← How I Invest with David Weisburd
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- [00:00]
A
You dropped out of Harvard at 18 years old. You've since raised $47 million for Dubb. What is Dubb?
- [00:06]
B
Dubb is the very first regulated copy trading platform. And very simply, instead of trading stocks in our app, you actually just copy what other people are doing. The whole thesis is that most retail investors will never get good at investing. Figures put at 70 to 90% of retail investors underperform. I love the action of sort of trading. So how do we channel that into a better way for better financial outcomes? And there's no better thing than just following what proven experts are doing in the markets. If you take a big step back, it's actually nothing new. What we're doing with copy trading, when you have money, you've got $50 million, you're not trading yourself. You're hiring a fancy wealth manager at Goldman Sachs. You're going to hedge fund like Citadel. You're trusting the experts. Deploy your capital. We want to enable anyone with $100 to do that same experience.
- [00:49]
A
Preparing for this interview, I did some research. I was shocked. 20 to 25% of all trading in the market is retail. What are the confluence of factors leading to kind of such a large chun trading being retail?
- [01:00]
B
Yeah, you're absolutely right. It's actually exploded over the past 10 to 15 years. Probably doubled at least in terms of the retail trading volume. It's gone as high as like 35% today in many estimates now and it's only going to increase. And this is really the experience that I felt the revolution of the retail investor since really Robin Hood ignited the wave with free investing. And over the past, I think if you look at it 10 years, there are traders like me that grew up as kids who were sitting behind a bunch of screens. And now we're able to invest for the very first time and streamline and open a brokerage account in 10 minutes. And that accessibility Cambrian explosion was one of the first parts. Right now many more people could get access to trading. But two was really retail investing becoming part of the cultural zeitgeist. Think about what happened in 2020. 2021, many estimates show 30 million new retail investors came online for the first time. And it wasn't about behind sitting by screens anymore and looking at the fundamentals. It was about following people ideas and narratives to invest. We saw this in meme stocks, we saw this in crypto. Elon was moving the dogecoin markets every tweet and superstar fund managers like Cathie Woods, Bill Ackman raising tens of not if not hundreds of billions of dollars in their funds. And I think that was just emblematic of really many ways just social media, mobile era coming to investing. And that drove a lot of this ability to, to have these online communities with Wall street bets, Reddit X and everything that we've seen about social and finance.
- [02:27]
A
The confluence of that, it's almost like this memetic behavior. People were sitting around Covid with nothing to do and they started trading. Almost like playing Warcraft or playing. Playing Halo.
- [02:37]
B
Absolutely. And that was me. That was the original inspiration for Dub. I was 19 years old, I was sitting in my dorm at Harvard and we were part of the first Covid generation at school. So we're basically locked up in our park in our dorms. You couldn't go to anyone else's room. So all I did was I was just trading. And I'd grown up doing a lot of trading and start in second grade. But I got really serious during the COVID era where everyone is getting stimulus checks. Everyone had $1,000 to deploy the market and no one wanted to miss out the memetic desire and FOMO where every single last person, your dumbest friend was now making $100,000 in Dogecoin.
- [03:10]
A
Right.
- [03:10]
B
Who's not going to give that a shot?
- [03:12]
A
It's hard to lose when there's so much money printing. Absolutely.
- [03:16]
B
And also I think what people don't see about that narrative was in 2022 when the markets mean reverted, it crashed, the markets came down and we had a couple years of sort of choppy choppiness. That's where a lot of people lost money. GameStop. 80% of people who invested in GameStop actually lost money in totality. But the only thing that people hear about is the run up. So this is part of dub's mission is how do we get people not to just invest, but but invest better.
- [03:44]
A
You dropped out of Harvard at 18. Hopefully your mother did not have a heart attack. But when did you know was the right time to drop out and what did you need to see in order to do that?
- [03:54]
B
Yeah, so it was actually pretty lucky. Where I my first time leaving or dropping out of school was, was in high school. So I left high school when I was 16 to do my first company. It's a virtual reality ed tech company that absolutely failed. It was called Realism. But that was my school of hard knocks. I moved my two co founders to Boston. We raised a little bit of venture capital. We lived in one bedroom and we all had like three airbeds. And then I think after that experience, we were lucky. We sold the company. We had some patents pending, we had some good ip, but the business didn't work. That gave me the fortitude in the know how of like at least how to get started. So when this time came around and I saw this opportunity, I'm a product guy myself and I was going to be the customer because I was participating in this wave. I was like, how do I get the ball rolling? And the first people I called were my previous investors from the company that I'd sold in the past. And they're like blank, check for you no matter what we're going to do. So they de risked it, they really did. And that gave me the confidence to go, go to the next step. And then I actually didn't even tell my mom when I decided to leave school to start this company because I'd already raised money and I was able to pay myself. I guess I was financially free and I knew this is what I wanted to do. I think in many ways also Covid school kind of sucked. So it's a natural path to go, go and build. And I sort of saw this consumer behavior wave that might come once in my lifetime with how retail investing was changing and I wanted to seize the moment and go build something pretty incredible.
