I think there was an Elon metaphor he

told me once and this is like I I don't

remember when it was like maybe 2010

2011 and it was it was it was sort of

like uh there were there were these

three or four aerospace companies in the

US that were like really badly managed

and badly run and it was sort of they

were these very fat cows on this grassy

enclosed field and if you ever got in

there there was just going to be a blood

bath.

>> Oh yeah. [laughter]

So it's kind of

>> it's like he's like this this there's

this this carnivore and there's a big

fence and you got to climb this really

big fence. Eventually you got in there.

It's going to be it's but so so this is

a very optimistic thing though because

both Elon and and what we built together

uh with Palanteer were able to be great

enough and persistent enough to overcome

unnatural barriers and and do something

very optimistic and fix things. Is

should we also be trying to do that in

healthcare and education and

universities in some sense? Is it cuz it

was almost impossible but it turned out

after like years of work that we did it.

Shouldn't we also do that now in other

areas? It is it is worth trying in a lot

of areas. Look, I I always think it's

better to be optimistic than

pessimistic. It is um it's probably not

I the the place where I quibble with the

name of your show is that uh I I don't

think it's I don't think it's good to be

uh insanely optimistic or insanely

pessimistic. uh at the extreme optimism

and pessimism are the same thing because

if you are extremely pessimistic there's

nothing you can do. If you're extremely

optimistic there's nothing you need to

do. Um you just need to um you know the

singularity is near. It's the Curtzsw

Wild uh book title very optimistic title

and all you need to do is sit back and

eat some popcorn and watch the movie of

the future unfold. So both extreme

optimism and extreme pessimism. um

converge on laziness and on people not

doing anything. So uh so I so I I yeah

so I think moderate optimism is the

correct thing and then and then I I I

think you have to always pick pick your

battles. the the part that's um

the part that's

I think more difficult about education

and healthcare

um or historically was more difficult

was that these were these were areas

that lots of people were trying to

reform and there were lots of different

attempts people had uh if um whereas

let's say the in 2004 2003 2004 2005

when we started Palunteer

um the idea of trying to uh to do a

military related uh software startup.

There was nobody even wanted to give you

money as a venture capitalist. People

thought we were insane.

>> And so there was sort of an element

where

>> if you could get through you would have

no competition and then you know a

decade later we still had no

competition. There's probably a lot more

going on in the in the defense space now

than there was in the in the mid 2000s.

But and and again and again having zero

competition

it it's good if it works maybe it just

tells you you're insane. So even that's

an ambiguous thing

>> but then the um

>> the the place where I've had we probably

the two areas where I've had the you

know we we've tried to invest I at this

venture capital thing we started

founders fund 2005 in different ways

I've been been at this and I' done some

angel investing before that but I've

been been doing this for 20 plus years

and the area where we've probably had

the least success from a returnsbased is

in software. The two worst areas are um

are educational software related

companies and healthcare IT companies

and um and pro like education we we felt

was so hard we we didn't even uh we did

very little healthcare we tried a few

more things but um it's and and and the

the the rough version of what's gone

wrong in the health care sectors we've

done so little in education I feel I

can't even comment on it but but

healthcare What's what's roughly gone

wrong is um you have all sorts of things

that sound like a pretty good plan for

reforming the system and it's okay it's

this one angle on the pricing model you

need to change but then there are 10

different ways you can do it and it's

these complicated uh ways you have to

get the payments to shift from the

insurance companies or the government or

uh the hospitals which are very cluji if

you can just get consumers or doctors to

change that might be easier but the they

typically are not the people who pay.

And so there sort of are there's this,

you know, very cluji messed up system.

Lots of people try try to do it. My my

sociological model is always that I'm

I'm deeply skeptical of um of

investments where a lot of VCs uh would

go to some silly VC networking event and

uh want to brag about it. And I I I feel

there there's a lot of that with the

healthc care education startups. Um

>> there's like the green tech stuff too.

It's too popular.

>> Green tech stuff. Yeah. I mean at some

point it it loses money and then it's

not popular anymore. But but while it

lasts it's very popular because there's

there's no fast term accountability in

venture capital. You know sometimes you

have momentum and the valuations go up

and that that does give you a feel

whether things are working. But in

practice uh you of you know it's 5 10

years later you get liquidity on on

these businesses or even longer. it it

takes incredibly long and so people tend

to overindex [clears throat]

on these sociological factors and what's

what's popular and that's and so there

was there was a there's a way that uh

the healthc care education sectors even

though they're very broken um people

have these often too conventional ideas

on how to fix them and um and so yeah

it's I know you know another trend where

I' I've tried investing some over over

the last decade is that you know is is

are all these marijuana related

businesses and it's like yeah it's

obviously like a big trend. Um but it's

it's an obvious trend and then it turned

out to be extremely hard to figure out

what what to do with

>> Yeah. As I said some of the things

things that are too popular and too

obvious. It's just you have to have a

totally different take on them or it's

not going to work.

>> Uh yeah you like if you have an

unpopular take on it that that that

might work.

>> You were at Palanteer 04 to09. We were

also at PayPal and they they categorized

you as being part of the PayPal mafia.

Second, you know,

>> I I'm 15 years younger than Peter. I'm

12 years younger than Elon. I was a

junior kid there. I don't get any credit

for PayPal.

>> Well, you were still there. You were

still there learning. I was learning

from these guys.

>> And were you in meetings? Were you

watching them? Were you there? And what

was that like? What was Elon like in

meetings? What was Peter like in

meetings? What was that like? give us

some of the I mean I usually wasn't in

meetings with Elon be honest but I mean

these these guys were were just very

opinionated, very interested, very

ambitious, very fast. No tolerance for

things that are broken. You fix it right

away. Uh you know, you work through the

problems. You get you get everything

done today. You don't talk about what

you're going to do next week. You just

you just move. You know, people would be

there late at night fixing problems. You

know, passionate about their work.

>> What what was the demo of the age? What

what would you say the average is? would

you say 25 guys in their 20s mostly

>> in their 20s where you can as you can be

demanding of getting them to now at the

same time was Elon and Peter also there

driving working with them

>> yeah in different context right Peter's

more of the strategist the philosopher

the the the thinker he's not the one

he's not the technical guy himself um I

think I think Elon is more of the

operator he's more they're in the room I

mean I was I was in Paul Alto a couple

weeks ago right and I was meeting a

friend and Elon was in the back doing

engineering reviews at at xi just he's

just he just there working working he

he's kind of the more the workhorse just

pushed through solve the details of the

technical problems

>> was the level of intent like who was the

most intense guy at Apple the most

intense

>> I mean I think Elon's always been one of

the very most intense people I' I've

ever seen in terms of working but

there's other engineers who are just

there all the time pushing hard right I

think I think when when you're in

operation mode guys like Max Le and

others were just as far as I could tell

just always working some of the guys

that you you worked with that were maybe

junior guys like you that came out

became big stars as well.

>> Yeah. So, so I mean a lot of the guys

who were there, there were 16 different

companies that were started after PayPal

that quickly became billiond dollarar

companies, right? So, and a lot of these

guys were older than me, but it was the

guys that you know Chad and Steve who

built YouTube. It was Reed Hoffman who

built LinkedIn. It was obviously Elon

did Tesla and SpaceX. I mean, you know,

there's guys who built Iron Port.

