#129 Marc Andreessen: Interview with an Icon

0:00 What each of the top venture capitalists of all time has in common is each of them missed almost all of the great deals of their generation. We see this a lot. We do performance reviews, right? We do performance reviews and so it's like, Well, they've made ten investments and you know, one of them is this this just this huge success and the other nine are like, you know, sucking whip. And it's like okay, is this a good venture capitalist or a bad venture capitalist? And it's like well In any domain that's not probabilistic, you say this person's terrible, right? You know, it's batting average of like a hundred, you know, out of a thousand. It's like this person's awful. Um and and there's always the temptation to say, well, this one thing that's working is it's like it's a fluke, right? And so who knows whether they'll ever get it again. And it's at that point where I put my hand up and I say, We're in the fluke business. The whole point of this is to get the flukes.

0:36 You don't have to score a hundred percent. And and not having to score a hundred percent basically means you can take chances. Welcome to the Knowledge Project Podcast. I'm your host, Shane Parrish. The goal of this show is to master the best of what other people have already figured out, so that you can unlock your potential. We interview world-class doers and thinkers who can better analyze problems, seize opportunities, and live a more meaningful life. Every episode is packed with lessons and insights that never expire.

1:19 If you're listening to this, you're missing out. If you'd like special member only episodes, access before anyone else. transcripts, and other member only content, you can join at fs.blog slash membership. Check out the show notes for a link. Mark Andreessen is here today.

1:35 Mark is co-founder and general partner of the venture capital firm Andre Sun Horowitz. He's an innovator and creator, and one of the few to pioneer an entire software category used by more than a billion people, and one of the few to establish multiple multi-billion dollar companies. Mark co created the highly influential mosaic internet browser and co-founded Netscape, which any of you over thirty will remember. I've been wanting to talk to Mark for a long time and this conversation does not disappoint. We explore why he studies history to see the future, his optimistic and pessimistic view of the future.

2:09 how A16Z makes decisions, and specifically what Mark knows about decision making that most people miss. Our largely dysfunctional education system, assessing the judgment of founders, and so much more. It's time to listen and learn. What are you obsessed with right now? So there's a lot going on. So the the full answer to that question would probably take take the entire podcast, but You know, I would say probably two big buckets of things, you know, my my day job is you know being obsessed by all of the sort of changing you know technologies, um and then you know the the the sort of uh impact that all all the all the new technologies are having on on the um you know on on on different industries and in and on the world broadly.

2:55 Um and then the other thing I've just, you know, really have gotten just sort of extremely curious about I would describe uh you know, like a lot of people, um, a lot of my assumptions about how, you know, the world worked and about how the US worked, and about how politics worked, and about how society worked were kind of upended, you know, sig kind of sometime between two thousand eight and you know, twenty fifteen. Um, you know, and then for sure heading into the last five years. Um and and and so I've I've become somewhat obsessed with kind of reading my way back and basically trying to figure out essentially what the hell is going on. Um

3:25 You know back to my my my kind of day job, which is as society changes and as technologies change society. Um and as you know, frankly also society changes technologies. Um How much of what we experience as new is actually new. Um versus how much is old, right? How how many of the sort of behavior patterns or societal changes do we you know do we kind of experience as brand new that actually turn out to be quite old patterns? What what I find generally is if I don't understand something, I I try to read backwards and and and kind of the further back back I read, the more universal themes I find. And the more things that I think are kind of remarkable and unique to our era actually turn out to be quite universal.

3:57 Um and I don't know, at least for me that's a calming experience. Um,'cause it makes me feel less less like the world is sort of spinning, you know, in a in a in a different direction and more just that we're you know, we're we're we're playing out patterns that are kind of deeply rooted in in in humanity, which is what I mostly believe. So anyway, that's the that's the current thing. Can you talk to me a little bit about those patterns? Wha what what comes to mind when you think of an example that you're you're surprised by? I mean, you take almost anything, but I mean I'll just give you the the the most basic one. So most basic one is is societal reaction to new technology. Right. Um and so there are you know, there are these new technologies of our era, and you know, we could go, you know, make make, you know, whatever list we want. Um, you know, and it we could you know, everything from you know social media and internet to, you know, many many other things, automation, robots. uh and so forth. And then there's you know there's sort of the societal reaction, there's sort of the you know the reaction in the press, there's the reaction from politicians.

4:48 Um, you know, there's reaction from different political movements, you know, political candidates right are now, you know, taking you know kind of major stands on these things. Um, you know, both in the US and around the world. You heard a lot like around the kit like what technology does to kids, right? It's a sort of the go-to thing, which is you know that you know, sort of this technology is gonna ruin the new generation of kids. And then you just kind of, you know, ask yourself Well, is this the is this the first generation of technology for which they have made those claims? Right, or or in fact, have those claims been made for basically prior generations of technology. And then of course the the next question is like, okay, w are are were were the claims different in the past, or were they actually the same claims?

5:21 Right. And then to the extent that they were the same claims, you could ask like, okay, are you know, how are they playing out differently this time? Um and are they playing out differently this time? There and there's a there's actually quite rich literature both on the history of technology and and on the sociology of technology. you know, pr prior generations of sociologists who I think were actually more more kind of interested in the current generation. um, you know, actually grappled with these questions a lot, right? Um, and um I mean even like Marxism itself is like you know heavily based on the impact of technology on society. Or at least on Marx's theories on it. Um

5:49 Uh, and so I found this just like fantastic book that I just really highly recommend. That's a great example of this. Uh it's a book written by an MIT professor fifty years ago. It's a they just did a fifty year reissue of the book. So it's it's a book that it's very I can state very confidently it's a book written before the internet. Um before any of the things people, you know, people are mad about today, right? Um and it's it's this great book with this great kind of you know title from you know kind of the 1950s. nineteen early nineteen sixties called uh it's called Men Machines and Modernity. I'll have to have to look it up, but it's Elting Morrison is the uh is the title of this. I think it's Men Machines and Modernity. You know, but it but it's this it's it's basically it's a short little book and it it goes through basically the it goes through this history of like how do technologies are sort of received. Um in society. And it it

6:31 It pr just briefly it proposes this basically three step process. Um, and sort of uh, you know, step one is basically just like flat out ignore, right? New technologies are just like dismissed. All all the experts and all the people who are kind of in power. You know, just gonna say, Okay, this thing is not gonna matter, it's not gonna not gonna be a thing. Step two is rational counterargument, right? Which is sort of the status quo assembles all of the different arguments as to why this thing can't possibly work. And won't possibly be important. But like they really get into the argument stuff too and they really like try to try to reason it through.

6:58 Um and then he says step three is he says uh step three is when the name calling begins. Wh which is to say step three is when the status quo basically goes bananas, um and gets like super emotional and super irate. And and and kind of goes on tilt, right? And and and starts name calling and starts accusing the sort of proponents of the new technology of sort of all these evil kind of moral crimes. Um and and basically the the reason he says it goes through this three step process is because He says what what people think of as ta technological change is actually societal change and

7:27 Specifically societal change of the form of a r of a reordering of the power and status structure. Right. And so all of the people who have achieved positions of power and authority in the world based on prior generations of technology. are inherently threatened by new technology because new technology will upend the power of status structures and then a new set of people will, you know, come to the foreground. And and take the power. Um and and of course, you know, in in in in human society power and status battles are the core battles, like that, you know, they are they are the most vicious fights.

7:53 And so Basically what happens is a lot of technologists kind of start out by assuming that they've built a better mouse trap and of course, like, you know, people should appreciate them for it, and then they find out that everybody hate them for it. And basically that's the reason why. And and and that this is a persistent pattern through history, that this is in fact not new. Can you walk me through how you sort of see some of these technological changes and how they'll impact sort of this social hierarchy or how people um get into positions of power. So so the really big one is um

8:20 Uh is uh you know, basically hierarchy versus network. Um right, or you you kind of say institutions versus network. Um, and so the and by the way, for people interested in this, um uh Neil Ferguson actually wrote he wrote a really interesting book called The Square of the Tower that goes through this in some detail recently, that's very, you know, kind of historically informed, another great source on this. Um, I should say I agree a lot with like the first two thirds of the book, and then I kind of take the polar opposite view of him on the last third of the book. Um it's funny. The last third of the book made me very mad. Um Uh and of course the reason it made me mad is because he mounts sort of a rising defense of the old power structure.

8:54 Sorry, rousing defense of the old power structure. Right. Whereas, of course, I'm I'm on the side of the new power structure. So of course that would make me mad. It's kind of the reverse of that, right? I'm I'm mad by the resistance. And so anyway, the the big battle is sort of you could call it kind of institutions versus versus networks. You could call it kind of top down hierarchy versus sort of lateral, you know, kind of network building. Um and so start by saying top down institutions. So top down institution building is kind of how the West You know, in you know it's a certain sure of some other cultures as well, but let's just you know, I'm most familiar with the West, so I'll just focus on that. It's sort of how the West was won was we got really good at building these basically these giant hierarchies. Like we got really good and and in particular right in the um you know kind of in the in the late nineteenth, early twentieth century.

