Joe Lonsdale, co-founder of Palantir and 8VC, shares an unfiltered look into his diverse personal background on the Yesterday podcast. He discusses his Irish and Jewish heritage, detailing how his family's values, including his father's competitive spirit, his mother's focus on education, and the emphasis on scholarship and human dignity from his Jewish side, shaped his foundational principles and leadership style.
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1:31 - Early as possible, it'll be like hundreds of years ago. - Hundreds of years. - And all of the backgrounds they feed into you, which is also important. - Could be interesting. - I know that's how you think of the world, but anyway, we're gonna have to start there. - We could start there. Let's do that. (laughs) - Yeah, the history of the world before your life. - Well, I think, I mean, it's an interesting input, right? Because my father's side were mostly very poor Irish people who came in the mid-19th century, although there was like a couple other English and Scottish branches that were in America even earlier. And very proudly, my grandfather, my great grandfather's tombstone has like World War I and World War II on it. He was very proud of his role as a fighter for America. He was from Maine, Maine, he was in Florida as I had gone for a lot. I was the oldest 19 cousins on the Irish countryside. And then my mother's side was Jewish. My grandma came here. She was brought here in 1920 when she'd just been born. She actually only died a couple of years ago. She died 103. - Sorry. - And she lost most of her, well, 103 is pretty good. She made it pretty far. She lost most of her extended family in the Holocaust, but her core family, her grandfather, actually came here in 1910 and brought her. So it's interesting, there's a combination of like, people who've been in America a lot longer, poor Irish family who then were middle class, but are good Americans.
2:34 My grandfather was an inventor who invented all sorts of things, but he never really focused on making money. He was focused. - What did he make? - I mean, he built electric cars for his family. He made a bus for the family, he made like spinning tables. He had, there's this news article I have where in 1957, it shows an intercom he made for the boys dormitory. You know, my dad is three of some of his brothers. So he was going to yell at them to like be quiet or whatever. But it's like, it was just a different culture. It wasn't entrepreneurship. It was, but it was like caring about family, caring about friends, caring about the country. My mom's, my bubby's, my dad's called bubby's grandma, my bubby's grandfather, he was quite successful in America, but then his son, my great-grandfather, but my, I gave it all back basically. He was too generous apparently to everybody I worked with. He wasn't the best businessman. So, well, so he had this like very nice family that was like basically middle class on both sides. And, but my dad's super competitive. My mom cares a lot of education as well. And we grew up here in Silicon Valley. - That's awesome. Talk to me a bit about, before we get into all this stuff, just your principles and you know where the influence comes from, whether it's like some level of like Eastern and Western philosophy, some sort of mix and maybe your Jewish faith.
3:38 Talk a bit more about what drives you and kind of what your fundamental principles are. - Yeah, I know I think all of us are shaped by a combination of things. And obviously a lot came from my father who, he's still alive, he's not doing well unfortunately, but he's a very kind of smart, dynamic, competitive guy, very competitive. We love games. We love to like stand up for what's right. It's very much important. Like I was the oldest of three brothers, the oldest of 19 cousins. And one of the most important things was to like take pleasure in the success of your family and friends and to help them be better. That was just like, that's like always what he was doing. And so that's really, really core to who I am. And my dad was also a natural leader. I think you get that as well, along with a competitiveness. And the Judaism side, there's, it's almost like a softer side in a way. So if you think the Irish, English, you know, kind of like side is more fighters. Like, despite what we might think of Israel today, like the Jewish side is more kind of scholars than fighters. And it's more intellectual side in some ways. Like, and really deeply, deeply divided education.
4:40 My dad cared about it too, of course, but it was just like, there's even more on the outside. And then there's something soft in Judaism. We're like every, like the core part, I think one of the core insights for what we call our Judeo-Christian society is that it's like the equal dignity of every human life. And that's something that's just really important. And it's important. You kind of like, you know, when you're young, I was very, I was always lucky to be kind of like the kid who was headed on everything. I lost a lot of really smart friends who would have had me in something, sometimes too. But I was, you know, I was perfect scores and like just really good at games and really good at sports. And so you get, I got a lot of confidence as a kid. And then you kind of realize how like in the world, the smartest people are the ones kind of driving things forward and changing things and fixing things. But at the same time, like the Judaism and the Judeo-Christianity, I guess you'd call it as well, 'cause it comes from both sides, is all about how like every human life really matters. So even if someone's like not doing as well or not helping or causing trouble, like their life still has as much worth as yours. And I think that's a really important way to like, like dialectic that kind of grounds you. This is really important. So having both of those is really key. - Why do you think you're so confident? You said the games, or do you think it was mainly chess?