- [05:19]
A
A lot of people think that these kind of quitting, quitting college, like Mark Zuckerberg also quit after he had traction on Facebook. So a lot of people think he decided to quit and then he figured his way out. It's not necessarily binary. It's not like you have to quit and come up with an idea or never quit. It's about a risk adjusted decision making.
- [05:38]
B
I was in a very fortunate place also 2021 was definitely one of the top peaks of the venture market. So. And it just happened that Robinhood IPO Coinbase, IPO FinTech was the hottest thing on the market. So I, I also saw that and then wanted to seize that opportunity to go build something where there's true enterprise value being created and customer demand. And I think that's exhilarating for me to go work on too. And you can see the impact of what you're doing.
- [06:04]
A
How long did it take you to talk about your story that year? This 18, 19 year old. I'm sure there's some hesitation to kind of come out of the closet of being young and being such a young entrepreneur.
- [06:15]
B
One thing that's unique about Silicon Valley is there are a couple of these stories now so they really appreciate you more for your substance and your intellect. And the logical outcomes of what you're doing, rather than sort of the age. And part of it too was I think, like, how do I de. Risk that? Right. In, in many ways, I knew building this business was going to require a lot of skills that I just never, never was able to accumulate or may, may never go have just because I've been in the industry for that long. Like, I don't know the first thing about back then about like compliance. I don't, I didn't know sort of all the regulatory regimes. I didn't have any of the licenses. Right. I, it might take me years to go get those things done. So I hired a phenomenal chief compliance officer that's double my age. And now he covered that. A big part of building the business has been covering my weaknesses and, and really allowing myself to focus on the superpowers. And that applies to everyone.
- [07:01]
A
It's interesting because there's certain things that need to happen in every business and every business kind of hits this roadblock. And sometimes it's not obvious what the founder should be doing and what the founder should be hiring for, or sometimes the founder figures something out enough to know what to hire for. Walk me through. As you scale, you've scaled out to millions of users. How do you solve those problems? How do you know when you should be doing something? When a current team member or whether you should hire someone.
- [07:28]
B
But it was a lot of fall on my face and screwing up. Yeah. In the very beginning, I think one of the biggest lessons I learned was what got me here is not going to get me to where I want to go. And when I started the business and the way I grew up was like very individualistic. I, we were poor, but I had very tough. Asian parents are like very disciplined. You got to do everything followed by the book. And that's what I did. And I grew up in a, in a environment of fear, but I was motivated by fear to go succeed. And I thought that was the right way to manage as well, because that's how my parents manage me. So when I first started the team, I was the worst micromanager. I was up in the weeds of sort of every single person. I thought everyone had to stay late until 8, 9 o'. Clock. This is the startup grind. We got to live like how everyone else is. 9, 9, 6, 9, 9, 6. I still do it first. I do 9, 7, whatever. But I'm in a different boat.
- [08:17]
A
I've had the same issue. Like, I think everybody should be hardcore. As Elon puts it, if you're too flexible on that. You end up having a mediocre culture. How do you balance this need for like extremely great culture with not being a psychopath?
- [08:29]
B
It's very difficult. And the one thing that I think has worked for me has been filtering and hiring for people that are innately that that will do it without me asking. I've realized a better way to lead. And what's been working much better for me, or at least has been working for a team as I've recovered from these mistakes, has been motivating, leading not through fear, but inspiration, opportunity and driving outcomes in the success of what we're doing. And when you can have the intrinsic motivation come out that. There you go.
- [09:03]
A
Our zoom background has made a lot of noise.
- [09:06]
B
It's kind of banger sometimes.
- [09:09]
A
That happens at a New York stock Exchange Sometimes.
- [09:11]
B
Yeah. Wow. Good, good.
- [09:16]
A
So double click on that. So you're looking for people with that kind of drive. Are many of your employees today kind of 9, 9, 6 or more realistically, working till 7 or 8 or working in the evening after they come home? Yeah. And talk to me about the culture today at Dub.
- [09:32]
B
My policy now of the team is I don't inspect first. I expect greatness out of you. And I think when you are sat down and you're expected and your boss tells you I'm expecting really great things, you're just naturally more motivated to go crush it. And I don't actually care if you're in the office when you're working. Right. I think like I. When I hire you, I'm giving you an immense amount of trust and I trust that you know your best work style, your best work environment. So if you got to go home for the rest of the day at like 5 or 6 o' clock and you're just going to be better at home grinding for two or three more hours, I completely. No questions asked.
- [10:06]
A
How do you determine whether you want someone that's going to work their ass off or somebody that's going to. That's has 20 years of experience doing this one thing and could literally check out at 5 o' clock and be five times more effective than this person?
- [10:18]
B
I don't think it's binary. Some are best guys in our team. The older folks, my executive leadership team, they're maybe double my age, but they're still grinders. They might have kids, they're much older, but they just love staying in the game.
- [10:30]
A
Do you have any of those, though, that are just so good? They just come in for eight hours and they just crush and. Or does that hurt your culture?
