6: Chris Paik - Intentionally in Search of the New

[00:00] Welcome back to Dialectic. [00:01] It's been a little bit of a break, and I hope you all had a great holiday and end of year. [00:07] But 2025 is going to be a big year for Dialectic, and I'm so excited to be back. [00:12] Today's guest is Chris Peck. [00:15] general partner and co-founder of Pace Capital. [00:17] a venture firm here in New York City. [00:20] Chris is one of my favorite people to frankly argue with. He is, [00:24] has such a unique mind and worldview. [00:27] and the way he thinks particularly [00:29] from small seeds of ideas and frameworks [00:32] into explanations that [00:35] He uses to interrogate the world and opportunities and businesses. I just find... [00:40] deeply, deeply energizing. [00:42] Chris spent time at Thrive Capital from its earliest days where he invested in Twitch, in Unity, Patreon, among other companies. And today at Pace, he focuses on internet and software businesses. [00:53] I hope that this conversation puts Chris's unique thinking and frameworks on display and that some of his ideas challenge how you see and approach the world. [01:02] With that, here's my conversation with Chris. I'm really excited for this. Thank you for having me. [01:07] It's a pleasure. [01:08] We're going to start with a question that [01:10] I don't know if I've ever... [01:12] talk to you about or anyone else has. [01:14] But it is the... [01:15] Only thing in your Twitter bio. [01:18] And that is, what does it mean to be intentional? [01:21] End. [01:22] Within that, [01:23] How do you think about it? What are the costs? [01:26] What are the trade-offs? Great, great question. [01:29] Also, I don't know if anybody's ever asked me that. Okay, so...

[01:34] My Twitter bio... [01:35] says, in pursuit of intentionality. [01:38] and what is intentionality what does it mean to be intentional [01:43] I would argue, or my definition of intentionality, is that... [01:50] What happens? [01:51] is planned. [01:54] Hmm. [01:56] that there is a... [01:59] an idea of something, [02:01] a direction, a heading that you're moving towards? [02:05] And where you end up? [02:07] is a result of... [02:10] A why and a how? [02:12] not just habit stance. [02:16] Is that the same thing as control? [02:20] Hmm. [02:21] Is it the same thing as control? [02:25] I don't necessarily think so. I think you can have a lot of control without being intentional. [02:33] authority has a lot of control without necessarily requiring intentionality. [02:38] I think thoughtfulness might be... [02:40] a more, a closer synonym. [02:43] too intentional? [02:44] Um... [02:47] What is the opposite of intentionality? [02:54] uh, [02:55] Things happening by accident. Carelessness. Carelessness. [02:58] Things happening by accident. [03:00] My intuition would be that, [03:02] intention is more divorced than outcome.

[03:05] than at least how you described it. [03:06] Do you [03:07] Is the inverse of the control idea true? Meaning... [03:11] if you are intentional does that necessitate control? [03:15] Um, if you are intentional, does that necessitate control? [03:21] It necessitates control over the inputs, [03:25] but not necessarily, uh, [03:27] doesn't necessarily necessitate control over the outputs. You can have a process that is deeply intentional, yet [03:35] the outcome is not necessarily desirable. [03:39] Um... [03:41] I think you can have outcomes that are desirable that are void of intentionality. [03:46] So an intentional life... [03:49] is more about inputs than outputs but the description you made [03:52] at least implies some level of the outputs going according to quote-unquote plan. [03:57] Well, I would say like, [03:59] Maybe like, [04:01] The definition of intentionality is an alignment between intentionality. [04:07] the set of outcomes and the [04:10] desires going in. [04:15] you seem to be, it seems to run through very... [04:18] almost everything you think about and how you approach the world so i'm excited to [04:22] pull that curtain back a little bit more. It's a... [04:25] Sometimes it's a blessing and sometimes it's a curse. Yeah, maybe we'll get into the trade-offs. [04:31] you're clearly compulsive about. [04:33] understanding the world, but you're also specifically compulsive around.

[04:37] identifying where the world is going and, [04:39] presumably getting there intellectually or otherwise ahead of everyone else or ahead of most other people. [04:45] You have talked about this publicly as... [04:48] being pre-consensus in in with contrast to being just contrarian pre-consensus being ahead of the curve [04:54] And one of my observations that I think you would [04:57] probably agree with is [05:00] One of the core ways that manifests is explanations. Hmm. [05:05] and so you you've even said explanations are a good way to accelerate [05:11] if we're going from pre-consensus to consensus. It's true. That's true. [05:15] It can be marketing for the pre-consensus. Right. [05:18] or maybe even more than marketing. [05:20] Yeah. Yeah. [05:21] I'm curious. [05:23] What makes a good explanation? [05:25] And maybe within that, [05:27] one thing that feels particularly akin to you, which is what makes a good metaphor. Mm hmm. [05:31] Um, [05:34] I would say a good explanation... [05:37] is [05:40] trying to communicate [05:42] a concept [05:44] But using the ingredients that the... [05:48] audience has at their disposal. [05:51] Meeting them where they are. Exactly. [05:54] Um, [05:56] And this is also sort of dovetails with what I think a good metaphor is. [06:00] If you... [06:01] There's a great subreddit. I believe the subreddit is [06:04] R slash E-L-I-5. Yeah. Which is an acronym that stands for explain like I'm five.

[06:11] And I think that... [06:14] That prompt pushes you to... [06:17] really distill down what it is that you're trying to communicate into... [06:22] Relatively simplistic, easy to understand... [06:26] Uh, [06:27] concepts. [06:29] And... [06:30] Interestingly enough, [06:31] it. [06:32] That's harder. That's really hard. [06:35] It's much easier to be... [06:37] incredibly verbose and borrow... [06:42] Use a $1 word instead of a $0.10 word. [06:46] Um, [06:50] But what's the goal? The goal is trying to communicate information effectively. And in order to do that, I think that meeting people where they are [06:58] is much more important than sounding smart. [07:01] So I think a good explanation helps communicate as effectively as possible. [07:06] Maybe you can think about it as a [07:08] What is the bitrate transfer per second? [07:11] between the [07:13] person communicating the concept and the person [07:16] Understanding the concept. [07:19] And a good explanation, a good metaphor is a high bit rate transfer per second. [07:23] especially relative to the dead city of it yes the original density of it yes [07:28] Given what you do, you're a venture capital investor. [07:30] you have a small team you work with, but on a relative basis, [07:35] You probably... [07:36] Don't need to. [07:38] have amazing external [07:40] explanations and

[07:41] to at least be decent at what you do for a living, [07:45] And... [07:46] be at least... [07:48] free consensus on your own, [07:50] or individually, [07:51] So why is it [07:53] Why is it do you think you're still so... [07:55] inclined to develop great explanations and maybe within that what [08:00] group are you most inclined to explain to? [08:03] Hmm. [08:05] I think we'll probably have to go [08:07] rewind the clock a little bit and i'll do some maybe self-reflective psychoanalysis [08:13] Um, [08:15] Let's see. [08:16] I... [08:19] Publicly posting information, whether written or doing... [08:24] stuff like this, is... [08:27] relatively new, I think, for me. [08:30] I would say... [08:32] In the very beginning of my career in venture, I... [08:36] blogged a little bit. [08:38] Because I thought that's what you're supposed to do. [08:40] I read a lot of much smarter, more accomplished people's blogs, and it seemed like [08:46] Well, in order to be a successful venture capitalist, you had to [08:49] Have a blog. [08:51] You know, I think in the beginning of my career, I religiously consumed the blogs of Fred Wilson and Chris Dixon and whatnot. [08:58] And so, you know, naturally, the [09:01] Alright. [09:02] 22, 23 year old me [09:04] It's like, yes, I should blog. [09:06] Um, [09:08] I think I got to like... [09:10] maybe three or four posts before I realized...

[09:15] Oh, I know nothing. [09:16] And not only do I know nothing, [09:20] it would be incredibly dangerous of me to [09:23] put anything out into ether. [09:26] that [09:28] was remotely close to prescriptive advice, [09:32] Unless I... [09:34] knew what I was talking about. [09:36] So I stopped blogging altogether. Fast forward a number of years. I do wish you... [09:41] had blogged more or was that the right decision? I think that was 100% the right decision. At, uh, [09:46] Yeah, that was very much the right decision. [09:49] No, I don't know. I think some of us sitting here today would very much enjoy going back in the archive. If only just to... [09:59] What's the... [10:04] what's there, there's some incredible, incredible quip. [10:07] where... [10:09] The saying is, it's best to... [10:12] What is it? It's best to keep your mouth shut. [10:16] if people think you are unintelligent rather than open it and remove all doubt [10:23] Thank you. [10:24] Um, [10:27] It's no surprise that this industry really advantages. I think this is a [10:34] fundamentally human-based industry [10:36] uh, [10:39] It revolves on trust. [10:41] and rapport, [10:42] And so maybe it's no surprise that [10:44] a lot of the work in this industry is talking to people.

[10:48] It's meeting with founders. It's [10:50] exchanging ideas, [10:53] It is... [10:56] person-to-person communication. [10:58] And so... [10:59] I don't want to reduce down human connectivity to like... [11:04] these terms, but [11:05] maybe perhaps for a moment, having a [11:08] Good UI? [11:10] interpersonally is advantaged. [11:13] in at least the world of venture capital and startups. [11:16] And so I think for many years of my career, [11:19] I relied on [11:23] I relied on... [11:24] a proclivity for in-person interactivity and [11:29] Maybe... [11:30] overly relied on that as the way that I move through the ecosystem and I practice my [11:35] Minecraft. [11:36] It actually wasn't until the pandemic that, [11:40] where [11:41] I couldn't meet with people. [11:44] You couldn't just grab coffee. You couldn't chop it up and share ideas. [11:49] All of a sudden... [11:51] This... [11:52] motion that I was so used to engaging with. [11:55] Um, [11:56] having dinners with people, exchanging ideas, rock-tumbling thoughts in person. [12:01] Gone. [12:02] and I felt, [12:03] Like, there was this entire... [12:05] slice of meat that was missing. [12:11] That is what forced me to start writing again. [12:15] And I think that I published this Google Doc.

[12:19] with a bunch of investment frameworks and thoughts and sort of aphorisms, things like that. [12:24] And I put that out there. [12:28] into the into the ether and i got a lot of positive response and i'm [12:33] Thank you. [12:34] just as human as anyone else. And so that positive response, I think, drove a positive feedback loop. Um, [12:42] And it was a nice surprise. It was a nice surprise to... [12:45] Uh, of course it feels good to have your, your thoughts validated by other people, especially those that you respect. [12:50] And so that actually was probably [12:54] the beginning of [12:56] sharing more of my thoughts. [12:58] and thinking externally. [13:00] The implication of how you describe that suggests not someone who is just interested in [13:06] their ideas being [13:08] Getting more exposure? [13:10] but specifically someone who is [13:13] using external feedback as a way to make the explanations and thoughts better. Totally. Absolutely. I think one of my hesitations with using any kind of publishing platform [13:24] Except Google Docs. [13:26] was the... [13:30] almost hubristic implication that [13:33] What you put out there was... [13:36] Final. Right. Your framework stock is currently frameworks zero point V 0.2. Yeah, probably overdue for an update, honestly. [13:46] Pretty robust for a point, too, all things considered.

[13:50] I think that [13:51] Bye. [13:52] the intended communication of that format is these are [13:57] This is the... [13:59] best current form of these thoughts, but by no means are they... [14:03] immune to editing or [14:08] you know, updating or... [14:10] and new information should [14:14] should change. [14:16] the conclusions. As is exemplified by the fact that there's like 1,500 [14:20] comments on the document. Yeah. [14:22] Your ability and willingness to post just a Google Docs link on today's version of Twitter and have it go, have it bang is both impressive and daring. [14:34] Google Talks is a good product. [14:36] And I refuse to submit to... [14:40] the new rules of [14:41] I'll go hacking. Yeah. [14:44] Frameworks brings up [14:46] uh... [14:48] a great example probably the most robust example of the fact that you have a lot of these theories living out in the world some of them are [14:54] Framework, some are theories, some are aphorisms. [14:56] But you've done a lot of work to... [14:58] allow those things to become slightly more concrete. [15:01] Perhaps this is an explanation in and of itself, but one of the first things I can remember ever talking to you about [15:07] at least from a cultural standpoint, is like pendulum theory. [15:11] uh... [15:12] I think I'll just read the way you've described it in the past and feel free to revise. But you say... [15:17] The world is a series of pendulums swinging back and forth between poles. Decentralization eventually gives way to centralization.

