1 00:00:05,280 --> 00:00:08,119 Welcome back everyone. I am Cass PNC. 2 00:00:08,119 --> 00:00:10,480 I'm joined as usual by my partner in crime, Mr. Bennett 3 00:00:10,480 --> 00:00:11,600 Tomlin. How are you today? 4 00:00:11,680 --> 00:00:12,960 I'm doing well. How are you, Cass? 5 00:00:13,200 --> 00:00:17,400 I'm doing, I'm doing good. I'm hoping my Internet stays OK 6 00:00:17,400 --> 00:00:20,960 today because we have a very special guest, Travis Kimmel, 7 00:00:20,960 --> 00:00:24,880 CEO of a startup we've had him on previously, one of our 8 00:00:24,880 --> 00:00:26,600 favorite guests. How are you, Travis? 9 00:00:26,720 --> 00:00:29,240 I'm doing great, how y'all? Doing awesome. 10 00:00:29,240 --> 00:00:33,120 We're we're here to discuss venture capital with you, which 11 00:00:33,120 --> 00:00:37,200 is a topic that we bring up pretty regularly with a lot of 12 00:00:37,200 --> 00:00:39,560 animus usually. To me, the arc is sort of like, 13 00:00:39,680 --> 00:00:42,080 you know, there was like a lot of things like just sort of 14 00:00:42,080 --> 00:00:45,000 capitalism generally there. There is this original intent 15 00:00:45,040 --> 00:00:47,000 around it that that's really good. 16 00:00:47,320 --> 00:00:50,920 Like I'm a, you know, I'm a capitalist myself, like, and I 17 00:00:50,920 --> 00:00:53,320 believe in it. And yet you look at the way that 18 00:00:53,320 --> 00:00:58,240 it is that it has been playing out lately and there are still, 19 00:00:58,240 --> 00:01:00,520 there are a lot there. It's complex because there are a 20 00:01:00,520 --> 00:01:02,600 lot of people doing that sort of, you know, healthy 21 00:01:02,600 --> 00:01:04,360 capitalism. And then there's a lot of like 22 00:01:04,360 --> 00:01:06,880 weird regulatory capture stuff that goes on as well. 23 00:01:07,160 --> 00:01:09,600 So I think, you know, certainly open to talk about history. 24 00:01:09,600 --> 00:01:11,800 You may know more about it than I have. 25 00:01:11,800 --> 00:01:14,960 I mean, I've said read a few books on it, but I think that 26 00:01:14,960 --> 00:01:18,720 the we're at this weird place with venture capital where it 27 00:01:18,720 --> 00:01:21,240 is, it has sort of escaped containment. 28 00:01:21,640 --> 00:01:25,440 So for a while, you know, we had this like it was very much a 29 00:01:25,440 --> 00:01:28,240 Silicon Valley thing. And I think some of the best 30 00:01:28,240 --> 00:01:30,800 venture capital is still there. And, and in New York, it's on 31 00:01:30,800 --> 00:01:33,920 the coast. And I, I think that the way that 32 00:01:33,920 --> 00:01:37,600 venture has escaped containment is really strange because now 33 00:01:37,600 --> 00:01:39,400 they all have media companies, right. 34 00:01:39,640 --> 00:01:42,600 So like, if we think, I mean, we could sort of just get into it 35 00:01:42,600 --> 00:01:43,560 here. Yeah. 36 00:01:43,560 --> 00:01:46,200 If you think about like, if we think about like venture 37 00:01:46,200 --> 00:01:50,240 capital, the effect of having a large megaphone around a certain 38 00:01:50,240 --> 00:01:51,760 aesthetic that works really well. 39 00:01:51,760 --> 00:01:53,400 What is that aesthetic, that aesthetic? 40 00:01:53,400 --> 00:01:55,480 It is growth companies. Growth companies are a little 41 00:01:55,480 --> 00:01:58,120 weird and you have to be a little, a little broken to try 42 00:01:58,120 --> 00:02:02,240 to go make one safe from experience, because it's like 43 00:02:02,240 --> 00:02:04,760 it's really hard and there's a lot of risk and there's a lot of 44 00:02:04,760 --> 00:02:07,240 risk on the entrepreneur side, more so than on the venture side 45 00:02:07,240 --> 00:02:09,280 because they're building like a proper portfolio. 46 00:02:09,800 --> 00:02:13,240 And So what you, one of the things you want to look for in, 47 00:02:13,440 --> 00:02:16,240 in funding these companies is zealots. 48 00:02:16,400 --> 00:02:19,360 So you, it's a little bit of a zealot culture, right? 49 00:02:19,760 --> 00:02:22,360 So it's to my mind, there's this strange thing where like a 50 00:02:22,360 --> 00:02:25,240 Messiah culture inside of a little company that's doing 51 00:02:25,240 --> 00:02:28,920 something incredibly hard is like kind of fine because it 52 00:02:28,960 --> 00:02:31,440 gets you through the really hard times where you're not sure 53 00:02:31,440 --> 00:02:34,440 you're going to make it. But then the distribution of 54 00:02:34,440 --> 00:02:39,160 Messiah culture generally into Gen. pop is like, don't know if 55 00:02:39,160 --> 00:02:41,640 we want that. Well, I like this is interesting 56 00:02:41,640 --> 00:02:44,880 to me because this this brings up to me when I get into the 57 00:02:44,880 --> 00:02:49,960 history of Silicon Valley and venture capital, because in my, 58 00:02:50,200 --> 00:02:53,480 in my opinion, venture capital started in Silicon Valley. 59 00:02:53,480 --> 00:02:58,840 So Fairchild Semiconductors is known as the initial venture. 60 00:02:58,840 --> 00:03:02,120 Like as we know venture capital today, like that was when it 61 00:03:02,120 --> 00:03:03,760 happened. For anyone that doesn't know, 62 00:03:03,760 --> 00:03:08,400 they like really got integrated chips started and chose to use 63 00:03:08,400 --> 00:03:10,960 silicon and they were known as the traitorous 8. 64 00:03:11,040 --> 00:03:14,800 They left Shockley and form their own company. 65 00:03:15,000 --> 00:03:17,560 So there is a little bit of a few things that I think about 66 00:03:17,680 --> 00:03:20,280 that's still being involved in Silicon Valley and venture 67 00:03:20,280 --> 00:03:23,320 capital today, which are a bunch of people screwing over someone 68 00:03:23,320 --> 00:03:28,440 to start their own thing. And also what you're talking 69 00:03:28,440 --> 00:03:32,760 about, which was a zealotry, but a zealotry in relation to 70 00:03:33,240 --> 00:03:36,400 wanting to innovate in the fastest way possible 71 00:03:36,520 --> 00:03:40,160 passionately. And I don't think that that is 72 00:03:40,160 --> 00:03:41,800 the goal in venture capital anymore. 73 00:03:41,960 --> 00:03:46,520 I it's in there, it may not be, you know, the, the single goal 74 00:03:46,520 --> 00:03:48,640 or even the median goal, but it's still round. 75 00:03:48,800 --> 00:03:51,000 And I think there's a couple, there's a couple things I'd say 76 00:03:51,000 --> 00:03:53,760 on that. One, that pattern of like 77 00:03:53,760 --> 00:03:57,000 innovation at all costs works really well on software. 78 00:03:57,000 --> 00:04:00,680 It's one of the reasons I like staying in like software because 79 00:04:00,680 --> 00:04:03,800 software is a little, it's a little easier to like innovate 80 00:04:03,800 --> 00:04:09,560 at all costs when the downside of screwing up is like the site 81 00:04:09,560 --> 00:04:12,080 goes down and people don't have the SAS product you're selling 82 00:04:12,080 --> 00:04:14,240 them. That's not really, there's 83 00:04:14,240 --> 00:04:16,279 nothing really like violent about that. 84 00:04:16,360 --> 00:04:18,079 You know, it's sort of there's like a little bit of a broken 85 00:04:18,079 --> 00:04:20,240 promise and you got to make that up to the customer and you got 86 00:04:20,240 --> 00:04:22,680 to try to prevent that. But you can move very quickly 87 00:04:22,680 --> 00:04:27,200 and be like kind of safe a lot of times with software products. 88 00:04:27,560 --> 00:04:30,680 And then when that same ethos gets translated into other 89 00:04:30,680 --> 00:04:33,080 domains as venture expands outward. 90 00:04:33,080 --> 00:04:36,360 So like Theranos is a great example that everybody sort of 91 00:04:36,360 --> 00:04:39,360 loves to talk about here, like move quickly and break things 92 00:04:39,360 --> 00:04:40,960 when you're dealing with medtech. 93 00:04:41,600 --> 00:04:44,720 It's just not clear that that's a lean startup type of problem. 94 00:04:45,520 --> 00:04:47,960 And I think you, you know, any time we try to take this into 95 00:04:47,960 --> 00:04:50,680 another industry where now we're dealing with like, you know, I 96 00:04:50,680 --> 00:04:53,600 think you see a lot of the the drama around Tesla here, right? 97 00:04:53,680 --> 00:04:57,080 Like, OK, let's just ship something before it's ready and 98 00:04:57,080 --> 00:04:59,920 then keep iterating on it. Like, cool, that's great. 99 00:04:59,920 --> 00:05:02,960 Unless it's the thing driving my car and then like I kind of want 100 00:05:02,960 --> 00:05:06,520 to be a late adopter there. See, I, I started laughing there 101 00:05:06,520 --> 00:05:08,480 when you brought up Tesla because you were talking about 102 00:05:08,480 --> 00:05:12,160 how this move fast and break things type of model kind of 103 00:05:12,160 --> 00:05:15,240 works in software, but it doesn't work as you head into 104 00:05:15,240 --> 00:05:16,880 other domains. And I was going to talk about 105 00:05:16,880 --> 00:05:20,120 how software is eating everything, as they like to say 106 00:05:20,120 --> 00:05:23,840 in the example I was just about to bring up was autonomous 107 00:05:23,840 --> 00:05:26,880 vehicles being distributed perhaps before their time. 108 00:05:27,560 --> 00:05:28,960 And then you jumped right to there. 109 00:05:29,480 --> 00:05:31,200 Yeah. And I think, you know, you saw 110 00:05:31,240 --> 00:05:33,800 you see this in the packaging of other products as well. 111 00:05:33,800 --> 00:05:35,880 I get, I may get this example a little wrong, but it's 112 00:05:35,880 --> 00:05:38,040 directional. Right before the latest Boeing 113 00:05:38,040 --> 00:05:40,680 thing, there was some other Boeing thing where they had like 114 00:05:41,000 --> 00:05:43,560 they were selling these planes and they had like different 115 00:05:43,560 --> 00:05:46,560 tiers, almost like SAS pricing. So you got like the basic model 116 00:05:46,600 --> 00:05:49,000 and then you got the mid tier model and you could sort of buy 117 00:05:49,000 --> 00:05:50,960 whatever. What are autopilot control 118 00:05:50,960 --> 00:05:52,880 system? And like it turns out you kind 119 00:05:52,880 --> 00:05:55,000 of needed the mid tier one if you didn't want the plane to 120 00:05:55,240 --> 00:05:56,560 stall out and fall out of the sky. 121 00:05:56,560 --> 00:06:00,480 And I'm just not sure we wouldn't apply these lessons. 122 00:06:00,720 --> 00:06:04,640 They come from this sort of like blast scaling ethos around 123 00:06:04,640 --> 00:06:08,040 software where where I think it's safe to do that if you're 124 00:06:08,200 --> 00:06:11,000 if you're mindful of the externalities and and they're 125 00:06:11,000 --> 00:06:14,080 not there's no actual damage other than like the app being 126 00:06:14,080 --> 00:06:16,040 unavailable. But as soon as this stuff starts 127 00:06:16,040 --> 00:06:20,360 to get distributed as like the way the business is done by 128 00:06:20,400 --> 00:06:22,760 people with these large megaphones, that's where you run 129 00:06:22,760 --> 00:06:24,720 into some real issues. And I think that's a really 130 00:06:24,720 --> 00:06:26,920 interesting angle that we actually talked about a little 131 00:06:26,920 --> 00:06:29,840 bit on here way back in one of our very first episodes, like 132 00:06:29,840 --> 00:06:31,960 episode eight or nine or something. 133 00:06:31,960 --> 00:06:34,080 We were talking about when Coinbase was launching their 134 00:06:34,080 --> 00:06:38,080 media business and compared it to some of Andreessen, 135 00:06:38,360 --> 00:06:43,080 Andreessen Horowitz's efforts in the media landscape with kind of 136 00:06:43,080 --> 00:06:46,960 that same conclusion that entrepreneurial success requires 137 00:06:47,520 --> 00:06:51,440 an unusual type of person in an unusual type of circumstances. 138 00:06:51,840 --> 00:06:56,000 The type of success that is created there generally is not 139 00:06:56,000 --> 00:06:59,360 going to replicate broadly or across other circumstances or 140 00:06:59,360 --> 00:07:03,840 other types of people. But there was a tendency to use 141 00:07:03,840 --> 00:07:07,360 these stories to make it seem in these media projects like it did 142 00:07:07,360 --> 00:07:10,920 generalize more than it did. And then there was a second 143 00:07:11,000 --> 00:07:14,320 thing that you'd see these media companies sometimes do, which 144 00:07:14,320 --> 00:07:19,440 would be to take kind of successful examples or ones that 145 00:07:19,440 --> 00:07:22,000 didn't seem like they were likely to actually lead to the 146 00:07:22,000 --> 00:07:25,000 same kind of massive entrepreneurial success, but 147 00:07:25,120 --> 00:07:29,160 match it up against previous successes on its way there to 148 00:07:29,160 --> 00:07:30,960 like they wanted things that were. 149 00:07:30,960 --> 00:07:32,800 Not made the case. Yeah, yeah. 150 00:07:32,800 --> 00:07:36,200 That the media out effort they were doing was like part of 151 00:07:36,200 --> 00:07:39,800 their making the case that these other firms were like the big 152 00:07:39,800 --> 00:07:42,080 successes, yeah. I mean, it might be useful to 153 00:07:42,080 --> 00:07:44,760 talk through like, OK, so you know, just laying the ground 154 00:07:44,760 --> 00:07:46,600 with here. What is venture capital today? 155 00:07:47,040 --> 00:07:50,280 In my mind, you're, you know, you get a pool of money, which 156 00:07:50,280 --> 00:07:53,160 is often, you know, like pension money or whatever these like a 157 00:07:53,160 --> 00:07:56,400 large LP's, you pull this stuff together and then you go fund a 158 00:07:56,400 --> 00:07:59,960 cohort of companies. And if you're investing early 159 00:07:59,960 --> 00:08:02,560 on, so like, let's just say the company is from inception. 