Speaker 1: Now really now, well, hello, it's another really no really
Speaker 1: day by Peter Tilden. How are you doing, Jason Alexander?
Speaker 1: See how we're so good? Let me just say we're
Speaker 1: going to get into a topic today that is technical.
Speaker 1: Steve Blanks here now we're going to be talking about
Speaker 1: computer chips, which is apparently in everything. I don't believe that.
Speaker 1: I don't think there's anything in my house that has
Speaker 1: a chip. But supposedly it's a crisis because everything runs
Speaker 1: on a chip and we're running out of chips, and
Speaker 1: I don't really really, how is that possible? Who got blindsided?
Speaker 1: They didn't see, oh bye, the stack is going down?
Speaker 1: How did they? How could we get to a place
Speaker 1: where we're running out of chips? We don't have chips
Speaker 1: and everything needs a chip? Really? No real? Steve is
Speaker 1: a titan of the tech industry. He showed up there
Speaker 1: in sil Valley just as it was starting to boom,
Speaker 1: invested in I think companies. He had a couple of
Speaker 1: huge hits and a couple of notts of the hits.
Speaker 1: But he's also an educator. He teaches at Columbia Teachers
Speaker 1: on the Universities. He also is what does he teach, well,
Speaker 1: he teaches a lot of different stuff. At one of them.
Speaker 1: You don't know how to scale up, no, how to
Speaker 1: scale up, how to scale businesses, the fact that not
Speaker 1: every innovator knows how to run a business. If that,
Speaker 1: did I do that right? Steve? Kind of well close enough?
Speaker 1: So really not, really is there a really a chip shortage?
Speaker 1: And b is there something we don't know about this?
Speaker 1: Because really no, really hard to believe we ran out
Speaker 1: of chips. So that's a great question for twenty twenty two,
Speaker 1: because in twenty twenty three we now have a chip
Speaker 1: plot rather than a chip shortage. And it turns out
Speaker 1: that chips are kind of the new oil of the
Speaker 1: twenty first century. You know where we went to war
Speaker 1: for oil and in the Middle East. Concern is we
Speaker 1: might actually go to war war over chips in the
Speaker 1: twenty first century because they're not made in the US,
Speaker 1: and they're made in a country called Taiwan, at least
Speaker 1: most of the advance chips that you use in your
Speaker 1: iPhones or in other devices. And if you remember, Taiwan,
Speaker 1: while they think of themselves as independent, China believes that
Speaker 1: they're just a breakaway province. And that's A real problem
Speaker 1: for the US is that we're now completely dependent on
Speaker 1: at least the most advanced chips being made in factories
Speaker 1: called founderies, most of them in a foundry run by
Speaker 1: a company and called TSMC, which is a time when
Speaker 1: these company and that's you know, ninety miles from the
Speaker 1: shores of People's Republic of China. And so that's why
Speaker 1: last year the US government, for the first time in
Speaker 1: like seventy five years, stood up a national Industrial Policy,
Speaker 1: which is basically said, we're going to put our thumb
Speaker 1: on the scale and give fifty plus billion dollars to
Speaker 1: US chip manufacturers to start building factories in the US.
Speaker 1: Getting involved in industrial policy was something this country just
Speaker 1: never did for a long time, and now we're actually
Speaker 1: doing that. I've read that we are now making significant
Speaker 1: investments in US based chip production. But those factories, Am
Speaker 1: I wrong? They take like a decade to build one
Speaker 1: of these places, doesn't it? Yeah, two to four years.
Speaker 1: So the TSMCRE now building a couple of Arizona and
Speaker 1: they'll come up to speed maybe late this year, next year.
Speaker 1: But it's not just how long do they take, it's
Speaker 1: still even when they are functioning, there are maybe two
Speaker 1: percent of t SMC's output out Taiwan, right, and different
Speaker 1: different kinds of chips. They're not what my understanding too,
Speaker 1: is it in Taiwan, they're making this an A grade
Speaker 1: chip and they ain't going to share that technology. They'll
Speaker 1: make other chips down here, but they're not stupid. They
Speaker 1: want to keep their chip as the gold standards, so
Speaker 1: to speak. Correct. There are kind of three types of chips,
Speaker 1: ones that think called logic chips, and those are the
Speaker 1: brains of most devices, and those are made for companies
Speaker 1: like Intel that make microprocessors. But also what this company
Speaker 1: in Taiwan does is they don't design any of the chips.
Speaker 1: They actually make them for other people. So IBM and
Speaker 1: AMD and Ballcom and the video names that might not
Speaker 1: be familiar but are familiar with Technology Crowd. They design
Speaker 1: the chips, but this company in Taiwan makes them on
Speaker 1: the most advanced technology that exists on the planet. Well,
Speaker 1: Intel designs it and makes them themselves. Those are logic chips.