9:34 Know we with the rise of the sort of the second industrial revolution, you know, we we sort of had all these mass scale technologies of that era, right? So mass manufacturing. Right, um, and then you know, mass transportation and then mass media, right, and then mass government. Um and so we we got really good kind of between call it eighteen eighty and nineteen, you know, basically, you know, I don't know, nineteen thirty nine or something. We got really good at building, you know, giant industrial companies, right? You know, General Motors and General Electric and you know, all these companies. We got really good at building um, you know, giant government, you know, the sort of you know FDR, you know, the New Deal and sort of this massive expansion of state power. you know, that kind of hit, you know, after after you know, after the nineteen thirties. That you know, that that's only you know, it's only accelerated since

10:12 Um, and then we got really good at like mass media, mass communication, right, radio and television and and so forth. Um and then also, right, therefore, you know, mass politics, right? So this kind of absolute dominance of these two, you know, major political parties. Um and then of course, you know, even like to the extent that you consider America, you know, kind of in that era kind of as you know great empire, we got really good at kind of building the American Empire. Right, and and and of course the American Empire kind of, you know, continues to this day as you know, not as a not as a literal empire in the old sense, but as a as sort of a you know a modern empire, right, which is to say, you know, cultural. uh an intellectual uh right and as and and a societal empire. And somehow by the way we still have eight hundred foreign military bases, but you know, for the most part sort of a soft power s soft power empire. So so we just we got really good at these giant kind of top down things. And then we we lived in this world for fifty or sixty years in which basically these giant top down institutions just kind of ruled everything and we just kinda got used to it. And you know there are these famous books from that era, you know, the the organization man is probably you know the the key book kind of of of that era that kind of described

11:09 There's this great line in the organization, man, where he says, um, you know, the the um you know, in in sort of this era of all these these mass systems. Uh he said, you know, the route to power he said the route to power leaves, you know, inevitably uh uh leads through the conference room. Right. It's like right, the the the the way that power has been exercised in our society kind of through the through these decades of mass systems has been basically people in conference rooms arguing with each other over control.

11:33 you know, basically of the of these mass mechanisms, right? Over control of what the ad campaign's gonna be, over control of what the you know, the new car model's gonna be next year, over control of, you know, which which you know, which candidate's gonna be the you know, democratic, republican presidential nominee or whatever. you know, it's these people at the top of a hierarchy kind of battling in conference rooms. Um and and by the way, it's also right, as a consequence, it's like, you know, all these institutions over time kind of end up run by lawyers. Right, of one form or another. Right. There's sort of, you know, people who kind of deal in words, right? People who deal in kind of symbolic manipulation at the at the word level, uh, you know, or sort of the the sort of non non quantitative conceptual level. Um

12:06 And and you know, it looked by the you know kind of eighties or nineties like that was just gonna be how it was. Um and then, you know, this this internet thing comes along. Um, and you know, the the the core technological foundation of the internet, of course, is you know, it's a it's a it's it's not that, right? It's not a top down institutional thing. It's a by definition, it's a lateral peer to peer. Right. You know, the core architecture, right famously, the internet has survived a nuclear strike, therefore there is no central node. Right, therefore you're able to route around damage. Right, therefore you're able to sort of expand the network laterally. Anybody can plug in it, anybody can build whatever whatever app they want. Anybody can build whatever website they want. They can, you know, put on any information they want.

12:42 They can organize any movement they want. Right. Um and so you have this introduction of this like fundamentally disruptive lateral network based technology. That's sort of the precise time when it looked like we were gonna have sort of peak centralization. Um, and so I think what we have now is kind of at the at the sort of deepest level, what we have is kind of this big fight between people who want to use the internet to basically reinforce top down power. uh versus people who want to use it to disrupt top dot power.

13:06 My analysis is basically that's what's happened to our politics. Right, on both the left and the right, right, which is the internet is both the enabler for traditional political movements and parties to try to establish hegemony. Right, it's sort of a permanent enduring advantage, but it's also the enabling technology for disruptive movements, whether you know, on the left in the form of whether it's democratic socialism or you know, these kind of more energetic, you know, kind of forms of leftism. Or, you know, on the right, the Tea Party and then the Trump movement and you know Mega and you know the the new right and all the all the sort of new disruptive movements on the right. So there again you see the same You know, the same fundamental battle between basically institutions and and networks. I think that's fascinating. And one of the things that uh that I sort of see is it's permissionless. I don't need anybody in the boardroom saying that I can go talk to people now, I can just put my ideas out there and let other people be the judge of those ideas.

13:53 Yeah, that's right. And there's this huge tension. So There's this thing. Well, so let's take mobile, you know, because the smartphone is kind of the key revolutionary technology in terms of, you know, sort of access to all this stuff. It was not that long ago, as recently as two thousand six, right, which was only fifteen years ago. Um uh as recently as two thousand six, exactly to your point, if I wanted to I could actually build smartphone apps in two thousand six. I could build an app that did whatever I wanted on a on a phone. But to get it distributed, um uh to get it actually onto the phone for people to use, I literally had to go to the headquarters of Verizon or ATT.

14:26 Right, or one of the big telecom companies. Um, and I had to basically apply. Right. And and literally I had to go into a conference room. Um you know You had a gatekeeper. Absolutely, a hundred percent. And if if it was it was famously the term in those days, it was called the deck. And the deck basically it was basically the home screen or like the UI on the phone. And if if if you wanted your app in the deck, um, you went in and you started negotiating in the conference room. Right, with you know, men in suits. Um, and you know, the opening, you know, the opening, you know, s the opening bed was, you know, forty or fifty percent of your thing.

14:54 Um and then they could basically dictate like if it does this or that, like whatever, whatever. And then by the way, you know, to this day, like you know, the Apple, you know, opening up the iPhone and the App Store was a big step forward, but of course, even Apple continues to exercise a fair amount of control. I mean, they're far more open than than than Verizon was in those days, you know, but even still, like, you know, Apple banks entire categories of apps, and then of course they extract their thirty percent economics. And so even still, like there's still kind of a legacy holdover of that level of control. Um right, but in but in stark contrast, right, and and I think this is a good news story, right? In stark contrast, you know, the web like the web has never had that property. Uh the web didn't have that property on day one. The web didn't have that property in two thousand six. And the web in fact doesn't have that property today.

15:33 And you know, it's like You know, you y there's a compromise especially on smartphones, like there's a compromise for building a mobile website versus building a building an app. And you know, there are issues involved in that, but the the you know, the fact remains, like you can still build whatever website you want. You can put whatever information you want on it. Um and and just from a historical standpoint. That's just such a change. I mean I the the most dramatic the most dramatic way of thinking about how big of a change that is. as sort of a global kind of macro level, um, is that, you know, the the Soviet Union, you know, there was this there was this dissident movement inside the Soviet Union in the nineteen eighties, right? And you know, they

16:04 They didn't know that they were gonna win, like up until I think the very last minute. Like they you know, they didn't know the USSR would ever fall. Uh, but you know, they tr they tried and there were some very brave people behind the Iron Curtain in in Russia and in the other, you know, kind of East Bloc countries that you know that that battled for a long time. And so they you know, they had this concept of samizdat, right, which was was was basically basic you know, it's basically you know information, free information, right, about like, you know, open criticism of the Soviet regime. Um and uh it was necessarily an underground phenomenon, because if you were caught with it, right, you would get shot. Um, and so they had uh and so then there's this sort of practical question of like how do you produce samuzdot? And the answer in those days was you produce samuzdot by Nimeograph machine.

16:44 Right, which was sort of the you know the the for for kid for for kids listening to this, this was photocopiers before photocopiers. Um these are sort of you know pretty expensive, complex kind of you know, basically basement, you put put one of these in your basement or your office and you could do you could make copies of paper, you know, kind of in volume. Um and you know, sure enough, like there was like a whole thing involving smuggling mimeograph machines into Russia into Sov into the Soviet Union, and then if you were caught with a mimeograph machine, you were shot. Um, and so just the level of overhead involved in even getting, you know, information that contradicted sort of centralized power out. You know, was w still really hard, you know, even at that point. Um and then, you know, the internet kind of popped. You know, it's kind of interesting. It's like

17:22 Could you ever have another Soviet Union, like in the era of the internet? Um You know. North Korea's doing their damnedest to try to maintain that model, you know, but without going full North Korea, like I'm not sure you can. I I mean I guess I'm an optimist on this point. Like I I tend to think open access to information basically makes a lot of these historical things, you know, fundamentally impossible. Um, if people are able to actually like debate things, people are actually able to see, you know, alternate uh viewpoints, people are actually able to point out flaws.

17:54 you know, kind of in the systems that are ruling them. Like o over time, you know, I don't think people will put up with the kind of draconian kind of top down control that that that that you know that that we used to have to put up with, you know, before these technologies ex existed. Can you give me both sides of the next ten years? I'm interested in hearing your most optimistic scenario and your most pessimistic scenario. look optimism is just like it's basically the Morrison book, right? It it it's basically you have You have all these kits. So you have kind of the world as it is. You have the status quo, you have the power structures, you have the hierarchies and whatever. They they work as well as they do and and and so forth.

18:26 And then you basically have all these kids. Um, and and this is kind of one of the things in my day job that's just always so interesting is like cause these kids like walk in the door and they're just they're yeah, they walk in the door from all over the world. Right, from every walk of life, from every possible background. Um, and they walk in with, you know, an idea and a skill set. And You know, I would say the ideas are getting to be kind of increasingly, I think, profound and the skill sets are getting increasingly advanced. And part of it is, you know, kids now are growing up on on the internet in some fundamental way. And so

18:54 You know, we we see kids now from all over the world who walk in and they're they are like far more educated, right, and and skilled already to be able to do, you know, a startup or or you know, create new software or do any of these things. um you know than I was at their age. Um because they've they've learned on the internet. Like they've gone online, they've read you know, they've read everything, they've they've watched everything. They they you know, it's just kind of their their depth of sort of technological knowledge and business knowledge, finance knowledge and cultural knowledge. is just like incredibly broad. And so these kids walk in and they and they you know, like like kids, you know, like like like any s you know, generation of kids, they're they're idealists and they've got all these new ideas and they kind of have an intuitive sense of how new technologies can be harnessed to you know, improve the world in some way. And they actually have the power to do it and then you know and then you know, break a little bit on us. You know, we're we're in a position to be able to support them and help them do that. So there's you know there's a system kind of waiting for them.

19:38 You know, basically it's that we're just gonna see this sort and you see it now, but you're just gonna see this sort of continuous kind of movement. Um, of all of these new ideas and all these new ways of doing things. And you know, look it, you know. They're not all gonna work. It's a rubble alliance versus an empire. It's asymmetric, right? The the the umpire has to win a hundred percent of the time.

