20VC: USV's Albert Wenger on What Elon Musk Should Do with Twitter | The State of Crypto Today; The Impact of SBF and Why Now is the Best Time To Invest in Crypto | Are We Too Late to Save The Climate and Why Civil Disobedience is Required | Will TikTok b

Albert Wenger is a managing partner at Union Square Ventures, one of the most successful venture firms of the last decade with a portfolio including Coinbase, Twitter, Twilio, Etsy, and many more. Before joining USV, Albert was the president of del.icio.us through the company’s sale to Yahoo and an angel investor (Etsy, Tumblr). He previously founded or co-founded several companies, including a management consulting firm and an early-hosted data analytics company. In Today's Episode with Albert Wenger We Discuss: 1.) From Failed Startup Founder to Leading VC: How Albert transitioned from being a failed entrepreneur to being one of the most respected venture investors with USV today? What were the clear signs for Albert that he was not a good entrepreneur? Why does Albert believe this downturn is different compared to the dot-com bubble? Why was there more hope and promise coming out of the dot-com bubble? 2.) Income Inequality, The Rise of Depression & The Role of Politics: Why is income and wealth inequality more concerning than ever? Why does Albert believe universal basic income is the right solution? Why is mental health worse than ever? What can be done to improve this? Why are our politicians failing us? What should our politicians be doing? How does the rise of Trump show us what society is looking for in politicians? 3.) Climate Change: Misnomers, Developing Countries, Civil Disobedience: What are the single biggest misnomers people have when it comes to climate change? How can we shift spending on climate change solutions from 5% of GDP to 50%? Is that possible? Why do developing nations have an advantage when implementing climate change solutions over more developed economies? Why is civil disobedience the right course of action to ensure society is on a path to change our approach to climate change? 4.) Crypto and Central Banks: The Future of Finance: Why does Albert believe that over the past few years, for many, crypto was a good hedge against inflation? How damaging does Albert believe SBF and FTX will be to crypto in the long term? How does Albert evaluate the potential for governments to create a "central bank digital currency"? What would Albert like to see in a potential currency like this? How could stable coins be the solution to this? What is Albert fearful of with central bank digital currencies? Why does Albert believe now is the best time to be investing in crypto? 5.) The Future of Social Media: Twitter & TikTok: What does Albert believe is wrong with Twitter today? Why was the blue check mark such a mess? What does Albert believe Elon should do with Twitter from this point on? How should Elon deal with the debt providers he has? What happens to Twitter moving forward? Why is it so hard to kill? What is the future of TikTok? Will it be banned in the US? How concerned should the consumer be concerning their data being shared with the Chinese Government?

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

• 0:00Speaker 00

  The constraining factor on humanity isn't how much physical capital there is. We can do amazing things. So the rate limiting factor for humanity really is attention, which is what are the things that we pay attention to both individually and collectively as societies? And hyper collectively as all of humanity.

• 0:16Harry Stebbings?

  This episode was so much fun to do. In this show, we discuss the future of climate change, political leaders, education, the future of social media with Elon and Twitter, and TikTok's potential ban in the US. There is so much here and I'm so thrilled today to be joined by Albert Wenger, managing partner at Union Square Ventures, one of the most successful VC firms of the last decade, with a portfolio including the likes of Coinbase, Twitter, Twilio, Etsy, and more. Before joining USV, Albert was the president of Delicious through the company's sale to Yahoo and was also a prominent angel investor with investments in the likes of Etsy and Tumblr. But before we dive into the show today, SecureFrame is the leading all-in-one platform for automated security and privacy compliance. SecureFrame simplifies and streamlines the process of getting and staying compliant

• 1:01Harry Stebbings?

  to the most rigorous global privacy and security standards like SOC 2, ISO 2701, HIPAA, GDPR, and others. SecureFrame's industry-leading compliance automation platform, paired with their in-house compliance experts and former auditors, helps you get audit-ready in weeks, not months, so you can close more deals faster. SecureFrame makes it fast and easy to achieve and maintain compliance, so you can focus on serving your customers and growing revenues. Automate your security and privacy compliance with SecureFrame. Schedule a demo today at secureframe.com. So if compliance is one thing you always have to prioritize, you also always have to prioritize your team and work? Well, it's truly global today.

• 1:45Harry Stebbings?

  And until now, there's been no HR platform that's been able to handle everything for everyone, no matter where they are in the world. Well, Deal does exactly that. It handles all things for global teams. It allows you to easily consolidate contractors, EOR employees, and local workers in one platform with a tool built to evolve with every stage of your company's growth, no matter who, how, or where you want to hire. So whether you want to comply- Finally work with a contractor on a project in Argentina, hire an employee where you don't have an entity, or run payroll for a direct employee overseas. You can do just that and so much more with Deal. It's way less HR admin and a whole lot more peace of mind. Simplify global team management, payments and HR,

• 2:27Harry Stebbings?

  so you can hire faster, streamline more processes and stay compliant always. To see how Deal can scale with your team, visit deal.com/20vc. And finally, now we have this amazing global team. We want them to work amazingly well together and Retool helps you work more effectively. Most teams build custom software to make business processes work better. But building these internal tools from scratch takes time and engineering resources. And that's why teams at thousands of companies like Amazon, DoorDash and NBC, build internal tools using Retool. And Retool is a very different way of building custom internal software. Instead of waiting months, you can now build out five to 10 apps in just an afternoon, using a bit of JavaScript and SQL.

• 3:11Harry Stebbings?

  That's a game changer for your business. Retool is free to teams of up to five and startups now get $25,000 in free credits. $25,000. Just get started at retool.com/20vc. That's retool.com/20vc.

• 3:34Speaker 00

  You have now arrived at your destination.

• 3:37Harry Stebbings?

  Albert, I have been so looking forward to this. I think it's been four or five years since we last did this. So thank you so much for joining me again.