[15:24] Political parties in power, anonymity to identity, etc. Special opportunities arise when multiple pendulums are simultaneously aligned in their motion. [15:36] Maybe it's an entirely different thing, but [15:39] at least an adjacent idea would be the cyclicality of things. [15:44] from everything from just [15:45] fashion or simple things to like ideas like the fourth turning. [15:49] I am curious, and we don't necessarily have to get into cyclicality, but I'm curious how you hold... [15:55] Pendulum. [15:56] type thinking, maybe specifically around culture. [16:00] next to many of your other [16:02] frameworks which feel a little bit more [16:05] progressive and like they're just going to continue to compound over time. [16:09] Pendulum theory, if it were a meta theory over everything, would kind of break. [16:14] It would presume that like it's hard to hang on to any truth. No truth is perpetually useful. [16:19] It's useful seasonally, maybe. [16:21] That. [16:22] That way of arranging it makes sense, or is it better to just think about pendulum theory in specific context around things like... [16:29] culture fashion uh human nature stays the same the way we express it in certain contexts [16:35] Go back and forth. [16:37] That's a good question. [16:39] I think... [16:41] My best answer is... [16:45] Maybe it's a question of scope. [16:48] So I would argue that pendulum theory... [16:52] Maybe akin to...

[16:55] examining, [16:56] the movement of bodies in our solar system. [17:00] So understanding that [17:02] It takes 365 days for the Earth to orbit the sun and all of these other factors are in play. [17:09] It really helps to understand that. [17:11] But, [17:11] Largely that's [17:13] doesn't impact the day-to-day life that we live on Earth. What's more impactful of the day-to-day life that we live on Earth [17:20] is [17:21] you know, [17:23] How does wind work? [17:26] The little micro macro. Right. Like what is sunlight? Um, [17:30] understanding the balance of the system [17:33] inside of Earth rather than zooming out to [17:36] Maybe... [17:37] wider than Earth? [17:38] Um. [17:39] So I think [17:43] Yeah, maybe it's like Scope of the Truths. [17:47] Um, not necessarily, they're not necessarily incompatible with each other or only applied at certain moments in time. They're all true at the same time. [17:57] Um, [17:58] Yeah. [17:59] but applying at different levels. [18:00] Is there any specific... [18:03] or generalized implication of pendulum thinking that you've, [18:07] come back to often. [18:09] that you find is [18:10] more dominant than people... [18:13] normally, people would probably benefit from [18:17] Seeing more clearly. Um... [18:20] I'll use a relatively... [18:22] nationalist centric example. So

[18:25] Let's just like look at the state of U.S. politics over the last 20 or so years. [18:32] We'll start with, you know, [18:35] Bill Clinton. We had [18:37] eight years of Bill Clinton. [18:39] And that gave a Democrat. [18:41] That gave way to [18:43] Eight years of George W. Bush. [18:46] which gave in turn gave way to eight years of Barack Obama, [18:51] uh... [18:52] And then in turn, that gave way back to the Republican Party with Trump. [18:57] for four years and then [18:59] another native wave. [19:01] to the Democratic Party for another four years. And now we're back to four years with the Republican Party. [19:06] And so you kind of see the way that [19:09] the pendulum swings back and forth. [19:11] whether it is... [19:13] our general dissatisfaction with whatever current administration exists and we want [19:19] Something else? [19:21] But... [19:22] Just noticing that as the output of... [19:27] a system [19:29] is a helpful truth. [19:30] Now, you don't want to... [19:31] read too far into it, but you can't kind of, you objectively can't deny that that is the pattern that has emerged. Maybe one thing that's noticeable in there is it seems like with the [19:41] dissemination [19:43] of information. [19:44] that the amplitude of that pendulum swing is starting to tighten. Crudging. We're starting to maybe even get a little bit more frenetic in our energy. And... [19:53] Maybe we're... [19:55] Maybe, maybe like two term presidents aren't.

[19:57] going to happen anymore. I don't know. [19:59] Or for areas that are less constrained by, it has to be at least four years, could we see that swing... [20:05] really accelerate how fast it's going between the two poles. Yeah. [20:09] So, [20:10] That is an example of one pendulum that is swinging. [20:14] uh there's another you know we can we can talk about the pendulum swing of [20:18] anonymity on the internet? [20:20] I think [20:22] We I grew up with an Internet that was anonymous. [20:26] where a screen name, your username online, had no connection to your actual identity. [20:34] enter Facebook and all of a sudden, [20:37] everybody's screen name was their actual identity. [20:41] And there was an entire generation of people that grew up on Facebook and social media. [20:46] where, [20:47] Their internet identity and their real identity were the same? [20:51] And it feels like we are swinging away from that now. You see... [20:56] things like people with fake Instagram handles or the rise of the Anon account on Twitter. [21:02] Turns out, [21:04] There is merit. [21:05] to de-linking your real identity and your internet representation. [21:11] And so, [21:12] It's only natural, I think, that once we reach a pole of one system that... [21:18] we start swinging back away from that pole. Yep. [21:21] Yeah, it's interesting. That was the example I think we were chatting about. [21:24] probably three years ago, where you first brought this up.

[21:27] And it's clearly the magnitude... [21:30] or the degree to which anonymity or pseudonymity is more common is is is clear the question of course is [21:35] with any of these is where are we in the swing? [21:37] My suspicion would be there's probably still a lot of room to go on the [21:41] Subanimity front? [21:42] I agree. I mean, [21:44] Yeah. Uh, [21:45] two most popular streamers on Twitch. [21:48] Kaisenat, who is... [21:50] His actual name. The other Iron Mouse? Iron Mouse, yeah. Crazy. Who's a VTuber. Crazy. [21:55] And... [21:57] You know, she streams as a digital representation. [22:01] And... [22:02] Nobody knows her real identity. Yeah. [22:04] which is amazing. [22:05] Yeah, whereas when we were chatting about this three years ago, it was like, there are some big Twitch streamers, not... [22:11] The biggest, yeah. [22:13] Okay, I want to talk about a handful of kind of like broad business building and investing frameworks. [22:20] before we get into some other stuff. [22:22] The first one... [22:23] I almost think has become a little bit of a bit... [22:26] But you... [22:28] I won't say it's your God, but you are a firm and strong believer in the efficient market hypothesis. Sure. Including statements such as markets are so efficient. And in this house, we presume markets are efficient. [22:41] back. [22:42] Others, in my favorite example of this is Matt Friedman, have... [22:46] pushed on this idea a little bit. And he has a thing on his blog that says, basically, the efficient market hypothesis, if it's not... [22:53] Totally false. At least it's false in the areas that matter, or you'd be better off imagining the world of 500 people rather than 8 billion people.

[23:02] And I'm curious. [23:03] One, maybe for your rebuttal to that, if you're interested in it, but two, [23:07] Are there areas where [23:10] This, at least... [23:11] is pushed or blurred. For example, is the market for ideas [23:15] maybe less efficient? Or is Darwinism as efficient as capitalism? Like, [23:21] What is the root of this framework and how it may be the reason I push on it is it feels so central to so much of how you view the world, at least from a commercial standpoint. [23:32] And I'm curious how you think about that foundation. Yeah, totally. Um, [23:36] It's a great question. [23:38] So, [23:39] There's sort of an adage that describes the official market hypothesis or [23:43] Some aspect, which is, you know, there's no such thing as a $20 bill on the sidewalk. Yeah. [23:48] which [23:49] Um, [23:50] For the vast majority of people, it's true. [23:53] To the extent that there have been $20 bills lying on the sidewalk, [23:57] That statement has not been true for the person who picks it up. [24:01] Right. [24:02] objectively, when that person picks up the $20 bill, they're like, oh, actually, there was a $20 bill here, and I have now picked it up. There is no longer a $20 bill here. And now that statement is true. But in that moment in time, [24:13] There was... [24:15] a $20 bail on the sidewalk. [24:16] So I think... [24:18] Maybe the [24:20] The space where I would agree with Nat's [24:24] view of the efficient market hypothesis. [24:26] is part of it. [24:27] particularly true? [24:29] around seams of innovation. [24:32] When there is a technological breakthrough, there's a change that has happened. Something is now possible and it was impossible before.

[24:39] "'Regulation change has occurred.' [24:42] the efficient market hypothesis, the market doesn't immediately teleport to becoming efficient. [24:48] It is driven to be efficient by the individual actors inside of it. [24:53] over many iterations. [24:56] I. [24:58] you know, the... [25:00] The high level thinking about profit in a sector is not that there is no profit. [25:06] in a sector ever. It's that if there is profit in a sector, more firms will enter that sector, [25:13] to eventually compete that profit down to zero. - It was a half-life, right? - Right. - It was pretty quick. - But it's not saying there is no profit ever. [25:21] I think maybe the reason I'm inclined to push you on this in particular is that [25:27] of all the types of people. [25:29] Like in some sense, it is your job quite literally to find the glitches in the efficient market hypothesis. [25:37] Do you feel that's unfair? [25:40] Or another way of thinking about this would be that in some ways your job is to harmonize [25:45] Everything you understand about the world, the fact that they're efficient market hypothesis is sort of the current of capitalism. [25:52] And yet, [25:53] you're also looking for those sort of blips of space. [25:56] to find the $20 bill. [25:58] Yeah. So on some level, yes, we're holding to that analogy. I might add that [26:07] From a system design perspective,

[26:10] It's really important for people who are trying to be change agents. [26:16] and push the limits. Yeah. [26:19] to believe that the market is not efficient. [26:22] Yeah. [26:24] If everyone thought that the market was perfectly efficient, [26:28] Nobody would innovate. [26:29] Because there would be, it would feel hopeless. Yes. And so it's really, really important for every founder, for every entrepreneur to truly, deeply in their bones, sigh off. Or any creative person in some sense. Believe that they can create something. And that is true, I think. [26:44] you know, we run this sort of like [26:46] Uh. [26:48] Monte Carlo simulation and try to pick the lock of innovation [26:51] And... [26:55] Somebody gets it right. [26:56] Um... [26:58] Now, the... [27:00] When you zoom out and you look at the system as a whole, [27:05] The official market hypothesis is, [27:07] is describing the behavior of the system over time. [27:12] And it's consistency, not necessarily. Yes. [27:16] Exactly. [27:17] And so I... [27:19] I firmly believe in [27:21] Gravity. [27:23] Right. [27:24] But that doesn't necessarily mean that things are touching the ground at all times. Right. Or that something couldn't leave the atmosphere. Sure. Yes. [27:34] This probably is nicely into... [27:36] an idea we've chatted about [27:38] And I don't know if you've spoken about publicly,

[27:41] which is [27:42] your orientation around top-down and bottom-up thinking. [27:46] And maybe the right place to start would be that you've said at least once, it's hard for me to think in a top-down way. Hmm. [27:54] And so maybe that's a good place to start. [27:56] in terms of what you mean by that, and then we can talk about why this framework is useful for investors, for company building, et cetera. Sure. So maybe I... [28:04] I will caveat this entire section with this is very much an alpha thought and a work in progress and may suffer from... [28:13] a semantic issue, [28:14] where top-down people [28:17] thinking and top-down company may not [28:19] mean the same thing. [28:21] I'll start at a high level by... [28:24] saying that [28:26] I think about the definition of top-down as... [28:29] you start. [28:30] general, [28:31] And then over... [28:32] iterations of thinking, you get to specificity. [28:37] Um... [28:38] and with bottoms up [28:41] you start with specificity [28:43] and then over time you get too general. [28:46] And I would... [28:47] I think those are largely the principles that I would describe top-down versus bottom-up. [28:51] So top-down thinking, what is... [28:54] What is top-down thinking? [28:56] Well, I'm sure you have seen a market map. [29:01] posted by a venture capital firm. [29:03] where they say, this is our, you know, this industry, and here's the market map of opportunities in this industry. And they have these sort of sections carved out of,

[29:14] this area and this area and this area and these are the companies that are working in them. [29:20] I think a top-down investor approach is, [29:23] may feel like that, where [29:26] You... [29:27] ah, [29:31] define the limits of the system, [29:34] And then... [29:35] reach your answer [29:38] uh [29:39] from the [29:40] defined boundaries the boundary of the game is clear up front yes right um [29:45] That is... [29:48] not necessarily the way that I'm wired. [29:51] The way that I'm wired is to find like kernels of truth. [29:56] and then see how widely they can extrapolate. And it might be infinite. [30:00] It could be infinite. Yeah. I mean, I think [30:02] One of the really wonderful parts about venture capital is and startups is [30:08] Um, [30:10] Oftentimes, it's... [30:12] is really hard [30:15] to fully understand... [30:18] the [30:20] Just how... [30:23] impactful. [30:24] some of these companies can be. [30:27] It's incredible. We get to work in an industry. [30:30] where [30:31] We talked to obviously tons and tons of founders, tons of companies. [30:35] And... [30:36] Just the laws of the power law dynamics of it, not everyone makes it. [30:42] But, [30:43] A handful...

