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Today’s episode is an intellectual Feast.

It is about how to see the future clearly.

And because actually seeing the future is impossible.

0:35

It’s really an episode about how to see the present.

Clearly.

Today’s guest is Venture capitalists Josh Wolf.

We talked about this state of Technology, the stock market meltdown the last few months.

We play a game of overrated versus underrated for the metaverse and ft’s the space economy.

0:52

But mostly this is an episode for Josh to share with us his big brain and His Four big theories for predicting the Teacher for Matos.

I guess, you could say, for spotting the next big thing and I had about as much fun in that segment as I’ve had doing anything in this show.

1:10

So I want to start with a brief story about how Josh and I first met, it was three years ago.

I was in New York City.

I was hanging out with a friend of mine who works at the intersection of finance and media.

And he asked me, Derek.

Do you want to go to this off the Record dinner at a steakhouse that I’m going to?

1:29

We’re gonna have wine and steak.

And smart people and I said, well those are in fact, my few favorite things in the world.

So you should definitely count me in.

So I arrived at the steak house about 10 minutes late because arriving, 10 minutes, late to things, is my fourth favorite thing in the world.

1:45

And I walk into this room and see the table.

And I’m like, okay, I definitely do not belong here.

I don’t think I can name all the names because it was, in fact, an off-the-record dinner, but they had me seated between on the right and know.

2:01

Award winning Economist who is also a prominent media figure to my left, a chief Economist of one of the five largest banks.

In America across the table is a New York Times bestselling business journalist.

And one of the most famous Tech commentators in the country, I grab my seed and immediately.

2:18

I’m like, all right, I’m gonna have to chug at least three glasses of wine before I have the courage to say my name.

Much less offer an opinion on world events.

And then Josh Wolf walks in and he basically blows everyone else out of the water like Tech science politics China, art culture philosophy in 2018, LeBron James put up 51 points. 8 rebounds and 8 assists in game 1 of the NBA finals against the Golden State.

2:43

Warriors Josh Wolf put up a 50 18 - that table and anyway, I’m not sure that I belong there at all.

But I am very pleased today to bring you the very best.

Of that evening.

Josh is the co-founder and managing partner of Lux Capital Venture Capital firm that backs entrepreneurs and scientists working on projects, like Ai and flying robots and synthetic, biology and satellites, and space and drones.

3:12

His brain is Wikipedia.

He talks like he’s always just come off of his 13th cup of coffee after an extremely caffeinated afternoon, and I cannot wait for you to discover.

What I found out for myself in a steakhouse, in New York City, three years ago.

3:30

And that’s that Josh Wolf is really, really freaking smart.

I’m Derek Thompson.

This is plain English.

4:01

Josh Wolf.

Welcome to the podcast.

Good to be with you, man.

How are you?

I’m doing good.

Josh.

Tell me a little bit about Lux capital and how you try to distinguish yourselves as a venture capital firm.

Since there is so much competition among these, these these days.

What is it?

That makes luck special.

4:17

There are generally these two arrows that I’m always trying to find one.

Call the arrow of inevitability and one I call the arrow of impossibility.

The arrow of inevitability is the certain directional arrows of progress in almost every domain of technology.

And again, just being a student of History can help to inform what you see in the present and what might be happening in the future.

4:37

And then the arrow of impossibility is when everybody else believes, there’s no way that that’s going to work for that just seems so and if they’re wrong and we are right.

We have entered at a low valuation reflected by the fact that there is a lot of demand for the thing.

We’re investing in and our future return, should be really high.

So those Direction was the hours of progress.

4:53

You see them in lighting, you know, we went from incandescent from, from a flame, you know, in a, in a fire pit to an incandescent bulb to a light, emitting diode undeniable directional.

Arrow of progress that light became what was once more heat than light and is now more light than heat.

5:09

You know, an LED is cold to the touch.

Wears, a flame is very hot.

In automotive.

We went from horses to horse-drawn carriages to cars to electric cars to autonomous electric cars.

We are not going back along that our of progress to having you.

Horse-drawn carriages in the streets in the streets, you know strewn with manure.

5:25

I mean maybe in some cases you might same sort of thing where you look at communication protocols, you look at semiconductors.

You look at Computing.

We went from spinning mechanical disks to solid-state everything and so there’s certain directional arrows of progress that you can find those errors of inevitability.

5:40

And it doesn’t point to who the entrepreneur is, or what the technology is, or who the company which company it is, but it gives you a higher probability of being, right?

And then I read voraciously, I’m just always looking at what is everybody else believes.

Leave and where might they be wrong.

And when those two lines intersect, it’s Perfection.

5:56

So for those of you hadn’t possible and you already understand two things, I love about Josh, number one, whose brain is an encyclopedia.

Number two.

I like to listen to my podcast at one point. 51.75 speed, Josh is pre-programmed to speak at one point 51.75 speed and I always appreciate that for information density.

6:14

I suppose you could say.

So what do you tell me about one of the companies in your portfolio?

The are particularly excited about that maybe lives.

This intersection of arrows of inevitability and arrows of progress.