Speaker 1: The other types of chips that are used in you know,
Speaker 1: in iPhones or anything else you might have are memory chips,
Speaker 1: chips that store information, and those are kind of made
Speaker 1: by American companies like Micron and South Korean companies like Samsung, etc.
Speaker 1: And also you know China, People's Republic of China has
Speaker 1: a big memory company as well. And then there are
Speaker 1: other chips. And this goes back to the glut conversation
Speaker 1: versus the shortage that are analog that is, instead of
Speaker 1: ones and zeros deal with kind of different voltages like
Speaker 1: power and right relate temperature and things like that. They
Speaker 1: used a lot in automobiles and one of the bigger
Speaker 1: companies for that is in Japan. And what's really interesting
Speaker 1: is that last year the year before, there were a
Speaker 1: series of fires in those factories, those what are called
Speaker 1: fabs in Japan that made automotive chips. And if you
Speaker 1: were an automotive company and depending now on chips to
Speaker 1: control a lot of the functions in your car, when
Speaker 1: the factory went up in smoke, you look at you're
Speaker 1: just in time inventory and said, it's you know, none
Speaker 1: in time inventory. We don't have chips, and therefore we
Speaker 1: couldn't make cars unless you were Tesla, who managed to
Speaker 1: figure out how to redesign their cars on the fly
Speaker 1: to use different chips at a speed that the other
Speaker 1: automotive companies couldn't do because Tesla was vertically integrated, meaning
Speaker 1: they had all the technical people capable of saying, well,
Speaker 1: if we can't use this chip, we'll use another one.
Speaker 1: So GM and Ford and everybody else just put it
Speaker 1: around with their hand out going please more, can I
Speaker 1: have some more? Well, other companies were actual and innovative
Speaker 1: to redesign around that. Steve, Yeah, Steve, don't. I don't
Speaker 1: want you to have to say anything or go on
Speaker 1: the record, so you just do it with blinks. But
Speaker 1: I think what you're saying yes or no, A blink
Speaker 1: will tell me A guy at Tesla knew a guy
Speaker 1: who knew a guy who had a match who went
Speaker 1: over to a Japanese company, And is that possible? Is
Speaker 1: that what you're saying? Just just blink, just I saw blank, ye,
Speaker 1: a couple of plants. Actually, what's really interesting is that
Speaker 1: there were no fires in the Chinese companies I saw blinking,
Speaker 1: I saw a lot of this is my original question,
Speaker 1: Rose really, no, really, we ran out of chips, with
Speaker 1: the subtext of did we really? Is somebody hoarding him?
Speaker 1: If somebody sending him, somebody prioritize what's the real story
Speaker 1: underneath he ran out of chips. You can't just be
Speaker 1: that simple. And the story was there were a lot
Speaker 1: of quote accidents in a lot of places that made
Speaker 1: chips in very specific areas. And then once there's a shortage,
Speaker 1: what happens in almost every industry, particularly the chip industry,
Speaker 1: is people double and triple order that as you order
Speaker 1: more than you need. And now we're in this other
Speaker 1: phase of a glut where everybody's over ordered, and now
Speaker 1: we got more chips than we need. Plus at the
Speaker 1: same time, we've basically told China they can no longer
Speaker 1: buy the machines to make their most advanced chips. So
Speaker 1: we're kind of in a chip trade board, which, oh,
Speaker 1: it's good. Can I ask you about China. It's really
Speaker 1: funny because it because let's get tough with China. Let's
Speaker 1: do this with China. We're not going to let China
Speaker 1: do this. Kim Cook at Apple's gone, yeah, let's get
Speaker 1: tough with China, because he's blinking, blinking, blinking. If China
Speaker 1: screws him over, Apple's kapusky. I'm sure they're looking at
Speaker 1: other places to do stuff, but either the prices will
Speaker 1: go through this, So that's got to be a strange
Speaker 1: relationship between a company like that. And because he can't
Speaker 1: turn his background China tomorrow and say yeah, we're gonna
Speaker 1: get tough and yes, President Biden, we're gonna do it. Wow,
Speaker 1: they're beholden right, And in fact, both Apple and Tesla
Speaker 1: are both in the same place. Half of Tesla's businesses
Speaker 1: now from manufacturing faculty in Shanghai, which supplies not only China,
Speaker 1: but a good part of the Europe as well. And
Speaker 1: so there are a number of companies that are beholden
Speaker 1: to the Chinese market and more importantly Chinese suppliers. When
Speaker 1: the US offshore that has took its manufacturing to the
Speaker 1: lowest cost places to build stuff, which was Southeast Asia
Speaker 1: and China, not only took those specific industries, but it
Speaker 1: took the entire ecosystem, which means if you moved automobile
Speaker 1: manufacturing somewhere, you just didn't move that plant. All the
Speaker 1: guys who made machine tools and all the companies that
Speaker 1: made plastics and seats and whatever. Pretty easy to understand
Speaker 1: when you move a manufacturing plant. But the same thing
Speaker 1: happened starting in the twentieth century when we moved chips overseas.