- [10:37]
B
It's not aligned with their culture. Yeah. I think, especially the league, it affects.
- [10:40]
A
Other people as well on the team.
- [10:41]
B
Yeah. And I don't think, like, people who come in for eight hours and crush, they may be good at repeating their skill set and their experience, but to me, if they're just there for eight hours, they're not truly bought in. Right.
- [10:53]
A
They're just checking in and checking out.
- [10:54]
B
Exactly. That's emblematic of some. I want people who love what we're doing, are students of the game and care about being in the arena. And I try and viciously filter for that in my interviews now. And one thing that I was too scared to do in the past was anti sell during my interviews. I, of course, it's just selling the pitch of sort of getting someone in, inspiring them by the vision and the traction. But now it's like, hey, rank yourself on a scale of like 1 to 10. How gritty are you? If I talk to your former boss, would they say the same thing? Because at the end of the interview process, I'm going to get references. I'm going to talk to people who worked with you in the past. So. And then, like, I'm just straightforward. Like, if that doesn't align with what we're doing, I don't want to set you up for failure to come into dub. Right. So I think I've just gotten much more comfortable just being open and honest about this is our culture, this is the way that we operate, this is the way that you buy in. It's not going to be for everybody.
- [11:43]
A
What's the second order effects of anti selling in this process?
- [11:46]
B
And yeah, I usually do at the end. I think it hasn't, like, been bad. It hasn't had any negative effects. I think it's been beneficial in the sense that, like, it's helped. It has helped us filter out people. And in the moment, they may not give you the per the answer that they think you want to hear. They'll probably give you an answer that you want to hear. But I think we have seen some folks drop out of the process because this just isn't for them. And that's actually what we want to have happen. Yeah.
- [12:12]
A
So there's $100 trillion, 100,000 billion going from baby boomers to Gen Z and some younger millennials. How is that going to affect the marketplace trading dub and my generation, Gen.
- [12:23]
B
Z, the younger millennials, we live in a more polarized environment than we ever have in history. Maybe sort of modern history. And part of that is this we see in our politics. We see on the ground the wealth gap is growing faster than ever. And also this change in how people view wealth building. I'll give you a statistic. We just did a survey with the Harris poll, a nationwide survey with thousands of U.S. americans and now the Gen Z majority of Gen Z believe that the fastest way to become a millionaire is through investing. And they want on average they want to become a millionaire by 32 years old through investing and that rises to 64 years old. When it comes to baby boomers or the older folks that recruited, I think this comes down to this, the psychological shift where people are super risk on when it comes to the younger generation where all this money is going to go to. And what they crave more than anything is the dopamine hit the agency having control over the decision making. That's why we've seen risk assets like crypto options and all these things have a mega boom over the past couple of years. Reflective of the product that consumers demand. Right. Not all that is going to be able to funnel into that. Right. There's some things you can't move around, whatever trust structures and stuff like that. But if we think about what the next generation wants in terms of investing products, it's scary.
- [13:41]
A
Right.
- [13:42]
B
Most retail investors don't know how to trade these effectively. They're very esoteric assets. The volatility is incredibly high. I think that's Dub's onus. Here is what I think. I respect guys like Robinhood and the platforms that made investing free and opened it up and that's been incredible for industry. It's increased the market share and market size drastically, but it's not enough. Right. You're giving people the keys to the casino, but you're not teaching them how to play poker. And I think dub's onus and like the next generation of companies is not just increasing access to investing, but how do you educate people to invest better? And that's not there. People just going to continue losing money. That's the missing part of the equation. And that's what I'm afraid for during this Great wall transition. If that's not there, I think we're set up for in many ways failure protecting those assets. Well, for the long term.
- [14:33]
A
Double click exactly on what do users go on Dub to do?
- [14:36]
B
Yeah. So when you sign on to dubb, you open a brokerage account like you with Robin, you were a broker dealer as well. But when you deposit money, you see sort of portfolios or these baskets of assets that you can invest in. And it's not single stock trading. You're investing in a portfolio strategy. Essentially, it's kind of like you can think of it like investing in an etf. The whole idea is that these portfolios are managed by people on the platform who have real track record. So today we have hundreds of these creators who are existing or former hedge fund managers, wealth advised ras that hundreds of millions of dollars of assets, these financial influencers of like 500,000 followers that you see on X, who have been some of the most prolific traders that have engineered some of these retail sort of meme stock movements over the past couple of years. And the whole idea is like, hey, with the tap of button you can follow everything they do in their portfolio automatically. And of course that's not going to guarantee better investment outcomes. Right. But I do think on a probabilistic scale, when you're following someone who has a proven track record and you can see their whole transparent trading history is probably on average better than trading yourself.
