Graham Duncan - Talent Whisperer - [Invest Like the Best, EP.409]

0:00 I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Ridge line offers a better way forward, one unified platform that automates away the complexity across portfolio accounting. Reconciliation, reporting, trading, compliance, and more, all at scale. Ridge line is revolutionizing investment management, helping ambitious firms scale faster.

0:25 Operate smarter and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai. Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolosis.com.

1:00 Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Some. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.

1:29 Today's conversation is gonna make you think about your life in a variety of new ways. You should listen to it in its entirety. I first met Graham Duncan in two thousand seventy in the offices of East Rock Capital. We had lunch inside of his beautiful library. The food was insanely good. And I remember thinking this person is extraordinarily special.

1:48 I'd been a little bit nervous to meet him because his reputation was as the most discerning people picker on Wall Street. In the year since, I've been lucky to grow close to Graham, and there are not many people that have impacted my life and thinking more than he has. He's one of the most generous people I've encountered who has genuinely made me appreciate life in many new ways. His profile on X reads compulsively seeking new ways of seeing reality. And that is an understatement. Among the dozens of lessons he's taught me, one stands out as having been the most impactful.

2:18 He phrases it as a question. What are you most compulsive about? Is it possible to put that? at the center of your platform's activity. Anyone that knows me knows I'm obsessed with the concept of finding and pursuing one's life's work.

2:32 It is Graham as much as anyone else to whom I owe the impetus for my own quest to find mine. As you'll hear, because he has studied people more than anyone I know, he's the perfect guide for helping each of us think about ourselves in new and interesting ways. Graham is also fond of saying that talent is the best asset class. This is my obsession too. I want to spend my time finding the best people in the world and learning their life stories and sharing them with you all.

2:57 Last year we decided that it was time to build a new publication at Colossus that allowed us to go even deeper into life stories. Which we are calling Colossus Review. It's a quarterly print, digital, and audio publication that profiles the people, investors and founders that we respect most. We're launching it formally today. And to see more, you can click the link in the show notes or go to join colossus dot com slash subscribe.

3:19 When we were starting it. There was no doubt who we should put on the first cover. Graham himself embodies the work we hope to do. Finding and enabling extraordinary people. He's the perfect teacher for those interested in this pursuit.

3:31 This is a two hour segment of a four and a half hour interview I did with Graham last year. It stands alone as remarkable, but those that subscribe to Gloss' Review will also gain access to the full conversation. This will be true for future issues too. Graham built an incredible investing track record while managing billions for a select group of families. He did it by focusing on and backing people.

3:53 Our conversation explores a vast range of topics, from what makes a great investment partnership to the power of positive feedback to starting a restaurant. We discuss what he's learned about building trust, creating sustainable relationships, and identifying talent. I'm so excited for this new effort from Colossus and so proud of what the team has put together for you all. I'm so thankful to Graham for showing me the way so many times. And for being willing to be so incredibly open in this conversation. I hope it impacts you as much as it did me.

4:22 thinking of the Stewart quote of people make money like pros and then manage it like amateurs. How many people like that I know? that want An amazing setup.

4:35 But Somehow don't have it. Or Mills.

4:41 That Seems nice and probably feels nice, but under the hood is like there's nothing actually going on. It's like a normal financial advisor with better trappings or something. And Why there aren't more

4:52 Setups like what you had with Stuart. Why is it the exception? That like proves the rule. I think it's a principal agent thing. That's the

5:00 There's a way in which It's this paradoxical thing where If you're the principal And you treat the agent Like an agent.

5:09 then they become an agent. And so it's this very subtle energetic thing where you gotta Have This vibe of let's make money together.

5:21 So what happens is somebody's commercial wants more control over their life than most principles will give them. And so When the principal tries to bring

5:34 an a player inside the boundary of their firm, quote unquote. It's not unleashing the commercial activity of the agent. And I think the fact that Stuart Miller let me Set up my own company.

5:49 It's possible it was path dependent because he initially gave me a smaller amount of money. Fifty. And I ran that for a year and built trust and then If it hadn't been like that. It's possible

6:00 the market construct would have been just run my family office, but it's my thing. And it wouldn't have unleashed. What it ended up unleashing. It's also like

6:10 It has to be consistent with their Existing Aesthetic. I think. So like if you had a quant guy

6:19 Whose family office? needs a family office or wants to partner with somebody or put somebody into business to run a family office. The underlying Agent is gonna need to be super Mathematical

6:31 Left hemisphere. In order to have The principle's map of reality. overlap enough with the agents. That when shit goes down

6:41 It doesn't get wonky. 'Cause inevitably something's gonna go wrong. And It's those moments when it goes wrong that you either get shaken out and There's one.

6:50 Family Office that famously has gone through like fifteen CIOs because of that. Getting the dynamic wrong. In the early days. How would you describe that dynamic between you and Stuart?

7:02 personally, like what matched. What fit. Well, one thing was the time horizon. Like he just said from the beginning had a very long time horizon. And then He's just a very skilled

7:14 manager of people. Who's listening to Randall Stuppman. was famously Jamie Diamond's coach and he has this theme of they studied all the best leaders And

7:26 They found there's this quality of the people working for the leader as feeling like the leader's rooting for them. I knew exactly what he meant because I could feel it. That's exactly the vibe, Stuart. Had been

7:40 Giving me and eventually my Second partner as well. That feeling of Yeah, I'm rooting for you first and foremost, like let's do this. In retrospect, it was kinda crazy, right?'Cause I started it

7:51 In O five The initial vehicles which was just a fund of hedge funds and then Stuart gave me The rest of his capital out to Lanar in Really Two thousand seven.

8:03 And then I convinced Adam Spear to leave Goldman. And we started this new Venture and We had exactly a year to do stuff. Before the great financial crisis hit.

8:15 And so picture your him. Stuart. And it's the beginning O eight is happening. And you have hired these two kids. You're like thirty two or something? Yeah, exactly. And

8:28 You know me pretty well. But not that well. And then All of a sudden Your stock goes down to like

8:36 Or was it the highs, but it went out three bucks, so close to going bankrupt. And all of a sudden all your money And

8:47 There is this scene I talk about in one of my essays where And so he and His leadership team at Lenar is going around trying to raise money at the bottom. And He comes in, he notices that Adam and I are kinda depressed.

9:00 We were down like twelve percent at the time. But we had anticipated some elements of the great financial crisis and thought we'd be up flatter up and We weren't and so we were sad and mopey. He said to us You guys, what the hell do you think like I knew we're at risk of losing money. You don't see me moping around.

9:18 There's something about his physicality. He was like Jaunty. And It was totally like Well I imagine a SEAL team Captain is just going down. Like he's

9:29 So turn it on. Turn it on and just cracking jokes left and right. And like no No identity as billionaire or as rich guy, just pure This is a game. We're playing a game.

9:44 It just got interesting. Yeah. Straighten your back out. Exactly. There's something about that vibe of like we're doing this together and we're grown ups and we're taking risk and I know shit could go Bad.

9:58 Yeah. I think to your earlier question, like the principal has to set this condition Where It's okay for the agent to make mistakes.

10:09 And there's a lightness to it. Because otherwise the agent, depending on their own risk tolerance, may not take enough risk. The difference of like managing your own money versus Managing the optics of something can get so huge Based on like one word from the principal Is this a good example, do you think, of your notion of like the right grip?

10:27 I know it's an unusual like application of the idea. But like his grip on the overall situation. Where a lot is handed to you. Maybe explain that cold grip thing. I would love Yeah. Yeah.

10:40 I can I guess I mean it was literal. I rode. A lot. in high school and a bit in college, and when you're holding the ore

10:49 There's a tendency to really grip it, in which case your forearm Tightens up and you're kind of muscling it. versus there's a version where your grip is It's like paradoxical it's both Solid but also loose.

11:03 And If you catch a crab, it's called catching crab where the or goes under the water, the blade goes under the water and you can get thrown into the water if you're not careful. In that case you need to be able to let go of the ore, otherwise you're going in the water.

11:18 So there's this tight but loose grip. That I started Noticing that when I If someone's ideological about the thing they're discussing

11:30 They kinda subtly Conveying to you. It's not up for grabs. It's not Debatable. They're not looking for your input on it.

11:39 And So you're asking, is that the way Stuart was relating to this? Situation Yeah. He had like a light grip on I'm telling him that.

11:48 One point. JP Morgan, it was at the bottom in O eight and people who were buying gold and Really ready for Physical gold.

11:57 You corrected your c Yeah, I can just see myself Graham, you're gonna buy me a bunch of gold and then I'm gonna Like be dragging this bag along the street with my with my brother in law and what are you gonna drive the car like give me a fucking break So it's like This whole thing is a life is absurd. This whole Capitalism is a construct. We're playing this game.

12:22 Somehow But it's the humor is embedded in the light grip, I feel like, in those situations. You're conveying to somebody else. We're gonna do the best we can here and who the hell knows what's gonna happen. If you think back to like

12:34 the way that East Rock as a platform evolved. One of the things if you ask around about East Rock that you'll hear often is that it feels like such an organic development of a platform. that is very unusual in the sense that it can and did lots of different things and lots of different structures with lots of different kinds of managers. and was fundamentally unconstrained in in what it did. And I've seen you say before

12:57 In simplest terms, the idea is to find the best investors in the world. And then make great investments with them. And there's sort of two key parts to that that obviously we'll spend lots of time digging into both. Is that a fair summation of like the vision of East Rock was find and partner?

13:13 with the great investors of the world and is the platform really just we shouldn't study too much the platform itself because that's just an out natural outcome of this very simple goal. Like is that the right Way to think about it. Yeah, I think it was

13:26 Downstream of an understanding I felt that short and I had of The goal is to make money. And not lose too much. And it sounds so simple, but it's actually, of course, because the principal agent dynamics look super complicated.

13:40 And I didn't feel like I had compared advantage in picking stocks or doing Any number of Other

13:48 styles of investment. And so for me That was my computer advantage. I think now that Adam is running the platform He has a different comparative advantage and it'll morph Over time. Jesse Beirut from IA Ventures.

14:03 said something to me really interesting. He said You have to decide Probably. whether the kind of capital you want to provide

14:11 is unique, singular, or not, meaning if you didn't provide this capital to the person, they probably wouldn't be able to get it otherwise. versus winning access to the consensus like best new thing that if your capital didn't go there, surely other capital would. But your advantage is that You're accessing a scarce supply. And

14:30 I thought about that vis a vis U. And It seems like you did both. You both were often a day one investor, not a seater. In

14:39 people like Dan Sundheim that were leaving and just incredible investors and There's somewhat of a limited supply. And And the eight seed deals that you did, I think basically all of them or most of them worked out really, really well.

14:52 And by definition. That's more of the former. If they're willing to give up economics. It means something. I'd love to explore maybe like one example of each. You could pick a seed deal or you could pick an investment you made that wasn't a seed deal and a manager.

15:05 We could also talk about a direct deal. But but back to just understanding what you're doing and what's going on around one of these stories. I'd love to do one of each if you're game. On the seating. I feel like the process is

15:18 Can we set the table? In a way on terms. That The market will agree with But it's unclear whether the manager would have gotten those terms without us.

15:30 So that could be lock up of capital, that could be fee, that could be something else. I always tried to hold myself to the Standard of I would invest. In this

15:40 Manager. Even if I didn't have seed economics, I would just do it smaller. I would just take less risk and I wouldn't wear any reputational risk. I feel like that's one key distinction between just looking for seed deals, but holding yourself to the same bar of like I just size it smaller. And I wouldn't shape it.

15:58 And so That kept us, I think, out of a fair amount of trouble. What about on the traditional side? Is Dan a good example? Yeah.

16:07 So Yeah. Or is living Viking interviewed over the years all these people that worked for Dan

16:14 And they were always in such awe of him as a portfolio manager and as a I felt like it was them at the expert or professional level relating to him as a master. Is how I interpreted it at the time. I remember one guy saying

16:30 Dan would be planning how to get in and get out of a stock. six months in advance of buying it. he was planning out the whole arc of he was very focused on liquidity and It was this mix of fundamentals and understanding market structure. We had a number of friends in common and

16:48 When he left I feel like there's often within a hedge fund container there's this dynamic where the founder of the hedge fund Is pricing The up and comers each year. And it partly is expressed in terms of how much carry are they gonna have in the subsequent year and

17:04 There have been a number of cases where you're I'm kind of tracking Did the founder of the thing hit the bid correctly this year or not? And if they didn't Opportunity. And so so there was this moment where Dan was ready to go do his own thing. He had enough of his own money and I aspired to Earn the right.

17:23 to a dialogue with him and help him in his hiring because we were In touch with so many analysts. Any one time. I felt like I was able

17:33 To Calibrate. on w his taste in analysts and who would be at the right seniority And then help'em with that hiring process, I think. Forget of his initial

17:44 I don't know, I'm gonna say I could get these numbers wrong. Of his initial twelve, maybe four of them were from Patrick and me. And I got to know him very well during that process and saw how He had this very optimal grip. Like he has no defensiveness whatsoever. If you tell him a new piece of information about him or a process or a person, there's like no ego in it. He'll just drop it.