Speaker 1: Not only did those things go, but all the other
Speaker 1: machinery and software and whatever now moved with it. It's
Speaker 1: the same when you moved your iPhone manufacturing overseas. All
Speaker 1: the suppliers are now around the places that assemble the iPhone,
Speaker 1: which happened to be in China. So we ended up
Speaker 1: hollowing out, in a bipartisan way, of a whole set
Speaker 1: of industries in the United States to achieve lower cost
Speaker 1: and higher profits. The irony is, of course, the last
Speaker 1: people we believed who were complaining about this were the unions,
Speaker 1: who said, you didn't understand a set of industries, and
Speaker 1: we went out these inefficient guys. They just wanted, you know,
Speaker 1: their jobs. And it's all about Jimmy Hoffa for those
Speaker 1: who remember that their criminals or whatever, all might have
Speaker 1: been true, but they were they were the people who
Speaker 1: were one hundred percent absolutely right. Is that when you
Speaker 1: offshored industry acts, you're actually hollowing out a whole set
Speaker 1: of other industries. And I think we that the results
Speaker 1: of that by accident in the twenty sixteen election and
Speaker 1: some of the polarization of areas of the country. They're
Speaker 1: now left out right and by the way, that this
Speaker 1: offshoring wasn't a democratic or Republican thing. It was. It
Speaker 1: was bipartisans. It was everybody who got money from financial
Speaker 1: industries that thought it was a useful thing to do
Speaker 1: to optimize profits. And it did much cheaper to get
Speaker 1: cheap stuff in Walmart now because it's made cheap labors
Speaker 1: somewhere else. But one could argue whether that was actually
Speaker 1: great for the American economy or democracy as a whole.
Speaker 1: Was it real the schip shortage? Now you're saying there's
Speaker 1: a glut. Are they going to Are they going to
Speaker 1: adjust so this won't happen again? Are they going to adjust?
Speaker 1: The just in time production? As I understand it is.
Speaker 1: We used to wearhouse stuff, but that's costly, so just
Speaker 1: in time means it shipped just when you needed to
Speaker 1: complete the car or whatever, and you don't have to
Speaker 1: wear house but you leave yourself vulnerable to whether conditions
Speaker 1: or fire or whatever. Are we going to change the
Speaker 1: way you do business here? Are we still going to
Speaker 1: continue and this will be a problem in the future
Speaker 1: yet again? Yeah, I think it's going to be a
Speaker 1: problem in the future. Oh good, you know, but there
Speaker 1: are now just new variables, including amature we're going to
Speaker 1: import from China versus Now we'll move some of that
Speaker 1: manufacturing assembly to other places that have a low cost
Speaker 1: of labor, like Vietnam or India or or or again
Speaker 1: with a Chips Act, trying to enshore some of those
Speaker 1: critical things back to the US. It's it's a pretty
Speaker 1: just for that one industry. It's a pretty interesting mess
Speaker 1: about how globalization has both tied us up and how
Speaker 1: vulnerable we are to disruptions from the supply chain. And Steve,
Speaker 1: isn't there also an element point? You know? It's it's
Speaker 1: it's terrible when you only have smatterings of of information,
Speaker 1: which is where I live most of the time. But
Speaker 1: I thought I remembered something about there's a critical mineral
Speaker 1: or or that you must have an order to manufacture chips,
Speaker 1: and maybe it's something like lithium or something like that,
Speaker 1: and that we are actually in some jeopardy of running
Speaker 1: out of this critical element in order to manufacture these
Speaker 1: chips at all. Is there? Am I getting that right? Yeah?
Speaker 1: I think that's usually called money, But I think the
Speaker 1: lithium you're talking about is a critical element in making batteries, right,
Speaker 1: And then there's a whole set of what are called
Speaker 1: rare earth materials, which is a fancy word for materials
Speaker 1: I can't even pronounce jitrium and all the other things
Speaker 1: that are used in high performance magnets that are used
Speaker 1: in electric motors and electric cars. And one of the
Speaker 1: interesting things about about raw materials is Ukraine was a
Speaker 1: key supplier of something called neon, which was a gas
Speaker 1: used in making actually in some of the equipment that
Speaker 1: made the chips theography machine, and that neon needs to
Speaker 1: be replenished every couple of months in these machines, and
Speaker 1: we had to find other sources. So the world is
Speaker 1: kind of interdependent. The China kind of owns most of
Speaker 1: the rare earth materials, export control on us. We'd be
Speaker 1: are pressed to scramble to make some of those stuff up.
