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Speaker 1: M. This is mesters in business with very results on

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Speaker 1: Bloombird Radio this weekend. On the podcast what Can I Say?

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Speaker 1: I have yet another extra special guest, Albert Vennor, managing

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Speaker 1: partner Union Square Ventures. He has a fascinating background in

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Speaker 1: technology and software and is interested in all sorts of

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Speaker 1: interesting things, ranging from climate change to humanism, to the

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Speaker 1: huge transitions that humans have gone through as a species

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Speaker 1: and what it means to society investing scarcity and just

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Speaker 1: the quality of life that we will enjoy as a species.

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Speaker 1: I found this conversation to be really intriguing if you're

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Speaker 1: interested in venture capital, in technology, in how to think

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Speaker 1: about early stage investing, well strap yourself in. This is

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Speaker 1: a great one. With no further ado, my conversation with

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Speaker 1: Union Square Ventures. Albert Wehner. You have quite a fascinating history.

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Speaker 1: Let's delve into that. Starting with your background. You won

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Speaker 1: a national German competition in computer science in high school.

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Speaker 1: Tell us about that and where that led you. Well.

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Speaker 1: I fell in love with computers very early on when

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Speaker 1: I was a young teenager, and my parents were super

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Speaker 1: indulgent of this at a time when that was very unusual,

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Speaker 1: and they bobbed me an early Apple two computer. One

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Speaker 1: of the earliest Apple two is to be sold in Europe. Actually,

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Speaker 1: and I've stuck with that my entire life. I've studied

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Speaker 1: computer science as an undergraded and as a grated student,

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Speaker 1: and I've been investing in a lot of computer companies

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Speaker 1: over the years. So it's been central to what I

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Speaker 1: do and who I am. So let's talk about the

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Speaker 1: timing of school. You graduate Harvard in an economics and

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Speaker 1: computer science degree perfect for the explosion of the Internet,

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Speaker 1: a PhD from m I T and Information Technology nine.

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Speaker 1: So when you were leaving school, were you interested in

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Speaker 1: the Internet or was it more hardware and software? No,

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Speaker 1: the Web was really exploding while I was at m

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Speaker 1: I T. And I actually finished my PhD n but

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Speaker 1: I started a company in late nineties six early ninety seven,

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Speaker 1: and I was kind of doing the company and the

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Speaker 1: thesis at the same time, which wasn't great for either

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Speaker 1: and also wasn't great for our marriage. We kind of

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Speaker 1: managed to get through that. But I was really fascinated

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Speaker 1: with the web from when I first discovered it, which

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Speaker 1: was in a computer lab at M I T trying

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Speaker 1: to do my stats homework. So so let's talk a

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Speaker 1: little bit about some of the other companies you either

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Speaker 1: founded or run. The most famous is probably Delicious, which

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Speaker 1: ended up getting picked up by Yahoo. Tell us a

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Speaker 1: little it was. It was an early whib to Darling.

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Speaker 1: Joshua Schackter had started he was working in Morgan Stanley

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Speaker 1: actually full time, and had started this as a side project.

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Speaker 1: And it was kind of this idea that you would

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Speaker 1: share your bookmarks with others because bookmarks were kind of

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Speaker 1: an indication of something that was actually interesting on the Internet,

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Speaker 1: and Joshua added tacks to that, and so you could

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Speaker 1: browse things by bags. And at that time Unit Square Insures,

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Speaker 1: Fred and Brad had started the firm. They had just

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Speaker 1: raised the first fund. I had just finished another project

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Speaker 1: I've been working on and they were like, hey, we're

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Speaker 1: talking to this guy, Joshua what he thinks. So I

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Speaker 1: met up with Joshua uh and they wound up investing

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Speaker 1: and I wanted up becoming the president. So your president

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Speaker 1: of Delicious, you see it through in order to be

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Speaker 1: acquired by Yahoo in the early two thousand's. Tell us

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Speaker 1: a little bit about that experience. The Delicious team was tiny,

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Speaker 1: it was subt in people basically, and it was a

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Speaker 1: very rapidly growing service. I made myself sufficiently unpopular during

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Speaker 1: the acquisition, but because I insisted on certain things, I'm like,

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Speaker 1: we're not doing this, We're not doing this, we're not

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Speaker 1: doing this, um that. They at the end they were like,

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Speaker 1: we want all of you except for this Winger guy.

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Speaker 1: We don't want him, which was perfect for me, Mindy,

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Speaker 1: because I didn't want to relocate to the West Coast,

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Speaker 1: so I got to just take my marbles and start

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Speaker 1: making angel investments. So is that what led you to

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Speaker 1: Etsy and Tumbler was the Delicious acquisition? Yeah, exactly. I

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Speaker 1: had a little bit of money and I met Rob Kalen,

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Speaker 1: the founder of Etsy. He had just come back from

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Speaker 1: the West Coast. He had tried to raise money on

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Speaker 1: the West Coast, was unsuccessful with that, and so I

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Speaker 1: wrote an angel check here and then I brought Union

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Speaker 1: Square interest in as the first Series A investor. Is

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Speaker 1: that what led to your transition from entrepreneur to well?

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Speaker 1: I was basically hanging out at the USB offices after

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Speaker 1: the sale of Delicious, and just because she had no place.

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Speaker 1: Because I knew both Brand and Fred really well, and

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Speaker 1: so it was kind of a natural thing to do

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Speaker 1: I did these angel investments. I led the interest investment

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Speaker 1: in Etsy, I became a venture partner for that and

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Speaker 1: then became a GP in the two thus Nate Fund

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Speaker 1: so et C. Also, Tumbler was another one. If Memory

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Speaker 1: Serves were they acquired by they were also acquired So

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Speaker 1: so you're working, you're working that contact list. What was

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Speaker 1: that experience like now, not as a as a president

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Speaker 1: but outside investor. It was a very very lucky landing

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Speaker 1: for Tumbler because yeahoo really the only bidder and they

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Speaker 1: were bidding against themselves, but they didn't really know that.

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Speaker 1: So what eventually led you to say, you know, I

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Speaker 1: think I could do this venture stuff full time. Let

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Speaker 1: me let me hang my hat at Union Square Ventures

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Speaker 1: and focus solely on on Yeah, that had really been

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Speaker 1: my goal since my own first startup in seven, which

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Speaker 1: was a company called W three Health that ultimately failed.

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Speaker 1: From that experience, I realized that I really loved startups,

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Speaker 1: but that I was never going to be a good operator. Um,

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Speaker 1: but I thought I could maybe be a decent investor.

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Speaker 1: Let me make a digression here, and since you're in

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Speaker 1: front of me, I have to ask this question. So

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Speaker 1: ideal with traders investors, fund managers, economists down the list.

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Speaker 1: There is no group of people that seem to be

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Speaker 1: prouder of their failures than venture capitalists. Why is that

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Speaker 1: Because it's an integral part of the business, and if

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Speaker 1: you can't deal with failure, you can't be a VC.

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Speaker 1: Because many of the startups you invested and fail, it's

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Speaker 1: statistically that's your spectations. Yes, absolutely so. It just seems

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Speaker 1: like the healthiest way to think about what is unavoidable.

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Speaker 1: Yet so many people within the world of finance kind

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Speaker 1: of dance around it, trying not to deal with it.

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Speaker 1: There's a little bit of denial. It's almost like an

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Speaker 1: object of pride. Look here all the companies we invested

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Speaker 1: in that didn't make it. Look here all the great

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Speaker 1: companies we passed on. It's almost like a point of pride,

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Speaker 1: this sort of self awareness. Well, it's also important to

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Speaker 1: how the venture capital model works overall. Right, so the

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Speaker 1: most you can ever lose in venture capitalist the amount

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Speaker 1: of equity you've put in. But the upside is nearly limitless.

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Speaker 1: I mean, it's what Notes seemed to let calls convicts tinkering. Right,

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Speaker 1: it's the perfect example of that. You took many small

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Speaker 1: relatively small positions, and any one of them can be

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Speaker 1: become very, very large. But you also learn a lot

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Speaker 1: from the things that don't work, you know. Um, sometimes

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Speaker 1: you learn a lot more from that than you learn

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Speaker 1: from the ones that do succeed. Sure, you tend to

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Speaker 1: you tend to learn more from from losers than winners. Um. Usually,

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Speaker 1: And and then I have to ask the same question,

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Speaker 1: So Union Square ventures by definition union squares here in

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Speaker 1: New York City. What's it like being a venture investor

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Speaker 1: on this side of the country as opposed to what

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Speaker 1: seems to be you know, the gravitational black Hole adventure

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Speaker 1: out out in Silicon Valley in California. Well, first of all,

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Speaker 1: it's no longer that. So you know, Sequoia just opened

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Speaker 1: a New York City office. UM, Andrewson Harwitz has people

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Speaker 1: on the ground here. So New York City is now

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Speaker 1: today one of the epicenters when we started. That wasn't

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Speaker 1: the case. When we started. People were like, oh, there's

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Speaker 1: been no tech company in New York City. There's been

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Speaker 1: no I p O. Of course, you know, we were

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Speaker 1: involved with two of the major I p O s.

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Speaker 1: We let the Series A and It's I also let

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Speaker 1: the series A. We you know, Square Ventures. Let the

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Speaker 1: series A in MONGREDI b you know, the big New

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Speaker 1: York City based success story. So it was incredibly healthy though,

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Speaker 1: because we were never caught up in the oh my god,

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Speaker 1: fomo off, we have to have one of these or

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Speaker 1: one of those and everybody else's investing in the sector.

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Speaker 1: It was always a from our own thesis, let's figure

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Speaker 1: out what we believe and then let's find companies that

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Speaker 1: fit with that. And we've always been extremely competitive in

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Speaker 1: winning deals on the West Coast. I mean Twilio, I

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Speaker 1: let the series A UM for your grow interest and

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Speaker 1: it was a you know, San Francisco Bays company. So

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Speaker 1: last question on this topic, how different is venture in

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Speaker 1: New York versus California or is there really no big

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Speaker 1: There used to be a noticeable difference between East Coast

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Speaker 1: and West Coast today I think that's completely erased. Quite interesting.

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Speaker 1: So let's talk about the theses driven venture capital firm,

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Speaker 1: which is how USV describes itself. Tell us what these

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Speaker 1: theses are and how do they drive your investment? Yeah,

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Speaker 1: so there's been an evolution over time. I would say

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Speaker 1: the you know what we call thesis one that oh,

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Speaker 1: was that we invest in large networks of engaged users

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Speaker 1: differentiated by user experience, and those were investments like Twitter

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Speaker 1: and Tumbler. And then wear to focus on companies that

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Speaker 1: had less obvious network effects, so more data behind the

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Speaker 1: scenes companies like Sift for example. UH. And then we

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Speaker 1: added to our thesis sort of infrastructure and infrastructure investments

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Speaker 1: included Twilio and mongredib cloud Flare, Stripe. There's a whole

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Speaker 1: bunch of infrastructure investments infrastructures for building digital businesses. Our

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Speaker 1: current iteration, what we call thesis three DOTO is about

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Speaker 1: broadening access to knowledge, capital and well being by leveraging

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Speaker 1: existing networks and protocols and building trusted brands. And each

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Speaker 1: part of that thesis actually means something very concrete. So

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Speaker 1: let me just pick one of them. Building trusted brands

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Speaker 1: for us. A lot today is about is your business

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Speaker 1: model fundamentally aligned with your customer or not. The advertising model,

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Speaker 1: as we have learned, is not aligned with customers interests.