18:06 With no hesitation. So there were a couple of cases where I gave him feedback on things and the way he took the feel I was like, Oh my God. such a quiet ego, so focused on being commercial first. And ego second. So We ended up

18:20 Being a day one investor in there, it's had its ups and downs, but I continue to really believe in him as a commercial actor and as a leader of his firm as well. Can you define commercial? It's such an important term. In our dialogue. Yeah.

18:36 Why is that word so Incredibly useful. So the term originates Adam used it at Goldman. Other people at Goldman I'd heard it from And it connotes

18:47 All the cliches moneymaker. I think what's in there is one way I've ended up defining it. is it's the Ability and the intent to create more value than you capture. So that would be a kind of abundant version of it. I feel like there are people

19:01 who are signaling that they're in a repeat iteration game and they They're not gonna grab every penny on this transaction. Because they know that There's a sense of proportion about it somehow. Now, Goldman has that phrase long term greedy. It's like

19:17 I wanna make money, but I'm gonna do it. With the knowledge that we're gonna see each other again. And that sense of I'd rather make money than be right. Is another core tenant of it. Where

19:29 There are people who seem to me to be in the game. In order to experience satisfaction of being right. And that's the primary goal. And th that works some high percentage of the time, but then it can be disastrous, of course, because

19:44 your ego and your profile can get caught up. With that goal instead of just making money. Was there any through line to the mistakes that you made? At East Rock. Backing deals, managers, seeds.

19:57 There's a great story that Tina Fey has About the only things she learned from Lauren Michaels. Not the only thing. One important thing she learned at Saturday Night Live that she brought to Thirty Rock. was that you need in the writing room you need the optimal mix of Harvard nerds

20:12 And Chicago Improv. And I thought that was so profound when applied to investment managers because I had experienced a lot of both types. And I would say The Chicago improv is Sure.

20:26 Plasticity, pure flexibility. They will do anything for a laugh. To a fault. And the Harvard nerds in her language were Planning everything out.

20:36 very high order. Very high stability. But Not able to improv as much. Over time my taste evolved to accommodate

20:46 More Chicago improv. It was at first attracted to Harvard nerds. Over time. I came to appreciate Charlie Munger calls it the neck.

20:55 Or called it the neck. I remember early on in working with Ted Sides, we were in a meeting with a former No can credit trader of some sort. And we were sitting in a restaurant

21:07 In Santa Monica. And he turned up to me at one point, he put his hand on my arm. And said. Money's like water. All you have to do is learn to turn on the faucet.

21:16 C And I thought I was like in some sort of David Mammoth movie or something. But He's right. There is this woo way not forcing it, working with

21:27 There's a coach I like. Who I follow online named Joe Hudson and he had this line up. Where does the water want to flow downhill? Working with not forcing it, like working with what already wants to happen that I feel like is in there. Lack of stuckness.

21:41 It's like a pragmatism. But at the end of the day Rules out over other facets of Investing.

21:49 When you think about the moment at which You were there and and East Rock, the platform was sort of humming the most. I love that Josh Schwaitskin idea that not just career but life is like this opportunity for self expression. I'm curious where, if anywhere. It wasn't that. I know Easterrock was a great vehicle for self expression for you.

22:07 We could talk about lots of ways that that that was true. If you think about it. And had that blank sheet of paper Josh always talks about, like going into the cave with the blank sheet of paper to come up with a new platform. Is there anything different? That you would do

22:19 to better have a vehicle for self expression. Then Played out with East Rock. Not really. For that chapter of my life, it was

22:29 Pretty Amazing. and ideal and fit. It really felt like Stuart Provided.

22:36 A playing field with no constraints. But you had to earn the right to go anywhere. And so I feel like if I were doing it again. Like I can picture Furthering again.

22:47 Finding somebody Being purely opportunistic. And fitting the current Opportunity set. Two

22:56 The risk tolerance of the principle And then I can picture trying to seed somebody with a billion. If I had that level of confidence.

23:06 in them and if I felt like the principal could have that level of confidence because it's the same aesthetic or the same map of reality. But I just feel like If you can eliminate the optics and the desire to look like you've added value.

23:20 As the agent. And make it. as pure expression of this is genuinely what I would do with every single dollar if it were my money. I feel like there's such leverage to that. So I would fit it to the risk appetite and the trust level with

23:33 Another principle, but As I've said before, like I think I'm pretty lazy And it's a curse and a gift. And the gift side of it is like I have no desire to work for work's sake. Like zero. Like negative.

23:48 Is there a chance you're actually not lazy and you're just like applying that? Like you're lazy about taking action or hitting the hammer, whatever analogy you want to use. But it seems to me like I was thinking about the word prolific. We've written.

24:02 Seven very well read. Posts ever. Not exactly prolific in your writing output, but like extremely high impact. But I always wonder like for what are you prolific? And it seems like You've read everything, you've met everyone. There is some unit for which you are prolific, and maybe it's not output.

24:20 Yeah. Your own format of thing. Yeah. So Do you think that's right? That you're not lazy. You're maybe lazy.

24:27 From the outside looking in or something, but I don't know, it just seems like you're always Deeply tapped in. And that's not That's not lazy. Yeah. Yeah, I think that's good.

24:37 Catch it. It's like we were joking. What was the nickname? It was something like Leverage Lion. And we're I was talking to Boyd. Because lions when you watch them for long periods of they basically do nothing. And then they're just like

24:50 ferocious around opportunity and the intensity level is just I mean you can feel in your chest when you're there in Africa. And leverage because With you, I always think of that joke of the guy that charges a thousand dollars and nine ninety nine is for knowing where to hit and a dollar is for hitting it. And then that's sort of it.

25:07 a lot of it can be boiled down to a handful of really great decisions that were carefully considered, obviously. But that to make those good decisions you do need to be prolific in some sense, like You need to have seen the thousand things you don't do. Yeah. And that's far from lazy. Yeah. Yeah.

25:23 My appetite for finding the best person in the world to do the thing instead of me doing it. Is almost infinite. Yes. So And that applies to literally everything. Including Managing money, right? Yeah.

25:36 Say a little bit more about that. What is it about that process that's energizing to you? Is it figuring out the person? Is it something else? Is it excellence? Yeah, to figure out the person in In some new field trying to figure out how it's like the what's going on here. Like I can't get over how profound a frame that is. Like it it applies obviously at any level to the point where it's

25:58 So abstract it may not be useful, but I have this like I I guess there's hope in there, like optimism that I will find somebody. The kind of urine boy thing of what's the shuma. Yeah. I definitely had that. I've found the person when I thought there was no one enough times that I'm always like, I have hope. I could go through so many examples of like Are you kidding me this person exists and they're that obsessed with this crazy thing?

26:24 And then I think one key thing That people miss on hiring is You need to understand why it makes sense for the candidate. Why the candidate should choose this container in this setup?

26:37 And be rating it like a hundred out of a hundred if possible. Realistically it won't be that. I see people make mistake. It's like I'm hiring It's like a left hemisphere approach. It's like I'm hiring this person to do this thing. It's like they're treating it as a machine. But

26:51 It's so much more complicated than that. If you want the person to thrive and have the energy and then be rooting for them. You need to understand why from their perspective. This is the right thing for them at this stage of their life with this set of skills.

27:06 If you understand that, then it gives the stability to the whole thing. Maybe it's a great opportunity to talk about the idea of yours that's had the greatest impact on me personally. Which is this notion of positive feedback loops. a person's compulsion or bliss or

27:22 Lots of different names for I think probably the same thing. And like the right setup. That allows for this unlimited upside. And there's lots of dimensions to this. There's

27:32 How to help someone find this thing, what the right setup is. How to partner with someone that's doing one of these things, but each of these aspects to me is like has been in my life an incredible unlock of like self awareness around what my compulsion is. And then constantly asking that question, not just once, not just at the setup phase, but constantly

27:51 Is this thing wrapped around my compulsion or is it bled into like Normalness. So You've done this more than anyone I know. Thought about it more than anyone I know. How does someone start to like track that?

28:04 potential compulsion in themselves. What does it look like from the outside? What kind of questions do you get people to ask of themselves? One aspect is that I have that. analogy of a river with two banks of one is order and the other's chaos and you kinda start off your career closer to order.

28:21 And sometimes you swim closer to chaos over time. It's like a developmentally appropriate stage of being an intern and learning a craft and apprenticing and all that stuff Where You're not really

28:35 Often that in touch with what you actually want. You're just playing the game. The way other people have defined it. And I feel like

28:44 If you're talking to a twenty two year old They have been on the playing field less time, and so they don't know what they actually want. They're socialized in Keegan's language. There are all these things they're subject to That they can't see. And so

29:00 Partly the Pick your metaphor is about listening to the what the world wants from you and what you actually want and then looking for that intersection. So

29:12 The questions I ask sometimes What are you compulsive about? I noticed it for myself, like I Could surf LinkedIn

29:22 I don't know what my appetite would be. I could probably do it for three or four hours. I don't think I've ever surfed LinkedIn. Boring. For most people would be very boring.

29:34 I like looking at their picture. I feel like Someone's self selected photo is so crazily high signal. If somebody chose that photo to represent themselves. They are saying there's something of my essence.

29:48 That I want to have be my essence that's in this photo. And then matching it up. With my Impression of what life has done to them, what they've done to life.

29:57 in the photo and then matching against the resume, I could literally do that. What's the thing you do that other people kinda make fun of you for? I feel a little embarrassed that I can do that somehow. It's just like oh Weirdly tactical and kinda boring. But

30:11 On some of all I just enjoy seeing That dance of What somebody wanted and then what the world wanted from them. And then

30:20 Other places other than what are you compulsive about? That question of have you felt a moment of ignition where you saw somebody else And you said I wanna be that. I read that in the talent code. Have you read the talent code? Yeah. You said it's very Yeah. I read that in the telecom. I was like, Oh shit, I totally had that. I had that twice. I had that

30:37 Well, I was in eighth grade and I was rowing I It was like the sixth time I went rowing. And this senior and junior a guy and a woman We're tall. And he was handsome and she was beautiful and they just

30:49 had such Presence And mastery of Growing. They both won national championships.

30:58 And I was In eighth grade at the time it's like, oh, all I have to do is row four hours a day and I can be that. Done. Wow. And then I didn't look back. Because it was so embodied. And it was also a recognition that

31:09 I have enough. overlap with them that I can do this. Like it's not completely random. But then That feels like a viable path. It's not that reliable a question, actually, like

31:21 A lot of people will either fake it or they don't. recognize those moments. It's kind of a subtle thing to catch. But Tim Galway, the inner game of tennis guy. It's a slime. Desire wants what it wants.

31:33 I guess so profound. Like From schools Parents, peers, Like we cover up what the desire actually wants. And

31:43 Getting in tune with it. is so powerful and hopefully that happens to somebody as in their twenties or thirties from a career perspective. When it does click You can hear it in their voice, you can hear it in the way they

31:57 Create language to Capture the things they've seen. Yeah. What was your second moment of ignition? I was working at a fund of funds and

32:08 Dan Stern. who you may have met who used to run reservoir. The way These mutual friends described him and then his activity, which was so people focused. within investments.

32:21 I was like oh That's my own orientation towards this. Oh, there's a path here. Of being an effective investor by Selecting people having very high situation awareness.

32:33 on how to set up the right platform for them. That I thought you know what? I've never met him, but I could just tell

32:41 Friends we had in common and then How effective he'd been that Oh, that's a thing. I wanna be that. Was he the most

32:49 Prolific famous cedar at the time. Yeah. And what was your sense of what made him so good at that? Well I think he apprenticed under Richard Rainwater and Brainwater had this. feel for platonic ideal of this concept. Yeah.

33:04 And then Could just tell from the people he had seated. There was a consistency to his taste. Which was In seeding there's massive adverse selection, of course. Like the people in general

33:16 Somebody who has pulled out enough money From the market. should have enough money to put themselves into business. So you have to understand why you're so lucky. That you're either catching them I generally like catching people super young.

33:30 It's like a company going IPO. There's just not that much information. yet about them and so there's it makes sense there'd be inefficiency. But then the other times Another Pattern I liked a lot was

33:43 Someone's former boss Damning them either With faint praise or not even with faint praise. It's a huge structural inefficiency because if you're the guy running the platform and your star guy leaves

33:57 And you sponsor him and promote him too much. You create an incentive for everybody else to do that. So I really like hair. Um A former situation specifically where I know the former

34:12 PM and I have a feel for why they might be a little sociopathic about it. Like oh Fair enough. I see what you're doing. I've been on so many counseling calls with people thinking of leaving Five to twenty conversations going with somebody who's thinking of leaving a thing.

34:30 And the level of fear About how the source, the primary person of their existing platform is going to relate to them. Is so consistent and so high. And correct. Yeah. Like course.