Speaker 1: But I think your point is a bigger one. The
Speaker 1: world is kind of injured dependent on a whole ton
Speaker 1: of materials. Russia still supplies most of the titanium in
Speaker 1: the world used in aircraft and other manufacturing. Cobalt is
Speaker 1: sourced from places in Africa that are the same place
Speaker 1: that blood diamonds come from, so it's kind of a
Speaker 1: complicated set of supply chains. And the whole idea about
Speaker 1: some of these industrial acts that the US is thinking
Speaker 1: about is how do we in fact get some of
Speaker 1: the stuff made and sourced in the US now, or
Speaker 1: at least among our allies and a world that's becoming
Speaker 1: a little less interconnected, and that we're thinking that maybe
Speaker 1: we need to be self sufficient in some of these things.
Speaker 1: We used to have on national supplies of this stuff.
Speaker 1: We would stockpile. We stock by the oil, and we
Speaker 1: stockpiled strategic materials during the Cold War, and when we
Speaker 1: thought the world was, you know, unified, we kind of
Speaker 1: sold most of that stuff off. I think we're going
Speaker 1: to start stockpiloting again. It's thank god, thank god for stockpilot.
Speaker 1: That means warehousing, that means trucking. It moves America. I
Speaker 1: gotta ask you, do you have a guy like you.
Speaker 1: Do you have a vision board? Do you have a
Speaker 1: vision board? You know where you put up I'm so
Speaker 1: glad you said what a vision board? And I put
Speaker 1: up visions of things that you want to accomplish on
Speaker 1: a board so you can see him everything I want
Speaker 1: to do that I want to do that, I want
Speaker 1: to do it. No, no vision board. You know, my
Speaker 1: vision board extends to make it to the shower in
Speaker 1: the morning. He's too busy doing stuff that I go making. Okay,
Speaker 1: so doing stuff you're an entrepreneur. Here's another question. I
Speaker 1: really not really So guys come to investors like you,
Speaker 1: really smart ice who want to start businesses. It used
Speaker 1: to be you had to give fundamentals to give. Now
Speaker 1: it seems like they got a vision in a story
Speaker 1: that they're telling and ent up with thorough nos didn't
Speaker 1: or what's his name, Sam Bankman Freed? And I don't
Speaker 1: like people with three names anyway. I'm very suspicious to
Speaker 1: the three and three name. How are they pitching in
Speaker 1: Silicon Valley that that can happen? These are smart people.
Speaker 1: I look at the board of Pharaonos. It was major people,
Speaker 1: and nobody went, can we see how this item works
Speaker 1: before we give you another round of funding. Nobody says that.
Speaker 1: You know, every entrepreneur believes they're a visionary, and there's
Speaker 1: enough data to say that about ninety five percent of
Speaker 1: them or more are hallucinating, and so the differences, you know,
Speaker 1: to be able to figure out which ones or which
Speaker 1: But the problem is and what you just describe is
Speaker 1: that in a bubble economy, that is, when you can
Speaker 1: make money on any idea, the ideas, and it's whether
Speaker 1: it's could be profitable, it starts becoming less important. And
Speaker 1: so the end of twenty twenty two we were in
Speaker 1: the greater fool theory of like remember musical Chairs as
Speaker 1: a kid, everybody invested, the next guy paid more and more,
Speaker 1: and I sold it off, and so everybody was making
Speaker 1: profits until someone said, hey, the emperor has no clothes.
Speaker 1: There is no business here. And the venture business, that
Speaker 1: is the people who invest in startups make money on
Speaker 1: those crazy times, and they also make money on the
Speaker 1: bad times. But then they need different rules, and as
Speaker 1: you just explained, in the bubble times, the rules are,
Speaker 1: can we make money from the next dope who's going
Speaker 1: to put more money in at a bigger valuation. So
Speaker 1: it's a beer miss game. It's a beer miss game, yes,
Speaker 1: and it's more like a beer pod I'm sorry for clarifying,
Speaker 1: Oh my god. Time. That is, if you're actually doing
Speaker 1: this to see who has a company that could be
Speaker 1: profitable and deliver real products, etc. Then you look for
Speaker 1: different things and you invest on different criteria, meaning you say, hey,
Speaker 1: can you actually sell stuff that people want to buy?
Speaker 1: What a great idea. That's not what's happened in the
Speaker 1: last two or three years. I think we're getting back
Speaker 1: to that in twenty twenty three and twenty things about
Speaker 1: it and you read what people investing in. I want
Speaker 1: to know the next trend. But I'm noticing that Jeff
Speaker 1: Bezos and Musk and all those guys are investing in neuralinks.
Speaker 1: A lot of them are thinking about the computer that
Speaker 1: links directly to your brain. You know, you eliminate the
Speaker 1: whole deal, goes right to your brain. And when I
Speaker 1: see that much investment in that, is that real? Is
Speaker 1: that something that everybody thinks is going to be happening
Speaker 1: or is that a pipe thream? Well, when I was
Speaker 1: young and foolish, that was called the LSD went right
Speaker 1: to your brain and you've got to see visions completely.