It sounds about a bit sanctimonious and righteous but we like to say that we invest in matter, that matters physical stuff, that really has meaningful things and many times those things tend to have very few competitors because they’re so technologically hard.

6:38

That it’s just the number of people that might be able to do with these people are doing is few and far between.

In this particular case, the inventor of this company.

I Connie I Kon is a guy, Eric basic Eric had the distinction of winning the Nobel Prize, he Won.

The Nobel Prize because he was looking out into the outer regions of celestial, ether to find biology, you know, to look for aliens and that kind of stuff, inventing, new forms of telescopes.

7:03

And so that itself is interesting, but he decided.

Okay.

As is often the case with technological breakthroughs almost always preceded by the words, huh?

That’s funny.

He realized that by inverting the technique he was using and you can actually look not to outer space but to Inner Space by Mutual, by which I mean, being able to look inside of Will’s in real time to see what’s happening.

7:24

Now.

The reason why that’s important is we’ve never been able to do that before.

You can use a microscope.

You can use a high resolution microscope.

You can look at a cell but you’re typically looking at something before and after.

So, if you introduce a drug into a cell or a culture and you are a Pharma company, trying to figure out what is the quote unquote mechanism of action.

7:40

How does this thing work?

How does it do the thing?

It does?

It’s almost like looking at a 7-Eleven security video, footage camera and you see 7 a.m.

In the morning.

You see 3 p.m.

In the afternoon, you know the story.

Got ransacked a bunch of stuff was stolen.

The Cheetos are on the floor, but you don’t know who the guy was that came in and robbed the place.

7:57

So now, you can actually see in real time.

Effectively almost in slow motion.

What happens when a drug molecule that’s designed bind to a protein is sitting there in the cytoplasm gets metabolized by mitochondria causes the the cell to emit hormones at a protein.

8:14

Then reacts with another protein.

We’ve never been able to see that before this reminds me Josh of a phone call that we had about a 15-minute phone.

All that summer, which is probably the most information dense, 15 minute phone, call of my life.

And you had this amazing Riff on the power of tools.

8:31

You said imagine a world where Jimi Hendrix existed but the electric guitar did not wear Babe Ruth existed, but the baseball bat did not or where Steve Jobs existed, but the microchip did not and I’m hearing you.

And what you’re describing is a tool and it’s fun to imagine that this science fiction microscope that captures security.

8:52

Video footage of drugs interacting with ourselves.

Could allow some genius and 5-10 years to develop a breakthrough, drug that would previously be impossible to conceive of that, that you are building an electric guitar that we will later placed in the hands of a pharmaceutical Jimi Hendrix.

9:12

So now that we have people with a sense of who you are, what Lux is, I want to get your big brain on the news of the year, which is that Tech is getting its butt kicked in.

Stock market, stocks have been punished.

The NASDAQ right now is down, 14 percent this year, the Tesla Facebook met a PayPal.

9:29

These companies are down 30 40 50 percent in the last two months.

Josh.

What do you think is happening?

And why is it happening now?

On tech stocks?

Broadly.

I have been wrong for the past two or three years prophesying predicting in my general, the default cynical steak, or skeptical, steak that the end was nigh and that the current turn would come and I’ve been wrong.

9:51

So, you know, broken.

Clock might eventually be right twice a day.

I’ve been wrong for the past few years anticipating that the excess of excesses, the Abundant speculation, the mass retail participation, the availability of participation in part because of increased margin.

10:06

Now at all-time highs, getting people borrowing stock, you know, and borrowing money to invest in stock last seen at these levels at the last two, major, crisis of 2007, 89, and 99 2000.

We’re all at all-time highs compounded by people being home.

10:22

Sports being cancelled not being able to gamble on, you know, Athletics and instead gambling on stocks, the echo chamber of social media and the social proof that whatever was going up.

Would continue going up.

Exacerbated by the positive feedback effect that belief in it would further increase the valuation of these companies.

10:39

None of it was predicated on fundamentals.

And so, you know, you saw this first with Peloton, I think in a significant way you’ve seen a now with almost every major tech company in the time that we’re talking now or just maybe a week or two away from the fact that Facebook had its largest or a really the market had its largest ever one day loss of value in a company, you know, in excess of two hundred twenty five billion dollars and notably within a day of that you had Amazon with the markets largest single-day, gain of an excess of a hundred, nineteen billion dollars.

11:09

And so what that tells me is and then added another moment, which was snapped down 24% in one day.

Then up 50%, The next there is just Mass volatility.

Now, what that to me is Valve is that there are structural changes afoot in the market for the past 10 years.

11:26

You have had a rise of passive, indexation.

Meaning people were investing in indexes and ETFs and arguably that’s a form of Quant rating.

When I say, that what I mean is dollar in algorithm just says, bye-bye indiscriminately.

Whatever is in that index if it’s market cap weighted if it’s value weighted, whatever it might be just dollars, came in stocks, went up.

11:47

Well, on the downside, what happens dollars come out stocks, are going to go down.

In some cases indiscriminately just to come in here.

So it sounds like you’re stuck theory, has three parts.

Number one.

This was going to happen.

Eventually the level of speculation retail gambling.

Meme stocks, getting bit up by bored.

