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- [00:00]
A
If you took the normal path without AI and things, we were building and knew we needed to build, and soon we needed to build. We're taking the2030s and2040s. We're packing them into the next two or three years because so much is happening right now, and that means we're taking the 2050s and 2000s and going to put them into the end of the decade and the start of the next decade. It's just, like, so much cool stuff.
- [00:22]
B
All right, Joe, I've been really looking forward to doing this with you. You're one of the most interesting people to me, and I love a lot of the work that you've done, and so really excited to chat and learn with you.
- [00:31]
A
Thanks for having me, Jack.
- [00:32]
B
One of the things I want to start with is I kind of put you in this category of people who are both investors and founders, like, the real way. You know, like, a lot of people say that, but you really have done it. You've, like, started many companies.
- [00:45]
A
You've.
- [00:46]
B
You've started companies that you then, you know, become chairman. Some you work for a long time on. Obviously, there's Palantir, but there's, like, there's many others. Then you also have your own VC firm. I'm just sort of curious, like, what's the mindset that you approach company building, company investing with? Like, where do you start when you think about doing your work?
- [01:02]
A
Well, I think, like, starting a second or third company is, like, fundamentally sort of an insane act after you've been successful, because you already obviously, like, have the money you need, so what are you doing? Because these things are so hard. Like, you almost have to convince yourself every time that it's not going to be as hard as last time, even though you know it is.
- [01:18]
B
I mean, I did it once. Then I remembered. I'm like, that's too hard, I guess
- [01:20]
A
it's, like, really, really hard.
- [01:21]
B
But you kept going. You just keep doing it.
- [01:23]
A
Well, I did, like, two where I was CEO, Palantir and Addepar, and then I did a few where I was chairman and, like, really in the weeds with OpenGov. I was with Zach last night, who was my CEO at OpenGov, who did very, very well. He sold it for $1.8 billion after, like, 14 years. And I was. If it was, like, palling through the dirt. I was saying it's, like, so freaking hard, especially compared to these things today,
- [01:43]
B
like an AI founder who's just, like, at 100 million in no time.
- [01:46]
A
We were Next to this kid last night who I'm backing who's like, Joe, I'm not just doubling, I'm tripling revenue this quarter. And they sat because it was just like, it was so hard getting work,
- [01:54]
B
like of hard work where basically everything went right.
- [01:58]
A
Yeah. Now one of these kids who worked for me has a billion revenue third year. Like, screw these kids. I love it. I'm investing in them. They're great kids, but it's like, they're great. You're adults. I should call them. But no, listen, I think building is really, really hard. There are just gaps in the world that I see just how my mind works. And there's like, this is a gap and there's people who are hurting because of this gap. There's things that are broken because of this gap and it's so broken and no one else is fixing it. And, and I have all these really smart friends. Let's go fix it. And so I just can't help that instinct to like just go fix things. We say, we say at apc, like, the world is broken, let's fix it. That just, that's just my energy. So if no one else is going to do it, fine, let's get people together and do it. But it's like the last option. You'd much rather back a really competent person who's they themselves are already all in, you know.
- [02:39]
B
Yeah. Do you think not enough investors have this instinct? Like, do you think it's right that most people don't do it? Or do you think there's actually more investors who can and should, you know, understand this is an interesting setup, Just like get some balls moving and then you can attract people to it. Or do you think it's like, right.
- [02:56]
A
I think if you haven't yourself gone all in and built a startup and gone through the pain of that over years, then you probably have no idea how to actually build a startup and you just shouldn't be doing it. And I think the first time you do it and probably the second time, you should just be 100% all in and you shouldn't be distracted. So I think I'm like a really bad example for people. Like, you actually shouldn't try to do these things.
- [03:14]
B
But it's funny because even among investors who were former founders or who have done it before, I think many just don't take that as one of the options of actually I could just get this thing started, work with somebody, build around it.
- [03:25]
A
It takes a lot of energy. It's like you have to Pour a piece of your soul into something to really make it. Not that I do this right every time. I make new mistakes all the time, of course, but every once in a while, and frankly, the last several times I've been involved, it's not really mine. It's really like I'm helping assemble the founding team. I'm helping bring together lots of talents and how to bring together the mission. I'm giving them enough upside that it's theirs. And then so that's a little bit different than doing it yourself, obviously. So it's gonna be a spectrum, you know. Yeah, totally. I'd be curious to hear a little
- [03:55]
B
bit about how you're feeling in this general moment. You know, we were just talking about how hard it used to be to build companies to 100 million of revenue. Now these like AI companies are going so fast. It's like so fast. You strike me as like, you know, kind of like in the sort of Peter Thiel, contrarian esque mindset of things. And one of the things that, you know, I wonder is like, is it uncomfortable in any way when the whole world sees something and you're like, we might be in that. The quadrant of the two by two that is both like contrarian and right. Like, are you kind of in the mindset of like, AI is actually the thing most people have it. Right. And so I just need to go do it better than everybody else. Or do you sort of take the view of, well, when everybody's here, I should actually be, you know, spending my time here because there's going to be a new wave by 2030.
- [04:38]
A
You could still make like a bunch of like sub quadrants and they could be wrong in some things and you could be right about some things. But you're all inside the big AI right thing. Right. It's not like you just have this super simple model. But yes, I mean, obviously this stuff is working in lots of ways. In AI, I think people are probably not focused enough on productivity as like the kind of like grail you should be going after. I think they're not focused enough on the moats created just by the very most talented technologists. So I think, you know, going after just the very, very best teams and going after problems that are going to lead to higher productivity. And then there's just, there's just all these nuances for how big industries work. And we've been, I've been obsessed with a lot of these large industries for long time. So I think we have advantages there. And we're but Yeah, I mean, listen, it's, it is non consensus that I'm just like really bullish on this stuff right now. Is this working? Yeah. What are you gonna say? It's all working. Let's go after, go after the very best of it and help it.
- [05:27]
B
You know, I can't remember where I heard this, but you know, somebody was saying like there's, there is a form of contrarianism even among good ideas, which is that you can like believe harder than everybody else.