160 00:08:02,640 --> 00:08:05,120 I mean, most of those are going to fail just like outright. 161 00:08:05,960 --> 00:08:08,840 And so the model requires you to think about each of these bets 162 00:08:08,840 --> 00:08:12,440 almost the way you would a, a portfolio of options. 163 00:08:12,960 --> 00:08:15,480 Like they've got to have asymmetric upside. 164 00:08:15,680 --> 00:08:19,560 That position has to be able to be at a 203040 X. 165 00:08:20,440 --> 00:08:23,520 So you're only investing in stuff with, with really big TAN. 166 00:08:23,520 --> 00:08:25,640 This is why there's this obsession with market size. 167 00:08:25,840 --> 00:08:27,520 Like if you're, if you're going to invest in something with a 168 00:08:27,520 --> 00:08:31,240 small TAN, that portfolio, you're kind of wasting a bet. 169 00:08:31,360 --> 00:08:35,000 You know, out of 10 bets, maybe two to three of those return 170 00:08:35,000 --> 00:08:39,000 like a double or a 111 of those. It makes your whole makes the 171 00:08:39,000 --> 00:08:41,720 whole thing makes all the rest of the 10 and seven of them just 172 00:08:41,720 --> 00:08:45,160 like go to 0, some little like acquire thing that really scopes 173 00:08:45,160 --> 00:08:48,920 how VCs think about what companies are investable. 174 00:08:49,080 --> 00:08:52,880 And then I think if you take down one more step there into 175 00:08:52,880 --> 00:08:56,520 the into the operator side of it, you also want a business 176 00:08:56,520 --> 00:08:59,960 that is capable of being a growth business. 177 00:09:00,200 --> 00:09:02,840 And and that means it has to be structured such that the gross 178 00:09:02,840 --> 00:09:05,680 margins are super fat. So you're talking like 80 plus 179 00:09:05,680 --> 00:09:08,440 percent gross margin. So like the beauty of software 180 00:09:08,440 --> 00:09:12,160 basically is in this growth model where if I have, if I 181 00:09:12,160 --> 00:09:16,000 stand up a web application and I want to sell to add a customer, 182 00:09:16,080 --> 00:09:18,000 it costs almost nothing. Like there's a little bit of 183 00:09:18,000 --> 00:09:21,040 server cost there, but but it's, it's, you know, it's more or 184 00:09:21,040 --> 00:09:23,920 less free. And so that's what defines these 185 00:09:23,920 --> 00:09:26,360 growth companies is you can then take all of this capital you 186 00:09:26,360 --> 00:09:30,480 have and use it on sales and marketing and further R&D and 187 00:09:30,480 --> 00:09:33,760 you really just try to like grow as fast and as aggressively as 188 00:09:33,760 --> 00:09:36,040 possible. Now the, the failure pattern 189 00:09:36,040 --> 00:09:39,720 around venture is when you get a, a business that is sort of, 190 00:09:39,960 --> 00:09:42,360 you know, I guess I mean, you all I'll use cooking the books 191 00:09:42,360 --> 00:09:45,160 because you all appreciate it. But the way that you categorize 192 00:09:45,160 --> 00:09:46,680 the P&L, I mean, there's actually just a lot of 193 00:09:46,680 --> 00:09:49,880 discretion in there. So sometimes what you'll see in 194 00:09:49,920 --> 00:09:52,440 the world where I'm from, which is like SAS software is that the 195 00:09:52,640 --> 00:09:55,960 you'll have stuff that should be rolled into COGS, which is cost 196 00:09:55,960 --> 00:09:59,080 of goods sold And it's not. And so like let's say you evolve 197 00:09:59,080 --> 00:10:01,880 this really you have a software product, but like nobody really 198 00:10:01,880 --> 00:10:04,120 knows how to use it. And so you see you stand up a 199 00:10:04,120 --> 00:10:07,240 CSM department, just customer success and they handle like 200 00:10:07,280 --> 00:10:09,360 renewals and then they help onboard people. 201 00:10:09,680 --> 00:10:12,480 And if you, if you unpack what the customer success team is 202 00:10:12,480 --> 00:10:15,320 doing, you see that it's basically just like services. 203 00:10:15,400 --> 00:10:17,160 Well, now you're running a business that's a little bit 204 00:10:17,160 --> 00:10:20,240 more like McKinsey or, you know, something like a consultancy, 205 00:10:20,240 --> 00:10:22,480 then you are a, a software business. 206 00:10:22,680 --> 00:10:24,320 So that's the pattern in B2B SAS. 207 00:10:24,320 --> 00:10:26,760 But I think if you, if you generalize that out and you look 208 00:10:26,760 --> 00:10:29,200 at like, you know, these people who are doing manufacturing or 209 00:10:29,200 --> 00:10:32,080 whatever, are they really like, can we really think of them as a 210 00:10:32,080 --> 00:10:34,000 tech company? Do these comparisons that 211 00:10:34,000 --> 00:10:36,720 you're, that you alluded to here, like do they really track 212 00:10:37,360 --> 00:10:39,360 and are you going to get the kind of gross margins out of 213 00:10:39,360 --> 00:10:42,600 there that allow for this really rapid growth and a lot of 214 00:10:42,600 --> 00:10:44,480 control over the business is destiny. 215 00:10:44,600 --> 00:10:47,880 And, and just to be to be clear and like net out what control 216 00:10:47,880 --> 00:10:50,840 over destiny means is euphemism. You know, that means that most 217 00:10:50,840 --> 00:10:53,560 of your costs are labor. And if the economy turns and 218 00:10:53,560 --> 00:10:56,680 your growth falls off, you have this, the lever you have is to 219 00:10:56,680 --> 00:10:58,640 cut labor. So it's like, it's kind of a, 220 00:10:58,760 --> 00:11:02,400 it's a fairly brutal model to really scale very rapidly. 221 00:11:02,400 --> 00:11:06,400 And you see this in in tech and it it contributes to the sort of 222 00:11:07,400 --> 00:11:09,880 short average tenure of tech staffers. 223 00:11:10,000 --> 00:11:12,320 Like, there's just not a lot of mutual loyalty there in the way 224 00:11:12,320 --> 00:11:14,000 that there might be in a. Manufacturing business. 225 00:11:14,240 --> 00:11:17,320 So to me, a lot of the things you're discussing right now are 226 00:11:17,320 --> 00:11:22,120 like even as they are are quite tenuous for, for venture 227 00:11:22,120 --> 00:11:24,840 capital. And the reason I say that is 228 00:11:24,840 --> 00:11:26,960 because of things like cryptocurrency. 229 00:11:26,960 --> 00:11:29,240 Now I don't mean this in a positive way. 230 00:11:29,400 --> 00:11:32,920 I, I want to be clear, like I'm not saying, oh, cryptocurrency 231 00:11:32,920 --> 00:11:35,760 is coming along and defeating venture capital and it's good. 232 00:11:36,200 --> 00:11:38,400 I'm saying this is a conversation I've had with a lot 233 00:11:38,400 --> 00:11:43,360 of people. There's this new VC class like 234 00:11:43,440 --> 00:11:47,320 A16Z, Anderson Horowitz or I'm trying to a lot of the PayPal 235 00:11:47,320 --> 00:11:52,120 mafia guys, these types who are all into they love 236 00:11:52,240 --> 00:11:56,640 cryptocurrency, but they love cryptocurrency not because it's 237 00:11:56,680 --> 00:12:01,000 innovative and changing things. It's because their vesting 238 00:12:01,000 --> 00:12:03,720 periods are shorter. It's because they can sell and 239 00:12:03,720 --> 00:12:05,960 dump on retail faster. It's because they don't have to 240 00:12:05,960 --> 00:12:08,600 wait for it to IPO. It's because like the the 241 00:12:08,600 --> 00:12:11,800 reasons that they love it are for the greediest reasons. 242 00:12:12,040 --> 00:12:16,280 And I genuinely think that this is something that is going to 243 00:12:16,440 --> 00:12:19,840 help self destruct part of venture capital. 244 00:12:20,240 --> 00:12:24,480 It could. I mean, my, there's sort of a, I 245 00:12:24,480 --> 00:12:28,400 think we have to consider what role we want these various 246 00:12:28,400 --> 00:12:32,200 agents to play, right? Like, like for, from my 247 00:12:32,200 --> 00:12:34,760 perspective of venture capitalist, their job, their 248 00:12:34,760 --> 00:12:37,520 mandate is to like take that money and get a return. 249 00:12:37,760 --> 00:12:41,600 And you know, it's a big return. And so if you create a, a sort 250 00:12:41,600 --> 00:12:46,400 of societal set of incentives where you can get liquidity in, 251 00:12:46,560 --> 00:12:50,520 in sort of a shadow public market very quickly, in some 252 00:12:50,520 --> 00:12:53,240 sense, it makes sense to me. The venture has gravitated 253 00:12:53,240 --> 00:12:55,840 toward that. Like it is just sort of a, you 254 00:12:55,840 --> 00:12:58,240 know, it's, it's, it's like water flowing downhill. 255 00:12:58,440 --> 00:13:02,520 And I don't know when I, when I, when I rant about crypto, it's 256 00:13:02,520 --> 00:13:05,200 less about those specific players because I look at 257 00:13:05,200 --> 00:13:07,680 venture capitalists and I say this lovingly, like they're 258 00:13:07,680 --> 00:13:11,880 sharks, You know, they're very, you will get when you go in 259 00:13:11,880 --> 00:13:14,400 there as an entrepreneur, you'll get the brutal feedback. 260 00:13:14,400 --> 00:13:17,680 And, and part of your job is to like, take that feedback to be 261 00:13:17,680 --> 00:13:20,600 able to receive it because it's often very direct and just sort 262 00:13:20,600 --> 00:13:24,360 of like intake it and, and, and react to that and like change 263 00:13:24,360 --> 00:13:27,560 your business so that it so that it is a little bit more 264 00:13:28,400 --> 00:13:30,880 aggressive. And so the the idea that you 265 00:13:30,880 --> 00:13:34,880 have this set of fairly aggressive upside oriented 266 00:13:34,880 --> 00:13:38,600 investors who very quickly noticed that they could, you 267 00:13:38,600 --> 00:13:41,200 know, get liquidity faster and de risk their entire investment. 268 00:13:41,320 --> 00:13:44,400 In some sense that's their mandate and in some sense 269 00:13:44,400 --> 00:13:46,440 they're playing with like pension money. 270 00:13:46,640 --> 00:13:49,560 I agree that I don't think we want to see more and more of 271 00:13:49,560 --> 00:13:52,560 that in the world, but that is probably a regulatory framework 272 00:13:52,560 --> 00:13:53,240 problem. Right. 273 00:13:53,400 --> 00:13:56,880 I mean, yeah, maybe I got so part of this for me, it gets 274 00:13:56,880 --> 00:14:00,400 back to exactly the beginning of our discussion where I was 275 00:14:00,400 --> 00:14:04,240 saying back in the early days of venture capital, innovation was 276 00:14:04,520 --> 00:14:08,120 was put more maybe it wasn't completely the only prior. 277 00:14:08,120 --> 00:14:10,000 I think money is always the number one priority. 278 00:14:10,200 --> 00:14:13,480 But I do think that innovation was bigger priority back in the 279 00:14:13,480 --> 00:14:16,680 1960s, seventies and early 80s maybe. 280 00:14:16,920 --> 00:14:20,160 But like by the 80s, nineties, you have a complete 281 00:14:20,160 --> 00:14:24,400 transformation to like, OK, so money is the the only priority. 282 00:14:24,520 --> 00:14:29,440 And now we're at late game, you know, like not only is money the 283 00:14:29,440 --> 00:14:34,320 only priority, but like the fastest way possible at the 284 00:14:34,320 --> 00:14:38,760 highest returns imaginable. And like, it almost feels like a 285 00:14:38,760 --> 00:14:40,360 Ponzi scheme. Like it doesn't. 286 00:14:40,520 --> 00:14:44,720 In fact, this is something, this is something our for what it's 287 00:14:44,720 --> 00:14:47,560 worth, our discussion with Mark Cuban did not go well. 288 00:14:47,560 --> 00:14:51,280 Let me say that it did not go the way we wanted it to. 289 00:14:51,360 --> 00:14:55,000 However, one of the things he said, I asked him if it's AI was 290 00:14:55,000 --> 00:14:58,440 like, is this a Ponzi? Is the investments, this kind of 291 00:14:58,440 --> 00:15:02,240 thing, this venture capital, all these seed rounds, etcetera. 292 00:15:02,480 --> 00:15:04,320 Is this a pond? It sounds like a Ponzi scheme 293 00:15:04,320 --> 00:15:07,080 and he's like it is. So I would take issue with that. 294 00:15:07,080 --> 00:15:10,080 I would take issue with that in that the portfolio should be 295 00:15:10,080 --> 00:15:12,960 constructed in such a manner that it's not right. 296 00:15:13,360 --> 00:15:17,200 So so if you're investing in companies and like a bunch of 297 00:15:17,200 --> 00:15:20,040 them go to zero, there are things in there that are Ponzi 298 00:15:20,040 --> 00:15:24,600 scheme like, but it should be de risked by having a proper 299 00:15:24,600 --> 00:15:25,920 portfolio. Now, when you when you think 300 00:15:25,920 --> 00:15:28,640 about crypto, I mean, if we circle this back to crypto and 301 00:15:28,640 --> 00:15:31,760 think about let's address the root cause of why we might not 302 00:15:31,760 --> 00:15:33,800 want this type of structure around, right? 303 00:15:33,800 --> 00:15:35,720 Like let's look back at like Wildcat banking. 304 00:15:35,720 --> 00:15:38,360 And also we tried this before. It's not like this stuff is new. 305 00:15:39,040 --> 00:15:44,000 So, so I think the fear is not so much for, for me at least 306 00:15:44,000 --> 00:15:46,880 it's not so much that people are behaving badly, like some 307 00:15:46,880 --> 00:15:49,840 percentage of people always behave badly, but it's more that 308 00:15:49,840 --> 00:15:53,840 the we're creating structures that seem to be unstable in a 309 00:15:53,840 --> 00:15:55,400 way that we might not like later. 