12:05

People sitting at home.

Things were just getting too weird.

And the market was becoming a little bit like a late-game Jenga Tower.

It wasn’t a matter of if things were going to fall down.

But when number two, once that Jenga tower started to Tumble once the market started to fall, It’s because of inflation or anticipation of interest rates going up the amount of passive trading of algorithmic, trading accelerated, the decline of stock prices.

12:33

After years of accelerating their increase, which frankly tells me that, like, after years of irrational, exuberance.

We might be seeing a little bit of whatever the opposite is irrational.

Doom number three, though.

You’re saying, we’re also seeing a revenge of fundamentals.

12:51

The Revenge of profit margins, the Revenge of value investing, the Revenge of unit economics.

What were those words profit?

Margins, you need economic.

This is it.

This is an ancient Greek term.

13:06

That actually hasn’t been used for many generations in the stock market.

Yes.

Here’s my, here’s my long bed for you.

If you could get copies of Seth.

Klarman is margin of safety.

If you can get Charlie munger’s, you know, where the book about Charlie Munger poor Charlie Zombie.

You know, buffets letters those things.

13:22

I remember when in like, super scarce value, as everybody rushed out, you know, post.com crisis, you know, 102 and they started, you know, went from these 50 basis, point one percent declines on a daily basis, which is what we’re seeing now.

I think we might be March 2000 going for an 18-month period, till October 2001, where by the way, many companies dropped 80% in value, and they dropped slowly, because that was the slow decay of people’s belief being shaken from them.

13:48

So yeah, go back to you.

Yes, profit from The Horizon, unit economics.

I want to get to your philosophy of the world in just a second, but I’d actually just want to pin you down on the prediction that we are back in 2000, right?

In addition to the nihilism.

14:05

I want to pin you down in the on the 2000 prediction.

In 30 seconds, what’s the biggest similarity between right now?

And the.com crash of the early 2000s and what’s the biggest difference?

Biggest similarity is some of the composition of the investors.

Retail investors.

14:21

First-time investors people that never experienced loss.

People thought Marcus can only go up people.

I never saw a layoffs and riffs and just wild abundant speculation of the kind, that was highly correlated by which everything was going up at 1:00 today.

You see the same sort of thing whether it’s crypto me.

14:38

Of stocks high tech stocks growth.

The main difference is interest rates, interest rates, then, you know, were three and a half going up to four and a half.

You have the Y2K, you know, boom bust.

It was sort of a non-event, but you had Greenspan that began tightening and arguably in hindsight at the wrong time.

Interesting.

14:54

So similar Dynamics with retail investors and irrational exuberance, but a little bit different because inflation rates are significantly lower than they were twenty two years ago treats much lower.

So you can argue there’s a rational, you know, what else are people going to do with their either money?

The classic Tina, you know, there is no - and, and I would say, you know, there are companies that have real fundamentals and real sales this time.

15:14

Whereas the main metric last time, which in hindsight, of course, was laughable, but, you know, was eyeballs and clicks and those things didn’t necessarily correlate to monetization.

You still have a ridiculous.

Number of companies that have gone public in the past two years that have no sound business.

And I do think that there will be a mass shake out.

15:31

And I think the next wave ever going to see in markets public and private is consolidation just a wave of MMA.

Interesting.

All right.

Moving on to your philosophies, in addition to we are all going to die.

We spoken a few times and look cards on the table.

I am just a huge sucker for great frames like great memorable ways of thinking about the world and the future and I truly think that like the Josh will frame store is one of the best frame stores.

15:56

It’s out there like you have the Tiffany’s.

A frame store is just some really compelling philosophies that I think investors can learn from.

I think writers, entrepreneurs marketers artists can learn from and I want to walk Through four of my favorite frames that I’ve heard you should feel about on podcast or at dinners.

16:13

So first, you have a very sophisticated to word question, to figure out what the next big thing is, what are those two words and why?

Well, just be forewarned, you really do.

Need a PhD to understand this, so I’m going to try to simplify it, but here we go.

What sucks, what sucks?

16:31

That’s it.

Every entrepreneur that has ever started.

Anything looks around and basically says, huh, that sucks, you know.

No, there’s gotta be a better way to create a car.

There’s got to be a better elevator.

There’s got to be a better zipper.

There’s got to be a better, a better way to wheel a suitcase.

Whatever.

It is.

16:46

Everything around us, was somebody looking at something and say that sucks.

I can do it better.

Now, the beautiful thing about that is they were driven, you know, some sort of chip on their shoulder or whatever was to basically make their name, make their wealth, create status, whatever that human forces that pushes that it’s just an absolute inevitable.

17:02

And for me, I literally asked everybody like, what socks and they’re like, oh, you know, I just discovered this problem.

I can’t believe this this this thing existed that way.

How do you develop your what sucks muscle?

Right?

Like there’s lots of people, I go online.

I go on Twitter, people are complaining all the time.

17:21

They’re complaining about the world all the time.

But like I like, I like, I sometimes say, they, then try other than invent, they complain and complain, and complain, but the solution aspects of that equation.

Never comes into the picture.