- [05:35]
A
You believe, you believe more, you can under, you can understand more the nuances of what's working. So, so the thing, listen, I've got really lucky the last few years because I, I get no credit for like Palantir figuring out what it did the last five years. The only credit I get is that I actually like originally like built the company. I did hire a bunch of those people who are in charge. Yeah, but like, but it's them now who've done it recently. But like the stuff that we figured out at Palantir and the stuff they figured out at Palantir turned out to be relevant to a ton of other AI companies. Like, so it's like kind of the center of the AI world in terms of what's working in many ways was right around Palantir. And so that's just a huge advantage for us. And I think we understand a lot of the nuances. Like how do you apply a workflow ontology? This area, how do you apply like the FDE motion to this thing and go deeper on this with a SAS plus fte.
- [06:19]
B
It is interesting. The FTE thing is just everywhere now. I mean, it's almost memetic, but it's true.
- [06:23]
A
And Palantir figured out that the way you do these things in AI world, and yet you have to use that
- [06:28]
B
when you say, you know, Palantir figured out a lot of like the modes of like how AI is working. Like, what else besides that FD model? What about like the technology itself?
- [06:35]
A
Well, it's like how do you, how do you like extract the ontology of the workflows and how do you figure out where to apply LLMs and where not to apply LLMs too? And then what do you have to build for it to work? And there's just a lot of stuff that's like, people have got it right.
- [06:53]
B
When you talk about the productivity stuff being sort of under explored and people don't appreciate how important it is, do you mean areas of productivity software? Are you talking about making individual professional workers more productive?
- [07:06]
A
Every day.
- [07:06]
B
Is it both? Like, what are you thinking about?
- [07:08]
A
No, it's definitely both. It's also just like, how should this industry work in 2035? Like, what does this industry look like today and what does it look like if it's doing everything that's possible that we know is likely to become possible?
- [07:20]
B
Like, what matters? 2035 seems like it's. I can't.
- [07:22]
A
So far away now.
- [07:23]
B
I can't even think about, like, may.
- [07:25]
A
No, I know. It's like we were pulling. If you like, took like the normal path without AI and like, things we were building and knew we needed to build, and still we need to build. We're like taking the 2000s and 2000s, we're like packing the next two or three years because so much is happening right now. And that means we're taking the 2000 and 50s and 2000s and gonna put them into the end of the decade and the start of the next decade. It's just like, so much cool stuff. My favorite one this week. Every week there's something. My favorite one this week is I was with the guy who runs Joby Aviation. I was actually doing an episode with him. And it's just like. It turns out there's just gonna be all these ways that jets and airplanes are gonna be like 10 or 20 times as efficient in the next decade. And he's launching in the next year, obviously, these current flying cars, but. But actually there's like massive things that would take them three months before you do it in an afternoon. Now with these aerodynamicis, it's crazy.
- [08:10]
B
Yep. By the way, it's funny because I feel like before AI took off or like right at the beginning, like right after ChatGPT, so much of the conversation felt like it was around like, you know, AGI, asi and like, is this, you know, is this like sci fi Terminator taking over? And then as everything has, like, become super commercialized and, you know, these are great businesses and it's plus proliferating. The economy in a weird way feels less sci fi now and more just like, things to build.
- [08:37]
A
There's so much. And people underestimate, like, really smart people. Like, he was saying, like, his right hand had just like a list of like 50 things he wished he could work on a building. Just wasn't the resources, wasn't the ability. Now we're going to get through it all. There's just. There's so much to build. It's working.
- [08:49]
B
What's interesting is that, that mindset, though. I don't think everybody has it, you know. And like you can see this actually, you know, in, in high schoolers or something where some percentage of high schoolers I think are like becoming like, you know, putting on an iron man suit with AI. But you can also use AI to just sort of like skate by. And so you kind of see these like big skins.
- [09:06]
A
Well, it's like, it's like Soma, the sci fi. Sci fi. It's a heroine. Right. It's like, it's really scary. Like you can use, you can use AI to be your heroine. You can use AI to not have to do much at all. You can use AI to lose all your agencies. There's like a very negative version of it and then there's like this extremely positive version of it. And you know, this is a cultural thing. We got to figure out how do we get people to be more agentic themselves? How do we get people to engage and to, and to choose to get dopamine from iterating and winning and not from sitting there and attaching it to their brains. You know, it's like, like TikTok is evil. Yeah. And I hate that X is having to copy it because the, the financial incentive for social media is evil right now.
- [09:39]
B
Yeah. No, I mean you're saying, you know, you on X, you go into a video, you start, you scroll, you're like, it's bad.
- [09:43]
A
And TikTok again, I've blocked, I've blocked TikTok for years. Partially because the CCP and stuff, but partially because also I don't have the willpower not to frickin scroll these things. So I block it, I block Instagram, I can't deal with it.
- [09:54]
B
Yeah.
- [09:54]
A
And, and I'm an investor with Elon NX, I guess. I mean SpaceX now, so maybe it doesn't matter, but it's like, so I have it. And also I'm addicted to commenting, my stupid views online. I'm arguing with Balaji weird today. Whatever, he's a good guy, but I got angry at him. But then you go on this thing and it gets addicted to you late at night too. It's horrible. I don't know. I'm not going to turn it off.
- [10:12]
B
It's terrible. Yeah. I feel like tech probably lost a decent amount of trust with the public as a result of social media and people being like, you know, they don't care. Like the tech industry is just like here to like monetize eyeballs and make money off of us.
- [10:26]
A
You know what's ironic? It's like, generally market forces are really good in our society. Like they cause us to have to work hard to solve problems. They're going to bring down the cost of so many areas. If we can get rid of crony capitalism in the media itself, like with newspapers and in social media, market forces are terrible. Yeah, because it's like, because it's, because an attention economy, your incentive is to like distract people and just like polarize them. So it's just like that is like the worst area of society for tech and unfortunately that's what we're known by.
- [10:52]
B
It's really bad. It's also, you know, it's, you know, I'm not like some, I'm not anti journalist, I'm not, you know, against mainstream media or social media particularly. But you know, it's like, even with journalists who I really like, it's not their fault always, but you know, they might write a great article and then somebody, you know, some editor, clickbait, headline, always a crazy headline on top of it because they gotta, they gotta grow a business.
- [11:14]
A
It's, it's a very bad incentive and it's actually, it's ripping apart our society right now. These bubbles that it creates in social media, there's probably half your listeners if they're, if you have a typical listeners who are like, oh, that Joe Lonsdale guy, he's like, I don't, I don't like him. He has different views than me and he's offense. He offends me.