• 3:44Speaker 00

  Happy to be here.

• 3:45Harry Stebbings?

  I would love to start, for those that missed our first episode, which to be fair, I was there four or five years ago. How did you make your way into the world of venture and come to be at USV in a short two to three minutes, my friend?

• 3:56Speaker 00

  It is actually a long and circuitous route, but suffice it to say that I was at MIT in the sort of 93, 96 timeframe, getting a PhD and the web was exploding. And I thought, what am I doing here, writing a dissertation about it when everybody else is building? And so I decided to launch a company with two MIT professors. It ultimately didn't go anywhere, but I loved the process. I also learned about myself that I wasn't going to be a good operator, but I I love startups.

• 4:20Harry Stebbings?

  Why did you learn you weren't going to be a good operator?

• 4:22Speaker 00

  Because to be a good operator, you have to really stay on one thing with a kind of a singular focus for a prolonged period of time. And you also have to deal a lot with people and I'm not really a people person at the end of the day. The fact that my mind likes to go between different things and the fact that I like to not have to deal with people for the most part. I have lovely relationships with entrepreneurs, don't get me wrong, but that's a very different relationship from having a reporting relationship. From there, I decided I should get into venture capital and it took me a variety of false starts. I won't bore you with all the details. Along the way, included an incubator at the height of the dot com bubble. And Brad and I tried to raise a fund in the nuclear winter after the implosion of the dot com bubble.

• 5:06Speaker 00

  And then eventually Brad and Fred raised the fund and they launched in 2004 and I joined in 2006. And in between that, I briefly worked with Joshua Schechter, who had started Delicious and I became the president of that. And Yahoo acquired it shortly thereafter and then I started hanging out in the USB offices.

• 5:21Harry Stebbings?

  Albert, can I ask, you saw that bust. We're now going through a downturn of sorts. Many listeners have never been through a downturn before. How does it feel? What's different? What's the same?

• 5:31Speaker 00

  I think that the dot com bubble bursting, it felt somewhat dreamlike in a sense because it was such a short and super intense period of a few years. And the hangover was pretty dramatic. Now we're coming off a very prolonged period of time. When the dot com bubble burst, there was in fact a lot of opportunity. I think what's different now is that we've actually had a prolonged period of exploring and building and lots of opportunities. Not to say that there aren't opportunities in software left, there always are, but it feels very different. Now contrast that with crypto for a moment. Crypto, we've just come out of a bubble as well, but in crypto, it feels like there's a lot of opportunities, a lot of building, there's a lot of things.

• 6:15Speaker 00

  And this new cycle feels very similarly to me where we are in crypto today feels very similar to me where we were in the web post implosion of the dot com bubble.

• 6:23Harry Stebbings?

  So I have to be honest, I was so excited for the show today because it was a little bit different in terms of topic type to what we normally do on 20VC. And so I wanted to start on world after capital. And actually, you've spoken before about the transition from industrial to knowledge economy. For those listeners, just providing context, what does this transition mean between the two stages?

• 6:41Speaker 00

  Yeah, you're referring to a book that I've written and that people can find it online. It's called The World After Capital. The book talks about this transition out of the industrial age into a new age that could be, if we do it right, the knowledge age. This isn't like there's some deterministic mechanism that will get us there. We have to make a set of choices. We is here the collective, we of humanity to get us there. I think the fundamental difference is, and this is why the book is called The World After Capital, is that the constraining factor on humanity isn't how much physical capital there is. We can do amazing things. Look at Germany. Germany just built a whole bunch of LNG terminals in a few months. These are projects that people were like, oh, this will take years. But what was the decisive factor? The decisive factor was finally they put enough attention to it, saying, we need this and we need it now.

• 7:24Speaker 00

  So the rate limiting factor for humanity really is attention, which is what are the things that we pay attention to both individually and collectively as societies? And hyper collectively as all of humanity. And the book makes the argument that some of the most important things that we should be allocating attention to don't have prices associated with them and cannot have prices associated with them. And so as a result, we cannot be relying on the market mechanism to guide our attention. We have to come up with other mechanisms. That's the gist of the book.

• 7:53Harry Stebbings?

  Okay, so I love that as a starting point. I saw one of your other interviews and you said two symptoms of the transition is one, income inequality or wealth inequality. And then two, which is mental health. My question to you is, do you believe that the unequal distribution of wealth is the single greatest problem of the transition? And how do you assess income inequality today as a broad statement?

• 8:13Speaker 00

  I'm not arguing for that we should have equality of distribution. That's not a desirable type of society to live in. I just think you can take things too far. So you can have a healthy degree of income inequality, you can have an unhealthy degree of income inequality. And we have entered the unhealthy territory in this. The reason I think it's unhealthy is because we wind up paying Too much attention through various mechanisms to the people who have a favorite of capital. Part of it is that they can have large influence operations, right? Directly by contributing to political campaigns, indirectly by funding think tanks through personal foundations that pursue agendas largely outside of the democratic process. And then there's a problem at the other end of the distribution where we just don't have a floor.

• 8:55Speaker 00

  We just make it so that, especially in the US, you can just completely fall off. And we have a huge problem with people being unhoused, with a huge problem with medical debt. People can't afford access to healthcare. My view of society is sufficiently technologically advanced societies such as the US ought to provide a floor for everybody. Susan, my wife, and I have been long-term advocates for universal basic income. We are funding a universal basic income trial in the city of Hudson in the state of New York. And so that's a floor. I believe you need a floor.

• 9:25Harry Stebbings?

  Really worried. I just think that's going to be civil unrest. Like you walk the streets of not nice parts of town. I sound awful here, but it's scary. And this is in London, this is in New York, you name it.