19:57 Right. They have to defend against all attackers, right? Whereas you know the attack you know, so you can have many different attackers who kinda keep coming. Um, and so we're just gonna see in sector after sector just better and better ways of doing things, better ways of organizing, better ways of of you know, uh better ways of organizing the economy and you know productive activity and creating you know job opportunities for people and education and and um you know how the you know how you know just like all aspects of how people live and work. You know, just like more and more choice, more and more options, more and more better ways of doing things. Um and you know the incumbents will, you know, they'll they'll go through the three stages, right, every time. And you you see it, you know, it's like I said, it's either denial, it's sort of rational, you know, counterargument, or it's in calling.

20:35 I i is that inherent to even the winners today? Like w Google is now an incumbent, right? So so so this is one of the funny things I talk a lot to our founders about. Um and this is not a You know, what's what's so useful, I think, of this view is this is not a criticism of any individual person, right, or any criticism of an individual company. This this is why I try to get to the broader trends. Right,'cause like the the broader trends like are impersonal in the sense of okay, if you if you see this pattern over and over again, then it's not just you. Like when I you know, when I tell somebody you're doing X, it's not like a criticism of you're doing X. It's more an observation of, you know, you're doing X just like everybody else who's been in your situation. That's done X. And you know, at the very least be aware of it. If not, you know, decide to make a conscious choice not to be like that. You know, if you if you don't like that.

21:14 Um, but one of the things I talk to our founders about all the time is it's actually funny. A successful company has about five years, a successful startup. That's about five years until they become a new incumbent. Um and they actually start to behave like an incumbent. That's rational. Like of course that's rational. Like they've now built something worth defending. Right. And they they've like they've now established power in the world, right? They've established a position for themselves. um, you know, they built something of value. Um and now they have something worth protecting. And of course the next, you know, the next thing comes along very quickly.

21:41 you know, the next kid comes along five years later. You know, and a lot of times it's really funny because it's like, you know, the new incumbent's run by like a twenty six year old. Right, and then and then the new disruptors like a twenty one year old. So it's like You know, it's sort of like one kid really mad about the other one. And it's like yeah well You know, that was you five years ago, right? Like so You know, this is the way of the world.

21:59 And so yeah, so yeah, no, look, so the th this is actually a really big question. Actually Peter, you know, my my friend Peter uh TL has talked talked a lot about this in public and he he's much more, I would say, kinda hardcore on this than I am, but Peter sort of characterizes uh Google as as no longer a tech company. Peter now just flow calls them they're an anti tech company. In his view, it's their enemy of it uh enemy of innovation, like they're a blockade. uh innovation. They're they're no longer doing anything sort of, you know, disruptive. Um instead what they've done is they've established, you know, a new monopoly in search and they're using that monopoly in search to try to basically prevent new, you know, new new new technologies from coming to market from from from you know, including new competitors, but also just more generally, you know, a lot of a lot of new technologies. And you know, they become very, you know, draconian and heavy handed in terms of what goes in the search engine, and they become very censorious and they ban a lot of things, and you know, a lot of people get kicked off YouTube every day and so forth. So so they become kind of anti change. No, I would say that that's Peter's view, it's a it's a very, you know, strong view. Um I I would I would not say that about Google. I would just say more generally, like that is the incumbent temptation. Um is is basically go is basically go from attack mode to defend mode, right? Go from being the pirate to being the navy, go from being the you know, rebel with the rebel the rebel to being the umpire.

23:04 Um and so it yeah, it it is a it is a thing that happens. I I think, you know, there you could probably just fairly say companies like that are caught in some sort of intermediate state. You know, where they still have elements of both. Um and um you know it's kind of probably their lot in life to kind of figure out which side of that they want to follow. And w what's sort of the most pessimistic scenario you can come up with with how technology plays out? Do the incumbents start using it to squash free speech? Like how d how do you think about this? Yeah, I think you could paint yeah, you could paint maybe maybe two two pessimistic scenarios. So pessimistic scenario number one would be the one you just alluded to, and it basically is like, okay Um this technology had the potential uh to be to be revolutionary and to kind of disrupt all these hierarchies and institutions.

23:42 Um, but in fact it turned out that it was, you know, fundamentally enabling technology for top down control. There's nineteen eighty four, which basically is the pessimistic view, which is like technology is used by the state, you know, kind of the full the full Kind of you know. I don't know with the Hegelian like, you know, world state dominant like totalitarian regime, Soviet Union kind of thing. um, you know, technology is used to basically control the populace in sort of this very overt kind of top down way.

24:07 Um there's this other really wonderful book um called uh Orwell's Revenge written by this guy Peter Hubert. Um and Yeah, in Orwell's Revenge, he actually does a rewrite of nineteen eighty four. Um, and he does a rewrite of nineteen eighty four through the optimistic lens. You know, sort of your optimistic scenario. And and and the optimistic ones, th the the twist that he puts in the plot in nineteen eighty four is he basically just makes the telescreens, you know, the sort of technology in nineteen eighty four of these tele screens interactive. It's an interactive TV thing. Um, he basically he makes the telescreens two way.

24:35 You know, like like the internet, and of course, then he he elaborates out kind of the implication of that of the story. And of course, in in Orals Revenge, right, the the the rebels win, right, and the the totalitarian system is overturned. Because you know, because people are able to organize and and and and and and and hear the truth and so forth through through the two way system. And so anyway, yeah, the the pessimistic view would be the nineteen eighty four model. Um Contra the the the Orwell's revenge model that we kinda talked about earlier. Um and then look there there is another pessimistic view, and this is the Martin Gurry view. Uh if you've read uh so his book, the you know, is it the um Is it the revolt of the public? The Martin Gurry thesis basically is yes, um, and I can hear him, by the way, talking to me about this right now, uh in his in his in his uh wonderful Cuban accent.

25:15 Um, you know, yes, smart guy. Um, you know, the internet is very good at tearing down um uh you know, and tearing down these hierarchies. Um but the internet has not yet proven its ability to build governance systems, right? And so um it it it has not it yes, you can build these new peer to peer networks, but can these peer to peer networks actually take power? um and actually serve the productive roles that the hierarchies used to serve. Right. And so can you actually have, for example, a functioning democracy.

25:44 Right, if what you have basically is basically people arguing with each other in this peer to peer network like all the time. Right, and never basically forming astronomers of state power. Um, you know, or if you have, you know, this con you know, if if if all of your finance goes peer to peer and you don't have any banks anymore and there's nobody to call when your money goes away. Right, or you know, wh whatever the version of that might be, right? That they're that they're basically the that these networks are not in fact basically um sufficient substitutes for for for the institutions that they're displacing. Um and he describes this as the scenario of sort of nihilism. Um, which is basically that the peer to peer networks are good at destroying, um, but they're not necessarily good at building.

26:21 Um and so he he's he's fairly pessimistic. And and I think this is why uh this is what Neil Ferguson also is reacting to in his book, which is I I think this is also kinda his latent fear. He kind of describes it differently, but also his his kind of latent fear that if the institutions are torn down, that that that there's no guarantee that productive things will be built on the other side. Um so that's probably that that would be the other the other kind of really pessimistic scenario. A lot of people get scar tissue. They're still sort of like fighting the last war. You've been around the first internet uh big wave in the late nineteen nineties and the failures that happened there. How does that affect your thinking. Like WebVam, for example, failed, but the same thing today might be a resounding success. How do you switch your mind to um

27:02 Not getting burned. Yeah, so this is really Yeah, so this is really fun. This is one of these things again, I've just realized is actually really fundamental to human nature. Um and by the way, why I think they're Well, I think you have to ask questions about whether life extension technologies are actually gonna be a good idea. I think they are, but but I think there's a no question about that from a from a broader kind of cultural societal standpoint, which is right. It's the most it's the m to your point, it's the most natural thing in the world to try to learn.

27:29 From experience. Right. And so I you know, yeah, we all go through this, right? I touch the hot stove, it burns, we don't touch the hot stove again. Right. And that happens at like age three or whatever. And then like from from then on, basically like one way of just viewing like our trajectory through life is it's just touching hot stove after hot stove after hot stove and learning don't do that, don't do that, don't do that. You know, and so that's or it's like, you know, don't act out at work. You know, you know, you you learn all these things. And then one of the things you learn is like, okay, like, you know, what uh actually what a lot of people learn is what what a lot of people learn is they they they they they work with a startup, the startup doesn't work. you know, the one that threat doesn't work. And so the lesson is don't work at startups, right? Um or by the way, the other lesson, right? The other lesson is a lot of people went through in the last fifty years this thing where they thought they had lifetime employment.

28:08 Right, it's some big company and then they got laid off at some point. And then they're and then they and then sort of the lesson is well don't work in big companies because you can't trust them and they don't care about you and they'll you know they'll lay you off. And so anyway, it's like it's like the most natural thing in the world to like sort of sort of learn from these mistakes. And so what happens is it's it's absolutely like scar tissue. What happens is you just as you age You just naturally build up all of this all of this sort of psychic scar tissue and you have all these cautionary lessons in your in your head all the time. And you just yeah and and there and therefore as a consequence, right, your your aperture of what you're willing to explore as you get older just shrinks. Um and it's just it's just neat. incredibly natural thing to have happen.