5:41 - Chess was important. I was a state chess champion twice. No, but I mean, I don't want to be obnoxious, but like I was way ahead at math as a three and four year old and we have to go ahead grades in elementary school with my five or six friends. Listen, I was lucky to be born where I had some natural talents where I was pretty good at everything I did. So that's like, I mean, it's obnoxious, but it is what it is. I'm very confident. And you know, what I'd see problems as a kid, I'd want to fix them. I've always had that personality of, I don't want to help others fix them. But I think I learned from my dad how to help others see the best in themselves and like be inspired to, you know, to achieve what they can. Charles Koch puts it really well as one of my favorite business philosophers where he talks about how he wants everyone he works with to self actualize, right? He goes to the Maslow's hierarchy basically. And like the highest thing is to like self actualize and improve yourself and like achieve what you're able to achieve. Aristotle will talk about this where you're happiest if you're like using your capabilities to the full. And so competition has that, but so does everything else in life where you want to like help people like just do the best they can and live to their full so their capabilities.
6:41 - What did you do as a kid to help your dad sort of realize that and do more of that? - Well, my father was a chess coach. And so you hit on that, which is really key. Cause so his team like won this day like 20 years in a row, which is pretty unusual. - It's actually, it's really funny. I have this, I'm gonna show this to you. Pulled the softball. This is, this is your name, you guys won. And I was like, how in the world did you guys win every single time? And I was like, oh, it was your dad who coached for all the years. - You know, it wasn't just me. It was like literally my dad. - Yeah, it was the same school. - And I guess why Bell was the one competitor who he'd like have like this like tough fight with. They would like win two of those years. And that was, that was other school across the road, ironically. - Yeah, that's so crazy. And so how many years did your dad teach chess and? - Well, this was not even his full-time job. This was like a hobby on the side, which is actually pretty amazing. - Why does he so good at it? - He's very competitive and he's very smart. And he's just had a natural talent for it, you know? And, and you know, we wasn't like the best chess player. He's a great chess player, but there were probably people who are much better chess players than him. It's like, like being the best coach is not about being the best, you know, it's not the same thing as being the best player. I mean, if you want, I can like give you like a little bit of a formula, I don't know if you understand it.
7:42 It's like, I mean, there's quite a few things. One of them is in chess. You want to learn tactics when you're younger. So tactics is opposed to position plays. You're like studying like positions, two, three moves ahead. So you might get really good at tactics. You want to play over the games of the great players starting from the 19th century, because those games are something that your brain's able to like understand. Whereas if you start with the more modern games, it's just so much more advanced that the younger players, I don't even know what's going on. So it doesn't actually have to get better. So you want to kind of start studying at different level. And then you want to, every time you play a game, you like write down your move and you like, and you think about it and you, but there's always whole policy. And you, afterwards you play over the game, you talk about what you did and you learn. And then there's just like formula for how he has like the kids like teach each other basically, and how you to the kids like help each other too. So you have this like big process where you're doing your homework and you're learning, and there's like the principle, you have to memorize the 30 principles, which has all this stuff you do is like, like a few programming is built out. And then it's how you use the kids to teach each other is really important to you. - What did your brothers do? - They similarly asked him kind of as you. - Yeah, so each of my brothers and I were state chess champions actually. - Same. - So three of us, I guess I was twice, but they were pretty good.
8:43 - What did they do now? - The youngest ones, the CEO is doing very well in the tech world and we do a lot together. The middle one, right now I think he's taking some time off and advising some people between here in Vietnam, his wife's Vietnamese and she has great business, but he's done very well and he's extremely bright, but maybe he's more cynical and more optimistic. So it's just different. I'd probably start a lot more things because of that. - Is it touch up on your mom and what your family life was like when you were young? - You know, she was a very loving but very strict, super strict, but there's things that are right ways of doing things, wrong ways of doing things and there's things that are priorities and things that matter. She was kind of like the rock of the family. She was really, yeah. She's been gone for 20 years, I really miss her. But yeah, she, you know, there's something about just her role of just like holding everything together and making things matter and just like teaching you like how to focus on what you want to care about. But yeah, very loving person. - Yeah, how did you spend most of your high school years? Was it primarily playing chess? - So I was a state chess champion in fifth and sixth grade. - Gotcha. - And at age about 13, I don't know if Puberty, I don't think I'd do with this, but basically like, I'm like, you know what, you know, my chess teacher, you asked about wisdom before.
9:48 There was a lot of Eastern wisdom from my chess teacher. There was this guy who, my dad was great, but when he got to certain level, he brought in someone else who we worked with for several years and a great man named Richard Sherman who since passed away. And he did like teach us a lot of Eastern philosophy as well. And I mean, again, I was just like overconfident youth. He was like way ahead in a bunch of things. So he's like, you're going to be a great man, but if you want to be good and not evil on here, it's like, you know, all these principles in the Vagabagita and like all these different types of, types of things and ideas. He kind of, Kecom Sovself is a bit of like a Yoda or an Aristotle, I guess, which I'm very lucky to have someone like that in my life. But he wanted the lines he told me, which I thought was funny. He said, nearly every great man was a chess player, but few chess players are ever great men. And so at age 13, I'm like, okay, I'm really good at this. If I kept going, I could become a grandmaster, but I want to learn how to program and I want to like play sports and I want to talk to people of the opposite gender more. So it's like, you know, like there were a few girls in chess, but not too many unfortunately. - So how'd you spend most your high school time? I guess you're like 14 now, you have the chess coach. - So programming, building games, trying to pretend that was a little bit of a hacker or temporarily I had friends who were better at than me. I think I remember one of some of our friends once were, their dad was an Intel, and we got Pentium chips, this was the 90s.