- [15:45]
A
Let's say you don't believe in alpha, which I believe in the mostly efficient market hypothesis. I do think there's some alpha, but let's say you don't even believe in that. There shouldn't be negative alpha. So if we just invest in all companies with the letter A or with the letter B, you shouldn't do that. Much worse than picking, quote unquote picking. And I think what's important there is the agency that people feel on platforms like Dub. My mom will give me a call and she said, hey, I watched a interview with Alex Karp or Uber, like, should I buy Palantir, Should I buy Uber? And I'm always like, you know, do whatever you want because you can't really do wrong. Yeah. The worst thing is actually not being in the market, not investing.
- [16:21]
B
Absolutely.
- [16:21]
A
But if you just randomly pick stocks, you're actually doing pretty well.
- [16:23]
B
Yeah, 100. And part of it is just simple.
- [16:26]
A
Which by the way is not the case for crypto or random meme coins, which sometimes there's like rug pools. It's not an efficient market.
- [16:31]
B
Right. It's not an asymmetric alpha is more important. The fund manager, I think you hit on a really key point for us is like part of it is even just simplifying investing, getting people more into investing. Right. Like it's hard to learn which stock to pick. Just like your mom, like, what do I actually do? When you trust a human being, which we're much more Born to do that. We do that subconsciously we understand humans. It's really the influencer economy in many ways. Coming to investing and most of my product decisions today I go on Yelp to decide what restaurant go I decide what I buy through this Instagram influencer. It's the same thing. For now we're bringing it this new behavior to how you deploy capital. And I think that just done well we'll onboard more people into investing, get them more comfortable, get them more familiar. If we do that. Like the statistics right now is like 40 to 50% of Americans do not even own a single stock today. They're not participating. The greatest wealth creation engine capitalism, the American dream. It's the ownership economy. And I think it's kind of scary to think that in AI like we're going to be creating more market value than ever before. If a lot of Americans aren't participating in that, we're just going to perpetuate.
- [17:34]
A
And even worse, some people believe that true the rate of inflation is higher than the CPI and assets bubble up and incomes stay flat or go up by a little bit. So there's this increasing wealth gap between the rich, those who own assets and those who don't.
- [17:50]
B
Yeah. And I think that's if we can make investor simpler, more familiar and bring more even a 10% debt in debt. I think we'll do so much change to the market. Thing that shocked me is like Amazon when they IPO 1970 since IPO to today adjusted for all the stock splits the stock is up 225,000% with three zeros. I think post IPO not as. Not even as a private company. So that to me is like if you draw that parallel to AI and the Mag 7 has a very similar profile as that everyone needs to participate in that. So that's why I'm really excited about some of the things that I see in the current administration where Trump accounts. Right. Like whatever you want to label whatever you want to call it starting out every kid in the US with $1,000 in their bank account, they're going to inevitably participate and the future American innovation. And that is the one thing that the more that we've grown and more that we've scaled, I get more passionate about is how do we get everyone level the playing field of participation and what it means to be American and that's why we immigrated here as my parents came is to me app ownership. Yeah. And that is the beauty that I think a lot of people forgotten with all the noise today.
- [18:56]
A
I think if you bring it down to a neurobiological level. So in our brain whenever we have a new activity, a new neural pathway is formed. Negative and positive. So smoking, same thing. That's why it becomes habitual. But trading too and if could get people just doing right action even in small dollars Y even in these esoteric trades which I want to get into.
- [19:14]
B
Yeah, it's.
- [19:15]
A
It's very pro social for them and it completely changed the trajectory of their life.
- [19:19]
B
Absolutely. Yeah.
- [19:21]
C
So introducing Genius bank, the award winning bank that does things differently for our kind of genius spelled with a J. Award winning can mean many things like most locations. But who still goes to the bank for us? Award winning means best Newcomer bank of 2025 by Bankrate. Visit Genius Bank.com Genius with a J. Genius bank registered trademark is a division of SMBC Manu bank awards are independently granted by their respective publication are not indicative of future success or results.
- [19:50]
A
Speaking of trades, tell me about how I could follow Nancy Pelosi's trades. It's a meme. I didn't know that you could actually operationalize that. So tell me about that.
- [19:59]
B
Yeah, absolutely. So Nancy Pelosi, the queen of investing, our favorite by the stock act of 2012, every single sort of person in Congress needs to file any stock trades or their spouse's stock trades or the immediate family within 30 days. Right. And this is part of the disclosures and they get fined if they don't. So Nancy Pelosi just happens to have made some really phenomenal trades over the past 20 years. And it's actually not her, it's her husband Paul Pelosi who is a like he's made a bunch of money as a VC private equity investor. But their, their spouses, they talk pretty much every single day. Nancy's publicly denied she's shared any information but just can't. She's the speaker of the House. She's one of the most power. She was at one point the most powerful woman probably alive or at least within the US Right on dub as of today. I checked today morning. She's been up since inception which was I think in September of 2024 or 2023. She's up 188%. We made our customers tens of millions of dollars through copy trading Nancy Pelosi's picks. And yes, there's a 30 day lag. She has a 30 day window to follow trades. But Nancy mostly does long only stocks or leaps, sort of far out sort of options calls. So she doesn't trade too much. So she's been long only and she's been really long only. The top AI stocks, Nvidia and a couple esoteric ones like some biotech stocks that absolutely popped and now it's pretty cool because like you see whenever filing comes out, she moves the markets and we see what does have now reflects.