And so, I wonder how you can train yourself to be a Enter who is also an inventor.

17:41

I love your framing, their of venting and inventing, you know, some people here complainers, but I think for the vast majority of the team at Lux where listeners and you’re going around and listening to people’s vent and say that sucks.

And so we’re costly.

Ask them question.

What sucks.

But somebody else has basically said, not only the suck, like, I’m motivated to, like, to fix this.

17:59

Now.

I can’t, I can assure you that there are people that are so frustrated and angry by customer service that they have figured out a, i ways to like, I’m going to Please every customer service person.

Here.

There were people, so frustrated by, you know, the one percenters that we’re using their black cars and like everybody should have access to this that a guy decided.

18:16

Hey, we’re going to create this thing called Uber, right?

And then you you launch this competition.

One of the beautiful things about these things.

When they work is people look back and I’m like, I can’t believe it was ever that way before, you know, and so there’s a complacency that we have with way something worse their social proof of seeing everybody else just using it and then somebody stands out from the herd, you know, they’re the black sheep better either so emotionally, riled up.

18:38

That they’re like, I’m just, I’m literally gonna like change this industry that they go and do it.

And our job is to find those people whether they’re trying to shorten, how long or how much it cost for discovering drugs, whether they are trying to invent faster transportation and do vertical takeoff and Landing, you know flying cars whether they are trying to invent a brain machine interface.

18:59

Somebody is always out there just basically saying like that thing sucks and I’m going to make a better version of it.

All right.

So frame number one is what sucks frame.

Number two is a little bit more sophisticated.

I guess it’s four words rather than two words, science fiction, science facts.

What is this Frame?

What are some examples?

19:15

Why is this important?

You know, I grew up on Escapist science fiction as a kid, I grew up in Coney Island Brooklyn.

I just, I love science fiction.

It was the future.

It was what was possible.

It was the epitome of, you know, of change in technology and the amazing thing, by the way, of course.

19:31

And I believe, this is true throughout all History in everything we’ve ever done in venture capital.

I am extremely as you probably tell by my voice and like a Boolean and optimistic when it comes to Science and Technology.

And yet I am also very cynical or skeptical when it comes to human nature because businesses change markets, change Technologies change, but human nature is a constant.

19:49

So every story, you know, it’s the same Shakespearean, drama different different setting, you know, more or less gravity different clothing, but it’s the same human dramas, but the technology has changed and they solve different problems.

And every technology that somebody invents in science fiction.

I’m creating new problems for new technologies, you know, even further in the future to solve and that just a history of it.

20:09

We started cataloging this and it became sort of amazing.

And at first, I have to be honest, it was sort of just like Hannah, that’s sort of funny.

Like, look at all the stuff we funded that has come out of sci-fi.

But over time it actually became a Playbook and I will tell you we are not the only one so you look at podracing from Star Wars.

20:25

We backed a guy, Nick Courthouse, key who started this company drone Racing League and it literally looks like it’s right out of Science Fiction, you know, with these people racing drones whirring.

First person view, God.

Eagles doing these hairpin turns flying these things at a hundred miles an hour is just wild.

You look at 3D printing and 3D scanning.

20:41

I mean straight out of Science Fiction.

There was this old Michael Douglas movie called disclosure not a particularly great movie, but a very cool scene that I’ve captured where he scans himself and enters this virtual reality world again, going back more than 25 years ago. 3D printing itself is basically Star Trek.

Replicator being able to look at some of the designs, even of the Aesthetics of Motorola startac, you know, came straight.

21:03

Out of Star Trek tricorder.

And so there’s all kinds of inspiration between these things drone.

Satellite space, Rockets many of the engineers that are working on these very hard problems.

We’re absolutely inspired by something that they read or saw as a kid.

And so, I would say that either, our scientists are becoming way more creative because that Gap keeps shrinking between Psi Phi and PSI fact, or are sci-fi.

21:25

Authors are becoming less creative.

I actually think our sci-fi authors of the moment for the past 10 years, have had a little bit of a bias towards a dystopian, you know.

Future less of an optimism.

And they’ve also been totally right by the Zeitgeist about climate.

So like every major sci-fi movie today is about no climate catastrophe.

21:41

Very few books are talking about nuclear energy, right?

Like this.

It’s just like that’s to me, is the answer to climate but we’ll get there.

There’s a corollary.

Here is a corollary here that I want to ask about because you know, another Trend through the history of Technology isn’t just first.

We imagine it in science fiction and then we actualize it in science fact, but also this interesting Trend where we invent things for Minorities for people with disabilities that gives them the ability to go from disabled to enabled but then that technology is adapted to help people go from Human to superhuman.

22:14

So you think about something like Optics, technology in the 1400s and 1500s Optics Tech help the visually impaired read when gutenberg’s printing, press was proliferating all these different things for people to read, but then Galileo takes the same technology that plays with curved glass to magnify.

22:33

By objects on the other end of that, curved glass turns an upward kind of the opposite of a con Therapeutics Upward at the moon and then uses it to see objects far away in space.

Are there other examples?

You can think of where people move from where that which is built to help.