• 9:35Speaker 00

  I think there's a couple of points to that. Income inequality has something to do with that. But I also think that a lack of North Star for society has something to do with it. I think politicians are very far behind in understanding the nature of the transition that we're in. And so as a result, they are promoting incremental change and continue to promote incremental change. And there are growing parts of the population that are rightly saying, look, these incremental changes that you're proposing, they seem to only make you better off, but they don't seem to be doing anything for me. We have this lack of a North Star, lack of a vision for what a knowledge age society might look like and how everybody might have a purpose in such a society.

• 10:18Speaker 00

  Instead, we've been telling people for a couple hundred years now is that your purpose is your job. And then, of course, inevitably, after you pursue that narrative for some time and then you take people's job away, people are rightly wondering what their purpose is. My view of why I think this is a dangerous transition, it is a profound transition. And if you think of the prior transitions from the hunter-gatherer age to the agrarian age and then from From the agrarian age to the industrial age, the two prior transitions from the hunter gatherer age to the agrarian age and from the agrarian age to the industrial age. They were really traumatic for humanity and brutal. And it's politicians misreading where we are and trying to keep us in the industrial age, trying to fix the industrial age.

• 11:02Speaker 00

  That is going to make this transition bad because as you pointed out, increasingly, the industrial age is not working for a larger and larger fraction of population. It's not working because it's not providing kind of resources and it's not providing purpose. And that's a very dangerous combination.

• 11:18Harry Stebbings?

  My question is, does technology not make this worse? When we think about the rise of robotics replacing many low level jobs. And then we think about newer level technologies like NFTs and the forms of crypto, which actually a lot of the wealth, despite theory being decentralized, is concentrated to a load of bluntly male crypto nerds. It's actually just further concentrating wealth into the hands of even fewer. But is that not like a concern that tech just makes us work?

• 11:41Speaker 00

  So technology, what it does is it grows the space of the possible. So meaning a lot of new things become possible, some of which are good and some of which are bad. Like the earliest human technology was fire and fire is great. It lets you cook, it lets you belt things and make medals. But you can also use it to burn down somebody else's village or to torture, right? So it makes new things possible. Robotics makes amazing new things possible. Let's face it, automation has been very good to humanity today. So the reason you and I can have this conversation on all this high tech gear is because we're not working in the fields. And why are we not working in the fields? Because we have big tractors and other machines that do a lot of the agricultural work.

• 12:21Speaker 00

  If you go back not that long, eighty plus percent of the population was engaged in agriculture so that twenty percent couldn't. Today, in advanced economies, it's sub five percent that's engaged in agriculture. And so ninety five percent of size does something else. So I believe that if we play our cards right when it comes to AI and robotics and crypto and everything else, we can get to a place where we will look back at the current time and we'll be like, oh my God. Eighty plus percent of humanity is engaged in what I think of as the economic sphere. Meaning things are explicitly incentivized with prices, right? So like your labor is. Incentivized with prices, your consumption is incentivized by prices. And we can get to a place where the economy still exists. So it's not called the world after capitalism. I'm just trying to shrink the economic sphere and create more room for the non-economic sphere.

• 13:06Speaker 00

  And the non-economic sphere are all the things that we do that aren't economically incentivized. Spending time with friends, taking care of children, taking care of nature, making art. There's a million things that are non-economically, doing fundamental science. It's a million things that humanity needs. And what I believe we can do if we take the transition from the industrial age to the knowledge age the right way is that, just like we shrunk agriculture, we can shrink the economic sphere and make room for the non-economic sphere. That is the goal of the right transition to the knowledge.

• 13:35Harry Stebbings?

  My question is, you mentioned obviously the second being mental health and the state of mental health today. I'm fundamentally pretty terrified about this too. How do you evaluate this today? And is this not only getting worse?

• 13:46Speaker 00

  In the book, I talk about three freedoms that I believe we need to invest in so that we can make this transition. I call them economic freedom. We mentioned that briefly, that's universal basic income. Informational freedom, which we can maybe come back to, which is about who controls computation. And then I talk about psychological freedom. And it's very much the case that our brains didn't evolve in this kind of information environment. Our brains evolved in an environment where when you saw a cat, there was a cat. Now the internet can produce an infinity of cat pictures for you. We are maladjusted to this information environment. Just we're like we're maladjusted to an environment that has a lot of high fructose corn syrup and everything. So that means we need to develop practices that allow us to live in this kind of environment and to live healthily in that kind of environment.

• 14:31Speaker 00

  That means some type of form of mindfulness, which is a much abused term. Really what it means is being able to recognize that you can turn your phone off, that you can set your phone to do not disturb. Much of what you see online isn't real, never was real.

• 14:46Harry Stebbings?

  Can I be blunt, Albert? Do you not think this is slightly idealistic?

• 14:49Speaker 00

  Oh, no, I don't think it's idealistic. I think it's entirely doable and I think we've done it before. Whenever we've had new media emerge, we've had to go through a period of adjustment. I grew up in Germany, there's a very famous story around a work by Guti called the source of young Wurter, which describes a young man who is unhappily in love and commits suicide. When I book him out, it spites suicides. People didn't really realize that this was a book, essentially. And you have War of the Worlds, the Orson Welles radio broadcast, basically suggesting it's an alien invasion. And we, over time, figured out how to live with these mediums and how to adjust our individual practices, our market structures,

• 15:33Speaker 00

  our legal frameworks to get good things out of these and keep the bad things at bay. That is fundamentally what it means when I call myself a technology optimist. I don't mean that technology is going to solve all problems. I mean that, over time, we have the opportunity to make technology work for us as opposed to against us.

• 15:51Harry Stebbings?

  Okay, but today's media compounds intellectually. It gets better and grips us more and more. The more you play the game, the more they understand your habits, the more they retain you. The more you watch TikTok, the better accuracy the content, the more they retain you. Books, radio, it doesn't personalize, it doesn't.