- [21:21]
A
Of not only does she have insider information, she's also moving the stock at it.
- [21:24]
B
Absolutely. Because there's so many people paying attention to what they're doing and we've got enough capital on the platform where it kind of follows through now. Yeah. And. But I do want to highlight that Nancy Pelosi, she's viral, she's famous. Yes, she's made a lot of money, but who knows if the alpha will continue. She not retires soon. But it's only one of hundreds of different investing strategies that you can now copy trade on the platform. And I think the vision has been like, hey, we got a lot of early success because we leaned on the viral distribution, viral content policy and we did make a lot of money. But now it's like, how do we build this entire marketplace? Investing strategies across asset classes, across discretionary quantitative strategies and really bring on the best talented sort of managers or creators or traders the platform to deliver alpha for our customers.
- [22:11]
A
They're kind of like creating a mini citadel where you have you give people money or they come in with a track record, they're able to raise some money and prove themselves in the market and then the good ones get promoted with more capital and the bad ones basically get fired.
- [22:25]
B
100%. We're meritocratous marketplace right at Ken with Citadel, Ken Griffin. I guess it's controlled and centrally, but any PM can plug into this phenomenal system and infrastructure that they built. Data systems, trading, risk management. And Ken gives you the money and then you go trade. And they've got hundreds portfolio managers, they scale that system up. We're dub, it's the same thing. We've got hundreds of creators or traders now on the platform. Their money's not coming from me, but from our create our customers, our retail investors, maybe $100, but you multiply $100 over a million, that's a lot of money. And it's a substantive sort of move in the market, sort of likes a lot of assets. And then we give them the execution. We're the brokerage. We give them the data, we give them the tools and then we also give them, I think the most important piece, which is visibility and distribution. The moment you come onto dub, if you make it onto our leaderboard. We're putting you in front of millions of eyeballs and we're helping you attract capital and we're doing the marketing. And I think that's probably the most powerful.
- [23:20]
A
You're separating the skill from the marketing. So if you think about a stack of skill, you have some really great investors that are really great marketers, but it's a completely different skill set. Most great investors are great investors and sometimes it's because they're super nerdy, super introverted, never talk to anyone, and almost autistic. And then you have the marketers that are just really good at sales and it's just two different.
- [23:39]
B
Absolutely. I think that's one of the problems we're solving the market too. It's so easy to go on. Axe, you might have been great at marketing, but you might suck at trading, but everyone might think you're good at marketing because you made this call and you deleted your 30 other tweets.
- [23:50]
A
We're not going to mention any of those names.
- [23:52]
B
We won't. But now there's on dub, you can't fake your track record. It's fully transparent.
- [23:59]
A
A lot of institutional investors, they saw what happened. GameStop.
- [24:03]
B
Yeah.
- [24:03]
A
And it was kind of almost entertaining to see this kind of meme stock. There was no such thing as a meme stock before, I believe GameStop, and before that whole craze and they saw it again, then you could dismiss that as a Covid thing. But now it's coming back. You have open what just happened. Like the. Basically a hostile takeover open. Some stocks, without disparaging them, are seen as meme stocks. It's not binary. Some are somewhat meme stocks. What do you make of this and how does social media play into the trading of stocks? Because this is a completely new phenomenon.
- [24:33]
B
Yeah, absolutely. And I think it's very hard to model out. But it's the. To me, it's like the little guys finally come to the table and the individuals are many ways eating the institutions. With the Gamestop, we took down one of the top hedge funds. Melvin Capital is very short. It's like we're with what we talked about earlier. Retail volume is 20 to 35% of the daily tape. That means that's significant. Even just a chunk of retail investors coalescing together, you're going to destroy and go through the order bucket. You're going to make a significant impact in the market. I think people are waking up to the reality that because these new distribution channels of social media and places like dub that are Creating we're giving power back to the individuals. And I think that's so important. And part of the individualism that is so important is part of a fundamental American ideal. And I think empowering that helps people be better fiduciaries to the company. And that's part of the beauty of also being a public company. You have retail investors being part of your company now that can vote, that can drive social influence. So I think it's a really good phenomenon that's happening. Yes. It may make people, I guess like running these companies a little more scared of not doing well. I think it drives accountability, will ultimately help companies be better. And that's what we saw with Open. Right. Like I guess the retail army. The stock at the High was at $35, at the bottom was at $0.50, dropped by 98% basically since its highs over the past two or three years, clear the management team isn't doing something right. Right. So the retail army forced their way back in, bought the co founders Eric Wu and Keith Raboy back on the board and now the stock is back up to $7. It's up 1,209%. Not close to 35, but still a big jump from $0.50 to 7. That maybe just not be based on fundamentals yet, but I think that is the power to drive change. And that company might have just died.
- [26:17]
A
It's not purely a momentum trade because they turn momentum into intrinsic value. That's the interesting thing. GameStop started essentially looking at themselves as an asset manager, not as a gaming company. And just walk me through that. So at which point does the momentum turn into something real?