22:50

People go from disabled to enabled helps other people go from Human to superhuman totally, and you nailed it, you know, Vince Cerf who you talk to, he was hard of hearing, and part of the original design of arpanet was even thinking about people who are hard of hearing.

Be able to communicate through Visual text arpanet, being the, the precursor to the internet that the yet defense department, the belts and then text to speech speech to text, you know, as a kid.

23:14

I had the Franklin, you know, Moses speaking spell, you know that started as a handicapped assistive device.

When you look at wheelchairs, you know, the Segway itself really was originally designed by D came and with this idea of having this quad wheelchair that can actually climb stairs.

23:30

There’s a social component here, too, which I think is very interesting and started with, you know, in the early 80s, the Disability Act people, you know, basically advocating for design and technological inclusion and improvements.

One of the most amazing things that I think people take for granted in this current ERA of instant on e-commerce and our robots, delivering things, you know, on sidewalks, curb Cuts, curb Cuts.

23:52

This was such, a simple thing, but curbs used to not have that little ramp dip.

Well, you know who the main beneficiary of that over the past 30 years since that was became a law are moms pushing strollers, okay.

The second greatest beneficiaries, every single one of us who benefits from our daily deliveries that are coming from Amazon and Whole Foods and all our other places that are delivering with the guys that are pushing these giant carts up and down New York City and elsewhere.

24:15

And now you have robots that are able to actually navigate street corners and cross streets.

All because, you know of something that started with disabilities, so huge fan of this idea of the adjacent possible.

As you know, this idea from Stuart Kaufman say a little bit more about about what that is what the adjacent Possible is because that’s an idea that it did it emerged from the Santa Fe Institute.

24:37

But then also I think Steven Johnson wrote about it in his book where great ideas come from.

But it’s a fun idea at the sort of Frontier of Science and Tech is this idea of the adjacent possible?

Well, drawing on what you said, originally, which was, you know, an idea taken for one intent ends up getting used in another unintended way.

24:57

One of my favorite examples, a lot of things come from early, adopter, Industries gaming.

Is a big one and so video games because you know, it’s silly.

Its trivial people are tinkering gets in the hands of lots of people, 3D depth, sensing cameras, really.

So their first major expansion with huge volumes declining price point.

25:17

So it got a cheaper became more available with Xbox and PS4 and Dance, Dance Revolution, and these, you know, 360 cameras where your kids are in front of them, and they’re dancing and, and showcase, it turns out that that camera inside one engineer, that we backed in a company called matter Port now.

25:33

Multi-billion dollar public company, but at the time it was like a ten million dollar, you know, little tiny thing.

No Revenue.

He said, what if I took a bunch of these little 3D depth sensing cameras from an Xbox or PS4 and actually put them in a camera, press the button, have them do a 360 World and be able to capture physical spaces around us.

25:50

We said, okay.

Well that could be sort of cool fast forward.

We get into covid and the entire real estate industry with know how showings with no ability to for people suddenly and this thing went from, you know, not so great quality to just increase Edible high resolution photo quality.

He’s like the tool that became indispensable.

26:07

So there was no way that anybody that was designing a depth-sensing camera for Microsoft, Xbox, or PlayStation Sony, PlayStation PS4 ever thought.

Hey, this little fun thing that we might use almost like the, you know, old school, Nintendo Power Glove, or something like that was going to be used as a multi-billion dollar product in the real estate industry.

26:27

So we’re always looking for those adjacencies.

How is something in one domain?

Going to be seen by somebody else?

Who might have that inspiration of something sucks, and then reach into that other guys, domain, and pluck it, and reapply it.

And I think that that is the essence of most Innovation.

All new things come from combinations.

26:43

Of old, the more old stuff.

We have, the more probabilistic it is that can be combined in new ways and often super surprising ones.

Frame number three.

This one is just three words, but there are three words that sit on top of slightly more complicated ideas.

27:01

This is your Twain, Fitzgerald, schopenhauer theory of the future.

Tell me what the twain Fitzgerald schopenhauer theory of the future is I’m a voracious reader, very intellectually competitive.

I get information anxiety.

When I find out somebody, they know something.

But I love Mark Twain, by the way, I’ve learned and I learned the term information anxiety from you and I love the concept of information anxiety, especially Lee, as it Compares sometimes with, like, status anxiety, that some people, I think, in conversations your status anxious, how do I be, right?

27:31

And then other people are information.

Anxious.

Who I might be wrong, I can learn something and then become, right?

And I just think it’s, I think it’s a lovely idea to think about how you can be fruitfully anxious if your informationally anxious rather than status anxious.

So that’s my little sidebar.

But please continue with Mark Twain as a for the sidebar.

27:48

You and I hit it off because your voracious writer and reader.

And and you know, there’s people like Michael Mobis In one of my partner Sam our basement like every time you talk to them, there’s just like this super pro-social positive.

Like what are you reading?

And they have like ten books, you know, fiction nonfiction old books, new books.

Whereas other people, I might be like, hey, what are you reading?

28:04

I have no time to read.

Like, you know, we can’t can’t hang.

Okay.

So, these three words between Fitzgerald and shopping.

Our each is a famous author.