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Speaker 1: Right You, If your YouTube you want to serve the

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Speaker 1: most engaging videos so you can show more ads, you

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Speaker 1: don't want to serve the most appropriate video, right So,

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Speaker 1: but if you have a subscription model. Let's say, like Netflix,

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Speaker 1: you want to show something that somebody actually, really, truly

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Speaker 1: deeply is going to relate to so that they stay

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Speaker 1: a subscriber long term. So each part of this thesis

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Speaker 1: means something, and we we use these sort of high

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Speaker 1: level thesis to then look for very concrete things. So,

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Speaker 1: for example, I said broadening access to capital. So we've

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Speaker 1: done a lot in lending, like how can we do

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Speaker 1: better underwriting, better, cheaper, faster loans for instance, too small

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Speaker 1: businesses investment like a company like Funding Circle, or two

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Speaker 1: individuals like a company like Upgrade in a way that

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Speaker 1: actually helps people, so where you're not dragging them into

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Speaker 1: like a dead hole, but you're actually helping them build

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Speaker 1: up their credit score while you're giving them extending them credit.

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Speaker 1: So three point oh sounds a lot like World After Capital.

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Speaker 1: I'm hearing some very similar themes. They're absolutely um there's

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Speaker 1: a strong relationship between some of the ideas in the

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Speaker 1: book and some of the ideas that inform our investing.

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Speaker 1: We'll circle back to the book in a little bit.

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Speaker 1: Let's talk about a couple of companies you invested in,

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Speaker 1: because I'm picking up a theme there. Needable terror living carbon,

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Speaker 1: marvel fusion, legendary food, climate sustainability. So those are all

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Speaker 1: personal investments, not not theraventurous investments. But I made those

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Speaker 1: investments in the run up to us forming a climate

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Speaker 1: thesis and now a climate fund. So those are all

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Speaker 1: investments that go back a few years when I sort

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Speaker 1: of became really interested in what kind of opportunities come

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Speaker 1: out of the climate crisis. The climate crisis, if we

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Speaker 1: don't get on top of it, none of the other

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Speaker 1: stuff of matter, none of the money we've made will matter.

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Speaker 1: It's so big, it's so much bigger than COVID, for example,

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Speaker 1: in ways that I think people still don't appreciate. And

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Speaker 1: so I made some personal investments first, and then we

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Speaker 1: started talking to our LPs about it. And then during

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Speaker 1: COVID we raised the first climate fund, hundred sixty million

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Speaker 1: dollar climate fund. We're almost done investing that. And so

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Speaker 1: the climate thesis very simple. We want to invest in

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Speaker 1: companies that either reduce emissions, draw it down existing emissions,

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Speaker 1: or help with adaptation. So I'll give an example of

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Speaker 1: an adaptation investment. We invest in a company out of

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Speaker 1: Australia called flood Map, and what they do is they

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Speaker 1: predict where things are going to flood. They also measure

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Speaker 1: the actual flooding. Floods are one of the biggest problems

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Speaker 1: coming out of the climate crisis, and they're here today.

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Speaker 1: This is not some future problem with getting mega floods

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Speaker 1: in Pakistan. A third of Pakistan is underwater as we speak.

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Speaker 1: I don't think people understand how horrific the devastation there is.

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Speaker 1: It's the other side of the droughts that are everywhere.

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Speaker 1: It's what's dry gets dryer, what's what gets wetter. Absolutely

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Speaker 1: talking about emissions reductions, we've made investments, for example, in

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Speaker 1: our first every investment in Africa in a company called

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Speaker 1: Shift ev. What shift DV does is it takes existing

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Speaker 1: delivery vans and retrofits them in the space of a

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Speaker 1: couple of hours from internal combustion engine to electric a

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Speaker 1: couple of our couple of hours. Because if you want

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Speaker 1: to take an old nine eleven and converted to e V,

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Speaker 1: it'll take you about a year, assuming you can get

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Speaker 1: on the list. It's that they have completely industrialized this process.

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Speaker 1: They drive a minivan in and a couple of hours

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Speaker 1: later it drives out as an EV. Wow, what do

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Speaker 1: they do with the internal combustion engine. And that's a

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Speaker 1: great question. I need to ask Ali what they do

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Speaker 1: with that. I don't know. I mean, it seems like

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Speaker 1: that's a lot of hardware to just throw away. I

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Speaker 1: don't know. A great question. And then I'll talk about

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Speaker 1: one of the drawdown investments we've invested in, a company

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Speaker 1: called Brilliant Planet out of the uk Um. What they

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Speaker 1: do is they build ponds in the desert and they

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Speaker 1: pump seawater and then then they grow algae very very rapidly,

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Speaker 1: continues algae blue and it takes a huge amount of

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Speaker 1: carbon out of the atmosphere. Algae in ponds in the

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Speaker 1: desert can can move the needle. Yes, absolutely, Huh. That's

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Speaker 1: quite fascinating. Two questions come out of this. One is

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Speaker 1: structural and one is fund based. Let's do the fund

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Speaker 1: one first. So John Door had a climbed funds started

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Speaker 1: about ten years ago at Cliner Perkins Um. Some people

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Speaker 1: have said it kind of lagged other similar era venture funds.

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Speaker 1: Was he just early? How do you look at this

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Speaker 1: in terms of not just having a positive impact on

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Speaker 1: the planet but generating a return on investor. The the

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Speaker 1: early green tech funds they were too early in one sense,

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Speaker 1: but in another sense they were actually crucial to our

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Speaker 1: having a shot at overcoming the climate crisis, because if

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Speaker 1: it hadn't been for the investments, we wouldn't have gotten

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Speaker 1: on the cost curve, for instance, for solar PV. Right.

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Speaker 1: So the reason we have really cheap PV today, the

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Speaker 1: reason we have really relatively cheap batteries today, it's because

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Speaker 1: of some of the investments that were made back there.

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Speaker 1: And there's this pattern in the world where every big

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Speaker 1: technological shift starts with a bubble. Right, So when we

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Speaker 1: had ships, we had the South Sea bubble, right, And

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Speaker 1: when we had railer was we had the railer bubble.

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Speaker 1: There was an automotive bubble, there was the dot com bubble,

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Speaker 1: multiple bubbles in crypto. There was a green tech bubble.

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Speaker 1: But now it's a decade plus later and all the

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Speaker 1: things that they were rightly concerned about are all coming

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Speaker 1: true and we are now reaping some of the benefit.

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Speaker 1: But we're also now building on with sort of standing

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Speaker 1: on the shoulders of giants as we and and to clarify,

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Speaker 1: I believe that fund doubled over seven or ten years,

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Speaker 1: not like it was a sinkhole, but compared to what

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Speaker 1: it could have done. Had that money been invested elsewhere,

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Speaker 1: it might have seen better returns, but it wasn't. I

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Speaker 1: don't want to make it sound like it was a

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Speaker 1: total loss. So the second question is you're making seed investments.

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Speaker 1: How does that work if you want to bring one

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Speaker 1: of those seeds to your firm, to Union Square ventures

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Speaker 1: it from a public market. That sounds like it's compliance

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Speaker 1: and conflict nightmare. You guys approach it different. We in

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Speaker 1: our lp A, we can write checks up two hundred

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Speaker 1: thousand dollars, so we can't make massive investments in startups.

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Speaker 1: So all of the companies you mentioned a sub hundred

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Speaker 1: thousand dollar investment in, and then the only one where

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Speaker 1: I've invested more is Marvel Fusion. We can invest more

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Speaker 1: once the fund has passed on something. So if the

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Speaker 1: fund says we're not doing this, then we can best interesting.

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Speaker 1: So along those lines, there are some venture firms that

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Speaker 1: don't really seem to care a lot about valuations and

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Speaker 1: others seem to focus on a little bit. How do

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Speaker 1: you fall in that spectrum? Is valuation significant or is it? Hey,

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Speaker 1: we're gonna make a hundred investments and of two or

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Speaker 1: three work out the valuations are irrelevant. Now, we've definitely

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Speaker 1: always been disciplined on valuation, and we've let a number

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Speaker 1: of things go. Sometimes you let them go and they

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Speaker 1: do grading and like, well, we could have made money

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Speaker 1: if we had invested, and sometimes you're very happy you

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Speaker 1: did that. Our approaches, we've always kept our fund size

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Speaker 1: as small so we don't need to be in everything

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Speaker 1: that's out there. Um, our latest funds are our core

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Speaker 1: fund is two fifty million dollars. So these aren't big

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Speaker 1: funds in the scheme of things when you have other

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Speaker 1: firms that raised three eight fifteen billion dollars per fund.

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Speaker 1: And as a result, if we think the price is

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Speaker 1: too high, we can just find something else. So let's

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Speaker 1: talk a little bit about some of those bigger funds.

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Speaker 1: And I guess we'll hold off Bank off to the

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Speaker 1: side because that was really aberrational. But do you end

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Speaker 1: up when you have lots of ten and twenty billion

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Speaker 1: dollar venture funds with too much capital chasing too few

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Speaker 1: good deals. How does this impact the whole ecosystem that's

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Speaker 1: out there. Largely, it's great for us because we're early

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Speaker 1: stage investors, so you know, it means there's lots of

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Speaker 1: money to come in and fund later rounds of the

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Speaker 1: companies we've invested in, so we haven't really spent much

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Speaker 1: of our time worrying about it. And then every once

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Speaker 1: in a while these firms go, we're gonna go really early,

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Speaker 1: and some of them do spread money early. But we

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Speaker 1: find because with thesis driven and because we are opinionated

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Speaker 1: on deals that we're really interested in, we you know,

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Speaker 1: can win those deals. Uh. Sometimes they'll take a small

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Speaker 1: check from somebody else along for the ride, but they

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Speaker 1: know that we work with early stage companies, that we

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Speaker 1: roll our sleeps, upt that we're involved, and that we

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Speaker 1: have a thesis, and you know, we take the approach

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Speaker 1: we'd rather disagree with founder and then not invest then

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Speaker 1: sort of like be like, oh, well, whatever it is

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Speaker 1: you want to do, Like, we have a thesis as

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Speaker 1: to why we think this is interesting. Let's talk about this.

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Speaker 1: If it's aligned, great, and obviously things may change after

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Speaker 1: we've invested. We're not like stubborn, you know, um, but

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Speaker 1: let's talk about why we are excited and if that

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Speaker 1: aligns with you, that's great, and if it doesn't, let's

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Speaker 1: go separate ways. Right, So we take a kind of

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Speaker 1: I call it a high alpha approach investing. We'd rather

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Speaker 1: have really upfront conversations about what we like and don't like,

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Speaker 1: then sort of get married as it were. And it

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Speaker 1: actually it's harder to get rid of the VC than

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Speaker 1: is to get a divorce. So like, we think it's

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Speaker 1: good to have these conversations up front, right, What about

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Speaker 1: follow up rounds or some firms that will do seed

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Speaker 1: round and then participate in a or b around. Is

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Speaker 1: that something that well we we we reserve a lot

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Speaker 1: of funds for follow on and we have a very

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Speaker 1: um sort of I think sophisticated reserves methodology that we've

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Speaker 1: honed over many fund cycles now where we actually build

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Speaker 1: kind of a Monte Carlo analysis of the portfolio to

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Speaker 1: see how much money we think we need to keep

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Speaker 1: in reserve. But eventually, when the valuations get too high,

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Speaker 1: the rounds get too larger, we don't follow on. We

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Speaker 1: have a separate vehicle called the Opportunity Fund, where we

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Speaker 1: sometimes write bigger checks into late state trounts and some

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Speaker 1: of our portfolio companies, but not always. So let's talk

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Speaker 1: a little bit about this book, The World after Capital,

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Speaker 1: starting with what is technological non linearity. I like that phrase.

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Speaker 1: The basic idea is that um every once in a

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Speaker 1: while in humanity's history, we invent things that radically change

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Speaker 1: what we as society have as a binding constraint on us.

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Speaker 1: So let me make that very concrete. For hundreds of

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Speaker 1: thousands of years, our ancestors were foragers. They were hunt

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Speaker 1: to gather as they would go out and find things

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Speaker 1: and eat berries and kill little squirrels. And then roughly

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Speaker 1: ten tho years ago we had a bunch of inventions.

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Speaker 1: We figured out that you could plant seeds, that you

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Speaker 1: could irrigate them, that you could domesticate animals, that you

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Speaker 1: could use the dune from the animals too, as a fertilizer.