10:53 And they would like have some kind of like cryo setup where you could overclock them and you can make the Quake II game play better or whatever it was at the time. It was pretty, but you know, I was surrounded and I was like a group of Fremont. And so I'm very lucky to have just a lot of people teaching us about technology. A lot of my friends, like older brothers, some of them were building companies and stuff. So you kind of like got exposed to that in the late 90s. So it's kind of very lucky to be in the middle of that whole world. - Interesting. What did your parents push you to do if anything in regards to your education? - Just go to school. I assumed I was going to get a PhD. That was always the basic assumption. - It is. - It could have been computer science. It could have been something else. It probably would have been computer science. I looked at some PhD programs that were like, I always wanted to build a holodeck. I was going to start a track, of course, like a dorky teenager. And like, I always thought that would be super cool. I think that's how I ended up investing in Oculus and the first couple of rounds. Cause I was just so interested in my, my senior thesis, like, should have to give more credit to Steph and co-founded a pound tour with me. But our senior thesis was an augmented reality. And so, so I was like always into that area and stuff. And my parents assumed I was going to go there. We'd already finished most of the computer science when I got to Stanford for undergrad. So I was doing graduate work and, and like everyone assumed that, but like, you know, turned out entrepreneurship was like pretty obvious path.
11:58 Why did you get into CS so young? I feel like that's like now consensus that's relatively backwards. - It was really interesting. And you could build with it. I was actually really interested in electrical engineering as well, but you just couldn't really build things with it. There's no, there's no as much like leverage to like do stuff. I think we all had like what a TI-85 and 89. Do you have one of these things? - Yeah. - Really younger than me. - Yeah. - Yeah. - Not anymore, but. - So like, and I, and I, and I built a bunch of games first in like the basic language. And then I started learning how to like get like, build in something that would compile to assembly. I forget how I did this. There's some site online where you could do that. And then you could build much faster games. And it's just really, it's just really fun. - Interesting. And so you wanted to go to Stanford or that was kind of like, tell your friends when they were starting? - I want to know, okay, if I'm totally honest, I wanted to go to Caltech or MIT were my first two like biases of what to do because basically I thought I wanted to be the very best in the world at this. And so that's what I've seen like the very, very top people were going. But I think what was different about me is that I was also like very interested in history from a young age and very interested in economics.
12:59 So unlike a lot of my technical friends, I was like reading a lot of other stuff. Like my little brother, like how are we reading like Lubbock-Mieses and Murray Rothbard and like all the Austrian economists and stuff. It was like when he was, he must have been like 11. - Do you think this was a function of your chess coach or your dad or somebody? Like why are we doing this? - I hate my own brother's just really smart. I don't know. It's like my dad was interested in like these areas and my brother would go like, wait, really deep. I'm deeper than my dad ever did, I think. And so he kind of got me onto that stuff. So because I had those other interests, I'm really glad I ended up in Stanford. It was funny, my mom made me apply like the night before. And I was like, mom, I already applied to other ones, I don't want to. And I literally just went through it. And it's actually, I'll tell you the funny thing. It's just you've been asking me about myself. So I feel like kind of arrogant talking about all this stuff. But I was, but I was even worse as a high schooler. Like whatever, however bad I am now. And I was like, God, this guy, like we're gonna turn this podcast off. He's so, I'm not just, I was actually much worse. And it was very funny. I went back and I read, I don't have anything God, but I read my MIT application. And I was like, I don't want to just punch this little guy in the face. He thinks he's so great. And I say, because I did it so fast, which is like much more like not as obnoxious.
14:00 And so I think that's why they had to wait at least to me everywhere else. And they got me in that Stanford like a few. So that's what worked out. That's funny. Were your brothers like this? They're very, they're very, very bright. They didn't want to go to the same school as me. Jonathan went to Lila Merriman, which was like pretty funny because it had like, like a two to one girl to guy, where she went to a beautiful woman. So he's like a much wiser young man than I am. I think my brother got some scholarship to good UC school. I don't know, like, you know, dipped her in things. That's funny. And so touch a bit more about your time at Stanford. Obviously there's like some amazing trope of how you joined PayPal. Bella actually told me this funny story that you had applied to PayPal to intern and you got rejected. My freshman year I got rejected. I did end up arguing with Max on the whiteboard about something. But again, maybe the obnoxious thing is like, you gotta be careful. I'm sure Max was right. I don't know. He's like he's much more advanced than me in this area. Yeah, Peter let me in the second year. Listen to Stanford, you know, I joined a fraternity that was like, I ended up hiring a lot of them for Poundtail later. It wasn't officially an engineering fraternity, but it was less. It was a less cool one. It was a less cool one. Like, like our friends over at Sigma Chi would have like all like the, you know, Theta's running around with like half their clothes on.