310 00:15:55,600 --> 00:15:59,360 So if we take a bunch of capital and we funnel it into a, a sort 311 00:15:59,360 --> 00:16:02,840 of negative sum game, which I would argue that most crypto is, 312 00:16:02,840 --> 00:16:05,920 I think we would agree on that. What'll happen over time is that 313 00:16:05,920 --> 00:16:09,120 the capital coming in from these LP's, you know, initially it'll 314 00:16:09,120 --> 00:16:11,880 be awesome because like the, you know, initially these, these 315 00:16:11,880 --> 00:16:13,880 initial rounds, like you get a bunch of returns or whatever, 316 00:16:14,040 --> 00:16:16,760 but eventually that stuff is unstable and it falls over. 317 00:16:16,880 --> 00:16:20,720 And, and if it falls over, you destroy a bunch of capital in 318 00:16:20,720 --> 00:16:23,640 that, that capital will no longer come from these LP's to 319 00:16:23,640 --> 00:16:27,000 fund ongoing innovation. And if I were, you know, sort of 320 00:16:27,000 --> 00:16:29,800 like talking my book here as an entrepreneur, that's what 321 00:16:29,800 --> 00:16:32,920 worries me about tech. I think tech and the venture 322 00:16:32,920 --> 00:16:36,000 ecosystem are sort of like they're one unit like that 323 00:16:36,000 --> 00:16:39,040 capital ecosystem is a is a thing that self sustains. 324 00:16:39,040 --> 00:16:41,000 You get these founders who have an exit. 325 00:16:41,200 --> 00:16:44,280 When I'm a second time founder, I've done some seed investments 326 00:16:44,720 --> 00:16:47,560 and that capital sort of goes back in to fund future 327 00:16:47,560 --> 00:16:49,640 innovation. But when we when we shift to a 328 00:16:49,640 --> 00:16:53,160 psychology, we're like it. It's just about the gains and 329 00:16:53,160 --> 00:16:57,800 it's very risky sort of Val money transfer stuff like it's 330 00:16:57,800 --> 00:17:00,920 not really a creative overtime. That's super problematic because 331 00:17:00,920 --> 00:17:03,800 what will eventually happen if if we're right about this stuff 332 00:17:04,079 --> 00:17:07,079 and that it it ends up being a negative sum game is there will 333 00:17:07,079 --> 00:17:10,240 be this big rinse and a lot of that money that they could have 334 00:17:10,240 --> 00:17:13,920 been sustainably accretive to the economy by investing in tech 335 00:17:13,920 --> 00:17:17,880 in super risky ventures, most of which fail, but which we found a 336 00:17:17,880 --> 00:17:21,760 way to bundle together and make like a pretty good uncorrelated 337 00:17:21,760 --> 00:17:23,400 return. That's beautiful. 338 00:17:23,400 --> 00:17:26,160 Like I think venture capital is, is beautiful done right. 339 00:17:26,400 --> 00:17:29,120 It's just it's one of the big growth engines of the American 340 00:17:29,120 --> 00:17:31,240 economy. I've been preparing today to 341 00:17:31,240 --> 00:17:35,120 piss Cass off by doing a defense of venture capital that went in 342 00:17:35,120 --> 00:17:41,040 kind of that same direction, which is that most venture 343 00:17:41,040 --> 00:17:45,280 capital investments go poorly. I think most venture funds 344 00:17:45,280 --> 00:17:50,160 return sub S&P 500 with like the few outliners carrying like the 345 00:17:50,160 --> 00:17:53,680 bulk of that market forward. And like even in the funds that 346 00:17:53,680 --> 00:17:57,080 return outsize returns, that's driven by like a small portion 347 00:17:57,080 --> 00:18:01,320 of companies inside of those. And if you assume that having a 348 00:18:01,320 --> 00:18:04,080 reasonable portion of new companies trying new things is a 349 00:18:04,080 --> 00:18:08,000 societal good, then coming up with a, a socially acceptable 350 00:18:08,000 --> 00:18:13,280 way for high capital former entrepreneurs to gamble on which 351 00:18:13,280 --> 00:18:17,640 things might do well helps you get more of that type of thing 352 00:18:17,680 --> 00:18:22,440 in the world. However, that that works by 353 00:18:23,080 --> 00:18:26,440 putting capital at risk by having a chance of not having 354 00:18:26,440 --> 00:18:30,240 the return. And some of the problem Cass and 355 00:18:30,240 --> 00:18:32,840 I've had with the cryptocurrency investments that he was alluding 356 00:18:32,840 --> 00:18:37,880 to before, is that like by finding a way to exploit a group 357 00:18:37,920 --> 00:18:41,640 outside of the rich capital class? 358 00:18:41,880 --> 00:18:45,960 Like if A16Z actually, let's not say A16Z, let's say a 359 00:18:45,960 --> 00:18:52,080 hypothetical firm in California is able to get a 90% discount on 360 00:18:52,080 --> 00:18:54,920 a token they know is going to go on sale in two months or 361 00:18:54,920 --> 00:18:57,800 whatever, and then they immediately dump it on retail. 362 00:18:58,000 --> 00:19:01,400 The issue with that compared to like regular VC in my mind, is 363 00:19:01,400 --> 00:19:05,320 that they're not really at risk. The entire risk has shifted from 364 00:19:05,320 --> 00:19:09,160 the people who can bear the risk, the moneyed interest, to 365 00:19:09,160 --> 00:19:11,160 the retail people buying the token. 366 00:19:11,400 --> 00:19:15,160 And it's like that level of move makes complete sense for their 367 00:19:15,160 --> 00:19:17,720 incentives, right? These venture capitalists want 368 00:19:17,720 --> 00:19:20,960 to make as much money as possible as quickly as possible. 369 00:19:21,120 --> 00:19:24,760 But like you're kind of talking about there, it corrodes 370 00:19:24,760 --> 00:19:28,480 whatever societal role we believe venture capital or this 371 00:19:28,480 --> 00:19:32,840 form of investing can play. That makes, it makes sense to me 372 00:19:32,840 --> 00:19:36,240 why Cass thinks that that would self destruct venture capital. 373 00:19:36,680 --> 00:19:40,360 However, I I don't know that capitalists finding ways to make 374 00:19:40,360 --> 00:19:43,400 money for themselves quicker generally results in those 375 00:19:43,400 --> 00:19:49,840 capitalists destructing. Yes, I guess my to react to what 376 00:19:49,840 --> 00:19:52,200 you said there, I sort of agree that the structure is 377 00:19:52,200 --> 00:19:56,000 problematic and part of part of the reason it's problematic is, 378 00:19:56,000 --> 00:20:00,440 is again like tech and venture to share a culture. 379 00:20:01,120 --> 00:20:03,400 Like it's a it's a it's a unified capital ecosystem. 380 00:20:03,400 --> 00:20:05,440 It's a unified culture. It's hacker culture, right. 381 00:20:05,560 --> 00:20:07,960 And like we get in trouble for this stuff all the time. 382 00:20:08,040 --> 00:20:10,440 It's just sort of, you know, we're like, we're like Napster 383 00:20:10,440 --> 00:20:13,480 kids, you know, we're like. Making jokes about you wouldn't 384 00:20:13,480 --> 00:20:16,200 download a car and we all laugh like I'd download a car if I 385 00:20:16,200 --> 00:20:19,800 could. It's that there's this ethos 386 00:20:19,800 --> 00:20:22,000 about it's a little anti establishment. 387 00:20:22,000 --> 00:20:24,240 It's very like hacker culture is still alive and well. 388 00:20:24,240 --> 00:20:26,840 And now think about what happens when you take hacker culture 389 00:20:26,840 --> 00:20:30,080 into the realm of like investments and VC. 390 00:20:30,280 --> 00:20:32,680 They're going to find the exploits, entrepreneurs or 391 00:20:32,680 --> 00:20:34,400 people who go out and they find the exploits. 392 00:20:34,400 --> 00:20:36,680 And you know, we got to like shore those things up. 393 00:20:37,720 --> 00:20:40,000 And I think venture capitalists are going to find the exploits 394 00:20:40,000 --> 00:20:44,840 in a in a regulatory environment and it is in we should expect 395 00:20:44,840 --> 00:20:48,800 them to it's almost like a, a function they they perform. 396 00:20:49,720 --> 00:20:52,880 And then I think we should follow on and decide whether or 397 00:20:52,880 --> 00:20:55,000 not that's something we want to keep doing like. 398 00:20:55,200 --> 00:20:57,560 If you if you patch this exploit. 399 00:20:58,040 --> 00:21:00,200 I think so. I think like this is where I'm 400 00:21:00,200 --> 00:21:04,280 like, come on, devs and the devs are basically people in virus 401 00:21:04,320 --> 00:21:06,520 who don't know what the hell is happening. 402 00:21:07,880 --> 00:21:11,480 And so we have a real problem here where the where the the the 403 00:21:11,480 --> 00:21:14,200 devs are way out of sync. What's happening? 404 00:21:14,680 --> 00:21:18,480 To my mind, it's AI look at it and I think it's just like it's 405 00:21:18,480 --> 00:21:21,440 a fairly simple fix. We just need to look at these 406 00:21:21,440 --> 00:21:25,280 things which are like public markets as defined by, you know, 407 00:21:25,280 --> 00:21:28,480 public investors are able to invest in them without a bunch 408 00:21:28,560 --> 00:21:31,960 of accreditation stuff and then regulate them like public 409 00:21:31,960 --> 00:21:34,360 markets. And what we see is the is 410 00:21:34,360 --> 00:21:36,960 already the pre emptive narrative pressure to say, well, 411 00:21:37,160 --> 00:21:38,800 no, it's the accreditation that's wrong. 412 00:21:39,080 --> 00:21:41,240 And I and I think that is very toxic. 413 00:21:41,240 --> 00:21:44,280 Like to my mind, the accreditation is it's pretty 414 00:21:44,280 --> 00:21:48,160 good if you're going to invest in a hyper risky venture, I, I 415 00:21:48,200 --> 00:21:51,080 think you want to validate that the person making that decision 416 00:21:51,120 --> 00:21:56,360 can lose that money because AVC fund will invest in 200 deals or 417 00:21:56,360 --> 00:21:59,000 something. And if you're an Angel investor 418 00:21:59,280 --> 00:22:01,040 and you're not doing it professionally, you just start 419 00:22:01,040 --> 00:22:03,240 doing it as a punt. I mean, I have like 3 or 4 Angel 420 00:22:03,240 --> 00:22:05,080 investments, right? It is not a portfolio. 421 00:22:05,080 --> 00:22:07,320 It's not even rational. I fully recognize that. 422 00:22:08,480 --> 00:22:11,720 But they're, they're sort of, you know, I, I, I like the 423 00:22:11,720 --> 00:22:14,560 entrepreneur, I like the idea. I think you go somewhere and 424 00:22:14,560 --> 00:22:17,080 it's like it's a level of capital that's acceptable. 425 00:22:17,280 --> 00:22:20,400 So I think the attention that exists now is you've got this, 426 00:22:20,600 --> 00:22:23,080 you've got tech culture, which is doing its thing, It's finding 427 00:22:23,080 --> 00:22:27,120 the exploits and and society writ large doesn't quite know 428 00:22:27,120 --> 00:22:29,400 how to handle that. And we see that in a lot of 429 00:22:29,400 --> 00:22:32,160 arenas right now. The only thing I'm I'm taking 430 00:22:32,160 --> 00:22:36,640 issue with here is this goes back to the very beginning 431 00:22:36,640 --> 00:22:41,480 again, or the historical significance of venture capital, 432 00:22:41,960 --> 00:22:45,000 where I don't think I've expressed this yet during this 433 00:22:45,000 --> 00:22:47,280 podcast. But to me, the beauty of early 434 00:22:47,280 --> 00:22:51,200 venture capital was that it was not it was not everyone fighting 435 00:22:51,200 --> 00:22:54,560 each other, which I do think is like, this is a huge part of 436 00:22:54,560 --> 00:22:58,680 venture capital now where like I'm trying to like, yeah, you're 437 00:22:58,680 --> 00:23:01,400 not going to yeah, if you're investing in Samsung, you're not 438 00:23:01,400 --> 00:23:04,400 going to be investing in Apple at the same time. 439 00:23:04,400 --> 00:23:07,240 Maybe you are, I don't know. But like the idea is you want 440 00:23:07,240 --> 00:23:09,400 one to succeed and the other to fail. 441 00:23:09,400 --> 00:23:12,160 Like it is 0 sum, if if not negative sum. 442 00:23:12,880 --> 00:23:16,320 And I don't think that that was necessarily the case early on 443 00:23:16,480 --> 00:23:22,440 because what you had was every, you had government, academia and 444 00:23:22,440 --> 00:23:25,800 private capital working together to innovate. 445 00:23:26,040 --> 00:23:28,880 And I like you could argue it's because we were at war. 446 00:23:28,880 --> 00:23:32,160 You could argue it, it like whatever the reasoning is, I 447 00:23:32,160 --> 00:23:36,760 don't know, but it to me that was the reason that it worked so 448 00:23:36,760 --> 00:23:40,400 well that maybe I don't, I guess I haven't checked the data, but 449 00:23:40,400 --> 00:23:45,880 I, I would assume that there was probably less return and less 450 00:23:45,880 --> 00:23:49,120 risk also. But also like, yeah, you had 451 00:23:49,120 --> 00:23:52,800 people straight out of college at Stanford getting jobs. 452 00:23:52,800 --> 00:23:55,640 You had them working for Lockheed, you had them working 453 00:23:55,640 --> 00:23:57,800 for, you know, government contractors. 454 00:23:57,800 --> 00:24:01,240 You had, but also Fairchild, you had them working for a bunch of 455 00:24:01,240 --> 00:24:03,520 different people. You had a bunch of options. 456 00:24:03,680 --> 00:24:07,480 Everyone was is working together and now everyone is not working 457 00:24:07,480 --> 00:24:11,160 together and everyone is pushing for someone else's failure. 