And each of those famous authors, has a renowned quote, and each of those quotes to me, dictate where you should spend not your money, but the most valuable thing you have, which is your time and your attention.

28:22

So let’s go through each of the quick.

Fitzgerald quote was the test of a first-rate intellect is the ability to hold two opposing ideas in your head.

The same time, it still retain the ability to function.

So this to me our front page news papers.

This is the front page of newspapers where it’s the thing that everybody is talking about.

28:37

You might have a debate about it, but it’s really well known.

So there’s no scarcity.

There’s no real rare ideas.

It’s going to be relatively efficient pricing as relates to stocks.

But everybody’s paying attention to it.

This might be things like gold.

Gold is a shiny piece of metal.

Gold is nothing.

28:53

But But a shiny piece of metal and otherwise Fiat world or gold.

Is this, you know, great store of value.

Somebody might say, China is this great engine of growth and the future of humanity.

And that’s going to be the number one GDP.

Or somebody might say, China is nothing but lies, damn lies, and government statistics and Chinese government statistics.

29:13

Somebody might talk about the Olympics and somebody might say, they’re not important, but the big things that just like everybody’s talking about tend to have low value, particularly for those of us that have information anxiety.

Um, and so when I read the newspaper, I’m actually looking not at page A1 or A2 and actually try to read the physical newspapers or at least the digital replicas of them.

29:30

Because there’s value in, then I will look at like c22 where the editors have decreed that a little small inch in the bottom left of the page is not that important and then I have a differing view of the magnitude in the importance of that information.

So so that leads to the second quote, which is Twain, which is it ain’t what you don’t know.

29:47

That gets you in trouble.

It’s what, you know, for sure.

That just ain’t so.

And so, where is their certitude?

That things will continue as they are and if they don’t the consequences are going to be really bad.

So this is your sort of classic not seem to lab, you know, story of the turkey where every day, the turkey goes.

30:06

And from the time it’s born it’s fed, it gets fatter and fatter and fatter, and it would presume rightly.

Linearly that life is really good.

And then, all of a sudden, thanks giving me thumbs and chop off with his head.

And so, same thing happen, with the housing market, you know, housing prices could only go up and then all of a sudden, boom, you know, massive.

30:24

Housing prices.

Same thing.

Probably today, you have an entire generation that has not seen a downturn in 14 years a true downturn.

So the average person that graduated college 21, 22 years old is today, 36 years old, the average person in their mid-20s today was 10 or 11 years old back.

Then there is a mass generational Amnesia, which is par for the course of people have not seen a downturn, believe that stocks can only go up.

30:46

Tesla can go only go up, growth can only continue until it does, so that’s a Twain situation.

The third area is shopping Howard.

Who said That Talent is hitting a Target that nobody else can hit, but genius is hitting a Target that nobody else can see and that is really what we do on a daily basis.

31:02

We are trying to find those entrepreneurs who often with arrogance of the highest order say that this is the way that the world should look.

This is the technology that has to be in everybody’s hands and then we go and back her him in doing that.

And those are people that are inventing, you know, brain-machine interfaces and coming up with new drugs and new microscopes and deciding.

31:19

If they want to launch things into space and manufacture.

They are the people who see something that Else doesn’t and you go back to those intersecting arrows.

They found the technological, inevitability that era of progress and it’s beautifully matched against this perception of impossibility.

When everybody else is like that’ll never work or that’s 20 years out and then they’ve got that chip on their shoulder and they’re like, I’ll show them.

31:39

I love this because I am not a venture capitalist.

I am not an active investor, but these ideas I use all the time as a writer.

So exploding false certainties.

That’s Zagging that’s writing my most red piece and last two years but hygiene theater, everyone thinks that this disease lives on surfaces.

32:01

So they’re like dunking all their vegetables and soap and water when we know for a fact that the coronavirus French more efficiently in the air.

So, there is false certainty.

I love the idea of bringing that, which is important, but not obvious into the important and obvious realm, right?

32:18

That’s a little bit more shopping, how our right seeing that, which people aren’t paying attention to setting that that Askew, Target, and then pulling it into, everyone’s frame of mind.

That’s what great journalism does.

No one’s paying attention.

This really important thing.

Let’s have a conversation about it.

32:34

What are things I love about the Fitzgerald quote.

Now, keeping two things in an in your mind at the same time.

My wife is a PhD student in Clinical Psychology, and she is as described to me this theory in DBT.

Dialectical behavioral therapy, which is often for people with borderline personality.

32:51

Disorder Marsha Linehan.

Yeah.

Yeah, yeah.

Yes.

Marsha Linehan, the American psychologist who came up with dialectical behavioral therapy, Josh.

I thought I could get something by.

You.

Just just one fact by you and it turns out that I cannot.

33:08

So, there’s this lovely Theory called wise mind and why is mind assumes that the person psychology is torn between the reasonable mind, which is driven by Logic, kind of like the Star Trek Data that lives inside of Brain, and the emotional mind is driven by feelings, but there is a beautiful synthesis that can happen when we hold our feelings and our reasonableness side by side at the same time.

33:37

And sometimes for me.

This is just really useful.

In analyzing the news.