28:41 Um And so I so I would say the the the the the the the good news or the you know kind of the escape patch for that is is being in my day job. My my day job is an incredible teacher that that's a bad idea. Um right, because what happens in my day job, right, is you know, basically, you know, I I've now been, you know, kind of doing startups first as an entrepreneur for 15 years, now as a VC coming up 15 years. Yeah, coming up fifteen years. So and basically what you see if you kinda swim in in in you know in kind of this this pond for long enough is basically you see, you know, your your web van example, you see example after example. of startups that tried something and failed. And then you basically, you know, you draw the experience from that. Okay, well we know that's never gonna

29:19 Right, because it failed. Um and you see kind of a lot of people around you kind of going through the same process. Um and then you just see example after example of basically what happens next, which is some kid shows up with that same idea five or ten or fifteen or twenty years later. And they take another swing at it and it becomes a gigantic success, right? Um, and so, you know, it you you got your point, like w web van doesn't work and now with now today you've got these just giant successful companies in food delivery, right? Um that are like huge successes. And so like that idea absolutely works. Let let's hone in on that just a little bit more in the sense that

29:53 The the wrong lesson to extract from that experience is this idea will never work. How is it that we extract the right lesson from an experience? Yeah, so let's let's say I I think this goes to I think you wanna really understand the domain in which you're operating, right? So Okay. So the d the the domain that I'm talking about, like the domain of startups is representative of sort of a a a domain that you might call sort of probabilistic.

30:20 Um uh a pro it's a probabilistic domain, right? So so you know it's it's sort of inherent to the venture capital startup process, which is you know basically I'll just give you the numbers like For top adventure right for top adventure back startups. Um, about half the companies in any given period work and sort of generate positive returns and about half of them don't. Right. And so so we sh we start out like every new fund knowing that half the companies that we invest in are probably gonna fail.

30:44 Right. And and by the way, they're gonna fail for a bunch of reasons. Like a lot of the failure is idiosyncratic, right? That you know the team, you know breaks up or whatever, you know, something you know specific to the startup. But like in a lot of cases, it literally is like they're gonna fail because they're just like flat out too early. Right. It's gonna be, you know, it's gonna be a web van of its time, not you know, whatever you know, what the the new companies. Um, and so a lot of us just like just simply flat out timing. And so, but but you can see what I'm saying, it's like you're thinking probabilistically, like you're right. We're not trying to score a hundred on the exam, right? And this is maybe a thing that is like a big difference, right, between the education system and the real world, right?

31:17 You know, in the education system, it's like we're supposed to get a hundred on every test. Right. It's sort of this deterministic realm, right, in which we're you know, there is a way to kind of achieve perfection and we're kinda going for the four point oh grade average or whatever. Um, you know, in quote unquote real life, right, which is starting businesses or you know, writing books, right, or composing music. or playing basketball or playing poker, right, or basically doing anything interesting. We're in a probabilistic domain. Right. And in the probabilistic domain, it's just like we're not gonna we're not gonna score a hundred percent. We're gonna score, you know, most of the probabilistic domains, we're gonna score, you know.

31:49 If world class is like sixty percent, right? I don't know what the numbers are for basketball, but it's like if you look at I don't know whatever it was, like Kobe Bryant's or LeBron's like lifetime record and it's like they've scored all these baskets. And then the other fascinating thing if you think a look at is just you know, the the ranking of the basketball players who have missed the most baskets, right? And it turns out like it's the same it's it's the same people. Yeah. Right. Like Kobe's Kobe's Kobe might be number one on the list of like total best baskets. That is what it is, right? Um uh is an Annie Duke has this great great term. Uh she she is brought it for the world of poker um in her book, Thinking It Best, and she she calls this She says what a lot of people do is is they basically w when some when they're in a probabilistic

32:26 Listen, if they're in a deterministic domain and they get less than 100%, then there's then they can self-critique and they can say, Why didn't I get 100%? I should have gotten 100% and I did something wrong. Right, and and and that is a correct analysis. Like you could have gotten a hundred percent of that test. You probably didn't you know you didn't study hard enough, you didn't read all the material or whatever. Right. In a probabilistic domain, um I it didn't work, okay. It's again the scar issue. It's now no idea what she calls resulting. Right, which is basically now I need now I need an explanation for the result. Right. And the explanation for the result is, you know, I don't know, I should have this or that, or I should have bluffed or not bluffed or done this or done that or not started this company or waited five years or you know, whatever, whatever.

33:00 Um and and she's like look, it's a probabilistic domain. Like some percentage of them are simply going to fail if you if you try to explain what fundamentally is kind of the result of randomness. right through a narrative, like you're you're basically fooling yourself. Like you're making you're making yourself ir ironically, you're making yourself miserable. In a counterproductive way. Right, and and the and the right thing to do, right, if in poker, the right thing to do is to like play the next hand of poker, right? Um the exact same way you play the previous hand, right? Because you're you're operating in this in this domain of probability. The right thing to do if you're Kobe Bryant is to is to shoot the next, you know, the next basket.

33:29 The right thing to do as an entrepreneur is to start the next company. Right. The right thing to do as a venture capitalist is is to fund the next yeah, to to fund the next startup. Right, e even in a space where you've already tried to fail before. Um and then I I would apply at tech, I would say I I believe in the strong version of this. I I used to kinda say this to try to kind of exaggerate to make the point, but now I don't think I'm exaggerating, which is I no longer think there are any bad ideas. I I no longer think there are any qualified people starting tech companies that actually have bad ideas. I think all the ideas are good ideas.

33:56 Um, I think it's just a bit I think it's just a question of timing and execution. We we try really hard to say, Oh, this idea is stupid, this will never work. Right. Like we try really hard to never do that. Instead we try to do say okay, this idea if this is a smart enough person. And they put enough work into it. Um, then this idea is probably a good idea. It is likely to work at some point. And then we just have a very specific question, which is like is this the right person to bet on and is now the right time to make the bet? And then and then as as evidence of my strong view, I basically I basically say you can go through the entire, I think, at this point catalog.

34:27 of all of the failed dot com ideas of the late nineteen nineties, and I believe they've now all worked. How do you assess the judgment of founders? If you're not assessing the idea, how do you assess the judgment? Yeah, so say there's two two categories of two categories of founders, two two two ways to do this. So there's sort of you know, there's sort of there's the ones who've done it before, right? Um, and so the the ones, you know, the the ones who are this is their second or third or fourth time starting a company. Um, you know, with them you have this just obviously enormous advantage, which is you can basically look at the work that they've done, you know, it's like anybody else who's done, you know, who now has a track record. You can look at the work that they've done. And again, on this, it's not that you're necessarily looking for the track record of like the level of success per se. Right, although you know As Napoleon Napoleon you'd rather you want to you'd rather have a lucky general than a smart general. So like you know

35:10 Somebody who's had a highly successful company once, right, has has you know people has an enormous benefit of the doubt when they walk in the door for for obvious reasons. Um but you know, but even people who haven't had a big success before, it's like okay, you can look at kind of how they did the work. Right. And so you can look at like you know how you know, how did they prosecute the opportunity, you know, the the previous time, you know, and you can talk to the people, right, who they worked with. It's like okay, you know, how were they under pressure, how were they on in terms of like inventiveness, how were they in terms of you know, persistence, you know, how did how did they make the decision about when to give up. Right, um you know, or when something's just you know simply wasn't gonna work and and so forth. And so you you can kinda you know, you can you can kinda learn from their experience. You know, the harder one is somebody brand new, right? The harder one is somebody shows up, you know, right out of college or something. Or you know, or or you know, these days, right, the ultimate.

35:53 Golden credential is they got admitted to a top head school and then dropped out after one day. Um So um you know, it's it's sort of the kid, right? Uh and of course, you know, I say kid'cause I I you know, part I think of myself'cause you know th this was me at one point. And a look a lot of the real breakthrough companies, the a lot of the big franchises, you know, Mark Zuckerberg had not had a job. before he started Facebook, right? Like You know, the the Google guys came straight out of Stanford and you know uh the Stanford uh the PhD program and so forth and so on. Bill Gay strip out of college. Um and so, you know, a lot a lot of times these these big breakthrough companies are people they you know, they have no track record. Like their track record you know, you could ask for their high school to you know GP GPA or something, but like there there's no track record, right? Um and so there you're kind of, you know, evaluating, you know, de novo. And I think there what we do

36:38 The the cliche is basically right that it's, you know, some kid with some crazy idea and then some crazy VC gets him some money and you know some miracle happens and oh my God, you know, what a weird, you know, non reproducible thing or whatever. Um the reality is the kids that make new things work from scratch, it actually turns out that they actually have been deep in the domain for a long time. On almost every case they've been thinking hard about the problem that they're trying to solve. Actually for in in a lot of cases for many years. Um and and and what that actually means, you know, that this is actually really kind of interesting, and maybe software is kind of this unique kind of area like this, but You know, as a consequence, you like in software, you can have a twenty one year old who's basically been a professional level programmer for ten years, right?

37:17 Right. Because they you know, you can trace it back and it's like, Well, and you you we hear the story all the time. It's like uh well, the specific story we hear all the time. You know, I really loved video games, right? Um and so therefore, right, when I was, you know, eleven or twelve, I, you know, learned how to code so that I could figure out how to like Make my own video games. Based on that, I found it really interesting how, you know, for example, clans or tribes form inside games. And so when I was in high school, I built this app that, you know, did people matching for whatever World of Warcraft, you know, guilds or whatever it is.

37:46 Um, and then you know, in college I got a degree computer science and then I did this project, which is to do this new kind of social networking app. Um, and now I've been thinking about that and building that for the last five years, and now here I am. And now, you know, after ten years of thinking about this, now here's my new social networking idea. Right. Like that this is not a rare thing. And and and literally they've been thinking about this now for you know, they think about the specific thing for five years and the the general kind of pattern. category for like ten years. And of course, you know. For things, you know, it th th this of course is heavily biased for domains in which kids get to participate, right? And so th this is less true in, you know, anything involving, you know

38:21 Yeah, there's lots of areas. You know, there's lots of areas of technology where you you know, eleven year olds are not working on it. But but there are areas increasingly where they are. Um And so and so basically it's basically what we call the idea base. It's basically the backstory. Um it's what have they done. in the past to really kind of reason their way through and uh and often uh and often you literally have people who have been like writing prototype, and and a lot of the time you're actually people who have running code at that point.