458 00:24:11,440 --> 00:24:15,400 And again, this is like, I don't know how sustainable these 459 00:24:15,640 --> 00:24:18,280 trends are. Well, if you think about so 460 00:24:18,280 --> 00:24:20,480 there's this thing in software called Conway's Law. 461 00:24:20,640 --> 00:24:25,000 It is this observation that a product, the will will begin to 462 00:24:25,000 --> 00:24:26,800 mirror the org structure that created it. 463 00:24:26,920 --> 00:24:28,960 It's fascinating stuff. I think there's something sort 464 00:24:28,960 --> 00:24:32,760 of analogous here, which is that if you you know, the good old 465 00:24:32,760 --> 00:24:35,200 days of venture capital that we're being nostalgic about, 466 00:24:35,200 --> 00:24:37,760 nostalgia always has an element of like rose colored glasses. 467 00:24:37,760 --> 00:24:39,440 But let's roll with it. You know, the venture capital we 468 00:24:39,440 --> 00:24:41,720 want where it's a little more, it's more a little more 469 00:24:41,720 --> 00:24:44,720 cooperation. I think part of that is that if 470 00:24:44,720 --> 00:24:48,240 you got, if you have an ecosystem that is pursuing huge 471 00:24:48,360 --> 00:24:52,600 high Tam stuff, there is just kind of room for everybody. 472 00:24:52,720 --> 00:24:54,320 Like what you're basically betting on, you're trying to 473 00:24:54,320 --> 00:24:57,200 ride this wave of disruption. You know, you're about 474 00:24:57,200 --> 00:24:59,960 disruption a lot. Disruption is sort of like when, 475 00:25:00,200 --> 00:25:02,880 you know, I don't know, personal computing was great, sort of the 476 00:25:02,880 --> 00:25:05,200 cloud was is a good disruptive example, right? 477 00:25:05,480 --> 00:25:07,720 So you have all of this, you have these legacy providers who 478 00:25:07,720 --> 00:25:10,400 are doing software installs and a cloud provider comes along as 479 00:25:10,400 --> 00:25:13,680 like, man, I can make way better software and I can build it on 480 00:25:13,680 --> 00:25:16,600 multi tenant architecture and I can get it to people, you know, 481 00:25:16,600 --> 00:25:19,760 a day after they buy instead of after a month long install. 482 00:25:20,080 --> 00:25:22,720 And so all of the people who are creating these cloud companies, 483 00:25:23,080 --> 00:25:26,000 they don't really feel like they're maybe they're 484 00:25:26,000 --> 00:25:28,280 competitors in strict sense, but there's enough room for 485 00:25:28,280 --> 00:25:31,800 everybody to play. Now, if you are the the more you 486 00:25:31,800 --> 00:25:37,960 get into properly killing an an idea that already exists to just 487 00:25:37,960 --> 00:25:42,280 sort of replace it with something that that's not really 488 00:25:42,280 --> 00:25:45,360 a creative to the customer and doesn't really lower the overall 489 00:25:45,360 --> 00:25:47,400 unit economics. Tech should be deflationary, 490 00:25:47,400 --> 00:25:48,760 right? We should make everything 491 00:25:48,760 --> 00:25:50,280 cheaper. But the more you get into 492 00:25:50,280 --> 00:25:54,000 something where you're doing this sort of is it is it, you 493 00:25:54,000 --> 00:25:57,600 know, these models like Uber or Lyft where it's like, is that 494 00:25:57,600 --> 00:26:01,840 really tech or is it just sort of Labor regulation arbitrage? 495 00:26:01,840 --> 00:26:04,360 I don't think we know yet. You know, I think those things 496 00:26:04,360 --> 00:26:07,000 would get a little bit, they get a little bit stranger. 497 00:26:07,160 --> 00:26:10,800 And I think that the IT changes the competitive dynamic because 498 00:26:10,800 --> 00:26:13,760 it's no longer a bunch of people building the future, which is 499 00:26:13,760 --> 00:26:16,960 this huge open field that we can all go snag a piece of. 500 00:26:17,320 --> 00:26:20,120 And now it's like, no, we actually have to like, you know, 501 00:26:20,360 --> 00:26:22,640 get rid of the taxi union in New York to grow. 502 00:26:22,640 --> 00:26:24,840 That's just like, that's a little weird. 503 00:26:25,120 --> 00:26:28,280 I guess it's interesting to me like what you're what you're 504 00:26:28,280 --> 00:26:31,200 talking about here because a friend of mine, I was talking to 505 00:26:31,200 --> 00:26:33,400 a friend of mine about this topic just 'cause I was trying 506 00:26:33,400 --> 00:26:35,560 to prepare myself for this discussion. 507 00:26:36,240 --> 00:26:40,240 And one of the things my friend said to me that gave me pause 508 00:26:40,400 --> 00:26:46,080 was that for instance, in China, like they want to push EVs, they 509 00:26:46,080 --> 00:26:51,400 want to have WeChat where like on, on WeChat, right? 510 00:26:51,680 --> 00:26:55,120 They do everything on WeChat. It's every single thing is done 511 00:26:55,160 --> 00:26:57,840 on WeChat. And we have nothing like that 512 00:26:57,920 --> 00:27:01,560 here in America. And the way they got WeChat, 513 00:27:01,680 --> 00:27:04,160 whether we like it or not here in America, like I'm not 514 00:27:04,160 --> 00:27:06,840 suggesting we do need a WeChat. Maybe we don't. 515 00:27:08,280 --> 00:27:10,800 But the reason they have that and the reason they have such 516 00:27:10,800 --> 00:27:14,160 insane EV production right now and solar production and all 517 00:27:14,160 --> 00:27:17,320 this stuff is because the government has told them this is 518 00:27:17,320 --> 00:27:19,560 what we are going to pursue. We're going to work with you on 519 00:27:19,560 --> 00:27:20,680 this. We're going to support you on 520 00:27:20,680 --> 00:27:22,200 it. We're going to subsidize it. 521 00:27:22,440 --> 00:27:24,320 Let's do this and then they do it. 522 00:27:24,360 --> 00:27:28,440 And that gave me pause because I was like, damn, maybe that is a 523 00:27:28,440 --> 00:27:33,480 good point in that that is more of what I want to see when I 524 00:27:33,480 --> 00:27:37,200 talk about venture capital. Maybe it is that I do kind of 525 00:27:37,200 --> 00:27:40,280 want to see venture capital sponsored companies and stuff 526 00:27:40,840 --> 00:27:43,680 trying to land government contracts with the innovation 527 00:27:43,680 --> 00:27:45,280 that they're building and getting support from the 528 00:27:45,280 --> 00:27:48,280 government like they used to, which is things like, you know, 529 00:27:48,280 --> 00:27:50,920 you brought up Theranos earlier. I mean, that's a terrible 530 00:27:50,920 --> 00:27:54,080 example because they they did try to get government 531 00:27:54,080 --> 00:27:56,280 sponsorships and subsidies and stuff. 532 00:27:57,120 --> 00:28:01,280 But I like, it would be great to see the government push this 533 00:28:01,280 --> 00:28:06,080 tech and this innovation and instead of fighting it. 534 00:28:06,160 --> 00:28:08,880 But I think that they're fighting it for good reason. 535 00:28:08,880 --> 00:28:12,720 Like the the there is no cooperation from anyone anymore, 536 00:28:12,880 --> 00:28:13,680 you know? Yeah. 537 00:28:13,680 --> 00:28:19,200 I mean, you know, First off, I'd note that people that, you know, 538 00:28:19,320 --> 00:28:21,400 there are companies out there that are getting large 539 00:28:21,400 --> 00:28:24,680 government grants and they're in the public, you know, Tesla got 540 00:28:24,680 --> 00:28:27,440 a ton of grants. I think that there is there is 541 00:28:27,440 --> 00:28:31,480 government money flowing toward a bunch of these initiatives. 542 00:28:31,640 --> 00:28:33,680 There's government might flow into it's, you know, rooftop 543 00:28:33,680 --> 00:28:37,680 solar. There is there is a fair bit of 544 00:28:37,680 --> 00:28:41,480 that. What tends to the problem there 545 00:28:41,480 --> 00:28:45,480 is that it it changes the competitive dynamic in that part 546 00:28:45,480 --> 00:28:48,560 of what you have to get good at the front, you have to get good 547 00:28:48,560 --> 00:28:50,320 at competing on is sort of like politicking. 548 00:28:51,240 --> 00:28:53,960 And so there's a there's an open question for me about whether we 549 00:28:53,960 --> 00:28:56,640 want to to do it that way or not. 550 00:28:56,680 --> 00:29:00,200 Like I'm going to I'm going to convert you from central 551 00:29:00,200 --> 00:29:02,960 planning to like Adam Smith capitalism here in this in this 552 00:29:03,120 --> 00:29:06,000 episode. I think that there are, there 553 00:29:06,000 --> 00:29:08,480 are pros and cons that you can call out to each of these 554 00:29:08,480 --> 00:29:09,640 approaches. At the end of the day, 555 00:29:09,640 --> 00:29:12,760 Americans, we, we sort of seem to prefer that our 556 00:29:13,040 --> 00:29:16,320 centralization comes in the form of corporatism, which I find 557 00:29:16,320 --> 00:29:18,200 hilarious that we don't even really see that. 558 00:29:18,480 --> 00:29:19,880 You know, that can also be problematic. 559 00:29:20,160 --> 00:29:23,000 You get these Titanic companies that like, let's take health 560 00:29:23,000 --> 00:29:24,120 insurance. I love picking up health 561 00:29:24,120 --> 00:29:25,960 insurance. You get these huge companies, 562 00:29:26,200 --> 00:29:29,120 they get they, they get very established and then they create 563 00:29:29,120 --> 00:29:32,920 a sort of regulatory wave that means that the incumbents always 564 00:29:32,920 --> 00:29:35,680 win because it's just impossible to get through those hurdles 565 00:29:35,680 --> 00:29:39,200 when you're small. And to me, that is, that is how 566 00:29:39,200 --> 00:29:43,760 we experience the downside of central planning equivalence, 567 00:29:44,040 --> 00:29:46,320 right? Like that is sort of us not 568 00:29:46,320 --> 00:29:48,960 doing a great job at capitalism in some sense. 569 00:29:49,160 --> 00:29:52,920 And I, I generally find those structures to be distasteful 570 00:29:53,000 --> 00:29:55,600 because of their downstream externalities. 571 00:29:55,640 --> 00:29:58,040 But of course, I'm an American. I'm sort of wired to think of it 572 00:29:58,040 --> 00:30:00,040 that way. And so when I, when I think 573 00:30:00,040 --> 00:30:03,800 about like, yeah, China has WeChat, but you know, is that 574 00:30:03,800 --> 00:30:06,160 what I want here? Is that what I like? 575 00:30:06,160 --> 00:30:08,560 Do I want the initiative to be driven in that way? 576 00:30:08,960 --> 00:30:11,800 And is that better? Now, the downside of the way we 577 00:30:11,800 --> 00:30:14,360 do it is that it's sort of what we're complaining about here. 578 00:30:14,360 --> 00:30:17,160 Great Americans also do not like proactive regulation. 579 00:30:17,520 --> 00:30:19,880 We just don't like that. We would prefer that the 580 00:30:19,880 --> 00:30:23,680 regulatory motion be a little bit more like, let the thing get 581 00:30:23,680 --> 00:30:26,840 big, let it fall over. And then you come by and sweep 582 00:30:26,840 --> 00:30:29,880 up and it puts people in jail and, and, you know, after the 583 00:30:29,880 --> 00:30:33,520 fact, you, you come in and you do a little bit of mop up so 584 00:30:33,520 --> 00:30:35,480 that people know that we don't do that anymore. 585 00:30:35,840 --> 00:30:39,320 And there is a story about why, because this big thing fellow I, 586 00:30:39,320 --> 00:30:43,280 I kind of favor that, frankly, you know, we've, we've all been 587 00:30:43,280 --> 00:30:45,480 sort of inundated with a culture that reinforces that. 588 00:30:45,480 --> 00:30:49,080 Like we have these the mythology around like precog and precogs 589 00:30:49,080 --> 00:30:51,640 and and thought crime. That's very American. 590 00:30:52,080 --> 00:30:55,040 It's woven pretty deeply into our understanding of how the 591 00:30:55,040 --> 00:30:57,600 economy works. And it's hard for me to break 592 00:30:57,600 --> 00:31:01,080 out of that conceptually because I think that the, the, the 593 00:31:01,080 --> 00:31:06,200 externalities of top down dictates can just be really bad 594 00:31:06,200 --> 00:31:09,280 and make a lot of people feel a loss of an agency. 595 00:31:09,440 --> 00:31:12,880 And that is I I just value that more I guess at the end of the 596 00:31:12,880 --> 00:31:14,400 day. One thing I keep kind of 597 00:31:14,400 --> 00:31:16,520 thinking about him coming back to during this conversation 598 00:31:16,600 --> 00:31:20,280 station is like you talked about how a certain portion of venture 599 00:31:20,280 --> 00:31:25,160 capital investments are kind of a regulation dodge at this 600 00:31:25,160 --> 00:31:26,680 point. And like we can look at 601 00:31:26,680 --> 00:31:33,080 something like a Uber, Airbnb or the like, or kind of classic 602 00:31:33,080 --> 00:31:36,560 examples of certain types of regulation dodges billed as tech 603 00:31:36,560 --> 00:31:39,800 companies. And you talked about how like 604 00:31:39,800 --> 00:31:43,120 the venture capital firms having their own megaphones in the form 605 00:31:43,120 --> 00:31:46,880 of these media companies or sympathetic individuals who 606 00:31:47,280 --> 00:31:50,440 collaborate with these venture capital firms to help them like 607 00:31:50,440 --> 00:31:53,240 promote their messages and stuff, kind of amplify some of 608 00:31:53,240 --> 00:31:58,000 the negative effects of the type of person venture capital tends 609 00:31:58,000 --> 00:32:00,120 to attract. And I think the other kind of 610 00:32:00,120 --> 00:32:05,640 wrinkle that makes this even more complicated is the the goal 611 00:32:05,640 --> 00:32:09,160 of many venture capitalists and venture capital firms to also 612 00:32:09,800 --> 00:32:12,200 influence the regulations. They're trying to like take 613 00:32:12,200 --> 00:32:16,320 advantage of dodging, right is like that we said the dev should 614 00:32:16,320 --> 00:32:19,120 come in and patch these exploits they're taking advantage of and 615 00:32:19,120 --> 00:32:21,920 things like that. But there is a lot of the 616 00:32:22,600 --> 00:32:25,480 capital being invested from these firms that make their 617 00:32:25,480 --> 00:32:29,960 money from the dodge trying to ensure that those things don't 618 00:32:30,000 --> 00:32:33,600 get patched or that they continue to have these 619 00:32:33,960 --> 00:32:36,880 exploitable spaces. And so then when you end up with 620 00:32:36,880 --> 00:32:41,040 like the moneyed interest, like making the investment, promoting 621 00:32:41,040 --> 00:32:44,280 the investment through their own megaphones and then investing so 622 00:32:44,280 --> 00:32:47,320 much of their own money, like both directly from the venture 623 00:32:47,320 --> 00:32:50,600 capital firms and then having like their portfolio firms also 624 00:32:51,040 --> 00:32:54,840 do lobbying as well to like influence the regulation of 625 00:32:54,840 --> 00:32:57,360 those investments. And in those firms, I think you 626 00:32:57,360 --> 00:33:00,600 end up in a place where like each of those things 627 00:33:01,200 --> 00:33:05,280 exponentiates the potential like power and influence of the like 628 00:33:05,640 --> 00:33:12,600 venture capitalist and increases the risk of deleterious societal 629 00:33:12,600 --> 00:33:17,480 consequences when the venture capitalists like, make mistakes, 630 00:33:17,640 --> 00:33:21,880 as they occasionally do. And like that dynamic is hard 631 00:33:21,880 --> 00:33:25,680 for me to solve in my head. Yeah, I think, you know, for, 632 00:33:25,880 --> 00:33:28,680 for me, I, I just sort of bite the bullet, which is that I 633 00:33:28,680 --> 00:33:33,160 think regulatory capture is bad. Like even if my industry is the 634 00:33:33,160 --> 00:33:34,880 one doing it, I just think it's sort of bad. 635 00:33:34,960 --> 00:33:38,560 Like we, we should, you know, we should not do it because what 636 00:33:38,760 --> 00:33:42,040 happens is you, you know, First off it's anti capitalist. 