- [11:29]
B
Yeah.
- [11:29]
A
And the other one's like, yeah, you
- [11:30]
B
go and that's right.
- [11:31]
A
It's so unhealthy.
- [11:32]
B
Well, and the problem is, you know, the middle of the bell curve, who is neutral on Joe Lonsdale is not going to get shown this because that's not how the algorithm is going to work.
- [11:39]
A
And so I got to show everyone who either loves me or hates me probably.
- [11:42]
B
You know, it's like in general, I
- [11:43]
A
think I went over some haters.
- [11:44]
B
Maybe that's right. Yeah. Well, we'll try. That'll be our goal here. We'll run a survey afterwards.
- [11:48]
A
Thank you.
- [11:49]
B
I feel like that is probably the problem with social media though is it just amplifies extremes and like a middle of the road, neutral, agreeable take is not incentivized.
- [12:00]
A
Yeah, I know. Most people are boring anyway.
- [12:01]
B
That's true.
- [12:02]
A
No, but here's the thing. I was on a walk with one of my mentors at the Dish just before this and she comes from the moderate left. And I don't obviously, but I Actually think, like most issues there's a dialectic where there really is truth on both sides. And what I'm trying to do lately is like, actually step back and just like, what are the dumb people on each side, but what are the smart people on each side? And I think, I think social media does not do that. Like, I wish there was a way for it to do that.
- [12:23]
B
So relating this to AI, I feel like the tech industry has some currently missed opportunity to do a better job with our, like, you know, relations to.
- [12:34]
A
We need people to love AI more because otherwise we're gonna like, ban it and it's gonna hurt us and they don't love AI. All society's gonna like.
- [12:39]
B
I don't think America loves AI right now. I think enough people, yeah, I think not nearly enough people. And I'm like, I think they're scared, right? It's understandable.
- [12:46]
A
Like, are they scared? Why don't they like it?
- [12:48]
B
There's a threat for jobs, obviously. And so if you're in an industry where it looks like, you know, you're seeing all these headlines, do you know
- [12:54]
A
anyone personally who's worried about their job being lost? Just to be totally honest, like, like, oh, my life's going to be tougher than. Because everyone talks, everyone, no one knows.
- [13:00]
B
Not coming for me.
- [13:01]
A
Exactly.
- [13:02]
B
I think everybody believes it's going to happen to everybody.
- [13:04]
A
What are we afraid for? I'm actually really curious. Well, who's the archetype? Because you walk through it, it's hard to get to the person.
- [13:09]
B
You know, what's interesting is we should be, you know, software engineering. Let's take is a good example of, like, it's probably the best application of AI right now. I just saw a chart that job postings for engineers are going up and are as high as ever right now.
- [13:20]
A
There's so much to build right now.
- [13:21]
B
And so then you have the question of are we basically just amplifying the value of that function? And so there's going to be more demand because it's more valuable.
- [13:31]
A
There will be people. Oracle did cut, I think 30 or 40,000 people because there were things that they had to do with 30 people that have to do with three people now. And they just don't have as many of those things to do. Right. So there definitely are already things where you're seeing some cuts for sure. The question is, can those people now in this economy do better? And I think most of them can, but that's another agentic question we have to ask about.
- [13:50]
B
But so then why why, why do you think we're sort of like failing to make AI look like a positive force for the world?
- [13:58]
A
Because everyone hates tech from social media. I think social media has had a terrible impact on our democracy. It's ripped things apart. It's like very distracting for people. It's just, it's not good for kids. It's like terrible for young girls especially. I have five daughters and a son and it's like I'm not letting my young girls on social media. Just from everything I've seen, I think it's poison for them. And so this is like the last, their last consumer experience with us. And now that this is like the next social media to them, of course they're afraid of it. Like, I think that's the energy.
- [14:26]
B
Yeah. You were mentioning to me before that China likes AI more than America.
- [14:30]
A
Yeah. Some surveys show me it's like 75 or 80% positive and we're like 30% positive now. They may just take better direction from their leaders than we do. So. Which is a different. That's a cultural question. But I also think they're just more optimistic about how they could build with it and create wealth with it. Which people should be here too. I think this is going to. The last time we had productivity go up a lot over 30 years, it was like the working class person, the median was like 2.4 times wealthier. There was 1870, 1900, so more than twice as wealthy. Real terms for working class. I think it's going to be more than that the next 30 years. I think it's going to be like four or five times wealthier the next 30 years. If we allow this to rise. This is amazing. People, I think people will start to see, hopefully if we don't make it illegal, like just what it could do the next five years, I think it's going to be really positive.
- [15:11]
B
It's almost like we need it to proliferate quickly though because like to the, to that point there's, you know, we were just talking about these founders who are having these explosive businesses.
- [15:19]
A
Yeah.
- [15:19]
B
You have a lot of people who are resistant to AI. That sounds like the beginning of wealth inequality to me.
- [15:24]
A
Well, this is why we have to actually make sure that the applications of AI that help the middle class, that help the working class, you know, win faster and make sure they're legal. So right now, for example, like, the number one thing I think AI could do for 350 million people in the US is we can make healthcare like half cost really fast. Like healthcare should cost half as much, and it should be way better. It should be way more convenient.
- [15:45]
B
How?
- [15:46]
A
Well, there's a bunch of different levels of this, but we need healthcare services and AI. We need to actually have primary care BE work with deterministic AI where you're allowed to start a business that has one doctor and has a bunch of nurses and a bunch of others, and it has the input through AI and they optimize it and they do things through AI that we know are safe and we prove out. Here's 100 different workflows. So Utah just allowed one workflow. They allowed. If you have a chronic disease and you've been prescribed medicine by a doctor, your represcription can involve AI. It doesn't have to involve a doctor. And they're testing it out. So what I'm pushing right now is a healthcare AI sandbox legislation. We have Cicero Institute, which gets things done in 20 states. So we're trying to get a few states to create an AI sandbox. We can very safely prove out dozens and then hundreds of primary care workflows. And then that would allow huge cuts in cost for these things. And then there's a bunch of other areas of healthcare, of course, he goes after as well. But this is. You generally can have AI practice more safely for a bunch of things where it's actually better.
- [16:39]
B
Yeah, yeah. I mean, I think. I think there's gonna be so many of these. We just have like. There's like a marketing problem right now, it feels like to me is that we.