38:43 Right. And then it's like okay, now now you're dealing with somebody where yes, they're t on the surface they're twenty one in reality, they're already five or ten years into the journey. Um and you're like, Okay, now I get it. Now I have somebody who's like a primal creative force who's actually like really thought deeply about this. And so it's a So it's it's a it's a much safer bet than it looks. Can you walk me through in detail how you make those bets? Like what is the big capital allocation decision making process that you use at A sixteen Z? So there's basically there's three tiers. The way we operate is there's basically three tiers of bet, um, sort of small, medium, large, and the small one is so called C, you know, C funding. Uh the medium one is so called venture funding and then the the large ones are growth funding. Um, you know, the the seed bets, the small ones are, you know, two, you know, any I don't know, anywhere two to five million dollars.

39:27 on average. Um, which you know, is a lot of money absolutely speaking, but it's it's small in the context of, you know the you know, it's small in the context of the global economy. It's small in the context of funding new businesses, it's small in the context of our funds. The the venture bets are much more serious. The venture bets are ten plus uh million and then for the venture bets they're more serious for us because that's when we get really involved in the companies like that's when they form a board of directors. And we have, you know, somebody who goes to the board and we tend to really like work hard at the company. So that that's like a

39:55 Yeah, that's signing up from our standpoint to like a ten year journey. Um with the company, including, you know, an obligation to put more money in later rounds and so forth. So that that's a that's a more serious bet. It's sort of sort sort of size ten ten million and up. Um and then the the growth bets are for companies that have kinda you know, they're kinda hit their stride and they have a business that's working and they're growing and so it's it's like expansion capital. So you know, it's a different thing and and you know the check size there is sort of fifty and up and then you know on the high side it's a hundred or two hundred or three hundred. So uh million. So you don't the amount of money get large, but at that point you've got a business that's working and you're you're trying to figure out how to scale it to you know to to kind of to to be a global global champion.

40:27 Um And then there's just there's there's there's different criteria, you know, there's sort of similarities of the three, you know, we're we're trying to it's the same we're trying to back the same kind of founders. And the same kind of businesses across the three categories. Um, but you know, there it's very different decision making process, very different criteria depending on the stage. Um on the seed side, it's almost a hundred percent a bet on the people. You know, it's a little bit on the idea, but it's mostly the the people and it's and basically w the way you evaluate the idea at that point is like

40:52 You're basically evaluating the idea as a lens to evaluate the people. Right. So it's like you know, it's like the it's like it's like I was talking about like the twenty one year old comes in with this like crazy idea of something they've been thinking about working out, they have a college project or something and they want to start a company. Um, and it's like you're you're evaluating the idea, but really what you're doing is it's like okay, is this person capable of doing this kind of thing? And then you're evaluating the idea and the work they've done so far to kinda just draw a beat on how good the person is. As opposed to saying, Oh, you know, we've been waiting to back this idea.

41:19 At the adventure stage, there's the people component, but there's also this other really important thing, which is You have to have some reason to believe that this thing is gonna be the one that wins. Um, because we we sort of take on this sort of formal conflict at that point. We get very involved in these companies and we you know, we can't invest in in in competitors after that. in in that category. And so then there's this thing of like, okay, out of all of the different teams, both current teams and future teams that might pursue this idea. Um, you know, is this really the one that has the best chance of going all the way to victory?

41:45 Um and so that's, you know, trying to kinda dig it harder to the kind of competitive advantage and and you know capabilities at at a deeper level. Um and then the gross side is a that you know that's more of a of a of a of a business analysis. Um the gross side is where you start to get to start to make decisions based on numbers. Um right. Um and so you start to get to evaluate you know revenue growth and and uh market size and you know uh profit margins and and uh you know then. And then by the way, but but also You're still evaluating the people, you're still evaluating the idea. Right. And then by the way, at the growth stage, you're also still looking for new ideas, right? Where you're looking for existing businesses that also have new growth opportunities inside them. Um, and so you're looking for basically, you know, d does the is is this person so good that they have additional kind of venture

42:28 quality ideas that they haven't even gotten to yet. And so you know the best case scenario is you make this investment in a company that's doing X. And then over the course of the next five or ten years they also do Y and Z and A and B and C. And they just keep layering in all these new things, and then you get this kind of multi multiplicative effect. Is there a challenge function internally? Like how do you decide in in terms of making the actual decision? Yeah, so there's there's a there are if you kinda pull top end venture frames on this, you'll get actually every possible answer. Um and so there there are some firms that run on a un a unanimous vote model, um, where they they literally need unanimity.

43:04 Um, you know, there are other firms that have a um You know, they're they've a majority thing. um or they need a certain number of people to get critical mass. There are some firms that run a top down so called investment committee where you, you know, young young the younger partners in the firm get to propose ideas and then there's sort of a council of elders. You know, that either, you know, does the does the Glad Gladiator Waquin Phoenix thing, you know, thumb thumbs up or thumbs down. we have optimized very strongly towards what we consider to be kind of the most aggressive and most, you know

43:32 Anybody say contrarian model? So our model's what what we call single trigger puller. There's no vote. There's no investment committee. There's no override. There's no like I don't, you know, I formally sign off on all you know, Ben and I formally sign off on all the investments, but like I don't I don't like evaluate the investment proposal and then basically do thumbs up, thumbs down. Like that's not like I don't do that at all.

43:52 Um in instead of what we do basically is we we basically we basic delegate Budgets. Like so the the governance mechanism is budgetary. So we basically we raise a fund, we have a certain number of investment partners, we we delegate the budget down to those partners. And then basically if you're a partner at our firm, um, within your budget envelope, you could make whatever investments you want. There are expectations around how you're gonna do that, right? And so there's an expectation you're gonna do the work, right, by which it's gonna be like you're gonna go in like really deep, you're gonna like, you know, talk to all the people, you're gonna really investigate everything. We we don't mind the investment that doesn't work. What we do mind is like we're we're in the wrong one and the right one was out there. Like the winner in the category was out there. We didn't even know about it. Like that that that in our firm was like a big problem.

44:32 And so you're expected to do the work and we you know we have we have you know we have a whole kind of system for that. Um and then there you know, there is you're expected to like you have to communicate, everybody has to know what you're doing, there's no secret deals. Um you have to you know, and you have to be willing to kind of describe it and you have to, you know, be willing to kinda deal with crit you know. We weigh you know everybody weighs in on everybody else's things and so you have to be willing to kinda have the conversation. You know, because you know that you get to make the decision, you know, you are hopefully less defensive than you would normally be w when other people say things like, This is really stupid. Why are you doing it? You know that the peer pressure basically doesn't turn into an actual explicit veto. Like you can still do the deal and you know that you're at a firm that really prizes that wants wants us to do do do investments like that.

45:10 Um, and so but but you know, you do have to you have to be willing to like sit in a room describe what it is and you have to be willing to like listen to people, you know, crap on it. Right, without without getting dissuaded. Um And then, you know, there there is this thing, this conflict thing, right, which is it it's a big deal for us internally, which is is it's probably our biggest limit on our our ability to do business is we take on these conflicts. And so You know, the stickyest conversation we'll have internally usually is like boy Like it would be like between teams, right? It's like okay, if one team does or if one partner does this investment, then it conflicts the entire firm out of the category going forward.

45:43 Um, and so you know, you can imagine pretty vigorous arguments and debates around that. But the result of that is basically it's like I think we're way out on the edge of being able to be, you know, sort of creative in the investments. Um we're able to back the entrepreneurs that call her outside the lines, right? That that basically come in with ideas that sort of, you know, break the existing paradigm. you know, that there's no precedent for you know, that just where at a more structured or formal, you know, firm it might be like, Well, I don't even know what box this goes in. Right, like it's just this is so weird and like offbeat, like what how do we even classify this? And then, you know, if we have to explain this to the council of elders, how are they can ever understand that. Right. And in our firm, it's like we can we can make all those bets. And and and the history of of venture and new technology is those are often the most successful bets. And so that that's why we've optimized that way.

46:27 And you also get speed, it sounds like a lot of velocity with how fast you can make decisions. Yeah, we have a partner, I won't name I won't name name name names. We have a partner where he was in the e he was in the he was in the West Coast office. Uh I was the Palo Alto office of an East Coast firm. Um a firm that had historically grown up East Coast, very successful investment firm. Um, but you know, he would have to fly to New York and present all of his investment ideas to a group of five senior partners in New York. And and by the way, the five senior partners in New York incredibly like established, you know, legendary investors, like with incredible track records. with like absolute moral authority to be able to, you know, make such judgments. The problem exactly to your point, the problem is yeah, speed

47:05 And then just like, you know, this stuff changes, right? Um You know, the the scar tissue thing, um The scar tissue thing. There's a specific form of the scar tissue thing that we see a lot. I I call this sort of the the is is it's like the idea event horizon or something, which is there There's a point a lot of people reach where they're just done with new ideas.

47:22 It's like the general version of the problem. It's just like, okay Like I got through the PC, I got through the internet, um, I got Facebook, all right, I got okay, food delivery works. But like TikTok.

47:36 Like really? Yeah. It's just too much. It's just like okay, this is just at this point the world is getting ridiculous and like I don't want to process this anymore. And like Almost everybody hits that point at some point. Um and and so I j I just think like the the the the the That's it. Yeah. I I just think that The bad way to do venture um is to have people who have reached that point doing sign off on the decisions. And and I hope Ben and I have not reached that point, but uh even if we do reach that point at some point we'll have the firm to continue to be able to make the good investments. What have you learned over the years about making

48:06 Exceptional decisions that most people miss. So I uh quite honestly, I think I think a lot of it is embracing the uh the the probabilistic nature of the domain. You know, and a lot of these questions, like venture teaches you, they're very direct. versions of these lessons'cause it you know. What is it that the old submariner's slogan is uh stupid will be punished. When when you pass on enough companies that turn out to be these giant, you know, kind of global, you know, kind of behaves, you know, at some point you're just like, Okay, like obviously I'm not I'm not a super like I I have to have some level of epistemic ability here because I'm not making all these decisions properly. And and again, the the nature of the domain is I'm not gonna make all the decisions properly. Like what

48:39 What each of the top venture capital capitalists of all time has in common is they they all they each of them missed almost all of the great deals of their generation. the the bad news is you're gonna like make all these mistakes. The the good news is You don't have to score a hundred percent. And and not having to score a hundred percent basically means you can take chances. Right. And and and specifically the way that you instrumentalize that is it's basically and this we talk about this a lot I said, the firm is Success or failure is not at the unit of an individual investment.