- [26:31]
B
Yeah.
- [26:32]
A
And what, what is that realness?
- [26:33]
B
This is where it kind of cuts both ways is when your stock goes up so high, right. Then you can leverage that stock price to do a lot of things and bring more assets, stock buybacks, you can get debt on sort of that stock. Right. So now the company all of a sudden has a lot more money to work with to go do other things. So in the GameStop case or a lot of these meme stocks, right, maybe the core business isn't doing that well, but you can take those assets to go do a bitcoin sort of fund strategy, right. MicroStrategy, you can take those assets to go do a lot of things that may have actually real intrinsic value. So I think that's a play playbook that you're seeing. And I think management teams are getting more creative. Even amc, right, they issued like two second class of shares, third class of shares and they're able to bring a ton of money back in their coffers. Some of that financial engineering broadly is good. I think some of it is bad. I think there needs to be some more transparency around that. But part of it is like some retail investors are kind of blind going to this. So part of the job is I think where Doug can come in is like how to deploy that capital. Better trust someone who actually knows what they're doing, how to read sort of some of these financials, understand the basic mechanics of these complex financial instruments and actually decide should we go into that or not.
- [27:41]
A
So I had Cliff Asness from AQR founder and cio. He talked a little bit about his quantity legend quant strategies. Outside of following Nancy Pelosi, which is a clear, clear alpha trade.
- [27:51]
B
Yeah.
- [27:51]
A
In terms of her information, what do you believe is behind the alpha in your top traders? What are they doing outside of getting insider information illegally, what legal strategies do you think that they're doing?
- [28:04]
B
I see this in a couple of different slivers. One is a lot of our sort of top traders, they are focused not on the large cap growth stocks, but mid cap small caps and micro caps because they're. You just can't inject as much capital there. The bigger funds traditionally just don't focus on those stocks. As you have $10 billion in assets, you can't put it in a $300 million company. I still think there will always be alpha in smaller cap companies because there's just less attention, there's more divergent to sort of asymmetric information where you can still have an edge by talking, getting to meet these management teams that you may have not sort of had in the past. So I think that's one bucket. Two is like we just have some of these old school style Paul Tudor Jones sit about the screens reading the tape creators that stare at the screens all day long. They truly have this incredible intuition and they do mainly swing trades, a quick sort of in and out. Maybe you might. The holding period might be sort of a day or two or a week at max and I just don't know. I think there's something that the magic spice sauce, right. Of some of these guys who just kind of know the flow and they're so good at sort of that I think the final bucket is really the emergence of leveraging social influence to drive alpha. When you can do something like Open Door, which came out of the retail army with one person, Eric Jackson, this famous hedge fund guy who orchestrated the Carvana rise, he similarly Pushed up to the open and he made a lot of money. He had a big position to open. Right. So if you see a lot of these guys now with a massive audience, got a couple million followers, you can now start leveraging sort of your sort of base to galvanize them behind your views. And yes, some of this might get a little tricky with sort of disclosures and stuff, but it's just, it's kind of like going on CNBC in the old days, right. And talking shop about your stock. There's new distribution channels that are much more close to the people and less centralized in terms of power, where it's. Anyone can make a Twitter account and gain a following and then you can drive real change and price movements similar to the.
- [29:54]
A
Bill Ackman. Bill Ackman, friend of the pod. He would send out these research reports, these very long research kind of activist trades. This is why this is overvalued. This is why this is undervalued. And, and basically take, come in and do an activist takeover. This is kind of the same thing, but bottoms up from the crowd. It's like crowdsource activism.
- [30:15]
B
Yeah, I love that term. I think that's spot on. Yeah. And then I think it's just the power of that just amplified to the, to the nth degree now. It's so easy to sort of for something go viral. And the algorithms, I think the social media algorithms are trained to drive this sort of content. So I think you've got all the factors sort of coming in to sort of drive this push forward.
- [30:34]
A
Preparing for this interview, I found that we had a lot of great friends in common. Dash, Bradley Tusk, a lot of some of the smartest and most contrarian thinkers in New York City. How do you build out your advisory and your information diet and how do you make sure that you're talking to the smartest people and getting the best people round up.