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Speaker 1: We figured all those things out and we got agriculture,

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Speaker 1: and the constraints shifted from how much food can you

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Speaker 1: find how much land arable land do you have. And

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Speaker 1: when that constraint shifted, we changed just about everything about

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Speaker 1: how humanity lives like. We went from being migratory to

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Speaker 1: being sedentary. We went from very flat tribal societies to

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Speaker 1: very hierarchical agrarian societies. We went from being clearly like polygamous, polyamorous,

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Speaker 1: whatever you wanna call it to being monogamous ish um.

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Speaker 1: We went from having religions where you know, everything was

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Speaker 1: a spirit, a tree or rock, everything had a spirit

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Speaker 1: and it. We went from that to theistic religions, where

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Speaker 1: there was some defined number of gods. Then fast forward

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Speaker 1: to a couple hundred years ago, we had so the Enlightenment.

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Speaker 1: With the Enlightenment, we had big scientific breakthroughs, and we

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Speaker 1: figured out how to dig up stuff out of the

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Speaker 1: ground and burn it and create energy and make heat

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Speaker 1: and electricity and all those things. And the constraint shifted again.

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Speaker 1: It shifted from you know how much you have to

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Speaker 1: how much physical capital can you create? How many machines

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Speaker 1: can you build, how many buildings, roads, railroads, et cetera.

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Speaker 1: And we changed everything yet again. And so now the

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Speaker 1: point of the book is guess what we have to

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Speaker 1: change everything yet again because capital. This is why the

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Speaker 1: book is called the World. If a capital, capital is

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Speaker 1: no longer the binding come straight. Instead, it's human attention,

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Speaker 1: human attention. So that's the third grade shift is So

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Speaker 1: we went from agricultural scarcity to having enough food, and

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Speaker 1: we went from forger to a grarian so from food

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Speaker 1: scarcity to land scarcity. Then we went from land scarcity

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Speaker 1: to capital scarcity, and now we're going from capital scarcity

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Speaker 1: to attentional scarcity. Capital is no longer scarce, so now

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Speaker 1: attension is the new scarcity. Which there's a line in

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Speaker 1: the book that really caught my eye. Attention is time

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Speaker 1: plus intentionality. Explain that. Yeah, so speech just tells you

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Speaker 1: how fast you're going. Velocity to tells you how fast

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Speaker 1: you're going towards something, towards some destinations ne plus direction

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Speaker 1: speed plus direction list velocity and the same as true

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Speaker 1: for attention. Time just tells you how much time has elapsed.

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Speaker 1: You know, two hours. Attention is what was your mind

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Speaker 1: and your body doing during those two hours? Um, were you,

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Speaker 1: you know, just scrolling doom, scrolling Twitter? Or were you

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Speaker 1: like working on a solution to the climate crisis. So

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Speaker 1: you say something about these transitions that really jarred me.

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Speaker 1: Previous transitions like agriculture emerged over thousands of years and

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Speaker 1: was incredibly violent. Industrial Age lasted over hundreds of years

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Speaker 1: and also involved lots of violence and bloody revolutions and

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Speaker 1: to world wars, which raises the obvious question, what sort

429
00:22:46,000 --> 00:22:50,840
Speaker 1: of violence is the next transition? Based on attention scarcity

430
00:22:51,000 --> 00:22:54,040
Speaker 1: potentially going to involve well at the moment, the leading

431
00:22:54,080 --> 00:22:57,439
Speaker 1: candida is the climate crisis. We have known about it

432
00:22:57,520 --> 00:23:01,640
Speaker 1: for literally hundreds of years actually, and we have refused

433
00:23:01,640 --> 00:23:04,639
Speaker 1: to do enough about it. And so now we have

434
00:23:04,840 --> 00:23:07,960
Speaker 1: entered the state where we're getting extreme heat events, we're

435
00:23:07,960 --> 00:23:12,080
Speaker 1: getting extreme drought events. The food supply is definitely in question, uh,

436
00:23:12,200 --> 00:23:14,919
Speaker 1: something that we have taken for granted for many years now.

437
00:23:15,000 --> 00:23:16,600
Speaker 1: We've taken for granted that you can go to the

438
00:23:16,600 --> 00:23:21,880
Speaker 1: store and buy food unless we really course correct very hard,

439
00:23:22,000 --> 00:23:25,040
Speaker 1: very dramatically. And by dramatically, I mean the level of

440
00:23:25,080 --> 00:23:27,200
Speaker 1: government activation that we had in World War two. And

441
00:23:27,240 --> 00:23:29,560
Speaker 1: World War two we spent roughly fifty of g d

442
00:23:29,640 --> 00:23:31,680
Speaker 1: P on the war effort. We need to spend roughly

443
00:23:31,720 --> 00:23:35,480
Speaker 1: fifty of GDP on the climate crisis for several years

444
00:23:35,480 --> 00:23:39,800
Speaker 1: sustained in order to actually avert it. So that suggests

445
00:23:39,880 --> 00:23:43,040
Speaker 1: that you do think there's going to be some technological

446
00:23:43,280 --> 00:23:46,720
Speaker 1: magic bullet gonna appear out of nowhere. Well, if you

447
00:23:46,720 --> 00:23:50,200
Speaker 1: look at World War two, the government went to Ford

448
00:23:50,240 --> 00:23:52,679
Speaker 1: and said we need you to build airplanes, not cars.

449
00:23:53,119 --> 00:23:54,840
Speaker 1: And actually there's a chart in my book that shows

450
00:23:54,840 --> 00:23:57,280
Speaker 1: that the output of cars dropped. We need to get

451
00:23:57,320 --> 00:23:59,360
Speaker 1: to a similar point where we say there's certain things

452
00:23:59,359 --> 00:24:01,280
Speaker 1: but just not going to do for a while, because

453
00:24:01,320 --> 00:24:04,200
Speaker 1: we need to do these other things. There are great technologies.

454
00:24:04,240 --> 00:24:06,960
Speaker 1: We don't need to invent some magic bullet that doesn't exist.

455
00:24:07,280 --> 00:24:09,119
Speaker 1: We just need to build a lot of what we

456
00:24:09,160 --> 00:24:10,680
Speaker 1: already know how to build. Like we need to build

457
00:24:10,680 --> 00:24:12,800
Speaker 1: a lot of nuclear power plants. We need to build

458
00:24:12,840 --> 00:24:14,680
Speaker 1: a lot of these ponds in the desert that can

459
00:24:14,760 --> 00:24:19,200
Speaker 1: draw down carbon. There's a thousand and one different things

460
00:24:19,240 --> 00:24:20,800
Speaker 1: that we need to build. We just need to take

461
00:24:20,800 --> 00:24:24,600
Speaker 1: our physical capital and pointed at that. And when you

462
00:24:24,680 --> 00:24:27,920
Speaker 1: do that at that scale, incredible things become possible. So

463
00:24:28,560 --> 00:24:31,000
Speaker 1: during World War two, for a motor company built a

464
00:24:31,040 --> 00:24:34,440
Speaker 1: planet was called the willow Run Facility, and it willow Run.

465
00:24:34,480 --> 00:24:37,439
Speaker 1: They built the B seventeen Liberator bomber. Now that's a

466
00:24:37,720 --> 00:24:41,679
Speaker 1: four engine bomber with lots of gun turrets to defend

467
00:24:41,680 --> 00:24:46,679
Speaker 1: against fires. At peak production, they finished they finished one

468
00:24:46,720 --> 00:24:51,520
Speaker 1: of these every hour. They finished a complete airplane every hour.

469
00:24:52,359 --> 00:24:56,600
Speaker 1: And my point is, once we decide to take our

470
00:24:56,640 --> 00:25:00,600
Speaker 1: attention and allocate our attention to what the problem is,

471
00:25:00,960 --> 00:25:03,040
Speaker 1: we can read alright, our physical capital we have plenty

472
00:25:03,040 --> 00:25:05,639
Speaker 1: of physical coupital. People say, oh, you can't build nuclear

473
00:25:05,680 --> 00:25:07,680
Speaker 1: power plants fast enough. That's if you built them in

474
00:25:07,760 --> 00:25:09,720
Speaker 1: peacetime mode. If you built them in wartime mode, you

475
00:25:09,760 --> 00:25:12,440
Speaker 1: could build them very rapidly. So when you say this

476
00:25:12,560 --> 00:25:16,600
Speaker 1: requires a substantial commitment of capital, let's put a dollar

477
00:25:16,680 --> 00:25:18,920
Speaker 1: amount on that, or you talk half of GDP. So

478
00:25:19,080 --> 00:25:23,600
Speaker 1: I'm half trillion dollars just in the US alone. Now,

479
00:25:23,840 --> 00:25:28,359
Speaker 1: we just passed a climate bill arguably, um that was

480
00:25:28,400 --> 00:25:31,440
Speaker 1: a couple of billion dollars, a hundred billion dollars maybe

481
00:25:31,480 --> 00:25:34,800
Speaker 1: over ten years. And it was like pulling teeth. It

482
00:25:34,920 --> 00:25:37,760
Speaker 1: was a miracle that just managed to skate through. And

483
00:25:37,920 --> 00:25:40,560
Speaker 1: that's a fraction of a trillion dollars. How are you

484
00:25:40,560 --> 00:25:42,960
Speaker 1: going to get ten x or a hundred x that?

485
00:25:43,480 --> 00:25:45,639
Speaker 1: Do things have to get much worse before they get

486
00:25:45,760 --> 00:25:48,000
Speaker 1: much better? Yeah? I mean there's a book about the

487
00:25:48,040 --> 00:25:51,640
Speaker 1: climate crisis called Ministry for the Future Kim Stanley Robinson,

488
00:25:52,160 --> 00:25:55,639
Speaker 1: and the book starts with a devastating heat event in

489
00:25:55,760 --> 00:25:59,240
Speaker 1: India where tens of millions of people die. I don't

490
00:25:59,440 --> 00:26:02,240
Speaker 1: know what it takes, but I can tell you it's

491
00:26:02,280 --> 00:26:03,720
Speaker 1: only going to get worse. It's going to get a

492
00:26:03,800 --> 00:26:07,400
Speaker 1: lot worse, and at some point, hopefully people enough people

493
00:26:07,400 --> 00:26:09,720
Speaker 1: will wake up and say no, no, we really actually

494
00:26:09,880 --> 00:26:13,600
Speaker 1: have to get into a wartime footing. So up till now,

495
00:26:14,000 --> 00:26:17,320
Speaker 1: a huge swath of the population has been that's my

496
00:26:17,440 --> 00:26:20,600
Speaker 1: grandkids problems? What what wakes them up? Is it that

497
00:26:20,840 --> 00:26:23,840
Speaker 1: sort of event? I mean, you see what's happening in California,

498
00:26:23,840 --> 00:26:26,200
Speaker 1: you see what's going on in lots of the United

499
00:26:26,240 --> 00:26:30,040
Speaker 1: States with droughts. It seems like people are starting to

500
00:26:30,119 --> 00:26:33,480
Speaker 1: pay attention. How absolutely. The Yale does an incredible survey

501
00:26:33,600 --> 00:26:37,120
Speaker 1: of climate attitudes, and it is very clear that even

502
00:26:37,160 --> 00:26:40,080
Speaker 1: in the US, which has been lagging on this, a

503
00:26:40,400 --> 00:26:43,800
Speaker 1: significant majority of people believe that the climate crisis is real,

504
00:26:43,960 --> 00:26:46,080
Speaker 1: that is caused by humans, and that government should do

505
00:26:46,160 --> 00:26:49,040
Speaker 1: something about it. So I actually believe this is going

506
00:26:49,119 --> 00:26:51,639
Speaker 1: from a kind of losing proposition for politicians to a

507
00:26:51,680 --> 00:26:54,280
Speaker 1: winning proposition, and I think politicians need to lean much

508
00:26:54,320 --> 00:26:57,520
Speaker 1: more into it. Most of them still aren't willing to

509
00:26:57,560 --> 00:27:01,520
Speaker 1: acknowledge the full extent of this, and the physics of

510
00:27:01,600 --> 00:27:05,880
Speaker 1: this crisis are extraordinary. So because of all the CEO

511
00:27:05,960 --> 00:27:08,840
Speaker 1: two we've put in the atmosphere, the amount of heat

512
00:27:08,920 --> 00:27:11,080
Speaker 1: that we're now trapping that used to radiate out of

513
00:27:11,119 --> 00:27:13,399
Speaker 1: the space. Do you know how much heat it is?