34:42 Is there anything you hear on those calls? I have a lot of those too. I'm fascinated by this category of call. Yeah. The want to love the want to leave her. What are some common observations on those calls of like something you would hear We're like, Nope, not ready, like What are the piles you sort people into on those calls?

35:01 Well one is It's very easy to be to find almost everything You're thinking of doing In reaction to your current Container.

35:10 The genesis in part, I think, of Josh Waitskin's cave process is That's not a healthy way to start a new thing. You can't do it in reaction you can do it somewhat in reaction to the old thing,'cause that informs your map of reality and what you want to change. But if it's all reactive. There's something kinda it's like

35:29 The psychologist divide things into approach motivation and avoidance motivation. it ends up being too much avoidance motivation somehow Just like this. Negativity.

35:39 baked into the DNA of the thing if you allow too much of that. I feel like that's One thing. It's easy to be too cute about that.

35:46 You don't want to overweight that when someone's talking, but I feel like Over time. they need to get to the point where they're articulating a proactive vision, not just My job sucks. There is a category of it's like

36:00 My friends have all started funds or they've all started whatever the thing is, or all starting you get this in Silicon Valley right now where the mimetic kind of thing. Yeah. Yeah. I'm a founder. You're not founder yet? Like the founder thing is totally in this category and it it's so distinctive to my ear because it's I've just spent more time on it in the last couple of years. And the Silicon Valley version of it is so distinctive of Founder capital F.

36:25 So there's a version of it where someone is just frustrated With their current construct the core motivation is I want to create a new job for myself. And I think that's not a great Way to start a new thing. It needs to be slightly bigger than that.

36:40 I think and then At the highest level what it is is what they're wanting is to be priced. By the market. In a hedge fund context or probably applies to stripes too of just What will VC's price me plus this opportunity at from a

36:57 Seed round or series A valuation. Like I think of it as it's like a pricing exercise. Like A guy who runs an enormous fund. I was talking with him recently and he's kinda debating whether stay at this enormous fund. And

37:10 The question he's really asking is if I launch my own fund, am I raising a billion or am I raising five billion? And It's a great question. And I think there's kind of an answer to that. Based on okay.

37:24 How long have you been there? Do you have a standalone track record? It's answerable. Does that square with your a hundred percent. I've never heard it put that way.

37:33 It's so resonant. Yeah. Price. What's my price? And that should change over time. I remember there was a guy Running. A regional office for a really large hedge fund.

37:44 And thinking that If We have been able to spring'em He would have raised five hundred million to a billion. And we Ideally would have seated him, but

37:53 Quite possible he wouldn't have needed it. Then you end up running. Call it a ten billion dollar plus fund. I was thinking, Oh, that's a very interesting spread. Outside this container.

38:04 The market as a whole Well price'em at five hundred million to a billion. He's running A twelve billion dollar plus fund. The founder of that firm who made that decision

38:15 That's that guy's arm. That's the bet. And it ended up being the correct bet. I didn't necessarily see it at the time. I was thinking, Whoa, that's a huge spread. And if he went outside, it would be so much smaller. So interesting how it's turtles all the way down, like

38:29 If you hear founders fun. GPs talk about what they do, it's the same. It's like they want the hair. They want Any deal heat. And they're gone.

38:38 Because the price is wrong. And It raises a r interesting question about seeding, which is If it has to overcome This adverse selection problem.

38:49 And it has this juiciness to it. Like I feel like every investor ever has had some period where they're like, We should do seeding because You're putting L P dollars in, so whatever, like the downside is they're a really bad investor. And I get GP economics on the other side, and it just seems like this money machine. But obviously it hasn't been. Like you're probably the best seater ever. There aren't

39:10 Ten other great cedars. The model itself seems so sexy and alluring. But there's this adverse selection problem. Adverse selection and the moment you have to I remember we were so careful about this. Um

39:22 My partner who now run East Trock. If you have it all the mentality of I need to put assets out. It completely screws up. The dynamic.

39:33 I wouldn't trust myself If I seed funds. Yes. If I had two billion dollars that's burning a hole in my pocket and I need to seed. Important point. The other thing that people do, I've noticed this If you seed somebody

39:46 I was talking with a guy I won't use the name of the fund, but He was at a Very prestigious fund. And somebody called him

39:54 And offered him It was a big seed. Call it. Two hundred million dollars. My hypothesis. I remember talking to him. My hypothesis was if the guy hadn't called

40:04 And giving him the two hundred million, he he wouldn't have come up with it on his own. It's a very subtle I forget we've talked before about source dynamics, like work with source.com. Is uh Collection of

40:17 information on this concept that I'm obsessed with. But It's like The argument is this guy Peter Koenig.

40:24 And he had looked at all these startups in Europe. Several hundred. Even when there were co founders There was really one person

40:33 who took the first risk, even if that was calling the other co founder. And that You gotta be really careful about that first risk and who's taking it and why they're taking it. I remember meeting with a quant fund And when I

40:45 Pull the thread on the origin story. There was something about the energetic of the guy running the quant fund. Which was that he was relating to it as a job. Not his thing. It's like that's so weird.

40:56 And then I pulled the thread and it emerged. That had happened to him. He'd been sitting at a fancy firm And a friend of his had said Let's do this thing. And the source dynamics

41:08 We're screwed up from the start. And this guy Peter Koenig has this argument that all organizational dysfunction Can be traced back to disagreements about who is source. Or the actual source playing small or not. fully owning being source of the thing.

41:24 And uh totally m fit my sample of hedge funds where Our friend Diana Chapman has this analogy of The chick. needs to peck through The eggshell.

41:38 And develop the strength through the pecking in order to make it. Once you're outside if you break the shelf for them. They will die. If you mess with The original

41:48 In any subtle way. It can affect the entire trajectory of the thing. In ways you wouldn't think. Does that mean you don't think of yourself as a cedar? That just happened to be the right

42:00 Yeah. Eight times or whatever many it was. Yeah. Yeah. Kind of up one level. looking to back people and fit their circumstance and they were gonna do the thing anyway.

42:11 Yeah. It's so interesting that working with source thing is just true. Like if you go read it. and you have a high end of investors or companies or founders or whatever, like you just see it. Everywhere.

42:24 Are there other aspects of your obsession with that and like how you suss it out? That are interesting. When you're trying to identify what the source is. For any given person. In this language I often think of it as who is the source and are they owning it?

42:40 I mean you see it a lot in succession. One of the arguments. In this literature is that heading off source is extremely subtle. And hard to do. Where else do you

42:51 You see it with the in the dynamics between co founders Is there resentment on the part of the co founder who's not Soros. Toward source. Because they don't wanna be in that role.

43:05 I feel like I see that a lot. And Eighty percent of the time that's held in check, but then conditions can change and then it's not held in check anymore. They can go through a difficult period or Extreme success can also lead to it.

43:18 Bring it back to something very tangible, which is this interesting matching exercise between investors that might want to run money for a family or a set of families.

43:31 And Someone that's commercial and talented enough. That it would make sense to give them some of your money. Why is there not like a Y C for

43:40 that kind of person, or even a Y C for like investors. Why if I'm new billionaire X that wants some great setup, is there not a Demo day where I can meet highly talented, ambitious, hungry

43:53 Low ego commercial. Well one thing is I think Wonderful. I think it's because it's

44:03 The skill set. It's the skill set at the highest level. To managing risk. And being pragmatic. And commercial.

44:13 I think. And so In general those people tend to be older. I think Giving a bunch of money to a kid If you're running a family office

44:25 You need to do it in a way that there's room for them to screw up. And There's something around like Like the people who I think would be good at

44:34 Manager Family Officer. Have Taken risk. With their own capital and other people's capital before. I think ideally don't have identity

44:44 They have identity as being a moneymaker, but not as a specific thing. And Their EQ and social intelligence is high enough that when they're talking with other people Like r rainwater is the gold standard on this.

44:58 They're okay. Expressing A bet through other people. I feel like that's a distinct. Skill set. And so

45:07 Retired hedge fund managers. who were pretty high EQ Are probably a pretty good Pool. If you could

45:16 Make it feel like it's their money. either lend them money or they put half their net worth in, you lever it. Some way to make it feel As though they're doing it. So there's no I C because it's like the inverse of companies. You want young people with raw potential who are gonna go figure out some new thing. Yeah.

45:35 Whereas on the investing side, you want the grizzled, experienced veteran on average. Not always. Yeah. You don't need a big selection mechanism. You just kinda know who these people might be. Like it's a small pool and they're not applying to it. They're not gonna apply. Yeah. And that's why like setting up figuring out why are they available. People screw up and they think it's like oh it's just a role I'm gonna hire for it. No, it's not. It's like It's up one level or

46:01 By definition, if the person's good It needs to be a tricky Sella. It really is kind of a paradox. That you're stuck in.

46:10 You really have to want Back to Stewart's line up. Make it like a pro manage it like an amateur. Like you really want need to want to manage it like a pro. And the Batna is Iconic.

46:22 Or Jordan Park or something like they're not gonna fuck it up. They're gonna do a fine job. It's gonna be beta. Yeah. And it's gonna feel nice. Yeah. So be it. You w have to deeply want. Something better than that. To find that great CIO.

46:36 Yeah. Your ego needs to be able to take somebody else having the successes and Failures around it. I think.

46:44 Because If not, then If you want to be pretty involved or you have identity because I made a bunch of money and blah blah blah and I wanna keep making money and blah blah blah and now I want you to do it for me.

46:57 Anybody commercial who's sitting in the front seat now has somebody telling'em how to drive in the back seat. And unless The person in the backseat is extremely skilled. It's gonna screw up. The incentives of the whole thing.

47:10 There's three criteria that you've written about that like if you were hiring for a CIO for yourself or your family office or something. that you've laid out that I'd love to go through each one and kinda what you mean by each. So the first one is There's gotta be evidence they have good taste in people. And

47:26 Taste is a fun and funny word. to try to define very hard to define. What's your definition of it? Like what do you mean by that and why is that one of the three key criteria, I think. Well, so I would say it's good taste of people

47:40 From the perspective of the principal. It's not an absolute thing. Yeah. It needs to overlap. Otherwise They're not gonna trust The agent's judgments.

47:50 And vice versa. Practically speaking, if you're the principal Basically saying like tell me who you like. And then meeting all those people. And if you like all those people, like probably a good time. Yeah.

48:02 I mean I guess uh An example. The group of people around the Collison Brothers, I feel like, is very distinctive. It's kind of nerdy. And Alpha Nerds. Yes.

48:13 It's very specific. Aesthetic. And Patrick's got these public policy interests and Tyler Cowan and like that whole crew. It's a very specific

48:24 And By signaling it out to the world, they attract more of it. Did that happen at East Rock? Was there This gravity that got created as you

48:33 partnered with and backed. Was the marginal one always a little bit easier than the last one'cause of the gravity than and the reputation that you had built? Yeah, and uh would host these events and people would come to the event and then you'd see, Oh One guy who runs Large investment firm in

48:48 San Francisco had come to one and he said, Oh You sent me a note afterwards saying, Graham, you've restored my faith in humanity. Which was like such a high compliment. He's like referring to the fact that it's like being at a really good wedding, you're like, Oh my God, I like all these people. Like there's not a bad seat in the house. And I would do business with all these people. There's a level of

49:05 Trust or Integrity or something. Can you talk a little bit more about those events, big and small? I've been a part of that. And

49:14 It has that incredible effect. If you nail it. And you're not compromising in any way about like who shows up, whether it's a dinner used to do this amazing dinner with dads.

49:25 Investors who are dads. To talk kind of talk about being a dad, but like that was the frame. I mean, it would be very different people, but they would all be so Great. And then a much bigger event that's a hundred people that somehow also like every conversation is like, Holy shit, like who are these people? How did you find all these people?

49:42 And then that creates a like a mystique around you. Like, wait a minute, who are you like How are you doing this? So say more about The intentionality behind Those gatherings.

49:53 Seems like that is a really important ingredient in the Yeah. Yeah, it's creating talent density and then to your point it like creates a gravitational force of its own. And people end up doing business with each other and then it

50:06 Sticks to you somehow. Sometimes, sometimes not. What I do it's just very visceral. It's like If I get stuck sitting next to this person Am I neutral, psyched, or bummed? Mm-hmm.

50:19 And I try to have all site. And then the result it just takes care of itself. I came up with this But When I first started East Truck as a way to

50:30 Evaluate. Hedgeham Andrews. I felt like often If we had like thirty people in a room pitching investment ideas The room

50:40 New who the best people were. I'd go in with a thesis on This guy's the best on special situations. This is the best tech long short guy. And then

50:50 Some percentage of the time The room agreed with me, but then over the course of Several days of Talking like different people would

50:59 emerge if you read the room correctly, the room kinda knows where the pockets of quality are most of the time. Can you tell the story of working with uh guys who started Paradigm? Charlie Songhurst to I think I introduced you to You did. You sat me next to him at an East Rock event and I remember coming up to you afterwards and saying What the fuck? Like how does a guy like that exist? How does everyone in the world not know this guy exists so unbelievably talented and smart and

51:25 Amazing. He had left Microsoft and he was trying to figure out what to do next. And I remember counseling him at the time He said he really appreciated that I wasn't trying to Fit him into existing concepts, but I was just trying to figure out what was best for him.