There's just there's just so many things

that came out of there.

>> Got it. And so, from there, how did the

opportunity to be a co-founder of a

Palunteer come up? Well, I was working

with Peter at his hedge fund and uh I

was, you know, the hedge fund was a

little bit disorganized and I I started

bringing in my smartest friends to help

and there weren't really other managers

there. So, I'd helped start start

building things and a bunch of my

smartest friends I brought in one summer

to help us. They uh they weren't

interested in finance. They thought it

was boring. And so, and Peter and I had

been talking a lot about, you know, at

PayPal, we had to stop the Chinese and

Russian mafia from stealing all of our

money. And uh so, we got to know the

guys who were helping us arrest the bad

guys. There was Secret Service and the

FBI. And right after this happened, it

was 9/11. And so these guys were

spending billions of dollars on stuff

that we thought didn't make any sense.

And they were really, they kept asking

us for advice. They were confused about

how to do things. It's it was it was I

mean, President Bush created what was

called the Department of Homeland

Security at the time. I shouldn't be too

mean about it, but you know how it works

in government is that when you create a

new department, um, people can't really

fire people in government easily. So

sometimes they'll have a lot of people

they wanted to fire and then instead

they just push them into the new

department. So it was a bit of a mess.

photograph into new departments in your

fire.

>> So there's so therefore the whole

department didn't really know very well

what it was doing at first was my

impression and they were spending money

on just nonsense stuff and it became

really obvious to us that Silicon

Valley, Google, PayPal, all these things

that were going on out there were just

way ahead technically of where the

government was at that point and this

was a problem because because the

government was using all the government

was spending $ 38 billion a year

gathering data, looking at the data,

failing to stop the terrorists but also

abusing our civil liberties. So it was a

mess. So, we said, "You know what?

There's actually a really important

problem here to solve. A, I'd like to

stop the bad guys from attacking us

again and go get them instead. B, I

don't want everyone in the government

seeing all of my data without any

controls. That's crazy." And

>> so, that's when you said, "Why don't we

go do it?" You guys said, "Let's go do

it ourselves."

>> And I started having my friends I

brought that summer to help build the

prototype. And which which it sounds

even crazier than finance, but at least

it was interesting. They enjoyed help

helping me build it. And and my

roommate, who I'm actually seeing later,

he moved down here to Miami. He and I

controlled the team. and uh Stephan

Cullen, my co-founder, and we started

building it up

>> and and CIA was apparently one of the

first investors in in the company.

>> They eventually gave us money. I think

it was the second second or third round,

but it was it was only $2 million and we

actually bought him back. The reason we

needed them is that Peter basically no

one would give us money. First of all,

Alex Carpenter went all over Sanchell

Road like you guys have all this talent

because they can measure talent even

back then like why aren't you doing

social media? Why aren't you doing

something new and exciting? Working with

the government's crazy what's wrong with

you guys? It's not possible. So he

didn't think it was a good idea to

>> No, this is Alex and I talking to the

investors. So all the investors were

making they're telling us you guys are

crazy. No one does this. Why are you

doing this? It's not possible. It it

doesn't make any sense.

>> These are some big names. Credible.

>> These are these are the big names. These

are we got turned down by everyone.

Turned down by Excel, by Seoia. The guy

at Kleiner Perkins at the time and

they're a great firm. I admire them very

much. But the guy at the time who's no

longer there, he started laughing at us

on the phone because Alex didn't have a

technical degree. He's like, "You guys

don't even know what you're doing. And

he's a it's a doctorate, but it's not

even a relevant doctorate. Like like

he's laughing us out of the room,

basically.

>> And what what is Alex's mindset like

when he's walking out of the room?

What's he telling you?

>> Oh, we really

>> cuz Alex is a he's a very unique type of

guy himself.

>> We were we were not happy with these

people. Peter Peter Teal told me it was

probably really good for me cuz it gave

me like an even bigger chip on my

shoulder to make sure we succeeded after

being like mocked and turned down by

like 30 of these guys. And and Peter

couldn't just only fund it himself. You

need other people to fund these things.

So when we got Inqel which is CIA's

venture capital arm at the time to give

us a little bit of money and Peter gave

us even more that was really critical.

>> And then how long later did you guys pay

the 2 million back?

>> I think we bought it for a much higher

amount. We had some option. I forget. It

must have been five or six years later.

>> Okay. So they still made some money on

it.

>> Oh they made plenty of money on it. They

and you know and and and more

importantly we saved the government

billions of dollars versus what they

were doing. I mean you literally had

things going on the DHS guys. cuz I

remember there was some Unicist thing

where it was like $3 billion to

integrate all the data and we came and

we showed them we could have done the

same thing for them out of the box in a

month like don't waste billions of

dollars. So it's it turns out competence

saves the government lots of money and

protects civil liberties. People don't

realize it's both of those things.

>> What what is the the the desire to

constantly use names that are from I

believe Lord of the Rings, right? What

where does that come from?

>> Peter gets credit for naming

>> Peter gets credit,

>> you know, but I'm a fan of it. I think

listen and and we wrote about this at

the time. So, at the time when we're

creating this, we said this is a

dangerous thing to create, you know, and

but we believe it's a it's we believe

it's a worthy thing to create and it

took it took a lot of coverage. Like,

you know, there's a lot of different

things we could have worked on. It could

have made a lot of money doing a lot of

other things, but it was really

important to both help. You know, we

helped eliminate probably about to 10 up

to 10,000 terrorists that might not got

eliminated. We worked with the we work

with all sorts of amazing groups in the

government alongside them with the

technology and with the ability and we

help protect civil liberties and make

sure the government watchers are being

watched. Now

of you know of course you create this

technology it's it's if it gets into the

wrong hands and they turn off the audit

trails who knows what what bad could be

done with it. So there's there's good

and bad here. Do you think that we could

bring maybe using AI some more advanced

manufacturing here that was in China? Is

that a real thing the next decade to do

a bunch more of it here thanks to our

more efficiencies and productivity? Uh

there's there's there's probably always

a decent amount of things like that. You

you have to um you you have to always be

extremely granular on how expensive the

robots are, how expensive the equipment

is because in some sense manufacturing

has been getting steadily more automated

for 250 years. And you know and and

you've had the machines that make the

machines, the machines that make the

machines are getting sort of smarter and

more complicated. Um and and there are

ways in which AI is a quantum leap.

There's a way in which it's just you

know a natural continuation of this you

know two century two century long long

process. Um I think um but yeah I think

I think there are some parts that can be

moved to the US um with AI maybe also if

you if you change some of the

environmental rules and some some of the

other anti-industrial policies we have

in the US. Um and then but then if if

parts of this are moved to um other

emerging market countries um you know I

I don't Vietnam is look it's a communist

country it's it's it's a it has bad

mercantalist policies but it's not

planning to take over the world and so

at the margins if we can move things

from China to Vietnam that's a big win.

>> I want to ask you about a theory I have

that's based on how you see things. So,

one of the things you've been talking a

lot about lately is is is is how our

culture I want to put words in your

mouth, but things are broken to such an

extent that like we're not advancing as

quickly as we were in the in the

industrial revolution, right?

Something's wrong with our culture.