49:05 Right. Success or failure is at the level of a portfolio. Right. And so um and and we and we basically see these portfolio effects everywhere in the business. So we see the portfolio effect happens at the level of individual individual partner. It happens level of fun. It happens at the level of what we call a strategy, which is like a basket of investments, you know, in the in the same theme. Right. So let's say we're we're in our firm and we decide. Well, I'll give you an example. We have this big gaming push right now, right? Um as we just brought up this new this new gaming partner we're very proud, and we've got this big gaming push and we've been you know kind of investing in in gaming now for a while.

49:35 And it's like okay, so we wanna go out and make whatever you know, we wanna go out and make whatever, you know, bets in in in new game companies. And so we we we literally have a strategy to like back new game studios, new new new game new new game companies, and like we go out we invest not in one of them, but we invest in ten of them. Right, and you know, in in making different kinds of games, right? You know, different different kinds of approaches. Um and then we're gonna evaluate the success of that program not based on any of those individual investments, but based on the basket as a whole. And so when you liberate yourself away from I have to get this decision right to I have to execute a strategy. That is going to result in a series of ten bets. Um, and then I'm gonna be evaluated not by

50:13 you know, any individual one. And I by the way, I'm not even gonna be getting evaluated by the average outcome. Right, I'm gonna get evaluated by the total performance of the basket. Um, and if one of those bets um accounts for ninety nine percent of the profit of the basket, that is a perfectly fine outcome. Right. We see this a lot. We do performance reviews, right? We do performance reviews. And so it's like okay, we we we do performance reviews.

50:36 of a of an investment partner here. And it's like, well, they've made ten investments and you know, one of them is this this just this huge success and the other nine are like, you know, sucking wind. And it's like okay, is this a good venture capitalist or a bad venture capitalist? And it's like well You know, in any domain that's not probabilistic, you say this person's terrible, right? You know, it's batting average of like a hundred, you know, out of a thousand. It's like this person's awful. Um and and there's always a temptation to say, Well, this one thing that's working is it's like it's a fluke, right? And so who knows whether they'll ever get it again. And it's at that point where I put my hand up and I say, We're in the fluke business, right? Like the whole point of this is to get the flukes.

51:07 Um and so of course that person should get full credit for the fluke. Right. And in fact I hope they go make ten more investments and get another fluke. And so anyway, it's it's basically like it's getting into a domain in which you can basically make those risky bets in a way where you know that you're not going to lose everything if you don't score a hundred percent. Um and you know, and and look like Is you know, like not all domains are like this. Like, you know.

51:29 the person running a nuclear power plant doesn't get to live in this world, right? Um, but you know, uh it we'll put it this way. Anybody doing anything creative? Right, does live in this world. Um and I you know, I think the the creative artists of all kinds, you know, basically live in this world and and and the and the really good ones are are unafraid to take the bets, you know, be because of because because they know that this is the domain they operate in. We sort of talked about the the probabilistic thinking in terms of the magnitude and test taking as it relates to the education system.

51:57 To me, I mean, from the outside looking in, the education system seems a bit dysfunctional. Uh you're a parent. What do you think is wrong with it and how do you go about navigating it and what can we do to fix it? So it's completely unfixable. So so it it's it's it's it's like none of the specific point things people are worried about are uh are fixable because the the whole thing is built in a certain way. Uh so it it it goes back to this this the it goes back to this historical thing we started with, which is it's it's a it's a mass education system, right? So it it's a mass education system that was created in a time and place.

52:28 Um and it was created in a time and place. And you know you probably know the history of this, it was created time and place, you know, roughly a hundred years ago, hundred and ten years ago. And there were a set of you know theoreticians and names like you know John Dewey. Um and they you know developed a you know a system. And and at the time By the way, at the time it was like a huge advance, right? Because it was like we were going from like a nation of farmers. right into this into what was you know, this sort of second industrial revolution and into the twentieth century. You know, most kids didn't have much education in the nineteenth century and you know, um, you know, group in farms or whatever, and like w it they they knew, the theoreticians, the experts knew.

53:00 Like we need a system to educate all the kids. Um, and then and then they built a system the way that you build systems, you know, the way you you built systems in nineteen ten or twenty. Um, which is you built a mass manufacturing system, right? So you you took all of the same methodologies that were being used to make the factory for Model T cars. And all the same methodologies that were being used to do, you know, radio you know, R C A was doing to do radio broadcasting to the masses and the you know, the general motors or you know, General Electric was using to kind of you know build out the electrical grid for the country. You know, these these the mass system you built mass a mass education system.

53:30 Um and and you built it like a factory. Right. Um and and that made sense because number one, that let you get to massive scale. That solved the problem they had at that point. Um but but the other thing was you knew that you were training kids fundamentally for the industrial economy. Right. And so you were training kids at some fundamental level to work in factories. Right.

53:47 Or or by the way. to work in offices and of course the offices in those days were Also factories, right? There were factories for knowledge work. Right. Um and so if you don't know the history of mass manufacturing, there were all these ideas like time and motion studies and all these guys like was a Turner. um, you know, who have these, you know, who optimized mass manufacturing. And basically all of the leading intellectuals of that era basically said we use that that same battery of techniques we use for mass manufacturing.

54:09 We're also gonna use for mass media, we're also gonna use for mass education. Um and so these are you know, these are factories to s these are schools are factories to stamp out kids who are optimized to work in either U s you know, uh uh is their blue collar to work in a literal factory. Or if they're white collar to look to work at General Motors or General Electric in the you know in a conference room, you know, in a in a in a giant hierarchy, you know, to be to be an organization, man. Um, and so we built that system and then we set it on autopilot.

54:34 Um, and it's been an autopilot for a hundred years and here we are, and it doesn't fit at all to the world we live in today. Like not even a little bit. And then of course it it it it has, you know. It has suffered the fate of every institution that sort of goes across multiple generations, which is it has been taken over by a set of people, right? Incentives, right. It has been taken over by a set of people who have absolutely no intention to change it. Right, one hundred percent, they're not gonna change it. Like The people who run this system a hundred percent of their power and status.

55:01 and authority in the world and their income and everything else and their lifestyle, it's a hundred percent, you know, bought and paid for. by this legacy system, and of course they're not gonna change it. Um and so it's not I'll tell you one thing I don't believe in is reform. Like I have all these friends that work on like, you know, school reform. God bless them. Like they're just the wonderful most wonderful, sweetest, well intentioned people in the world and they're just burning huge amounts of money at time. I'm trying to reform the system that has absolutely no intention of being reformed.

55:24 And they're they're having no impact whatsoever. Like it's not working at all. Of course. Like we have a biological tendency sort of to defend our territory, right? So it would be it would be hard, especially with the organized unions and all of this other stuff that's involved with the education system to reform. Well, it's like the the the tip off, the tip-off If they just you know step back and think about it for a second. Like you can be pro union or anti union, you have whatever people have whatever views and union say well, organized labor, you know, big debate for a long time, you don't have whatever views you want. But The idea of a unions the idea of unions of public sector employees. Right. Like So

55:59 Right. And you're gonna reform that system? Like no, you're not. Like they're gonna take your money, laugh at you, and like nothing is gonna happen. And so yeah, there there there there is no uh unless there is no fix. There there is only one thing to do, in in my my opinion. There's only one thing to do. Right, which is to build a new system.

56:21 Right, and the new system has to get built from scratch. It has to get built the hard way, right? Um it will probably not look Right or sound or smell like you know these it it probably you know, the new system will probably not be a giant error. It'll probably be something else. Right. It'll look like synthesis or something like that. It'll be or it'll be like it'll be distributed. You know, it'll be uh you know, like uh uh uh this I'm just gonna I'll paint a vague picture of what it might be, but it might be, you know Look, the country clearly right now and I'm actually we're actually living this with a six year old right now. Like there needs to be like a home school network. Right, there needs to be a whole like support structure, right, and network um and knowledge flow and expertise flow and talent.

57:00 hiring pipeline, right? And you know, quality standards and and resources and activities. Right, for for home school kids, right? Um and and for the for these slight micro schools that are popping up all over the place, right? And and you know. And by the way, like now's the perfect time to do that, right? Because then the post COVID, you know, all all the changes you're you're well aware of, but like, you know, that there's this massive spike in homeschooling. Um, there's this massive spike in parents who are very unsatisfied with with formal you know, all are sort of Say newly unsatisfied with the the the the legacy model.

57:28 Um, and so now is obviously the right time for this. And look, there are lots of example, there are lots of people working on this and there are lots of early examples uh of this. And so I hope something really takes here. Yeah. It it's also interesting when you you look from the outside in that the there's sort of like no individual to blame, right? Like I feel for the teachers in the classroom. I feel for the principals, I feel for everybody involved in the system. But the end outcome is just terrible. Yeah, Char Charlie Munger has this great thing I really like when she says he says, look, if if you often in the world, and this is a great example, you often have a system and the system has incentives. And this and the incentives result in terrible behavior.

58:02 And then you have a choice, which is do you blame the people who were exhibiting the terrible behavior? Or do you blame the people who created the incentives? Right. And and and he he believes and I agree on this. I I think a hundred percent you blame the people who create the incentives. Right, I think I think you're right. Like I th I think when you take human beings and you put them in a system where they have bad incentives and you get bad results, like it at at some level it's not their fault. Like You know, you could say maybe they should resign a principle or something like that, but like most people need to live their lives and they need to like, you know, put food on the table for their families and so forth. And so like I just don't have expectations of like masterbolt.