What are the facts of the case?

And what are the interpretations is something?

I asked complaining this all the time, but it’s also useful in life like imagine.

For example, if you Josh, you walk into a room, You say hello to your wife and kids and they don’t look up at you.

33:56

They’re still looking at their phones.

They’re watching TV.

You might storm out of the room and say, oh my God, my wife and kids hate me.

They never pay attention to me.

But then you can sit with this sort of wise mind exercise and you can say, let me check the facts here.

The facts, the case or I walked into a room.

34:13

I said hello to my family.

They didn’t respond.

Now I check my emotions.

My emotional response is that they didn’t respond because there’s so, so angry with me.

Now, you can hold those things side by side while also imagining other interpretations for why they didn’t look up.

34:29

Maybe they didn’t hear you.

Maybe they were just distracted.

And I think it’s so lovely to imagine that in the psychology of our normal life or in the analytical mode of reading, the news.

Interpreting the news.

We’re trying to pick the next big thing into these see there’s this beautiful wisdom that comes from synthesizing, our reasonable mind and Emotional mind, I love that.

34:54

And yes, DBT is something that I think should be taught at companies.

I think kids should learn it at an early age in.

Whatever construct it is taught the idea that yes, those two opposing ideas of sort of the emotional mind, which is your reactive mind, you know, you can think of, in some cases system, water system to in a common sense and your analytical mind.

35:12

And there are people that have natural disposition for one of the other.

I am a height which Fast Response person.

So my natural default is to assume and I remember the first time you know, for a pony.

I’m broke.

And I show up it if the Cornell freshman year somebody’s like, hey, nice haircut.

I’m like, what are you trying to say?

You know, my first instinct is there being sarcastic is murky and you’re challenging me, you know, and I’m ready.

35:31

I’m girded for a fight.

So some of us have blueprints where we’re primed for one thing of the other, it has made me.

And I wish I would have learned some of these skills way earlier my life, because I would have had less relationship conflicts, in some cases.

But whether it’s with CEOs board members, fellow Partners, just the idea that you never go to extremes, which itself is a metal, you know, violation of that, right, but you if you try not to go to extremes, it’s not You’re always this or you’re never that right?

35:54

That things are gray.

And this idea of just yeah.

I tried trying to find the Wise mind in these situations, which is not the default, you know thing, but what a beautiful way to avoid conflict and help with, you know, people that get easily dysregulated.

36:10

I think it’s absolutely beautiful technique.

I wish I would have learned way younger.

I want to talk about the fourth category that I had written down the fourth frame that you have.

I think it’s really useful.

I think of it as your triple failure.

Philosophy, tell me your triple failure, philosophy.

This is mostly a protective psychological mechanism.

36:28

So let’s say that this really derived not from brilliant inside, but from my own psychological desire to prevent vulnerability and anticipate bad things.

It’s failure comes from a failure to imagine failure.

So failure comes from a failure to imagine failure.

The idea here is, if you can anticipate the things that can go wrong, whether you are an investor or an active Venture capitalists, like, we, you are trying to throw time or money.

36:52

Talent to think about the things that can go wrong, prevent them from happening and reduce and eliminate risks.

I’ll give you two adjacent ideas.

One is that a lot of people celebrate entrepreneurs as these heroic risk-takers and I think they are the exact opposite.

They are risk murderers.

They are risk killers, they identify risks, and they kill them.

37:09

They are not jumping off of, you know, Bridges and jumping out of planes and you know, doing crazy risk-taking things for the thrill.

They’re often identifying, what could go wrong, and they’re eliminating them, whether that’s internally Personnel.

Whether that’s a competitor with as technology.

I love that.

I for some reason.

What that reminded me of is I have a friend who’s writing a book about whom V animals that have a different sensory, appreciation of the world.

37:34

So you think of a hound dog, it smells very well.

It senses the world through smell.

There are other animals that are extraordinary, seeing in the dark, other animals that extraordinary taste.

When you’re describing is a kind of risk, heavy Loom belts, when you look into the world you see risks, you have eight.

37:52

Used for risks.

When you look at the world.

Whereas other people might only see the opposite, the only see opportunities.

They only see sort of, they a pollyannish gloss to the world.

It’s really interesting to think that that entrepreneurship is not about being having a high, aptitude for risk, but rather about having a advanced taste for risk.

38:14

They know what risks are worth taking and what risks are not worth taking because they process the world.

Bye.

Being so, the processor also visibly through risk.

I wonder if that sort of connects to you, if that connects to your personal home, built it does and I’ll give you two sort of adjacent things to that one.

38:35

Is I sleep.

Well, when I know that my entrepreneurs, the people who are running the companies whose board I said on are not sleeping well that they are stressed and worried when they say when I say hey, how are things going to like?

Everything’s fine.

You know, God forbid they ever say oh, As competition, that just came into this Marketplace.

38:53

That’s validating for our know.

Nothing is validated.

So when somebody is freaked out and stressed, I feel a sense of calm because I know that they’re worried and I don’t have to import their worry and take it on.

So that’s number one.

I want to say very quickly.

I feel this way about worried.