- [16:47]
A
Well, if you're. You guys are the better marketers than me, I need help on that.
- [16:49]
B
Well, I don't know either. I mean, you know, let's fight to
- [16:52]
A
actually bring down costs for people. That's a good marketing thing.
- [16:54]
B
To buy is better. One thing I don't think helps for, you know, you were close to this, obviously. You know, if we can talk about a little bit, you know, at a high level, at least about like the Department of War thing that just happened.
- [17:02]
A
I mean, I'm actually interested to hear. So you think it doesn't help because I think it's war look bad where anthropic look bad or what?
- [17:07]
B
No, I don't think that. I think it's. I think what. What it is is when you have two companies or, you know, other, you know, where you see them at odds and you see everybody fighting and there's this dynamic of like when, you know, the pigs roll around in the mud, everybody's messy kind of thing, and it's
- [17:22]
A
just like, just a negative energy around.
- [17:24]
B
Everybody's like telling each. Everybody is trying to project that, like, the other side's terrible.
- [17:29]
A
You know what's funny is that the positive is that it is still being used right now with Palantir and Anthropic and it's working like, really, really well. This is like one of the most accurately fought wars with least civilian deaths and the most bad guys falling so fast, which is amazing, you know, so it's like there's always positive for the US if you know what it's like.
- [17:44]
B
It's like a nasty. It's like a nasty primary election before the general election. It is like that, you know, and it's like, hey, like there's this sense I have where I'm like, on some level, if we all really care about AI getting there, you don't want a really nasty primary before the general. It doesn't help.
- [18:01]
A
It doesn't help.
- [18:02]
B
So I think there's a little bit of that. I'd be curious because you're obviously very close to the Department of War. And so
- [18:09]
A
my friend Emil and Depsec Feinberg and these guys in the middle of this.
- [18:14]
B
Yeah. And so it's like with most people in tech, it's like people got sort of their tribe to some extent or whatever. And that's fine.
- [18:21]
A
We were talking about this ahead of time. That is my tribe. But I was trying to tell you ahead of time that even though I am on and I can explain why I think they're right and Palmer's right. I actually introduced Dario and Palmer and was. Yeah, and I was trying to get them. I was trying to get them to go.
- [18:34]
B
And it's like how you're saying, you know, you appreciate the moderate left and you want to hear the good side of the other side.
- [18:39]
A
I think it's really important in this stage, like if you've heard about the Dow in anthropic battle and you only think there's like stupid people on one of those sides, you have to assume
- [18:47]
B
it's smart people who want good outcomes for the world.
- [18:50]
A
It's smart people want good outcomes who have their good point of view. So my main point of view supporting the Department of War ultimately is that you can't have the gray, complicated, nuanced decisions about what's allowed being made by the company or having the company involved in those. You have to be able to make those nuanced decisions at the Pentagon at the end of the day. And I think that's a fair, totally correct Viewpoint. But stepping back, listen, originally, Anthropic came from a much more effective altruist called Very left, very different perspective. And originally they had, I don't know, like 50 pages of demands for the Pentagon, which were ridiculous. And then, to Dariel's credit, A, he went and worked with the Pentagon ahead of time, more flexibly, he was trying to help America. He does believe America's better than CCP. B, he got all that 50 page of nonsense after lots of iteration with his team and lots of work, down to just two requests. And he really has boundaries of why they created Anthropic and what their boundaries should be. And that's in his mind. And he's managing a bunch of co founders who have different views, you know, and they got him all the way there. They were working with them, they tried really hard, but at the end of the day, when they're in the room with the male, there's 20 people, and the two demands were like, no autonomy, no surveillance, and no surveillance. And they'll say, okay, well, for autonomy, let's say we're gonna be using one of Palmer's autonomous fighter jets and something we're planning, and Anthropic's involved in planning the whole thing. Is that not allowed? Or let's say we're using some autonomy in how we respond to an attack and they, oh, that's defense. It's okay, well, what if we're doing an attack, but then as part of the attack, we're using autonomy to respond to things autonomously? There's all these nuances. Dario's response, oh, just call me. We'll work it out. Just call me. And the secretary's like, well, I can't just call you. I'm in charge, not you. I can't have a CEO making the decision. So, sorry, spec where Dario's coming from, but I think the part of where I had to make the decision I had to make now, I'm very sad I got into all the mudsling. I'm very sad about that.
- [20:37]
B
Yeah, no, totally. And that's where I'm just like, to me, going back to the AI thing. It's where I hope there's some way for the industry to just want to think of it as all on a team of, this is going to be something that's good for the world.
- [20:52]
A
Yeah, I think it's good for the world. But I think we have to have debates, and it's fair to have Deb, and there's going to be really tough debates about how this is going to be used. And you know, I think Dario is right. There are laws Congress does need to pass that it has not passed yet because hasn't even anticipated some of the nuance of like how can you even do surveillance and things with these tools you could never have done before. So there. So I mean, listen, there's a lot of good points on both sides here. We're going to have to work together and hopefully our Republic can figure out some good rules.
- [21:15]
B
I hope it will. I think it will. On the defense side, you know, obviously you've been involved in a bunch of companies like Palantir, Anduril, Saronic.
- [21:22]
A
Yeah, I started Palantir Surround. I only invested in Andrew.
- [21:25]
B
Only invested.
- [21:26]
A
Yeah. And every one of the early rounds. So those guys are crushing it, man. It's so impressive to see. You know, three of them used to work with us at Palantir and then Palmer's a good friend and it's just. Yeah. And then Dino at Sironic. You know, he's built more big ships than anyone else now. He's great. I mean fastest built ships since World War II that are big. It's so fun. Yeah.
- [21:42]
B
I mean I wasn't doing venture 10 years ago, obviously, but like seems like there was no interest in this stuff now. And now outside of AI it's like the hottest.
- [21:49]
A
It wasn't just that there was no interest. Like when I wrote the check in Andrew, I had multiple people tell me they would never work with me again and to not even talk to them about their next round because it's so evil to be working in defense and working on weapons. It was like you had to basically be willing to just go completely against the cultural zeitgeist and be. And be excommunicated, basically. It's like because it. Which is like. But by the way, sometimes that's the most valuable things to do is when you do stand up to everyone, you know.