15:01 And then they were having a party once for three girls came. And it was like, whatever, we weren't the coolest. But we were really good at computer science. No, it was a good group of guys. Some of them were much cooler than me. I shouldn't say that about the whole group. They're a lot of good ones. You know, I was, I had a girlfriend while I was there the whole time. We had met about four freshmen here and we dated for a few years. She's a great, great woman. She's doing really well. A triple major. She's a smart girl. And, you know, I was just really focused on, I took a bunch of classes. I took like maximum units the whole time. Took a bunch of graduate computer science and math, math theory. It was just fun. It was kind of like a playground. It was like really interesting to be there. And then like I played in immoral sports and just keep super busy. I was the editor of the review. I got a bunch of arguments around that. I guess I've always had really strong opinions that I just, when people say something wrong, like if someone says something to a dorm list, that I think is stupid, like, I guess I would just reply and explain, like, actually you shouldn't go to this protest. And here's why. This doesn't make any sense. And people would have to come to. It was funny. One of the guys, my RCC, which means your residential computer guy, who was like one of the leadership staff in my sophomore dorm before I was in it. And then for a journey, he had to come talk to me because everyone else was afraid of me.
16:03 And I ended up hiring him for a volunteer. He's still running a volunteer right now. This is him. But he's hockey. You know, hockey. He's hockey. He's still running a volunteer. Why was everybody scared of you? Well, I had strong opinions. And I was like sending these things about why these things were wrong. And I guess he's the only one that he would want. He was like, will anyone come talk to me? And I'm like, Joe, you know, you're offending people. Would you send that to a list? I'm like, well, you offend me by sending these things to a list. You know, it's very funny. What are some opinions you had when you're against freshmen software? Most environmental causes they were pushing were wrong. And they were not thought through. They were religious as opposed to rational. The people who are coming to protest stuff who would just egg the synagogue should not like be able to advertise in our dorm list. Or if they do, I'm going to tell them why they're wrong. And I shouldn't get in trouble for it. Yeah. You know, we had to read the Koran in one part of Stanford class. And I had some opinions on it that people came and screamed at me. And I said, well, these are my opinions. And then they called me up to the school and said, you can't have these opinions. And I said, no, well, this is clearly wrong. This is clearly something I don't think is good. And you read it and tell me why. It doesn't matter. I don't want to read it. You're not supposed to say this. I'm like, I thought this was a university.
17:05 Like, this is not a madrasa. What the hell are you talking about? So these are things like that. You know? When did you first meet Joe? What was that like? I was the editor of the Stanford Review. So I think it must have been at Stanford Review dinner. I think maybe also like he spoke at something. I was never at the entrepreneurial clubs at Stanford. They always seemed like quite cheesy to me at the time. So it's like, it was like a lot of people, they were trying to hire a computer scientist. So it's like, it wasn't really my interest, even though I was interested in entrepreneurship. So it probably was more something at Stanford Review. And I think he and I both have a pretty strong interest in history and economics and philosophy. I mean, his philosophy was way ahead of mine at the time. I didn't take it and he did. But, but, but he has like lots of opinions on the world that come from different angles. And he likes to debate them. And that's something that I also obviously have. So, so, so we have this like intellectual kind of connection where I think he was able to get along. And he asked me to come work with him. Was it clear then that Teal, the other people he was working with, were a bit ahead of their time or was it unclear? It was clear to me that he was intellectually one of the most interesting people that had been there. Like I, like I actually did this thing sophomore year where I reached out. It's like a dozen successful people try to get to know them and see how I get value to them.
18:06 And like it was just whatever. I don't know if it's like a good idea or not. It's probably not a bad idea for people in college. Like, like who, like who do I want to go work for? Who do I want to go learn from? And like of all the people I met, he was just by far the most intellectually dynamic. And so I, even though he wasn't like famous at the time, I couldn't have told you he'd be as famous as he was now. It was just more interesting. It felt like a better fit for my interest. There's this kind of like trope that you've had throughout your life or like thoughtful intentionality around going to his talent dense clusters. This is probably a function of why you were rejected PayPal, but still we're like, no, I have to work here. Like doesn't fucking matter. This is becoming more obvious to everyone now, right? Like it wasn't as obvious 25 years ago. Well, but the question being, why was it to you? And why was it so clear that you have to work at PayPal? To me, you want to be around the most interesting people that I could learn something from. I like had some other internship freshman year and I just learned basically nothing. If anything, I was teaching people their stuff, which is terrible because I was 18. I don't want to attack them. It was some like silly startup. This is like, this is the year 2000. So it was like, I don't want them to, it's like, so it'd be the one mentioned to them online. They'll think some, they're probably, well, I haven't seen them in 20 years.