Speaker 1: But I think there's a set of amazing stuff that's happening.
Speaker 1: Neuralink is one of them, and if possible, it's going
Speaker 1: to provide people ways to communicate. I mean, think about
Speaker 1: the good part of that. People who are paralyzed and
Speaker 1: people who can't communicate or don't have the motor skills
Speaker 1: to do that. It also has a dystopian view that says, Gee,
Speaker 1: I'll plug people in whether they want to or not.
Speaker 1: And so I think it's going to be in interesting
Speaker 1: to see how that turns out. You know, I think
Speaker 1: that the part when we talk about tech, though, and
Speaker 1: you talked about neuralink, the part that really doesn't get
Speaker 1: talked about much in the same breath is all this
Speaker 1: stuff that's going on in what's called biotech and life sciences,
Speaker 1: the people who are using entrepreneurship and innovation to create
Speaker 1: new drugs, ethical drugs, meaning pharmaceuticals and vaccines and whatever.
Speaker 1: And you know, when you're talking about iPhones and hardware
Speaker 1: and chips and whatever, we tend not to look at
Speaker 1: the other side of technology innovation. In the last couple
Speaker 1: of years, there's been some breakthroughs that are just amazing
Speaker 1: to make people healthier and safer in a way that
Speaker 1: we didn't think it was going to be coming for
Speaker 1: a while. Is there altruism there in Silicon Valley? Are
Speaker 1: these guys only money? You know? You read all these
Speaker 1: articles and it seems like the Internet was supposed to
Speaker 1: be a shared thing, and it was supposed to be
Speaker 1: democratic whatever, And now you're seeing being with the fines
Speaker 1: from the EU Facebook that it's all about the money.
Speaker 1: It's all about engagement and money. Is there altruism still
Speaker 1: in Silicon vallement? So you've got to remember who you're
Speaker 1: asking the question to a guy in a giant room. Yeah, well,
Speaker 1: you know, I remind my students you get that at
Speaker 1: the end of your career. Hopefully not if you're asking
Speaker 1: the entrepreneurs, that is, the people come up with the
Speaker 1: idea and the technology and the vision and whatever. You know,
Speaker 1: I'd say at least half, if not more, of them,
Speaker 1: maybe three quarters, are doing it because they see something
Speaker 1: that they want to create and they want to bring
Speaker 1: it to reality and they want to make the world
Speaker 1: better or at least more interesting, or or create something.
Speaker 1: But remember the other half of the people we are
Speaker 1: talking to are extreme capitalists. Those are the venture capitalists.
Speaker 1: Their goal is to make an obscene return on some
Speaker 1: of those investments, because they're not like a bank wanting
Speaker 1: five percent interest knowing that most of their bank wants
Speaker 1: almost all their investments to succeed. Capitalists realizes that most
Speaker 1: of them will fail. That's a big idea that's a
Speaker 1: crazy type of financing that never existed before the last
Speaker 1: quarter of the twenty first twentieth century. That made all
Speaker 1: these things that we take for granted possible because who
Speaker 1: else would it invest in ten things knowing that eight
Speaker 1: or nine of them won't work. That's called a Broadway backer.
Speaker 1: That's that's it. It's called the producers. That's exactly right right.
Speaker 1: It's a new type of what's called financial asset class
Speaker 1: that says we're going to take extreme risk for extreme return.
Speaker 1: And so those are the capitalists. When you see people
Speaker 1: funding these crazy you go, well, I would anybody fund
Speaker 1: one of those? Well, that's why I would have said
Speaker 1: about Apple and in the nineteen seventies, or they would
Speaker 1: have said about Bill Gates or whatever. And as I said,
Speaker 1: most of them fail. But those are different people than
Speaker 1: the people who start the company. So you need to
Speaker 1: separate out the entrepreneurs from the venture capitalists who are
Speaker 1: taking financial risk, moving entrepreneurs who are taking career risk
Speaker 1: and taking taking failure risk in a different way. And
Speaker 1: so let me ask this because it kind of segues
Speaker 1: into this, and I know you're you're not necessarily an
Speaker 1: expert in these other new kind of most of anything,
Speaker 1: these cryptocurrencies. But I have never understood cryptocurrency specifically, and
Speaker 1: I have friends who have invested in it, and they
Speaker 1: made a whole bunch of gains and now they seem
Speaker 1: to be making a whole bunch of loss. And I
Speaker 1: know that's the Sam Bankman freed thing. Is this a
Speaker 1: real thing, this alternative sort of tech currency. Does that
Speaker 1: have legs? Do you believe in it? Or is it
Speaker 1: a fesso and something that just doesn't really make much sense?