58:31 um uh I guess people's self interest. Um and so yeah, no, I I totally agree with that. And so therefore I think you have to look at incentives. Um and then you have to look at the people who are putting the incentives in place. Um and you and you have to judge them. And and and and that's the that's the thing with this thing is like the people who put these incentives in place are dead. Like they're gone. Right. Like we we can you know, I can I can sit here and yell at John Dewey all day long. It doesn't matter. Like he's you know

58:54 He's he's gone. Um and and the people who are running these institutions now are just basically at some fundamental level level executing scripts that were developed a hundred years ago. And like it it it To to some extent it's like not their fault. And then look.

59:08 You know, there is corruption, right? I mean, like the level to which a lot of these legacy systems are intertwined with the political system. you know, up to the level of just overt corruption. Like at some point you're you're in this like really sleazy zone where you know politicians are just being bought bought off to you know, to basically preserve a system that's obviously, you know, dysfunctional and corrosive. Um so uh anyway, you you can certainly you know, I don't I don't mean to let everybody off the hook, but But yeah, look th the the the key thing at at the core of it is yes, how was the system constructed?

59:34 Um and then um and then and then what are the what are the incentives for it for its continuity. Um again, that's why I said like I'm not That's why I think reform is impossible. Like it there's no way at this point to go in and change the incentives inside one of these systems. Like I I it just there's too much vested interest. It just can't be done. Well what a political policy platform look like that encourages innovation? What are the sort of like key variables that matter? I don't know if it's too I don't know if it would work um because it's a little bit too abstract, but it it it is kind of at the heart. It's a little bit at the heart of populism, it's a little bit at the heart of actually a lot of the left wing critique. um actually a business also. So you you see you see it actually there's a critique from both the left and the right. And I think the critique

1:00:13 The way the libertarians uh to say libertarians have the answer, but the way the libertarians would put it is there's a difference between being uh pro business and pro market. Right. Um and so and and what they mean by that basically is it's like there's one concept of a business, right, or an entity an entity of any kind. Let's start with the business, but we can apply the same thing to other other kinds of institutions down the road. Like, um, there's one form of business that's like actually forced to compete in a fully competitive market. Right. So sort of fully subject to market discipline. Right. And so like if whatever, you know, and I don't even say like the car industry works like this or something, right? Which is or I don't mean let's Actually the car industry gets repeatedly bailed out, so they're probably not the the right example.

1:00:50 I don't know, soft drinks or something. It's like, you know, Coke and Pepsi and Doctor Pepper and so forth. Like they you know. every time you, you know, buy a can a a soft drink or a you know any the any dr you know, I I went to you know it's a gas station the other day and it's like, you know, there's like four hundred different, you know, bottles and cans of drinks right on the shelves. you know, those companies are like forced to compete every day, right, for for every purchase. And so there there's a there's a standards bar that they have to hit. Um And then there's as and and and sort of libertarians are kind of classic free market economists are like that. That's that's market economy. Like in the market economy, you you you you don't want businesses to kind of run on tramble, what you want them is you want them subject to market discipline.

1:01:26 you want them forced to compete all the time. Um and that and that's how you you get quality control and it and innovation. Um and then and then there's there's pro-business. And pro business basically the problem with pro business is basically what happens is a lot of industries over time end up not like that. They end up not being actually a fair and free market discipline, they end up as something else. In the business world, what they end up with is either just, you know, one company with a fallout monopoly or More commonly they end up with what's called an oligopoly, right? They end up with a small number of companies that sort of dominate the entire sector.

1:01:56 Um and then what you get and you know, you see this over and over in the economy. It's like, you know, three car companies, um, you know, for a very long time, it's you know, four movie studios, it's three accounting firms. You know, it's just you go right down the list, right? Um and it's just, you know, three big banks. Um you know. Um and and so and and these are oligopolies. And oligopolies are not monopolies, like each company doesn't have t you know, there's no one company that has total control, but You know, now you've only got three companies and are three companies really is that sufficient competition?

1:02:24 to really have market discipline or do they kind of end up as sort of a cartel? And there's all these ways that they like signal to each other to price fix and so forth, uh, that sometimes verges into over price fixing. Um, and then what happens is the oligopolies basically they get big and staltifying and then what happens is they basically end up sort of colonizing politics. Right. And then this this leads to this concept of regulatory capture, right? Where basically the the you know the the the companies end up basically

1:02:49 essentially occupying the government, you know, usually at the same time the government's occupying the company. Right. And so you end up with these like giant regulatory edifices, you know, Dodd Frank and all these things. Uh, you know, you end up with uh you know these bailouts. You end up with all these, you know, intertwining in this in a revolving door. Right, where you've got these regulators that all know that they're gonna get, you know, these really high paying jobs with these companies when they when they when they step out of government service or you know, or you know, it's like You know, friends at Goldman Sachs. You know, the like the number of people who had like, you know, Goldman Sachs and the business card who now work for the federal government is just incredible, right? Like

1:03:21 It's just this incredible talent flow, right? Um And so you end up with this sort of intertwining um of uh of business and government. And then of course, you know, we experience this in a very tangible way, which is okay, then. You know, imagine being a startup, right? Imagine being a new bank. Right, or a new car company or a new movie studio or a new whatever going up against you know these cartels. And it's just you know, it's just like oh my God, like you know, it's like it's like a mountain that is, you know, for at least for most entrepreneurs is almost impossible to conceive of climbing.

1:03:47 But there was not a new car company in the US that mattered for Eighty years? you know, between the establishment of the of the oligopoly of the US and then and then the emergency Tesla. Right, so that that's like a eight years is a long time. Um

1:04:00 And so you know, what is that, right? It's it's certainly not a free market economy, right? Um it's not company subject to market discipline. It's it but but it's also not just like flat out top down socialism or communism. Right. It's something else, right? It's this it's this kind of hybrid mutants, you know, kind of entangled thing. Um and then you can generalize this idea to uh you know many of these other topics. And so it's the same, you know, higher you know, education is education is through that lens, education all of a sudden starts to make a lot of sense'cause like what is education? K through twelve is a monopoly. Right, it's a it's a government sponsored run monopoly. And so of course it's gonna act you know, it's a Soviet it's a Soviet system, right? It's gonna it's gonna do it's it's run exactly the same way education on the front of the Soviet Union, of course it's gonna generate the exact same results.

1:04:39 It's gonna generate worse results because the Soviets were really good at math and science. Um and then you know, higher ed is a cartel, right? It's it's quite literally a cartel. And the universities form You know, they have an industry group, uh these industry groups that they run, then then and then they have what's called accreditation. Um and they control the accreditation process.

1:05:00 And you need to get accredited to get access to federal student lending and all and federal research funding and all these other things. Right. Um and so it's it's a it's a flat o oligopolistic cartel. Um and so of course it's gonna be non-innovative and of course prices are gonna spiral like crazy and of course there's gonna be more government subsidies over time and of course the quality is gonna collapse over time. The sort of intellectual version of the platform would be sort of anti monopoly, anti oligopoly, anti concentrated power, anti government, you know Yeah.

1:05:25 Uh a government entwining itself in the economy, right? Anti regulatory capture, anti legacy institutions that are no longer being run by their founders. Right. Um, anti systems for which there's no competition, right? Um, anti anything that basically tries to, you know, do what's called rent seeking. you know, to kind of you know extract, you know, basically economics from the broader society without competitive alternatives. Like that would be the core of it. The the right wing populist version of that, I think, is sort of very straightforward, which is basically, you know, it's it's Tea Party, right? It's basically just like How absurd is it that we have these huge things that just keep getting bailed out? Like what the hell?

1:05:57 Um and then uh you know, and by the way, you know, sort of Occupy and Tea Party actually kinda have the same, you know, in a lot of ways the same argument. Um you know, from the different sides of the spectrum and then You know, the the the modern form of that is, you know, the the you know, the the the left wing version of that is is you know, you do hear it. And and you know the left the left wing people argue more directly for the government should just do all this, but You know, I they are onto something, I think, with a critique of like look, like Are these even companies?

1:06:20 Right. Right. And and and is the market actually delivering what the market's supposed to deliver. You got my vote, man. When are you running? Never. Never under any circumstances. You once said that you had this little uh I remember this interview, it was like several years ago, you had this little mental model of Elon Musk on your shoulder. Is that true? And if so, why? And who else do you have mental models of and how do you use them to help you? Yeah, one of the things is you kind of, you know, as you study kind of, you know, very s very kind of smart people and you know people who have like done a lot of important things, it's like, you know. They they all had some way of operating. They all had some theory, right? Some some some structure or framework of the world and how it worked and how how to cause things to happen.

1:07:01 Um and and there one of the things that's interesting, you know, there there are many such frameworks. Even even the same kind of person that you know, they're many very of the most successful investors, generally each of them had some unique take. on the world. And they and they weren't necessarily compatible takes, right? And they just they figured out uh you know kind of a a a a way to do things. It's very different from the way a lot of other people did things. And the same thing for CEOs and entrepreneurs and you know, by the way, same thing for artists and you know, any any other kind of you know, these these sort of very uh sort of successful people.

