Podcast Summary:
TBPN - Palmer Luckey: Why I Started My Own Bank
Hosts: John Coogan & Jordi Hays
Guest: Palmer Luckey
Date: February 20, 2026
Episode Overview
In this engaging episode, John Coogan and Jordi Hays welcome Palmer Luckey—founder of Oculus and Anduril, and now the force behind Erebor Bank—to discuss his latest venture: building a new, deeply American bank designed to serve the unique needs of the tech, hard tech, and energy sectors. Palmer goes deep on the failures of Silicon Valley Bank, the vulnerabilities of banking rails, innovation cycles in hardware and gaming, and even shares stories about commercial failure collections and the persistence of loyalty in founding teams.
Key Discussion Points & Insights
1. Why Palmer Luckey Started Erebor Bank
-
Triggering Event & Motivation
- Palmer had considered starting a bank for some time but was galvanized by the collapse of Silicon Valley Bank (SVB) and the ensuing bailout.
- He noticed a gap: “You didn't have banks that were aligned with United States interests, that were aligned with deep tech, hard tech, energy… but that do really matter.” (Palmer Luckey, 01:21)
- Existing banks adequately serve specific sectors like agriculture or oil and gas, “but when it comes to tech, it’s a pretty sparse field.” (01:41)
- Palmer's core driver: build a conservative, low-risk, US-aligned bank that’s truly for builders.
-
New Technology Integration
- Erebor leverages US dollar-backed cryptocurrencies for instant settlement: “365, 24/7 settlement of payments… very few get that.” (01:58)
2. Network Effects & The New Banking Standard
- Potential for Network Effects
- While early adopters enjoy benefits like 24/7 settlement, Palmer predicts “pretty quickly, everyone is going to realize they need to support these things.” (02:55)
- Erebor’s edge: being “out front from the start.” (03:17)
3. A Bank for Builders: Product Prioritization
- Customer-Led Product Focus
- Erebor’s roadmap is guided by founder and customer feedback.
- Focus is on “not losing their money!” (07:13)
- Not targeting consumer products (like mortgages)—instead emphasizing equipment financing and seamless integration with legacy banking systems. (06:18)
4. Conservative, US-Focused Banking and Security
- Alignment with US Interests
- Erebor collaborates proactively with government agencies to reduce fraud (“the opposite of HSBC… we are at the other end of that spectrum”). (04:37)
- Explicitly rejects foreign influence and European/Chinese regulatory pressure: “We will comply with U.S. law, but we will not comply with spurious rulings from people who have no real jurisdiction… and you'll find a very hard time finding a bank that takes that position. I'm not aware of any other than us.” (05:28)
5. The Importance—and Cost—of Having a Banking Charter
- Why Go Through the Pain?
- Palmer highlights that most fintechs “dance around the fact that realistically what they're doing is basically being a bank” without a charter. (07:46)
- The charter ensures Erebor isn’t at the mercy of partner banks or foreign pressure, and that “the buck stops with us.” (08:09)
- “If you don’t control your own charter… you’re always going to have to keep other parties happy.” (08:34)
6. Physical vs. Digital: What is a Modern Bank?
- Vaults and Tangible Assets
- Erebor’s not a “pure ether company”; they want actual vaulted storage, treasure and all. “We are not a bank of the ether. We are of Terrafirma.” (10:29)
- Palmer notes customers, particularly from hard tech, want real, physically secure storage. (10:36)
7. Mod Retro and the M64: Hardware Nostalgia, Modern Lessons
- N64 Tribute Console (M64)
- The M64 is in mass production, aiming to avoid previous mistakes of under-supplying demand (“not letting down our developer partners this time and make sure we maintain stock”). (12:12)
- Notable for new releases of unreleased games, and a “supply chain resistant” design due to minimal memory requirements. (13:11)
- Palmer muses on efficiency: “Surely we can do better than needing gigabytes of RAM to search through text files.” (14:34)
8. Gaming, Children, and Designing Out "Extraction"
- Moving Beyond Slot-Machine Mechanics
- Palmer wants his kids to start on classic games, not microtransaction-driven gambling systems:
“It’s not a vintage play. It’s starting them with a good foundation... I’m not going to be throwing them into the slot machine microtransaction Gamblerama that is dominating kids games today.” (15:48)
- Palmer wants his kids to start on classic games, not microtransaction-driven gambling systems:
9. Vibe Coding and New Tech Paradigms
- On Low-Code/AI Development
- AI-driven, low code allows hardware innovators to move faster: “It’s going to be the shape rotators, not the word cells.” (17:06)
- Palmer values being able to outsource the “crappy stuff” to computers: “Even if everything that comes out of it is slop, even if it is all shit, it’s better than I was able to make.” (17:55)
10. The State and Future of Virtual Reality
- Meta’s VR Commitment
- Media hype about Meta’s pullback is “sensationalizing”; real investments in VR remain huge. (19:07)
- Other companies (Sony, Apple, Google) are poised to hit new levels of display fidelity soon, with cheaper, smaller devices: “Vision Pro was never intended to be a product of the time. It's a product of the future, hauled into the present by spending enormous amounts of money.” (20:20)
- Palmer remains “very optimistic.” (21:51)
11. Team Loyalty and Founder Stories
- Lessons Learned Choosing Co-founders
- Palmer recounts missing the chance to ring the NYSE bell due to a co-founder intercepting an invite—founders’ stories are “fluid and dynamic.”
