Summary of "The Joe Rogan Experience of AI" Episode Featuring Jack Selby

Release Date: January 18, 2025

In this engaging episode of "The Joe Rogan Experience of AI," host Jen converses with Jack Selby, a multifaceted entrepreneur, venture capitalist, and film producer. The discussion traverses Jack's illustrious career, his insights into venture capital (VC) and artificial intelligence (AI), and his commitment to fostering the tech ecosystem in Arizona through AZ VC. Below is a detailed summary capturing the essence of their conversation.

1. Introduction to Jack Selby

[00:00 - 00:41]

Jen introduces Jack Selby, highlighting his diverse roles as an entrepreneur, venture capitalist, and film producer. Jack's noteworthy tenure as Senior Vice President at PayPal, his collaboration with Peter Thiel in founding Clarium Capital Management, and his current leadership at AZ VC, Arizona's largest venture capital firm, are emphasized. This sets the stage for a deep dive into Jack's experiences and perspectives.

2. Jack's Journey into Tech and Venture Capital

[00:42 - 05:12]

Jen expresses her anticipation in having Jack on the show, intrigued by his early involvement with PayPal and his connection to the "PayPal Mafia." She probes into what initially drew Jack to the tech and VC spaces.

Jack recounts his serendipitous entry into the tech industry through a mutual friend who introduced him to Peter Thiel in 1998. At the time, Jack was slated to attend UCLA's business school but was persuaded by Peter to join the nascent company, eventually prefiguring PayPal. Reflecting on his early days, Jack shares:

"I realized I'd met just an out of this world, really, really, really intelligent guy. And I kind of vow to hold on for dear life and fast forward 25 plus years later, I'm still holding on by strength."
—Jack Selby [02:51]

He emphasizes the importance of seizing unexpected opportunities, especially when they align with visionary leaders like Peter Thiel and Elon Musk, whom he met early in his career.

3. Building and Leading Successful Teams

[06:18 - 09:41]

Jen shifts the conversation to team-building, a crucial aspect of Jack's success across various ventures. She inquires about the principles Jack has adopted to assemble effective teams.

Jack attributes his success to the exceptional talent he encountered at PayPal, particularly Peter Thiel's hiring acumen. He shares:

"Peter hired a lot of just exceptional people... it's the jockey, not the horse."
—Jack Selby [07:02]

He highlights the importance of delegation, allowing leaders like Peter to focus on their strengths while entrusting other critical tasks to capable team members. In his current endeavors, Jack credits his best friend, Jason Pressman, for helping him manage AZ VC without the constraints of taking a salary, thereby enabling a larger and more effective team.

Furthermore, in his film production company, High Frequency Entertainment, Jack relies on long-standing partnerships, ensuring that trusted and competent individuals handle day-to-day operations, which allows him to serve as a multiplier of his time.

4. Relocating to Arizona and Establishing AZ VC

[09:41 - 17:28]

Jen delves into Jack's decision to base his ventures in Arizona rather than traditional tech hubs like California. She explores the challenges and perceptions associated with operating outside established ecosystems.

Jack explains that his move to Arizona was influenced by personal ties and a desire to escape California's hefty tax regime. He notes the strategic advantage of proximity to California, facilitating easy travel for business purposes:

"If you can literally jump in a plane and such a fast flight, be in Burbank in 45 minutes or... the Bay Area, it's an hour and 20 minutes."
—Jack Selby [16:40]

Addressing skepticism from potential investors who may prefer coastal bases, Jack underscores Arizona's untapped potential. He emphasizes that AZ VC raised its fund predominantly from local investors, fostering a reinvestment cycle within the Arizona ecosystem. Jack asserts:

"We have not had our own kind of larger venture capital source of funding... Local investors are reinvesting back into Arizona, fueling the ecosystem."
—Jack Selby [21:06]

He discusses the strategic importance of keeping investment returns within the local community to create a sustainable growth model, contrasting it with how funds from outside would otherwise drain benefits away.

5. Future Plans: Vintage Two and Expansion

[17:28 - 25:10]

Jen inquires about AZ VC's future, specifically regarding Vintage Two. Jack outlines his vision for scaling the fund, potentially increasing its size to between $150 million and $200 million. He plans to broaden the geographical focus beyond Arizona to include neighboring states like Utah, Colorado, New Mexico, Texas, and Nevada. This expansion aims to tap into other underserved markets with entrepreneurial potential.

Jack elaborates on AZ VC’s investment philosophy:

"We're sector agnostic... we're just trying to find rock star entrepreneurs."
—Jack Selby [37:35]

He envisions AZ VC as a pivotal force in matching capital with innovative startups in these regions, fostering a "non-coastal arbitrage" model where high-potential companies are supported without the inflated valuations common in traditional tech hubs.