[30:45] Change the world. [30:46] like fundamentally change the way that we exist, which is kind of insane. And they start from nothing. [30:51] So I'm much more wired to [30:53] be this sort of maybe [30:55] Truffle Hunter? [30:57] trying to find [30:59] these kernels of truth and then extrapolate them and understand the limits of or just how far the limit of their impact is. [31:07] That describes... [31:08] the first part of what you described, which is bottom-up and top-down thinking. And then conversely, [31:14] at least I think your belief is that companies themselves [31:17] have a bottom-up or top-down. [31:20] shape or profile or DNA? [31:23] Yes, yes. [31:25] I fear I will make [31:30] some enemies with this dichotomy. [31:36] But, um... [31:37] you know, [31:38] risk of making enemies. So yes, I do think that there are [31:42] largely... [31:43] two kinds of companies there are top-down companies and bottom-up companies and there are hallmarks of each [31:48] top-down companies [31:51] are... [31:53] Top-down companies are what we understand to be... [31:56] these sort of like visionary founders, right? [31:59] They have this idea in their head. [32:01] that they're executing against, [32:03] And they're somewhat unattached to the means of execution against that goal. [32:09] But the boundary of the game they want to play, personal computers or electric cars or whatever it might be, is pretty clear. Yes, there's a clear heading that they're moving towards.

[32:22] One characteristic of top-down companies is that they ship [32:25] many products over their lifetime. [32:29] What are some examples of top-down companies that we know? [32:32] Apple. [32:33] Tesla [32:34] SpaceX. [32:36] Amazon, Amazon. [32:39] These are founders that [32:41] had a vision of the way that the future... [32:45] could. [32:46] Would be? [32:47] and relentlessly execute on products to move towards that future. [32:52] Um, [32:56] bottom-up company. Just to pause you there for a second. [32:59] 1. [33:00] reaction here might be "Oh, [33:03] Some of those companies started really, really specific. Yes. Tesla started Lotus Elise. Amazon started only with books. Yes. How do you square that? It's... [33:12] Each, every top-down company starts with this general vision and then is boiled down to a specific go-to-market. [33:19] Within that boundary. Yes. So... [33:22] Every single top-down company starts, obviously, with a specific product. [33:26] It doesn't stay this general amorphous blob forever. [33:30] The go-to-market has to be in a specific product-specific motion. [33:33] Tesla, obviously the Roadster, [33:36] uh apple you have the original macintosh um [33:40] or the [33:42] Apple 2, the Apple computer. Apple 1. Apple 1. Yeah. [33:46] But, [33:47] After that initial product, you have many other products that follow it because they're executing against the same vision.

[33:53] Um... [33:55] Growing back into that big boundary in a sense. Exactly. Because each product is advancing incrementally more towards that ultimate goal. [34:06] bottom-up companies [34:09] Conversely, [34:10] only ever ship one product. [34:13] They ship a single product. It is a [34:16] Really good product. [34:18] They capture lightning in a bottle. [34:21] It is such a good product, in fact, that the entire company [34:26] is, [34:27] And the entire company forms... [34:29] around the goal, [34:31] to optimize that singular product. [34:35] And scale it to infinity. Exactly. To see how far that product can go. [34:39] Um, [34:41] So what you get actually at like culturally is you have bottom up companies that are [34:45] really focused on optimization, [34:47] And you have top-down companies that are focused a little bit more on innovation. [34:51] What is the next thing? [34:54] Can you give a few examples of bottom-up companies first? Yes. Bottom-up companies. Good examples of bottom-up companies. Google. [35:00] Facebook [35:01] Airbnb. [35:04] Reddit. [35:05] Craigslist. [35:07] Twitter. [35:10] Is there an example of one that isn't... [35:12] like a software website type thing. [35:15] Hmm. Um... [35:18] Because you, interestingly enough, almost all the first examples you gave are like atoms. They're making products or delivering products.

[35:25] And almost all the examples you gave in BottomUp are digital, they're bits. [35:30] Perhaps that's just a pattern? [35:32] Sure. Uh... [35:34] I mean, the first example that comes to mind is Nike. [35:37] Nike's top down. Nike is a bottom up company. Here's a good litmus test. [35:43] remove the product from the company, [35:48] Remove a product from the company. [35:51] is it still a company? [35:53] Or how good is the company? Let's take Apple. [35:56] You remove the iPhone from Apple. [35:59] you have... [36:00] taking a big [36:02] like healthy organ out of this body, but it's still a great company. So as its laptop division, all these other things, it is still by and large a very valuable company. Right. You take... [36:13] Amazon, you remove Amazon Web Services, you still have e-commerce. You remove e-commerce, you still have Amazon Web Services. [36:20] Um, [36:21] If you take like [36:23] Shoes? [36:24] out of Nike? [36:26] What even is it anymore? [36:28] Yeah, it's a little less pure than Google, as an example, in part because products can't evolve forever. Right. But the core ethos is there. Right. [36:36] Right. If you remove Google search from Google, [36:41] In some sense, Nike has been optimizing shoes for 50 years. Yes, that's right. [36:47] That's right. [36:48] And even Tesla now has batteries and robotaxis and all those things. Yeah. [36:53] I would argue... [36:54] When I think about it,

[36:57] a lot [36:58] of [37:00] Physical brands are bottom up because there is a reflexive motion... [37:06] between brand and [37:08] like the consumer purchase of brand, [37:10] It's understanding and [37:12] optimizing that brand and how consumers understand it to expand margin. Right. [37:18] This is obviously interesting and useful for... [37:22] people who are investing in new things. [37:25] Can you talk a little bit about why you think this is broadly applicable, whether somebody's thinking about joining a company, somebody who runs a company, thinking about what their company is, maybe even a public market investor like, [37:37] Very easy to map to the BC headspace. [37:40] Why? And part of your implication, by the way, I think, is that [37:43] you can't change and which one you are actually matters a lot. Yes. So I will say that... [37:48] I don't think that [37:51] I think the top-down nature and bottom-up nature is encoded at a DNA level of the company. [37:58] And it really is calcified as the company grows because every layer of [38:03] of personnel that is hired. [38:05] is hired to either optimize, [38:08] or innovate. It's one of the two. [38:10] And, [38:11] It's like making a jawbreaker. [38:14] And so you start with this core and over time you're creating every incremental layer and it gets large enough. [38:22] immutable, it's calcified. [38:23] Um, [38:25] So what does this mean? It means that

[38:29] I'm sure you've heard the meme of no Google APM has ever started a company. [38:35] Why? [38:36] Right? [38:37] Well, Google has started other things, other research projects and eventually Waymo. [38:41] Well, so let's take the Google APM. No Google APM has ever started a company before. It's because to become more senior at Google, [38:49] you have to be really good at optimizing. [38:51] not be really good at innovating. Right. Especially if your core job is your job is on the core part of Google. Exactly. Exactly. [38:59] They had so much extra cash that they ran some side projects. Yes. So I think what does it mean to work at a bottom-up company means that, [39:09] if you are working on the core product [39:14] Probably pretty exciting. [39:15] And if you're working on anything that's not the core product, [39:22] Well? [39:24] That will never be the core product. [39:27] which is totally the opposite of Apple. [39:29] Very much so. If you're working at a top-down company, [39:32] There are many, there are constantly new product initiatives. [39:37] I would maybe conceptually think about a top-down company as – [39:41] you know, like a root system underground. [39:45] that [39:46] where trees grow [39:49] up from it. [39:50] uh [39:52] but every new product is a new tree. [39:54] The breadth of the root system underground is hard to... [39:59] fully.

[40:00] internalize except when you see trees break through the ground. Right, right, right. [40:05] And so I think, you know, [40:07] What does this mean like in company analysis? I think every time you see a bottom-up company, [40:13] posture, advertise, market a new product. [40:18] It's never going to work. [40:20] It's like Twitter and Periscope. It's just never going to work. [40:24] you know, Discord, uh... [40:26] uh discord game store not gonna work [40:29] meta horizons. Not going to work. [40:32] None of these bottom-up companies are capable of shipping new products, [40:37] because their entire... [40:40] Corporate apparatus is around optimization. Facebook or Meta. [40:44] with maybe the single exception over 20 years of Reality Labs, which came out of Oculus, has basically... [40:50] Never really shipped anything new. [40:52] despite having many products because they [40:55] Optimize Facebook and then they bought more products and you need to optimize them. Yes. Bottom-up company, a hallmark strategy of product footprint expansion for bottom-up companies is M&A. [41:06] So Meta buys Instagram. Meta buys Instagram. [41:12] WhatsApp, YouTube, is purchased by Google. [41:15] and is now a very large part of the entity. [41:18] But, these... [41:20] These products aren't [41:21] born from within these companies that are acquired. [41:25] When you are... [41:26] large and calcified as an optimization engine, [41:29] the way that you...

[41:31] Ingestion. [41:32] innovation, [41:33] is... [41:34] through acquisition of companies that still have that [41:38] That innovative dynamic, not necessarily... [41:42] Casking anybody internally with it. [41:44] I'm sure people are going to be able to come up with this. [41:46] nitpicky examples you talk about google and gmail or waymo or or whatever i think the broad essence of the thinking here is that [41:55] understanding the natural tendency or inclination or like almost flow of the water [42:01] for our company's shape. [42:02] Even if there are exceptions, [42:05] will be really helpful in understanding [42:07] what is likely to happen over time. Yeah. What is the state of entropy for this system? [42:12] Twitter is a product that has had eight different leaders... [42:15] different ownership. [42:17] And it's the cloud car in the gold mine that's been there the whole time. Yeah. No – [42:21] Furthermore, no product except the core product, [42:25] of Twitter will ever work. And you're also specifically talking about it from a commercial standpoint. Sure. Yeah. You know, Airbnb is an incredible company. [42:34] Incredible company. Incredible leader. Creative leader. Great team. Uh... [42:41] you know, [42:42] I think it feels like [42:44] Airbnb has tried to make experiences work. [42:47] for a really long time. [42:48] And there. [42:50] They're just not going to. It's just like they're not going to be able to make any new product work except the core [42:57] product of Airbnb. [42:59] And so, [43:00] Really?

[43:02] I would argue that [43:04] In order to grow as a company, you should optimize that core engine. [43:09] or there should be a view of M&A to expand the product footprint. [43:14] With all this thinking, [43:16] Are there specific, it seems like bottom up. [43:19] The core product is really what matters and how you should think about the company's long-term success and how wide that can go. [43:26] Yes. Conversely, it seems that top-down companies are actually very much about vision and [43:31] Leadership. [43:32] I'm curious if you've [43:35] noticed or have any theses around what makes for a really great top-down, the prototypical example being Steve Jobs or whatever, Elon, what makes for a really good top-down leader? [43:45] Assuming given it seemed like that's the existentially important thing in a top down company. Yeah. [43:51] You have to be able to recruit incredible people. [43:54] Let's talk about like the importance of the personnel at the organization. [43:59] I [44:01] Bottom-up companies. [44:05] How do I even describe this? [44:07] You can cut 80% of the headcount in a bottom-up company, and it still largely works. [44:14] Like, what does the chief products officer at Craigslist do? [44:18] You know, it's kind of it's like it's just funny to think about. And and and so when Elon comes into Twitter, cuts 80 percent of staff, [44:26] It's because it is lightning in a bottle. It's because it works. And it's because to some degree, it kind of doesn't matter who's running it.

[44:35] Because that's how good the product is. [44:38] Yeah, there can be optimizations made. [44:40] in terms of how the scale works and all these things, but [44:44] Substantive changes are unlikely. Yes. [44:46] If you cut 80% of the staff at [44:49] SpaceX, the next rocket ship explodes. [44:52] You can't cut 80% of the staff of top-down companies. And so top-down leaders have to be really, really, really good at recruiting. [45:01] What are the sort of maybe... [45:03] second order implications of this? [45:05] Um, [45:08] Founders are probably more likely to come from... [45:11] top-down companies than they are [45:13] from bottom-up companies. [45:15] meaning found, uh, [45:17] previous employees who would be founders. Yes. [45:22] or if you're thinking about joining a company that's [45:25] promising you this inflection point due to this new product they're about to ship. And in fact, they're a bottom-up company. There might be some reason for doubt. Yeah. Particularly, the more senior somebody has been at a bottom-up company, [45:36] The more. [45:38] specialized they are in optimization, [45:41] This one really is going to make some dance. Rather than innovation. [45:47] Cool. I'm sure there's more to pull apart there over time and maybe even a Google Doc. [45:52] I'll say one more thing. Sure. Like, you know, if you're a public market investor, [45:57] I think... [45:58] You basically have to discount every single new product announcement of any bottom-up company. [46:04] Simultaneously, top-down companies are chronically undervalued in between product lines.