- [30:51]
B
I first moved to New York City, I think we had some phenomenal investors. You got the CEOs and founders, Uber, Airbnb, Robinhood around the table. But a lot of those investors, right, they're like, you might get an hour of their time and it's great. That sort of the hour time that you get every quarter or year, it's very valuable. But it's not enough to build a real in depth relationship. So I think for young folks who moved to New York City without network, I made it my mission in the first year or two to find the smartest people I could in New York City. What I did Was I love food. I found a couple restaurants I absolutely love. I host these dinners where it asks smartest people I know to bring a plus one. And within two years I built this phenomenal network of the smartest people I know. I keep it tight, I don't have that many friends but I'm truly believer of the you're the average of five people you spend the most time with and I really just focus on those in depth relationships. On the one to one stuff I do sort of selectively meet by trade the business and bill and dub. I meet brilliant people every day, especially on the investing side on the personal information diet. Honestly these days I just spend a lot of time talking to ChatGPT. Even on my way home I just talk to audio mode. I also become more articulate. Helps me it sort of synthesize information faster. Outside of that I'm a big fan of I know friend of pod, David Senra. Like I love reading autobiographies and a huge fan of philosophy too. I love thinking about life and ever went back to school I'd probably be a philosophy major. I think there's a lot of open ended questions of like the stony of like the hardships and like for what caused right we're all going to die one day and sort of nihilism, absurdism but so why do we build what we do and like finding passion in the day to day. I think one thing I like to say is like I don't know if I'm actually happy every day and probably not. There's a lot of things I do that I don't want to do. From admin work to like going to work out the gym. But am I fulfilled over the long term? Hell yeah. And that to me I think is the propelling force over the long run that drives sort of the human existence and ability to grind it out for a long time.
- [32:42]
A
I got to shadow Jim Jordan, one of the top kind of private equity investors back in the day in college and I was like this wide eyed kind of college guy that really loved business and loved everything about it. And I was sitting next to him and he was signing documents. I'm like are you passionate about what you do every single day? He's like look at how passionate I am signing these documents. And it was pretty brass but. But the point was made which is like it's absurd to think that if you're doing something and you're not loving every single second you're doing the wrong thing. There's this meme out in the market that's so destructive to people creating great things. Because if you're lucky to have 30, 40% of what you're doing, like, bring you energy and bring you happiness, you're on the right path. And a lot of people kind of. They're like, well, I'm not constantly smiling. Not every. I have to file my taxes, so this can't be the thing that I dream of. Yeah, it's kind of like one of these very destructive memes out there.
- [33:31]
B
I completely agree with you. And I think you're just grappling with reality right now. Everything's gonna be perfect. And my influence. Most influential book I think I read during high school was the mythosyphesis. It's been by one of my favorite philosophers, Albert Camus. And syphisis is the God that's condemned to pushing boulder up the hill and gets stopped, resets. And Camus book mysticists. The final line is, one must imagine Sisyphus happy where it was. It was an awestruck moment where it was like, the guy is happy, or he found joy in the difficulty of the process of pushing the boulder up the hill. And that's like life. You go up the hill, you reach an achievement, but then you reset. You're back doing the same thing every single day and until you die. So I think that's part of what I've really internalized. That gives me, I think, motivation on some low days. I've had some really low days sort of building out the company. And you kind of. That's been the journey of growth I've been committed to, and I'm excited to continue doing that.
- [34:30]
A
I think the way to operationalize it is literally stop and smell the roses. Today I have my first podcast on New York's stock exchange. We're doing this beautiful. I mean, this is emblematic. Get to talk to people like you and just to stop for a second and just be thankful for where you are. I think that's like the operation. It's like, how do you operationalize being more grateful? You literally have to stop and appreciate, take a picture, and not always take everything for granted. Sometimes we can move so quickly. You've raised $47 million, and it's always the next milestone. You're like, holy crap, I've raised $47 million. Yeah. I have millions of users. Like, that's. That itself is an incredible achievement.
- [35:06]
B
Yeah.
- [35:06]
A
Yes. You want to go. You want to go public here. You want to go, you know, ring the bell, but at the same time, it's. You Know those milestones are meaningful and are things that one in million people are able to accomplish.
- [35:19]
B
Truly. Yeah. And I feel very blessed and sometimes, like, it's hard to internalize that, like you said every single day. But to me, it's like I tell my team this. Your words are the house you live in and even like waking up in the mirror and saying like, dang, yeah, you're gonna have a good day today. Those moments of slowing down can really just change the perception of your psychology. Injecting a little bit of really healthy energy into your beginning of your day.
- [35:42]
A
Are you doing some meditation?
- [35:44]
B
Oh, absolutely, yeah. Walking meditation, guided meditation. I love the Waking up app by Sam Harris. My CEO coach recommended me to it and I've been addicted to that ever since.
- [35:53]
A
Yeah, I have been doing a lot of sound meditation and gong gong therapy, which is, it's crazy. There's a lot of actually scientific literature on it. I surprised myself.
- [36:02]
B
Yeah. To me, it's like I used to think it was voodoo bs, but now, like think about every great wisdom tradition in history has evolved towards bringing some form of meditation into their day to day life and how they perpetuate it. So I think it's just an incredibly powerful tool. It's a technology, it's an ancient technology and it's a travesty if you don't apply it.
- [36:20]
A
If you go back to 2021, when you were just starting dub and you could give yourself one piece of timeless advice that would either help you accelerate dub or help you avoid mistakes, what would be that one piece of advice?