637 00:33:42,240 --> 00:33:45,120 Like it's just anti capitalist and I like capitalism. 638 00:33:45,280 --> 00:33:48,800 I think that what you want is these little like the, the good 639 00:33:48,800 --> 00:33:53,240 version of regulation would allow sort of little startups to 640 00:33:53,240 --> 00:33:55,520 come along and challenge stuff and like do things a little 641 00:33:55,520 --> 00:33:57,720 differently, which you see in maybe an example of that. 642 00:33:57,720 --> 00:34:00,440 You see it in like, you know, some, some labor law stuff. 643 00:34:00,600 --> 00:34:03,120 Like nobody really looks at you and tell you're 50 people and 644 00:34:03,120 --> 00:34:05,800 it's just because they don't want you to have to comply as a 645 00:34:05,800 --> 00:34:09,120 small company with a bunch of like nickel dime regulatory 646 00:34:09,120 --> 00:34:11,280 stuff like me. They're not going to hunt you to 647 00:34:11,280 --> 00:34:13,800 see whether you're allocating overtime properly or there's a 648 00:34:13,800 --> 00:34:15,239 bunch of weird little stuff in there. 649 00:34:15,239 --> 00:34:17,560 And then you get to 50 people. They're like, OK, now you're 650 00:34:17,560 --> 00:34:19,960 like unemployed and you got to play by the rules. 651 00:34:20,400 --> 00:34:21,960 I think that's a fairly healthy structure. 652 00:34:22,120 --> 00:34:26,040 I think the the challenge is that any time in in a society, 653 00:34:26,320 --> 00:34:30,000 you get a concentration of power that bands together and just 654 00:34:30,000 --> 00:34:33,520 throws its weight around. It doesn't really tend to work 655 00:34:33,520 --> 00:34:35,880 for the whole. And this is, this is the thing 656 00:34:36,000 --> 00:34:38,960 that Americans don't like about central planning in our 657 00:34:38,960 --> 00:34:41,120 mythology. And I think we're, we're 658 00:34:41,120 --> 00:34:46,400 curiously myopic about that when it comes to the private sector. 659 00:34:46,800 --> 00:34:49,400 I'm a huge fan of the private sector, but I would like to see, 660 00:34:49,560 --> 00:34:53,679 you know, dozens of little companies all competing, not 661 00:34:53,679 --> 00:34:57,520 sort of this, these large conglomerates that band together 662 00:34:57,520 --> 00:35:00,800 and like act almost like a, a corporate version of a, of a 663 00:35:00,800 --> 00:35:02,760 union. And, and when you take the, the 664 00:35:02,760 --> 00:35:05,880 already powerful corporation and then you aggregate that into a 665 00:35:05,880 --> 00:35:08,800 ball or all of these companies are sort of forming this, this 666 00:35:08,800 --> 00:35:12,520 economic phalanx. I'm just not sure that's good 667 00:35:12,520 --> 00:35:15,320 for us. Yeah, I think that it's more, 668 00:35:15,320 --> 00:35:18,720 it's more this it's for me, it starts conceptually with this 669 00:35:18,720 --> 00:35:22,840 idea of how do we feel about concentration of power over 670 00:35:22,840 --> 00:35:24,880 time. And I and for me, the answer 671 00:35:24,880 --> 00:35:27,720 there is like the reason I like capitalism is it's sort of not 672 00:35:27,720 --> 00:35:31,680 that it's in favor of smaller, you know, localism and all that. 673 00:35:31,680 --> 00:35:35,000 So that variant of capitalism and then the second layer is 674 00:35:35,000 --> 00:35:38,080 like, how honest do we want to be about that in, in light of 675 00:35:38,080 --> 00:35:40,600 our other values and, and how should we go about enforcing 676 00:35:40,600 --> 00:35:41,640 that? And this is where it gets really 677 00:35:41,640 --> 00:35:44,840 challenging because the government is a large 678 00:35:44,840 --> 00:35:48,200 concentration of power and it is positioned against this 679 00:35:48,200 --> 00:35:52,320 increasingly self aggregating private sector concentration. 680 00:35:53,080 --> 00:35:55,160 And I just don't know that we have an answer for that as a 681 00:35:55,160 --> 00:35:57,400 society yet. Personally, I, I like the idea 682 00:35:57,400 --> 00:36:00,320 that the private sector should be this much more distributed 683 00:36:00,320 --> 00:36:04,880 high agency environment. Like it's similar to why I mean, 684 00:36:04,880 --> 00:36:06,600 you just did a great episode on community banking. 685 00:36:06,880 --> 00:36:09,640 It's similar to why I like the idea of having a lot of 686 00:36:09,640 --> 00:36:12,400 community banks because you know, I can go down the street 687 00:36:12,400 --> 00:36:15,480 here and, and talk to my local bank and they can underwrite me 688 00:36:15,680 --> 00:36:18,240 for a house because I've lived through my whole life. 689 00:36:18,480 --> 00:36:21,520 They kind of know me, They know the house, they know the 690 00:36:21,520 --> 00:36:24,160 neighborhood that you're just never going to be able to 691 00:36:24,160 --> 00:36:26,880 underwrite with that level of finesse through Zillow. 692 00:36:27,320 --> 00:36:30,400 Yeah, I mean, I think a large part of what you you're talking 693 00:36:30,400 --> 00:36:33,400 about not liking, Jen, feel free to stop me if I'm wrong, but a 694 00:36:33,400 --> 00:36:35,640 large part of what you're discussing not liking about 695 00:36:35,640 --> 00:36:38,720 venture capital is this regulatory arbitrage, regulatory 696 00:36:38,720 --> 00:36:40,680 capture. But I would, I've been thinking 697 00:36:40,680 --> 00:36:43,920 about regulatory capture and arbitrage like a lot lately. 698 00:36:44,200 --> 00:36:47,840 And it's really interesting to me because obviously this does 699 00:36:47,840 --> 00:36:51,800 not just affect tech or even finance for that matter, right? 700 00:36:51,800 --> 00:36:55,160 Like, oh, sure, there's regulatory capture at the SEC 701 00:36:55,160 --> 00:36:58,760 and, and, and the CFTC or whatever. 702 00:36:58,760 --> 00:37:03,480 But like, let's talk about the FAA and the NTSB and let's, 703 00:37:03,480 --> 00:37:07,400 let's go into all of these regulators who are so the CFPB, 704 00:37:07,400 --> 00:37:12,000 like these, these regulators don't have or they do have a 705 00:37:12,000 --> 00:37:15,600 concentration of power. They do not utilize that power 706 00:37:15,600 --> 00:37:22,480 to help the retail consumer and one of the only regulators, I 707 00:37:22,480 --> 00:37:24,080 guess I don't know. I don't know if this I I think 708 00:37:24,080 --> 00:37:26,160 this is the right term. One of the only regulators that 709 00:37:26,160 --> 00:37:28,880 I can think of that hasn't suffered from arbitrage or 710 00:37:28,880 --> 00:37:35,600 capture, and this is not a big one, is like the DMV where where 711 00:37:35,600 --> 00:37:40,360 like everyone can agree that you need rules and regulations to be 712 00:37:40,360 --> 00:37:44,760 allowed to go onto the, the road with a, with like a two ton 713 00:37:45,120 --> 00:37:48,680 metallic thing that's going 60 miles an hour. 714 00:37:48,920 --> 00:37:52,200 Like you need to be able to be certified for that. 715 00:37:52,360 --> 00:37:56,240 We all agree on it and the rules of getting your driver's 716 00:37:56,240 --> 00:37:58,080 license. We all accept that. 717 00:37:58,080 --> 00:38:00,680 And no one's trying to like drastically change it. 718 00:38:00,880 --> 00:38:03,040 Nobody wants to be like, actually I would like to 719 00:38:03,040 --> 00:38:05,440 privatize the DMV. Like nobody is talking about 720 00:38:05,440 --> 00:38:07,800 that stuff, right? This is a regulator that we all 721 00:38:07,800 --> 00:38:09,920 can agree on is doing a good job. 722 00:38:10,280 --> 00:38:13,800 Why can't we do that for other regulators? 723 00:38:14,160 --> 00:38:17,400 Well, we should we should get a little more detailed nuance here 724 00:38:17,400 --> 00:38:19,320 about what we mean by regulatory captures. 725 00:38:19,320 --> 00:38:23,640 So if we, if we take at face value by theory here that 726 00:38:23,640 --> 00:38:26,560 Americans like regulation in arrears, meaning we like the 727 00:38:26,560 --> 00:38:28,840 thing to fall over and then we, the regulars come in, they're 728 00:38:28,840 --> 00:38:30,080 like, all right, and nobody do this. 729 00:38:30,080 --> 00:38:34,840 Again, I don't think we want proactive action on the part of 730 00:38:34,840 --> 00:38:37,240 regulators. And in fact, I think that is one 731 00:38:37,240 --> 00:38:40,600 of the signs that regulatory capture is sort of creeping in 732 00:38:40,680 --> 00:38:43,480 is this proactive thing. And second, I think we want, if 733 00:38:43,480 --> 00:38:46,040 we're going with that structure where things get to a certain 734 00:38:46,040 --> 00:38:48,640 size, they fall over. I, I think it is when things get 735 00:38:48,640 --> 00:38:52,720 to a certain size and we don't let them fall over that, that we 736 00:38:52,720 --> 00:38:56,240 run into the moral hazard stuff. So let's take it outside of tech 737 00:38:56,240 --> 00:38:59,520 again and look at, you know, more the mortgage crisis that 738 00:38:59,520 --> 00:39:01,680 happened in OA. We're like, OK, so we've got 739 00:39:01,680 --> 00:39:03,560 this country, we're like, oh, you know, everybody wants 740 00:39:03,560 --> 00:39:05,920 affordable housing. Houses start to become more 741 00:39:05,920 --> 00:39:08,240 affordable. And we're like, whoa, OK, we 742 00:39:08,240 --> 00:39:11,120 don't want that. We don't, we want them to be 743 00:39:11,120 --> 00:39:13,520 more affordable, like conceptually, but we don't want 744 00:39:13,520 --> 00:39:15,880 them to be cheaper because everybody's so levered up that 745 00:39:15,880 --> 00:39:17,360 that would actually ruin the mortgage industry. 746 00:39:17,960 --> 00:39:21,040 And So what you have is you have a bunch of you have a bunch of 747 00:39:21,040 --> 00:39:24,880 like underwriters and bankers who are holding this debt on 748 00:39:24,880 --> 00:39:29,320 their books and stuff who when the system gets so big that it 749 00:39:29,320 --> 00:39:33,640 starts to collapse in on itself, approach the regulators to save 750 00:39:33,640 --> 00:39:35,280 them. And they make very compelling 751 00:39:35,280 --> 00:39:37,560 arguments, right? They're like, oh, well, you 752 00:39:37,560 --> 00:39:39,480 know, the average, this is what will happen to the average 753 00:39:39,480 --> 00:39:41,480 household. Their people are storing their 754 00:39:41,480 --> 00:39:44,240 savings in their homes. And like those arguments are 755 00:39:44,360 --> 00:39:48,560 they're good arguments, but it's very challenging for us to both 756 00:39:48,560 --> 00:39:52,520 have a society that does this regulation in arrears thing and 757 00:39:52,520 --> 00:39:57,240 also dive in and not let these large incumbents fall when it's 758 00:39:57,240 --> 00:40:00,440 time for that to happen. You know, like I think we we got 759 00:40:00,440 --> 00:40:03,560 to pick a path there. And my path is. 760 00:40:04,120 --> 00:40:06,880 My, my preferred path is the, the creative destruction thing. 761 00:40:07,000 --> 00:40:09,440 Just because I, you know, I'm going to commit to the bit on 762 00:40:09,440 --> 00:40:12,160 being a capitalist here. I think it works pretty well. 763 00:40:12,360 --> 00:40:14,160 And I think a lot of the problems that we're running into 764 00:40:14,400 --> 00:40:19,200 the people ascribe to failures of capitalism are, are really 765 00:40:19,200 --> 00:40:22,560 actually more of this thing where we're not allowing 766 00:40:22,560 --> 00:40:26,880 capitalism to do to, to do it's sort of organic motion enough. 