19:06 They'll probably be really sad. And I had those dumb people. They're terrible. I mean, they're very nice people. I just, I just wasn't learning anything. I've always been interested in ideas and it improved me. And like I was at Stanford, taking related events things to push myself. It's made sense, like follow the most interesting, most dynamic people, like where are the people I admire the most going and go try to work with them and learn and build together. What were most your friends doing at that time? Teaching computer science at Stanford and going way ahead in math and CS and getting their phd's and MIT and Berkeley and Stanford and Caltech or whatever. You know, I had some friends who were more into history, but it was very few. It's mostly, most of the ones I was closer to were kind of going deep on the tech side. It's funny looking back, but it wasn't that hard getting all of our smartest friends to come work with us. I think because we just had a really interesting place, it was a natural place. Once we already had like some of our smartest friends, everyone just, it was just more fun to be there to be somewhere else. Someone was telling me there a day they want to hire people who don't know each other. I, and I just, for me, I totally disagree. I think it's like really good if they like, like each other and like, like admire each other and want to like work hard together and then be at the office late together.
20:10 I think that's a positive thing. Is that what drew you towards PayPal? Really, it's like most of your friends were there? No, it was people I admired who were there. That was like, everyone there was older than me. So we feel like talking about PayPal mafia. It's like, you know, Peter's 15 years older than me. Elon's 12 years older than me. They're both friends, but they're both people who like, I get no credit for any of that stuff. I was just like a kid who was learning there basically. And, and I did get to know some more people there. And I guess there were people like Bob McGrew who were working there, who I didn't know for my fraternity and from Stanford Review and stuff. I ended up recruiting him to Palantir later as a key person. He ended up building up an AI after that, after, after a decade. But so there were some people there who I guess who I knew, but it was mostly like getting to know them there. But, but kind of having watched from the computer science department, people like, had like kind of heard about and like new through friends were going there. It was more of the, it was just because I was pretty young at the time. Yeah. Why do you think Teal took this liking that you'd eventually let you join Clarion and be a very meaningful partner there? He gave, he gave a lot of young people. I think he gave a lot of young people a chance who were smart. I think he likes people who are smart and who argue with him and who bring him fresh ideas and who, and who are intellectually dynamic for, to really get along with him.
21:14 I think you have to have like an interest in economics and history and philosophy. Like I said, I think having that and then being able to build stuff obviously was able to be useful. My kind of self-starteredness was like off the charts. And so when I was there, I like bring smart friends to help us with things and push things ahead and, and be like, we should be doing this, we should be doing that. And so I ended up, there wasn't really another manager there. So I ended up kind of running a lot of the place just by being confident, which was very productive. But also I think there's some people who were like 10 or 15 years older who were pretty resentful at the time. But looking back, I can see why I'd be obnoxious. But, but it, but it just, it's like, not like he put me in charge. I just started doing stuff and creating things. What was Elon like back then? So I only knew Elon a little bit that far back because he had just been kind of like moved out of the company when I was going in. So I only actually acted a little bit. He was a very smart, very intense, very hardworking guy. But I, I really got into him better in the last decade, to be honest. Makes sense. And so like around this time, you're working at Clarion and you just graduated. What were you doing there? I know this is like a common story you've told where you play. There's something efficient. I forgot what it was. It had made a large amount of money. There's all sorts of these things.
22:17 But I mean, it was kind of fun because it was Peter's family office. There's all sorts of companies at the time. He was investing in Facebook. He's investing in like, I remember Zoom with Kevin Hartz and was helping out there. It's actually very funny. The first time Kevin tried to hire me away, it was like, Peter like then took like, like valued me more, which is like very funny. It's just, there's always, there's always like indicators. It's just very funny. I think everyone has to do these things. And, and yeah, there was like this macro trading fund. I would do, I did a bunch of research projects on like all sorts of like commodities and currencies and like fixing come around the world. And you know, I think the smartest guy there was Kevin Harrington, who I think he's still part of the National Security Council. Actually, because Peter hooked him in there as a genius kind of physics, PhD, who studied physics and biology and other things. And he would have come up with these like crazy conspiracy theories about how the world worked. And like more than half of it would like clearly be wrong, although maybe there's like something there that would do it. What are some of the stories? Oh gosh, I'm gonna get, he's gonna be pissed at me because he's still like in the power. I gotta be careful because he's still in power. But it'd be like, it'd be like connecting all this stuff to other things happening into the people running a part of a world.