[46:12] Because the market can't see the root structure underneath. The market can only see the trees that emerge from the ground. [46:19] And so... [46:20] you know, whatever, like before SpaceX launched Starlink, [46:23] People could have said, well, it's, you know, how big is like the space launch market and blah, blah, blah, blah. [46:29] And then all of a sudden Starlink is out there. It's like, oh, wait, this is just like all of telecommunications. [46:35] It's really hard. We're – [46:38] Again, it's hard to see the underlying root structure, the fitness of the innovation flywheel that underpins these new products that emerge from the ground. [46:47] Um, [46:48] And so... [46:49] Top-down companies are just chronically undervalued in between product launches. And perhaps the inverse is true for bottom-up companies in that, [46:57] when people are underrating the reach of the core product. [47:02] They're being undervalued. [47:04] Yes, I would say the the just maybe a little less common. [47:08] I... [47:08] the way that bottom-up companies are underestimated [47:12] is in market size. [47:14] Right. [47:15] So, you know, the classic example, Facebook, you know, you've invested in Facebook Series A or C, you're like, you know, how big is the college network, college social network? Right. How much money can you really make off college students? And what you would be missing is, wait, this is actually – [47:31] you know, [47:32] This doesn't apply just to college students, it applies to everybody in the world. [47:36] Bottom-up companies are... [47:39] They're almost like a crystalline structure. Mm-hmm.

[47:42] at an atomic level [47:44] it is the same if you break off a piece of a crystal and you put under a microscope [47:49] It looks the exact same in one area as it does any other area. It's just how wide that crystalline structure has been expanded. It's not a company, but you can make this case for the entire crypto market. [48:02] is basically this. [48:04] Am I prepared to? We don't need to open that, Camel Hortons. Maybe Bitcoin. Okay. [48:09] There are two ideas that [48:11] I think are particularly useful around the approach to [48:15] starting a thing the first is first to market and best to market and the notion of [48:19] What is sort of like the right timing or the right [48:22] arrangement of the chess pieces [48:25] to begin [48:27] assuming a market's going to be really successful. [48:29] I would love you just for you to interrogate. [48:33] how you think about [48:35] evaluating first to market and best to market from the standpoint of [48:39] how much being early is rewarded. Whether that be a historical example like Facebook and MySpace, [48:45] or a modern example like AI or something in the future? Sure, sure. So... [48:51] you [48:53] For better or for worse, I think that due to survivorship bias, um... [49:00] and [49:01] early, like, [49:04] first market companies kind of getting taken out early. [49:07] We're left with like most of the examples that we have to...

[49:13] draw from are like best to market. [49:15] examples, but let's walk through some of them. [49:18] Myspace. [49:19] Uh, [49:20] really successful social network, Friendster even as well. [49:24] I believe Friendster sold for $80 million and MySpace sold for $580 million. [49:31] $850 million. [49:32] to News Corp. [49:34] And, [49:34] There's a... [49:35] Back then, that was a lot of money. This was a very successful exit for a social network. [49:41] This is even, you know, [49:43] before we really understood the power of these things. [49:46] But Facebook is worth hundreds of billions of dollars. [49:50] clearly the best to market. [49:52] in the social networking category. [49:55] and [49:57] the lion's share of enterprise value. [50:00] goes to... [50:02] them rather than any of the quote-unquote first markets. [50:06] As a founder... [50:08] If you are... [50:11] first market, [50:13] You're first to market. [50:14] Uh, there's there, you're not competing against anyone. You're not trying to [50:19] Substitute out. [50:21] you're not [50:22] addressing a pre-existing user behavior. You're actively trying to be the first attachment of a user behavior. [50:31] And if you're not first to market, well, your strategy is definitionally best to market. [50:36] you are trying to [50:39] replace... [50:41] for at least some subset of users.

[50:45] larger than early adopters. [50:46] you're trying to replace the pre-existing product that they're using. [50:50] It's not to say that you aren't going to be the first product that a normie uses. [50:53] But for the early adopters who are trying to replace... [50:57] the product that was probably a earlier mover a first to market [51:01] or maybe an inferior best-of-market competitor. [51:05] uh [51:05] Now, I don't think anybody starts a company. [51:08] not trying to be best to market. [51:10] or just trying to be first to market. Maybe there are some founders out there that are particularly savvy about timing markets and technology. I think people are very... [51:19] People spend a lot of time thinking about trying to time technology and time markets for what it's worth. Sure. Yeah. I mean, arbitrage windows are attractive. Right. [51:27] What's your AI strategy? What GPT wrapper are you going to start in the three years before superintelligence makes... [51:35] It's starting anything not worth it anymore. Whatever. Yeah. Um, [51:39] the sort of [51:40] Explosiveness of value creation when it is palpable certainly inspires a lot of people to start companies. [51:48] But I would argue that like the vast majority of people start companies with the [51:53] hope that they are ultimately the best product. [51:57] Yep. [51:58] I don't think there are very many people that start companies aspiring to just be like the first product that people use, but not necessarily the last product. In some sense, maybe even being first will allow me to eventually be best. Yes. Yeah, exactly. [52:13] First to market and best to market.

[52:15] are... [52:16] most suitable as descriptors [52:21] Later on in the evolution of a industry. Right. To understand the position that each company has played in the unfolding of the industry. [52:32] But it's perhaps last... [52:35] valuable to [52:38] use that framing at point of inception. [52:42] Is there a world where it actually maps... [52:45] at least in some degree to some of the top-down bottom-up stuff is there a world where more often than not [52:51] Bottom up. [52:53] companies and products. [52:55] are more likely to be first to market and that they're emergent and new. [52:59] And top-down is more likely to see something that seems compelling as a design space. [53:05] and prescribe... [53:07] a right or quote unquote best way of doing it. [53:10] Hmm. [53:11] in a way that's more helpful, at least at the starting point. And for somebody who is considering starting a company or joining a company, [53:18] and trying to evaluate that trade-off of where the company sits in the playing field. [53:22] So sort of like, again, I think [53:24] Due to survivorship bias, the vast majority of recallable examples definitionally are the best to market. [53:31] examples in their category. [53:33] I will say that [53:35] bottom up companies that are really successful. [53:39] have a higher chance of being both [53:42] Firsts. [53:43] ish to first market and also best to market. It's almost sort of best and only.

[53:47] Um... [53:50] you know, like the prior art for [53:52] for airbnb was couch surfing arguably but couch surfing wasn't monetized maybe burbo [53:58] Not sure. Um, Verbo was still wet, like squeaky clean within the bounds of regulation. Yeah. Um, [54:06] And so... [54:07] Airbnb was really like the... [54:09] first. [54:10] to market, to commercialize in a transaction, a standardized homogenous transaction on a marketplace, this idea. [54:17] and is also the best market. [54:19] Uh... [54:21] I... [54:25] There are some counterexamples, right? Google was not the first search engine, but it is the best search engine. Facebook was not the first social network, but is the best social network. [54:33] Um... [54:36] But, [54:37] eBay was largely the first... [54:39] auction site as [54:42] I believe AuctionWeb [54:44] And... [54:45] and is also like the best online auction site. Yeah. [54:48] Maybe the most helpful takeaway would be that [54:52] to the extent there is an opportunity to [54:56] Become best by being only. [55:00] There's uniqueness there. [55:02] Um, [55:03] Bottom-up companies? [55:05] tend to possess [55:08] what we understand more traditionally as moats. Right. [55:11] And those moats protect the company as it scales from challengers? [55:17] and it mitigates

[55:19] incremental attacks [55:21] of would-be best-to-market competitors. [55:24] top-down companies, [55:27] inch. [55:28] There are certainly a number of top-down companies that have maybe quote-unquote moats. [55:32] But [55:33] They don't enjoy them to the degree with which we understand like network effects, for example. [55:39] That's much, much more common in bottom-up companies. [55:44] Another idea that may be more topical now... [55:47] and in the near future than ever, is the notion of cost of capital. [55:51] 4. [55:52] people raising venture capital, raising money to start raising equity to start companies. [55:57] I think a... [55:58] concise explanation you have is that without a sufficient answer to the question of why now [56:04] Any venture capital invested into the company or category is subsidizing company building that would be better served by alternative capital instruments instruments. [56:13] with a lower cost of capital, i.e. debt. [56:16] It seems that [56:18] Investors are very attuned. [56:20] to cost of capital. [56:22] In fact, even raising bigger and bigger funds, all these types of things. [56:26] and yet entrepreneurial people [56:28] Or perhaps on the opposite end of the spectrum. [56:31] at least around how expensive it might be to sell equity in a business. [56:36] Do you want to talk about... [56:38] that and why people should be really thoughtful around whether venture capital is kind of the right way to [56:44] fund what they're going to do. Oh, okay. [56:47] So I think there are a number of

[56:51] confounding variables [56:53] talking about this one of the confounding variables in talking about this is the [56:59] is the supply side of capital efficient? [57:05] One could make the argument that the supply side of capital is [57:09] in venture capital is plagued by [57:12] the principal agent problem. [57:14] and really long feedback loops. So the corrective feedback loops for the supply side of entry capital are not as tight as they could be. [57:22] And so you end up with [57:25] venture capital firms that have large funds that they are incentivized to deploy. [57:31] to raise their next fund. [57:33] because the fee stream off of [57:36] their AUM base is meaningful. [57:39] And so they're incentivized to deploy capital. They're incentivized to deploy capital so they can raise their next fund. They're incentivized to raise their next fund to maximize fee stream. [57:47] And so you multiply this by dozens, if not hundreds of firms, [57:52] And you have this... [57:54] glut of venture capital. You have [57:57] you know, individual actors at these firms that are [58:01] sometimes can be price- [58:03] completely price insensitive. [58:06] you have let's say you have like a junior partner at a venture capital firm [58:10] and they are trained to be a heat-seeking missile. [58:14] because they're gunning for a promotion and all they care about is momentum in a deal and they'll pay whatever price for that momentum. [58:21] Because...

[58:22] that is more likely to guarantee them a promotion in the short term versus [58:26] Are they actually investing in a company that has durable, defensible, free cash flow? [58:32] at Terminal State. [58:34] Um, [58:35] Okay, so... So, in this case, doing something is better than doing nothing. [58:38] Yeah, 100%. Vast majority of investors are... [58:43] The vast majority of investors at firms... [58:47] will outsource their restraint to the firm. [58:51] Right. [58:52] Um, [58:53] And so you have this like, by the way, is an opportunity for entrepreneurs as well. [58:58] 100%. I mean, look, if you were selling something and you knew that the bidders on the other side were price insensitive, [59:07] I mean... [59:08] It, it, it, it. [59:11] changes your calculus of what your clearing price is right [59:15] You know, value is in the eye of the beholder. Well, the beholder is kind of drunk. [59:19] you know, the value goes up. [59:21] And so... [59:23] The question is, okay, is the supply side like quote unquote, [59:26] Perfectly rational? Or is there... [59:29] this exogenous factor that's impacting the [59:34] the size of the supply side and therefore the average market clearing price of a transaction and venture. [59:41] When I say, [59:42] If there isn't a why now, [59:45] for a company that [59:46] being created, [59:49] venture is [59:51] largely way more expensive as a

[59:54] uh financing instrument for that company [59:58] It's because... [1:00:01] Well, one, it assumes that the capital market is efficient. [1:00:04] The second thing is [1:00:06] A lot of companies that are starting on the back of a fundamental technological change or regulatory change [1:00:13] They have pretty big J-curse that they need to go through. [1:00:17] whether it's capturing market share or developing a product before shipping it. [1:00:22] it's pretty rare for them to have revenue that they can... [1:00:27] predictably... [1:00:29] Uh... [1:00:30] optimize and maybe even optimizing for revenue is premature and ultimately hamstrings their ability to capture the fullness of the market that they're targeted. [1:00:38] And so, [1:00:39] I. [1:00:40] The high risk, high reward [1:00:44] capital instrument. [1:00:45] from venture capital is really well suited to these companies that have a really high mortality rate. [1:00:52] Um... [1:00:53] And who need to get to the future fast. Exactly. They're almost pulling the future forward with money. Exactly. Exactly. [1:00:59] If I told you... [1:01:01] I was starting a lemonade stand tomorrow. [1:01:03] and I want to raise venture capital for it. [1:01:05] Um... [1:01:06] I think, you know, a easy first question that most people would ask is, well, like, why don't you just get like a, [1:01:13] small business loan. [1:01:14] Or like, why don't you... [1:01:16] borrow money from, you know, [1:01:18] Isn't there a easier way for you to finance the creation of this thing? Also, by the way, you're generating revenue from day one.

