's where that stops. Like you are going to start, you are going to ship something, you're just going to start, start trying it. And then just your point on pump for X or our point on it. It's, it's never been a better time to be a creator in terms of monetizing, even stuff that's come out in the last few weeks, like

• 1:16:06Speaker 02

  the, the rolling funds, I, I think is, is game changing. If, if you have an audience based on your writing or you have a course, one, if you have a right, if you have an audience based on writing, you can start a course, you can make money off that. Then you can also, they, people trust your judgment, you can start a fund and invest in people that you're, that you're, you're seeing or, or starting. And so I'm seeing a lot of creators pursue that path and, and, and it's very exciting.

• 1:16:29Anthony Pompliano?

  Listen, you're welcome whenever you want. I'll do this forever with you. Where can people find you on the internet? Find out more about global or Villas Global and also on deck.

• 1:16:40Speaker 02

  villageglobal.vc, beondeck.com, follow me on Twitter, Eric Torenberg. Pump, when I talk about personal moats, your name comes up because to reverse engineer what you've built over the past few years is, is immensely difficult. Mad respect. It's a pleasure to, to know you, be your friend. I'm stoked you had me on the show. Thanks a lot.

• 1:17:00Anthony Pompliano?

  You're, you're way too kind, my friend. We'll do it again soon.

• 1:17:04Speaker 02

  Awesome. Okay.