Like with in rooms, like if lots of people are freaking out about something, I don’t freak out about it cuz I’m like clearly the room has already reached the threshold of freaked out that I think is necessary, but when I’m in a group and no one’s freaking out about the fact that like we haven’t, you know, whatever made a dinner reservation.

39:22

Ation in a foreign country and we might not be able to find a restaurant to eat it.

I freaked out because I’m like, we’re not even close to the threshold of freaked out that is necessary within this group, and I need to lift us up.

I’m I’m, I’m naturally.

I think a relatively cool and collected person but I shared this theory of a threshold freak-outs.

39:39

Well, the, the other component of this is I think it’s the secret of Happiness failure to imagine failure.

What I mean, you know, if you’re always expecting the worst again, might not make you the most happy party person, but Your threshold and preparedness for bad.

News is so high that when it doesn’t happen.

39:58

It’s actually a positive thing.

This is gonna sound super dark.

Every morning.

I wake up out of, I’ve got three kids 12:9, and six, two girls and a boy.

I assume that one of them is going to come to my bedside as they do and say, daddy my throat hurts.

And, you know, and I feel and there’s like a lump there, every day, every day.

I walk out of the house and I think I am going to get hit by an e-bike delivery guy and I’m gone.

40:17

Right?

And so I think that just like the sort of momentum Maury the constant reminder, you know, shedding that illusion that, we’re not all going to die.

That we are all gonna die.

It just it makes me appreciate every single day.

And and so I think being a risk conscious makes me happier because the the very definition of risk is more things can happen than will.

40:39

And most of those things don’t happen and when they don’t, it makes me happy.

Last thing I want to do with you very, very quick game.

If you’re down for it of overrated versus underrated.

Yes.

Metaverse overrated.

Why?

Well, again, sci-fi, sci-fi fact, this is something I really started with Neal Stephenson.

41:00

It’s been you know, basically stolen via Ready Player, One Ernest, Cline and beautiful book.

The first one that is ducks Playbook.

I mean, people on the board of said like this is UPS Playbook and so I don’t think that people truly want to be ensconced in headsets for long periods of time.

41:17

I will say the thing that I’ve changed my mind about is there There are large groups of people.

The vast majority of the world that are living in squalor and crappy conditions and and their lives are not great.

And we already have people who come home after work and don’t find meaning and purpose and community and feel dejected.

41:39

And you know, go into social media or Tik-Tok or movies or sports, or whatever.

And so, there is an element of a large group of people that, you know, we will be saying my God, you know, get out of the metaverse and get in the real.

Old.

And they will say, the metaverse for me is better than my real world.

41:55

And I think there’s a social Dimension there.

So so I’m sympathetic but I do think at the moment.

It’s overhyped like every technology and the real people that are going to be developing the metaverse.

I don’t think it’s going to be Facebook.

I think it’s gonna be somebody else that comes along.

Just as Facebook came along when we were all focused on Google or Microsoft and I don’t know who they are.

42:13

It’s my job to find them, but I’m convinced it’ll be some you know, Young Junior folks that are like 16 years old.

Right now that have a better conception that are going to Go do it and, you know, become billionaires in the process overrated underrated SpaceX.

Underrated.

I am very publicly critical about Elon Musk as his relationship with the truth.

42:32

And it comes to Tesla.

I think that SpaceX domestically has inspired a generation.

We have started companies like, or funded companies that have been started like Hadrian, that’s doing.

Manufacturer using robots for space, replacing the 3,000 mom and pop shops that are doing aerospace engineering and varta.

42:49

That is manufacturing and low earth orbit and Chimera.

That’s making antennas to beam down satellite bandwidth.

All that is possible in part because was there a brilliant people that have followed Ilan Sirens song and call to go pursue a, you know, high expectations, very tough culture.

43:05

They’ve done it and yeah, they’ve done a well, so brilliant people coming out of SpaceX that are the next generation of entrepreneurs.

Yeah, I think SpaceX to me.

It seems like another chapter of the story The Power of tools, right?

If you think about cheap reusable Rockets is a kind of tool for accessing the New Frontier space.

It seems to me like a like a tool who’s positive externalities could be really, really fantastic.

43:26

Troy I’m sorry.

I had to do it overrated underrated and FTS.

Underrated in that in the current form.

I think they’re overrated.

You know, they’ll be a form of our work but I do think that nft Zurich into Satellites by which I mean the same way GPS came from triangulation of multiple computers in the sky that tell you that there’s a blue dot or some other abstraction technologically.

43:48

There is a adjacency of multiple computers that are saying this digital artifact is in fact in this Basin time, and I think that that’s going to be an important foundation.

Technology.

So, hmm.

Well, I have to use, as satellites for art is not a metaphor that I thought I would land on, but that’s a really lovely way to put it again.

44:11

The Josh full frame store, very happy to spend an hour shopping within it.

Thank you very much, man, and I will talk to you very soon.

My pleasure.

See you soon.

Planning this with Derek Thompson is produced by Devon.

Manzi.

Thank you so much for listening this show.

If you like us, follow us on Spotify rate and review on a podcast.

44:29

We will be back with our second episode this week.

On Friday.

We will see you then.