[1:01:25] So as you scale this business, it should be a little bit more clear to be able to borrow against the revenue that you're creating rather than needing to sell equity in your business to finance it. [1:01:39] Um, [1:01:40] a lot of quote unquote [1:01:42] true venture-backed companies don't possess those characteristics and have to [1:01:47] build out, you know, [1:01:49] A lot of these companies are operating for years without turning their first dollar of revenue. Structurally, not just out of preference, but literally by necessity. Exactly. The J curve is deep that they have to dig into. [1:02:00] But how common is that? And maybe the... [1:02:03] presupposition and my question is [1:02:06] as software gets cheaper to create, as an example, [1:02:10] Some of the things that may have been true five or seven years ago are no longer true about how much you need to buy the future forward. Very, very. Absolutely. I would argue that there's a there's a large swath of like software out there. [1:02:22] that is revenue generative from day one, [1:02:25] that has no need for venture capital. [1:02:30] Like the lemonade stand. [1:02:32] And that's particularly more true today than it was even two years ago. Absolutely. Absolutely. I mean – [1:02:39] I think there are plenty of examples of the capital efficiency of... [1:02:45] software business is and [1:02:47] Venture capital is really expensive. It's really, really, really expensive when you think about it from an equity perspective. [1:02:54] Yeah, I think the sad fact of the matter is

[1:02:57] Many people aren't that... [1:02:59] even really thinking about [1:03:01] optimizing for owning as much of the company [1:03:03] someday because they don't value it that highly. Yeah. I mean... [1:03:07] on, [1:03:08] We're going back to like kind of like principal agent problems. [1:03:11] When it feels like monopoly money to founders and venture investors. Yeah, the whole – everyone in the game. You lose this – [1:03:24] you lose sense of the worth of a dollar. [1:03:27] Thank you. [1:03:28] You are one of my favorite people to talk to because you... [1:03:31] are an original thinker. And I think there are a bunch of components of that in terms of how you learn, where you get your information, how you, [1:03:37] Explain how you teach. [1:03:40] Maybe something inside of the... [1:03:42] orientation towards thinking in a bottom-up way is that I, [1:03:45] at least my read of you is very much that you're someone who sources ideas via discovery more so than hypothesis, although obviously there's both. [1:03:54] And I'm curious... [1:03:55] Fur. [1:03:57] One way you've articulated this is like hang out on the edges of the internet, hang out on fringes. [1:04:04] So much of information flow has shifted from pull to push. [1:04:09] as algorithmic content platforms have come to dominate. [1:04:13] And so when it comes to [1:04:15] your safaris, your unique discovery, which is not mainstream. [1:04:20] It's almost like finding uncommon music that's good or something. [1:04:24] Are you... [1:04:26] Finding ways to still pull?

[1:04:28] Or are you just really good at putting yourself in context or areas where [1:04:34] so that the content that gets pushed to you is unique or different. [1:04:38] And broadly how do you find... [1:04:40] How do you do your discovery in a unique way in the year 2025? [1:04:45] Yes. When scarcity is rare. So... [1:04:48] I think... [1:04:50] My answer to this is twofold. One is I think the first cut is actually... [1:04:57] The kind of content. [1:04:59] um, [1:05:00] And... [1:05:02] What do I mean by that? [1:05:03] I spend zero time [1:05:06] consuming content, [1:05:09] that is [1:05:10] understood as like [1:05:12] let's call it social media from people that I know. [1:05:16] Like I don't, if you looked at my screen time, I don't spend any time on Instagram. [1:05:19] or Facebook. [1:05:20] or Snapchat. [1:05:22] I don't... [1:05:23] This is maybe... [1:05:24] I love my friends. Um, [1:05:27] I'm really not interested in spending my time consuming information from my social graph. [1:05:34] It's not about who, it's about what. [1:05:36] I spend 100% of my time on the internet. [1:05:39] consuming information from people that I do not know. [1:05:43] Like that I do not consider friends. [1:05:46] Uh... [1:05:48] Reddit. [1:05:49] TikTok. [1:05:51] uh discord [1:05:53] servers. For what it's worth, this would be [1:05:56] I would argue this would be a version of you being pre-consensus in some sense, which is this has been the shift for everyone's consumption behavior as the Internet gets more mature.

[1:06:04] You look at something like TikTok compared to early Facebook. [1:06:08] Everybody else is kind of doing more of what you've been doing, right? Yes. Yes. And I... [1:06:14] I don't follow anyone I know in real life on TikTok. I don't follow... [1:06:19] I mean, like I have a lot of friends I've made professionally through Twitter, but I don't really follow any of my like real life friends on Twitter. Right. I'm not. [1:06:27] You're not looking to overlap those two things. I'm not looking to overlap those two things. I'm just trying to find... [1:06:33] signal, [1:06:35] from [1:06:36] communities and parts of the internet that I believe to be [1:06:41] be assembling around [1:06:44] things with high potential. [1:06:46] And what's interesting about Hang Around [1:06:49] the edges of the internet? [1:06:51] is... [1:06:52] Based off of the, let's call it like the efficient market, [1:06:56] of people allocating their own time. [1:06:59] A lot of these hobbyists, a lot of these early adopter communities, they're [1:07:02] They're doing so with really critical judgment. [1:07:06] of how they allocate their time. [1:07:08] And more often than not, [1:07:10] When they assemble around these emergent... [1:07:14] areas of potential, [1:07:16] The "why now" is answered. [1:07:19] even if it's not fully visible in that time. [1:07:23] Just because... The tailwind is there. 100%. And anyone who's ever... [1:07:27] Most people aren't doing this holistically in the way that you are, but anyone who's ever found themselves in some niche... [1:07:33] relatively early when it comes to a music scene or a hobbyist community or some kind of technology or some kind of weird youtuber or

[1:07:41] creator, whatever, anyone... [1:07:42] who's experienced that in some forum. Definitionally pre-consensus. Knows what this can be and is. Definitionally pre-consensus. Definitely take, definitionally taking advantage of something that is early on in its adoption curve. Because people are showing up there despite the odds in a sense. Yeah. [1:07:57] Right. Yep. [1:07:59] We talked about this briefly, but when it comes to how you think, I see it as sort of there's a few modalities. There's sort of like the internal interiority. [1:08:08] Chris mode. Then there's you thinking verbally. [1:08:13] in oftentimes sparring with other people or explaining ideas to people. [1:08:16] And then there's maybe the [1:08:18] I'll call it writing, but it could be any kind of form of mass media, which is [1:08:23] making it more compact and solid [1:08:25] and turning it into a blog post or whatever. [1:08:29] Are you conscious about those three modes and... [1:08:33] how like something has to sort of stay inside until it's at a certain breaking point and then it can go, then it can be discussed and it sort of expands out the funnel, bottom up in a way. [1:08:43] Yeah, I think so. Uh... [1:08:45] God. [1:08:48] Maybe there are some crazy bangers that are just they haven't entered phase two yet. Okay, I'll compare this to I think like how some people get dressed. [1:08:57] Okay. [1:08:58] So, [1:08:59] you know, [1:09:00] My internal thinking is when you're, you know, [1:09:03] trying to decide what to wear. [1:09:05] and you have an idea [1:09:07] And you kind of [1:09:09] pull you you put some sort of outfit together

[1:09:12] uh [1:09:14] That is like internal monologue, internal thinking. Okay, like maybe there's something here. [1:09:22] the [1:09:23] External thinking. [1:09:25] sparring conversation, maybe I would describe as like [1:09:29] rock tumbling. [1:09:31] where you're talking with people. [1:09:32] That's when, like, you, like... [1:09:34] Ask. [1:09:35] other people's opinions. So like, you know, you take a picture, you text your friends, Hey, like, what do you think? Like, does this look good? Does it look bad? What's going on? What? Yeah. [1:09:42] End. [1:09:43] And this is where you're like, you are... [1:09:46] echolocating, [1:09:48] with your friends and your network that you respect. [1:09:52] to try to have a higher fidelity view of the thing that you have thought internally. It's probably a seed, though. [1:10:00] Yes. Like, what are what are you missing? What are you not seeing? What is good about it? Maybe what's not so good about it? Maybe I'm kind of thinking about taking a risk here, but I'm not totally sure. Exactly. Right. [1:10:11] But through that echolocation, you develop a higher fidelity view of the thing itself. And then once it is sufficiently high fidelity... [1:10:21] And you're... [1:10:21] comfortable with it. [1:10:23] That's when you walk out the door. [1:10:25] And that, [1:10:26] is when you [1:10:27] Publish this thought. [1:10:28] Now, [1:10:29] Maybe you got something wrong. Maybe you sell spinach in your teeth. [1:10:35] but I would say like loosely [1:10:38] That maps to how I think.

[1:10:42] You are... [1:10:45] A big believer in incentives. [1:10:47] Back to the efficient market hypothesis, that type of thinking. [1:10:51] something that I've been feeling [1:10:54] increasingly as of late, and I've talked to lots of people about [1:10:57] is the notion that [1:10:58] The... [1:10:59] core incentives of the internet and possibly of capitalism. [1:11:04] despite a whole bunch of access, GDP growth and productivity growth are not necessarily making our lives better. [1:11:10] Um, [1:11:12] despite all of the potential upsides, it should be great for agency and knowledge and learning and all these things. And yet. [1:11:18] Most people's lived experience of the internet is sports betting and Instagram reels and match three games and sort of getting like zapped. [1:11:26] Uh... [1:11:27] And more than that, I think the expressed... [1:11:30] sort of Western... [1:11:32] mentality around it is like I don't have control over it I wish I was [1:11:35] spending more deep attention in places... [1:11:38] I'm lonelier than ever. [1:11:42] So it seems that this thing is not serving us as well as... [1:11:45] We... [1:11:46] And one notion just says, oh, we should all try harder to use our phone less. That doesn't seem to follow the Chris incentives rule everything around me view of the world. [1:11:55] And you're also someone who on one hand is like, [1:11:59] deeply commercial and rational and incentive-based and also as someone who knows you pretty well like [1:12:04] has a pretty big heart and cares a lot about people. Yes. [1:12:07] Okay. [1:12:08] So... [1:12:09] The world... [1:12:10] has two signs. There's a for-profit world

[1:12:14] and a nonprofit world. [1:12:16] There are entities that are trying to drive profits, and there are entities that are not trying to drive profits. [1:12:21] The for-profit world is, as we understand capitalism and companies and all that shareholder value. [1:12:28] The nonprofit world or places that are not necessarily trying to drive profits, [1:12:33] we understand as nonprofits and [1:12:36] to some degree [1:12:37] religion and government. [1:12:39] where it's not the cool... [1:12:42] focus is not driving quote unquote shareholder value or dividends [1:12:47] for-profit companies [1:12:50] are really good [1:12:52] @ [1:12:54] pushing the world to the way that it will be. [1:12:58] and for-profit companies this is pretty important for-profit companies [1:13:02] are very bad. [1:13:04] at being paternalistic. [1:13:07] For-profit companies will give people exactly what they want. Right, right. Exactly what they want. Right, right. [1:13:15] the nonprofit side of the world, [1:13:17] is really good at pushing the world into... [1:13:20] to how it should be. [1:13:22] Explicit counterweight. The way that we think about, oh, gosh, it ought to be like this. [1:13:28] And the nonprofit world is really good at being paternalistic. [1:13:32] It's good at system. Like we, we as individual actors, [1:13:36] kind of depend on the systems to imbue [1:13:40] society and the system that we exist in with paternalism.

[1:13:44] Elegant system design. [1:13:46] understands all of the individual incentives structures. [1:13:51] and designs a system to funnel that incentive [1:13:55] to optimal places. [1:13:57] That presumes that there is a system above capitalism, right? [1:14:00] Sure. [1:14:02] Yeah. [1:14:02] Do you think there realistically there is today? [1:14:05] Um... [1:14:07] Or at the very least that capitalism doesn't always win. [1:14:12] or almost always win. [1:14:13] My instinctive answer... [1:14:16] to that [1:14:17] is... [1:14:19] Um... [1:14:23] Power. [1:14:24] is the system that exists above capitalism. [1:14:28] Yeah, we've seen some. [1:14:30] tech people and venture capitalists made that job. Yeah, I think I think power is a system that exists above capitalism and power is not [1:14:40] governed by [1:14:42] Money necessarily. Money is an input into power. [1:14:47] but power is governed a lot by [1:14:51] humans? [1:14:54] the relationships that those humans have to power... [1:14:56] uh... [1:14:59] Bullets. [1:15:01] arms. [1:15:02] Um... [1:15:03] and not necessarily money. - Right, risk, caution, all these, yep. - Yes, and so if you're to think about, okay, [1:15:12] Yeah, what are the systems that exist as a superset to the corporations?