51:41 his appreciation of my doing that kind of made it object to me and I tried to do it with other people. Hm. had been at an East Rock event. Uh hedge fund gathering we had and had How did

51:52 Bitcoin. Back when it was probably six months before we ended up buying it, but we we bought a small amount Uh three hundred dollars a coin.

52:00 And then it proceeded to go up quite a bit. And so I was trying to figure out what to do with the position. Whether it was real, how to think about it. And so I went to a Crypto conference.

52:10 And I've noticed this thing I I don't know if AI is like this now or not, but when you have a new field, it tends to attract the people who are available to be in that new field. And that's often unemployed people or People who are So Chicago improv that they're switching what they're doing and chasing the next thing. And so it can be kind of aesthetically distracting when there's a new thing.

52:33 Because the people who've gotten in there first are kind of scrappy, but also Fly by night in this way. And crypto is like that. And so I went to this conference and I experience a lot of the people as Not

52:47 Like that line from succession, they're not serious people. Um and then I came across this woman who was running crypto for Facebook at the time. I was in a room of like three hundred people and I just Followed her'cause I noticed that The room seemed to know. That she was among the most credible in the room, and if I just sat near her It was interesting and coming.

53:08 And Matt Wong was at Sequoia at the time, and he came in. And then I was like, you know what? Actually, I'm gonna follow him. And so I became kind of his wingman. And it turned out in retrospect he and Fred Orson We're debating whether to work together in that They had gone on this trip. Partly to figure that out. I ended up having a road

53:26 trip I drove the two of them to the airport and we spent a bunch of time together. And I was just struck by I experienced them both as commercial actors that I would back

53:37 Feel agnostic. I would bet on them. individually and as partners, regardless of what they were pursuing. And I ended up interviewing CFOs for them.

53:48 I like to interview team members for people because I can often add value that way and I understand how they're approaching everything and I learn a lot about it. And I happen to have just read the description of Enigram one. On the morning that I interviewed

54:03 This endowment. person who they were interviewing as a CFO. And She and I had this amazing deep conversation and I realized oh my God, she's in Enneagram one.

54:13 And I said To them to Fred and Matt, like I think she's an amazing hire. She's gonna bring Institutional credibility into

54:23 The Inside of the firm. The shadow side, the one catch is she's gonna have this slight vibe. Of You're trying to get away with something.

54:32 I said, particularly Fred, she's gonna have this vibe of like you're kinda getting away with something. Why are you being that way? And if you take that personally, you're gonna end up firing her. But if you don't, she's gonna be amazing. And Matt recently sent me I think that email recapping that, she's ended up becoming their CFO. She's amazing. She's totally built their firm. She's their third partner. And because I was there

54:56 with her before. It's like She can I share this. I noticed this recently in visiting somewhere else where I helped recruit a lot of people. You're sharing the before and after reality with somebody, and you're on. The same journey in this camaraderie like way. So I've seen them go from nothing to I think they managed like ten billion today.

55:14 And to their credit. They've consistently invested in crypto and put real money to work at Multiple bottoms. Because of their own. long term

55:23 belief in it and the quality of their decision making. I add kind of a front row seat to that and that's been really fun. I realized that earlier we talked a lot about identifying the person that is maybe entering into their positive feedback loop compulsion platform.

55:38 Whatever you want to call it. What we didn't talk about, which seems really important for the prospective CIO hire. Whatever, doing this job in general. Is the act of once you've identified them. structuring the relationship with them in such a way that like everyone makes money together to use your language.

55:54 What was that process consistently like? And sometimes it was seeding, sometimes it was an LP investment, sometimes it was a direct deal. Maybe bring us into the room on what those processes tended to be like and what you learned about doing that second half. So well. Not just finding, but then ultimately consummating.

56:11 Well I think it's part of the pricing, right? You think of somebody Like Musk. The terms of Mus's X dot AI fundraise. I presume are

56:22 Agregious quote unquote, from a investor's perspective. They have no control, they have no transparency, whatever, right? So that's the market pricing, the fact that he's highly credible. Part of pricing The talent what you're pricing is the degree of autonomy

56:37 Transparency And the fees and the duration of the capital, all those things are like, okay, what feels reasonable Given where this person is in life, what their track record is. Your assessment of their competence and all of that.

56:52 The way I ended up doing it is if I were them At this stage. With this track record, with this set of relationships. Would I feel like this is a fair deal, or do I feel exploited? And if I would feel exploded, I'd try to dial it back.

57:07 A little bit so that it doesn't feel explodative. And sometimes I would get it wrong, of course, but I feel like that Pricing talent. Pricing talent. It's like How much money

57:18 And with what constraints on the activity, like w what are your decision rights And how often are we you gonna check back in and And then I think there's a way to do it if you're the I guess in this sense the principle, there's a way to do it where you're

57:34 Even though you formally have these rights, you're doing it with a very light touch. You can make the experience feel like A much more open field depending on the tone. of the people who you've str struck the deal with. The second thing on this categorical list, which I love so much, is a quiet ego.

57:52 Why those two words? Back to that. Part about identity. If you're the Principle

57:59 You need an agent who Can make money. Through other people And not care be kind of indifferent about whether it's quote yours

58:11 Or somebody else's It's just net of fees, how much money did you make? And I feel like I observed that a lot of people who allocate money to underlying GPs

58:23 They actually would prefer to be the underlying GP from a power and identity and experience perspective. You the principal should just want to make money. Like it's not All the identity claims about who did what or whatever So many people actually are not good at making money through other people. They need they can

58:42 Do the analysis themselves. But they actually can't It's like the stage of a Portfolio manager's development. Where if they've been a stock picker and then they move to being a portfolio manager and they need to own a stock.

58:55 That actually. Is their analyst favorite idea and they aren't as deep on it as the analyst. That's a really big moment of transition and A lot of people cannot make that transition. It's the equivalent transition, I feel like, in the

59:10 Family office CIO where I think the ideal is just Agnosticism on enough self awareness to know where you have comparative advantage. But also an ability to interview other people

59:24 And appreciate them for who they are and what they're doing without any need to make it your own somehow. The third of those criteria is that they be conservative by nature. That one kind of stood out to me as interesting. You need somebody who knows what it's like. to lose money and cares in their bones about

59:44 Never selling putts. Or never doing something that could Take you out of the game. Because people do weird shit and And so part of the trust is

59:56 A conservatism of like, yeah, I'll let some things go. You want the agent to view the money as though it's theirs And there's a price for that, which is Ideally they've got enough money that They've already

1:00:10 found a way to relate to money that way, or they're just innately Conservative. That's what I was trying to capture. On the topic of investment platforms Just like hiring a CIO, you've got some of these great questions that

1:00:23 You encourage people that Ask themselves. And I'd love to go not through all of them, but just through a few of them, the ones that stood out to me. Because I think People that listen and read

1:00:33 What we're gonna produce here. some huge portion of them are in that funny category of like working at an investment firm wondering like do I have what it takes to launch my own thing. And the first question you pose or you encourage people to pose is whether or not they can like manage the ambiguity of this new thing.

1:00:51 Can you explain what you mean by that ambiguity and like where you've seen that sink people? Or be a hurdle that's harder than people might perceive from the outside looking in? There's a guy who has a quote I'm blanking the guy's name. The job of the leader is to define reality on the way in and thank them on the way out. Should I think it's so profound.

1:01:10 Because it speaks to how each container is a different reality. And I've been thinking lately how You've heard him. Gellman amnesia. Yeah, Gellman Amnesia, yeah. Where you're reading an article

1:01:23 It's about a subject you know about and you're like, Oh my god, the reporter doesn't know what they're talking about and then you turn the page and then you assume the next article Accurately captures reality. I've been thinking I have that and most people have that about moving from one container to another. You're like, oh This one is so idiosyncratic based on the source and the way the leader

1:01:44 to find reality on the way in. Oh, I'm gonna go to this next one. But that won't be the case of the next one. It'll be quote normal. No, every single one is so Weird and idiosyncratic and the older you get. Your ability to

1:01:59 transition between containers gets really compromised. Because Either you've grown up in one container Or your willingness to put up with somebody else's Frame on reality.

1:02:10 Diminishes. And so I think the ambiguity That I was referring to when somebody's trying something new is just That act of defining the reality

1:02:21 But While you're doing it, it feels Super slippery. And Amorphous and it's like I don't know if I'm gonna get the investors. I don't know if I'm gonna get the

1:02:32 Team. You're like holding so many thirty three percent probability things. At once. That it's very taxing and

1:02:41 If you haven't run something yourself before You're not used to having Everything be up for grabs. And I feel like the act of starting something new

1:02:51 You're sitting there on Monday morning Hopefully you have an office. If you don't have an office, you're sitting at a Starbucks. And you're like Holy shit. The lack of strength. Yeah. There there's no order. The only order comes from you asserting reality.

1:03:09 And if you haven't done it before It can feel fake, it can feel disorienting, it can you can have vertigo, you it can be like, Oh my God, what did I just do? So What is it? It's getting comfortable. With that level of uncertainty

1:03:24 And there's also this subtle thing where I'm actually working with somebody right now who's Literally doing this very masterfully. You have to pretend it's more certain than it is. Because you're pretending

1:03:35 Makes it so But there's something slightly intellectually dishonest about that. And it's particularly hard for hedge fund managers because many of them or kind of default skeptical They're liking to See the downside and the risk and the

1:03:49 calling bullshit on things. And so if you're in that mode and yet Your own thing feels like bullshit to you. It's not gonna work. You gotta thread the needle on it's real enough. I'm gonna find the thing that's real enough to me.

1:04:05 That I'm willing to put a stake in while at the same time having a sense of humor about it. My favorite ever line on this from someone I know was Henry Shuck from Zoom Info. When he was doing their first they've been fascinating M and A story to that business and how it got piece together and he did it all, talk about asserting reality. And on his first big

1:04:24 acquisition that was going on. He was flying somewhere and he's like, I remember I'm sitting on this flight and having this thought like I'm playing pretend business. Like, what the fuck is going on? Like this is so weird. Like I'm gonna buy a multi-hundred million dollar company. Like, what? And like my job is to pretend like this is normal. I'm playing pretend business. I'm in my pretend suit. I thought that was so Funny

1:04:50 But also to the wrong person terrifying. And it relates to the second question from that list that I love, which is protecting the climate in your skull. So it seems like that is the skill that allows you to do the first one well. Yeah. How have you seen people do that really well or poorly, protecting the climate in their skull?

1:05:08 Love that visual. It's related to the idea in the investment world, but maybe it applies to founders too. Like the main asset is your future decisions. And so When you're moving from The container you were in before and the way reality was defined into this new ambiguous setting. If in the transition

1:05:26 You are now sitting next to somebody I use the example in the piece of often younger hedge fund managers will hire a more seasoned CFO But the CFO Is

1:05:37 Taking Risk that Almost by definition, if they're a CFO and grew up in the accounting profession is more risk than they actually feel comfortable taking. And so their

1:05:50 Risk aversion And slight Scepticism about You the portfolio manager can enter your confidence when you're

1:06:00 Fund is down ten percent. You're less Senior and Your own chip stack is smaller. And you're sitting there and the guy sitting next to you

1:06:10 In his body language and in his questions Is conveying Anxiety and fear. Those are very contagious emotions. You want to be very pristine.

1:06:22 Particularly early on as you're holding the ambiguity and asserting trying to assert reality. About The energy of the people around you and whether they believe in you because You need some skepticism in there, of course. You don't wanna go off a cliff because you're sizing something too big and

1:06:37 Or in some other way you haven't taken input, but You're managing your own psychology And the I think one of the best ways to do that is manage the inputs. And so it could mean Turning down an investor

1:06:49 Where the check size is really good, but They're actually kind of an asshole. And They're gonna call you weekly. And They

1:06:56 signed up for your liquidity terms, but they've never signed up for a fund with that liquidity term before they actually like quarterly liquidity and In all these ways, they're faster twitch than you are And You sold them on your strategy.

1:07:11 The expectations you have with your team With Your investors have to be so pristine and so well managed, or you don't protect the climate in the skull. What role does a partner or partners play in this?

1:07:25 Like picking a partner. Yeah. It plays a big role, of course. And it's back to the source point. You want them Senior enough.

1:07:35 that you find them credible and they find you credible and you've had enough time together. But then Depending on the construct. You hopefully. want them game for at the end of the day being on your ship.

1:07:47 And the challenge becomes If actually they wanted to do their own thing or actually they think they should be The PM or they should be co PM or all of those you're capturing somebody who's extremely talented on their path. Do they believe in you?

1:08:03 And Do they agree with how you price them? You don't want somebody Who they think they should have forty percent, you gave them ten percent. Like it's just in the water all the time.