23:21 But every once in a while, there'd be like this genius patterns he'd find. One of them, it was like really clear. It was really clear that like the hedging that Fannie Mae and Freddie Mac were doing, these are called GSEs, Care Responses Enterprise. It's called convexity hedging. But basically the hedging they had to do was like completely destroy the global fixed income markets. So we can, we can walk, I mean, if you want to walk through something, you can just make it. It's like, okay, so, so basically you have like the interest rate is like five point something in late 2002. And you start, and it starts to go down because the economy starts looking at it's doing worse still because they're still in the kind of throws after the bubble, right? And it's still a mess. And then Bernanke, and Bernanke at the time was his greenest man, of course, was cutting rates. And so because he cuts rates, because it goes down, more people refinance. And as more people refinance, so here's what you have. You have the GSEs are like these big levergencies. They have tons of cash, they have a certain amount of equity. And so they have what are called assets and liabilities. Their assets are mortgage-backed securities. They're liabilities or bonds that you issue.
24:22 And a lot of the money from the bonds comes from the world. And so they have to match the interest rate in the duration as much as possible. These assets and liabilities. So duration is how long a bond lasts. And so basically if people start to refinance, your assets start to have lower duration. And in order to like have these things match, so you do not expose interest rate changes, you have to go basically like buy tenure notes and you have to pull the duration up. And so these things were so big that in order to like rebalance their duration, they'd go when the interest rates start going down where people start refinancing, you start going to buy tenure notes. Now when you buy a tenure note, you actually make the interest rates go lower. All right, bond price go up, interest rate go lower. And so they'd buy, so they're supposed to go lower. So more people were refinanced. Instead of buying more tenure notes, especially a lot of refinance. And it was literally like a feedback loop in the economy. And so the interest rate would go all the way down all the way from like 5.1 to like 3.1 in June 2003. And then finally when like everything that had refied could refi. And really not everything refied, but basically the duration got down to like one year. And it was like as bad as much as you can go.
25:22 It's like extra, extra force. And there's like natural force pushing back. And then at the same time, there's all this money coming out when you refi, you spend more. So all of a sudden there's like tons of more expenditures happening in the economy. Everything looks like it's doing better. Inflation is going up, growth is going up. Fed's not going to raise rates. So suddenly they're going to start raising rates. And so all of a sudden rates go up and then like, and then like they have to sell tenure notes. And so it went from 5. something to 3.1 and then shot up. And all the money hit the economy as rates were shooting up. So it was like 7.3% GDP growth on the consumption expenditure side. And so anyway, this is like a crazy bond trade because you can like basically watch it. You can be long and then you could like as it starts to get extreme, you start to shorten to it, short, short, short, short, short. Then you make a ton of money when it comes back. And this is an unwind of the force fire effect. And it's happened like three times over four years. So we made like a ton of money trading bonds. It was really cool because it turns out like, gold bonds are all really correlated for various reasons. So GGB is the Japanese government bonds. The first time got down to like four to 50 basis points right around that time. Like super, super cheap.
26:22 And we were like massively short. So I remember having these like, like we looked all around the world and like pricing like six months options on the GGBs was like, out of the money was like so cheap. We just made like a, so I remember my account, we had like an infinite, I don't know, but time was infinite money for me. Just like betting these things could shoot up a lot more and people realized which they did. So it was a very, it's very, it's like a very interesting game. And it's like, and ultimately, you know, I built a lot of companies. I enjoy things that scale over time, but it is like just intellectually fasting. And I do think it is good for the world to like price global markets, like more accurately and have large financial firms like balancing these things out. So they don't move as dramatically because it actually helps like plans for finance and stuff. So actually, finance is a good thing for the economy, but it's so abstract that it's like not really nurturing for your soul. You don't feel like you're building something. It is fun, but you know, so for me, it doesn't, it's like not a status finance thing, although I do think it should exist. - How in the world were you actually good at this? Right? You were a computer programmer. You'd studied the economy. - Well, I think because I was, I think to do the macro stuff, you have to be interested in finance, in your economics, you have to have read thousands of articles.
27:23 You have to like just been into it and had opinions about it. Like when I went to PayPal actually as a kid, my first time there and I was working there the first summer, my friend Ralph Ho was working for Roll Off and the Treasury Department. And they taught me how to use Bloomberg, which is like the finance terminal because like he was like rebound. He's like doing repo trading on like, I didn't even know it was appropriate at the time. I love Ralph, but it was like, it was PayPal's proud company and they were like trading bonds to like make extra money like safely on people's deposits, which is great. It was a very safe version of trading bonds, but still it was like pretty fun. So I just learned how it all worked. - Yeah. - And it's like a giant game that all fits together. And it's one of those things if you don't understand finance, you probably don't understand actually how like a lot of things work in the world. So I think it's one of those things that people should take the time to learn. I don't know. If you're interested in business, you're interested in how the world works. Like if you want to run the world, like the fact that there's people who are politicians, who don't even have any idea how a bank works, which by the way is most of them, it's kind of scary to me because these people are regulating them there making the rules. So I, anyway, I think, I think if you're interested as I am in how the world works and where the world's going, I think it's a natural thing to want to study.