[1:15:18] It is... [1:15:19] nation states. [1:15:21] and religions. [1:15:24] And those are largely aligned around power. Yeah, hard to square some of this balance maybe then with some of the [1:15:31] Peter Thiel-esque sort of libertarian... [1:15:34] decentralized [1:15:36] The notion of having our current capitalistic system without paternalistic counterweights seems... [1:15:42] challenging, I guess, a little bit with this view. [1:15:46] Say that one more time. [1:15:47] One common view amongst people who are very pro-capitalism and pro-technology is also that [1:15:53] a one world government would be really bad or overbearing governments or overbearing religions or any of these paternalistic, [1:15:58] style organizations. [1:16:00] But yet the critique of that, I suppose, here would be that [1:16:04] uh, [1:16:06] decentralized systems, whether they be systems of belief like libertarianism or otherwise, [1:16:11] or, [1:16:12] trying to establish decentralized regulatory systems, it's just it's just far less likely to meet capitalism with the level of strength required to balance it out. Hmm. [1:16:24] So maybe if I could tweak the... [1:16:27] framing of decentralization as... [1:16:30] competition. [1:16:32] Mmm. [1:16:33] Um, I think if there is competition, that is good. I like, for example, um, [1:16:39] Think about how democratic... [1:16:42] So, you know, obviously we... [1:16:45] Every American loves self-loathing. We talk about how bad our two-party system is.

[1:16:50] Think about how terrible it would be if it was a single-party system. [1:16:54] You know who has single-party systems? [1:16:56] non-democratic country. [1:16:59] They have single party systems. [1:17:01] Competition is good. [1:17:03] If there's not competition, we should be concerned. [1:17:06] And so if the world was a. So that that that I think is the critique, by the way, like Peter Thiel's whole argument. [1:17:12] around this type of stuff is... [1:17:15] We should let kind of capitalism run. [1:17:17] And then when it comes to critiques of capitalism or critiques of technology, [1:17:21] e.g. the risk of single-party risk around [1:17:24] World ending. [1:17:25] bombs or bioweapons or whatever. [1:17:27] is that [1:17:28] A lot of people will tend towards suggesting consolidation of power, [1:17:32] or governance, [1:17:34] in the form of a one-world government or the Greta Thunbergs, whatever it might be. [1:17:38] More competition on the power regulation governance side would allow what you're describing. And yet we don't totally always see that happen. It seems that if anything, we're moving in the other direction, which is that there are more [1:17:49] pleas for consolidation and more paternalistic behavior. [1:17:53] Obviously, I don't think you and I are going to solve this today, but it's an interesting thing to try to square. [1:17:59] Yeah, well, I mean... Maybe it's just competition around power is the core input that needs to persist, less things get... [1:18:07] Harry. [1:18:08] I think I agree with this. [1:18:10] Um, [1:18:12] We are safest and [1:18:14] Best when there is healthy competition of power.

[1:18:20] Right, right. [1:18:21] I think [1:18:23] We're probably most at risk when there is... [1:18:26] no competition of power and monopoly because that [1:18:30] Depends entirely on the benevolence of... [1:18:34] the monopoly. [1:18:36] On one related but more optimistic point, [1:18:40] I think I've always been a believer that the internet has been really net positive in just the way that it lifts agency. [1:18:46] An idea that you've talked about [1:18:48] that I'm quite interested in and I really like is that usually it's less about education than it is about motivation for getting people to do things that might be good for them. And there's this sort of notion around like how do we have more agency in the world? And it's like is there venture capital for people or better grant systems or like – [1:19:04] Things like this, obviously, I always give the toy example of TikTok of like that maybe explains the education motivation thing, which is TikTok's like really in some sense has been a lever for agency for people to create stuff. [1:19:17] Are you seeing stuff like that that makes you more optimistic? Are we getting better despite all the critiques around attention and addictiveness on the internet? [1:19:24] of [1:19:25] unlocking that like motivation piece for people to have agency and do stuff. [1:19:33] Early on in the internet. [1:19:34] I think early on in the Internet's existence, I think there are a lot of people in education that were excited about education. [1:19:42] MOOCs. [1:19:43] and wikipedia and access to information mooks are uh more multi massive massive online forget what the acronym stands for

[1:19:52] but like large scale classes online. [1:19:56] And... [1:19:57] I remember it was like this watershed moment when MIT and Harvard and Stanford uploaded all of their coursework. Yeah, yeah, yeah. Um... [1:20:08] And we thought that we would have all of a sudden we would have these like [1:20:14] millions of like [1:20:15] Harvard-educated people out there. By the way, this is the agency argument. A kid with a smartphone in India has all the information a Harvard professor had in 1980. And it's all available. Yes. And yet. And yet we... [1:20:27] I think we were confronted with the [1:20:31] clear reality. [1:20:33] that, [1:20:34] access to information, [1:20:36] is a much [1:20:38] wider bottleneck? [1:20:40] than motivation to educate is. [1:20:44] And so your question, motivation to like, like what, how do we, how do we amplify agency in people? Um, [1:20:56] You know, I think... [1:20:59] I actually think the movie The Social Network [1:21:01] was an incredibly positive psyop. [1:21:06] Um... [1:21:07] Whether or not it's net positive for the people that... [1:21:11] monkey see monkey do uh imitated or like were motivated to start [1:21:15] I think... [1:21:17] And this goes back to what we're talking about, like Nat Friedman. [1:21:22] Mm.

[1:21:23] It is really good for more people to... [1:21:26] to believe in themselves and to believe anything is possible or whatever yes [1:21:30] And so everything that we can do, [1:21:33] to instill that idea, [1:21:35] Um... [1:21:36] I think is good for the entire population and the system. [1:21:40] this idea of like, you know, [1:21:42] I think some people call it American exceptionalism, but like this idea that you can do anything. [1:21:47] That is... [1:21:48] the more we can [1:21:51] beat that drum, the more that people [1:21:53] Whether... [1:21:54] realistically or unrealistically truly think that they can do anything, I think the better off we will be as society. [1:22:02] Yeah, you have this idea that [1:22:03] economic inequality is caused by an asymmetric ability to take risk. [1:22:08] And in some sense... [1:22:09] This is like improving the ability or willingness motivation for people to take risk. Absolutely. I think, you know. [1:22:20] People who don't have the means [1:22:24] to take risk because they cannot afford to take risk. [1:22:28] are strictly limited in what they can do. [1:22:32] professionally. [1:22:34] And what happens is... [1:22:37] When you... [1:22:38] When you bound... [1:22:39] somebody's options you end up with a [1:22:44] completely different expected value function. [1:22:47] And so, [1:22:49] the more that we can encourage, create environments that

[1:22:55] Educate. [1:22:56] people, [1:22:57] earlier on, [1:22:59] to develop a fluency with risk, [1:23:03] the better. [1:23:05] Yep. [1:23:05] Now, we don't want people like, [1:23:08] there's a difference between risk and danger. [1:23:11] um [1:23:12] So I think most parents of children will understand the difference between risk and danger. [1:23:18] your child [1:23:19] standing on a block that could fall off and hurt themselves. [1:23:25] That is very different than your child's [1:23:28] trying to stick a fork in an electrical outlet right developing a fluency with risk is really important but at the same time from a system design paternalistic perspective we should prevent people we [1:23:39] We should protect people from danger. [1:23:41] But allow for as safe risk-taking as possible. Exactly. Yes, very much so. [1:23:47] Okay, we've talked a lot about how you think. We've talked a lot about [1:23:50] your frameworks for investing and building companies in frankly the world [1:23:54] I'd like to zoom maybe in a little bit. [1:23:58] You run a firm called Pace Capital. [1:24:01] You run it with your partner, Jordan, and a number of other wonderful people. [1:24:06] and maybe unique to Pace or at least uncommon in this domain, [1:24:11] is you care a lot about brand, in my opinion. And I think brand, one of my favorite ideas around brand is this notion of, [1:24:19] I think it's like a Steve Jobs talked about, like every time somebody interacts with your brand, you have a chance to,

[1:24:25] incrementally improve their opinion of you or lower it. [1:24:29] And that just feels, I think anyone who's interacted with you or Jordan or anyone at Pace has probably felt that. [1:24:34] With that said... [1:24:37] I'd love to hear you talk about the founding principles of PACE and [1:24:41] to the degree whether it was true then or now, [1:24:45] the degree to which anything is like holy or truly like, [1:24:49] uncompromising. Sure, sure. [1:24:53] Um, [1:24:56] So I'll first say that I think that there is [1:24:59] I think brand is... [1:25:02] Obviously a term that [1:25:05] we all understand and latch on to. I think the more important... [1:25:11] thing that we think about is reputation. [1:25:14] And they're similar but distinct. [1:25:17] And I think the way that we think about it is brand-friendly, [1:25:21] over time, always converges to reputation. [1:25:25] And your brand is what [1:25:29] you will tell other people? [1:25:31] Mm-mm. [1:25:33] And your reputation is what people say about you behind closed doors. Right. [1:25:38] And so they're still both this idea of like, well, what's [1:25:43] What's going on? Like, how do others perceive you? [1:25:47] But... [1:25:49] They're... [1:25:50] notably distinct. [1:25:54] There's this...

[1:25:57] Screenshot from, I think it's the movie Juno. [1:26:00] where these two characters are talking or [1:26:02] One person says to the other, [1:26:05] wow, you're so cool. It's like you don't try... [1:26:10] at all. [1:26:11] and Michael Cera's character [1:26:13] response. [1:26:15] I actually try really, really hard. [1:26:21] And I do actually kind of think about that with the way that, [1:26:25] We're... [1:26:26] hoping to build pace. [1:26:27] We care a lot about... [1:26:30] We care a lot about our reputation. I think we're, [1:26:33] We're oriented to a few principles. [1:26:40] we have a service orientation. We think that venture is a services business. [1:26:45] if you're to really dumb it, if you're not dumb it down, if you're really to like, [1:26:50] lay it bare [1:26:51] We sell capital. [1:26:54] A lot of capital in the world. We sell capital. There's a lot of capital in the world. Why would any one person... [1:27:01] choose any one salesperson of capital over another. [1:27:07] And I think we... [1:27:09] We hope, we believe that it is because... [1:27:13] This industry is... [1:27:15] built on human connection and trust and [1:27:18] reputation and guidance. [1:27:20] and [1:27:21] We hope that [1:27:23] The founders that choose to work with us do so because...

[1:27:28] they find a deeper connection [1:27:32] with us as partners and as individuals. [1:27:35] as a firm. [1:27:37] than others. [1:27:39] Now, if... [1:27:40] Reputation is something that [1:27:44] You build... [1:27:46] One day at a time, one meeting at a time, one interaction at a time. [1:27:51] And it takes a long time to build that reputation. And it also can go away. [1:27:57] in an instant. [1:27:59] It requires a sort of diligence of integrity and... [1:28:04] it's important to program into the ethos of the company. [1:28:08] So we have this [1:28:09] Deep. [1:28:11] service orientation, [1:28:13] And embedded in that service orientation is that [1:28:16] We're never... [1:28:21] in the spotlight. [1:28:23] Um, [1:28:24] At best, maybe, maybe we are a third base coach. [1:28:30] Right. [1:28:30] We're like... [1:28:31] telling the telling the runner to round third [1:28:35] when they don't have [1:28:37] their eyes on the ball. [1:28:40] We're never in the batter's box. [1:28:41] We're not building these companies. We're not putting the 100-hour works in, 100-hour work. [1:28:46] weeks in building these companies. [1:28:50] What we can offer to founders is perspective. [1:28:54] We're in the crow's nest, not on the deck. [1:28:58] And it's important that we never forget that.