• 16:08Speaker 00

  Sure, it's the most difficult environment we've been in. I'm not going to deny that. But I do think it is possible to develop the right set of habits. Now, is our education system set up to help people with this? Absolutely not. So when I talk about this transition and I talk about the need to change everything, I really mean it. Things as profound as learning and where learning happens. Look at Uniscore Ventures. We have continued to invest in companies that are essentially paving the way towards a new way of learning. Companies like Quizlet and Duolingo and Brilliant and Skillshare, you name it. We now have a company called Sora Schools that's doing a new type of school. And why is that? Because the existing education system is not fit for purpose. It's an industrial age system and we don't live in the industrial age anymore. So I do think we need to.

• 16:52Harry Stebbings?

  Why is it not fit for purpose?

• 16:54Speaker 00

  Because, look, there's a wonderful book by a guy named John Taylor Gatto called The Underground History of American Education. That book, Gatto was a teacher in the New York school system. That book documents how we got to the system that we have today, a system that teaches everybody the same thing at the same time. We're treating kids by manufacturing data. And that's an industrial age system. There's a wonderful quote, variously attributed, but it's education is not the filling of buckets, it's the lighting of flames. And that's what we've totally forgotten. We are in a bucket filling system by manufacturing date, and that's not going to survive this transition.

• 17:30Harry Stebbings?

  You mentioned a couple of values in the book, which are really important for us to remember. You talk about the second value being responsibility. And you say with great power obviously comes great responsibility. The quote, politically, Albert, we've never had such morons running countries. This is not a great time of great responsible leadership.

• 17:46Speaker 00

  There's one way of looking at it where you're like, oh God, it's terrible. It's only going to get worse. And then there's another way of looking at it and saying, look at the climate fund. We have a new wave of climate movements that are much more determined than the old ones were, that are much more working in kind of a civil disobedience mode, and that's much more likely to lead to success. So it's easy to be pessimistic and I have bad days and on those bad days I'm very pessimistic. But I think there's also signs of new things. Yes, there's a lot of things that one can be unhappy about and pessimistic about, but there's also a lot of things that are promising and that are beginnings of transformation from within. What's happening in homeschooling today is it's a transformation of how people are learning.

• 18:30Speaker 00

  So you've got both people working in the system and people building new systems. There's a way of looking at the world and going, yeah, change is coming too.

• 18:38Harry Stebbings?

  But I do want to understand, you say kind of about the positive mindset and taking a proactive approach. We saw the second climate fund raised at the end of last year, and it was December, $200 million fund, very exciting. Talk to me about the internal discussion around a new product being a climate fund. Because what I love about USP, and I'm sorry, I don't mean to just talk, but what I love about USP is how focused you are. You are the cross men and women of venture who just absolutely nail the boutique strategy. I'd just love to understand the internal discussion on expanding a new product with climate.

• 19:06Speaker 00

  Yeah, the way we've always approached investing is to think about what are large transformative forces that are changing markets, market dynamics, the look as a power. Our theses that we've had over the years are never around a specific technology. Have an iPhone fund, let's say, or we don't have a crypto fund. These are technologies and it's really for us about understanding how do those shift the structure of markets, the nature of competition, how do they create opportunities for new companies or new projects to come into the world and to make a difference. Climate is one of those forces where the nature of how energy is being produced,

• 19:48Speaker 00

  the nature of how products are being produced, also end of life for products where raw materials come from, all of those things are up for grabs because they have to change fundamentally in order for us to get under the climate crisis and that creates opportunity. Markets that had not seen opportunity in a long time are being shaken up fundamentally and the structure of those markets is being disrupted. Electricity, for example, is going from a very centralized system to a very decentralized system. And so it is a fit with the way we've always thought. It's not a departure from fundamental USV. It's just applying the USV style thinking to a new force in the world.

• 20:26Harry Stebbings?

  I spoke to like a top fund the other day and they said, the reason we don't have a climate fund, Harry, is we don't think there will be enough winners in climate to justify a separate climate fund. We think there will be a couple, maybe five, 10, 15, whatever that is, but there's not enough venture scale returns in climate to purely do a climate fund. Would you disagree with that?

• 20:45Speaker 00

  I'm thrilled to hear other people think that way.

• 20:49Speaker 00

  At least more room for us. No, actually, actually, we need more capital pointed at climate, let's say. At USV, we've always taken the approach of being very clear about what our thesis with a specific fund is. We don't have a growth fund, for example. We have a fund that we call the opportunity fund. And why do we call it the opportunity fund? Because things we put in there need to feel like the actual opportunity. And so it doesn't have any revenue requirements. It's not a chase the hot deal kind of fund, throw money at companies we miss. It's an opportunity fund. And people sometimes say, why do you have three separate funds? Because it forces discipline. If you raise one big fund, you can be less disciplined than if you have three vehicles where you have a very specific thesis for each vehicle. And each time you can ask yourself, does this fit with the thesis? Or I have too much money and so I'm chasing things.

• 21:32Harry Stebbings?

  Albert, you said before in Terms of like climate, it's about shifting attention, which you mentioned earlier. And you said before about putting fifty percent of GDP to climate and sustainability. And I read this and I was like, wow, jeez, is that even possible? We're at five percent today, I think you said.

• 21:46Speaker 00

  Yeah.

• 21:47Harry Stebbings?

  To be done.