767 00:40:27,240 --> 00:40:29,240 I mean, it's, it's, it's amazing to me that you'll see our 768 00:40:29,240 --> 00:40:31,920 politicians going on to, you know, go on Twitter and they're 769 00:40:31,920 --> 00:40:33,920 like, oh, we got to build more houses to make it more 770 00:40:33,920 --> 00:40:35,920 affordable. I'm like, well, how about we 771 00:40:35,920 --> 00:40:39,920 stop making the decision that a housing, housing is an 772 00:40:39,920 --> 00:40:42,640 investment is something that we're going to support as a 773 00:40:42,640 --> 00:40:44,720 society. Like that seems weird because 774 00:40:44,720 --> 00:40:46,880 what that's going to do is attract a ton of investment 775 00:40:46,880 --> 00:40:49,440 money in housing and run the price of housing out. 776 00:40:49,640 --> 00:40:53,480 I hear I hear your criticisms here, but I also look at it and 777 00:40:53,480 --> 00:40:56,200 go like, what isn't the end game for capitalism? 778 00:40:56,200 --> 00:40:58,520 Like essentially the tokenization of error, like 779 00:40:58,520 --> 00:41:01,200 everything should be constantly going up in value and making 780 00:41:01,200 --> 00:41:04,880 everyone money Isn't like like I, I know that's not that isn't 781 00:41:04,880 --> 00:41:07,920 what capitalism means, but I but I do I like, I'm just saying 782 00:41:08,120 --> 00:41:12,640 that the the concept is to always like the let the free 783 00:41:12,640 --> 00:41:14,800 market speak. And if you're going to let the 784 00:41:14,800 --> 00:41:17,920 free market speak, the best thing you can try to do is find 785 00:41:18,080 --> 00:41:23,920 little things to make the market in your like advantage you. 786 00:41:24,040 --> 00:41:29,040 Now, I I understand that you shouldn't be able to make the 787 00:41:29,040 --> 00:41:33,760 market advantage you in a purely capitalistic society, but like, 788 00:41:34,040 --> 00:41:36,680 that is we don't live in a utopia. 789 00:41:36,840 --> 00:41:39,880 You cannot have a purely capitalistic society and 790 00:41:39,880 --> 00:41:42,600 therefore there are gonna be market inefficiencies and 791 00:41:42,600 --> 00:41:46,400 there's gonna be like you're saying people want rules and 792 00:41:46,400 --> 00:41:50,040 regulations behind them, but then not always. 793 00:41:50,080 --> 00:41:54,640 And like we, we see a Ponzi scheme and like you don't want 794 00:41:54,640 --> 00:41:57,640 the proliferation of Ponzi schemes and the free market to 795 00:41:57,640 --> 00:42:01,320 decide which Ponzi scheme gets to live or die like we we don't 796 00:42:01,320 --> 00:42:02,760 want. Ponzi, I think I'm going to I'm 797 00:42:02,960 --> 00:42:05,080 going to come off very pedantic in this whole thing, but 798 00:42:05,600 --> 00:42:07,960 whatever, it's kind of no. So let's let's talk about the 799 00:42:07,960 --> 00:42:11,320 free market thing for a second. There is this sort of toxic 800 00:42:11,320 --> 00:42:14,280 hyper libertarian variant of that, which is basically, I 801 00:42:14,280 --> 00:42:16,480 think just the Hobbesian state of nature, right? 802 00:42:16,480 --> 00:42:20,800 Like, I don't know, whatever. So I, I think we, I think we 803 00:42:20,840 --> 00:42:24,880 have to reject that and say that what is the market? 804 00:42:24,880 --> 00:42:28,120 What is the free market? The free market is the economic 805 00:42:28,120 --> 00:42:32,240 activity that happens within the boundaries of the rule of law 806 00:42:32,240 --> 00:42:34,480 that we have constructed and continue to evolve. 807 00:42:34,720 --> 00:42:38,320 And I'm a believer in that. I'm a believer in the rule of 808 00:42:38,320 --> 00:42:40,000 law and the boundaries that we have set forth. 809 00:42:40,000 --> 00:42:43,000 The free market is the, is the action of all those little 810 00:42:43,000 --> 00:42:45,720 agents within that system, within that game that we've set 811 00:42:45,720 --> 00:42:47,280 up, which has well defined rules. 812 00:42:47,360 --> 00:42:50,800 And we, we largely want them within those defined rules that 813 00:42:50,800 --> 00:42:53,600 are defined in advance, right? We have the laws written and all 814 00:42:53,600 --> 00:42:55,600 that stuff. We want them to be able to move 815 00:42:55,600 --> 00:42:57,240 very freely. Now, occasionally what will 816 00:42:57,240 --> 00:43:01,360 happen is someone will find a hole in the game like, you know, 817 00:43:01,640 --> 00:43:03,640 like you're playing, like imagine you're playing Monopoly 818 00:43:03,640 --> 00:43:06,240 and somebody finds like an infinite money glitch within the 819 00:43:06,240 --> 00:43:08,040 rules. And, and what do you do? 820 00:43:08,040 --> 00:43:11,040 You're like, OK, well, we can either stop playing this game 821 00:43:11,040 --> 00:43:13,800 because it's not fun when people play like that, it's super lame, 822 00:43:13,920 --> 00:43:17,360 or we can just like patch the rules and we, we end up patching 823 00:43:17,360 --> 00:43:18,920 the rules a lot. That's basically what the 824 00:43:18,920 --> 00:43:23,000 justice system does. So I think the, I, I think the, 825 00:43:23,440 --> 00:43:26,480 the, the challenge around these conversations about like free 826 00:43:26,480 --> 00:43:28,960 market absolutism. Free market absolutism would 827 00:43:28,960 --> 00:43:32,840 say, well, that infinite money glitch was part of the rules 828 00:43:32,840 --> 00:43:36,600 when I started playing. And so therefore, I don't think 829 00:43:36,600 --> 00:43:39,360 I should get in trouble for it. And you see this, this is trying 830 00:43:39,360 --> 00:43:41,360 to back into crypto. You see this a lot in crypto, 831 00:43:42,040 --> 00:43:43,920 right? Like code is law and all this 832 00:43:43,920 --> 00:43:45,800 other stuff. I was sort of following the 833 00:43:45,800 --> 00:43:48,600 constraints of the system. And it's like, yeah, that's 834 00:43:48,600 --> 00:43:52,640 fine. But one of the overlays on the 835 00:43:52,640 --> 00:43:57,160 system as defined rigidly by law is also don't hurt people. 836 00:43:57,360 --> 00:43:59,720 And like, you should kind of know that too. 837 00:43:59,920 --> 00:44:02,520 And there is a level at which you can be held accountable for 838 00:44:02,880 --> 00:44:06,200 knowingly hurting people. And then we, we come back and 839 00:44:06,520 --> 00:44:10,320 we, we define the rules of, of the game after people get hurt 840 00:44:10,600 --> 00:44:12,920 such that that's a little bit more explicit, just as a 841 00:44:12,920 --> 00:44:15,880 courtesy to our future selves and for posterity. 842 00:44:16,080 --> 00:44:19,920 And for me, that is when you read Adam Smith, like he talks 843 00:44:19,920 --> 00:44:22,120 about some of this stuff like that is the free market. 844 00:44:22,120 --> 00:44:24,520 The founding fathers had this idea about, you know, an 845 00:44:24,520 --> 00:44:27,640 evolving structure of, of how society works. 846 00:44:27,640 --> 00:44:30,960 It wasn't this this sort of, you know, they sat down at the IT 847 00:44:31,440 --> 00:44:33,880 was at the Green Dragon. What was the name of the tag you 848 00:44:33,880 --> 00:44:36,560 guys from the name of the Tavern anyway, there's some Tavern. 849 00:44:36,560 --> 00:44:39,080 Yeah, yeah, yeah, yeah. They sit down and like we solved 850 00:44:39,080 --> 00:44:42,760 it, you know, after 8 pints or whatever, they're all in their 851 00:44:42,760 --> 00:44:44,040 20s. They're like, we did it. 852 00:44:44,040 --> 00:44:47,240 We created the perfect society. They have the self-awareness to 853 00:44:47,240 --> 00:44:50,280 literally not do that and talk about other not doing that. 854 00:44:50,280 --> 00:44:53,840 And and so I think we just sort of have to reject the rhetoric 855 00:44:53,920 --> 00:44:57,120 of, of, of the free market absolutists who, who will say 856 00:44:57,120 --> 00:45:00,160 things like we should let the free market to its then and, and 857 00:45:00,160 --> 00:45:02,480 be like, that's not the free market is man, like the free 858 00:45:02,480 --> 00:45:06,440 market is. It's a set of rules that we have 859 00:45:06,440 --> 00:45:10,640 defined to the best of our ability to create a society that 860 00:45:11,000 --> 00:45:13,840 incentivizes people to like, you know, innovate and all this 861 00:45:13,840 --> 00:45:16,080 other stuff. And occasionally people will 862 00:45:16,080 --> 00:45:17,640 figure out a way to break those rules. 863 00:45:17,680 --> 00:45:20,160 And then we got to patch it. And that is also part of the 864 00:45:20,160 --> 00:45:23,240 free market. So having said all that, Travis, 865 00:45:23,240 --> 00:45:27,880 why do you think that most of the public venture capitalists 866 00:45:27,880 --> 00:45:31,520 that we end up hearing from are such reprehensible people? 867 00:45:33,960 --> 00:45:36,640 So first of all, I don't, I just think, I just think there's a 868 00:45:36,680 --> 00:45:40,160 lot of loud voices out there that are, they're sort of 869 00:45:40,160 --> 00:45:45,320 advocating ideas that are not in keeping with that, that more 870 00:45:45,320 --> 00:45:49,160 nuanced free market is like, you know, I read Peter Thiel 0 to 871 00:45:49,160 --> 00:45:51,240 one. It's a, it's an interesting 872 00:45:51,240 --> 00:45:52,960 take. Like there's some value to be 873 00:45:52,960 --> 00:45:55,320 derived from it, especially if you're in business. 874 00:45:55,360 --> 00:45:59,160 I think ultimately I, I reject the idea that monopolies are the 875 00:45:59,160 --> 00:46:01,320 goal for reasons we've already talked about. 876 00:46:01,640 --> 00:46:04,600 And I sort of reject that entire line of thinking like what I 877 00:46:04,600 --> 00:46:07,400 want is to be, I think they're the right way to approach 878 00:46:07,400 --> 00:46:11,520 ventures like be fast and be first and have that define your 879 00:46:11,520 --> 00:46:14,240 destiny to just sort of like a constant competition. 880 00:46:14,240 --> 00:46:16,560 If you want to be on market first, you want to have a six 881 00:46:16,560 --> 00:46:18,800 month lead on your fast followers and you just want to 882 00:46:18,800 --> 00:46:21,720 push, push, push. And that speed is what the 883 00:46:21,720 --> 00:46:23,600 money's for when people invest in you. 884 00:46:23,840 --> 00:46:28,160 It's not to like ladder pull and try to like snipe people who are 885 00:46:28,160 --> 00:46:30,120 coming, who are nipping at your heels and just like don't 886 00:46:30,120 --> 00:46:32,760 believe in any of that. And so when I, when I hear 887 00:46:33,120 --> 00:46:35,640 people advocating for those types of beliefs, as you're well 888 00:46:35,640 --> 00:46:39,280 aware on Twitter and more recently on threads, I just kind 889 00:46:39,280 --> 00:46:42,600 of they got to speak out and say like, that's not, that's not the 890 00:46:42,600 --> 00:46:44,560 fine. That's not the society we want. 891 00:46:44,760 --> 00:46:47,760 I think there are RVCS that do a good job of that, You know, I 892 00:46:48,200 --> 00:46:51,080 mean, you know, Logan Bartlett did a great job. 893 00:46:51,080 --> 00:46:53,520 He saw the crypto stuff coming. He's like, yeah, I don't really 894 00:46:53,520 --> 00:46:55,160 know. He's like discussing stuff on 895 00:46:55,160 --> 00:46:57,360 the merits. My direct experience with a lot 896 00:46:57,360 --> 00:46:59,280 of VCs is a little more early stage. 897 00:46:59,280 --> 00:47:03,200 So it's not these Titans who are running a $5 billion fund as 898 00:47:03,200 --> 00:47:07,480 much as it is the the like up close and personal VCs who are 899 00:47:07,480 --> 00:47:09,680 doing like seed investing in Series A series. 900 00:47:10,320 --> 00:47:13,640 Like, I know that there was, it was mostly a joke what Bennett 901 00:47:13,640 --> 00:47:17,440 was saying, but I do want to, I do want to actually say that. 902 00:47:17,440 --> 00:47:20,480 Like I hear, I hear your, I hear your response to that, Travis. 903 00:47:20,480 --> 00:47:23,080 And I'm like, that makes sense. Of course, Like there's 904 00:47:23,400 --> 00:47:27,480 thousands of venture capitalists like we're we're talking about. 905 00:47:27,720 --> 00:47:30,600 At least. At there's there's thousands for 906 00:47:30,600 --> 00:47:33,360 sure, like across the globe, there are thousands and 907 00:47:33,360 --> 00:47:35,640 thousands of of venture capitalists, no doubt about it. 908 00:47:35,640 --> 00:47:39,520 But like the idea, I think there's validity to what Bennett 909 00:47:39,520 --> 00:47:41,960 is saying. Like the loudest ones are the 910 00:47:41,960 --> 00:47:44,960 biggest, worst motherfuckers ever. 911 00:47:45,200 --> 00:47:47,760 All all of them. You know, like almost all of 912 00:47:47,760 --> 00:47:53,480 them, the ones who were hyper, hyper loud, the all in crew A16Z 913 00:47:53,480 --> 00:47:56,600 folks and their partners. And like those are the ones who 914 00:47:56,600 --> 00:47:58,200 were front facing venture capital. 915 00:47:58,240 --> 00:48:01,880 They're the ones who were defining how venture capital is 916 00:48:01,880 --> 00:48:05,960 perceived publicly by the regulators, by Congress, who 917 00:48:05,960 --> 00:48:07,800 you're talking about. Like we don't want these people 918 00:48:07,800 --> 00:48:10,400 deciding like they're 85. They shouldn't be talking about 919 00:48:10,400 --> 00:48:11,480 tech. They don't know what the fuck 920 00:48:11,480 --> 00:48:12,840 they're talking about. I agree. 921 00:48:12,840 --> 00:48:17,760 And yet, like when you have the worst people causing like bank 922 00:48:17,760 --> 00:48:20,640 runs and shit, like, how do you counter that? 923 00:48:20,640 --> 00:48:23,840 You know, like, how do you change the public perception of 924 00:48:23,840 --> 00:48:26,800 what venture capital is? And and you know, like that is 925 00:48:26,800 --> 00:48:30,880 why, that's why I have such animus for venture capital. 