[1:29:01] One of the other core principles [1:29:04] that pace is built around is [1:29:07] Truth Seeking? [1:29:09] I think... [1:29:13] It feel, of course, it feels good to be right. [1:29:17] It feels good to win an argument. [1:29:19] It feels good to end a debate. [1:29:23] But if that comes at the cost of making the wrong decision, [1:29:26] That feels really bad. [1:29:28] And so this idea of truth-seeking [1:29:33] We are... [1:29:36] the way that we work internally is [1:29:42] closer to putting a puzzle together. [1:29:46] then it is a boxing match. [1:29:50] There is some truth to be pursued. [1:29:53] and every person can contribute to it equally. [1:29:57] And whoever... [1:29:59] There's no ego associated to... [1:30:02] more or less helping assist getting to the right path. [1:30:07] truth of the situation. [1:30:08] And the thing that we need to optimize for is clarity. [1:30:12] rather than— [1:30:15] Ego. [1:30:18] Now, eh. [1:30:19] In an industry of very type A, [1:30:22] driven people. [1:30:24] That is... [1:30:27] Less common. [1:30:28] For sure. [1:30:29] I think there are plenty of firms out there that are architected in a way that,

[1:30:32] that [1:30:33] are optimized for [1:30:35] really strong competition between people that have strong personalities. [1:30:40] And don't get me wrong, that's probably a good system design. [1:30:43] Competition, baby. Competition. [1:30:45] we are competitive and we're competitive with [1:30:49] Driving to Clarity. [1:30:52] We think about [1:30:53] the quality of thought, the level of rigor with which we [1:30:57] dissect and talk about companies and opportunities and founders [1:31:02] Because that's the input of the process that we can control. [1:31:07] Mmm. [1:31:07] I think the other thing that is... [1:31:10] holy or sacred at pace is... [1:31:15] If we do... [1:31:16] Our best job? [1:31:18] This firm is a collective of incredibly talented people. [1:31:24] And we sort of have this... [1:31:26] unofficial approach to hiring [1:31:28] which is... [1:31:30] We want to... [1:31:33] hire people whose careers we would bet on regardless of where they are. [1:31:38] and [1:31:39] we kind of think about [1:31:41] this firm is like maybe a [1:31:43] We've like lassoed a bunch of shooting stars together. [1:31:46] Ffff. [1:31:48] and, [1:31:49] gosh, that is so powerful. Pace ideally is a place where people can [1:31:56] Pursue excellence. [1:31:57] own their craft, [1:31:58] Learn from others. [1:32:01] learn the most about themselves the fastest

[1:32:05] And we want this place to be a great place to be. And of course, shooting stars are going to go off at some point. We want this place to be a great place to be and a great place to be from. [1:32:20] Could you give a pre-mortem? [1:32:22] on Pace's failure. [1:32:27] Thank you. [1:32:33] This... [1:32:36] is a hard business. [1:32:39] I think... [1:32:40] I think I read somewhere that there are fewer... [1:32:43] venture capitalists and our professional baseball players. [1:32:47] Maybe that actually is not true. It seems a little hard to believe. Yeah, maybe that's not true over the last four years. Minor leaguers. [1:32:55] It's a hard business and it should be hard. [1:32:58] Right? [1:33:00] Um... [1:33:02] There's a world where [1:33:08] There's a world realistically where you don't cut it. [1:33:12] Now, do I think that is likely? [1:33:14] No. [1:33:17] But we all know that we live in this sort of probabilistically distributed world. [1:33:21] And so is it a possibility? Sure. [1:33:25] I think another way to premortem pace would be... [1:33:28] that [1:33:32] The effort... [1:33:34] and time put into

[1:33:36] Thought. [1:33:38] thesis development. [1:33:40] Truth-seeking. [1:33:42] and building frameworks. [1:33:45] is cute. [1:33:48] but it doesn't stand up to... [1:33:52] the war machines. [1:33:54] that are other firms. Your intentionality was wrong. Sure. Sure. [1:33:59] I think you have to... [1:34:01] You have to go down playing the game you want to and know how to play. [1:34:06] if you are going to start a pace capital art gallery [1:34:11] What? [1:34:11] Peace with you. [1:34:13] uses your anchor. [1:34:15] first or most essential. [1:34:18] Any medium. [1:34:24] So I think it would just be... [1:34:26] a single installation. [1:34:29] And it would be... [1:34:32] and artists this artist his name is namjun peck [1:34:36] No relation. [1:34:38] And he has a piece called The Zen of Film. [1:34:42] And what it is, is it [1:34:44] It's a role of black film. [1:34:46] blank. [1:34:47] that's continuously running through a projector. [1:34:50] and it runs 24/7. [1:34:53] Now, [1:34:55] Film is an analog. [1:34:58] medium. [1:34:59] It degrades over time. [1:35:01] dust enters into it. [1:35:03] You know, so cracks emerge in the film.

[1:35:06] and [1:35:07] the idea of the zen of film is you know that it starts [1:35:13] Fully black? [1:35:14] and you know that over enough time it ends fully white. [1:35:18] Hmm. [1:35:18] Thank you. [1:35:20] And at any given time, an observer will see something different. [1:35:24] Because... [1:35:25] the organic state of that role of film. [1:35:28] changes over time. [1:35:30] So somebody who sees it at the beginning, [1:35:33] will be different than somebody who sees at the sort of quote-unquote end of that film's life. [1:35:38] I just think that it's just... [1:35:40] wonderfully beautiful encapsulation of ephemerality, [1:35:44] the [1:35:46] of time, of our interaction with technology. [1:35:51] And like all good art, it makes us think. [1:35:55] My last subject is a few questions for you about yourself. [1:35:59] We'll go... [1:36:00] We're already running long, so we'll go kind of, not lightning round, but we can go through a handful. [1:36:07] You have an uncommon set of worldviews. We've hopefully put on display a little bit today in the conversation in the way you think about the world. [1:36:13] Do you attribute that more to nature or nurture? [1:36:21] Before I was... [1:36:23] "'Before as a parent, [1:36:25] I don't know. [1:36:27] I think I would have answered nurture 100%. [1:36:31] Um, what is this? [1:36:34] Ha ha ha. [1:36:34] And on the other side of being a parent.

[1:36:37] and seeing the sort of [1:36:40] temperament that people are born with. [1:36:42] I think it's probably not 100%. I still do deeply, deeply believe that the vast majority of the way that we end up as adults is nurture. [1:36:51] and not nature. [1:36:54] What is a good analogy here? [1:36:57] Nature may... [1:37:00] drop us into... [1:37:03] an initial location. [1:37:05] But the path dependency of nurture is sufficiently infinite [1:37:11] Hmm. [1:37:11] that, [1:37:12] There is nothing close to fatalism. [1:37:15] And you think it keeps going long beyond maybe most people might think it calcifies? 100%. Right. [1:37:20] 100%. [1:37:22] What have you compounded most continuously? [1:37:26] My knee-jerk reaction is curiosity. [1:37:30] I am a new... [1:37:32] Junkie. Yeah. [1:37:34] Like every Monday, I get my new Discover Weekly on Spotify. I love it. I only recently learned that... [1:37:41] people like listening to music that they've already listened to before. [1:37:48] and that people like watching reruns. [1:37:51] That's crazy. [1:37:52] That's crazy to me. Revisiting stuff can be pretty great. I agree. I agree. I don't know if I've ever read a book twice. I'm not sure if I've ever read a book twice. I think with films and books at least, [1:38:04] maybe given that they're rarely revisited relative to other mediums.

[1:38:07] I probably feel most strongly. [1:38:10] You're much better off re-watching [1:38:12] I rewatched Return of the Spotless Mind every four years, and every time I'm like, that was just so much better than anything else. [1:38:19] With music, I'd probably be better off going the other direction like you. [1:38:23] You have this quote. [1:38:24] The best long-term strategy in life is to make frequent karmic deposits in the universe. [1:38:30] What is your favorite [1:38:33] or best investment in the universe or comment to model in the universe. [1:38:37] Wow. [1:38:39] I mean, it is 100% [1:38:44] Sending a message to my wife. [1:38:48] Without a doubt. [1:38:52] I'll date myself. It was a Gchat message. Sick. [1:38:55] But, [1:38:56] Yes, that is by far... What made it karmic? [1:39:00] Obviously the outcome, but... [1:39:03] That's a good question. I guess like, [1:39:07] Maybe the reason why I answered... [1:39:10] that [1:39:11] is the payoff function is so astronomical that like the quote-unquote IRR from any amount [1:39:19] is near a single trivial ish action is near infinite it doesn't even matter how benevolent it was right right it's just like like did it did the thing happen or not [1:39:28] I uh... [1:39:30] You know, the best part about [1:39:32] that approach though is if you do it authentically [1:39:35] You actually never keep tabs.

[1:39:39] And so if you're asking like, what is like, [1:39:43] Also a case for agency, I think. [1:39:46] Sure. I think... [1:39:49] I can't readily think of any example. [1:39:53] Because it's, you know, [1:39:54] You're just not... [1:39:56] You're not a bookie. Yep. [1:39:58] Yep. [1:39:58] Yep. [1:40:01] How do you use laziness as a lever and how might other people – [1:40:06] benefit from your learnings there. [1:40:08] So I think or an engine, I think laziness needs a rebrand. [1:40:12] Okay. [1:40:14] I think laziness gets a bad rap. If you were to define laziness... [1:40:18] uh, [1:40:18] If you define laziness, [1:40:20] I would argue that [1:40:22] Somebody who is lazy... [1:40:24] is trying to get to the same outcome [1:40:28] but expend less work. [1:40:32] It's not that they're comfortable with a... [1:40:34] worse outcome [1:40:36] They want the same outcome, but they just want to do it with less work going in. [1:40:42] And so, [1:40:43] One way to do that is actually efficiency. [1:40:46] uh... [1:40:47] Or even creativity. Yeah, creativity. A lot of innovative thought comes from laziness of wanting to. [1:40:55] to improve the return function of something. [1:40:59] Top for David Goggins, but... [1:41:01] Ha ha ha ha. [1:41:02] Yes, yes. Like, this isn't an argument against... [1:41:06] putting as much into your inputs as possible.

[1:41:10] But it might be... [1:41:12] a little bit closer to like work smarter, not harder. [1:41:15] Bye. [1:41:16] Love laziness. I think it is... [1:41:20] One might argue that [1:41:22] every [1:41:24] good thing we have to show for [1:41:28] As humans, [1:41:30] is the result of laziness. [1:41:32] It feels. [1:41:33] connected to constraint kind of begetting creativity, certainly. And maybe even necessity is the mother of all invention. Maybe laziness is the mother of all... [1:41:43] quicker and getting there more quickly. Absolutely. Yes. [1:41:48] You... [1:41:50] So much running through how you think is this like metagame. [1:41:54] analysis of reality so there's the game happening and then there's like the metagame happening on top of the game [1:42:00] Uh... [1:42:01] You've talked about like the cat and mouse game of rational self and meta analysis. [1:42:06] And so... [1:42:08] I'm curious, like, what is your most common... [1:42:13] or dangerous failure case when you're wrapped up in the meta-analysis. [1:42:18] sort of missing the forest through the trees, perhaps not a perfect analogy, but yeah. [1:42:23] I think... [1:42:24] you know, [1:42:29] It's not... [1:42:30] If you are being subjected to a mental bias, [1:42:34] It's what mental biases are you being subjected to? [1:42:37] And I think it's important to constantly... [1:42:40] Remember that?

[1:42:41] because, [1:42:43] it's natural for us to want to feel... [1:42:46] confident in our own views and self-assured. [1:42:49] And, you know, [1:42:51] We have to [1:42:52] Hold our views... [1:42:56] Basically at like a healthy... [1:42:59] Tension Distance. [1:43:00] I'll use this. [1:43:02] metaphor. [1:43:03] We... [1:43:05] as an investor or even your view of yourself. [1:43:09] you kind of are operating like a... [1:43:12] A mafia boss. [1:43:15] And... [1:43:17] The way that you... [1:43:19] Opry. [1:43:20] a large operation. [1:43:22] is [1:43:24] through scale you have to have things that you can depend on yeah and those things that you depend on are parts of your world view [1:43:30] It's how you view yourself as these core assumptions, these frameworks that you're leaning on. [1:43:35] to parse through information and [1:43:38] And... [1:43:40] Scale. [1:43:41] your impact. [1:43:43] But, [1:43:44] Here's a fink. [1:43:45] You have to be... [1:43:47] paranoid. [1:43:49] Yes. [1:43:50] about every single one [1:43:53] Uh, the... [1:43:56] of your lieutenants. It's sort of like their reports. Yeah. [1:43:59] Because they'll kill you. They want to kill you. They're trying to actively kill you. [1:44:04] And so if you have... [1:44:07] or maybe they don't want to kill you. [1:44:10] But,

[1:44:11] you have to be [1:44:13] constantly on the lookout. [1:44:15] for any signal that any of them want to kill you or you have misplaced your trust in them. [1:44:22] Because if you trust, if you overly trust them, [1:44:26] they will kill you. We do this thing in this context too that sort of resembles Jailman amnesia, which is like... [1:44:32] We presume that [1:44:33] Yes, we've been so foolish and blinded by ourselves in the past, but now we see clearly. It rhymes with one of your favorite lines, which is, this time it's different. Yes, 100%. There's a meta version of that all the time. You're this mafia boss, and so maybe you... [1:44:50] develop some new level of self-awareness and you realize something about yourself. Oh, wow, that was like so cringey. And so you found a mole in your organization. You got rid of them. There's never going to be a mole again. And there's, yeah, there's never going to be a mole again. No, no, no. It's actually... [1:45:04] The truth of the matter is, [1:45:06] It's just there is a mole and it's just up to you to find where it is. [1:45:10] It's semi-related, but another idea that I don't know if I was rereading frameworks, I think, and you have this idea of the user manual. [1:45:18] I think maybe we've talked about this. I think about this sort of like an operating system for every person. [1:45:23] And I think you say you can hack engineer workarounds to avoid behaviors, do better. The best part of life is getting to intimately read your own user manual and sharing it with others. Many don't finish reading. [1:45:34] Others only make it halfway. Some never open the book. [1:45:37] And so my question would be, [1:45:39] If someone was going to wake up tomorrow as Chris...