514
00:27:13,800 --> 00:27:18,760
Speaker 1: It's four Hiroshima sized nuclear bombs every second. It's insane

515
00:27:18,840 --> 00:27:20,800
Speaker 1: that I read that in your book and I was like, no, no,

516
00:27:20,920 --> 00:27:24,280
Speaker 1: he must be in every week, every second, every second. Now,

517
00:27:24,680 --> 00:27:27,440
Speaker 1: imagine for a moment you had alien spaceships above Earth

518
00:27:27,760 --> 00:27:30,119
Speaker 1: throwing four here she mus as nuclear bombs into our

519
00:27:30,119 --> 00:27:33,080
Speaker 1: atmosphere every second. That would put us on a wartime place.

520
00:27:33,119 --> 00:27:35,359
Speaker 1: And what will we do? Yeah, we would drop everything, right,

521
00:27:35,440 --> 00:27:37,680
Speaker 1: we would be like, they're trying to kill us. We

522
00:27:37,800 --> 00:27:39,240
Speaker 1: have to get rid of them. I mean, we made

523
00:27:39,280 --> 00:27:42,760
Speaker 1: a movie about it called Independence Day. Four nuclear bombs

524
00:27:42,920 --> 00:27:46,240
Speaker 1: every second and it's just every minute of every hour

525
00:27:46,359 --> 00:27:49,160
Speaker 1: of every day. It's a mind boggling amount of heat.

526
00:27:50,119 --> 00:27:51,800
Speaker 1: So there's a couple of other things in the book

527
00:27:51,840 --> 00:27:55,880
Speaker 1: I wanted to touch on. Um you mentioned alien visitors

528
00:27:56,320 --> 00:28:00,040
Speaker 1: will hold off on the Fermi paradox discussion because what

529
00:28:00,119 --> 00:28:03,439
Speaker 1: he wants to hear me babbel about that. But one

530
00:28:03,480 --> 00:28:05,560
Speaker 1: of the things I thought was kind of interesting is

531
00:28:06,080 --> 00:28:10,159
Speaker 1: the transition of the nature of scarcity. You right, it

532
00:28:10,359 --> 00:28:13,200
Speaker 1: changes the way we measure human effort. It makes it

533
00:28:13,320 --> 00:28:17,760
Speaker 1: more difficult, and we need increasingly more sophisticated ways of

534
00:28:18,000 --> 00:28:22,560
Speaker 1: providing incentives to sustain unnecessary level of effort. Flesh that

535
00:28:22,640 --> 00:28:26,480
Speaker 1: out a little more so if you think of hunter gatherers, right,

536
00:28:26,520 --> 00:28:28,680
Speaker 1: I mean, you can see the results of effort immediately,

537
00:28:28,840 --> 00:28:30,080
Speaker 1: Like you go out to the forest, you have to

538
00:28:30,119 --> 00:28:32,640
Speaker 1: come back with something or not. So it's very easy

539
00:28:32,680 --> 00:28:34,920
Speaker 1: to create incentives like if you don't find something, go

540
00:28:35,000 --> 00:28:37,000
Speaker 1: back out and come back with something, where you go hungry.

541
00:28:37,119 --> 00:28:40,040
Speaker 1: Right when you go to agriculture, you have these you

542
00:28:40,160 --> 00:28:41,760
Speaker 1: need to see, you need to take care of it,

543
00:28:42,120 --> 00:28:43,920
Speaker 1: and you don't know how big a harvest you're gonna get,

544
00:28:43,960 --> 00:28:47,480
Speaker 1: so you need a little more sophisticated incentives. And a

545
00:28:47,560 --> 00:28:50,320
Speaker 1: lot of those incentives were often provided via religion, religions

546
00:28:50,560 --> 00:28:52,800
Speaker 1: saying you have to apply yourself to this backbreaking work

547
00:28:52,840 --> 00:28:55,400
Speaker 1: because it's the word work of the lord, etcetera. And

548
00:28:55,960 --> 00:28:58,520
Speaker 1: then when we went over to capital, now it gets

549
00:28:58,560 --> 00:29:01,000
Speaker 1: even more complicated because you might not see results of

550
00:29:01,080 --> 00:29:04,720
Speaker 1: some effort for many, many years. I actually think when

551
00:29:04,800 --> 00:29:07,680
Speaker 1: I say more sophisticate incentives, in the book, I talk

552
00:29:07,720 --> 00:29:10,560
Speaker 1: a lot about just freeing up humans to pursue their

553
00:29:10,640 --> 00:29:14,760
Speaker 1: interests to make it so that you can freely allocate attention.

554
00:29:15,760 --> 00:29:18,880
Speaker 1: And I'm always very inspired by mathematics, like, you can't

555
00:29:18,880 --> 00:29:21,800
Speaker 1: get rich as I'm working mathematician basically. I mean, yes,

556
00:29:21,840 --> 00:29:23,200
Speaker 1: if you wind up going to Wall Street, you can,

557
00:29:23,240 --> 00:29:25,160
Speaker 1: but if you actually keep working as a mathematicians, that's

558
00:29:25,200 --> 00:29:28,560
Speaker 1: not a you know, there's also no patents, and you know,

559
00:29:29,440 --> 00:29:32,560
Speaker 1: the only thing math works on recognition by peers. And

560
00:29:32,640 --> 00:29:35,560
Speaker 1: there's some prices. There's like the famous Fields Medal, and

561
00:29:35,760 --> 00:29:38,440
Speaker 1: there's some other prices. And yet the amount of math

562
00:29:38,560 --> 00:29:41,600
Speaker 1: that's been produced over the last you know, a few decades,

563
00:29:41,640 --> 00:29:45,239
Speaker 1: it's just mind blowing extraordinary. And I believe we need

564
00:29:45,320 --> 00:29:48,480
Speaker 1: to bring that type of model to many, many more

565
00:29:48,720 --> 00:29:51,440
Speaker 1: parts of the economy and parts of activities. So in

566
00:29:51,520 --> 00:29:54,400
Speaker 1: a way, what all of world after Capital is about

567
00:29:54,520 --> 00:29:59,440
Speaker 1: is how can we shrink all the explicitly incentivized economic

568
00:29:59,480 --> 00:30:02,960
Speaker 1: activity where there's an explicit okay, you go to work

569
00:30:03,000 --> 00:30:05,360
Speaker 1: and you get paid a wage kind of thing, and

570
00:30:05,440 --> 00:30:08,640
Speaker 1: here's a market transaction. How can we shrink that and

571
00:30:08,800 --> 00:30:12,400
Speaker 1: make room for things that are super super important but

572
00:30:12,720 --> 00:30:16,280
Speaker 1: cannot have prices, cannot be economically incentivized. Let me give

573
00:30:16,320 --> 00:30:19,200
Speaker 1: concrete examples of that. Obviously, we've talked about the climate crisis,

574
00:30:19,320 --> 00:30:22,320
Speaker 1: but let's talk about death from above. Like every million

575
00:30:22,520 --> 00:30:24,800
Speaker 1: years or so, the Earth gets hit by something very

576
00:30:24,880 --> 00:30:28,360
Speaker 1: large out of space. That's very, very bad when it happens,

577
00:30:28,960 --> 00:30:31,760
Speaker 1: But there's no market for allocating resources to that. There's

578
00:30:31,800 --> 00:30:35,000
Speaker 1: no supply and demand for it. So we as humanity

579
00:30:35,080 --> 00:30:37,640
Speaker 1: need to decide that this is a real problem and

580
00:30:37,720 --> 00:30:39,960
Speaker 1: we ought to be working on it now, aren't we

581
00:30:40,240 --> 00:30:45,400
Speaker 1: tracking various large observed asteroids? And we are, But the

582
00:30:45,480 --> 00:30:47,600
Speaker 1: amount of effort we're putting into this relative to the

583
00:30:47,680 --> 00:30:50,200
Speaker 1: size of the problem is minuscule. The number of people

584
00:30:50,240 --> 00:30:53,360
Speaker 1: who sort of truly globally work full time on this

585
00:30:54,040 --> 00:30:56,880
Speaker 1: is a tiny fraction of the people we actually should have.

586
00:30:57,040 --> 00:30:59,520
Speaker 1: And we're also not working sufficiently on Like what will

587
00:30:59,560 --> 00:31:03,360
Speaker 1: we do if we detective one that's clearly headed for us? Right? Well,

588
00:31:03,400 --> 00:31:07,680
Speaker 1: you send Bruce Willis up exactly he takes it. He does.

589
00:31:07,800 --> 00:31:11,520
Speaker 1: I mean, it's not unknown. We know the regular major

590
00:31:12,040 --> 00:31:16,560
Speaker 1: extinction events. There's a real interesting theory that as the

591
00:31:16,640 --> 00:31:19,440
Speaker 1: Sun goes around the galaxy and passes over and above

592
00:31:20,000 --> 00:31:23,160
Speaker 1: the galactic plane that affects the asteroid belt out and

593
00:31:23,240 --> 00:31:27,000
Speaker 1: the famous sort cloud a lot of these objects, which

594
00:31:27,080 --> 00:31:30,080
Speaker 1: is full three six around. So we know all of this.

595
00:31:30,560 --> 00:31:33,840
Speaker 1: And here's the interesting thing. When we went from the

596
00:31:34,040 --> 00:31:35,960
Speaker 1: Graian Age to the Industrial age, we didn't get rid

597
00:31:36,000 --> 00:31:39,240
Speaker 1: of agriculture. This agriculture today, right, we all eat food

598
00:31:39,360 --> 00:31:41,600
Speaker 1: that's grown in agriculture. But what we did is we

599
00:31:41,760 --> 00:31:44,840
Speaker 1: shrunk how much human attention is required to do agriculture,

600
00:31:44,880 --> 00:31:46,520
Speaker 1: and we took it from being like eight percent of

601
00:31:46,600 --> 00:31:49,880
Speaker 1: human attention to like sub ten percent. It's less than

602
00:31:49,920 --> 00:31:52,920
Speaker 1: two percent in the United States. It's tiny. So what

603
00:31:53,040 --> 00:31:54,640
Speaker 1: I want to do is let's do the same with

604
00:31:54,720 --> 00:31:57,800
Speaker 1: the rest of the economic sphere. I'm not an anti capitalist,

605
00:31:57,840 --> 00:31:59,880
Speaker 1: I'm not a d growth person. I'm not suggesting we

606
00:32:00,000 --> 00:32:02,080
Speaker 1: should get rid of markets. I'm just saying we should

607
00:32:02,120 --> 00:32:05,600
Speaker 1: compress market based activity from observing much of human attention

608
00:32:05,880 --> 00:32:08,280
Speaker 1: to observing maybe thirty percent of human attention, and we

609
00:32:08,280 --> 00:32:11,200
Speaker 1: should free the rest up to work on these incredibly

610
00:32:11,280 --> 00:32:13,360
Speaker 1: important things. Some of them are threats and some of

611
00:32:13,400 --> 00:32:17,480
Speaker 1: them are opportunities, right, opportunities to cure cancer, opportunity to

612
00:32:18,440 --> 00:32:22,680
Speaker 1: create incredible wildlife habitats, restore those wildlife habitats, opportunity to

613
00:32:22,720 --> 00:32:25,719
Speaker 1: travel to space. I mean all these opportunities that were

614
00:32:25,760 --> 00:32:28,320
Speaker 1: not paying attention to because they're not again, they're not

615
00:32:28,480 --> 00:32:31,160
Speaker 1: really market price based and can't be market price based.