Something's wrong with science. It's not

not advancing. Yeah. I would Yeah. The

there's it's generally been stagnant in

the world of atoms, not the world of

bets for something like 50 years. And um

and then yeah, why why it's happened is

overdetermined, but there are cultural

factors. Maybe we just ran out of ideas,

which is a very pessimistic version.

Maybe there's something wrong in our

culture. Maybe we're too riskaverse.

Maybe we're we're scared about how

apocalyptic some of the science and tech

are. Um, but for for a range of

different reasons, it's it's slowed down

since the 1970s. Mhm. And I I I tend to

think of things and I'm not sure if this

is how you see it, but I take I take

some of maybe your interest in Gerard

and mimemetic theory. And I say people

tend to all think of things the same way

even when it's incorrect because it's

natural to be mimed and to think of

things the wrong way together. That's

kind of why cultures move in the wrong

way. And so I I tend to see that there's

a lot of opportunities right now thanks

to the fact that you do have this kind

of broken cultural situation where

people are thinking of it wrong. So for

example, I'm particularly bullish. I

know it's random, but on Elon's boring

company I'm excited. I was working on

with some of the guys yesterday on

tunnels because I think it's just

obvious we could create trillions of

dollars of value by building tunnels and

getting rid of traffic around our cities

and and the reason that opportunity

exists is because of this thing that's

really broken because it's an obvious

thing but just it's so broken that no

one's doing it. Is there are there

things like that where there's

opportunities tied to the fact that

things are broken? Do do you see it that

way?

>> Well, those those anything that fits

that pattern is a great opportunity. So

if if it's um if you have some if if you

know it's it's always if it's broken not

because of the science or tech. So it

doesn't require a miraculous

you know you don't have to have a dozen

miracles in terms of tech breakthroughs.

you have to just do something in this,

you know, in this non-mafia controlled

drilling way or whatever where, you

know, I think so many of the um

tunneling is this a super corrupt um

contracting. It's mafia adjacent, you

know, sort of super corrupt labor union

adjacent. And so I don't know, it costs,

you know, what it cost to build a subway

in Manhattan. It's like a billion

dollars mile.

>> Billions. Yeah. 10 I think it's 10 times

as much as Paris or something like that

which we don't think exactly capitalist

efficiency

>> it's insane

>> so

>> and Elon's Elon's a 10th the cost of

Paris right so it's like a 100x multiple

>> crazy

>> but you know but then the the the place

where I I always think it's non-trivial

is uh is that there's there's some non-

tech reason we're not even at the Paris

level.

>> Yep. Yep. So, but if you could push

through, then you could disagree.

>> You could do it even you can do you

could do something big even if you could

get to the Paris level and uh and so you

have to think really hard about what

that what that political blocker is and

how to how to overcome that

>> and and so there's all these things that

are that are dysfunctional and broken

and not working and like and like if

things right now I think you're more

optimistic than you have been. said like

like should we be trying to use our

voice and fix things more? Should like I

know a lot of friends who just decided

to exit, right? And a lot of friends are

in Singapore and Switzerland, they gave

up. They think it's going to be too hard

to fix it. I feel like you I feel like

you're in between this where you you've

done a lot of things to fight for our

society and to fix a lot of things, but

then you're like skeptical. You should

be pushing too hard in a bunch of areas.

How do you think about that trade-off

with voice and exit on these things?

>> I think it's I think it's very important

to try. It's very important to pick It's

very important to pick the right battles

is what I is is what I would always what

I would always say. And so I don't know.

Yeah. The the the in between answer is

um you know I I don't think you can just

be I don't know shooting at bad guys

when they're two miles away and firing

your guns at random and it's it's yeah

you get credit for some kind of you know

Marxist labor theory of value. You're

trying hard but um we're not we're not

Marxists here and we're it's not

>> about trying. It's about actually it's

it's not we're not measuring uh input.

We're measuring you know where where you

can actually uh where you can actually

get output. I I um I I keep trying in a

lot of these areas. I you know we we've

we've we've made a number of investments

over the years in um in nuclear

technology. Um and it it always it

always when you look at the science

there there are all these much better

ways that in theory you could do it. You

can build small modular fision reactors.

Maybe the fusion technology is not that

far away. There are different verticals

within the industry where things are

extremely broken and in theory should

find a way to to um to build a

successful company that overcomes some

of these these problems. And then um

there's you know then there's a sobering

reality that uh you know the Nuclear

Regulatory Commission basically hasn't

approved a new reactor design in in 50

plus years. And so there's so so it's

always it's it's always these these

these these things that you're you're

trading off.

>> What do you learn from your time with

Peter? What are the things that have

stuck with you?

>> Oh gosh, so many things. He's always

he's always approaching the world from

some kind of like orthogonal perspective

and finding new ways to pick apart the

most important reasons for things. Every

time I see him, I learn something. Uh

you know, I I I wrote this piece online

a while ago, like my team about 15 years

ago. It's like main lessons from Peter

Teal. So I won't I won't repeat all of

them here but there were nine key

lessons. I think one of them was to

really value intelligence really highly.

I think that was absolutely key. And so

it just turns out the very brightest

people matter a lot. Um one of them was

you have to break down like their actual

reasons for things and their core

components. And usually the number one

reason should be like much bigger than

everything else. So if you tell me I

have four reasons for doing this

business thing, it means you haven't

really thought about it enough. There's

probably like one thing that's dominant.

>> Those were really big. One thing you

always talked about was that uh effort

on any project is convex. And what

convex means, it's a shape of a curve

where if you spend like 80% of your time

focused on something, that's maybe half

as good as spending 90% of your time

focused on something because those that

last bit of effort and like is one of

those things where like I think being 99

percentile is worth so much more than

being 90th percentile also because that

means you're number one and being number

one is worth a lot. So there's there's a

lot of things like that that you just

kind of gave me all these concepts that

we all kind of learn when we work with

them. Do you find it difficult to not

divide your attention in that way? You

>> It's very very hard and I think the most

important things I've accomplished has

been when I've been able to really focus

on something for a while and whether

that's Palunteer, whether that's Adapar,

whether that's spending months on a

thesis at HVC and a framework at HVC

that we're going to work on for our

investing. Yeah, it it is really

important to focus and and you know, you

get to a certain point where I have

obviously a lot of financial resources

now, a lot of influence in the world and

so I'm able to help others who are

focusing, but anything I invest in or do

it has to be someone really amazing is

making it their main thing and some

someone the CEO has to be all in and you

know for for the things I do,

>> right? So an advice for talent is to not

divide your focus at all.

>> You really just need to like be

courageous. I think I think the a lot of

people in our culture nowadays a lot of

them want to do incubators or they just

want to do a fund never having built

something or they just want to say I'm

going to help five different projects

and that that's actually kind of like a

form it's a it's a type of cowardice.

It's a type of saying I'm afraid I'm

afraid to go all in. I'm afraid to say

this is the best and I'm going to crush

it. And like 99.9% of the people who are

crushing it and who are changing the

world and who are really you know

building the future of our civilization

they're they're focusing on something.

How do you come to think about risk?

It's sort of u built into the

conversation around courage is fear and

uncertainty and risk and dealing with

risk and stuff like that. How do you

assess it?