6. Commitment to Local Ecosystem: Envision AZ

[25:10 - 28:07]

Jen shifts focus to AZ VC’s philanthropic efforts through Envision AZ, a nonprofit designed to bolster Arizona's tech ecosystem. Jack explains that Envision owns a portion of the carried interest from AZ VC, with the profits funneled back into local initiatives. This creates a symbiotic relationship where successful investments not only benefit investors but also reinvest in the community, thereby sustaining long-term growth.

"Envision is hopefully can be the bedrock for ecosystem here for many, many years going forward."
—Jack Selby [26:41]

This initiative embodies Jack's commitment to "it takes a village" in building a robust and self-sustaining entrepreneurial environment in Arizona.

7. Insights on Venture Capital and Team Dynamics

[28:07 - 31:35]

Jen delves deeper into Jack's approach to venture capital and the importance of team dynamics. Jack reiterates the significance of hiring highly competent and trustworthy individuals to multiply his efforts. He credits his partner, Jessica Pacheco, a former executive at APS, whose connections and expertise were instrumental in securing significant investments from Arizona’s utility company, Pinnacle West.

"Jessica was so instrumental... she's incredibly well connected here in the local Arizona community."
—Jack Selby [31:35]

Jack emphasizes that building a strong, locally integrated team is crucial for the success and growth of AZ VC, ensuring that the fund remains deeply rooted in Arizona's unique landscape.

8. Thoughts on Artificial Intelligence and Investment Strategy

[33:10 - 36:17]

The conversation transitions to AI, a central theme of the podcast. Jack shares a critical perspective on private AI investing, expressing skepticism about the viability of identifying the next major AI breakthroughs in non-traditional tech hubs like Arizona.

"The probability of you finding the next early stage anthropic or open AI, especially coming from Phoenix, is zero."
—Jack Selby [33:47]

Despite this, Jack observes that AI has become an integral component in the business models of many startups. He warns against neglecting AI, as failing to incorporate it could lead to vulnerabilities where competitors leverage AI to gain an edge.

Jack categorizes the AI landscape into two distinct segments: the dominant publicly traded giants and a vast array of other players. He underscores the scarcity of top-tier AI talent outside major hubs, making it challenging for startups in Arizona to compete. Nevertheless, he remains optimistic that the integration of AI across various sectors will enhance the overall ecosystem.

9. Notable Investments and Entrepreneurial Traits

[37:23 - 39:10]

Jen probes into specific investments made by AZ VC, seeking examples of companies excelling within Arizona's ecosystem. Jack highlights his preference for entrepreneurs with a relentless work ethic, often identifying those with backgrounds in competitive sports as indicators of resilience and determination.

"I have an aversion towards first time entrepreneurs... I love investing in entrepreneurs that have the mettle to run through brick walls."
—Jack Selby [41:26]

He cites Blue Tail, an aviation tech company, as a standout investment. The company digitizes private aviation maintenance records, transforming a traditionally paper-based process into a cloud-based system. Jack praises the founders' practical approach and their commitment to achieving substantial outcomes before retirement, contrasting them with more hype-driven AI ventures.

10. Advice for Entrepreneurs and Investors

[39:10 - 42:59]

As the conversation wraps up, Jack offers valuable advice for both entrepreneurs and investors. For entrepreneurs, he emphasizes the importance of demonstrating resilience and a proactive mindset, especially for first-time founders lacking an established track record. For investors, Jack underscores the necessity of identifying robust work ethics and tenacity in entrepreneurs, which are critical for navigating the uncertainties of startup ventures.

His closing thoughts reinforce his central philosophy:

"If you can find people that you trust implicitly that are super competent, hold onto those people for dear life because that will enable you to multiply your time."
—Jack Selby [09:41]

Jen concludes the episode by congratulating Jack on his film projects and expressing excitement for future discussions on AZ VC's developments.

Conclusion

This episode offers a comprehensive look into Jack Selby's strategic approach to venture capital, his dedication to nurturing Arizona's tech landscape, and his thoughtful perspectives on AI and entrepreneurship. Jack's journey from a foundational role at PayPal to leading AZ VC exemplifies the impact of visionary leadership and purposeful investment in fostering regional innovation ecosystems.

Notable Quotes:

• "I realized I'd met just an out of this world, really, really, really intelligent guy. And I kind of vow to hold on for dear life and fast forward 25 plus years later, I'm still holding on by strength."
  —Jack Selby [02:51]

• "Peter hired a lot of just exceptional people... it's the jockey, not the horse."
  —Jack Selby [07:02]

• "We have not had our own kind of larger venture capital source of funding... Local investors are reinvesting back into Arizona, fueling the ecosystem."
  —Jack Selby [21:06]

• "The probability of you finding the next early stage anthropic or open AI, especially coming from Phoenix, is zero."
  —Jack Selby [33:47]

• "I have an aversion towards first time entrepreneurs... I love investing in entrepreneurs that have the mettle to run through brick walls."
  —Jack Selby [41:26]

Speaker Attribution:

• A: Jen, Host of "The Joe Rogan Experience of AI"
• B: Jack Selby, Guest and Venture Capitalist