1:08:14 And if they wanted forty percent, actually maybe they actually wanted fifty percent. And Nah. If you could hold it for a couple of years And then they go off and do their own thing, that's great, but

1:08:25 That can screw up The energy of the system. It's also like why in those settings If your partner has experienced failure in some form or done it themselves And knows how hard it is.

1:08:39 Is pricing it correctly. Because If they think it's easy Then they should Fucking go do it. And and if they think it's too hard, they're probably not gonna join you. So it has to be like right in that sweet spot.

1:08:52 And the think of this in personality terms, depending on what how you're wired. How they're wired. You need to understand how those two are gonna go together. Just like It would in a marriage.

1:09:03 Because If they're truly your business partner I think David Sra picked out that amazing Zell quote. A partner is somebody who shares the same level of risk that you do. I thought that was so profound.

1:09:15 That was such a good catch up, his own. Like That is a partner. You're in this new thing and If it goes down, like it has real world implications for your family.

1:09:24 For where your kids are gonna go to school, where you're gonna live. And yet I think most of the time those systems benefit from at the end of the day, the buck stops one person and they I'm gonna make a call and

1:09:36 Everybody needs to be okay with that. It's interesting. It's like a calibration for the would be partner on whether or not they could be resentful in the case of success. If it works. What are the odds they're gonna be like, Ugh you know, that was more me than I got credit for or something like that.

1:09:52 And your interesting point is If they have tried and failed, they'll better understand. how hard it is and price themselves better. So it's both. Like you want self awareness on pricing and fairness. On pricing or something like that.

1:10:06 Yeah. And having it be dynamic over time, of course. To accommodate. The shifting system. There's a quant fund I'm obsessed with the culture.

1:10:16 And I probably shouldn't get into the specifics of it, but they have a very dynamic Comp system. In a way that

1:10:23 gives rise to the culture and so I think there are ways to be creative. About how equity changes over time, how carry changes over time. That allows

1:10:36 For meritocracy and for change. And people tend to do the same Self expression. hitting the comp system and how value will change over time, I think is a fertile area as you're setting up something new.

1:10:50 It seems like so much of what you write about is Related to periods of transition. You wanna start an investment platform, you wanna set up a family office. You're trying to hire someone You seem always to keed in on like phase changes.

1:11:05 What is it about? transitions that Fascinates you so much. It's the what's going on here. It's what's going on here in this new setup. And can I

1:11:16 Or anybody else describe it in a way that's useful to you. truly understanding the structure of what's going on here. If you have humility about it and realize the things you can't see. Then if you read the right thing or hear the right person talking at the exact right moment. There's such leverage to that moment.

1:11:34 Wait skin has this language of firewalking somebody else's mistakes. Can you burn in someone else's mistakes? Or not. And it's really hard to do. 'Cause it's obviously not visceral to you the way it was to them. But are there ways to

1:11:47 And form your own Compass. In this Whatever period whatever rite of passage you're going through. that makes you better at it or somehow improves your ability to do it. I think I just think there's extra leverage around those.

1:12:01 I'm curious what those mistakes were that you made. entrepreneurially that you kind of referred to earlier. That maybe fall in this category of like if someone else heard this They might avoid doing it.

1:12:12 Well a huge percentage of them are source related. Like Knowing When you're source and when you're not. is such a valuable thing. So the first business I started with a professor of mine

1:12:25 Richard Medley. He was source on that. But I was running the business. He wasn't really a business guy. He w I was a beneficiary of his poor judgment about people, which extended to me, so he let this twenty one year old run this thing and this completely inappropriate massive imposter syndrome at the time. And thirty people. Working for me.

1:12:45 I don't think I knew that. Yeah. It built a big business. So if I were replaying that There were moments at which In retrospect. I was

1:12:54 Frustrated with him as source. Back then I saw it as I'm producing the Richard Medley Show. But the moments when I didn't want to produce the Richard Medley show, I wanted to produce The Graham Show. They were frustrating and He and I had conflict.

1:13:09 In a way that was extra. Like No, I'm not source here. This is the Richard Show. At the end of the day Everyone, including me, needs to understand that the buck stops with him and he started it and over time we tried to grow it off of him but knowing source is super powerful of like am I source

1:13:29 I think in some ways At East Rock I didn't fully own source at times. As an example. And My partner Adam Shapiro has become you know, I kinda handed its horse off to him and now it's very coherent.

1:13:41 is my sense. He's a great investor and people in East Rock and the clients are living within Adam Shapiro world. I'm helping an entrepreneur right now.

1:13:53 Who I think is at risk. Of not fulning source. It's something that Enneagram threes. And nines in particular, I think are subject to where You can be so adaptable.

1:14:04 And pragmatic. That you write yourself out of the narrative. Because it's like at the end of the day, I'll take care of my own needs. I'm gonna take care of everybody else's needs and I'll do anything to make this thing work. And so there's a very fine line of being flexible and adaptable.

1:14:19 But allowing your own creative voice What's coming through you, the reason you started the thing in the first place. And it's why means so many things do not work.

1:14:31 At the end of the day, you need to be comfortable with the power dynamic. One tiny crimp. in that hose and all sorts of weird shit happens. And if it's clean, if everybody in a system Says yeah, the sky source.

1:14:47 And I want to live in this reality. It has such a healthy vibe to it. I'd love to understand your view on physical spaces. The East Rock office it's just has this Someone text me recently that it was like the best office that he had ever been in in New York.

1:15:02 And your attention to physical spaces is very notable. It's like one of the most reliable things about you that like wherever I show up, it's gonna have a specific feel to it. What's behind all that?

1:15:15 What is it about? physical spaces that Obviously intrigues you. It affects my mood. when I'm in the space, obviously light and ceilings and all that art, all that kinda stuff, but

1:15:27 Well, one of the things about the East Rock office that I was focused on is I wanted a lot of extra space feel like one thing that people with capital should do more Is provide physical space for Up and comers.

1:15:40 It's such an easy arb and Richard Rainwater did that. I think very Stern like Camped maybe in Danster in a reservoir space. As he was starting Star Wood. There's polling

1:15:52 A physico space And covering the overhead of that. That's what A certain set of people are lacking. You wanna pay their overhead so that and collect them.

1:16:02 And ideally they find things to do together and you find things to do with them. So We have a Cafe at East Rock with a great chef. For some of the same reasons you do it here, like it Creates more of a

1:16:13 A restaurant or Not quite a club, but uh Just a vibe of So welcoming. Yeah. Food is so welcoming. Good food. Yeah. And community table. Yeah. Yeah, exactly.

1:16:24 When you're making a major decision. Let's say we've east drock. What process do you put yourself through? as you analyze your own transitions. What do you do?

1:16:33 What do you think about a movie frame differently? Like why did you leave East Rock? In January of twenty twenty I had moved to Santa Barbara right before Covid. And I

1:16:44 Realized that there was enough of a difference in s management style between partner Adam and myself, that it was incoherent to have me trying to Input. My

1:16:56 Claim to source. From the West Coast. He's an amazing investor. He has such a different style than me. When we were in the same office, it worked. When I was on the West Coast The people who worked for us were Getting confused.

1:17:11 This is no longer coherent. You know what? At the highest level, what I'm really good at is finding somebody Who's better than I am at doing a thing. I realized.

1:17:22 Adam's better at running East Rock than I am. Like I'm not that great a manager of people. I love Coaching people, I love having a sense of abundance. I love setting people free. Not that good a manager of people like Very thing. Not being that good a manager, people

1:17:38 Is And part why I have to be so good at hiring. Because I don't have the attention span or the desire to stay in their business if they're not doing the thing they should do. And so I decided, you know what? I found somebody who's better than I am at running East Rock and he

1:17:54 Should take it and make it his own and turn it into the next era. And I always thought That There's this concept of third culture kid, which I learned about from a

1:18:05 Israeli friend of mine who grew up in Puerto Rico And his Indian girlfriend said, You're a third culture kid which is such a great mix. I guess the concept is it's when you grow up in a place that's not your family's home culture. A lot of military brats are like this and a lot of immigrants are like this, where you never quite feel like somewhere's home. And I had grown up my parents were hippies, started a nonprofit in Kentucky, and I grew up in Kentucky

1:18:29 And I was home schooled and we were so different from everybody else. It was like I was growing up in a foreign country. And In retrospect, it felt incoherent to me. I had no alternative basis. Other than the fact that we seemed very different.

1:18:44 I moved to New Hampshire when I was fourteen and that immediately felt much more coherent. My dad had grown up in Boston. My Mom was grew up in Santa Barbara. And on the West Coast. And When we moved

1:18:57 In January twenty twenty to Santa Barbara. It has felt like home. In a way that I thought I was a third culture kid. One of the things about third culture kids is that nowhere ever feels like home. They always feel like an outsider. They always feel like they're

1:19:11 Visitors. And so One way I made decision was This feels like home, I don't want to leave. And whatever I do next

1:19:20 I wanna use this as the base. And travel from here. And so that That's ultimately how I made the decision. And it feels like it's worn well.

1:19:29 I miss the team, I miss the clients. I miss being in New York and the Flow of it, but then I almost feel slightly smug saying this out loud. But on a hundred point scale, my life satisfactory is like a ninety eight or ninety nine. I'm saying this

1:19:43 In that spirit of like Recognizing how fragile it is, how quickly it can change. So You're living on the West Coast now. I wanna capture

1:19:52 A sort of Vignette. of you with an idea of something you want to create. And the process by which you then go about. Creating this.

1:20:02 You do more upfront work than anyone else. And you're willing to Just put a tremendous amount of the first time. that would frankly exhaust and Extinguish.

1:20:12 Most other people. into getting the original setup right. And for some reason the restaurant wanted it's so simple and tangible. I also love restaurants. Maybe you could just tell that whole story like From start to finish. What did you identify? What did you want to do? What have you done so far?

1:20:27 I Had heard Danny Meyer say on maybe a podcast with Tim that There are some spaces

1:20:36 restaurant spaces, potential restaurant spaces, that if you gave them He wouldn't start a restaurant there. That totally clicked,'cause I'd been keeping an eye out kind of opportunistically in Santa Barbara and specifically in Montecito

1:20:51 For a restaurant spot. And It constantly felt like I was forcing it. And so Oh, spot came up.

1:20:59 That has such good feng shui it's like your car kinda wants to go there. It's the center of this particular part of town. And I instantly knew, Oh, if that were available, I would be drawn to go there myself all the time. I of course I knew nothing about restaurants, but I

1:21:16 Figured it was a casting exercise just like most other things. So I was like Okay, so I need to find A chef And

1:21:25 The other thought I had was that the percentage mind share that Shea Panisse has in Berkeley. Like if I lived in Berkeley being able to walk to chapanese and having that One Woman.

1:21:38 In a house Totally. disproportionately impacts that whole place's sense of itself. Like there's such leverage. To really good.

1:21:47 Culinary and But more than clinical, just neighborhood. experience. I aspired to bring that in some way to Santa Barbara and Montecito. And This restaurant spot came up. It ended up taking about a year to get the lease. It ended up being a sub lease, but a long one.

1:22:03 And then I started trying to figure out What distinguished different chefs and I interviewed a ton of chefs And the reality is That

1:22:12 for a chef to get leverage, they need to open multiple locations and then most often not be in the original location. And so I had several potential licensing deals with very fancy chefs. 'Cause everybody seemed to agree once I had this lease that this was an amazing lease. But I realize there's something about

1:22:31 When you're in a restaurant and the chef is there versus John George number ten. Yeah. Yeah. that it just feels different and it doesn't feel like a neighborhood place and I wanted this to feel like a neighborhood place. I kept looking for either someone younger, this is gonna be their first breakout restaurant, or Someone for whom it made sense that they would actually be in the restaurant. And

1:22:52 I interviewed a ton of chefs. And One of the co founders of BlackRock, Keith Anderson, owns a restaurant called Community Table in Lichfield County. I was speaking to him. About it.

1:23:02 I was speaking to him on a reference on a chef that had worked at community table back when he started it, and that chef, Joel Vielhand, ultimately we hired. And I'm super excited. He's moving to Santa Barbara in July and then we're gonna open this restaurant. But there's a dynamic between The general manager And the chef that is very delicate. Because one runs the front of the house and one runs

1:23:26 The back of the house. And One theme that people who've owned restaurants have is Chefs are artists. They're only gonna last

1:23:35 Three to five years. So you actually want the stability of the general manager and having it be an experience first and a food second. And I wrestled for a while with that trade off. And only to say I didn't want that trade off. And I was gonna try to we'll see whether it works. Try try to have it both ways.

1:23:52 But this particular chef I had interviewed him early in the process and he was so Joel was so knowledgeable and wise about the business without being cynical. It was like this knife edge of And it'd be so many chefs who were burned out. This particularly probably a post Covid experience. They've gotten

1:24:11 Slightly cynical and victimized feeling about The profession and How restaurants fared during Covid. And Joel didn't have that.

1:24:20 And then I was looking so he's an Enneagram six. Which my wife is And Is the Loyal skeptic.