616
00:32:31,200 --> 00:32:34,200
Speaker 1: There's just no prices for them. So the conclusion of

617
00:32:34,240 --> 00:32:36,960
Speaker 1: the book had a list of action goals, which was

618
00:32:37,080 --> 00:32:40,640
Speaker 1: not what I was expecting in a book on venture

619
00:32:40,680 --> 00:32:48,320
Speaker 1: capital and the world after capital. Mindfulness, climate crisis, democracy, decentralization,

620
00:32:48,600 --> 00:32:55,320
Speaker 1: improving learning, and humanism. Address whichever those you feel like. Well,

621
00:32:55,360 --> 00:32:59,840
Speaker 1: these are all core components of how to have a

622
00:33:00,760 --> 00:33:04,560
Speaker 1: hopefully a transition that's not a violent transition. Right. These

623
00:33:04,600 --> 00:33:06,680
Speaker 1: are all about how could we get out of the

624
00:33:06,720 --> 00:33:10,120
Speaker 1: industrial age into the knowledge age without some kind of

625
00:33:10,160 --> 00:33:13,920
Speaker 1: colismic event, without a world war, without killing billions of

626
00:33:13,960 --> 00:33:17,719
Speaker 1: people through the climate crisis. Right. They're also all components

627
00:33:17,760 --> 00:33:20,320
Speaker 1: of what a knowledge age society might look like. Right,

628
00:33:20,440 --> 00:33:24,240
Speaker 1: So let's talk about mindfulness for a second. We're constantly

629
00:33:24,760 --> 00:33:28,240
Speaker 1: assaulted with new information. Now this you know, our brains

630
00:33:28,360 --> 00:33:30,960
Speaker 1: evolved in a in an environment where when you saw

631
00:33:30,960 --> 00:33:32,920
Speaker 1: a cat there was an actual cat. Now there's an

632
00:33:32,920 --> 00:33:35,360
Speaker 1: infinity of cat pictures. So if you don't work on

633
00:33:36,200 --> 00:33:38,960
Speaker 1: how you how much you're in control of your mind.

634
00:33:39,640 --> 00:33:43,080
Speaker 1: External sources will control your mind. So mindfulness, which is

635
00:33:43,120 --> 00:33:44,920
Speaker 1: a much abused word, but it has become much more

636
00:33:45,000 --> 00:33:49,920
Speaker 1: important in the world where we're constantly assaulted by information flows. Right, Um,

637
00:33:50,000 --> 00:33:53,360
Speaker 1: let's talk about humanism for a moment. Humanism is about

638
00:33:54,000 --> 00:33:57,479
Speaker 1: recognizing that humans are the prime movers on this planet.

639
00:33:58,040 --> 00:33:59,880
Speaker 1: We are the ones who brought about the climate crisis.

640
00:34:00,000 --> 00:34:01,840
Speaker 1: We're the ones who could, in theory, solve it or

641
00:34:02,200 --> 00:34:04,880
Speaker 1: wind up getting wiped up by it. And it's about

642
00:34:04,920 --> 00:34:07,680
Speaker 1: this idea that you know, with great power it comes

643
00:34:07,760 --> 00:34:10,960
Speaker 1: great responsibility, and so we are responsible for the whales,

644
00:34:11,000 --> 00:34:13,319
Speaker 1: not the whales. For us, there is at the moment,

645
00:34:13,440 --> 00:34:16,160
Speaker 1: because we're in this transition period already, and because things

646
00:34:16,200 --> 00:34:19,520
Speaker 1: are going so poorly for so many people in this transition,

647
00:34:19,960 --> 00:34:22,239
Speaker 1: there's now a flight back to religion. There's a flight

648
00:34:22,320 --> 00:34:25,000
Speaker 1: to populism, and a big part of the book is

649
00:34:25,000 --> 00:34:29,000
Speaker 1: about no, there is a secular alternative way of thinking

650
00:34:29,200 --> 00:34:36,520
Speaker 1: about society that embraces science, that embraces progress, that embraces

651
00:34:36,719 --> 00:34:40,120
Speaker 1: humans and all types of humans, and that recognizes that

652
00:34:40,239 --> 00:34:42,960
Speaker 1: we are first and foremost human and only secondarily are

653
00:34:43,000 --> 00:34:46,480
Speaker 1: we American or Russian, or male or female or something else.

654
00:34:46,600 --> 00:34:49,400
Speaker 1: You know, these are all secondarily but primarily where humans

655
00:34:49,440 --> 00:34:52,440
Speaker 1: and humans are fundamentally different from all the other species.

656
00:34:53,200 --> 00:34:58,120
Speaker 1: Quite fascinating. So let's talk about the current state of

657
00:34:58,160 --> 00:35:02,040
Speaker 1: the world for venture capitalists. We've seen valuations come way

658
00:35:02,120 --> 00:35:06,319
Speaker 1: down for public companies. They're pretty reasonably price these days,

659
00:35:06,719 --> 00:35:11,080
Speaker 1: about sixteen times for the SMP five. That's historically more

660
00:35:11,160 --> 00:35:13,880
Speaker 1: or less average. Where do you see the state of

661
00:35:13,920 --> 00:35:17,560
Speaker 1: the world in early stage valuations? How are they holding up?

662
00:35:18,200 --> 00:35:21,960
Speaker 1: A year ago, late stage valuations had gone just bonkers.

663
00:35:22,480 --> 00:35:24,480
Speaker 1: Tell us a little bit about what's going on today.

664
00:35:25,320 --> 00:35:28,280
Speaker 1: The correction always basically is a trickle down type of correction.

665
00:35:28,360 --> 00:35:31,200
Speaker 1: It happens very rapidly in the public markets. Then you

666
00:35:31,320 --> 00:35:33,839
Speaker 1: still get some high price private rounds that either we're

667
00:35:33,840 --> 00:35:36,200
Speaker 1: in the works or they have a lot of structure.

668
00:35:36,600 --> 00:35:39,320
Speaker 1: On the later stage markets, you know, it's it's a

669
00:35:39,440 --> 00:35:41,799
Speaker 1: there's a headline number, but then nobody talks about all

670
00:35:41,800 --> 00:35:44,719
Speaker 1: the warr and coverage that's behind the scenes. So and

671
00:35:45,400 --> 00:35:48,160
Speaker 1: then the early stage valuations tend to sort of lag

672
00:35:48,239 --> 00:35:50,880
Speaker 1: behind all of that. But we're seeing early stage valuations

673
00:35:50,920 --> 00:35:54,120
Speaker 1: come down. Um and as a firm, we've always been

674
00:35:54,120 --> 00:35:56,839
Speaker 1: disciplined on valuations, so we we just let a lot

675
00:35:56,880 --> 00:35:58,480
Speaker 1: of things go where we just thought it was are

676
00:35:58,560 --> 00:36:02,279
Speaker 1: they down off the peak or are they cheap and attractive?

677
00:36:02,800 --> 00:36:05,520
Speaker 1: The down off the peak. Whether they're cheap or attractive,

678
00:36:05,600 --> 00:36:08,520
Speaker 1: I think, you know, time will tell. But we are

679
00:36:08,680 --> 00:36:11,799
Speaker 1: back in a situation where you know, there are seed

680
00:36:11,880 --> 00:36:15,520
Speaker 1: deals getting done that the low ten million dollars certainly

681
00:36:15,560 --> 00:36:19,440
Speaker 1: below twenty million dollars, and you know seed rounds that

682
00:36:19,520 --> 00:36:21,759
Speaker 1: have a reasonable size. So you know, for a while

683
00:36:21,840 --> 00:36:25,239
Speaker 1: we were seeing these ten million dollars seed rounds um

684
00:36:25,600 --> 00:36:28,960
Speaker 1: sounds pricey, Yeah, and and that's not happening anymore. But

685
00:36:30,200 --> 00:36:33,880
Speaker 1: even scriventest, we've also always tried to basically be at

686
00:36:33,960 --> 00:36:37,200
Speaker 1: the next era, at the next thesis, and evolve our

687
00:36:37,280 --> 00:36:39,960
Speaker 1: thesis before everybody else gets there, and once everybody else

688
00:36:39,960 --> 00:36:42,680
Speaker 1: gets there, trying to evolve our thesis. So, for example,

689
00:36:42,719 --> 00:36:44,880
Speaker 1: in the Climate Fund, we've made any number of reasonably

690
00:36:44,920 --> 00:36:49,000
Speaker 1: pressed investments, very reasonably presced. So I always assumed it

691
00:36:49,120 --> 00:36:52,520
Speaker 1: was tied to the public markets. But sometimes you just

692
00:36:52,600 --> 00:36:55,200
Speaker 1: don't realize when you have a good couple of years

693
00:36:55,280 --> 00:36:57,719
Speaker 1: in a row in the public markets, like we saw

694
00:36:57,760 --> 00:37:02,360
Speaker 1: in the tens, pretty much straight up through one. You

695
00:37:02,480 --> 00:37:04,600
Speaker 1: see that impact in what people are looking for, what

696
00:37:04,719 --> 00:37:08,160
Speaker 1: sort of deals get done, and and valuations generally. I

697
00:37:08,239 --> 00:37:13,640
Speaker 1: always find it relatively surprising how much private early stage

698
00:37:13,719 --> 00:37:18,360
Speaker 1: valuations are tied to public markets, because right, but but

699
00:37:18,440 --> 00:37:21,680
Speaker 1: our holding periods are five, eight, ten years, and so

700
00:37:21,960 --> 00:37:24,680
Speaker 1: like what's the current public and so there's a couple

701
00:37:24,719 --> 00:37:27,640
Speaker 1: of different explanations. One obviously, it's just investor sentiment, right,

702
00:37:28,400 --> 00:37:31,480
Speaker 1: you know, when investors are like bearish because of what

703
00:37:31,560 --> 00:37:33,760
Speaker 1: they're seeing in the public markets, they take a bearish

704
00:37:33,800 --> 00:37:36,880
Speaker 1: attitude towards their own investing. We try, as soon as graventest,

705
00:37:36,960 --> 00:37:39,640
Speaker 1: we try to have a pretty steady pace as one

706
00:37:39,680 --> 00:37:42,600
Speaker 1: way of contracting our own sort of you know, whatever

707
00:37:42,680 --> 00:37:46,200
Speaker 1: our own emotions may be about the public markets. There is, however,

708
00:37:46,239 --> 00:37:49,920
Speaker 1: another effect that sometimes is underestimated, which is that the

709
00:37:49,960 --> 00:37:52,880
Speaker 1: people who give money interventure funds, so these are pension

710
00:37:52,960 --> 00:37:56,120
Speaker 1: funds and endowments and so forth, they have a certain

711
00:37:56,160 --> 00:37:58,680
Speaker 1: whips of from the public markets because when they're feeling

712
00:37:58,680 --> 00:38:01,680
Speaker 1: flush on the public markets, then the private allocation, you know,

713
00:38:01,840 --> 00:38:03,880
Speaker 1: as a percentage of their overall portfolio. They have a

714
00:38:03,880 --> 00:38:06,200
Speaker 1: certain target in mind. Now, when the public markets come

715
00:38:06,239 --> 00:38:08,360
Speaker 1: down a lot. All of a sudden, they're overallocated, so

716
00:38:08,480 --> 00:38:11,000
Speaker 1: they want to pull back. So there is a mechanism

717
00:38:11,080 --> 00:38:14,800
Speaker 1: by which the current public markets transmit into the private markets.