>> You know, I think we're all really lucky

today versus the past. I think it is

true that the conditions under which all

of us evolved. If you go all in on

something and you fail, you might have

starved to death. You might have been

eaten by lions or or some kind of giant

old cave bear. You might have been

crushed by the local tribe. So, I think

we all evolved uh to have existential

risk and to be really afraid. And it's

not that it's great not to have money in

our society. I can't I can't speak to

that. Obviously, it's not not great. But

come on. Like, we're it's not it's not

like 3,000 years ago where you might

just get you might just die if you don't

succeed. So, I think I think there is

enough of a safety net. And listen, it's

easier for me to say that coming from a

middle class family when I grew up that

I knew my parents would be able to take

care of me if something didn't work out.

So, obviously, I had some privilege, but

I think a lot of people with that

privilege still aren't willing, you

know, to take the risk they should be.

What about obsessing over perfection?

Something else that I think Peter that's

very big on

>> 100% that really ties into the 99.9

percentile thing is like getting

something just to be the absolute best.

I remember working with him. I was 21

years old and there was some speech that

was going to go on in New York the next

day and we were like basically pulling

an allnighter with a few of the guys in

the office to be ready to like have this

thing was it was about inflation versus

deflation and the risk for both of

those. And it was just it was just a

natural thing to do to just try to make

it like absolutely perfect before we're

going to go present to the investors.

And it was really funny. I actually was

with Ken Howry who's an ambassador now

to Denmark. He was ambassador of Sweden

last time. He's a good friend. He's

who's our age and very successful guy in

the background. We were just like going

back and forth with him and a few others

just like working hard and then jumping

on the plane and sleeping on the plane

on the way over and it's just like

everything has to be as good as possible

and pushes you push as hard as possible

which is if something was wrong like

this totally unacceptable.

>> How do you avoid that from holding you

back? Uh because perfectionism can be

procrastination sort of masquerading as

quality control like you know the

classic

west coast move fast break things

mentality.

Is there a tension between these?

>> 100%. And I think if you have really

tight fast deadlines, it's probably

good. So it had to be as perfect as

possible given that it was coming due in

the next day, but we we weren't going to

be able to work on it for 5 weeks,

right? So I think I think there is

something about about really making

things as strong as possible, but but

sprinting and having really tight

deadlines and getting it done right

away. I think I think if you use

perfection as procrastination, then it

becomes a problem.

>> Yeah. Well, I'm I'm still interested in

this sense of not getting distracted and

trying to keep the main thing the main

thing, especially if your main thing

becomes a varied thing, right? Like

built into a lot of people's lives,

especially as they end up getting to the

kind of place that they want to, is

well, you don't have to do things you

don't want to do that much anymore. No

one tells you what to do. So you end up

in a world where you think, well, I get

to choose. But with that comes a lot of

responsibility cuz I have to choose now.

As opposed to before where I just sat on

the set of train tracks, it's God, do I

want to go left, do I want to go right?

The same for yourself. Do I want to

invest in or should I sit down and spend

6 months working on a thesis? Um

what about the skill set of learning to

sort of let go of what was there of how

you operated previously? The sort of

courage to to do something uh new even

as you've got something that's given you

success in the past.

>> No, it's that's totally right. You do

have to constantly keep adjusting for

what makes sense today. And it's it's

interesting. There's different versions

of this. One version is as you're

successful something you would have been

really excited about before, you have to

be like, I don't have time for that now.

And because all of a sudden you could

just have things you were really excited

about before 10 times a day. And I do

fall into this myself sometimes because

there's lots of really exciting things

to do and you have to so it's like

really hard to say no enough when you go

through periods where you don't say no

enough.

>> You might be feel like you're getting

stuff done but not actually getting

things done. And that's it's really

tough. And

>> but you know what you said what you said

earlier about like things you don't want

to do. To me that's like one of the most

important things that we focus on is

what do you like to do? And as you're

successful, you should probably mostly

only do things you like to do because

when what would like to do means to me

anyway is that it's like stimulating

your entire brain. Right? So if you look

at like a grandmaster chess player and

the very best chess players, when you

map out their brains when they're

playing, there's always emotions that

are turned on. There's always full parts

of their brains that are turned on and

it lets them be a lot better what

they're doing. And I think this is true

in anything we do. If you really love

it, then your whole mind is engaged and

and you're just able to bring like this

this power to bear on things that if

it's something you don't really like,

you're probably never going to have just

that top top ability there. You know,

>> it's almost matching up with what you

said about being sort of the 99th

percentile within an industry

accumulating the 99% of your brain power

onto this.

>> You have to you have to be obsessed and

love something. And like this is not to

say that like everyone should only do

things they love to be successful cuz

you got to do all the grunt work too.

But then once you have a certain level

of where you are, you should structure

your company and structure your life

where you do the parts that you love and

you're good at and other people could do

the parts, you know, that you're not as

good at that you don't love. Joe Hudson,

uh, who has just become the head of

human performance at OpenAI. Uh, he's

like kind of an underground hero coach

type person. I'm aware that coach has

got a lot of icky uh, associations with

it, but this guy's legit.

Really, really great. He says,

"Enjoyment is efficiency." And that's

kind of I think referencing what you're

talking about here, which is if you

absolutely love something, it takes

fewer inputs to get more outputs.

>> 100%. You can get into the flow. You

could just be great if you love it. And

so that's that's how you should

structure your life as much as possible

is what are the things that you love

that you're good at that are worth

doing? And that's and then do more of

those and do less of the things you

don't like, but have someone else do

them if they're necessary.

>> How do you avoid cynicism? It's a very

easy trap in the modern world.

>> This is uh this is the debate I was

having with Peter Teal earlier about

stuff. He tells me I'm too naively

optimistic and is like you want to be

kind of optimistic in general, but you

don't want to be you don't want to be

like overly so. And you know, in

general, I think it's easier to be

pessimistic and and cynical. I think

it's like an easier thing to be. I think

I think it's like you can just always

say why things won't work. And it

actually takes it's a little bit of a

challenge to say, "Okay, this is really

broken. The system is really broken.

Other people haven't been able to do it.

How are we going to make it work despite

that? It's it's kind of like a it's kind

of like being like the hero, warrior,

champion to say even though even though

this is a mess, what are we gonna do to

make it work? And and and that's it's

it's a it's a leadership quality that I

think if you bias towards that it can be

figured out often I've just found often

times things can be.

>> Have you ever read uh Endurance by

Alfred Lansing? It's about Sir Ernest

Shackleton's crossing of the Antarctic.

Very cool. So it's the best I think the

best retelling of that. And um it's

really interesting cuz all of the guys

had their their own individual journals

or diaries that they were writing in.

And what you hear from everybody else

except for Shackleton is what

Shackleton's saying. But what you read

in Shackleton's diary is what Shackleton

was thinking. And it's this really

interesting dichotomy between what he

says and how he needs to show up as a

leader.

>> Yeah.

>> And what he's thinking privately. And

it's almost like a Bruce Wayne Batman

type split personality.

>> What was he thinking privately?

>> He is just swimming in self-doubt and

uncertainty and fear. He has no idea if

it's going to work. He he doesn't even

know if he if this is the right. But he

goes out there and he needs to say to

the guys, "This is exactly the way that

we're going to go and we know that this

is going to work and we're such and

such." And um it it was the first time

that I'd ever really thought because

obviously the

>> the consequences are so dire. But it

really made me think about huh there are

prices that leaders pay that nobody else

pays and that you can't share the burden

of and everybody everybody has main

character energy in their own life.