1:24:29 Or the if you were to have a headline it would be winter is coming. So there's like there's this underlying fear to it. But there's an excellence. The fear like coexists with this excellence. And judgment. And then

1:24:44 or general manager I'd known for a while She grew up in the business. Huh. parents ran a restaurant in Santa Barbara. Her name is Jane.

1:24:55 And she's in anagram eight. And I have a working theory that eights and sixes do really well together. The eights provide stability, the sixes Are loyal. But also skeptical in a great way and alive in their decision making.

1:25:09 So I ended up thinking Like I introduced the two of them. Sometime Joel did not want to be the general manager. He knew

1:25:18 In his old restaurant. At one point he'd had to act as general manager and he hated it. It's a little bit like if you've had a failure It's actually better sometimes because somebody Prices themselves.

1:25:30 Correctly. He prices the value of the general manager, in my view, correctly. Oh, interesting. And so and therefore values it. And then values it. And I feel like There's a good chance it'll be a very long term thing for that reason. And so

1:25:45 I guess the other Elementary. In Santa Barbara is the housing is so expensive. And so a couple of years ago when I started this project, I knew the the toughest thing if I was gonna recruit somebody from outside San Barbara was gonna be the housing and the biggest carrot I could provide somebody would be a great Housing setup.

1:26:02 I also wanted the feel of the restaurant to be of somebody of that neighborhood, not somebody who's commuting an hour in But to serve somebody else, but somebody who's grounded in that community. So I had bought what at the time was the cheapest house in Montecito and redid it. It's right near a great public school and it's a three minute walk to the restaurant.

1:26:21 And so I was able to get'em. The reason I'm so lucky here and the reason I know why it's a good setup for him. He's gonna live in this house, his kids gonna go to the school, he's gonna walk to the restaurant. And so All those elements came together.

1:26:35 And then the final one was I was kind of debating whether to have a ton of investors in it. And pass the hat to the community, or just kind of keep it simple. And either just fund it myself. And I ended up finding a friend

1:26:48 Who's a partner at Sequoia. Brian Trier who he and his wife have a real interest in hospitality and have done other projects kind of like this and they Met Joel, met Jane.

1:27:00 We're extremely excited about it. It seems to me like this is just something you do all the time. I like the idea of a casting exercise. I don't think I've ever her to use that specific terminology for it, but you are kind of a casting director in so many ways. That is kind of one angle to understand you, like the world's best casting director or something.

1:27:20 Another great example of this is Sone. Where Sean pre dated you. How many years have you run it now? Six.

1:27:28 Okay. So What was it like to take over something that had its own Stick and Gestalt. Which is literally just a casting exercise. Certainly suits you.

1:27:40 Yeah. Just same questions with the restaurant. Talk me through Something that you didn't start in this case, but have sort of made More into your own.

1:27:49 And what you get out of it and what the process is like behind the scenes. You're right. That it's a casting exercise is it's so compact. This year we had thirty two speakers, so it was thirty two choices that I did together with Paulino Lopez and a number of other friends on the host committee.

1:28:09 And then one of the East Rock. team uh Brian Waterhouse did Next Wave, which is how I started with Sone ten years ago. I see it as Is the person a credible threat at saying something interesting?

1:28:22 If I saw them on the agenda and I already knew who they were ish. Is that when I'm gonna go take a call or not? And I try to have none of those breaks if I can. And then

1:28:34 A little bit like What we were talking about on the retreats. If I were sitting next to them When I feel engaged. And in terms of making it my own

1:28:44 Doug Hirsch who started it, who is source His big insight was to make it all actionable investment ideas. And to hold the line on not having panels. I feel like that's one of the things that distinguishes it. But I

1:28:56 at various points wanted to bring in People like Patrick Carlson or other tech people where there wasn't really an actual idea, but I just give myself a small budget of those on a given Conference. And then this year

1:29:12 My friend Boykin Curry came up with the idea of this lightning round where we did a series of five minute Talks that we're going to do. I thought really complimented the longer format quite well. And I think we'll double down on that next year. It seems like an interesting annual

1:29:25 exercise in figuring out like Who has it? Who is the main characters of the moment. Which is a fascinating exercise, like a fascinating check in. And it makes me wonder about

1:29:38 Your thoughts on who somehow finds a way to maintain that over a long period of time. Like Keper, someone you've written about who He's very quiet, you know, doesn't show up in the press very often. But my sense is like he's been Yeah.

1:29:51 Or has had it. For just an insane long period. And I don't know how many I could rattle off. Like that. It's quite rare.

1:30:00 Yeah. When there's a handful. Any observations on that about The people that somehow You could say have it every year, year in, year out.

1:30:09 Over time. Yeah, well m Macro, of course, may 'Cause Dracken Miller also comes to mind and Soros in his day. had long duration like there's something about macro where you're You're opportunistic enough to shift to the style of what's making money in that period.

1:30:25 So you could do long short, you can do distressed. But you don't know. You're not a hammer looking for a nail. So I feel like that. Provide some duration. And then

1:30:35 I do think in general that the financial markets If you've made a lot of money And you're starting to get your ego and identity is starting to solidify and you're not The market's

1:30:48 Or such a good feedback mechanism to make you constantly learn. And so if you're gonna choose one profession to grow old in to maintain intellectual

1:31:00 And cognitive flexibility and responsiveness rather than Hardening. I feel like financial markets pretty good because you'll just lose all your money if you get too ideological or start Drinking your own Kool-Aid. And so I feel like Tepper

1:31:14 Drag and Miller are both good examples of They're forced to constantly Engage. With new ideas. Young people

1:31:23 And move with that chapter in the market sensor. I think there's something in that. The category of investor. Won't name them, but everyone can imagine them. Who nailed doing one thing. really well. They rode one specific wave. They

1:31:38 Invested in one specific kind of business model or something like that. None of that stuff lasts forever. And so Maybe Macro is like a unique ultra flexible and maybe buffets like the ultimate expression of this.

1:31:51 Shut his skin. however many times to adapt to a new style. But maybe love of the game. And a broad purview. Or like the two ingredients.

1:32:00 Yeah. Love the game. Humility. And bordering on paranoia that you're missing the thing that's now happening, so that you maintain extreme high open mindedness. Like I feel like There's a form where

1:32:12 When sown works, you've got all these listing posts of people who are on the edge of a thing. I thought this year Eric Steinberger Daniel Gross's interview of Eric Steinberger was super interesting because Eric is neck deep in the I world and From my perception. Maybe the blue chip into the pool.

1:32:32 And how he makes sense of reality is so different than mine. Daniel was trying to act as a translational layer between said that as he was doing it. Like, let me translate from there. He was doing such a good job of it. And it was still hard. But The fact that

1:32:47 In that world there's this idea of I want to be in the room when AGI happens. And there are like I don't know, five to ten places that are in the hunt. For that.

1:32:57 And they're paranoid they'll be in the wrong room. It's such an interesting Perspective. Maybe that's not the right frame, but the fact that that's A dominant frame totally

1:33:07 Strikes me. I'm curious because I think about that hierarchy of yours. So I think it's apprentice. Expert. Professional master steward.

1:33:17 What is the difference between professional and master? What happens in that Gap. How many masters are there? Maybe there are ten

1:33:26 To twenty? Ten to thirty. A bunch who are just managing their own money. And I know a number of those, but I bet I'm missing s a couple. What's the distinction? The distinction is

1:33:40 A shift to thinking of it as Becoming source maybe of your own style of investing, is how I think about it, and not those portfolio managers will have had influences Before them.

1:33:54 That leave their mark, but coming into their own And not playing the game the way other people have played it, but like truly playing it in their idiosyncratic way. I think of an example. Beyond Tepper. Tepper's such a good one'cause it's in the public domain and I don't actually know him, so I'm not violating any confidentiality.

1:34:14 I do think There's a consistency to What I think of is that master level where Their identity is up one at the level of I'm a

1:34:24 moneymaker, not I'm not a portfolio manager that invests in this sector. I think that shift Is one Elemental piece. How many stewards are there?

1:34:34 Do you think? At any given time. Yeah, also a handful. I think of John Arnold is

1:34:42 working on the machinery, you know, the platform of the country in public policy right now in a way that's consistent with that. It's not financial markets per se, but He seems like he's heavily engaged. Felt like Bill Gates. Controversy aside, I don't know if you think of him as an investor and that distinction between founder and investor, but at the beginning of COVID I felt like he was

1:35:03 acting in that way, like he was caring genuinely for the system more than his own interests. I feel like Mitt Romney is in that category right now. As a former investor whose politics aside is like Seems to my perspective from afar to be

1:35:17 It's care of the system itself. You know when Dreck Miller is concerned about the debt. And playing the role of a modern Bon vigilante.

1:35:27 That's him saying like Guys, I see this. We gotta be careful here. I'm curious whether there's more or less capacity for like investing masters today than There used to be. And I guess it's kind of a question on like market efficiency and What you think about markets and whether or not

1:35:45 It's gonna attracts great talent. The way it has in the past. As a profession, do you feel like It's as potentially rewarding and exciting for a twenty two year old as it was thirty years ago.

1:35:56 I think if you define it at the right level it is, which is back to the Point that Maybe founders versus or start up founders. Versus hedge fund managers is uh

1:36:08 And private equity managers is uh A tricky distinction. That The game Think of AI coming onto the scene and how

1:36:16 Much disruption that'll Ca in investing. But how many new opportunities and maybe it'll be a a startup founder. Who's organized as a company that ends up making the most money. I was talking with a

1:36:29 somebody who's deep in the AI world recently and they're paranoid that There may already be AI at scale In markets. And I thought it was such a interesting

1:36:39 idea even if they're wrong, like oh It's the kind of thing that's gonna happen sooner than you think and then weird stuff's gonna happen. I think Existential questions about AI and how it'll reach the world aside.

1:36:52 I think it'll morph and commercial Pragmatic. aggressive, humble people will continue to thrive in the system, but it may take lots of different forms. Are there traits? in investors that you think matter more

1:37:07 in twenty twenty four than they did And Two thousand four. It would basically be the same. Decisiveness, the open minded with a point of view. Like at a high level that's the same.

1:37:19 There are moments where In two thousand eight, two thousand nine were like this where You're on the field and the game itself Changes. In the structural ways.

1:37:29 And people that can handle being comfortable with that level of change of No, you thought you had cash in a bank. Actually you don't. Oh yes you do. No, you don't. Those sort of movements of the game like I remember at the time

1:37:44 There were several managers who I would not have guessed felt wronged by They were short. And when the FCC banned short selling There was one guy in particular who just felt like that wasn't fair.

1:37:55 I feel like the sentence underlying. Everything you said was that's not fair. And That's a version of I feel like trying to be right. Rather than making money, like

1:38:05 What? Nothing's fair. It's not fair that you have a gazillion dollars in your managing a hedge fund. Like what So I feel like If you told me there was some shift in I don't know what it would be, but just in the game itself over the next five to ten years. That it's useful

1:38:22 To be So opportunistic and so flexible that you're fine with that and you flow with it rather than getting stuck. And it matters more during periods of punctuated equilibrium. Does AI scare you? Like what do you think about It's freaking me out lately, to be honest. And excited at the same time. Munger spoke at Sown Australia.

1:38:41 A year before he died, and he And this amazingly Poignant. Where he said. I was talking with Warren this morning.

1:38:50 And we're both saying like If we could just Watch what happens the next thirty years. And then he said, Not even participate. Just watch.

1:38:59 The cow Beautiful. Yeah, I oscillate back and forth between. Fear Around

1:39:06 How my kids will navigate that reality. And we as a society And then Tyler Cowan's frame of like Number one, it's happening no matter what. Yeah. Number two, it's the return of history, like

1:39:22 There have been other eras that felt like this. And so That's how I try to rationalise it. What would surprise people the most that aren't in the world of What I'll call it, the very high end of the investment. Game.

1:39:34 Where you have very talented Very smart. very aggressive, often investors.

1:39:42 Vying for edge, vying for talent, vying for whatever funds from LPs. What would surprise people about the way that world works? That You've seen having probably interacted with it. As much or more

1:39:55 Than anyone. One thing is just the path dependents of it. You happen to have launched in a period Where Your first year

1:40:04 You made either good returns or bad returns. And then we tell all these stories after the fact. But I remember there was a It's Cliff Aznes. A Q R

1:40:14 There's another Manager. Who launched at the exact same time, very similar pedigree. Yeah. Yeah, yeah, I know what you're talking about. Yeah. And it didn't work.

1:40:24 And I remember One story on that is Maybe they launch two months apart or something, or there's some There's a difference in their initial returns. Yeah. And then that led to just these Just crazy different that we have all these stories about after the fact. I think there's a past dependence and an arbitrariness and luck component. That we

1:40:44 In retrospect. Tell stories about skill and other things. Of course, real life is it's both and it's messy but So that's one There's a lesson there to

1:40:53 Work really hard to start hot. Higher bar for that first deal. Yeah. Yeah, and and have a feel for Where you are in the cycle, obviously.