- [22:12]
B
Well, it is. I mean Trey wrote something. Trey Stevens wrote something recently that's basically about like you want to be funding people who are, you know, saying the thing that's not popular and not exciting and it's going to be the creation of the next thing.
- [22:22]
A
I love this is one of my favorite things. It's like what is no one else want to do that is really important to do. Yeah. And by the way, to me that's like a definition of leadership.
- [22:29]
B
It also like. But it both means you're playing in a space that other people aren't playing. But it also reflects a personality type
- [22:36]
A
that has like, you're willing to just say you guys are all wrong. Can I give you a crazy one right now? We're doing. It's working.
- [22:41]
B
That's what I want.
- [22:42]
A
So China, during COVID ended up cutting off a lot of things from us and they had this whole big strategy of like going after our biotech sector. And one of the really key things you need in biotech is to do primate testing. And this is very controversial in the US because obviously you're hurting monkeys, of course, but like my 5 year old daughter, by the way, gets it. I say, if mommy had a very bad disease and we had trying to work on a cure, do you want us to test the cure on mommy or do you want to test on the monkeys first in case it kills the monkey? Would you want to know that instead of killing mommy, she's like, test the monkeys. I'm like, how many? And she's like, hundreds of monkeys. Yeah, hundreds of monkeys before mommy.
- [23:12]
B
What's the ratio? It's high.
- [23:13]
A
It's very high. Right, because it's mommy. But there's wisdom there. I think human life is more important, even though I feel bad hurting a monkey.
- [23:22]
B
Well, you don't test the monkey right away. You obviously are.
- [23:23]
A
No, of course you do all these other things first you try to use AI to figure it out, but sometimes AI is not going to know as well as testing it. And so anyway, there's not nearly enough primates now and no one will touch it. So we started the company to provide safer human medicine, it's called, and we're providing like massive numbers of primates working with a bunch of biotech firms and we're breeding them here and bringing them over. And no one will touch it because they're afraid. Because it sounds scary to do, right?
- [23:44]
B
Yeah, but.
- [23:45]
A
But guess what? Would you rather save your sibling or the monkey?
- [23:49]
B
That's a very taboo idea.
- [23:50]
A
But it's working. We're making tons of money and it's not evil. People might say it's evil. It's not evil, it's actually good. It's pro human.
- [23:56]
B
Well, it's funny, I think a lot of ideas. There's a whole category of idea that sounds really bad when you say a snippet of it.
- [24:02]
A
Yeah, this evil man is doing his defense and killing monkeys.
- [24:05]
B
You hear the whole. Yeah, exactly. Can we get that on our headline here?
- [24:09]
A
I failed again.
- [24:12]
B
That thumbnail will get us a lot of clicks. That'll be perfect. But there's a lot of ideas like this where, where they Sound bad if you take a certain snippet of them, but if you think the whole thing through, you're like, actually that is an increase in overall morality.
- [24:24]
A
It's really good.
- [24:24]
B
That's the type of idea that sounds like it could flip.
- [24:26]
A
And it's critical for like bio supply chain. This is like actually something our Defense Department's even aware of, that we need a supply chain for our industry. But like no one, literally, I actually. So we're gonna have to do the next round ourselves. I think even though it's crushing it, no one will touch it.
- [24:38]
B
Yeah, that makes sense.
- [24:39]
A
Everyone's a coward.
- [24:40]
B
Yeah, it's crazy. It's crazy.
- [24:41]
A
I'll make all money myself.
- [24:42]
B
But then I guess, I mean, with these defense companies, it's like eventually it's flips and then there becomes an insane amount and there's too much.
- [24:47]
A
And there's too much.
- [24:48]
B
You can't even take all the money people want to give you.
- [24:50]
A
Saronic has like billions and billions of interest. For the next round, they're going to crush it. So guys, you know, it's still great investment here.
- [24:54]
B
I don't know a ton about defense in general. Is it a space where there will be like a thousand blooming flowers or is it a space where there'll be a small number of companies dominating?
- [25:02]
A
It'll be like a dozen Neoprimes that will completely crush it.
- [25:04]
B
And I think it'll be that many though.
- [25:06]
A
Yeah. I mean there's already probably like eight or nine that are just really crushing it. I think Andrew is the biggest Neo prime and it's going to make the most money.
- [25:12]
B
Yeah.
- [25:13]
A
And I think Saronic is going to be massive, massive company. I mean, we need to try 100x our shipbuilding capacity. I think a lot of ones like Saronic are already trying to work not only in defense, but figuring out how to work commercially. And you know, chaos is crushing it. Epirus is doing really well, shooting down drones with microwave.
- [25:29]
B
Why can't the incumbent Prime. Incumbent Primes catch up on the technology?
- [25:34]
A
So what happened was in the 90s is that like 80 of these companies merged to become like eight primes, basically. And then you had the tech wave and like all their core tech talent left and they don't have computer science talent and they don't understand what computer science talent is. So you've seen this like when you start a really top tech culture, like why can't, you know, why can't Anthropic be built by IBM? You know, it's like it's like, come on, it's not going to happen.
- [25:58]
B
Even easier things than that. You're like, why can't a 30 billion market cap, you know, incumbent system of record, why can't it build one of these applications that 30 engineers at a startup are building, even though they're putting 200 engineers on it?
- [26:13]
A
But how do they hire those right. 30 engineers? How do they give them the upside? How do they have the culture, the engine that we track? You know, I'm sure you guys do too. At benchmark, we track at 8 VC thousands of talented engineers. We have all sorts of ways of doing it. We try to get a map of what they're doing. And I've been doing this for 15 years. Like none of them were going into the primes. And the very few that did, they would leave very quickly because they'd be rejected. They wouldn't get. They wouldn't get an upside, they wouldn't get the right culture building, they wouldn't get treated the right way. They basically be like the kid in the basement being yelled at who has to like, earn his stripes for 20 years. Why would they do that? Like these, these cultures are broken there.
- [26:46]
B
Yeah.
- [26:46]
A
And they're. And they're not showing any signs of fixing themselves. Like, there's certain things they're good at. There's not. They're not doing the other stuff.
- [26:51]
B
Yeah. What else are you interested in? I mean, we could talk about AI too. And I want to. But outside of AI, what are the other areas? Like bio, robotics, like, anything?