>> Right? Everybody is the lead star.

They're the front man woman of their own

existence. Um, and I think a lot of the

time we want to port that across onto

the teams that we work in, the

organizations that we're a part of. You

go, okay, there's going to be some

prices that you're going to have to pay

for that.

>> As as a as a leader, you have to suffer

things that no one else suffers, and you

have to deal with the things no one else

deals with. And it's actually really

interesting cuz I I I invest in a lot of

great leaders now and try to help them

and try to mentor them. And it's very

funny cuz you end up sometimes having to

be their therapist a little bit because

there's no one else they can talk to the

company, what's going on. You know, we

we didn't really grow up with therapy in

my house. It's not something I do at

all, but I think I imagine it's

something similar when people are

dealing with struggling through

something really hard like this. One

thing I I kind of wonder is you've been

around a bunch of special people, Peter

Teal, Elon Musk, all this stuff.

>> Is it clear in early like in the early

days? Like, do you remember the moment

where you're like, "Oh, this person's

kind of different. They are that five

standard deviations." Yeah.

>> And intelligence or conviction or

whatever.

>> One of the I mean, we all try to like

set strategies for ourselves and goals

and whatnot. Like I remember in college

I thought, "Wow, this is a really good

opportunity at Stanford to reach out to

a bunch of successful people and kind of

learn from them, see who I see who I

admire, who I want to be like." And you

know, I met some of the legends of

global macro finance who I'm still in

touch with. I met a bunch of other big

business people and run Fortune 500

companies. And Peter to me had by far

the most interesting intellect. He was

he was clearly just one of the smartest

people I'd ever met. And he was

interested in some of the same things I

was interested in. And he taken some of

the logic farther than I ever had. So So

I always learned the most from

conversations with him. So that's that

that to me was one of the reasons he was

most attractive to try to work with and

try to build with.

>> And so before you start uh multiple

other companies, you do Clarium, which

is his hedge fund, I guess is the way

>> global macro fund. Yeah. It's it's like

the most fun part of finance. There's

always there's lots of parts of finance.

Finance is like all sorts of areas.

Global macro is looking from like the

highest possible perspective at

everything going on in finance. It's

like the the bond yields around the

world, the flows of money around the

world, how equities are being valued.

you basically it's like just from very

top down like what is happening in the

world of finance and how do you map it

out how you and you look at

relationships and you understand you

know of course like you know the

Australian currency is going to be

really correlated with the price of

metals and there's different ways in

which they can get way off and you can

create a regression trading system if

they're way too far off where you can

make money based on the reversion but

then you say oh normally I would trade

this but actually this is happening cuz

because China just like you know invaded

this thing over here so actually it's

not a good time to do it and it's just

it's this really really fun map of the

world and we we're really interested in

longdated oil prices, what was happening

with oil. We're very interested in how

uh Fanny May and Freddy Mack, which are

the two big giant housing groups, they'd

gotten to be much much bigger in the US

in the early 2000s. And and they they're

giant mortgage back security portfolios

that are worth trillions of dollars. And

they had to hedge these portfolios

basically and I won't go into all the

details. It's a little bit esoteric, but

based on how they were hedging their

portfolios was completely changing the

global fixed income market, completely

changing the pricing of bonds. We found

some really interesting ways to do

things there. I my f my my favorite

story though I'll give you is just to

give so so we're working at the hedge

fund market's open we're in San

Francisco we're in 555 California right

it's that big building downtown like

after after 911 I think Peter had a

parachute in his room I always told him

have parachutes for us too but anyway

[laughter]

there's one parachute okay that was just

a joke but it's probably anyway but no

so it's cool office on the 42nd floor

and and and the market's open at 6:30 so

the traders are supposed to be in at

6:30 except the first Friday of every

month you had to come in at 5:30 because

the non-farm payrolls come out still now

the first Friday of every month at 8:30

a.m. on the east coast. And it turns out

this is a very important number because

it shows you what's going on in job

growth in the whole economy. Uh you know

based on the Bureau of Labor Statistics

numbers and and what was really cool is

Kevin Harrington was our head of

research. He's like genius crazy physics

biology interesting guy who's who's

ended up being on the national security

council later like super interesting

smart guy. And he like had mapped out

this thing I'd helped him with where we

realized that they were adjusting the

numbers wrong uh based on seasonal

adjustments. instance, we were able to

predict whether the number would hit or

miss. And this thing would move bond

markets like crazy, like like hundreds

of billions of dollars and move around

based on this number. And we figured out

there systematically mis misdoing it.

This is totally legal. You're allowed to

do this in finance. So we figured, okay,

this is a mistake. 75% of the time we

can make money trading this. And then we

can adjust it, make it even better based

on where the market was position. So the

market's going to be surprised and we

can kind of tell there's a good chance

it might be. But take a big position,

right,

>> like the night before or whatever and

then like make a ton of money that

morning when it worked. And it was at

4:30 in the morning about 75% chance.

And so if you do it enough, you're going

to do it well over time. And it was the

most fun thing cuz we take these like

giant positions on this thing. And you'd

be there with like Peter and Kevin.

>> This just like the highest high stakes

game of poker.

>> It's the most fun I think of poker. And

you're like literally personally have

like a few million dollars writing on it

at a time as early 20s. These guys, you

know, Peter probably had hundred million

dollars riding on it every time. And and

and you're like high-fiving if it goes

right or you're depressed if it goes

wrong. It was the most it was it's the

most fun heist example.

>> Is he sweating or what's his uh

everyone's like everyone's like

[laughter] what's going to happen? It's

like so exciting and then you're like I

remember so many like celebrations. We'd

all like go to like our favorite

breakfast place afterwards if it worked

out. It was [laughter] it was pretty

cool.

>> Yeah. What you do if it didn't work out?

>> Yeah. Sometimes we go there anyway. But

but uh for some reason in my mind, this

is maybe who I am. I remember all these

times it worked out. I barely remember

the time it didn't. I know it didn't

sometimes but like maybe this is like a

serial entrepreneur sort of thing where

you just have the good memories, you

know?

>> Right. I was like, but I remember it was

it was it was a fun time.

>> That's a entrepreneur survival uh

tactic.

>> All the traumas too because if you know

if you remember how hard something is,

you're very less much less likely to

have started again or do another

>> way. I would have built all these

companies if I had to force myself to

like think about that too much. You

know,

>> you the way you just described like the

global macro fund, you're pretty young

when you're doing this and that's not

what you were doing just before. So,

it's not like you had tons of

experience.

>> My my little brother got me reading like

a bunch of economics and finance stuff

when I was young. So I kind of had a

weird both computer science and finance

background. So and I had opinions about

it. So I think it's a weird those are

like my two things and so so you know

so I knew that world pretty well and

yeah you learn a lot being in it. You

just do. You just have to be in it to do

it.

>> But it's I mean credit to them for

betting on you to be able to to do that

versus you know they could have hired

somebody who's been doing that for 20

years. And

>> this is we talk about lessons from Peter

Teal. I think one of the most important

ones I've seen from him that I've

definitely taken to heart in what I've

done is I'd much rather hire hire I'd

much rather hire for talent and ambition

and hard work then hire for expertise.

So almost and there's exceptions, right?