718
00:38:15,440 --> 00:38:18,400
Speaker 1: There's a real financial mechanism. There's a psychological mechanism and

719
00:38:18,480 --> 00:38:21,680
Speaker 1: a real financial mechanism by which some transmission, some contagion

720
00:38:21,760 --> 00:38:24,160
Speaker 1: basically happens from the public markets into private But it

721
00:38:24,200 --> 00:38:27,200
Speaker 1: doesn't make very much sense. Like if people were sort

722
00:38:27,239 --> 00:38:30,560
Speaker 1: of more cognizant of both the emotional reaction and this mechanism,

723
00:38:30,640 --> 00:38:33,759
Speaker 1: they'd be like, well, yeah, but innovation is happening at

724
00:38:33,840 --> 00:38:35,880
Speaker 1: some pace in some area. There's some innovation that we

725
00:38:35,920 --> 00:38:38,200
Speaker 1: should be funding that innovation. So I'm just I'm just

726
00:38:38,320 --> 00:38:45,759
Speaker 1: making notes, and investors are irrational, so profound insight right here. Yeah,

727
00:38:46,040 --> 00:38:49,160
Speaker 1: you've never heard this one before. So to put that

728
00:38:49,239 --> 00:38:55,960
Speaker 1: into a little context, one very founder friendly deals. Now

729
00:38:56,040 --> 00:38:59,080
Speaker 1: it seems like a little more investor friendly, fair assessment

730
00:38:59,239 --> 00:39:02,200
Speaker 1: or not quite there yet. Well, when it comes to

731
00:39:02,320 --> 00:39:05,839
Speaker 1: found a friendly versus investor friendly, there's a lot more

732
00:39:05,880 --> 00:39:09,000
Speaker 1: to a deal than valuation is all the other terms.

733
00:39:09,640 --> 00:39:13,680
Speaker 1: And while I believe we will see a h correction

734
00:39:13,920 --> 00:39:18,359
Speaker 1: on valuation, that's pretty significant. I don't think we're gonna

735
00:39:18,480 --> 00:39:21,319
Speaker 1: go back to where venture capital was twenty or thirty

736
00:39:21,400 --> 00:39:25,280
Speaker 1: years ago that had all these super draconian terms. Certainly

737
00:39:25,520 --> 00:39:27,680
Speaker 1: even at the early stage, even at the early stage,

738
00:39:27,719 --> 00:39:30,200
Speaker 1: there were all these like there were redemption provisions in

739
00:39:30,280 --> 00:39:33,839
Speaker 1: early stage deals. I don't think that's going to come back. Um,

740
00:39:34,760 --> 00:39:37,440
Speaker 1: we are not fans of structure in later stage deals.

741
00:39:37,480 --> 00:39:39,719
Speaker 1: Like just to give a good example, UM, And I

742
00:39:39,800 --> 00:39:42,160
Speaker 1: was still on the board of Twilio. Um, Tweli, you

743
00:39:42,280 --> 00:39:45,440
Speaker 1: had the option of doing a totally clean, no structure

744
00:39:45,480 --> 00:39:48,480
Speaker 1: around and called it a billion one and a highly

745
00:39:48,560 --> 00:39:51,279
Speaker 1: structured round with like you know, we're gonna have a

746
00:39:51,360 --> 00:39:53,920
Speaker 1: full ratchet into an I p o at a billion five.

747
00:39:54,560 --> 00:39:56,760
Speaker 1: And I was, you know, some of the other investors

748
00:39:56,800 --> 00:39:59,160
Speaker 1: at the table really wanted the billion five number, bees

749
00:39:59,200 --> 00:40:01,320
Speaker 1: at the bigger headline. And I talked to Jeff and

750
00:40:01,360 --> 00:40:03,920
Speaker 1: I said, just make any sense. You don't actually know

751
00:40:04,000 --> 00:40:06,400
Speaker 1: what you deal is until many years. Just take the

752
00:40:06,480 --> 00:40:07,960
Speaker 1: deal where you know what the deal is today, and

753
00:40:08,000 --> 00:40:09,120
Speaker 1: you know what the deal is a year from now

754
00:40:09,160 --> 00:40:10,799
Speaker 1: and tiears from now, because it's not going to change

755
00:40:10,800 --> 00:40:13,799
Speaker 1: based on circumstances. And so Jeff took the clean deal

756
00:40:14,600 --> 00:40:16,920
Speaker 1: and that enabled Twiley to go public um when the

757
00:40:16,960 --> 00:40:19,520
Speaker 1: I p O window reopened, whereas at the billion five

758
00:40:19,600 --> 00:40:21,360
Speaker 1: deal they wouldn't have been able to go public. And

759
00:40:21,440 --> 00:40:23,239
Speaker 1: it worked in probably well for Twiley to become a

760
00:40:23,280 --> 00:40:27,800
Speaker 1: public company. Really interesting. So since we're comparing early stage

761
00:40:27,920 --> 00:40:32,160
Speaker 1: investments to the public world, lately, everybody has been looking

762
00:40:32,200 --> 00:40:34,680
Speaker 1: at different sectors. The past year, energy has done well,

763
00:40:34,800 --> 00:40:38,200
Speaker 1: technology not so much. Within venture, do you see that

764
00:40:38,360 --> 00:40:42,759
Speaker 1: same sort of segmentation different sectors have different Well, we

765
00:40:42,960 --> 00:40:45,600
Speaker 1: we were basically the first sort of venture firm to

766
00:40:45,640 --> 00:40:48,960
Speaker 1: have a dedicated climate fund, and now many of the

767
00:40:49,160 --> 00:40:51,960
Speaker 1: venture firms are falling suit, either adding a climate pocket

768
00:40:52,040 --> 00:40:55,320
Speaker 1: to the existing funds or a climate thesis or you know,

769
00:40:55,480 --> 00:40:58,080
Speaker 1: some people call a sustainability fund. Hours is very focused

770
00:40:58,120 --> 00:41:01,320
Speaker 1: on climate, so for instance, we don't deal with water waste.

771
00:41:01,600 --> 00:41:05,879
Speaker 1: It's strictly about atmospheric carbon. So there's a lot money

772
00:41:06,040 --> 00:41:09,360
Speaker 1: rotating into that sector. There's still a healthy set of

773
00:41:09,360 --> 00:41:12,839
Speaker 1: activity around Web three so you know with three, there's

774
00:41:12,920 --> 00:41:15,560
Speaker 1: still cryptow blockchain all that. Yeah, there's still a healthy

775
00:41:15,600 --> 00:41:19,080
Speaker 1: set of activity. I do think that certain kind of

776
00:41:19,840 --> 00:41:23,399
Speaker 1: software companies that had founded very easy to raise money.

777
00:41:23,600 --> 00:41:25,680
Speaker 1: I think of finding it a lot harder, just because

778
00:41:25,760 --> 00:41:28,560
Speaker 1: people have looked at and said, wow, I think we've

779
00:41:28,560 --> 00:41:31,640
Speaker 1: reached some stage of normalization in this market. You know, like,

780
00:41:32,800 --> 00:41:34,440
Speaker 1: not everything in this market is going to be a

781
00:41:34,480 --> 00:41:36,640
Speaker 1: fifty billion dollar outcome, and there's going to be many

782
00:41:36,840 --> 00:41:39,280
Speaker 1: much smaller outcomes, and so we need to adjust accordingly.

783
00:41:39,320 --> 00:41:41,600
Speaker 1: And also, many of these markets had just too many

784
00:41:41,640 --> 00:41:44,520
Speaker 1: companies raised venture capital doing basically more or less the

785
00:41:44,560 --> 00:41:47,480
Speaker 1: same thing. So it was easy to raise money for

786
00:41:47,560 --> 00:41:50,680
Speaker 1: a fund today a little more challenging even if you're

787
00:41:51,160 --> 00:41:54,760
Speaker 1: a pretty decent sized VC with a ten twenty year history.

788
00:41:55,239 --> 00:41:58,520
Speaker 1: Are they having difficulty going back to their clients saying, hey,

789
00:41:58,600 --> 00:42:01,880
Speaker 1: we're doing another billion dollars. You know, I think that

790
00:42:02,280 --> 00:42:04,279
Speaker 1: we will only see a year from an hour or

791
00:42:04,320 --> 00:42:07,320
Speaker 1: two years from Uh. There were a lot of funds

792
00:42:07,360 --> 00:42:10,520
Speaker 1: that had put out a lot of money very very rapidly. Uh,

793
00:42:10,640 --> 00:42:13,160
Speaker 1: and we'll see just how big the hangover is, but

794
00:42:13,280 --> 00:42:15,560
Speaker 1: we won't know that for some time. So some of

795
00:42:15,640 --> 00:42:19,120
Speaker 1: the folks who give advice to founders, like Jamathan and

796
00:42:19,320 --> 00:42:22,799
Speaker 1: Jason and the crew at the al In podcast, they've

797
00:42:22,840 --> 00:42:26,560
Speaker 1: been talking about preaching really about cutting costs and reducing

798
00:42:26,600 --> 00:42:29,080
Speaker 1: your burn rate and get ready for a tough year

799
00:42:29,160 --> 00:42:32,759
Speaker 1: or two. How do you see this environment? Is that

800
00:42:32,880 --> 00:42:36,040
Speaker 1: good advice or do you really have to, you know,

801
00:42:36,320 --> 00:42:38,840
Speaker 1: go all out and get more funding as opposed to

802
00:42:39,640 --> 00:42:42,840
Speaker 1: trying to make a more modest burn rate last longer.

803
00:42:43,320 --> 00:42:45,839
Speaker 1: This very little, one size fits all advice that makes

804
00:42:45,880 --> 00:42:49,840
Speaker 1: sense and fair. Nonetheless, we held a call earlier this

805
00:42:50,000 --> 00:42:53,439
Speaker 1: year for all of our portfolio companies UM and we said,

806
00:42:53,920 --> 00:42:56,840
Speaker 1: this really is a big adjustment, and it's not a

807
00:42:57,640 --> 00:43:01,040
Speaker 1: one or two months blip does It's a long term adjustment.

808
00:43:01,920 --> 00:43:05,120
Speaker 1: And it was great because we had some CEOs in

809
00:43:05,160 --> 00:43:07,560
Speaker 1: our portfolio who had managed through the implosion of the

810
00:43:07,640 --> 00:43:10,440
Speaker 1: dot com bubble, and they spoke about just how difficult

811
00:43:10,440 --> 00:43:14,359
Speaker 1: the funding environment can get. So generally speaking, we did

812
00:43:14,520 --> 00:43:17,400
Speaker 1: a lot in twenty one because we saw this coming.