• 21:48Speaker 00

  I think it can be done if and when we get the right kind of leadership. Certain types of topics go from being a losing proposition to being a winning proposition. And climate will be that kind of thing. It'll go from something where politicians feel, oh, I can't really talk about it. There's not enough voters, I'm not going to get elected and so forth. I think it's going to go from that to something where somebody will run and say, no, this is both the biggest threat and the biggest opportunity that we've had in a long time. And so we're going to lean into it, we're going to lean into it hard. And once that happens and somebody gets elected somewhere in a big way on that program, I think that'll make a lot of things possible that aren't currently possible. When I look at the set of technologies that we have on the table,

• 22:31Speaker 00

  if we deploy them the right way, we can wind up with very cheap, almost free electricity. I think we can wind up with very clean cities. I think we can wind up with less land being used for agriculture, more land being available for biodiversity, for recreation and some combination of the two. There's an incredible, amazing future that we can get to once we develop the will to do it. And I think there's another related misunderstanding and it goes back to what we were talking earlier about transitions. As long as you're caught in this idea that this is an incremental transition, your approach to the climate crisis will also be incremental. But it's not a problem that can be solved with incremental approaches. I believe this is in a way a leadership opportunity. It's an opportunity for politicians to run on a different platform. And I believe that will happen.

• 23:16Harry Stebbings?

  When you say run on a different platform, you mean with the central thesis being climate protection?

• 23:20Speaker 00

  With the central thesis being that we need dramatic radical change and we need massive resource reallocation for some time period to get to a new age and leaning into the idea that the time for incremental change has come and gone, that this really is about transformational change across the board.

• 23:39Harry Stebbings?

  So if you're a politician now and you say fifty percent of GDP is going Or thirty percent or twenty percent. There's the opportunity cost of budget. And respectfully, one of my mentors, I didn't say this, but it always reminds me something. People are always bluntly less smart or intelligent than you think. And ninety percent of people will be going, hey, what are you doing? You're taking away from my budget. You're taking away from my budget. You would never get elected.

• 24:02Speaker 00

  I don't think so. I think that people want to actually be called upon. People want to be given purpose. This ties into the earlier part of the conversation where a lot of people feel they don't have purpose. A lot of people feel they don't have the positive outlook in their lives. What leadership ultimately is about is to craft the kind of visions that people can rally behind. And that opportunity exists today. And I believe we will see people leaning into this. In a way, the success of Trump, which took some people by surprise, was a version of that. Not the kind of version I'm excited about, but it was somebody saying, look, I will take you to a great place. It was an imagined place in the past, but it was about making radical changes. It's not about making incremental changes. It shows that there is an appetite for that.

• 24:46Speaker 00

  This idea that people somehow don't get it or people aren't smart enough, I think that's wrong. I think people do get it. I think people do understand that the thing we've been doing for the last ten to twenty years of incrementally trying to fix industrial age is not in fact working.

• 25:02Harry Stebbings?

  I'm really just like asking all the questions I want to hear. Because I very much actually said the same as what you were saying to a friend the other day. And the friend actually said, Harry, how privileged. Your countries have bluntly squandered our countries for years on resources. And now we're just getting to some form of standard of living that's really attractive to anyone. And now you want to make that more challenging with climate change.

• 25:24Speaker 00

  I think it's the opposite, actually. I think that developing nations can leapfrog. They don't have much of an existing infrastructure that needs. If you look in big parts of Africa, they don't have a grid. They can lean right into decentralized energy production. Why does Africa have better adoption of mobile banking? It's because it didn't have banking banking. So I actually think there's a huge leapfrogging opportunity. And a lot of the framing of this, I just think is off. Now, I do think it's our responsibility to help. If all the solar panels are going to be produced outside of Africa and then it's become Extractive where we're basically like harvesting African solar energy to make green hydrogen to pump to Europe and not grow the African economy. Yeah, that's definitely on us. But to say that we cannot have growth in places like Pakistan or Africa unless we ruin the climate.

• 26:09Speaker 00

  I just think it's flat wrong. It's flat wrong. What else is flat wrong about how we think about climate that you often hear? What's flat wrong is that people seem to think that this is like a nuisance problem and that the private sector somehow has got it covered. I just think people have no understanding of the actual physics of this crisis. To put this into perspective, concentration of greenhouse gases in the atmosphere was very constant for about a 10,000 year time period. That 10,000 year time period coincides with the rise of the agrarian age. And then the last hundred years, we've been radically changing that balance. In climate speak, we call this the pre-industrial baseline. We call this 10,000 year period where the concentration of greenhouse gas in the atmosphere was roughly constant.

• 26:50Speaker 00

  And so the question is, how much energy, how much heat are we now retaining in the earth's system that used to go out into space? Right? So what greenhouse gases do is they let the sunlight in, so stuff warms up. And then they keep the heat here, they trap the heat instead of the heat radiating back out into space. The question is, how much heat is that? And obviously, the right unit to express that is joule, but nobody has an idea what a joule or a pen of joule or, you know, is. One way to express it is in terms of Hiroshima sized nuclear bombs. I do this as a survey in like large rooms of people and I put it up as a live survey and I sort of say, how much heat do you think it is? Do you think it's one Hiroshima sized nuclear bomb per year, one per month? I give them options all the way down to one per second. Basically, the mode of the distribution winds up being somewhere around like one per hour and some goes maybe one per minute.

• 27:34Speaker 00

  But the reality is it's four to seven per second. Of every second, of every minute, of every hour, of every day, four to seven Hiroshima sized nuclear bombs worth of heat. Now, I wanted to imagine for a moment a very different setup. Imagine alien spaceship hovering about earth and throwing four to seven Hiroshima sized nuclear bombs into our atmosphere every second. What would we do? Shoot them down? Yeah, we would drop everything. We'd be like, there's nothing that matters. They're here to kill us. They're trying to overheat the planet. We made a movie about it. It's called The Independence Day. We would drop everything. Except it isn't aliens, it's ourselves. And it's not bright explosions that he can see. It's just the molecules in the air, especially the molecules in the ocean wiggling harder because that's what heat is. But the amount of energy is absolutely mind boggling.