28:24 - What is your thesis now of how the world will look in sort of 10 years? You're gonna touch on your colleagues that you see. Bello and Bacon, a lot of them, like Joe is always a little bit in the future. And for a fair bit of time, he's like probably accurate. And somehow he's always like a little bit ahead. There's something he's thinking about. What do you think about now in terms of the future? I think that's like the common AI question. - I think I'll tell you before we start, I like go on walks with various friends. I'm just briefly visiting California right now for a couple of days before I go back to the kids in Texas. And it's fun because a lot of people here who are in the future and they're different versions of the future. I'm pretty confident we're gonna have pretty significant productivity growth over the next five years. In a way we haven't seen before in the last 30 years. I think if you want to make fun of tech people, you could tell us like, you know, you guys think you're doing all this great stuff, but like where is the productivity of the economy? It's like we went up like 2% a year, like in the, through the bubble in the 90s, and it's gone up like 1.5% a year or something since then. It's like much slower than like industrial revolution. We had times it was going up like 3% or 4% a year. I think you get back to that. I think you get back 3% or 4% a year. And this is really, really important because there's implications for like everything about global finance and how the economy works.
29:27 It's also really interesting because I think you actually start creating a lot more real wealth. I think you start bringing a lot of manufacturing back to the US. I think you start building homes cheaper. And this is, I'm working on a policy a lot right now because I think it's policy dependent. Like we could have really dumb policy, both from the far left and the far right, by the way, they could break this stuff. But assuming we don't, I think healthcare education get a lot cheaper. I think it's ironic because the country's been in a bit of a tough time obviously lately, but some of these things going on. I lost obviously my friend to a shooting recently. It was what I heard about. It was just very tough. I actually think like I'm very, I'm actually very optimistic on the future we're going to be in if we can like not break things all the way there. And so I get, and it's like, there's lots and lots of versions of this that are interesting. But it's mostly about like for me, how do we navigate for the American worker while creating all this wealth and how we make sure we're like creating tons of new jobs and better jobs alongside the disruption that's going to happen. So maybe this is not too far ahead, but this is the stuff that I've been spending my time on. - Around 26 or 27s, '08, Clarion had been around for maybe five or six years.
30:32 And it's now a seven-billion dollar hedge fund. You're up around 75% midway through '08. You're generally short financial stocks, but fast forward a little. The fund is down 4% that year. Poundture's struggling, again, sorry to hear about this, but your mom had passed away that year. It's pretty hard for you. How in the world are you pushing through? What is keeping you going? Drew mentioned another podcast you could find at ABC with. Joe is this person who is so positive it has. Ridiculous amount of pain tolerance. Was that consistent back then? - It was a really tough year. It was, I mean, obviously, losing your mother is the toughest thing. And that kind of like probably makes you react like not as well to other things. And I'd like to think she'd raise me well enough to still be strong even in the powder. But you're more volatile probably in the year like that trying to deal with everything around it. One of the kind of the glib things I tell people now is I try to make sure I'm only responsible for the failure of one thing at a time. - Jesus. - It's just like really bad if you're responsible for like multiple things that are not working. It's funny, my account was up 40-something percent that year 'cause I just turned it off. I just couldn't deal with it anymore.
31:33 And I know it was not gonna happen. And then Peter kept trying to trade. He kept thinking the government bill out was going to work and he was right, but he didn't realize how deep it would go before the bill out worked. So he says ironically we were short for like a year and a half. We were right about the crisis. So he turns it around to you soon. It shows you how hard this is. It's hard to trade these things. There's a lot of crazy stuff that you're doing. Listen, there was, I was not spending enough time with every one of my teams. And so I'd have people working on things that I was really excited about that weren't quite there yet on the quant side and the finance side. It's a really cool tools between these things. And it's just feeling so close to working. And then there was the people who started to like rebel and be angry because I wasn't there enough. And I was trying to like, when I was there, I'd be like trying to stay with me really late. And like a couple of people just started becoming resentful and like attacking me. And it was, it had some like, there's like, I think like one of them had like a mental illness or something and that led them to like, I don't know, but it was just like a really nasty, it was really a nasty thing where things all kind of broke down and people obviously when some things broke down and you're in charge and it's your fault.
32:35 So it's a point to figure back on me. So that was a tough time. - What do you tell yourself in these tough times? Obviously that was one point. There's a variety of other points in your life where you've had tough circumstances. You're working with your friends, you don't want to let them down. What is actually pushing you? Right now, obviously there's a variety of other things driving you. There's ABC, ABC, the kids. - You gotta protect, yeah, listen, I think at the time I had to make sure you protect Palantir and like, there were people attacking me at Clarion and I had to like make sure I protected Palantir from them and made it more about me. And so at the time I had to like step away for a little bit and not be as seen as like the main driver because it was just too dangerous even though I had re-recruited everyone, I was still driving a lot of things that I thought were pretty important. So at the end of the year, I like had to shift that up a little bit. - What did you do to get out of the line? - I started out of par, yeah. - Okay. - And it was, I mean, I started things successfully inside of Palantir. It would have been like a third thing inside. I was gonna start a new thing inside of Palantir, just made more sense to start outside of it to clean things up and also, you know, it's a better way to do it.