1:41:07 That requires a macro judgment that most people wouldn't have or that may not be available in any given period. Can we talk about referencing a little bit? Yeah. I don't think I knew that you were willing to troll LinkedIn as much as you were. You're certainly willing to do more referencing. in pursuit of finding the perfect person to lead the you know lead the thing. What have you learned about this art? And I would call it an art.

1:41:28 It feels like it's a common thing to say, now I'd rather reference than interview or it's become a popular idea to do referencing, but ninety-nine times out of a hundred When I see people reference, they do three references, three customer calls, three for our bosses or something. And I think that is very different from the way that you've done it. So how have you done it?

1:41:50 I would actually love to hear the story of how you came to this. What was the origin story of you doing referencing is I don't think I've ever asked you that. And why do you find it so valuable? Well, the origin story is I worked for Ted Sides who had learned it from the Yale Investment Office.

1:42:07 their emphasis on it and their professionalism around it. Where's kind of my window in that where it's like oh It's not quite true. I When I met Ted, I had started a reference. Orient.

1:42:19 Bizas And was pitching him as a client, and then I ended up joining him. So I was kinda already onto it, but he was so good at it that I felt like I learned a lot from in effect. The Yale Endowment Lineage of References. And they were maniacal about it, like they tracked down College roommates and that sort of thing.

1:42:35 And then I wrote that piece, What's Going On Here with this human Partly to put myself Like I reread it before I do references'cause it captures a mood. I'm trying to get

1:42:47 myself back into the mood when I'm In the zone. Of Pulling somebody Uh

1:42:54 The humility about how much you can see How much you know at that moment. And then I'm enjoying the process of figuring them out together with other people.

1:43:05 It's also just uh this point the felt experience of finding it so accurate. I can often find In the reference. Something that is w highly relevant to what ends up happening later.

1:43:17 And how I end up experiencing that person. I've just seen the power of it. I do believe that There's signal in there. It's not. Hundred percent, but it's like seventy five percent.

1:43:26 Just to make sure I understand that point, which I hadn't thought about before, it's not just about making a decision to hire them or whatever. It's actually improving the chances of working well with them after the decision. And so the component I've seen you write about a couple of component like goals that you have in a reference process. I think one of them is understanding the elephants in the room. Explain that process and a couple other things I'll ask about too.

1:43:49 I like Jonathan Heights. Metaphor of The elephant and the rider. Which he says he came to in a psychedelic trip. And it

1:43:59 Resonates because Both on references and when you're interviewing a candidate. The some percentage of the time Where you're interviewing the writer. And his idea is that

1:44:09 They're two separate I guess it could be just the ego and the unconscious, but it feels like it's more than that. You have to distinguish between what somebody's saying How self aware are they?

1:44:20 And Are they speaking for just the writer or for the writer and the elephant? And An example would be like Everybody knows that you need quote should be high conscientious and detail oriented.

1:44:34 In most professions on most things. But the reality is some people aren't. And Understanding in a reference process like The implications where are they on that and the implications for that given role ends up being

1:44:47 Super important. How do you get at the elephant? You get it, the elephant, because it's the pattern of behavior over time. That you're hearing from multiple people in different contexts.

1:44:58 Past performance is indicative of future results. Well, it's like past behavior is future indicative of future behavior. Past behavior as experienced by multiple agents. On the field. Over time about this yeah. In similar contexts. How would you describe your own personal elephant?

1:45:19 My wife No is my elephant well. people I've worked with, Waitskin knows my elephant well. It's like so come out in adjectives from them. I'm extremely comfortable with ambiguity and so

1:45:32 I like I think one of the characters in Shogun Apparently does this I haven't just started watching it, but Toronaga. Just hold.

1:45:43 whole totally to the point where everybody else is losing their minds. I'll notice it when I'm working with somebody else on a reference process or on a given human Decision and I'm like I feel no need to make up my mind. There's all this evidence on both sides on X. It would be useful to make up my mind. It's like

1:46:01 I'll just keep eating the grass over here and then I'll go over here. It can be maddening for people who are working with me. It's like you're the ultimate open loop person. Yeah. Closed loop being like what's the thing that he's doing?

1:46:13 Get it done as fast as possible versus like Delay. Yeah. Need to make a decision, like keep options open as long as possible. Oh, it's probably makes me frustrating to work with at times. But then I think friends would say like then I can

1:46:26 act very decisively. Much faster than they would think. When it lines up. In addition to the elephant concept. You talk about this.

1:46:35 in this whole like category of seeing reality clearly through understanding, through references, trying to understand a person and a situation. You talk about seeing your own reflection in the window. What does that mean? A metaphor that Sam Harris uses when you're trying to get someone to understand the non dual perspective. And his point is just

1:46:54 The If you and I were looking out this window And They're was a very strong reflection.

1:47:02 But You were focused on the building outside. The Using language to get you to see the reflection is very hard. And I like it in the hiring context because

1:47:15 I think Many people are blind to the way that they're creating the interaction themselves with the other person. And so If you're interviewing somebody The example I use in my essay is like if you're interviewing somebody and you're

1:47:29 Nervous. Holding your breath yourself. often they will start to do that and then you experience them as nervous, but actually You were the prime mover on that? That's why references using the interview is just one piece and then what's so hard is

1:47:45 The interview is so vivid in your mind you're inclined to really wait it. But the reality is if you can do really good references then you can control for the fact that you've created the other person. The last of these goals, if you will. From this great amazing piece is

1:48:01 Seeing the water, which I think is a David Foster Wallace reference, I'm guessing. describe that last goal in the process of Trying to understand what's going on with the person. We've Talked earlier about containers and how different the reality is in

1:48:15 Each container. And I think of the water as They're making sense of reality. Based on

1:48:23 their lived experience within a given field and within a given company. And You don't want to take somebody out of water that's working really well and just assume it applies somewhere else.

1:48:38 And Try to think of an example. If you were working at Goldman Sachs, In the nineties. There's a certain way of doing business.

1:48:46 That if you took that person out Somebody was extremely commercial and extremely successful and you put them in a different firm. With a different style of doing business. They could be seen as super sharp elbowed or super something.

1:48:58 And just being conscious of how different it is moving from container to container and they aren't necessarily aware They will not control for that themselves, so you have to control for it. When we talked when we were sitting by the beach Last time I was on Montecito with Boyd and a few others.

1:49:16 You were telling us some of these amazing early formative experience stories. We talked about one which was this moment of ignition seeing the senior rowers and thinking, Oh, I you know, if I work hard I could be that. I'd love to hear a few more what you could think of as like the formative experiences. of your life at any stage.

1:49:34 can be investing, can be rowing, can be anything. That you feel like were pivotal moments of growth for you or just formative in the way that you think about the world or have experienced the world. The rowing one's a great one'cause I can't remember how many championships you won, like a lot. Yeah, nein.

1:49:50 Yeah. Yeah. So like an unbelievable amount of success. Tasted? Early, which is like an interesting thing.

1:49:57 People taste. Excellence. Yeah. Touch it. Yeah. At different times. I feel like that's something I aspire to for my kids is because I feel like that experience for me. It locked in this sense of My identity being I can outwork other people. If I just try hard enough.

1:50:14 So when I Subsequently hit challenges like having launched East Rock a year before the great financial crisis. I had this underlying confidence that it could only get so bad somehow. 'Cause I can always fall back on working hard.

1:50:29 I've seen it before, so it's tangible in this way. Like I believe it in my bones. And that underlying confidence that I'll figure it out. I feel like It allows you to operate from integrity. In periods where it's stressful.

1:50:45 I would love to hear more about the rowing because I Obviously it was formative, but also just like such an interesting contrast of I think A little bit of identification for you as being somewhat lazy. But so much evidence to the contrary in some of your formative experiences.

1:50:59 willingness to work extremely hard. What was it about rowing? the physicality of it, was it the pain? I've never wrote in my life. What did you learn there? in that space that you worked your way into. There's a lot of pain tolerance so

1:51:11 The races Depending on how fast your row or it's two thousand meters in in a single you'll do it between like seven and eight minutes. And so that's a a length with it's not a sprint and it's not a Marathon. You're producing an incredible amount of lactic acid.

1:51:26 It's like running the mile. Yeah. There's a threshold of okay, I gotta get used to the pain and be okay with that. There was also a big difference between uh I at first won a couple of national championships in the double

1:51:38 And it was striking how different it is to be out in the water With just one other person. Compared to being just yourself out there and how there's nowhere to hide. And so I feel like I learned Partly just

1:51:50 A training mindset. I was fortunate in that the club I worked at was mainly training national team members, like adult national team members. So We had fancy boats and we were videoed in every practice. So you'd go home and watch video. And constantly work on your technique. And so that

1:52:08 Training Mentality that My friend Josh Waitskin is very focused on applying to Any profession today is That confidence that

1:52:18 the investment in the training pays off. Was one thing. I learned. And that you could always this optimism, you can always tweak it a little bit and make it slightly better. My dad always said I was very coachable.

1:52:29 Which I think is true. So I I was able to evolve my technique. I think Pretty effectively and pretty quickly. 'Cause I just wanted to win. I didn't experience much friction.

1:52:40 Did anything formative happen to you at Yale? What was just the experience of being with so many ambitious smart people. Kinda blew my mind. My

1:52:51 freshman year I was in a program called directed studies. had to apply to get into and it was sixty kids and you had full professors teaching you classics. And Yeah.

1:53:03 Philosophy class. Of the sixty kids, seven of them are from Saint Anne's the school in Brooklyn. And I'd gone to public school in New Hampshire And Two of the St. Anne's kids were reading Plato in the Greek.

1:53:16 I first I mistook one of them as the TA. And when when I remember calling my parents saying, I don't think I'm gonna make it definitely in director studies and maybe at Yale if this is what the standard is. The other thing was you're writing a paper a week. It was intense. And they called it directed suicide at the time. I'm sure that's no longer allowed as a term, but

1:53:39 I was at that guy's wedding, George's wedding. Fifteen years later. And then sitting at a round table. Where it was all directed studies alums. And somebody else told that exact story.

1:53:50 It turned out. half the table had called their parents because George was playing reading Plato and the Greek. So Making it through That

1:54:01 Oh yeah, over the course of the year. I got better at writing because of the paper week and I got my footing in Decided I could make it. The confidence that that built felt formative. And then

1:54:12 Sophomore year, I read A paper by a professor. Which implied that he was gonna roll out this application of his political philosophy to a bunch of different domains. And I remember sitting there thinking, Oh, that's gonna require a lot of work.

1:54:26 I wonder if he needs help and if that's an opportunity to apprentice under him. His name is Ian Shapiro. I emailed him at Eleven PM at night. And he mailed right back and said, Yeah, actually I do

1:54:39 Need people For exactly that project. And he and I grew very close over the subsequent two or three years and I did a ton of research and kinda learned

1:54:49 a standard of research from them. But I think that sense of taking initiative and of being Like I wonder if You're just reading things that are in the public domain.

1:55:00 Can you intuit? what the next thing is from that. Talk about the partnership. That But it and what you did with him.

1:55:09 He ended up writing a book And I've built With my dad's help at the time. I built out a huge Lotus Notes database. Of all

1:55:18 the literature around Workplace democracy. And He ended up using a bunch of the things I had found

1:55:27 And credited me in his book and He became a real mentor. He's South African. And I are still in touch. And it was kind of a intellectual touchstone of quality But I can

1:55:39 Measure somehow. Did it have a similar Vibe. of touching excellence that the rowing did. Mm-hmm. Like the intellectual version. Yeah.

1:55:47 Exactly. Like oh People are doing a thing at a standard I was not aware was a thing. Huh. Makes me think of Teller's thing about The competitive advantage of having seen true excellence.

1:55:59 how excellent an example someone has seen is a really important factor about somebody. 'Cause it's the standard Git set. Of course, he saw for Elon at his right hip for six years, so he's maybe arguably the best at this. Yeah, it's that belief in what's possible, right? Sometimes I would interview Anlists.

1:56:16 who I realized were not calibrated on what excellence was. They had been at mediocre banks and mediocre hedge funds, and they thought they knew The territory but I was experiencing them as not So yeah, I think it's super profound. Seek excellence. Early. Yeah.

1:56:33 Yeah. Not just watching, but helping. We're doing Houching. But there's a great moment. In an interview with Serena Williams' husband.

1:56:42 The red guy. Yeah. He talks about dating her. And thinking he was kind of a tech guy in Civisco, and he thought he knew what

1:56:51 hard work was and he thought he knew what Training hard was and so he was kinda macho about it. And then as he started to date her, he was like, Oh my God. The number of hours a day. the sheer intensity is at just a whole other level of what Serena does than what I thought was possible.

1:57:07 I remember thinking, Oh, he's capturing exactly that moment when you see a person do a thing They're bringing Something to it. What happened after Yale? So Ian Shapiro, this professor, had done his PhD at Yale in

1:57:21 In uh I guess in the eighties together with a guy named Richard Medley. Who dropped out of his PhD program and went on And ended up working for Soros and being a partner at Soros being his kind of in house political intelligence guy.