- “I've learned a lot. I've been stabbed in the back a lot. And I'd probably make very different decisions if I were doing it today.” (25:14)
- Suggests a “blockchain company where everyone agrees what the founding story is… so nobody can come back and say they're a co-founder.” (23:34)
12. Personal Collecting: From EVTOLs to Commercially Failed Motorcycles
- Hardware Palmer is Collecting
- Jetson One EVTOL aircraft among latest acquisitions. (26:33)
- Motorcycle collection theme: commercial failures. “The more of a failure, the better!” (26:56)
- On the legendary Honda Rune: “Performance is the only object, price is of no importance. […] They lost over $100,000 per bike in the end.” (27:12)
- “Commercial failure doesn’t mean a product is bad. It just means they couldn’t figure out how to make a business out of it.” (27:41)
Notable Quotes & Memorable Moments
-
On Banking Innovation:
“There’s room for a company to be a real bank for real companies doing real things.”
— Palmer Luckey (01:30) -
On Innovator’s Dilemma:
“Industries have moved from innovation to extraction.”
— Palmer Luckey (15:38) (quoting Nirav Patel of Framework) -
On the M64 Supply Chain:
“It might be—the least memory-impaired consumer electronics product of the year.”
— Palmer Luckey (13:42) -
On Loyalty and Founders:
“I have a long memory and a long memory grudges.”
— Palmer Luckey (22:14) -
On Microtransactions in Kids Games:
“Not going to be throwing them into the slot machine microtransaction Gamblerama that is dominating kids games today. It just seems like a crazy thing to do.”
— Palmer Luckey (15:48) -
On Hardware Collecting:
“The theme of the collection is commercial failure. All of my motorcycles were huge commercial failures. The more of a failure, the better.”
— Palmer Luckey (26:56) -
On Virtual Reality’s Future:
“Vision Pro was never intended to be a product of the times. It's a product of the future, hauled into the present by spending enormous amounts of money.”
— Palmer Luckey (20:32)
Important Timestamps
- 00:23 — Erebor launches: Palmer’s rationale for starting a bank
- 02:34 — Network effects and tech banking
- 03:53 — Erebor’s approach to fraud, security, and US government alignment
- 07:39 — Why Erebor went for a full banking charter
- 10:14 — What is a modern bank? Ledgers, vaults, physical assets
- 11:04 — Mod Retro and M64 update: new console, lessons learned
- 15:34 — Raising kids with games: choice, nostalgia, microtransactions
- 17:04 — Vibe coding and the future for hardware-first founders
- 18:30 — VR today: state of industry, what’s coming next
- 23:20 — Being burned by co-founders; need for “blockchain verified” founder stories
- 26:33 — Palmer’s collection theme: commercial failure as badge of honor
Tone and Language
- Palmer is frank, witty, and at times self-deprecating—never shying away from criticism of the status quo
- The hosts maintain a breezy, tech-insider vibe, keep the energy high, and often riff with Palmer’s humor and candor
Final Thoughts
This episode is rich with startup wisdom, industry gossip, technical depth, and stories only Palmer Luckey can tell. Whether you're a founder worried about banking infrastructure, a hardware junkie, or an old-school gamer, this is a must-listen—offering both practical insight and hilarious behind-the-scenes anecdotes.