- [26:59]
A
Well, everything is like tied back to AI in a way. Because if you're doing things in robotics like our best, we have one robotics investment called Bedrock. And it's a bunch of guys from Waymo with me, Boris, and he's like doing excavation and it's working. Right. So it's AI driven excavation, which is 25% of the construction spend in the US is going to change the value of quarries and mines and super cool stuff.
- [27:17]
B
By the way, it seems to me like robotics should be like a bigger category than like software.
- [27:20]
A
Yeah, I think eventually, I think most
- [27:21]
B
of the time it might take 30 years.
- [27:23]
A
None of this stuff works. Yeah, I mean, his thing's working. It's my first big investment I made. Most of this stuff doesn't really work yet. That's the problem. I've looked at hundreds of things. Like, not personally, but my team and I.
- [27:31]
B
Don't you just think, like, Elon will figure this out, you know, like, he'll
- [27:34]
A
figure out a big piece of it. I think, but. And I love Elon and I back.
- [27:38]
B
I'm not saying he'll make that there's no other robots available. I'm just saying, like, don't you think this. Why would this not end. Why would robots not end up working?
- [27:45]
A
I mean, no, I think the world models are harder than people think. It's obviously. And I've tried to back everything Elon does. I think it just takes longer than even he thinks for some of these things. Right. It's just like, we can say the estimates are really hard to get. Right. I don't know what's going to be there by 2030. I'd be surprised if we don't have some really cool robotics companies by 2040. Right. It's just like, it's clearly coming.
- [28:06]
B
Yep. Yeah. What about other things? Like, is there anything in, like, bio that you're interested in?
- [28:10]
A
There's a bunch of stuff going on in Bio, but again, like, the discovery, rate of discovery, just like, AI enabled. Yeah. I think Demis's Nobel Prize was well deserved. Right. I think we had like 213,000 proteins we'd like, mapped out and understood how they work and understood the mechanism of action over many, many years of hard work. And I think his AI mapped out like 200 million of them. Just like all of a sudden, you know, just from figuring it out. And so, like, we're still in the. In the dark ages of. We're just figuring out, like, I saw like a small model the other day with all this bio data and they were like, how do you make a protein do these two other things to go after this, like, just like, you know, this disease? And it just like redesigned the protein and figured out. And we don't even know why it figured it out, but it, but it did. Like, so we're, so we're still. It's like, it's really cool. Like, so it's like, so, I mean, bio isn't. I mean, listen, it's not just an AI story, but bio is.
- [28:54]
B
I mean, like, for example, if we can. Like, if we can recreate a cell in a computer, that should unlock so much speed, I would think, to drug development and things like that.
- [29:02]
A
I mean, I guess other stuff we're doing just like competent people at execution. So, I mean, Quince, we were the first big investors in. That's good. That's like. Have you bought stuff from there?
- [29:11]
B
Yeah. My wife has her house full of quints.
- [29:14]
A
100%. My wife likes, obsessed with it, which she's like, look, Joe, I'm making you money. I'm like, yes, darling.
- [29:18]
B
Yeah.
- [29:19]
A
She knows she's joking, but it's like, no, it's like what? I don't know what is public there, but it's like more than doubling again this year in the billions of revenue. And it's just such a great execution.
- [29:28]
B
No AI story there, is there?
- [29:29]
A
I mean, internally, of course, you're using every. Using it to execute, but really it's
- [29:33]
B
just a good business with good.
- [29:34]
A
It's just like really good. Listen, the real story there, by the way, is that I was the first big investor in Wish and I led the seat in the A. And then it went all the way up and all the way down. And there's lots of reasons why it did. Basically, China subsidized the Shein and the TAMU competitors basically. And there's like weird postal changes and then like the CEO, like probably didn't hire enough people around him to replace himself. So when he had a kind of a breakdown, like the whole thing kind of crashed. So that was tough. But we learned a lot of lessons about how this stuff worked. And so actually my partner Drew with Sid came up with the idea for Quints. After that it was like a more really high end luxury type thing with a similar framework. So if anything, that was like my redemption story after having like personally made and lost hundreds of millions of dollars on that damn thing.
- [30:14]
B
That's right. It seems pretty good on Quint.
- [30:16]
A
It's like, is. Yeah, it's good. I need it. Well, yeah.
- [30:19]
B
And what about energy? It seems like that would be natural. Like you're in Texas, like, you know, energy.
- [30:22]
A
I know there's all this cool.
- [30:23]
B
And like we kind of need energy for AI. We need it for other reasons.
- [30:25]
A
I love it. It's actually really, it's actually really funny, Jack, because it's like all I go and they'll have me speak to like these like 200 guys and there's like all these really complicated tech stuff to explain that we're doing and how it works and how hard it is. And they'll just like, with a slow draw, just feel like, like, you know, but, you know, but they'll have like $5 billion of energy assets and they just realize that, you know, your stuff's really complicated. But, but I got a lot of like, it looks like we're going to make tens of billions of dollars on this.
- [30:50]
B
Sounds like it's like I'm like, oh
- [30:52]
A
man, that's like actually maybe the Texas guys are smarter than me. No, when we Talk about investing in
- [30:58]
B
AI, different ways to do it.
- [30:59]
A
We talk, we talk about six levels, right? So we do energy as the base, they call it zero. Then chips and then data centers and then the models and then software infrastructure and then apps and services. Right. And so there's like 0 through 5, 6 levels and we're obviously mostly level 4 and 5. I have a few bets at level 3 with Elon's XAI, with anthropic and et cetera. Unfortunately, all my friends were involved in OpenAI was a nonprofit. I stupidly didn't get into it early on, but then I should have done that. And then the data center stuff I don't really do. And then chips, we're doing a little bit because it's pretty interesting now. I think Nvidia, AMD and Intel are like 99% of the value right now. And that 1% is probably going to change to like 15 or 20 of from new things would be my guess because there's so many new architectures and so we're doing a little bit there. And then, I mean, we've done a few things around energy, I think around like nuclear. There's stuff with uranium that's interesting that we're definitely working on. I think general matter we're invested in, which I think it's doing really important stuff.
- [31:53]
B
Nature works. That'll be a mega online.
- [31:54]
A
It's like the monkeys, by the way. It's like a controversial supply chain. You can get monkeys, you can get like, you can get uranium feedstock, you know. So I think these are good things to be doing, you know, if you do it with the top people, I think so Costs and grade a general matter, you know, so I mean. Yeah, so we definitely will try to touch the things that aren't there in energy. I would say, like at hbc, it's not really our job to do like the natural gas turbines and stuff, but I think that's a great thing to do.