926 00:48:30,880 --> 00:48:33,760 It is because of those guys. Well, it's because, see, you're 927 00:48:33,760 --> 00:48:36,560 a capitalist, you're against the concentration of power and it's 928 00:48:36,960 --> 00:48:41,760 deleterious side effects. I, I really do like to me, I, I 929 00:48:41,760 --> 00:48:45,480 try to fit this stuff into some, you know, some way I can think 930 00:48:45,480 --> 00:48:49,160 about things that is coherent across the chaos that is 931 00:48:49,160 --> 00:48:53,520 happening in society. And I think it's just, you know, 932 00:48:53,800 --> 00:48:57,520 American culture at least tends to be happier when there's like 933 00:48:57,760 --> 00:48:59,400 more opportunity. We like that. 934 00:48:59,480 --> 00:49:03,680 And the more you get these, these entrenched power bases, 935 00:49:03,760 --> 00:49:07,800 the more challenging it is for us to find those little pockets. 936 00:49:07,800 --> 00:49:09,400 I don't, I don't think it's limited to venture. 937 00:49:09,400 --> 00:49:12,400 I think your critiques are, I think your critiques are fair. 938 00:49:12,640 --> 00:49:15,760 I mean, I'm, I'm here to sort of advocate for the, the venture 939 00:49:15,760 --> 00:49:18,560 capitals that I've met who are like not doing that, who are 940 00:49:18,560 --> 00:49:20,600 still funding our industry and funding innovation. 941 00:49:20,600 --> 00:49:24,240 And I'm like an astonish ally of theirs, despite being brought up 942 00:49:24,240 --> 00:49:26,120 by my father to never trust a banker. 943 00:49:27,320 --> 00:49:31,000 Working, working with good venture has sort of brought me 944 00:49:31,000 --> 00:49:32,240 around on that. Like I think there are 945 00:49:32,240 --> 00:49:35,840 financiers out there that help help run everything, help run 946 00:49:35,840 --> 00:49:39,080 my, you know, my life wouldn't be the same because you have to 947 00:49:39,080 --> 00:49:41,640 fund these start-ups. Every software service is this 948 00:49:41,640 --> 00:49:44,520 like capital hole that you then have to like climb out of. 949 00:49:44,720 --> 00:49:47,440 We just wouldn't have the cool stuff we have without venture 950 00:49:47,840 --> 00:49:51,280 without the venture model. Now, I think in addition to 951 00:49:51,280 --> 00:49:55,440 that, we need to look at a bunch of stuff like politics, term 952 00:49:55,440 --> 00:49:57,080 limits. It's people who just get into a 953 00:49:57,080 --> 00:50:00,120 chair and sit there until they're sit there for 50 years 954 00:50:00,120 --> 00:50:02,120 right in legislation. You know, I'm like, I don't know 955 00:50:02,120 --> 00:50:04,760 about that, that maybe we should mix it up a little more. 956 00:50:05,040 --> 00:50:07,280 And you know, one of the things that's really fascinating on the 957 00:50:07,280 --> 00:50:10,000 on the venture front is the more there's been a bunch of studies 958 00:50:10,000 --> 00:50:14,480 around sizing of funds. Venture is healthier for itself 959 00:50:14,760 --> 00:50:17,720 when you stay within a certain fun band that is like sub a bit. 960 00:50:18,760 --> 00:50:21,360 So when you raise a fund that is, I mean, I haven't looked at 961 00:50:21,360 --> 00:50:23,200 the numbers in a few years, so I don't want to throw something 962 00:50:23,200 --> 00:50:25,160 out there. But when you the the optimal 963 00:50:25,160 --> 00:50:27,440 venture fund is actually smaller, call it half a billion 964 00:50:27,440 --> 00:50:30,240 or something, and then you go allocate that stuff, those funds 965 00:50:30,240 --> 00:50:34,760 outperform by a lot. And so I think that the, the, 966 00:50:34,920 --> 00:50:37,200 the way to counter this is a combination of just like 967 00:50:37,480 --> 00:50:40,760 bringing awareness, the fact that these monster funds, their 968 00:50:40,760 --> 00:50:42,960 incentives change so that they're more about the care, the 969 00:50:42,960 --> 00:50:45,440 2% carry they get than the 20% upside. 970 00:50:45,480 --> 00:50:47,960 And that's a little weird. And like maybe as an LP, you 971 00:50:47,960 --> 00:50:50,720 should think about not putting your money in that and instead 972 00:50:50,960 --> 00:50:53,240 spreading it around to a bunch of smaller funds. 973 00:50:53,440 --> 00:50:55,920 And I think that the, the cure for a lot of the stuff we're 974 00:50:55,920 --> 00:51:00,360 facing is this return to like the original idea of behind 975 00:51:00,360 --> 00:51:02,320 localism. The original idea behind 976 00:51:02,320 --> 00:51:05,800 localism is not like going out of that shop over there and buy 977 00:51:05,800 --> 00:51:07,880 their food and they're getting it all from Cisco. 978 00:51:08,080 --> 00:51:10,640 You know, like the hope is that they're also buying locally. 979 00:51:10,800 --> 00:51:13,680 And what you really want to do is spread the economic activity 980 00:51:13,800 --> 00:51:16,040 across the country so that it's more robust. 981 00:51:16,480 --> 00:51:18,480 And I think you also want to do that in venture. 982 00:51:18,640 --> 00:51:24,040 I think what you want to see is LP's allocating to these smaller 983 00:51:24,040 --> 00:51:27,360 funds that are more profitable, that don't have an incentive to 984 00:51:27,360 --> 00:51:29,760 go build it. Monster megaphones so they can 985 00:51:29,760 --> 00:51:33,360 just cream 2% off of, you know, multi billion dollar funds and 986 00:51:33,360 --> 00:51:34,920 stuff. To me that's the solution. 987 00:51:35,040 --> 00:51:38,040 It's so funny because again, that goes right back to this 988 00:51:38,040 --> 00:51:40,600 where it's like I know I'm essentially taking the, I don't 989 00:51:40,600 --> 00:51:43,440 know, anti capitalist stance or something like I am not, I am 990 00:51:43,440 --> 00:51:46,440 not anti capitalist. I don't like I don't I as much 991 00:51:46,440 --> 00:51:49,760 as I I have animus for the loudest venture capitalists. 992 00:51:49,840 --> 00:51:51,560 I don't hate the idea of venture capital. 993 00:51:51,560 --> 00:51:55,240 And when I go back to the early parts of venture capital, it it 994 00:51:55,240 --> 00:51:56,600 is local. It's localism. 995 00:51:56,600 --> 00:51:57,960 It's what you're talking about, right? 996 00:51:58,560 --> 00:52:03,080 Like you're, we're, we have Fairchild Semiconductors in 997 00:52:03,080 --> 00:52:06,800 Mountain View, CA, working with students at Stanford and 998 00:52:06,800 --> 00:52:12,080 Berkeley who are getting general, like general contracts, 999 00:52:12,240 --> 00:52:15,520 like getting contracts from the government through Lockheed 1000 00:52:15,520 --> 00:52:18,040 Martin or whoever, right. And academia is working with 1001 00:52:18,080 --> 00:52:20,680 private CAB. They're all working together to 1002 00:52:20,680 --> 00:52:23,920 do something. And that is, that is localism. 1003 00:52:23,920 --> 00:52:26,200 That is like they're all building something Better 1004 00:52:26,200 --> 00:52:28,040 Together. And they're. 1005 00:52:28,080 --> 00:52:30,520 Yeah, they're keeping it in their in their club, so to 1006 00:52:30,520 --> 00:52:32,440 speak. But the club is large and it 1007 00:52:32,440 --> 00:52:36,880 gives us things like DARPA and ARPA and the Internet, and 1008 00:52:37,280 --> 00:52:41,080 that's what I like. I don't know, you know, again, 1009 00:52:41,080 --> 00:52:44,600 going back to what you're saying, is Lyft and Uber a huge 1010 00:52:44,600 --> 00:52:47,720 leap in innovation like DARPA and ARPA? 1011 00:52:47,880 --> 00:52:52,880 Like, no, it isn't Like, I think it's easy to say no to that. 1012 00:52:53,200 --> 00:52:56,000 And if that's most of the innovation, sorry, go ahead, 1013 00:52:56,040 --> 00:52:57,680 Bennett. I I just want to interject 1014 00:52:57,680 --> 00:53:00,120 though, and cast and go like, and how much of that would like, 1015 00:53:01,200 --> 00:53:03,800 which direction is the arrow of causation running here, right? 1016 00:53:03,800 --> 00:53:06,680 Because didn't like the Department of Defense initially 1017 00:53:06,680 --> 00:53:11,720 creating DARPA kind of create the like set of contracts that 1018 00:53:11,720 --> 00:53:15,320 the initial group of kind of the Bunker Hill companies were 1019 00:53:15,320 --> 00:53:16,960 competing for and stuff like that. 1020 00:53:17,280 --> 00:53:20,920 And so like, it was like the direction wasn't like venture 1021 00:53:20,920 --> 00:53:24,080 capital funded these things. These things then created DARPA, 1022 00:53:24,080 --> 00:53:28,080 which and then the Internet. It was that the DARPA project 1023 00:53:28,080 --> 00:53:31,200 was created, which set up these contracts, which then companies 1024 00:53:31,200 --> 00:53:33,800 wanted to compete for, for companies to compete for those 1025 00:53:34,000 --> 00:53:36,760 they needed funding to get like projects off the ground. 1026 00:53:36,760 --> 00:53:40,120 Things started things like that. And so like the arrow there went 1027 00:53:40,120 --> 00:53:44,040 from like the the Department of Defense creating this government 1028 00:53:44,040 --> 00:53:47,720 contracting project, basically this collection of kind of 1029 00:53:47,720 --> 00:53:51,400 ambiguous and large dollar amount government contracts is 1030 00:53:51,400 --> 00:53:55,200 essentially kind of what it was led to then the rest of the 1031 00:53:55,200 --> 00:53:58,120 stuff coming afterwards. I mean, I think I and I, I think 1032 00:53:58,120 --> 00:54:01,040 that's like, I do think that's not as uncommon as we might 1033 00:54:01,040 --> 00:54:04,880 think it is, right? Like I do think here's a simple 1034 00:54:04,880 --> 00:54:08,920 one that it doesn't have the same large scale effects that 1035 00:54:08,920 --> 00:54:12,560 the Internet does. But like drones, obviously that 1036 00:54:12,560 --> 00:54:15,440 was a military contract from the very beginning, but now that has 1037 00:54:15,440 --> 00:54:18,880 been utilized by people to do all kinds of things. 1038 00:54:18,880 --> 00:54:21,480 And some of it is great. Some of it is like, oh, you can 1039 00:54:21,680 --> 00:54:24,920 scan the land and figure out like the proper place to put 1040 00:54:24,920 --> 00:54:28,760 certain things or like there is actual great use cases for 1041 00:54:28,760 --> 00:54:33,200 something like drones. Also, they're murdering people. 1042 00:54:33,200 --> 00:54:35,880 So like, I like it's, you know, I, I get it. 1043 00:54:36,000 --> 00:54:38,800 I guess that's kind of my worry. I worry that if you set that up 1044 00:54:38,800 --> 00:54:43,200 as like the desirable version of venture capital, then the thing 1045 00:54:43,200 --> 00:54:46,760 meant to inherit it is Andrell and Palantir, right? 1046 00:54:47,080 --> 00:54:49,800 Is like the modern Silicon Valley funded companies which 1047 00:54:49,800 --> 00:54:53,040 are competing for government contracts from the Department of 1048 00:54:53,040 --> 00:54:55,840 Defense, right? Yeah, I think that, you know, my 1049 00:54:55,920 --> 00:54:59,520 my with this topic and a lot of times they just circle back to 1050 00:54:59,520 --> 00:55:03,760 this idea that what we what we want is a less incumbent centric 1051 00:55:03,760 --> 00:55:06,200 economy. Like that's the fix. 1052 00:55:06,520 --> 00:55:10,720 The fix is not so much just to to, you know, steer away from 1053 00:55:10,720 --> 00:55:11,960 capitalism. Like I actually just think 1054 00:55:11,960 --> 00:55:14,760 that's absurd and, you know, continue to fight anybody on the 1055 00:55:14,760 --> 00:55:19,280 Internet who suggests, but I, I and I and I don't know that we 1056 00:55:19,320 --> 00:55:22,960 and I don't know that we want to even put this albatross around 1057 00:55:22,960 --> 00:55:26,520 ventures neck, but we'd still want to call out the the sort of 1058 00:55:26,520 --> 00:55:30,760 like pro pro oligarch, whatever's these like neo 1059 00:55:30,760 --> 00:55:33,000 oligarchs who just think like it's like, you know, let's take 1060 00:55:33,000 --> 00:55:35,000 all the power. I think that it's important to 1061 00:55:35,000 --> 00:55:37,320 push back again as soon as a societal duty there. 1062 00:55:38,480 --> 00:55:41,080 And and I think part of this ties back into another one by, 1063 00:55:41,320 --> 00:55:44,560 you know, pet topics. It's just sort of like the way 1064 00:55:44,560 --> 00:55:49,360 that we conduct everything from monetary policy to to to 1065 00:55:49,360 --> 00:55:52,280 legislation, like it just needs to be a little less incumbent 1066 00:55:52,280 --> 00:55:54,080 centric. And what that means is we have 1067 00:55:54,080 --> 00:55:56,280 to be OK with incumbents taking losses. 1068 00:55:56,520 --> 00:55:59,560 But I do wanna push back on that just I guess on 2 levels. 1069 00:55:59,560 --> 00:56:04,840 So one, I know I personally am all for having term limits and 1070 00:56:04,840 --> 00:56:08,560 stuff like that, but when it comes to people who are pro free 1071 00:56:08,560 --> 00:56:13,160 market, they say why would you take away someone's ability to 1072 00:56:13,160 --> 00:56:15,760 vote for whoever they want? Like if I want to vote for the 1073 00:56:15,760 --> 00:56:20,440 same guy to be senator for 2 1/2 decades, that is my right. 1074 00:56:20,440 --> 00:56:22,400 That's my God-given right or whatever. 