[1:45:42] What would you like put at the very top of your shortlist on the tips and tricks of your using your user manual? [1:45:49] Oh gosh. [1:45:51] I mean, I have very... [1:45:53] dumb, simple... [1:45:55] Simplistic things? [1:45:56] So for example, let's say I'm trying to remember to do something. [1:46:01] before I go to bed. [1:46:04] I'm not going to like write it down on my phone. How do I set a reminder? [1:46:07] Basically, [1:46:08] like place. [1:46:10] a bunch of socks outside of my bedroom door. [1:46:13] As a physical prompt. As a physical prompt. So like when I open the door, I'm like, oh, I have to remember to do that thing. It's sort of like a memory palace. Yes, absolutely. [1:46:22] Or like, let's say I'm in... [1:46:26] in a situation where I don't have access to that or like I'm taking a shower and I remember, oh gosh, I need to do this thing. [1:46:33] I'll actually move my wedding band to a different finger. [1:46:37] and I will only move it back to my... [1:46:40] ring finger when I have completed that task. It's funny how much this resembles the totem in Inception or the reality check for lucid dreaming. It's like a jolt of awareness. Yes. Yeah, I think it's because I don't do really, really well with to-do lists. Right. My brain isn't organized that well to work through them. [1:46:58] But I can... [1:46:59] sequentially process things right very easily right um the q one q leads to another [1:47:05] Exactly. And so I... [1:47:08] I think I would, I would, [1:47:09] put those on. Um, [1:47:11] Maybe it's sort of, [1:47:12] And then...

[1:47:13] uh... [1:47:15] The other things would be like... [1:47:18] How do you use the emotions that you feel as... [1:47:22] signal. [1:47:24] So for example, [1:47:26] I would tell the new pilot of Chris's body [1:47:29] Hey, by the way, when like this light's flashing, which is low patience, [1:47:34] That's actually the strongest indication that more patience is needed. [1:47:38] Right. [1:47:39] I think that one probably generalizes pretty well. So like, oh, just like, you know, just... [1:47:44] That red light flashing doesn't mean push the frustrated button. It actually means you need more patience. [1:47:51] We talked about precontentus and your desire to sort of be ahead of the curve. [1:47:56] Are there any areas... [1:47:59] For which you are most. Lindy. Or most. [1:48:04] confident that the classical, non-new [1:48:07] Almost that the consensus is right. [1:48:12] I mean, I don't want to sound like... [1:48:14] Uh... [1:48:15] Full-throated. [1:48:17] "'Red-blooded.' [1:48:18] patriot here [1:48:21] But I have a [1:48:22] deep, deep affinity for... [1:48:25] the country that we live in. [1:48:27] i think it's the best country in the world i think it's incredibly elegant system design [1:48:31] inclusive of the two-party system and the republic? [1:48:36] I think it's awesome. It's one of the most beautiful things ever. [1:48:39] that humanity has created. [1:48:41] collectively. [1:48:42] And I feel incredibly, incredibly fortunate to be a part of it.

[1:48:46] Yeah, not a day goes by that I don't. [1:48:48] you know, [1:48:49] It's all lost on me that [1:48:51] just [1:48:52] Being born here was. [1:48:54] Probably. [1:48:56] 90% of my success. Yeah. Most of us don't cherish that that much. Yeah. [1:49:01] I interviewed our mutual friend, Tina. [1:49:03] before you. - Yes, of course. - You shared a generous question, and so I asked her to return the favor. [1:49:08] And so her question was, how do you apply your pre-consensus thinking and frameworks from your investing in professional life to your personal life? [1:49:16] Mmm. [1:49:18] Interestingly enough, I think... [1:49:20] my pre-consensus proclivities, [1:49:23] were [1:49:25] existed before [1:49:28] being a venture investor. [1:49:30] I think being a venture investor is actually just like... [1:49:34] The snuggest fit. [1:49:35] of capitalism. [1:49:37] For my... Being who you are. Yes. [1:49:40] Um, [1:49:41] I, gosh, I love. It's all any of us could ever hope for, I think. [1:49:46] I love it. [1:49:46] Finding new music? [1:49:48] I love finding new... [1:49:49] artists and restaurants i love consuming new information [1:49:55] I, as I mentioned, I'm like a new junkie. [1:49:58] I... [1:50:01] My wife jokes that my hobby is starting hobbies. [1:50:04] Um... [1:50:06] And so... [1:50:10] I can't get enough. [1:50:13] Um... [1:50:15] things. Yeah.

[1:50:17] I think it's one of the reasons why I love living in New York, the density of life here. [1:50:22] is amazing. It's incredible. It's why [1:50:25] I. [1:50:26] I feel very lucky to have been born... [1:50:30] while the internet exists. [1:50:32] Because the internet is incredible. It's amazing. [1:50:37] And, [1:50:38] You know, the sort of philosophical question, if you could live forever... [1:50:42] Would you... [1:50:43] My instinct is yes. [1:50:45] Because I just want to know. [1:50:47] I just want to know things. [1:50:51] But, [1:50:51] specifically answering Tina's question. [1:50:55] I fear that my pre-consensus [1:50:59] Me being pre-consensus on other aspects of life [1:51:02] He's also... [1:51:04] more insufferable? [1:51:06] because it comes with [1:51:10] a superiority complex. [1:51:12] of [1:51:14] Oh, like... [1:51:15] No, no, no, that restaurant's not good. Keeping score is definitely less... [1:51:20] Less cherished. Keeping score and being a professional investor is pretty cherished. It's most talibro when it comes in the form of authentic good recommendations. [1:51:30] and it's [1:51:31] most insufferable when it comes in the form of what's perceived as superior taste. Correct. [1:51:36] Alright, penultimate question. [1:51:38] you [1:51:39] have one of your frameworks, I think, or aphorisms is optimized for alignment, not outcomes. [1:51:44] And you go on to say, if success is defined over long periods of time, the best way to ensure consistent collaboration between parties is,

[1:51:50] is to spend time on alignment. [1:51:53] Outcomes are an output of the execution ability of the group, not an input. [1:51:57] This is why value systems, manifestos, etc. are core to long-term business and professional relationships. [1:52:03] I'm going to generalize it though. And so I would ask you about your alignment experience. [1:52:07] Maybe... [1:52:08] You could talk about it generally, but I think probably most interestingly, you know, [1:52:11] and you're [1:52:12] two core relationships, alignment with your partner, Jordan, and business and alignment with your partner, Keeley, in life. Yes. What have you gotten right about alignment? [1:52:23] Well, first of all, I think both of them wouldn't necessarily be comfortable being lumped into the same sentence as the other. [1:52:31] Um, [1:52:32] I'll answer those two separately. I think... [1:52:38] I think one of the things that [1:52:40] I'm really proud of having gotten... [1:52:44] to alignment on with my wife, [1:52:47] is [1:52:49] understanding how we both grow together. [1:52:51] I think maybe one of the most important things... [1:52:55] um [1:52:55] our alignment of values [1:53:00] One of the most important things [1:53:02] to a successful relationship is... [1:53:04] You understand how not just who you are in that moment in time, [1:53:09] but over time together. [1:53:12] How does being... [1:53:13] with each other impact each of you as individuals. [1:53:18] And do you like that?

[1:53:21] is the vector of change for both of you over time. [1:53:28] going in the same place, going in the same direction. [1:53:31] And I'm incredibly grateful, incredibly grateful. [1:53:34] for that. [1:53:35] I think... [1:53:37] We... [1:53:39] also have [1:53:40] We are also deeply aligned. [1:53:42] On. [1:53:43] our commitment to communication. [1:53:46] I would argue that communication is the foundation [1:53:49] of any relationship. [1:53:51] personal or professional. [1:53:53] And it's because communication reduces information asymmetry between two parties. [1:53:59] And the less communication you are capable of, [1:54:04] the more that [1:54:05] information asymmetry exists and the higher the likelihood of miscommunication misinterpretation [1:54:11] non-charitable interpretation exists. [1:54:14] So I think communication is super, super, super important. [1:54:16] We're really committed to it. [1:54:19] Shifting gears to Jordan. [1:54:20] I think similar, actually, we have this commitment to communication that's rooted in [1:54:25] This idea of truth-seeking. [1:54:27] of [1:54:28] when we talk about [1:54:30] people or investments it's very much trying to drive to clarity [1:54:34] And that requires a high fidelity system. [1:54:38] level of communication and clarity between the two of us. [1:54:41] we are also deeply aligned on values. [1:54:44] when we think about [1:54:47] Going back to reputation, what is the reputation that we want to have with each other as a firm?

[1:54:54] or deeply aligned along the axis of PACE being a services-based organization. [1:55:00] We're not in the spotlight. [1:55:03] and also alignment on what this firm means to the people who are here. [1:55:10] Deep, deep, deep alignment there. [1:55:12] Now, [1:55:13] We disagree a lot on investments. [1:55:16] But if you showed me... [1:55:17] And if you showed me an investment decision, [1:55:21] were [1:55:22] The investment committee was unanimous on it. [1:55:27] I would be really scared. [1:55:29] Because if... [1:55:30] The investment community is wrong. [1:55:32] It means that no one saw the truth. Yep. [1:55:36] And that's terrifying. So disagreement is... [1:55:40] competition. [1:55:41] and competition is good. [1:55:44] All right, last and final, there is an episode of The Bear television show. [1:55:49] Great show. Season 2, Episode 7 called Forks. [1:55:52] that I think was particularly resonant for both of us. [1:55:55] And there's a specific phrase at the end of that episode that I know is meaningful to you. [1:56:01] And do you want to talk about that? [1:56:02] Phrase and why. [1:56:06] So, [1:56:07] there's a, [1:56:09] There's a sign. [1:56:10] It's posted inside of the kitchen that... [1:56:14] carmy the main character stage is at which is a three michelin star restaurant [1:56:19] And he gets his own version of this sign to put in his own kitchen.

[1:56:24] And it says every second counts. [1:56:27] And... [1:56:29] What does that mean? [1:56:34] My brain goes to... [1:56:36] Another scene from Lord of the Rings. [1:56:39] which is a conversation between Frodo and Gandalf. [1:56:42] where Frodo... [1:56:44] laments to Gandalf. [1:56:47] He says something along the lines of, [1:56:49] I wish we did not have to live in such times. [1:56:54] And Gandalf responds... [1:56:56] "'Yes, me too.' [1:56:58] But that is not our choice. [1:57:00] our choice is what to do with the time that we have. [1:57:04] And it's this... [1:57:05] Deep. [1:57:06] deep [1:57:06] deep high agency. [1:57:09] view. [1:57:10] which is [1:57:12] Every second counts. [1:57:14] Everything Matters. [1:57:17] you are capable [1:57:20] You are high agency. [1:57:22] And [1:57:24] this idea that, [1:57:27] in the same episode of [1:57:29] of the bear. [1:57:30] Another phrase is used, which is, [1:57:32] Every day here is the freaking Super Bowl. [1:57:38] I think it's important that everybody takes pride in what they do. [1:57:42] You know, I think there's something that [1:57:46] I learned early on in my career. [1:57:48] which, [1:57:49] was impressed upon me, which is, [1:57:52] you know, [1:57:53] For you, a meeting might just be

[1:57:56] One meeting. [1:57:58] during your day. [1:57:59] But for the other person, [1:58:01] It might be... [1:58:03] their most important meeting of the day, maybe the most important meeting of the week. [1:58:07] and you have to show up in that meeting [1:58:09] with that internalization. [1:58:14] You cannot phone it in. [1:58:16] You can't cut corners. [1:58:18] It's important to take deep pride in your work and [1:58:23] And I internalize the message of every second counts as... [1:58:29] It is wholly up to you. [1:58:33] whether or not [1:58:35] your commitment to the pursuit of excellence leads to it. [1:58:41] Thank you. [1:58:42] Thank you. It was really fun. [1:58:43] Thank you, Jackson. This was great. This was really fun. [1:58:46] See you guys next time. [1:58:47] Thank you.