- [32:16]
B
Looking around, like the venture market now, you've obviously been doing this for a long time and we're in like a kind of chaotic moment.
- [32:22]
A
It's really fun.
- [32:23]
B
It's really fun.
- [32:23]
A
It's chaotic. It's a fun moment.
- [32:24]
B
Well, it seems like this is what you, you know, if you can't enjoy it now, like, when can you.
- [32:27]
A
If you're not going to be enjoying it now, you should retire because this is like the best time of what we're doing.
- [32:31]
B
What I imagine in 2022 or something
- [32:33]
A
was like, it was actually pretty painful, like four Years ago because it was like, it was like not clear to me yet like how you could do AI or how AI was going to work. Unfortunately it wasn't as smart as some people about how it's going to work. And then like, and then like you couldn't really start a new SaaS company because I was trying to convince everyone like if you start a SaaS company now, you're competing against SaaS companies now, which is much harder than competing against things when we first started them. So there was a couple of years there was like, oh, this is like
- [32:55]
B
most of the good stuff was picked
- [32:56]
A
over and I had to like, I started Saranic then because I spent, spent a lot of time on it because I had a lot of extra time back then, you know, because it wasn't that as much else to do and that worked out. Yeah, the defense was like the right thing I think to do. Yeah. But yeah, but now it's like there's like so much and yeah, we're like two thirds of just like AI productivity type stuff.
- [33:12]
B
Yeah. What do you think is like the either the sort of like structure of firm or individual that is like best equipped to succeed right now you need
- [33:21]
A
a lot of young people on your team who are friends with the other young people who are the best programmers and who are in the networks from. I just think you do.
- [33:28]
B
Yeah, I think it's going so young now. I mean you even look at like these like accelerator programs are getting extremely young.
- [33:34]
A
I mean these kids who are 18 but are AI native and have been programming for a long time. I actually hired Scott woo as an 18 year old 10 years ago, like he'd won the gold medal three years in a row at I.O.I. and you know, top in the world the previous year. And like this guy Vlad on my team helped me like hire him. And actually Alex Wayne came to the same class and all these guys at Add a Par and it was seen as like a really weird thing to do back then, but it was really productive. They were really at that level. They were still really, really good back then. Now it's just like 10 years later. It's obvious because like a lot of these people are just so good even when they're younger.
- [34:02]
B
I know, yeah. I mean there's some counter examples. You know, I had Brett Taylor on the show and he's you know, an example of somebody like, you know, you can be in your 40s and fully
- [34:11]
A
readjust as a 43 year old. I'm not totally washed up yet hopefully.
- [34:15]
B
But it's rare. It's like. And I think, by the way, for the subset who do that, I think it's like a massive superpower because you have all these networks and talent, capital.
- [34:22]
A
I think investing right now, even like 10 years older than me. And if you. And it is like, it actually is really hard as a venture capitalist to like be in the game 10 years older than you. You're saying there's people in their 50s. Yeah, there are some who are doing it. I think it's just really hard to be in the game. It's. And frankly, it takes a lot of humility. You also, because you have to convince all these 22, 23 year olds to
- [34:40]
B
hang out with Chase. 22 year olds, which is hard. I think some of them are used
- [34:44]
A
to that in Miami. But this is a different version, which is. We'll cut that. No, it's like, I mean, one of my favorite CEOs last night at an event for a friend and is like, he's. I think he's 22 and he's. I think he's. He's the one who's tripling revenue this quarter. And he's just, he's genius. And like, that's, that's. You need to be working. By the way.
- [35:04]
B
There's a big advantage that these kids, adults, whatever, you, you know that, that you have if you're that age, because you never saw the old way of doing it.
- [35:11]
A
I know.
- [35:11]
B
And so you just have this fresh mind where you're not unwinding anything.
- [35:14]
A
And to some of their credit, like, to his credit, he wants to learn from me where I think the old way is still relevant, which I appreciate as the old man now, but. So I think there are some of them who's like, okay, we're gonna do all these things, all the new ways, but then you can kind of step in and say, well, here's a couple lessons. And I do think you still want to mold it, but you do need to rethink from first principles almost everything right now. And by the way, every few months. Cause it's changing every few months. What's possible. Which is a weird time.
- [35:38]
B
I'm fidgeting around on this podcast because I tweaked my back out.
- [35:41]
A
So you need to. Peptides.
- [35:43]
B
Yeah, Peptides. Yeah. What do you think about all those peptides? I mean, they're like everywhere right now. Do you think this is going to be a huge. We're going to learn that it was all a huge problem, or do you think this is next coming of the great wave of medicine.
- [35:56]
A
So I first had some peptides because I tore up my knee heliskiing. So I'm like, I got to heal. And not only did it make me heal faster, it fixed my back problem. I was like, oh, this is interesting. I should study these things. And one of our other friends actually, who you know as well, Matt Mazzeo, he had gotten pretty overweight, bad blood markers, not in shape at all, working too hard, making too much money. So he took some time off, started taking a bunch of peptide sacs and exploring it. And all of a sudden, seven months later, he's lost over 60 pounds. His blood markers are perfect. The girls in the office were asking who he was. He's married girls. And he's like, he's in great shape. He's crushing it. And so he's actually our new CEO of a Peptides company. We're doing that he's founding with us and it's called Noho Labs. And it's like growing like crazy. This is one of. Listen, GLP1S is one of the biggest market in the world. One of my bioinfrasture companies I built makes billions of dollars producing GLP1. So I'm watching peptides from that side and now it turns out a bunch of these other peptides are also, I think going to be market worth hundreds of billions of dollars. And we're going after it. Yeah, it's one of the fastest growing consumer I've ever been part of. You can go online. We wanted to make. We're buying our own compounding pharmacy because we want to have everything done here, everything legit, everything super careful. Listen, like RFK himself is, is, is he's rumored to be on these. I'll say. I won't give any inside information. He runs hhs. I mean these things are going to become.
- [37:15]
B
On a bunch of these Peptides.
- [37:15]
A
You're saying he's rumored to be on a Metro himself? A lot of smart old people are. A lot, A lot of. A lot of. A lot of my billionaire friends are all on these things. It's like, it's a legit thing.