1:07:28 Um And so like I'm I'm pretty convinced there's no way to like synthesize all of their kind of different approaches and views and frameworks into a single model. Like it's just it's too complicated and it's too contradictory and it it it it kinda it wouldn't really work, or at least I I don't think so. Um But what you can do, right, um you know, when when you

1:07:47 And then what what you do is like you you know, as you go through life you you you you talk a lot about this and your work and we talked a lot about this today is you you do try to assemble your own kind of world view. in your own framework and your own way of of of sort of uh of doing things. Um and and by default, your your your your kind of framework on that will get probably narrower over time because you'll you'll get kind of more locked in more set in your ways, um and you'll get more resistant to new ideas. Um And so the like one of the ways to offset that is to like quite literally have like

1:08:13 Have the mental model for how somebody else would think about the same situation, right? In in in in a way that's like not threatening to you, right? Which is it's not like okay, this is like now I have to have an argument with myself. But it's more just like okay, like if you know, I take your pick of who you admire, but you know in my case it's like Elon Musk or you know, or uh Steve Jobs or you know, Andy Grove or Peter Thiel. You know, we're in the room, right? Uh, you know, what would they say? And you know, and by and by the way, this itself is a daunting challenge because these people are incredibly smart and I I don't know that I can even, you know, kind of replicate their thought process. Um, but you know, I do know, you know, I I do know a fair amount about their thought process.

1:08:48 And that you know they and you know, I I it it uh it so happens that I've I also have known them, but also like you know, they've they've they both have written they've all written and talked a lot about kinda how they how they think about things. Um so then it's like, okay, what what's my mental model for yeah, how how would Elon think about this, right? And so And so I just get, you know, the simple one, like the simple one for Elon, the simple one for Elon. And Elon's very complex guy, but the most simple kind of form of Elon. that's useful in this way is is what he calls first principles thinking. Right, which is it's like okay, like basically in Elon's view, we all basically just like assume too many things from from the way things are.

1:09:20 And the right thing to do is to kind of you know, he kinda gets this from physics'cause he he was trained as a physicist originally. uh which is a very different mentality than than than the one that I come from. Um and it's basically okay, script things all the way down to basics again and start and basically start the logical thought process over again. Right. And so basically, you know, go deeper into the idea to the very foundations and then build your way back up. Um and and you know, just going through that process is a way to kind of really catalyze your thinking.

1:09:46 You know, Peter's form you know, Peter's kind of core mental model that you know that I borrow that I've kind of drawn from is, you know, his focus on this this uh philosopher Renee Girard and you know, this idea of of sort of you know the mimetic dynamics and and you know people copying you know, people copying behavior between each other. And then also, you know, rivalries forming and how that plays out, you know, human dynamics. And Gerard had this very kind of sweeping whole theory about how that kind of determines how well society. Kinda functions and maybe that's not. Completely true, but like there's there's clearly a lot to that. And then of course there's this scapegoating cycle, which which does seem to play out every day, especially when dealing with any of these internet things or systems things, networks.

1:10:21 you know, it's a very useful framework. And so, you know, being able to kind of have an imaginary debate with Peter. Um and kind of say, okay, what would the lents on that be? Um you know, and then obviously we we could go on at length, but you know, Jobs and Groving, these guys had their own their own views of things. Um and so it's just it's it's a way to kinda keep the actual um Yeah, I don't know, keep Keep ideas flowing and then sort of

1:10:41 Enable yourself or force yourself to like basically stress test your own ideas. uh through a lens that's not just your preconceptions. Um I I think is quite helpful. I think you get a different perspective, right? Like you see the problem through the lens of somebody else, which helps you actually understand the problem a little bit better than you do just seeing it through your own lens, because we can't fulfill a system that we're part of. So by assuming somebody else's persona we get more detailed information about what we're missing and we eliminate some of our blind spots. And then I also think it's also um I also think a lot about it's like it's also keeping a high bar

1:11:14 um for yourself and for your work, right? And and and this maybe is also something that's also has to do another thing that happens with kind of age and success is And we see this actually with founders. It's like at some point there there are some founders where they start, you know, company three, four, five, six. At some point they get tired of doing the work. Like they get tired of going all the way back to basics. Ben and I had this uh we had this we had this uh we talked to uh Jeff Beezis about this at one point at uh Yeah, so why we we were starting a venture capital from another company.

1:11:40 And uh another startup and and and and we asked him, well, if if Amazon, you know, for for some reason Amazon got sold or whatever, um, and you were a free agent again, like would you start you know, would you start another company? Um and he laughed and he said, You know, not in your life. He's like you know, he's like that would be going back to kindergarten. And he's like, look, don't get me wrong, I really liked kindergarten. Right. But like You know, having build Amazon I'm not going back to kindergarten, right? Um you know, having build Amazon, I'm not starting a company again from scratch. And so You know, and and so there's this is this like the where the first principles think comes in handy, which is it's like okay, like what's the bar?

1:12:13 Right, like what's the bar that you're applying to your own work and to your own thought process? And are you actually being as rigorous as you you know, are you being as rigorous at say fifty as you were when you Five. Um, and are you able to actually you know,'cause when you're twenty five or whatever you're doing something new, like the world is judging you every step of the way. It's like a harsh, you know, it's it's a harsh environment and you know the world corrects you quickly. H how do you keep that bar rising, right? And not let success sort of You need you need some you need some forcing function. Right. You need a reason. This is why we always spit and the the smart the smart entrepreneurs all know this, but this is why even entrepreneurs starting company number four or five six.

1:12:48 You know, this is why they should have like a board of directors and they should have people on their board who are actually like very strong smart and strong willed who will argue with them. Right, um, as opposed to just them doing whatever it is they're gonna do on their own. It's because like the they they you need no matter how good you need some force most people. need some forcing function where they're they're sort of forced to fully think things through. They're forced to do all the work and they're forced to be able to defend it. Right. And if at your point like if they don't do that, it's it it it it turns into complacency and laziness, and at some point it turns into arrogance and it it just it becomes very destructive and then you stop being effective. And so there's gonna be some forcing function. The Peterfield on the sh on the shoulder thing is is a forcing function.

1:13:23 is how I use it. Um it's like a forcing function of my own thoughts. It's like Okay, if I were explaining this to Peter or to Elon or whatever, like would they be like, Oh, that's a good idea, or they'd be like, Mark, like Elon would say that's fucking stupid. Peter would say, I don't I don't think you fully thought that through. And you know, and then it's like okay, now I know that I have to go like if I'm gonna do this work, now I know that I have to go back and do it for real. Like I I have to be able to justify this. Um and and and it's and it's an obligation to myself, and you know, number one, because like why am I wasting time on something if I'm not actually set up to do it right. But then of course it's also an obligation for any of us in a position where other people are gonna make decisions based on what we do, right? People are gonna come to work for us.

1:13:58 Right, are gonna participate in things that we're leaving. You know, then we have a real obligation, right?'Cause like it's you know Imagine how unfair it is, you know, for an entrepreneur who gets lazy, who doesn't think things through, who starts a company, who hires a bunch of people. Like that you know, that's really unfair to those people. Um and so it's it's a self, you know, this is the the surface level answer to your question, but like it it has to be a self imposed standard. At a certain point.

1:14:19 Um and people either want to say people either have a reason to impose that standard on themselves or at some point they should stop trying to do the things that they're doing. Uh, last question. What's the last book you reread? That's a really good question. Um You know, I'll tell you one book I keep coming back to. I keep coming back to um I keep coming back to the the the Henrich the Joseph Henrich book, um The Weirdest People in the World. Um another book that I keep coming back to is a book called The Mach the Machiavellians.

1:14:45 by this guy, James Burnham, um, which I think is probably the best book on politics. of the twentieth century and it's been like incredibly helpful to understand what's happening right now. Um so those are two big ones. Martin Gurry's book, uh, The Revolt to the Public. We'll we'll put all of these in the show notes on the website to make it easier for people to get them. Oh, I'll give you a fourth one. I'll give you a fourth one. We don't have time to talk about it now, but um a fourth one that uh people haven't

1:15:08 A lot of people haven't read, but it's had a really big impact on how I think about things. Um uh it's a book called The Ancient City. And it's written by a uh so it's a f it's it's from the it's from the eighteen sixties, um, but it's a still a very relevant book'cause it's based entirely on original classical sources, Roman and Greek sources. And it's sort of uh it's sort of and it h the the the history of it is holding up really well. It's a reconstruction of basically human society kind of pre the Romans and Greeks. of what it was actually like and then sort of how that turned into Roman Greece and then how that turned into our world. Um, and it was written by a French, uh a prominent French academic a hundred and fifty years ago. Um, but it's a it's a really profound and striking book. Um, and if you read it, you're like, oh, this explains a lot.

1:15:50 Yeah, it it in particular it's the best book I've ever found. It's the best book I've ever found on sort of the creation of civilization, the sort of prehistory of civilization. And then it's the best book I've ever read on like basically the role of the cult. Right. So like why cults exist, um, what they are, um, and what it feels like to be in one. Um and of course, you know, one way of looking at the world is the world is just basically this, you know, sort of series of cult of one form or another. I I don't know that I would even say that I fully understand it yet, but um it it is. It's one of those books. I don't know about you, but like when I there's something interesting in a book, I I underline it and then if it's really interesting, I I dog ear the The page uh that it's on.

1:16:29 Um, and then there's there's a few books that I've read where it's like they they destabilize the piles of books because I've doggered like every single page. Another book is like freaking Um and the books on top of it will like tip over at some point. And this is one of those books where like I just I've dog earned every single page. There's just stuff that just jumps right off the page at you and just like bites you like right in the nose and it's like okay, this is like the the world does not work the way you thought it did. People are not the way that you thought they were and here's all this, you know, here's four thousand years of history kind of explaining why. Um and so anyway, we maybe we'll talk about that one another time, but uh that one I keep coming back to.

1:17:05 Thank you so much for taking the time today, Mike. Yeah, good, chain. Real a real pleasure. And congratulations on everything you've been up to. It's it's uh I'm a I'm a huge fan. The Knowledge Project is produced by the team at Farnum Street. I'd love to get your advice on how to make this the most valuable podcast you listen to. Email me at shane at fs.blog.

1:17:32 You can learn more about the show and find past episodes at FS dot blog slash podcast. To get a transcript of this episode, go to fs.blog slash tribe or check out the show notes. Can you do me a small favor? Go online right now and share this episode with one friend who you think would love it. Thanks for listening and learning with us.

1:17:52 Till next time.

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