Speaker 1: So I normally don't pass on any question, but this
Speaker 1: one is way above my pig right, Okay. I mean
Speaker 1: I have a bunch of students who start crypto things
Speaker 1: and it all gets confused with bitcoin and blockchain and
Speaker 1: you know, digital good currency and distributed finance, and some
Speaker 1: of it has some real legs that will like distributed
Speaker 1: finance and things built on blockchain that will bypass all
Speaker 1: the bitcoin and digital currency stuff. But right now it's
Speaker 1: all getting confused, and I think twenty twenty three will
Speaker 1: be the year that it settles out. So here's the question.
Speaker 1: If you are you investat in crypto? Never? Okay, definitely,
Speaker 1: That's that's really all I need doesn't mean that's how
Speaker 1: I should invest. Why was I being intellectual and going
Speaker 1: because you know that's here to go? I really got
Speaker 1: you on just to forget the chips there. Really, that
Speaker 1: really is can we get some investment advice? Because money?
Speaker 1: I think the other question at the same time as
Speaker 1: you should ask is how often do you go to
Speaker 1: Las Vegas? And I think there's a direct correl So
Speaker 1: it doesn't mean it was a bad idea. It just
Speaker 1: means what was your risk tolerance for for investing in something?
Speaker 1: You know what I saw Warren Buffett say, yeah, you can.
Speaker 1: It's a house. You have the house, and so it's
Speaker 1: the thing here. It's the thing with crypto. What's who's
Speaker 1: it helping, who's manufacturing, who's doing and he's That's why
Speaker 1: you can't hold it in your hand. I don't know
Speaker 1: what it is, you know. That's why my head spins
Speaker 1: every time I hear about it. And they're selling real
Speaker 1: estate in the megaverse. Okay, So and I go, okay,
Speaker 1: I'm out, I'm out, I'm out. I don't know anything.
Speaker 1: So one of the things to think about is for
Speaker 1: any new tech is that it's usually ahead of regulation
Speaker 1: and government involvement for years, if not decades, And that's
Speaker 1: both an opportunity and a problem. You know, remember we
Speaker 1: were talking about entrepreneurs and venture capital. Venture capital is
Speaker 1: an asset class that's completely unregulated. There is no regulation,
Speaker 1: which allows them to do some pretty innovative stuff, but
Speaker 1: it also allows them to do things like they're in
Speaker 1: NOS and FTX and some of the others. Digital currency
Speaker 1: and crypto is completely unregulated. In fact, some of the
Speaker 1: contributions FTX was making to both parties was to figure
Speaker 1: out how to get regulation written to actually legalize that
Speaker 1: in their favor. Because remember, we operate in a while
Speaker 1: we operated in a democracy, we operate what I call
Speaker 1: it depockets democracy. I remind my students that Congress is
Speaker 1: coin operated and that what writing that John Congress. It's
Speaker 1: the best way to put it. Wow, you know, I
Speaker 1: have just as an aside. I was a public official
Speaker 1: for a while in California, and I still remember going
Speaker 1: to my first meetings and then realizing that the little
Speaker 1: video I had watched as a kid on how a
Speaker 1: bill was made like it didn't have the word will
Speaker 1: lobbyist writing house about how did that work? Yeah, and
Speaker 1: I'm a little older and more cynical. But obviously democracy
Speaker 1: is still the still the best bet we have. But
Speaker 1: you need to understand how it really works, not how
Speaker 1: you wish it would work, and then hopefully be able
Speaker 1: to get it to work a little better and more efficiently.
Speaker 1: But but I found if you really don't understand how
Speaker 1: the game is wired, then you're always going to be
Speaker 1: a victim of the game. Wow, all right, it's a
Speaker 1: bottom line. Bottom line. We got enough chips, We're gonna
Speaker 1: be okay. You think we're gonna be O, We're okay. Well,
Speaker 1: we're gonna be okay until China decides to do something
Speaker 1: in response. So this is more of a China issue
Speaker 1: than it is a shortage issue now, yeh, all right,
Speaker 1: So we gotta look to China and hope that we
Speaker 1: know what's doing. One good night's sleep and he just
Speaker 1: took it away. That's it. Now I gotta be up
Speaker 1: all night worrying about China. What China is going to do.
Speaker 1: There's nobody in My father used to have a saying,
Speaker 1: right whenever I had a thing, I'm not going to
Speaker 1: pass that test. I'm never gonna I didn't study enough.