1075 00:56:23,440 --> 00:56:26,440 So I want to put that out there. But I also want to say this, 1076 00:56:26,720 --> 00:56:31,400 that when it comes to business or finance or whatever, I don't 1077 00:56:31,400 --> 00:56:34,480 actually have a huge issue with the concept of incumbency, 1078 00:56:34,480 --> 00:56:37,240 right? Like the best example I can do 1079 00:56:37,240 --> 00:56:39,320 for this is actually a restaurant. 1080 00:56:39,560 --> 00:56:43,600 Because for me, I, when I worked in restaurants, what I hated 1081 00:56:43,600 --> 00:56:46,680 about it was I, I would go to these small restaurants that 1082 00:56:46,680 --> 00:56:49,200 were well known or popular bakeries and they would be 1083 00:56:49,200 --> 00:56:52,520 starting out, they'd be in their first year or two or three of, 1084 00:56:52,680 --> 00:56:54,920 of getting going. And they're like, we got to 1085 00:56:54,920 --> 00:56:55,520 grow. We got to grow. 1086 00:56:55,520 --> 00:56:57,680 We got to open up a second, third, fourth restaurant. 1087 00:56:57,680 --> 00:57:01,800 And I'm like, why stop? Stop, You're already making 1088 00:57:01,800 --> 00:57:03,400 money. You have enough employees. 1089 00:57:03,600 --> 00:57:07,200 Stop, you're good. And in places like Paris or 1090 00:57:07,200 --> 00:57:10,520 Oslo, when I went and visited them years ago, you have one 1091 00:57:11,040 --> 00:57:16,200 patisserie or you know, bakery that's been around for 350 1092 00:57:16,200 --> 00:57:18,440 years. There aren't 12 of them. 1093 00:57:18,600 --> 00:57:22,480 There's one and that is like, I am fine with that. 1094 00:57:22,480 --> 00:57:24,320 That's great. You have culture, you have 1095 00:57:24,320 --> 00:57:27,480 history, you have one bakery that's had all this time there, 1096 00:57:27,840 --> 00:57:31,320 fine. But I don't want one Amazon for 1097 00:57:31,320 --> 00:57:33,240 150 years. You know that. 1098 00:57:33,240 --> 00:57:38,120 That is where incumbency gets to be when it gets into oligarchy 1099 00:57:38,120 --> 00:57:40,960 is the problem. It's not incumbency itself that 1100 00:57:40,960 --> 00:57:42,480 is the issue, I guess is what I'm saying. 1101 00:57:42,600 --> 00:57:45,360 It's incumbency around power, you know, and they can always 1102 00:57:45,360 --> 00:57:46,680 play us into that. Yeah. 1103 00:57:46,680 --> 00:57:50,360 I mean, in, in an ideal world, we we run a society where like, 1104 00:57:50,680 --> 00:57:54,120 we try a lot of different stuff. And, and then over time and like 1105 00:57:54,120 --> 00:57:57,520 you're only going to, you know, people only have so many ideas. 1106 00:57:57,640 --> 00:58:00,760 Like people get into their like 30s and 40s, they get kind of 1107 00:58:00,760 --> 00:58:03,560 typecast. So and then we've got, you know, 1108 00:58:03,600 --> 00:58:05,800 and then we just let them sit in that chair until the end of 1109 00:58:05,800 --> 00:58:07,440 time. Like we know we're going to get 1110 00:58:07,440 --> 00:58:09,760 out of them. And so, you know, this, this 1111 00:58:09,760 --> 00:58:11,840 idea of I have a right to vote for who I want. 1112 00:58:12,120 --> 00:58:14,920 I'm not even sure that that is I mean, to me, it's, it's almost a 1113 00:58:14,920 --> 00:58:18,120 pure straw man when people say stuff like that because, you 1114 00:58:18,120 --> 00:58:21,320 know, you look at the the presidential candidates we've 1115 00:58:21,320 --> 00:58:23,800 got now and like, how did those get to be the candidates? 1116 00:58:24,000 --> 00:58:26,040 Like what? Like I'll tell you, I'll tell 1117 00:58:26,040 --> 00:58:30,040 you who I want running stuff is, you know, it's not them. 1118 00:58:30,760 --> 00:58:33,560 Like let's just get some, let's just, let's get somebody in 1119 00:58:33,560 --> 00:58:36,960 there who's like fresh, but it just has some fresh ideas. 1120 00:58:37,200 --> 00:58:39,840 Let's put up to like, I, I just think it's a myth, this idea 1121 00:58:39,840 --> 00:58:42,720 that we get to select whoever we want. 1122 00:58:42,840 --> 00:58:45,120 So stuff like that, I think we just reject it. 1123 00:58:45,120 --> 00:58:48,640 Part of my issue with even like the presidential, like the two 1124 00:58:48,640 --> 00:58:51,720 party system is a problem for me just 'cause I'm like, it's 1125 00:58:51,720 --> 00:58:57,000 almost, it's like a fallacy that's been concocted against 1126 00:58:57,000 --> 00:59:01,960 ourselves that we are convinced is absolute, even though very 1127 00:59:01,960 --> 00:59:04,960 explicitly you can always vote for whoever you want actually, 1128 00:59:05,080 --> 00:59:06,160 right? You always can. 1129 00:59:06,160 --> 00:59:09,800 You always can. Like anyone over the age of 35, 1130 00:59:09,800 --> 00:59:12,960 you can vote for them to be president technically, right. 1131 00:59:13,040 --> 00:59:16,760 But like we've decided that that means there's two people that 1132 00:59:16,760 --> 00:59:18,920 you can vote for. Well, three you can vote or the 1133 00:59:18,920 --> 00:59:20,760 brain worm. You can vote for a brain worm or 1134 00:59:20,760 --> 00:59:24,520 two individuals. But yeah, like I do. 1135 00:59:24,760 --> 00:59:28,360 But I do think that it it, it's unfortunate because it's a self 1136 00:59:28,360 --> 00:59:31,640 perpetuating system. Like, oh, well then there's two 1137 00:59:31,640 --> 00:59:34,200 parties and therefore there's always two parties and there's 1138 00:59:34,200 --> 00:59:36,680 nothing we can do about it. I like, I don't know. 1139 00:59:37,080 --> 00:59:40,520 I think the two party system can can even, it can work well. 1140 00:59:40,680 --> 00:59:42,600 You know, I would point the finger here more and we're 1141 00:59:42,600 --> 00:59:44,480 getting off on a tangent and I love tangents. 1142 00:59:44,520 --> 00:59:47,640 I would point the finger here more at like when you think 1143 00:59:47,640 --> 00:59:51,640 about in aggregate from a societal perspective, who are 1144 00:59:51,640 --> 00:59:54,960 the power and money incumbents And like they're the boomers. 1145 00:59:55,080 --> 00:59:57,480 You know, I got nothing against boomers generally. 1146 00:59:57,480 --> 00:59:59,520 I like to sort of talk shit about them. 1147 00:59:59,520 --> 01:00:03,400 This is fun. But they those are the people 1148 01:00:03,400 --> 01:00:05,400 who are sitting in all of these shares and they're making a 1149 01:00:05,400 --> 01:00:08,640 bunch of decisions that are very like pro incumbent, right? 1150 01:00:09,120 --> 01:00:11,160 Like, we can't let the housing prices fall. 1151 01:00:11,160 --> 01:00:12,360 We can't. And then you look around and 1152 01:00:12,360 --> 01:00:13,840 you're like, what's now what's the problem? 1153 01:00:13,840 --> 01:00:17,200 Well, millennials and below are like, how many live where many 1154 01:00:17,200 --> 01:00:18,640 live? And then the boomers turn around 1155 01:00:18,640 --> 01:00:20,000 like, well, you can't live at home. 1156 01:00:21,480 --> 01:00:24,440 Like, so there's we're preventing this sort of turn 1157 01:00:24,440 --> 01:00:26,520 churn in the economy around housing. 1158 01:00:26,520 --> 01:00:28,880 That happens when people get rinsed because they make bad 1159 01:00:28,880 --> 01:00:31,600 decisions. And now that we have the the the 1160 01:00:31,640 --> 01:00:34,360 up and comers who like can't really get a toehold in the 1161 01:00:34,360 --> 01:00:38,320 economy because the the entirety of the legislative body is 1162 01:00:38,320 --> 01:00:42,440 dominated by socio political economic, however you want to 1163 01:00:42,440 --> 01:00:45,440 frame it, incumbents like and they've just got this lie. 1164 01:00:45,440 --> 01:00:49,160 I think it's a real it's a real demographic challenge in in some 1165 01:00:49,160 --> 01:00:52,120 ways, which I think will eventually clear here. 1166 01:00:52,440 --> 01:00:55,840 But when we, as we look across the effects and like diagnose 1167 01:00:55,840 --> 01:00:59,040 society, I'm I'm very wary of, I'm, I'm very aware of like the 1168 01:00:59,360 --> 01:01:03,520 anything that ends with like, ergo, we must return to free 1169 01:01:03,520 --> 01:01:07,800 market absolutism or ergo, you know, capitalism doesn't work. 1170 01:01:07,800 --> 01:01:09,120 I'm like, I don't really think so. 1171 01:01:09,120 --> 01:01:11,280 I think what we got to do is sort of just like clear out the 1172 01:01:11,280 --> 01:01:13,200 Deadwood. And it's been a very long time 1173 01:01:13,200 --> 01:01:15,720 since we did that. Any libertarian who's like 1174 01:01:15,800 --> 01:01:19,200 telling you Adam Smith didn't go far enough is probably not being 1175 01:01:19,200 --> 01:01:22,040 particularly serious, and you can probably ignore them. 1176 01:01:22,440 --> 01:01:24,000 Oh, they probably haven't read Adam Smith. 1177 01:01:24,240 --> 01:01:27,040 I mean, like, you can go, my favorite thing is just go pull 1178 01:01:27,040 --> 01:01:29,960 quotes from Adam Smith and be like, OK, talk to me about this 1179 01:01:29,960 --> 01:01:31,960 one. You know, reasonable boundaries 1180 01:01:31,960 --> 01:01:34,560 are on around the game of the economy like that. 1181 01:01:34,560 --> 01:01:37,320 It's just like there's not, you can't find an intellectual 1182 01:01:37,320 --> 01:01:38,920 tradition that was arguing against that. 1183 01:01:39,000 --> 01:01:41,560 You can misrepresent 1. I don't know, I've got some iron 1184 01:01:41,560 --> 01:01:43,880 ran books behind me if you want them. 1185 01:01:45,640 --> 01:01:47,600 Everybody in them six. Times wasn't enough, huh, 1186 01:01:47,680 --> 01:01:49,160 Bennett? Well, I mean, I'll probably read 1187 01:01:49,160 --> 01:01:50,840 them again at some kind of my life if I'm. 1188 01:01:50,840 --> 01:01:52,400 Being Why do you hate yourself so much? 1189 01:01:52,440 --> 01:01:56,960 What's wrong with you? I find lots of twisted things 1190 01:01:56,960 --> 01:01:59,800 deeply fascinating. You don't need to read Ann Rand 1191 01:01:59,800 --> 01:02:01,440 again. So yeah. 1192 01:02:01,480 --> 01:02:03,800 Do you have, do you have anything else you want to you 1193 01:02:03,800 --> 01:02:06,120 want to throw out there Bennett or Travis? 1194 01:02:06,280 --> 01:02:09,600 I guess my, my, my parting words here would be like with it, you 1195 01:02:09,600 --> 01:02:13,120 know, as we, as we take back to the rough streets of the 1196 01:02:13,120 --> 01:02:17,960 Internet here, when our tweeting or whatever we're doing, like I, 1197 01:02:18,040 --> 01:02:20,760 I think there is this, there's sort of this dual mandate, much 1198 01:02:20,760 --> 01:02:22,480 like the Fed. And the dual mandate is 1199 01:02:22,480 --> 01:02:25,800 basically like when you see this stuff that it feels kind of 1200 01:02:25,800 --> 01:02:28,040 corrosive, you know, you got to go after it. 1201 01:02:28,120 --> 01:02:31,440 But I think the, the other side of that is it's just important 1202 01:02:31,440 --> 01:02:36,160 to avoid condemning the, the superstructure that that actor 1203 01:02:36,160 --> 01:02:39,120 lives within. Like, you know, there are, there 1204 01:02:39,560 --> 01:02:41,640 are, I mean, there are startup entrepreneurs out there 1205 01:02:41,640 --> 01:02:44,760 misbehaving, you know, and, and I'm a startup entrepreneur and 1206 01:02:44,760 --> 01:02:47,280 I'm like, OK, well, I think we got to talk about this 1207 01:02:47,280 --> 01:02:49,600 misbehavior because it's, you know, we kind of got to police 1208 01:02:49,600 --> 01:02:51,520 our own here a little bit. But it doesn't really mean that 1209 01:02:51,520 --> 01:02:55,600 like startup entrepreneurship is a, is a, is a bad thing. 1210 01:02:55,960 --> 01:02:59,320 And I think if anything, we're getting, we have the, the 1211 01:02:59,320 --> 01:03:02,880 extremism of sort of social media echo chambers has the 1212 01:03:02,880 --> 01:03:06,040 tendency to lead us down these little, these little sort of 1213 01:03:06,040 --> 01:03:08,960 mind tunnels where we end up concluding like that entire 1214 01:03:08,960 --> 01:03:12,400 institution needs to go. And I, I guess my call to action 1215 01:03:12,400 --> 01:03:16,280 is like, let's stop doing that. Let's keep talking about the the 1216 01:03:16,280 --> 01:03:18,680 stuff that we don't want and how we need to like, you know, keep 1217 01:03:18,680 --> 01:03:21,280 improving the rules of the game so that it works for everybody. 1218 01:03:22,880 --> 01:03:28,280 But condemning these like an entire school of thought, even 1219 01:03:28,280 --> 01:03:29,760 libertarianism. At the end of the day, there's 1220 01:03:29,760 --> 01:03:32,880 some good stuff in there. You know, It's, yeah, human. 1221 01:03:33,040 --> 01:03:36,480 Labs, though human labs, we can condemn that institution. 1222 01:03:37,880 --> 01:03:39,400 Why? That guy became the main 1223 01:03:39,400 --> 01:03:41,560 character pretty quick. All right, Well, awesome. 1224 01:03:41,560 --> 01:03:44,800 Yeah, I think that's a good nuance note to go out on. 1225 01:03:44,840 --> 01:03:48,560 And yeah, I if anyone wants to follow Travis, I guess he's 1226 01:03:48,560 --> 01:03:50,960 spending more time on threads these days. 1227 01:03:50,960 --> 01:03:54,000 So are you at Colorado, Trav there as well? 1228 01:03:54,040 --> 01:03:57,760 Yes, at Colorado, Travis, I finally got my handle over 1229 01:03:57,760 --> 01:04:00,440 there, my first time on Zuck platform. 1230 01:04:00,600 --> 01:04:03,440 It's pretty good. I think there's a little bit of 1231 01:04:03,920 --> 01:04:05,160 a little bit of a different group over there. 1232 01:04:05,160 --> 01:04:07,360 I am still on Twitter like when I leave.