So if if you have a company that's

already really working and already

really scaling and there's like a

machine that has to be run, you want to

hire the guy who knows how to run the

machine. That's fine. That's like that's

like that's the operator who knows what

they're doing already. But when you

before you've actually built the machine

or when you're doing something with a

group and like kind of high finance or

whatever, you want to hire for raw IQ

and hard work and just iterating and

figuring it out and that's that's a

different skill set than the people who

run the machine.

>> What's your way of filtering for that

IQ? What you know how do you interview

or what are the signals you look for?

>> This is like super hard. I think you

start with

>> throw hard math problems at people. What

are you doing?

>> We used to do that at Clarium. We had

these really hard problems. I remember

uh my friend Sujio ran Dropbox one of

his partners there his new his new

ventures channel Lee was like the

highest scorer on on these tests I gave

this smart smart guy I uh yeah we had to

do really hard tests but you know once I

already had around me a bunch of people

who were really top talent it's like

they knew people like oh who is the

smartest guy in your physics PhD at MIT

who is you know things like that so it's

it's like you kind of you kind of get a

network that's already really solid and

then you go out from there

>> and so let's go more on that so uh two

things one Ben told me something that

like there's some number I don't know

the exact number 20 30 people who have

worked at your companies that have then

gone on to start like unicorn companies

dude what is what is that number roughly

>> oh gosh you know I don't actually keep

track of the official number but there's

over 20 people who've worked directly

for me who've started huge companies and

it's something I'm really proud of is

that we've had a lot of super talented

people and you know in some ways it's

like I like to like back my mind like oh

yeah I'm a great guy take credit for

shaping them but in some ways it's like

they were already really amazing and and

you know and and so I was like maybe I'm

just good at convincing them have worked

with me ahead of time, you know. So,

it's like there's a

>> Well, there's a nature nurture thing,

right? So,

>> yeah, there's and there's some of both.

I I do like to think that we've given

them useful frameworks just like I

learned from Peter. They might have

learned some of these things from me,

too. But, but, uh, I mean, one of the

one, you know, not all of them I've even

backed. Like, some of them I back, some

of them went off and then did it

themselves and Right., you know, which,

you know, usually they let me back them,

though. [laughter]

>> Yeah, that's the worst when you don't

you didn't get the call.

>> Actually, I'm still proud. I was still I

was still proud of like I'll tell you

the guy who came right out of school to

help run adapar with me and and and I

was like he became president of the

company super talented guy and uh I did

not know what I was doing uh even though

I just already done Palunteer there's

always mistakes I was making cuz there's

like things I didn't realize I had

advantages of Palunteer and you know I

had a part multillion dollar company now

it's great but there's things that took

longer there's mistakes but there's also

obviously good things we did cuz the

company worked out really well and I

think he had he had like went off on his

own and he had like uh you know his own

tough time or whatever for a little

while afterwards and then he ended up

partnering with someone and he started a

company that became worth $3 billion in

like four years and he sold it.

>> Wow.

>> Which I'm like, "Oh, wow. That's pretty

cool." So, but I was like and

you know and I and I he didn't have they

didn't bring anyone else into that

company, but I was still really proud of

the fact that I'd worked with this guy

and that he'd gone on and had like crazy

success. I mean, that's a cool feeling,

you know?

>> But for the record, it's always I'm more

proud if I got to invest, too, right?

>> Come on. Let's take care of your

buddies. Exactly. Most of the like 95%

of them it's like people will bring me

in and I'll still like help and we'll

coach and work with them together. So

let's do uh big hit number two. Adapar.

Um you explain like

>> explain in layman's terms what even is

adapar and then I want I have some

questions for you but let's first do the

the explain like I'm 5 years old. What

is adapar?

>> So adapar is uh is the leading wealth

management technology company in the US.

And so there's people who work at what

are called raas registered investment

advisors. There's tens of thousands of

these. And they will help you or your

parents or whoever kind of manage their

wealth. They'll give you reports.

They'll do your trusts in estate.

They'll just do everything around kind

of the wealth planning. Man, it was

really freaking hard. We built all this

stuff and we like hooked up to Schwab

and Fidel because those are like two of

the biggest everyone's heard of those,

right? The biggest custodians and we had

all this wrong data in the reports like

what are we doing wrong? And it turned

out the data coming from Schwab and

Fidelli was often times wrong like what

is wrong with this space? It's like the

whole thing's a mess. So it was it was a

hard company to build. It took about

three or four years before we really got

to the point where where it was useful

to people. And

>> so you didn't give up though during that

time. Uh,

>> oh no, that's like the last like you

have to have a personality where you're

not going to give up. I mean, I'll give

up if it turns out someone else has

already solved it perfectly. Like if a

already existed, it would have been a

stupid thing to do then and I learned

that then then maybe you give up and

pivot. But the fact that it's just a

hard problem, you're not going to give

up. You're just going to like double

down and like fix it, you know?

>> Interesting. So you're you're uh you you

don't give up if it's too hard, too.

>> But like that's better. That means once

I do solve it, it's going to have this

giant moat. Like Adabar has the biggest

freaking moat. We were talking earlier

about guys like Rocket Internet will

like go around copying things and annoy

people. Like good luck. If you want to

try to copy that, you got to take a

billion dollars in 10 years, you know,

like no chance. No chance.

>> You talk about hard work. I when I was

doing research for this, I I called

somebody who works on your team and I

said, "Tell me about it. What's he like?

What's it like to work with him?" One of

the things I said was like, "He's always

on. I've never seen him just go like go

dark, go off, or just like turn his

brain off or be like, I just want to

chill on the beach and just drink my

ties and not do anything." Is that

>> Well, this is like accurate for you.

>> This is like my game, though. I mean, I

think you have to love what you're

doing, right? So, like you shouldn't

play games. you don't you don't like you

know if you're not playing you're not

enjoying the game you got to switch it

up.

>> Yeah.

>> So this is this this is this is this is

what I'm doing this because I really

enjoy it. It's really fun. I'm really

good. I think one of the you know

Aristotle would talk about how like one

of the highest pleasures is like is like

using your mind in its highest capacity.

Right. So it's like you explain like you

actually enjoy chess more than checkers

if you're good at both because chess is

has more levels to it. It's more

complicated game and so you you want

your mind to be engaged in interesting

complex useful things that are getting

things done. It's it's like a positive

part. I think it's how humanity works,

>> right? How do you still um recharge or

just get clarity of thought? Cuz one of

the challenges is if you're always on,

uh you might not have that chance to

step back and reassess.

>> You do need open time for creativity. I

I've noticed when I overchedule myself,

I'm not nearly as creative then. And I

think the cold plunge helped, right? I

don't know if that clear mind.

>> That was a quick you were in there for

60 seconds 51 second reset we had.

>> I think I stayed in for the full

>> Yeah, you you you actually did two

plunges. That was pretty good.

[laughter]

>> What is a typical schedule like? Uh

what's a day in the life? Cuz you got

your fund, you got companies, you got

all kinds of stuff. You got your

podcast.

>> Yeah. My number one my number one is AVC

and AVC has a build program which is my

favorite part of it. A third of our

money now goes towards building new

companies. So my favorite thing is like

the strategy for recruiting talent and

and then strategy sessions with with you

know to figure out what we're going to

build.

>> Right. And so when you you said strategy

for talent, what was the other one?