Speaker 1: I'm not going to get the in. My father would go,
Speaker 1: there's about a billion people in China that don't give
Speaker 1: a crap about what you just said. And now I
Speaker 1: got to be worried about those billion people who don't
Speaker 1: give a crap about they don't care about what before
Speaker 1: we go one lasting Steve, your commencement speech to Philadelphia
Speaker 1: University was rated by MPRS one of the top commence
Speaker 1: to speak in the last three hundred years. Really, could
Speaker 1: you just because I want to, I'd like to close
Speaker 1: on something positive. I'm guessing you didn't depress the kids
Speaker 1: and say you're stirting. What was it? What was the
Speaker 1: message there? If you can condense it down that made
Speaker 1: it so memorable for so many people and so lauded
Speaker 1: by so many people. What were you telling young kids,
Speaker 1: because maybe that message could go out and resonate today. Well,
Speaker 1: you know, there were a couple of messages. Most of
Speaker 1: it was a story of how I ended up where
Speaker 1: I ended up, and it was about taking control of
Speaker 1: your own destiny and just showing up a lot. The
Speaker 1: story of my life was sticking out my thumbs and
Speaker 1: seeing where the world would take me and being present
Speaker 1: for opportunities and not And again it's also a story
Speaker 1: of Silicon Valley is not believing that the world has
Speaker 1: a set of fixed jobs and rules and whatever. Is
Speaker 1: that you have an opportunity to do almost always what
Speaker 1: you want to do. People are constrained about how they
Speaker 1: grow up and circumstances where they start, but that doesn't
Speaker 1: mean that's where you need to end up. And I
Speaker 1: was just telling folks about my journey was just what
Speaker 1: their journey could be. Some people started with more circumstance
Speaker 1: than others, but it doesn't mean you can't end up
Speaker 1: in a pretty good place. And so that was the story,
Speaker 1: and some people found that it resonated with them because
Speaker 1: it gave them some hope that it didn't matter where
Speaker 1: you started, it mattered about the journey, and that was
Speaker 1: the reward. Steve Blank, thank you. You're really a gentleman
Speaker 1: for coming on. And you're you're so successful you don't
Speaker 1: need us. I decide you make things that I don't
Speaker 1: understand a little bit clearer, and that is no small
Speaker 1: room is a big room, Steve. That's spaking of my house.
Speaker 1: How forget he's living on a golf course. Look at
Speaker 1: the property? Is that your is that your golf course?
Speaker 1: You do it's my friend blood ladies. Okay, yeah, but
Speaker 1: you're involved with the giving pledge. You're giving all your
Speaker 1: money away, right we can. We announced that right here today,
Speaker 1: that you're giving you all your money away, and part
Speaker 1: of my children are taking care of That's fine. Mine
Speaker 1: along with that, mine is inadvertent against my widow and Peter.
Speaker 1: Thank you. It's always fun, leisure leasure man. And I'm
Speaker 1: glad to know that there's a blood of chips right now. Yes,
Speaker 1: talk to me. So what do we think? You know?
Speaker 1: I I would like to think that the chip thing
Speaker 1: is solved, but America doesn't learn. Well, I'm doing my
Speaker 1: part because I maintain what I said at the beginning.
Speaker 1: You know I don't use chips. So okay, let me
Speaker 1: let me. I wrote down some things to see if
Speaker 1: you use. I don't use chips. Hold on, hold on,
Speaker 1: so I guarantee I don't use more than so. Not
Speaker 1: even a ring doorbell. You have a ring doorbell, I
Speaker 1: do not. You have a roombavac. I do not. Okay,
Speaker 1: you don't. I do not say the obnoxiously. You have
Speaker 1: one of the computer toothbrushures. No, no, I hit my hands.
Speaker 1: It's just fine. Controls but through not through, not through
Speaker 1: an app. Your light stone you have a light, not
Speaker 1: through an app clock to turn them out. I'm not
Speaker 1: through an app. No, sir, coffee, Mac, you make sank
Speaker 1: you with a screw, strangeway enough. I do have a
Speaker 1: chip for that shaver, pacemaker, nothing, nothing, nothing, but you're
Speaker 1: you're out of ships by the way, you're out of
Speaker 1: regular ship. I have no corn chips, I have no chips.
Speaker 1: I don't use you, really, Jason, you're really I assume
Speaker 1: my car has chips. I assume my phone on my computer.
Speaker 1: Other than that, I don't think I have chips. I
Speaker 1: really don't. I'm part of the solutions, like I don't
Speaker 1: even cutting down. I'm cutting down. I'm conserving. So everyone
Speaker 1: else has a little so delusional. As a summary, what
Speaker 1: I learned is if Steve is to be trusted, it's
Speaker 1: that Wow, he's just spending half an hour thrown him
Speaker 1: under the bodies. Why wouldn't it be trusted because it's
Speaker 1: not that he's at the information, but I don't know
Speaker 1: that he's getting Who knows who's getting more information? We
Speaker 1: can't monitor China. You think he's using him. China doesn't
Speaker 1: send him spreadsheets we don't know what they're making. Okay, right, okay,
Speaker 1: what's your point that I think it's more complex than yes,
Speaker 1: we're okay or we're not okay, because I keep hearing
Speaker 1: we're threatening China except the nine hundred nine hundred eight
Speaker 1: million dollars of our debt. So it's hard. It's like
Speaker 1: me saying to Laurie, go screw yourself, and she goes, oh, really,
Speaker 1: paving back to twenty grand I learned you and you go,
Speaker 1: you know what, don't screw yourself. So there's it's a balance.