813
00:43:17,719 --> 00:43:21,120
Speaker 1: To me, the biggest sign of the bubble really was

814
00:43:21,320 --> 00:43:23,279
Speaker 1: that we really were reaching the tail and was all

815
00:43:23,360 --> 00:43:25,759
Speaker 1: these incubation efforts that we're being raised. And I knew

816
00:43:25,800 --> 00:43:28,560
Speaker 1: this because I had raised money into an incubator towards

817
00:43:28,560 --> 00:43:30,400
Speaker 1: the end of the dotcom bubble, and I think when

818
00:43:30,440 --> 00:43:32,320
Speaker 1: investors think, oh, I don't even need the entrepreneur, I

819
00:43:32,360 --> 00:43:34,680
Speaker 1: can just start the company myself. That's kind of when

820
00:43:34,719 --> 00:43:37,600
Speaker 1: you know that it's gotten too easy, right, and that's

821
00:43:37,640 --> 00:43:39,680
Speaker 1: not gonna last. So in twenty one, we took a

822
00:43:39,719 --> 00:43:41,520
Speaker 1: lot of liquidity, we sold a lot of things that

823
00:43:41,600 --> 00:43:43,680
Speaker 1: we were able to sell, and we told all of

824
00:43:43,719 --> 00:43:49,439
Speaker 1: our portfolio companies to raise money. And so we last year. Yeah, well,

825
00:43:49,520 --> 00:43:53,400
Speaker 1: it's it's best to do things before a right, So

826
00:43:53,960 --> 00:43:56,279
Speaker 1: as a result, we have very few companies in our

827
00:43:56,320 --> 00:43:58,120
Speaker 1: portfolio that need to raise We have some, but we

828
00:43:58,200 --> 00:44:00,720
Speaker 1: have very few. And then you know, at the beginning

829
00:44:00,719 --> 00:44:02,920
Speaker 1: of this year, we told everybody who had raised successfully,

830
00:44:02,920 --> 00:44:04,840
Speaker 1: you've got to make this money last much longer than

831
00:44:04,880 --> 00:44:08,879
Speaker 1: you thought when you raised it. And so yes, absolutely, Um,

832
00:44:09,160 --> 00:44:12,879
Speaker 1: you know, companies were operating with very inefficient growth because

833
00:44:12,920 --> 00:44:15,880
Speaker 1: it was easy to fund inefficient growth. You could be

834
00:44:16,000 --> 00:44:20,120
Speaker 1: burning one to three four million dollars a month and

835
00:44:20,480 --> 00:44:24,440
Speaker 1: you know, if you were growing fortent, that was good enough. Um,

836
00:44:24,560 --> 00:44:27,479
Speaker 1: that's not going to be the case. So you'll either

837
00:44:27,719 --> 00:44:30,359
Speaker 1: growing very fast or you have something very compelling, when

838
00:44:30,440 --> 00:44:33,240
Speaker 1: which case you can raise money, or you are growing,

839
00:44:33,440 --> 00:44:37,600
Speaker 1: you know, but you are growing very very efficiently, right,

840
00:44:37,760 --> 00:44:40,279
Speaker 1: So being in this sort of fifty pc growth, but

841
00:44:40,520 --> 00:44:42,680
Speaker 1: you are super inefficient. That's gonna be a really tough

842
00:44:42,719 --> 00:44:46,000
Speaker 1: place to be, alright. So before I get to my

843
00:44:46,320 --> 00:44:49,960
Speaker 1: favorite questions, I have two questions I've been sitting on

844
00:44:50,760 --> 00:44:52,920
Speaker 1: sort of from the book and somewhe from your blog

845
00:44:53,400 --> 00:44:56,239
Speaker 1: continuations that I want to hear where you go with this.

846
00:44:56,440 --> 00:44:59,360
Speaker 1: And the first one is a quote from the book

847
00:44:59,719 --> 00:45:04,200
Speaker 1: mal this could not foresee the scientific breakthrough that enabled

848
00:45:04,239 --> 00:45:07,719
Speaker 1: the industrial revolution. I think you let him off the

849
00:45:07,800 --> 00:45:11,520
Speaker 1: hook a little too easy. It's just an abject failure

850
00:45:11,560 --> 00:45:16,880
Speaker 1: of imagination, and you are in the imagination business. The Malthusians.

851
00:45:17,200 --> 00:45:21,520
Speaker 1: Weren't these folks just unable to imagine any sort of

852
00:45:21,880 --> 00:45:28,640
Speaker 1: progress or technological development. Well, we have had more progress

853
00:45:28,760 --> 00:45:31,680
Speaker 1: and more technological development than people were able to imagine.

854
00:45:32,440 --> 00:45:35,160
Speaker 1: I think conversely, we're now in the opposite trap. We

855
00:45:35,360 --> 00:45:39,120
Speaker 1: can't imagine that things could get really, really bad. We

856
00:45:39,320 --> 00:45:42,239
Speaker 1: can't imagine that the climate crisis could disrupt our food

857
00:45:42,280 --> 00:45:44,800
Speaker 1: supply to the point where billion people start. We simply

858
00:45:44,840 --> 00:45:47,080
Speaker 1: can't wrap our head around this idea. So I think

859
00:45:47,120 --> 00:45:49,080
Speaker 1: we're in the opposite trap at the moment. We've we've

860
00:45:49,120 --> 00:45:52,200
Speaker 1: been so used to the successive progress, and we have

861
00:45:52,320 --> 00:45:57,160
Speaker 1: so neglected the engines that produce progress that I think

862
00:45:57,200 --> 00:45:58,920
Speaker 1: we're in the opposite trap at the moment. What what

863
00:45:59,120 --> 00:46:03,000
Speaker 1: are the other engines? Is it early stage investing from

864
00:46:03,120 --> 00:46:06,319
Speaker 1: governments when the project has a ten and twenty year

865
00:46:06,840 --> 00:46:08,600
Speaker 1: r O I that the private science want to do it?

866
00:46:09,040 --> 00:46:13,400
Speaker 1: Foundational research, we've not had a true breaks through in

867
00:46:13,600 --> 00:46:18,080
Speaker 1: science since quantum mechanics. It's a hundred years ago, so

868
00:46:18,360 --> 00:46:21,680
Speaker 1: general relativity and quantum mechanics a hundred years ago. Now,

869
00:46:21,760 --> 00:46:24,640
Speaker 1: we've made some progress in biology. Biology, we've had some

870
00:46:24,840 --> 00:46:29,160
Speaker 1: really good progress, but you know, you're talking fundamental science.

871
00:46:30,280 --> 00:46:33,040
Speaker 1: Fundament like I immediately think of semi conductors was a

872
00:46:33,160 --> 00:46:36,400
Speaker 1: giant Oh no, incredible progress, but fundamental science we've not

873
00:46:36,560 --> 00:46:40,560
Speaker 1: had a true big unlock in a hundred years now.

874
00:46:41,000 --> 00:46:43,560
Speaker 1: I think when we talk about engine of progress, this

875
00:46:43,800 --> 00:46:46,600
Speaker 1: also how hard is it to start a business? How

876
00:46:46,640 --> 00:46:49,320
Speaker 1: many regulations do you have to comply with? How expensive

877
00:46:49,400 --> 00:46:52,920
Speaker 1: is it to comply with those regulations. We're also talking

878
00:46:53,000 --> 00:46:57,200
Speaker 1: about we're still subsidizing oil and gas globally to the

879
00:46:57,280 --> 00:47:01,880
Speaker 1: tune of trillions of dollars subsizing oil and gas. It's crazy,

880
00:47:02,280 --> 00:47:04,680
Speaker 1: which by the way, helps to explain why so many

881
00:47:04,760 --> 00:47:09,640
Speaker 1: people have an incentive to either question the impact, the

882
00:47:09,719 --> 00:47:13,360
Speaker 1: source or the reality of climate change. Yes, there's forces

883
00:47:13,400 --> 00:47:15,800
Speaker 1: at work there, and and so I believe we're in

884
00:47:15,840 --> 00:47:17,960
Speaker 1: this sort of opposite trap today. And and you know,

885
00:47:18,280 --> 00:47:23,120
Speaker 1: people like to make fun of Greta Thunberg, but young kids,

886
00:47:23,520 --> 00:47:29,080
Speaker 1: young activists, understand the severity of the climate crisis in

887
00:47:29,160 --> 00:47:32,200
Speaker 1: a way that most adults don't seem to be willing

888
00:47:32,239 --> 00:47:35,280
Speaker 1: to accept. Right, I don't. I don't think climate change

889
00:47:35,400 --> 00:47:39,480
Speaker 1: is gonna impact my life. You know, I'm sixty. I'm

890
00:47:39,520 --> 00:47:42,399
Speaker 1: I'm going to run out the clock someone in our age.

891
00:47:42,640 --> 00:47:45,200
Speaker 1: The reality is you're not. You're not going to escape

892
00:47:45,880 --> 00:47:48,279
Speaker 1: You and I are not going to escape this. It's here,

893
00:47:48,400 --> 00:47:50,800
Speaker 1: it's now, and it's only going to get worse. I

894
00:47:50,880 --> 00:47:53,000
Speaker 1: don't doubt that for a second. But and here's the

895
00:47:53,120 --> 00:47:55,719
Speaker 1: here's the thing I think I challenge. We could live

896
00:47:55,800 --> 00:47:59,120
Speaker 1: in this amazing, incredible future, Like wouldn't you rather live

897
00:47:59,160 --> 00:48:02,560
Speaker 1: in a city that has mostly electric or all electric

898
00:48:02,600 --> 00:48:05,520
Speaker 1: cars in it? Like the air would be so much better.

899
00:48:05,760 --> 00:48:08,600
Speaker 1: Wouldn't you rather live in the world that has huge

900
00:48:09,040 --> 00:48:12,960
Speaker 1: like think of all the Midwest instead of growing corn

901
00:48:13,480 --> 00:48:17,120
Speaker 1: to feed cows, super inefficient if we can grow the

902
00:48:17,239 --> 00:48:19,680
Speaker 1: meat with the cows in the vat. Instead, we could

903
00:48:19,760 --> 00:48:23,360
Speaker 1: have like incredible forests, we could have incredible wildlife areas

904
00:48:23,440 --> 00:48:27,200
Speaker 1: in these airs, Like we could have this amazing, incredible future.

905
00:48:27,239 --> 00:48:28,800
Speaker 1: We could have energy out of the wazoo. If we

906
00:48:28,840 --> 00:48:32,239
Speaker 1: build more nuclear power, electricity could basically be almost free.

907
00:48:32,760 --> 00:48:35,680
Speaker 1: So we have this amazing thing we can go. Instead,

908
00:48:35,719 --> 00:48:38,440
Speaker 1: we're headed for this complete disaster, and we're mostly like,

909
00:48:40,680 --> 00:48:43,160
Speaker 1: I think that's a fair assessment. I think you definitely

910
00:48:43,239 --> 00:48:49,360
Speaker 1: have that, And I certainly see people my generation absolutely

911
00:48:49,440 --> 00:48:51,840
Speaker 1: think it's not going to impact them more minimum impact.

912
00:48:52,080 --> 00:48:54,879
Speaker 1: It's really their grandkids problem. Yeah, And it's just that's

913
00:48:55,040 --> 00:48:58,200
Speaker 1: totally utterly wrong. Alright. One other curveball I have to

914
00:48:58,280 --> 00:49:02,120
Speaker 1: ask you about, which in you've all know ah Harari

915
00:49:02,760 --> 00:49:07,160
Speaker 1: who says in sapiens, all value systems are based on

916
00:49:07,440 --> 00:49:12,920
Speaker 1: equally valid subjective narratives and humans have no privileged position

917
00:49:13,360 --> 00:49:17,759
Speaker 1: as a species. You say, he's wrong. Explain not just wrong,

918
00:49:17,840 --> 00:49:20,800
Speaker 1: it's completely dangerous because it opens the door to absolute

919
00:49:20,880 --> 00:49:23,759
Speaker 1: moral relativism. It's sort of like, well, if you believe that,

920
00:49:23,960 --> 00:49:27,240
Speaker 1: then you know the isis narrative is just as valid.

921
00:49:27,400 --> 00:49:30,080
Speaker 1: You know, um, and I just think that's wrong. And

922
00:49:30,200 --> 00:49:32,920
Speaker 1: I do think there's an objective thing, which is humans

923
00:49:33,040 --> 00:49:36,200
Speaker 1: have knowledge. And by knowledge, I mean I can read

924
00:49:36,280 --> 00:49:39,400
Speaker 1: a book today that somebody who else wrote in some

925
00:49:39,480 --> 00:49:41,799
Speaker 1: other part of the world a thousand years ago. Right.

926
00:49:42,520 --> 00:49:44,759
Speaker 1: No other species on the planet has this. I mean,

927
00:49:45,000 --> 00:49:47,320
Speaker 1: other species have amazing things about them, but none of

928
00:49:47,400 --> 00:49:50,680
Speaker 1: them has knowledge. And that puts us in a privileged position.

929
00:49:50,760 --> 00:49:53,880
Speaker 1: By the way, privilege comes with obligation. That's usually what

930
00:49:54,040 --> 00:49:55,960
Speaker 1: it used to mean. Today we think of privilege just

931
00:49:56,320 --> 00:49:58,200
Speaker 1: let's you do whatever you want, But it used to

932
00:49:58,239 --> 00:50:01,440
Speaker 1: mean that you had real obligations, right, And I believe

933
00:50:01,560 --> 00:50:03,520
Speaker 1: because we have the power of knowledge, we have real

934
00:50:03,600 --> 00:50:06,200
Speaker 1: obligations to other species. Other species don't have much of

935
00:50:06,200 --> 00:50:08,239
Speaker 1: an obligation to us, but we have an obligation to them.