• 28:16Speaker 00

  Where people are flat wrong is that they think that this is some problem that we're on a path to fixing this problem. We are not on a path to fixing this problem. The economists recently said, ah, yeah, give up on one and a half degrees because it's gone. They're right, but the answer isn't, oh, let's give up on the whole thing. The answer is no, we're so far behind that even one and a half degrees of warming at this point is we've already blown through it and we're going to blow through it.

• 28:38Harry Stebbings?

  I'm a control freak and so I like to feel like we can take action and we can make a difference or control as much as we can reinforce. Trouble is, I saw a brilliant stat, not a brilliant, but a stat the other day that said that if Canada hit their climate change targets in the next 25 years, it wouldn't be as much as China hitting theirs for the next year.

• 28:57Speaker 00

  Yeah, obviously the climate crisis is a global problem and one country doing the right thing isn't going to solve the problem. But you got to start somewhere. The opportunity to transform economies for the better is in the here and now. The threat is in the here and now. I believe that by leaning into it, we can not just transform our economies, but show what's possible. I think that will get emulated. For some time period, I was actually less concerned about China, to be frank, because I think the Chinese understood the climate problem. I was more concerned about India, but it's very encouraging. We made an investment in India in a company called Bolt that deploys charging networks for two wheelers, three wheelers, EV, two wheels, three wheels, and now also four wheelers. I just had a board meeting with them earlier today and the network utilization is growing rapidly and India is leaning into EVs.

• 29:42Speaker 00

  I believe that what we do in economies, even if these economies aren't as big or aren't as polluting today as let's say China or India are. It matters because it sets a clear path and a direction and I believe that's important. Waiting for everybody else is not how entrepreneurs work. It's not how venture works and it's not how the world works. You don't wait until everybody is on the same page. You start doing the right thing and then others will come along.

• 30:11Harry Stebbings?

  You take action, Albert. You take action. And I saw you say that civil disobedience is compulsory to climate action. And I thought, what? The just oil people hanging off a bridge? That's compulsory, Albert.

• 30:24Speaker 00

  What I think is that the history of making big changes is applying pressure to the existing system. That was true for women's right to vote, the Sephardic movement, that was true for the civil rights movement, that was true for the AIDS crisis. It wasn't until ACT UP, it started with civil disobedience, that enough attention was being paid to HIV and AIDS. And I think the same is true for climate. People may be upset about the tactics, but the reality is it's keeping the topic in the news day after day. And that is absolutely crucially important.

• 30:52Harry Stebbings?

  I do totally agree with you in terms of the importance of it being in the news. You mentioned there about things that people think that are maybe wrong about climate. In terms of things that people think are that are wrong about crypto, everyone that I speak to have seen, Harry, I told you, crypto is not a good hedge against inflation. I've seen that you say before, I think it was actually. Why do you think maybe it was a good hedge against it?

• 31:11Speaker 00

  Yeah, I mean, if you live in a dollar-denominated country, it probably wasn't a very good hedge. But there are many other countries where there was an amazing hedge. So there are other countries whose currencies have devalued massively over the same time period. I think it's a little bit of a perspective of where you live.

• 31:25Harry Stebbings?

  Why have central banks abused their power through quantitative easing?

• 31:29Speaker 00

  It's because central banks aren't these entirely benevolent policymakers. Cantillon wrote about this in like the 1700s, that when you print money, the people who are closer to the money benefit more, closer to the money meaning people who have good relationships with banks, people who are already wealthy. And this isn't a new idea, this is actually a well-understood, longer-running idea. The reality is, central bankers too are people who have friends, who have their own finances. They not only saw this as doing their job, but they also like, this seems to be working well for me and my friends.

• 32:05Harry Stebbings?

  How do you think about central bank digital currencies? We've seen a lot in Europe, but now you have your digital passport post-COVID. Now we see Rishi Sunak talking about a central bank digital currency. How do you think about these?

• 32:17Speaker 00

  I believe that a lot depends on the specific features of these. So if you wind up with The central bank digital currency that is totally centrally controlled and anybody's balance can be turned off at a moment's notice. And there's no concept of people having custody or a chain of custody. Where I think it will make it far too easy to circumvent law and to use finance as power. I thought it was a very bad precedent for Trudeau to freeze the accounts of the truckers during the trucker demonstration. And if central bank digital currencies take that form, I think they're very bad because they will further shift the balance of power from the citizens away to the state.

• 33:02Speaker 00

  So I'm a fan in the US, if we got the right stablecoin legislation, let a lot of stablecoins bloom. Allow the stablecoins to have multiple tiers. Essentially, the government, if it wants to free somebody's assets, needs to take serious steps to do so. It needs to go to multiple people in order to be able to do it. And potentially, there's some amount of digital cash equivalent that cannot be frozen by government. Just to strike the right balance of power. A kind of a Chinese style central bank digital currency where the center really does control everybody's balances. I think is the wrong allocation of power.

• 33:38Harry Stebbings?

  When you think about crypto being a viable alternative to fiat and there's stablecoins with different tiers, which I totally agree with you. And I would like to see a future in that happens. But do governments allow for a loss of control in this way? They sent.

• 33:50Speaker 00

  Well, it's not so much a loss of control. I think is a lot of what's currently planned is a further increase and shift of control to government relative to a world of traditional banking and cash and so forth. I don't want to go to the other extreme where all payments are secret all of the time either. Because there's a failure mode in both directions. There's also a failure mode where anybody can be bribed and you can never trace any money and that's bad. I don't think you want to live in a society where there are these vast movements of money that nobody knows where they're going. I don't think that's good. And I don't want to live in a society where somebody with a button in Washington can control everybody's bank balances. The answer is somewhere between those.

• 34:29Harry Stebbings?

  I totally agree with you there. The other thing that I'm hearing is, oh, we always knew. Crypto was for scammers. Look at FTX. You've been in crypto for so many years. How damaging is FTX, do you think, for the crypto ecosystem?