Speaker 1: You know, there's much more going on here. So let's
Speaker 1: add this wrinkle. So call it country A. Where country B,
Speaker 1: Country A puts the screws to country B. Can Country
Speaker 1: A not suffer as a result of that? Where aren't
Speaker 1: we all so interconnected, our economies, our mutual survival at
Speaker 1: this point? Is there? Really? How are you gonna how
Speaker 1: are you gonna turn to the United States and say
Speaker 1: we're cutting you off from hope and survive. What's what
Speaker 1: sad is it's not because we care about each other.
Speaker 1: It's the countries in the world will work together because
Speaker 1: it's commerce, because it's commerce and we're depending on it.
Speaker 1: There are best customers. So that's all right, Google Heim,
Speaker 1: what do you got? Well, I think it's really no, really, Peter,
Speaker 1: that you're asking Jason if he has a fifth bit?
Speaker 1: He is? Really how many times? I don't think that
Speaker 1: was a little bit of a zen, you know, times,
Speaker 1: a little begging. He's looking at me and going fat.
Speaker 1: I can say something, can I say to you can
Speaker 1: testify to the what do you mean you're not it's
Speaker 1: a rebellion from mar Oh? Yeah, right, so that is
Speaker 1: and you gotta you gotta and don't kiss his ass
Speaker 1: just because he was on signfiled the first eighty times
Speaker 1: we did eighty times we did zoom meetings. I think
Speaker 1: Peter's micros off. I think he's it's always somebody else
Speaker 1: that's problem. And it turned out to be you're freezing.
Speaker 1: It's gotta be your problem. What are you you were
Speaker 1: looking about? The Zoom's thing was a problem. Are you
Speaker 1: out of your true Oh you suck up? You sucked
Speaker 1: Every time we were doing this from our houses, your
Speaker 1: microphone was a problem. He would hear my microphone perfectly,
Speaker 1: get it, I get it. That's okay, it's okay. What
Speaker 1: are you pointing? You know? Look, you're actually pointing a finger.
Speaker 1: You're pointing fingers pointed at yourself, young man. Everyone else
Speaker 1: is the problem. You know what you need to do?
Speaker 1: You need another one going on? Ayouaskar retreat for it.
Speaker 1: If they have anything else, gonna wrap it up. Marie's
Speaker 1: going to wrap it up. It's enough already. Jimmy half
Speaker 1: Jimmy halfer anyone, Yeah, who said we don't know who can?
Speaker 1: That's it? All right, I'll give you. I'll give you
Speaker 1: one extraneous. I'll give you an extraneous. Really no, really
Speaker 1: to think about. On a YouTube science channel, they have
Speaker 1: proved using mathematics that the entire Internet, the entire Internet
Speaker 1: is ways fifty grams or relatively the way of a strawberry.
Speaker 1: Really no, really, So Laurie wrapped us up and you
Speaker 1: ignored that for that? Do you notice that Laurie is
Speaker 1: behind me. I'm looking at you. If you want better
Speaker 1: control of this program, put Laurie where I can see her,
Speaker 1: and we will be in and out the way we're
Speaker 1: supposed to. Really know, Really, this episode was not that
Speaker 1: we really aren't on a chips or the China relationship.
Speaker 1: It's the Internet ways. What a Strawberry and the other. Really, no, really,
Speaker 1: is Laurie sitting in the wrong spot. That's the that's
Speaker 1: that's what we've learned, and this show is the weight
Speaker 1: of a hamorrhead. What are we talking about here? I
Speaker 1: don't even know. All all right, we'll be back, I'm
Speaker 1: sure because there's chips and we'll have plenty of them
Speaker 1: and we'll be able to keep doing this. Everyone talking, now,
Speaker 1: how are you talking? We'll be happy too. But then
Speaker 1: we're you're talking like my mother. You're putting words in
Speaker 1: an order that I'm not familiar with. All right, I'll
Speaker 1: be like my father. I'll sit here silent, you know.
Speaker 1: Finished the show. Congratulations, goodbye now really now, Jason and
Speaker 1: I would like to thank Steve Blank for joining us today. Steve,
Speaker 1: of course, has been called one of the most influential
Speaker 1: people in tech by Forbes, and his contributions to tech
Speaker 1: and the lean startup movement have been noted by The
Speaker 1: New York Times and Bloomberg. That goes on and on
Speaker 1: and on. He start undergraduate and graduate students at Stanford Berkeley, Columbia, NYU,
Speaker 1: UCSF and soon the Imperial College in London. You can
Speaker 1: find more about Steve at Steve Blank dot com. Of course,
Speaker 1: you can find us online at really No Really dot com.
Speaker 1: We're also on Instagram, YouTube, and TikTok at Really No
Speaker 1: Really Podcast. We now have full episodes on YouTube, so
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