Strategy for building the company. Is

that

>> Yeah. You're basically strategy when

you're the way I look at the way I look

at opportunities for new businesses is

you're looking for conceptual gaps in

the world. you're saying like

>> here's here's where this industry is now

like here's how this thing is working

here's how this process is done in the

economy and here's where it could be if

it was using like the right new

technology or the right new incentives

or this or this right new effect of

cultures or what whatever it is that

like could be better about it and the

question is not just it's actually very

easy to find conceptual gaps I'll put

forward if you spend some time with like

a few smart friends and you like study

industry and talk to people you're like

you usually will find oh wow this thing

could be done this way and so the the

harder question is not just what it

could be done, but like what's the path

to get there? What could we put in place

that would allow us to get it there? How

do we build this thing? How much is it

going to cost? How do we how do we make

the people want to? So, there's a lot of

things, for example, in like healthcare

and hospitals that are done completely

wrong, but it makes the hospitals more

money. So, so, so, so it's like, so even

though it's like clearly not the right

way of doing things, they're not going

to just fix it. You have to find some

way to get from here to there with the

actors being willing to do it, right?

>> So, let's do an example. So, um, give me

an example. either maybe something that

you're that's top of mind because you're

thinking about it right now, maybe it's

not all figured out or a recent one.

>> Yeah. So, a gap and a path that you kind

of figured out

>> 100%. So, uh it turns out that there's

tens of thousands of loading yards

around the country in logistics. These

are places where trucks come, they get

in line, they drop things off, they move

things around, they they you pick things

up, and it's it's a pretty interesting

area. And like the biggest warehouse

company in the country is Prologice. And

it turns out the founders investor with

me is based in based in, you know,

nearby in California. were back there

and then it turns out there's like a

handful of the biggest carrier companies

like Ryder you've probably heard of and

others and we've actually sold a company

to Ryder so we're close to those guys

too and so so because we knew a bunch of

these guys we started analyzing what can

we do with AI to make your yards better

and what we figured out is that if you

put a just a couple cameras in first we

thought we need six but just a couple

cameras you can kind of watch and map

out where everything is map out how

efficient the gate is map out the

processes create accountability and

incentives for people to go faster uh

create ways of pinging the carriers if

it's backed up to like to use other

loading yards nearby. Just like basic

little ways on the margins of like

making these things work better and and

and timing them and creating because you

want a little bit of competition. People

always respond well, you know, if you do

it properly. And so we've mapped this

out and we ended up founding a company

with a really strong AI team. Uh and and

we ended up kind of co-founding it with

a this like, you know, the warehouse

companies, the carriers and others based

on their needs. And it's really cool

because the way we built it with them is

we have like a few hundred million

revenue already built in that we can

scale up into their into their yards

they already own. And then we can have

something all the other yards want to

use as well.

>> Let's do more details. So you you're

already kind of in adjacent to that

world because you've done stuff, but how

does the brainstorm work inside your

office or where like where when does

somebody ask the question, hey, could

you use AI for these loading yards? Like

how how do like take me all the way to

that? Like where does a question like

that even come from? Where does the

nugget of insight come from?

>> So my partner Jake's in charge of

logistics and supply chain. He's the

he's the kind of biggest driver here and

he's, you know, done some strategy

sessions with, you know, our our friends

running these different companies we're

close to. get together. I I have a

vineyard in in Napa Valley and we like

bring every year like the 100 top

logistics CEOs and you know drink and

strategize and hang out you know it's

like a good way

>> and you kind of are asking them

questions to try to find their

>> what are your problems what works you

spending money on what are you seeing

and we'll bring like new entrepreneurs

and we're backing and like get their

take on things and we'll bring what are

called e entrepreneurs and residents you

know who will talk with them and iterate

on the idea so we kind of knew loading

yards is a big thing let's go talk and

iterate on ideas what we could do to

apply new things to it and uh you You

know, in this case, there's a really

strong AI team that happens to be in the

UK that we'd met through other friends

that like had worked on some really cool

visual problems we thought was very very

good for this and ended up recruiting

them as co-founders, which which worked

out really well. So, we're constantly on

the lookout for like separately like

napkin math. You're like, "Okay, so if

we can improve the loading yards by

this, that's the size of the prize and

then that kind of clears a hurdle for

you."

>> Yeah, this this is this is and you know,

the other thing here which I I don't

love but is definitely helpful is

California had some new regulatory rules

about things you had to actually map out

as well. So they were going to have to

do something anyway, but why not create

more value based on then but then like

be the thing they put in when they're

going to have to do it anyway in the

next year. They have the rules coming

up. There's like, you know, logistics

has had a few of these things. There had

some rule on telematics where you had to

like I think for purposes of not making

people drive too long, you had to like

record things differently, which was

kind of an insertion point for a couple

TMAX companies we held back as well,

which is the thing tracks the trucks and

stuff. So there's things like that where

the regulatory thing was helpful, too.

>> And then yeah, you just you sit down,

you map it out, you know, you've known

the people for a long I mean, the the

one of the unfair secrets of business is

the more success you have, the more it's

like a platform for a bigger thing you

can do next time. And that's just the

way it is. You just got to keep in the

game cuz like it's like the I think when

I was really young, I used to think, oh,

I can start a business and make a lot of

money and then go to the beach and then

that would be like fun. And that's like

that's not nearly as fun as the fact

that once you've already started and

successful once, now you get to do like

bigger things more easily, right?

>> So, it's like it's like and that's why

like I think when you're young, partner

with someone else who already has that

unfair advantage, help them use their

unfair advantage, build something with

them. Now you have all these extra

unfair advantages. You could do it

again. So this is this is like there's

like this naive thing where like you're

like this lone business founder. I think

you can do that but it's still hard,

>> right? Why play the game on hard mode?

>> Yeah. Why play game on hard mode? Why

not why not find there's so many places

in the world where there's unfair

advantages? And an unfair advantage what

I mean by that is like every time you

have a success, you now have the respect

and attention and understanding of all

these people who will then help you do

the next thing, right? And and once you

prove you're competent once then you

know there's you know I have a bunch

more things I could be doing now if I

had more competent like young people

around me who want to be entrepreneurs

and partner with me. We have a bunch of

them but we always need more cuz there's

the thing we lack. We don't lack ideas.

We don't like money. We lack really

talented hardworking people with

persistence you know. So at the time I

was we working I was working for you

working on the hedge fund you were

invested in Facebook you're doing other

investing and we decided to really go

all in and spend a lot of time on

Palunteer. Why why was that the right

choice then it's tech but go more

specifically like what what what was

what was your high level around that at

that time? How were you thinking about

it? What what gap were we going after?

It was very broadly uh government and

then it was within that it was defense

uh more narrowly it was sort of the the

um intelligence community that sort of

adj you know defense adjacent uh I

you know it was it was a couple of years

after 9/11 we're sort of starting it in

2003 2004

and uh there were all these ways that uh

I felt that we didn't you know that we

that we had these very low tech and very

privacy violating solutions for the

terrorism problem. You know, it was it

was annoying that you had to take off

your shoes at every airport, which was

like just not security, but it was this

incredibly intrusive security theater.

And uh and then yeah, the the question

was could you do something where you'd

have, you know, way more security with

way fewer um you know, technolog is

doing more with less. And so the the

terrorism context was could we have more

security against terrorists with less

intrusive um civil liberties violations?