936
00:50:08,440 --> 00:50:10,440
Speaker 1: And the interesting thing about what you said is, not

937
00:50:10,560 --> 00:50:14,080
Speaker 1: only does no other species have the ability to access

938
00:50:14,320 --> 00:50:18,560
Speaker 1: anything anybody has written any time in history, pretty much

939
00:50:18,680 --> 00:50:21,040
Speaker 1: this is the first generation that had access that in

940
00:50:21,120 --> 00:50:24,319
Speaker 1: that way, across pretty much across the whole board. Well,

941
00:50:24,600 --> 00:50:26,719
Speaker 1: this is the amazing thing about digital technology, right. We

942
00:50:26,800 --> 00:50:30,040
Speaker 1: could use it to make all the world knowledge accessible

943
00:50:30,120 --> 00:50:32,040
Speaker 1: to everybody in the world, and great things could come

944
00:50:32,080 --> 00:50:34,919
Speaker 1: from that, right. So there's some people like Ellen Musk

945
00:50:34,960 --> 00:50:36,920
Speaker 1: and others who are like, oh my god, the population

946
00:50:37,040 --> 00:50:39,080
Speaker 1: is gonna, you know, decrease a lot, and that will

947
00:50:39,120 --> 00:50:42,279
Speaker 1: be bad. I'm like, no, we have eight billion people

948
00:50:42,280 --> 00:50:45,080
Speaker 1: at the moment. Peak population at present trajectory might be

949
00:50:45,080 --> 00:50:46,600
Speaker 1: eleven billion, although if we don't get in top of

950
00:50:46,640 --> 00:50:49,959
Speaker 1: the climate crisis, it will decrease actually rapidly. But we're

951
00:50:50,040 --> 00:50:52,480
Speaker 1: making such poor use of it. Why because so many

952
00:50:52,560 --> 00:50:55,399
Speaker 1: people don't have access to knowledge, don't have a shot.

953
00:50:55,640 --> 00:50:57,760
Speaker 1: I always love the story of Ramanuja and the famous

954
00:50:57,760 --> 00:50:59,640
Speaker 1: mathematician who was to send a letter to Hardy, and

955
00:50:59,680 --> 00:51:02,200
Speaker 1: Hardy like, we should bring this guy over to England

956
00:51:02,239 --> 00:51:05,560
Speaker 1: and he wanted up being a very productive mathematician. There

957
00:51:05,640 --> 00:51:11,479
Speaker 1: are Einstein's and Remanue Jones and Eleanor Ostrom's and Marie

958
00:51:11,520 --> 00:51:15,879
Speaker 1: Carries all around the world today and we're not giving them.

959
00:51:16,200 --> 00:51:19,359
Speaker 1: So we're vastly undertapping human potential. And we can use

960
00:51:19,400 --> 00:51:22,480
Speaker 1: digital technology to change that and to give everybody access.

961
00:51:22,520 --> 00:51:24,279
Speaker 1: And that's one of the things, one of the great

962
00:51:24,320 --> 00:51:26,720
Speaker 1: opportunities that we have in this transition to the knowledge

963
00:51:26,760 --> 00:51:30,680
Speaker 1: age quite quite fascinating. So let me jump to my

964
00:51:30,760 --> 00:51:34,200
Speaker 1: favorite questions that I ask all of my guests, starting

965
00:51:34,280 --> 00:51:37,120
Speaker 1: with tell us, what kept you entertained over the past

966
00:51:37,200 --> 00:51:40,080
Speaker 1: couple of years? What have you been watching or or

967
00:51:40,200 --> 00:51:43,520
Speaker 1: listening to? I really don't watch much um at the moment.

968
00:51:43,800 --> 00:51:45,719
Speaker 1: The only thing I watched with any kind of regularity

969
00:51:45,840 --> 00:51:50,319
Speaker 1: is to being Hastenfelder's YouTube series called Science without the Gobbledegook.

970
00:51:51,120 --> 00:51:53,879
Speaker 1: I'll take a look at that. I'm a giant fan

971
00:51:54,000 --> 00:51:57,759
Speaker 1: of YouTube premium, and I'm always astonished that people I

972
00:51:57,840 --> 00:52:01,640
Speaker 1: know who are YouTube junkie spring for the eight bucks

973
00:52:01,680 --> 00:52:05,760
Speaker 1: a month to pull out commercials and distractions. But YouTube

974
00:52:05,840 --> 00:52:09,880
Speaker 1: is just endless rabbit hole. Well, YouTube is an example

975
00:52:10,000 --> 00:52:11,759
Speaker 1: of the best and the worst of the Internet all

976
00:52:11,800 --> 00:52:15,120
Speaker 1: in one place. Right, There's so much amazing knowledge, like

977
00:52:15,239 --> 00:52:18,160
Speaker 1: Sabina's video, it's very tassium. I mean, there's you could

978
00:52:18,239 --> 00:52:20,800
Speaker 1: learn almost anything from how to fix your dishwasher to

979
00:52:21,000 --> 00:52:23,799
Speaker 1: how you know the theory of general relativity works. Um.

980
00:52:24,000 --> 00:52:26,080
Speaker 1: At the same time, YouTube is also this place where

981
00:52:26,239 --> 00:52:29,879
Speaker 1: tons of people you know become radicalized or red pilled

982
00:52:29,960 --> 00:52:33,319
Speaker 1: or whatever it is because the algorithm. The algorithm has

983
00:52:33,320 --> 00:52:36,799
Speaker 1: the wrong objective function, right, It's objective functions, engagement, it's

984
00:52:36,880 --> 00:52:39,880
Speaker 1: not lifting people up. Tell us about some of your

985
00:52:39,920 --> 00:52:43,960
Speaker 1: mentors who helped shape your career. I was super super

986
00:52:44,040 --> 00:52:46,600
Speaker 1: fortunate when I was at early teenager. We talked about this.

987
00:52:46,880 --> 00:52:49,200
Speaker 1: When I first fell in love with computers. I lived

988
00:52:49,239 --> 00:52:51,880
Speaker 1: in a relatively small village in Germany, UM, and there

989
00:52:52,000 --> 00:52:55,200
Speaker 1: was one computer science student there who was maybe ten

990
00:52:55,280 --> 00:52:58,759
Speaker 1: years older than I was, and he just spend time

991
00:52:58,840 --> 00:53:02,560
Speaker 1: with me, and he gave me his books, and he

992
00:53:02,640 --> 00:53:06,160
Speaker 1: gave me his floppy disks with software, and he helped me.

993
00:53:06,560 --> 00:53:10,360
Speaker 1: UM sort of understand all this, and I'm forever grateful

994
00:53:10,480 --> 00:53:13,399
Speaker 1: to add Sturgen Gunta wherever you are in the world,

995
00:53:14,760 --> 00:53:17,399
Speaker 1: that's really interesting. UM. Have you spoken to him any

996
00:53:17,440 --> 00:53:19,719
Speaker 1: time recently? No, because I haven't been able to find him.

997
00:53:19,719 --> 00:53:23,280
Speaker 1: He's basically he seems to have disappeared. Well, if you're listening,

998
00:53:23,840 --> 00:53:26,480
Speaker 1: reach out to Albert tell us. We mentioned a number

999
00:53:26,520 --> 00:53:28,719
Speaker 1: of books. Tell us about some of your favorite and

1000
00:53:28,840 --> 00:53:32,880
Speaker 1: what you're reading right now. Favorites, I would say, Um,

1001
00:53:33,239 --> 00:53:36,200
Speaker 1: David Deutsch The Beginning of Affinity is definitely one of

1002
00:53:36,280 --> 00:53:39,560
Speaker 1: my favorite. Just started that because of you. I'm reading

1003
00:53:39,840 --> 00:53:44,040
Speaker 1: at the moment a book by um Ada Palmer called

1004
00:53:44,200 --> 00:53:48,240
Speaker 1: Perhaps the Stars. It's the fourth book in a serious

1005
00:53:48,280 --> 00:53:50,640
Speaker 1: called the Terra Ignota series. She's a professor at the

1006
00:53:50,719 --> 00:53:53,920
Speaker 1: University of Chicago. What sort of advice would you give

1007
00:53:54,000 --> 00:53:56,600
Speaker 1: to a recent college grad who was interested in a

1008
00:53:56,719 --> 00:54:02,080
Speaker 1: career in either entrepreneurship or venture capital. Develop a mindfulness practice,

1009
00:54:02,320 --> 00:54:06,440
Speaker 1: you know, whatever works for you. Um, whether that's yoga, running,

1010
00:54:07,520 --> 00:54:10,200
Speaker 1: For me, it's conscious breathing. I just think it's such

1011
00:54:10,239 --> 00:54:13,080
Speaker 1: a superpower not to get hijacked by your emotions. It's

1012
00:54:13,120 --> 00:54:16,600
Speaker 1: a true superpower. And the more humans can cultivate it,

1013
00:54:16,640 --> 00:54:20,640
Speaker 1: the more we can achieve. That's that's really really intriguing.

1014
00:54:20,960 --> 00:54:23,040
Speaker 1: And our final question, what do you know about the

1015
00:54:23,080 --> 00:54:25,959
Speaker 1: world of venture today that you wish you knew thirty

1016
00:54:26,080 --> 00:54:28,160
Speaker 1: or so years ago when you were first getting started.

1017
00:54:28,480 --> 00:54:31,560
Speaker 1: There will always be another bubble. There will always be

1018
00:54:31,719 --> 00:54:36,600
Speaker 1: another bubble. That's amazing. Just human nature can't be avoided.

1019
00:54:37,800 --> 00:54:41,080
Speaker 1: And what should we do in anticipation of during and

1020
00:54:41,160 --> 00:54:45,080
Speaker 1: after bubbles. We should acknowledge that they will come, that

1021
00:54:45,200 --> 00:54:48,359
Speaker 1: they're part of how we operate, that you can make

1022
00:54:48,480 --> 00:54:53,239
Speaker 1: money before, during, and after. There you go really really

1023
00:54:53,320 --> 00:54:57,320
Speaker 1: fascinating stuff. We have been speaking with Albert Venner. He

1024
00:54:57,600 --> 00:55:01,880
Speaker 1: is managing partner at Union Square Ventures. If you enjoy

1025
00:55:02,000 --> 00:55:04,600
Speaker 1: this conversation, well, be sure and check out any of

1026
00:55:04,680 --> 00:55:08,040
Speaker 1: our previous four hundred or so discussions we've had over

1027
00:55:08,120 --> 00:55:12,040
Speaker 1: the past eight years. You can find those at iTunes, Spotify,

1028
00:55:12,320 --> 00:55:15,879
Speaker 1: or wherever you get your favorite podcast from. We love

1029
00:55:15,960 --> 00:55:20,000
Speaker 1: your comments, feedback and suggestions right to us at m

1030
00:55:20,120 --> 00:55:23,520
Speaker 1: IB podcast at Bloomberg dot net. Sign up from my

1031
00:55:23,719 --> 00:55:27,000
Speaker 1: daily reading list at ridals dot com. Follow me on

1032
00:55:27,120 --> 00:55:30,239
Speaker 1: Twitter at rid Halts. I would be remiss if I

1033
00:55:30,320 --> 00:55:32,480
Speaker 1: did not thank the crack team that helps put these

1034
00:55:32,560 --> 00:55:37,640
Speaker 1: conversations together each week. Sarah Livesey is my audio engineer.

1035
00:55:37,920 --> 00:55:41,040
Speaker 1: Sean Russo is my head of research. Paris Wald is

1036
00:55:41,080 --> 00:55:45,359
Speaker 1: my producer. Atico val Brand is my project manager. I'm

1037
00:55:45,440 --> 00:55:48,600
Speaker 1: Barry rich Halts. You've been listening to Masters in Business

1038
00:55:49,040 --> 00:55:50,160
Speaker 1: on Bloomberg Radio.