- [37:23]
B
Was there some unlock that just like made us discover, made people discover like a bunch of these things? And now we're just like, you know, there's. There's this just like proliferation of new ideas happening at once or what. What happened here?
- [37:33]
A
You know, I think a lot of them have been around for a little while and people just started like sharing more stories. And I think maybe the fact that people are willing to do the GLP1s and they work so well because that is a peptide. And that's like the cultural phenomenon kind of opened people's mind up to the others. And now the hhs, the unlock is that they are taking some of them off the schedule to like make it like more legal to sell them and stuff. And so I think it's more of like a policy has been holding it back as well. I mean, listen, we have an NIH in this country, which is National Institute for Health. And if you're on different political side, you can yell at me for what this administration is doing. I don't agree with all of it. There's different things. But the one thing the NIH should be doing is there's something like piptides, which no one's allowed to patent because the IP already exists. They should be studying them more. If there's tens of thousands, hundreds of thousands of Americans using something, why the hell do we not have the NIH studying? For me, that's why government exists is to do the tragedy of the common type things. And I think they're extremely. And the secretary agrees with me. So I think they're finally going to start actually doing a lot more studies too and approving, which is great because we can start approving these and make them safe and listen, it seems obvious to me. They're super helpful.
- [38:34]
B
Yep. You lived here for a long time. Obviously you still spend a lot of time.
- [38:37]
A
I hear you mean Woodside. That's right.
- [38:39]
B
Just like the broad here.
- [38:40]
A
We still have a house somewhere near here.
- [38:42]
B
But you know, but you know, now obviously spend most time in Texas. And I'm curious, we're based with our
- [38:48]
A
six kids in Austin.
- [38:49]
B
Six kids in Austin. My brother Max lives in Austin. I feel like there's probably some changes to your mindset I had imagined by being out of California. I'm just like curious if it like. Does it like help you think more clearly? Do you feel more in touch with like the world outside of tech? Does it change anything? Is it just a place to live? Does it. Is there anything about it other than it's just a place to live as it relates to?
- [39:11]
A
Definitely a. Definitely a different culture. You definitely. You definitely see. I mean, I'm talking. It's partially because of my policy work as well. I talk to a lot of people from a lot of red states and in purple states, like in different parts of the country. And you see the skepticism of tech. You see the things they're afraid of and you kind of see more clearly to them, it's just such an alien thing and how certain things come across much more natively than I would see it coming from here. And kind of knowing the insiders realizing what's going on is not as scary as they think. And so it's definitely given me more perspective on, I guess, like you said, we really probably should be doing a better job marketing some of these things for our country and coming across in the right way and respectfully to people. Listen. It's also a more sane place. I think there's, like, a really healthy middle class in Texas. I think I have people who work for me there who can live 10 minutes away, even though you only pay them $100,000 a year. Whereas if here in Woodside, if you pay someone $100,000 a year, they're living an hour away. And so I think it's just a healthier, better place for society, the way it works.
- [40:04]
B
I mean, we also, I think, have more aggressive and challenging political swings happening here in general. And you've obviously been sort of focused on politics for a long time, like, back since Stanford Review.
- [40:17]
A
I'm just trying to bring common sense, man. That's my point of view.
- [40:20]
B
Yeah, we actually had someone intern with us who was editor at Stanford Review recently. I love it all cap before benchmark, but I love it. And I'm like, you know, it's like, really good anyways, but so, like, I'm, like, familiar with, like, the school of thought, and I think it's great. And, you know, I'm just curious, like, as you've watched us go over the last few years through the sort of, like, you know, swings of politics and political correctness and all of it, where are we now? Like, do you think that, like, do you think people can more or less say what they want to say now? Do you think they're still like, the Overton windows? Not where it should be?
- [40:52]
A
There's, like. There's still a lot of things that I think, like, polite society, like, won't talk about or won't want to understand. You know, there's a lot of the reasons for why things are broken. There's a lot of stuff in California that's very corrupt that I think people here are just starting to appreciate. Like, they don't realize the billion dollars for San Francisco to NGOs is not to help the homeless. It's to help a very powerful political class of people who control things. You don't realize that the government worker unions here just really run the state and really just light insane amounts of money on fire. The budgets got up 75% here in six years. 75% in six years. And it's like things are getting.
- [41:27]
B
What have we got?
- [41:27]
A
Well, you get much better paid civil servants and you get a few million of them with much better pensions, which is great, except for the fact you can't afford that and you're breaking so many other things. And. And so it's. And in Texas, you'll have things like in Texas, we had something where the cities were. Which cities are always a little bit blue and they weren't permitting things because people are in nb. So we said, listen, if a city won't get back to a permit in 45 days, you go around it to the state and the state will approve it really quickly. And we passed this law in Austin. Building exploded the last three years. The prices are down 20% in Austin, not because people are leaving, but because there's just so much more stuff we brought online and here. And by the way, of course, Saronics building there. All these companies are building there. The things that we're building there really fast. You still like five or ten years later, be in permanent health. You're trying to do in California. So we have to fix CEQA in California. And I think the fact that people still don't know what CEQA is very much. I'm not sure things have shifted that much. Like this California Environmental Quality Act. It's like there's just crazy things in there where you're like, talking to 14 Indian tribes and you're in years and years and years of lawsuits to pay off environmental lawyers. I mean, the whole thing's just broken still. So. So. And by the way, there are candidates here, even on the left. Like I say the San Jose mayor on the left, I don't agree with him on everything, but he, like. He, like, gets it. He gets it. These interests are broken. So I think you're just having some people come around. Will the people here support the moderates on the left who get it?
- [42:43]
B
Because.
- [42:44]
A
I don't know.
- [42:44]
B
Yeah, I mean, there's sometimes I hope that we're on, like, a better path, but it's not like it's not getting there as quick.
- [42:49]
A
We need the leaders.
- [42:50]
B
Things take a while.
- [42:51]
A
We need the leaders to actually win, and we need people to wake up and actually fight for it. And too many people here are too scared to fight for what makes sense, even in a moderate way, which. Which that's why it's still broken. So. But we need more. More courage, man. More courage.
- [43:02]
B
All right, well, this was super fun, Joe. Thanks for doing this with me. I really appreciate it.
- [43:05]
A
Thanks so much, Jack.