And then um and then and then there was

broadly this question, you know, was was

there some way to to reset all these

things in the government? And uh it was

a black box and you know we did not know

whether places like the CIA and NSA and

places like that had you know some super

duper computer working in the background

that was catching all the terrorists. Um

we sort of suspected they didn't um and

um and then it took it took a while to

figure that out but uh I I think our

suspicions were probably correct. Yeah,

we saw them doing a lot of things that

made us suspect that they actually

gotten way behind Silicon Valley and

there were I mean there were details

that you know it was hard to say you

know with our I remember our first trip

to Langley in uh in 2000 2005 we got

inel to invest and you and I were there

and I think it took us about a day or

two to process but you know at the end

of the trip it was like do you want to

come do you want to buy some stuff from

the CIA gift gift shop and it was like

you can get a windbreaker and a CIA cap

>> coins they were kind of cool

>> I think they were half of them were made

in China which was you know But but um

and then of course there was probably

some you know there's some steelman

version where the the it was just a

decoy and there was really a lot of

stuff going on in the background. But uh

>> do you remember the doors all had these

like eye detectors on each of the door

that you're supposed to scan your eye to

get in but none of them worked. So there

so wherever you go around there would be

like the eye detector but they were

broken. they turn them all off which I

thought was kind of like a kind of a

typical

>> I don't know there you know there yeah

there all these all all all these play

and so in that context you you you would

think okay there's there's some very big

problem that can be can be solved it you

know in some ways it turned out to be

more difficult than uh than one would

have thought uh you know there obviously

are all these pro all these sectors

where you have that are very very broken

where um you know education healthare,

all all these sort of deeply broken

sectors where the solution um you know

there's some obvious solutions and the

fact they have not been implemented

tells you there's some big barriers to

implementation.

>> They're set up not to allow you to break

them. This is kind of what I think the

palanteer version is you know there was

uh there was this uh forget what the

acronym stands for. was this a software

program. This was once we moved from

intelligence community into the broader

military called DSyncs which was just

sort of this um in theory was a system

we were supposed to figure out ways to

integrate the data across all these uh

units in the field and headquarters and

you know integrate what was going on

which is incredibly important thing to

do in practice. Uh it was a sort of a

cluji consultant

billion-dollar boondoggle that didn't

work and uh and we naturally thought we

would replace it in in 6 months and it

took it took something like 10 years. We

finally replaced it in in 2019 and you

know we had to sue the army which and

you know we had all our all our

consultants quit and said you know um

this is just the most ridiculous thing.

you'll never get a you can't sue your

customer and um you definitely can't sue

the army and uh not only will you not

get them as a customer, you will not get

anybody else in DC. You'll just be black

ballalled by everybody. And then but

then you know um and it was under we we

it was in 2016 that we sued them. It was

under a 1994 law where um you know the

military was supposed to have an open

procurement process and then when you uh

and then what you can do when you sue

somebody is you you get discovery and

you discover and you sort of discover

what's going on in the sausage making

factory that no one's investigated for

22 years and there's a lot of stuff and

there were sort of you know there there

were internal reports that Palanteer

worked better which didn't matter

because obviously nobody can assess the

software but then more scandalously

there were um you know [clears throat]

there were um orders to suppress the

reports. There were emails that people

had to hide the findings and there was a

cover up and this this did did not sound

like the open procurement process and uh

and then you know and you you won at the

court level then you won at the district

at the DC circuit level and uh you know

you were forced to they were forced to

reopen the process and then you know

after after a decade we we sort of got

the contract. So yeah, so there was

something that was doable, but it was it

was not as straightforward as it as it

sounded.

>> It feels like there's these and SpaceX

had to sue as well, of course. It feels

like there's these parts of our society

that are set up to just maintain their

broken nature, and you have to just

punch really, really, really hard

through them. And it's very rare people

do that, you know.

>> Yeah, SpaceX was the first successful

template to do it.

>> Uh and

and there's, you know, there's obviously

something like this. you know, the

university system seems as broken or or

more than the military procurement

process. And then especially with the,

you know, crediting agencies and all

these things where where they where they

just uh are designed to to prevent

newcomers and the it's it's like if you

actually had a newcomer, they would just

eat the field.

>> They try to crush you. They try to crush

you. It took us thousands of pages of

regulation. There's this kind of like

trope that you've had throughout your

life or like thoughtful intentionality

around going towards talent dense

clusters. This is probably a function of

why you were rejected PayPal but still

were like no I have to work here. Like

it doesn't

>> This is becoming more obvious to

everyone now, right? It wasn't as

obvious 25 years ago.

>> Um but but the question being why was it

to you and why was it so clear that you

have to work at PayPal?

>> To me, you want to be around the most

interesting people that I could learn

something from.

>> I like had some other internship

freshman year and I just learned

basically nothing. If anything, I was

teaching the people their stuff, which

is terrible cuz I was 18.

>> I I don't want to attack them. It was

some like silly startup. This is like

this is the year 2000. So, it was like I

don't want them to It's like they'll be

the one mentioning them online. They'll

some they probably I haven't seen them

in 20 years. They'll probably be really

sad. I'm like, "Yeah, those dumb people.

>> Terrible." [laughter]

>> I mean, they're very nice people. I just

wasn't learning anything.

>> I've always been interested in ideas and

improvement. And like I was at Stamford

taking really advanced things to push

myself. It made sense like follow the

most interesting, most dynamic people.

like where are the people I admire the

most going and go try to work with them

and and and learn and build together,

you know?

>> What were most of your friends doing at

that time?

>> Teaching computer science at Stanford

and going way ahead in math and CS and

getting their PhDs in MIT and and

Berkeley and Stanford and Caltech or

whatever. You know, I had some friends

who were more into history, but it was

very few. Most most of the ones I was

closer to were kind of going deep on the

on the tech side. It's funny looking

back, but it wasn't that hard getting

all of our smartest friends to come work

with us. I think because we just had a

really interesting place and it was a

natural place once we had like some of

our smartest friends. Everyone just it

was just more fun to be there and be

somewhere else. And

>> someone was telling me the other day

they want to hire people who don't know

each other and I just for me I totally

disagree. I think it's like really good

if they like like each other and like

like admire each other and want and want

to like work hard together and then and

be at the office late together. I think

it's a positive thing.

>> Yeah, probably.

>> Is that what drew you towards PayPal?

Really? Just like close most your

friends were there or was

>> No, it was people I admired who were

there. That was like there everyone

there was older than me. Mhm.

>> So, when people talk about the PayPal

mafia, it's like, you know, Peter's 15

years older than me. Uh Elon's 12 years

older than me. They're both friends, but

they're both people who I I get no

credit for any of that stuff. I was just

like a kid who was learning there

basically. And and and and I did get to

know some more people there. And I guess

there were people like Bob Mcgru who

were working there who I didn't know

from my fraternity and from Stanford

review and stuff. I ended up recruiting

him to paler later as a key person. He

ended up building OpenAI after that

after after a decade. So, there were

some people there who I guess who I

knew, but it was mostly like getting to

know them there. But but kind of having

watched from the computer science

department, people like had like kind of

heard about it and like knew through

friends who were going there was was

more of the impetus cuz I was pretty

young at the time.

>> Yeah. Why do you think teal took this

like you'd eventually let you join