• 34:41Speaker 00

  I think it'll be a blip in the long term and it'll be a blip in much, I don't know, webvan imploding or flus.com or whatever. I pick your favorite dot com thing that imploded. We've been through two crypto bubbles, essentially. Whenever you go through a bubble, it attracts all sorts of people. Some people from the beginning are scammers. Some people bumble themselves way into being scammers. I'm not trying to pass judgment on which one SBF was. I'm just saying when the bubble bursts, all those people get washed out and that's net positive. And I think a few years back, nobody will care.

• 35:13Harry Stebbings?

  What do you think in terms of now being the best time to be investing in crypto? I've made two crypto investments in Q4 and my LPs were like, what are you doing?

• 35:22Speaker 00

  I mean, I was just at a crypto conference and I said the best time to have been in crypto was January 2009. That was when the Bitcoin network launched and the second best time is January of 2023.

• 35:30Harry Stebbings?

  I do have to ask you, we're managing dissemination of information, we're managing kind of political power, social networks and media control more than ever. What do you think of Elon's acquisition of Twitter? I saw you tweet a couple of times about it.

• 35:40Speaker 00

  Look, I think there was a lot wrong with Twitter. Unfortunately, I don't think Elon has made it better.

• 35:45Harry Stebbings?

  What do you think was wrong with Twitter?

• 35:46Speaker 00

  I think what was wrong with Twitter was that it was trying to provide all the features inside of Twitter itself instead of making Twitter more programmable. That was my number one misgiving. And my number two misgiving was that really basic things had been botched. The blue check program was just a complete utter fiasco. And then I also think a lot of the approaches that Twitter took to content editing, I think, were or content moderation started with good intention, but were not executed very well at all. I do think there were a number of important things wrong. I also think it was wrong how heavily dependent the company was on advertising and so forth. I still believe that there's an opportunity today, even after all the damage that has been done both by the prior regime and by the current one.

• 36:27Speaker 00

  I still think it's not too late because Twitter is hard to kill. It's a network of networks. I do wish very much that Elon would basically say, look, we're moving this to a steward ownership model and we're going to make it so that it becomes fully programmable again and we may. Make it so that the verification makes sense. I think that's not too late, but it is going to be too late at some point. Now, whether or not it's possible to do this for him, given the financial structure he's created, and that I don't know, but that would be the right thing to do. And I think if he were to do it, I think it would change the perception of why he acquired it and the perception of whether he can take any kind of feedback or not.

• 37:08Harry Stebbings?

  Why is the blue check mark been a fiasco?

• 37:11Speaker 00

  It completely confounded two things. It confounded the identity thing with the importance thing. And the importance thing, I think, was complete BS always. Who's supposed to say who's important is not important? It should have always just been like, we have verified that the person tweeting from this account is who they say they are, period, end of story. It would have been really simple. And instead, they made it about all sorts of other things, and that was a terrible idea.

• 37:30Harry Stebbings?

  Totally get you. I totally understand. If you want to sit down with Elon today in an armchair, nice fire, little coffee and tea, whatever we want to do, what would you advise him?

• 37:38Speaker 00

  I would say move this to a steward ownership model. You create a golden share, you put the golden share with the foundation. So Twitter can be acquired. You have a clear vision and mission of enshrined with this golden share about being this network that's a globally accessible network. And then making it programmable, making it going back to letting third party Twitter clients flourish instead of shutting them off.

• 37:58Harry Stebbings?

  A would respond, I can't do that. I'm up to my eyes in debt. I've got financial providers who are crushing me. I'm selling tests.

• 38:04Speaker 00

  Yeah, no, look, I mean, that's tough noogies for you, but you're still one of the world's richest people and you still could give any debt provider an out and you could still basically just take a bunch of your wealth and sort of say, look, we're doing it. He has the financial wherewithal to do it. The question is, will he want to do it? It's not a question of does he have the financial wherewithal to do it?

• 38:23Harry Stebbings?

  A final one, I promise. TikTok, what are your thoughts on TikTok? How do you think about it? How do you think about the Chinese intrusion on US consumer data and the future for TikTok?

• 38:32Speaker 00

  Like any other system, I believe the same to be true here, which is that these large social systems need to be programmable so that I can have a third party client. If they're not, we're being programmed by them. It's a very stark choice. Either we're being programmed by the system or we can program the system. And I don't feel different about TikTok than I feel about Twitter or Facebook for that matter. These systems need to become programmable. If they're not programmable, we're being programmed by them.

• 38:56Harry Stebbings?

  The fact that TikTok is the Chinese owned and they have very different rules around data sharing with their governments doesn't change.

• 39:02Speaker 00

  I think it's about shifting the balance of power. As long as I am basically reduced to my thumbs and those are wetware between my ears, while somebody else on the other end is operating millions of servers, that's just the wrong balance of power.

• 39:14Harry Stebbings?

  You tweeted before, it boggles your mind how many founders think they will be able to raise in 2023 on meh metrics with high valuations. I was literally like, thank the Lord, someone else agrees with me. So what do you advise them? What should they do? I'm a portfolio founder in USV's portfolio. What do you advise?

• 39:30Speaker 00

  We held a call early in 2022 for all of our portfolio founders and we had some of the veterans who had managed through the dot com bubble implosion. And we're like, if you have raised at a high valuation and you have a lot of money in back, you have to get a cash flow positive. It's the only safe place, literally the only safe place is cash flow positive. Some people took that advice and some people immediately implemented riffs and other things. And they're on a trajectory to being cash flow positive. And I think those companies will do well. And some other companies are going to run into a wall at some point. I think I've been doing this for nearly 30 years. And I've done like three down rounds in that entire time period. Down rounds are incredibly hard to pull off. People will try to paste over it with structure and so forth. And some of that stuff will get done.