- [36:31]
B
Oh, that's a good one. What got you here will not get you to where you want to go. I would say I thought there was a right way to do things and I tried that and that drove me to the ground in many ways. Psychologically. The early days of the company, I made a lot of people mistakes and we let a lot of people go. And there were some very low moments that I didn't think we're going to make it, make it out. And I think it took some of those really low moments and taking a step back and realizing that if you don't kind of change the way that you do things, you're not going to get to where you want to go. And really assessing that. I credit some, some incredible sort of investors, Jordan, some of my earliest investors, really helping out and being there in those moments and helping me realize that. I think that's been the journey I've been on since that first year started. The company is this constant reinvention process of taking a look at my routines, what do I do, how do I lead the team and improving on that and treating feedback as a real, real gift. And I would say that's what I tell my team every single day now. And I think it's a real skill that I've had to build up is like how do I listen to feedback, how do I internalize it and how do I build a culture where everyone is comfortable and open sharing it because everyone, we're just moving towards the same mission. We truly think the best for the company and we want the best for each other. We should be brutally honest and blunt with the feedback that we give. It's all towards what advice would you.
- [37:54]
A
Have given yourself in those dark moments?
- [37:58]
B
Yeah, oh, stay cool, calm and collected. It's so easy to feel it in the gut. And some of the worst decisions I've made is like when I feel it in the gut, I react immediately. And now I tell myself, you feel it in the gut. Feel, don't say anything, just wait, wait an hour, wait 20 minutes. Just let that pass. Think about it with a rational, cool, calm, collected demeanor and you're going to make a better decision.
- [38:28]
A
I've been thinking about this paradox. I haven't termed it but, but as an entrepreneur or as anyone doing anything, you want to be highly ambitious, highly proactive and yet sometimes being too proactive or too ambitious can become antifragile and that you're not willing to be a little patient. Being fully proactive is extremely fragile and obviously being not proactive at all is even worse. But is there something there? Is there something that being too ambitious or wanting to move too fast can be self defeating, could lead you to always start new things and never kind of stay the course.
- [39:05]
B
Building a startup, I think filters for a lot of A type players and a lot of A type players are most of their life, they're used to being number one all the time. Constant achievement. If you work hard, you're going to be successful, right? If you study enough, you're going to get a perfect score on the sat. And that's how most of our life was designed. If you did enough, you were going to achieve and it was more of a expected outcome. The probability of reaching the top was more guaranteed and it's very linear and correlative to the work. But in startups it's not. You could try the hardest, you can work the hardest and still most fail by all probabilities. And the smartest people I know have completely flopped their Companies. Right. So I would say I think it's important to have the mindset where, yes, I think it's important to channel that ambitious energy, especially as the founder, because you need to be that spiritual soul, the inspirational leader of the company. But you can't do that at the cost of being irrational to the team. And you also will inevitably hit those moments where your ambition is going to get hit. You're going to have a low moment. And I think those are the moments where what I just said, like, feel in the gut. How do you slow down and actually process that? This is just reality. And I think it's a maturity sort of, it's a process of maturation to realize that, yes, it's important to always maintain the ambition, but sometimes you need to channel it in other ways to get across the next hump. And I think that's definitely a process that I've learned.
- [40:27]
A
Kind of think of the world as driven by deterministic and physics, kind of the physics of business and life. And whenever I don't get an outcome, it's because I didn't follow the rules. The world does not owe me to change the laws of physics to make me successful. It's because I did the wrong thing. So instead of thinking, oh, you know, I'm a victim or why isn't it working? It's like, no, you're following the wrong physical laws. Yeah. So what should you be doing that actually leads to the outcome? Kind of going from this emotional, kind of almost like childlike state to this highly rational, like, what needs to be done that would lead to this outcome.
- [41:01]
B
Yeah, absolutely. I think that's probably one of the hardest things to do is also like, what is the outcome that you want to go towards? And having a clarity of vision. Because I think it's very easy to live an ambiguous life and not choose and clarify. But once you do, it's all about just closing the gap between sort of your vision and reality and steps that you can map out. I think that's so important for a startup on a day to day basis. I do it every morning. Is from everything that's small to sort of large. What is that clear picture that we're going towards? I think that's essential as a leader to describe your team.
- [41:32]
A
It's a novelism. Sometimes there's a time for exploration, figuring out what you're doing and sometimes exploitation. Just doing the thing every day that is a thing. It's not sexy, it's not something you could talk about on a podcast. What did you do. I just did more of what I did yesterday and faster and I hired more people to do the same thing.
- [41:49]
B
And then the beauty of compounding and I think that builds up over time. That's what you can Never measure in 10 minutes or talk about in a podcast, but probably the most powerful thing you can do.
- [41:58]
A
Well, on that note, Steven, thanks so much for being the first guest for me and capital series for New York Stock Exchange Wired and looking forward to continuing this soon.
- [42:06]
B
Thank you so much, David. This is incredible. Thanks.
- [42:09]
C
That's it for today's episode of how to Invest. If this conversation gave you new insights or ideas, do me a quick favor. Share with one person, your network who'd find it valuable or leave a short.
- [42:19]
A
Review wherever you listen.
- [42:20]
C
This helps more investors discover the show and keeps us bringing you these conversations week after week. Thank you for your continued support.