1:57:36 And so I remember there was this moment. I was sitting In my room senior year, I had already selected all my classes and Ean Shapiro emailed me that there's this interesting Professor

1:57:47 Visiting professor and I should check out his class. Actually I gave him grief for this later. He didn't pound the table on it, but he was like, you might want to check it out. I was in my gym clothes. And

1:57:57 The class was in like An hour. I remember thinking, okay, do I go to the gym or do I Play out this option. And thank God I played out the option. I went to that class. I was like, Oh my God, this guy is in it was a moment of ignition. This guy is in a world

1:58:15 That is extremely interesting to me. Um Financial markets meets politics. I didn't even know this was a thing. And It was a very small class. And over the course of it

1:58:26 He Offered me a Job of the after graduation starting a company with him. Which I ended up doing.

1:58:34 Describe the company. Larry Summers called us a private sector CIA I felt like I built A business a little bit around a Tom Friedman like character who is very good at narrating

1:58:44 What's going on? and a feel for how events might unfold. He was a really good writer. So we had In essence of newsletter business. At first we tried

1:58:53 different business models, but uh I was out cold calling. People trying to sell them These services and I had a I think we're charging four hundred dollars a month.

1:59:03 I wasn't getting any meetings. And on a lark, I decided to try Saying, Oh, actually we charge twenty thousand a month. And all of a sudden I got Five meetings right in a row.

1:59:15 Who the hell has the Twenty grand worth of stuff of month. And then eventually we charged even more than that. We built a big business. I remember it started to develop kind of a feel for How information leaks through a system.

1:59:29 And I remember We were trying to track what was going on. Around In ninety seven, ninety eight, around the Russian Emerging markets crisis.

1:59:39 And You're trying to do is find people that Or in the rooms where stuff is going down. And are willing to talk to you. It's like an intelligence operation. You're trying to figure out whether when somebody's telling you something and they could be a journalist, they could be a professor, they could be a former central bank official.

1:59:57 Are they overstating what they know or are they telling you exactly what they know? Because there's an incentive to overstate it. And I realized I was good at finding people Who were

2:00:08 a credible threat at having access to an information stream that was relevant to a given thing. And I in the Russian case. I found a woman. who was a documentary film maker. who just had bizarr reads of what was going down. I later I think I found out

2:00:25 Eighty percent chance in retrospect she was sleeping with the finance minister at the time. But whatever it was, it was like very High signal and bizarrely accurate. And we we had hundreds of stringers in effect. And we would be able to publish things that were more hunches than A normal newspaper would.

2:00:46 At the time. What was graduation like from that business? What happened? What was the transition? To the next thing. We had the opportunity to sell it.

2:00:56 To one. Large news organization. The professor ultimately didn't want to sell it to them. I asked him to buy me out at that multiple, which he did.

2:01:05 They ended up selling to the Financial Times a couple of years later. I was producing someone else's show I wouldn't have had the language for it at the time, but I kinda wanted to try out being source and having my thing. Be at the center of it.

2:01:18 I tried to start several businesses There were failures. Like a wilderness period. A wilderness period. I remember somebody giving me grief. for how many different email addresses I had. And that really stung at the time. I was like, ah, yeah, he's right. Like fuck. I've had like three email addresses in

2:01:36 Two years. Or maybe more than that. Four. And he was giving me shit about that. So then Bring us home. So from that wilderness period.

2:01:43 Well, I guess maybe is there any other meta lesson from the wilderness period of just like Wondering. Trying to find the thing. Think w one would be just patience and not Overweighting.

2:01:55 If you're doing that at a what Bob King would call the socialized stage of your life, where you're really focused on approval of other people and Where you are in the system. And being quote relevant. You gotta make that as object as you can and not

2:02:10 Let it freak you out. Tom Morgan did this. Five minute talk at someone have you watched it. And he closes with y one of your favorite quotes, I think, on my Joseph Campbell Follow Your Bliss. There's a follow your bliss element to it and trusting the universe that if you get in touch with the thing you're compulsive about and that you love,

2:02:29 The world will come to you. It's a trustfall. And it's hard. And I remember during that period thinking I'm very interested in

2:02:37 People And information networks. There's an element of almost being an anthropologist. I remember like thinking like how does that fit in? I had that Ignition.

2:02:48 around Dan Stern that we talked about. Who had run reservoir. And so that that was one Compass point through that period. One thing I think a lot about is In that

2:02:58 Swim. Use your back to your river analogy. After a long enough hard swim you swim to the order side. And if I think about my own life not having come from like crazy amounts of financial success or whatever early on, but I had enough support.

2:03:12 That I could keep Swimming. Longer like the sort of nepotism of having worked for my dad. And knowing that I probably He wouldn't fire me.

2:03:23 Was such an unfair advantage that I could swim longer without swimming to the order bank. I couldn't have taken as much risk. There's this great quote and I wanna find it and read it exactly right. Only those who will risk going too far can possibly find out how far one can go.

2:03:39 Yeah. Does that feel like that? Wilderness thing. Like is it related? Yeah. The tolerance for the ambiguity

2:03:47 The willingness to take risk. To not play within On somebody else's board. Yeah. But I think you're right that it's a nice image of

2:03:56 You try chaos, And then you go back And then you try chaos and it's like I repeat Iteration game.

2:04:05 There's a Quote I love From Michael Singer Who's uh Spiritual teacher of sorts. And he says

2:04:13 Eventually you will see that in the way of the Tao you're not going to wake up See what to do and then go do it. In the Tao you are blind. And you have to learn how to be blind. You can never see where the Tao's going. You can only be there with it.

2:04:26 I think there's something like that. It's like The tolerance to be blind. And not know. and just f experiment and figure something out is very hard to do. At any stage of life, but particularly

2:04:39 When you know your rent is Do and or you have a family or you have Financial obligation. So That Isn't that seems to come?

2:04:48 We talked a little bit about the origin story of East Rock itself, starting with I think fifty million dollars from Stuart. And then growing from there. Maybe tell just a quick version of that origin story and what was going on in your head and

2:05:02 what your source was, what your vision was, what you wanted to accomplish, how it came together. I had been working with One of the co founders of Greenlight, Jeff Keswinn, in running a fund of hedge funds And doing some seeding. Keeping an eye out for

2:05:15 how to be source on something myself. And Got an introduction. Two Someone who is advising the Miller family.

2:05:24 I wanted That sense of Selecting people Empowering them.

2:05:30 I had observed that a lot of Fund of funds people and endowment allocators. had this scarcity mindset. And we're very focused on fees. And

2:05:41 felt like they would be taken advantage of and kind of disgruntled all the time. I thought there was an opportunity to to approach it as being on the same side of the table of let's take risk together, let's make money together. And have that be the overall. Gestalt of the Place.

2:05:55 Adam Shapiro had been a year ahead of me at Yale And we talked about working together over the years and he was in the special situations group at Goldman. And I remember thinking Actually, Vinod Kosla has this line that If you could hire somebody that your anchor client

2:06:10 could not hire themselves for some reason, but is blown away by Try to do that. And I remember thinking, Oh, I did that. Like I found it turned out Adam and Stuart new people in common. and had been involved in similar deals. Adam had done a lot of real estate.

2:06:26 And they had a similar Enough of an overlap in sensibility. That that ended up being an amazing Higher in More than a hire, he ended up being the co founder and co CIO of me.

2:06:37 And then we can build a great business. Can I ask about Josh's For me, very beautiful. visual exercise of going into this

2:06:46 Cave. And bringing with you a Stack of blank pieces of paper or something. And really trying to separate your attachment to the prior conditioning. And experience.

2:06:57 And on a blank piece of paper write the perfect setup for yourself and then come out of that cave. I I just love that. I just love that idea, especially around transitions. If you were to think about going into a cave And I constrained you on like I want you to come out and describe the perfect setup and you're like when I think of the word setup, I think of you.

2:07:19 There's no one better at designing a setup. For Yet again. Managing your own and someone else's money. Tell me what you see on that piece of paper.

2:07:29 Think it's Somebody who's got similar taste in people But I do. Or that I can sense

2:07:36 their taste in people and it's a subset of mine and I can constrain the things we invest in to that. And then The ability to hunt For opportunity In an extremely opportunistic

2:07:50 Unconstrained way. Where because I have so much money. At risk. There's this mutual trust and credibility.

2:07:58 And it's overlaps with how they're already inclined. To manage money. There are no style points. The lack of gap between principal agent is so thin. It was what I would aspire to. And that the amount of money total

2:08:14 Provides leverage so that you can play Interesting games. And find interesting people and have it be worth their time. This stage.

2:08:25 I kinda want license to hunt big game. I already have Some big opportunities in mind. And My own chip stack.

2:08:34 is not quite big enough. to closing those deals, but If somebody shares my taste and my map of reality and says, Oh Yeah, you're right.

2:08:44 then that would feel very satisfying. It's like the ease of it. One last quote. Zo. Whatever a human being desires for themselves will not come about exactly as they first imagined it or first laid it out in their minds. What always happens is the meeting between what you desire from your world and what the world desires of you. It's this frontier where you overhear yourself and you overhear the world. And that frontier is the only place where things are real, in which you just try to keep

2:09:12 and integrity and groundedness while keeping your eyes and voice dedicated toward the horizon that you're going to. or the horizon in another person that you're meeting. Can you talk about that intersection? Desire and what the world desires of you. In terms of applying it to me.

2:09:28 I feel like at this stage I'm very open to what The world wants Rather than trying to assert reality, I'm more letting it unfold and trying to surrender a little bit and see what comes in. I think I'm good at I can be of service in putting two people together

2:09:48 All the source dynamics we've talked about or Finding the right fit. For somebody at that stage of your life. I really like I really like giving high context advice.

2:10:01 When there's a lot at stake. Whether that's picking a business partner, picking an investor. Picking a spouse. I think picking a nanny is oddly high stakes. And I like really care about it on behalf of that person's kid.

2:10:15 And so around that like I can act as a sounding board for people and hold the complexity of the decision they're trying to make. And if I've met the person they're trying to decide about I can sometimes Give them a feel for

2:10:29 Unexpected positives and unexpected negatives that they may not have seen yet. And When I do these Gathering sometimes I'll have people go around And say

2:10:39 Call me if you need help with X. And People answer that at such different it's a little bit like the criteria question of what criteria would you use to hire somebody? People answered at such different conceptual levels. Like one.

2:10:52 Famous hedge fund healthcare guy said. If you or any of your Family members get sick, call me and I'll help you find blah blah. It's such a beautiful sentiment. That is his highest use. Like he does know. The energy in the room like radically shifted when he said that. And then from then on the Offerings were much more

2:11:10 high level and generous in this beautiful way. Call me if you need help with. My current formulation that would be that If you have an extremely high stakes Decision.

2:11:21 That involves a person. And you're agonizing about it. And it's a lot of leverage to the situation. I just enjoy that inherently. The big metal lesson that I would take away from reading everything you've written, spending a lot of time with you, learning from you. Is that

2:11:37 There probably is a path. Or a theme. For everybody. That if they were to get Closer to it, on it.

2:11:45 In it. That both their lives and the lives around them would materially improve. And I entirely credit you

2:11:54 With a lot. Of How I've thought about structuring my life. and very specifically to be honest with myself about what I can outwork other people doing.

2:12:05 And then to try my best, and I'm still not perfect by any means. to build my professional life and personal life around those things. And I've experienced personally the power of taking that simple idea seriously. And I am

2:12:21 Incredibly grateful. That You've taken the time Both personally between the two of us, but also at scale.

2:12:29 to take great care and time. You know, I've seen drafts of your writing And You're painstaking. Like you take great care to get it right. And I hope you know the impact that it's had.

2:12:41 I'm sure that if I called around, which I might do for fun. And asked a lot of very impressive people the same question, they would say something similar. So I hope you feel that. Thank you. Yeah, yeah. Because it really Munger said, Take a simple great idea, take it seriously. And different people have said it in different ways, but for whatever reason the way you've said it

2:13:00 Got to me. And so I appreciate all the time. And just all the amazing lessons and the amazing Fun. You know what I'm gonna ask at the end.

2:13:09 What is the kindest thing that anyone's ever done for you? I'm gonna answer that. Professionally'cause it's more useful. The kinda in an absolute sense it's obviously my parents and the way they raised me and In a professional

2:13:21 Setting up. The level of risk that Stuart Miller took In entrusting this kid To manage his Money.

2:13:29 And then navigating the financial crisis together and then This feeling of him rooting for me all the way through. I would put that in that category. I've never really had a boss.

2:13:41 I started that company with the Professor. I've done all these things, but Well, I've had one or two bosses and it didn't go that well with a but That feeling when Randall Stuttman said that's the mark of a good leader. I aspire to take that Feeling.

2:14:00 And I hope maybe partly what you just said. is you feeling me rooting for you. Oh. I feel like I felt that and so I know it and then I can pass it along and the gift keeps on moving in that way. That's how I would answer that. Um If you enjoyed this episode, check out Join Colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning.

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