• 40:09Harry Stebbings?

  Why is it so hard to pull off? I'm naive.

• 40:11Speaker 00

  Well, it's hard to pull off because people would rather move on and find some new thing than incur the brain damage of having lots of people be mad at them.

• 40:19Harry Stebbings?

  And you don't think we'll see pay to play come?

• 40:21Speaker 00

  No, no, we will see all sorts of things come back. We'll see all sorts of structure and pay to play and everything else. But we'll also just see some businesses just blow up and people will be like, you know what? I've got better things to do.

• 40:30Harry Stebbings?

  I'm going to move into a quick fire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

• 40:35Speaker 00

  Sounds great.

• 40:35Harry Stebbings?

  So why is strong opinions weakly held a corrosive attitude?

• 40:39Speaker 00

  Because it puts the burden on others to talk you out of it instead of trying to get smarter yourself.

• 40:46Harry Stebbings?

  What is the kindest thing anyone's ever done?

• 40:48Speaker 00

  Told me they love me even when I've been a complete fool.

• 40:52Harry Stebbings?

  That was one of my questions, which is, I'm unmarried, but you have a wonderful marriage. What's the secret to a successful marriage, Albert?

• 40:58Speaker 00

  Still working that out all those years later. I think it's not being static. Static is bad for anything. It's exploring new things, discovering new things about each other, discovering new things in the world.

• 41:08Harry Stebbings?

  How do you make generational transition work in venture when no one else does?

• 41:12Speaker 00

  By not hogging the economics.

• 41:13Harry Stebbings?

  Tell me, best investment advice you've received and why it stuck with you?

• 41:17Speaker 00

  Best investment advice is to have one clear thesis about it. What is the one sentence thing why this investment makes sense?

• 41:25Harry Stebbings?

  Cold showers. Why? When? How? Take me.

• 41:28Speaker 00

  It's cocaine in the morning and it's just stimulating.

• 41:32Harry Stebbings?

  Tell me, what's the most common investment mistake E C's make today?

• 41:36Speaker 00

  Until recently, it was just FOMO-based investments. I don't know what it'll be in this new period.

• 41:40Harry Stebbings?

  What's the most painful lesson that you've been through, but you're also pleased to have been?

• 41:44Speaker 00

  Just failing. I just, I've failed repeatedly at things and it's painful and I'm very glad for it because I think the people where the very first thing that they ever did became a monster success, I think that's really warps you.

• 41:57Harry Stebbings?

  What's so special about Burning Man? That one's from Cindy.

• 42:00Speaker 00

  It was my first time there. It's a weird place. It's full of contradictions. It takes you out of your comfort zone and challenges certain ideas and that's good.

• 42:10Harry Stebbings?

  Tell me, penultimate one, single biggest lesson from working with Fred?

• 42:13Speaker 00

  Oh, single biggest lesson? Just be a good person and work hard.

• 42:17Harry Stebbings?

  Final one for you. What are you most hopeful for and optimistic about in the next five years? Let's end on a note of positivity.

• 42:23Speaker 00

  Our embarking on the path to the knowledge age.

• 42:27Harry Stebbings?

  Albert, I love talking to you. Thank you so much for putting up with my incredibly negative tone today. You've been a joy to work with on this. So thank you so much, my friend.

• 42:36Speaker 00

  Love it. It's great talking to Harry as always.

• 42:40Harry Stebbings?

  As always, I so appreciate your support. If you'd like to see the full video from Stays In for you, you can find that on YouTube by searching for 20 VC. But before we leave you today, Secureframe is the leading all-in-one platform for automated security and privacy compliance. Secureframe simplifies and streamlines the process of getting and staying compliant to the most rigorous global privacy and security Standards like SOC two, ISO twenty seven hundred and one, HIPAA, GDPR and others. Secureframe's industry-leading compliance automation platform, paired with their in-house compliance experts and former auditors, helps you get audit-ready in weeks, not months. So you can close more deals faster. Secureframe makes it fast and easy to achieve and maintain compliance

• 43:24Harry Stebbings?

  so you can focus on serving your customers and growing revenues. Automate your security and privacy compliance with Secureframe. Schedule a demo today at secureframe.com. So if compliance is one thing you always have to prioritize, you also always have to prioritize your team and work? Well, it's truly global today. And until now, there's been no HR platform that's been able to handle everything for everyone, no matter where they are in the world. Well, Deal does exactly that. It handles all things for global teams. It allows you to easily consolidate contractors, EOR employees and local workers in one platform with a tool built to evolve with every stage of your company's growth, no matter who, how or where you want to hire. So whether you want to compliantly work with a contractor or a project in Argentina,

• 44:09Harry Stebbings?

  hire an employee where you don't have an entity, or run payroll for a direct employee overseas, you can do just that and so much more with Deal. It's way less HR admin and a whole lot more peace of mind. Simplify global team management, payments and HR so you can hire faster, streamline more processes and stay compliant always. To see how Deal can scale with your team, visit deal.com/20vc. And finally, now we have this amazing global team. We want them to work amazingly well together and Retool helps you work more effectively. Most teams build custom software to make business processes work better. But building these internal tools from scratch takes time and engineering resources.

• 44:51Harry Stebbings?

  And that's why teams at thousands of companies like Amazon, DoorDash and NBC build internal tools using Retool. And Retool's a very different way of building custom internal software. Instead of waiting months, you can now build out five to 10 apps in just an afternoon using a bit of JavaScript and SQL. That's a game changer for your business. Retool is Free to teams of up to five and startups now get $25,000 in free credits. $25,000. Just get started at retool.com/20vc. That's retool.com/20vc. As always, I so appreciate all your support and we have an amazing interview on Wednesday at 20 Sales with the CRO Avantur, Stevie Case.