33:40 But at the same time, like stayed involved in various ways. And I'd finished vesting over four years. It was like unfortunate timing because the vesting thing came due exactly when there was like all these pull-ups going on. So I'm like, I don't really want to have to argue about this right now. So, you know. - Let's build that story up until out of par. The first day you had Palantir, you started working with Teal, Karp and others. And-- - Well, Karp wasn't there the first day, but he was a critical founder. - Touch a bit on those things you built internally, what it was like working with him. And then build up to, okay, I'm gonna start out of par. - You know, I always want to be careful talking about the very start of Palantir, because I was like the founder who was driving it early on. But it wouldn't have worked without Stefan, my roommate who was actually also founder driving early on. It wouldn't have worked without Peter's support. If we hadn't gotten Karp to come in, and at first pretend to be CEO, but then actually be CEO, it wouldn't have worked. And there's lots of wisdom he's had that's made it much bigger. Frankly, it's not just, I mentioned Aki earlier, it wasn't for Shom and Aki, and Bob McGrew, who was my fraternity, went on to open AI.
34:41 The company just wouldn't have been nearly as big and nearly as successful. So it is one of those things where it's like, I'm really proud of having hired most of the first couple of people and being in charge of a lot of things the first five years. But I think the real interesting story is it's one of those things that actually took the combined work of just a lot of amazing people. And then frankly, something they have, which I didn't contribute to, is the persistence for them to keep building and keep taking advantage of opportunity. It's just amazing. I used to get in trouble because I'd give offers where I'd give different sizes the company could be. And the high size back in 2005 was five billion and people would yell at me and say, "That's ridiculous. It's not gonna be five billion." I'm like, "No, I think this is how we could get there over the next several years." And it was kind of ridiculous that time. Back then, I was like, "Nothing new gets like that." But I'd never imagined it'd be like, "Whatever this $400 billion market cap is amazing. I'm so proud of this team." And I did put them in place. I can't take credit for their work. That's pretty amazing. You were essentially a bunch of Stanford kids running around going up against the government.
35:41 People must have... Well, in theory, we're trying to work with the government. Yeah. [laughter] Work with them. Going up against the primes, maybe is what you're gonna say. Which are kind of like the government that you're right. Sure. But I think there's a lot of pushback. You're quite young and you're trying to do this thing in a very regulated field. There's also been a consistent thing, regulation that you kind of go towards in the start-kick industries. But that was your kind of your first attempt at a very young age. Yeah. Well, what was that like? Well, I mean, it was very frustrating for quite a while. You had to really be really persistent. And the idea is the reason some of these regulated industries, and I have built in lots of different areas, but quite a few of them have been regulated, the reason they're interesting to build in is because they're so broken. I think this is a really important point. Like, because these things are artificially protected and skewed and like, if you can actually get in and have competent people, it's like you just like, win. Because you're just like, 10 times better and you shame everyone. And that's what we did. It just took a long time because there weren't the past. I mean, it was all set up to be crony and to only support the existing things there. So you had to just consistently keep building allies. Everyone said, "Well, you'd find some ally who had honor and want to push for you."
36:44 Joe Felter, who I still know is Stanford today in 2005, was deployed in Iraq in 2005, 2006. And he had honor and he wanted the best solution to save the lives of his comrades. And he was pushed to bring it in like, at the time. And along with others there. And it only worked because of people like him who, they're already like diamonds in the rough who are willing to go around the system and cause trouble to ask for the right things. You know? And so you can't win. And really, if it wasn't for both Palantir and SpaceX, though, which each had to push insanely hard, each had to do all these unnatural acts, each had to eventually sue the government, then you wouldn't have kind of made that new path. And Palantir and SpaceX made that new path and took us a long time. And then I think Yander Oles obviously driven through and made the path even stronger. And now you actually do get a lot more. It's like, it's still really hard. People underestimate me how hard it is. And how hard it is to build a team in DC. But it is at least not as hard as it was. What did you really feel was clicking? You know, you had this thesis about the world, regulated, and then things kind of started working. You know, it's always always, it's really hard to put it. There was definitely a time when it really wasn't working, where we'd have like a bunch of things fall apart in year three.
37:46 And a bunch of the guys, some people I mentioned, all of them like, threatened to quit. They're gonna quit. And I had to give in some pleas, take it for six more months. And like, you know, it's like all these, you know, it's really interesting. And then we got some big contracts to come through and kind of everyone stayed and it worked. But I mean, the first time, one of the early trips to DC, I remember, you'd get a rental car, which I haven't, we got one of those in a while. I got a rental car. And then you drive to the address of the hotel. And it turned out, I didn't know that DC had like Southwest, first Northeast, you know this? They had like the same addresses, but they're labeled like with different letters. And so I'm in this like African-American part of town. And this very nice black guy is like, what the hell are you boys doing here? (laughing) Being in danger. (laughing) Really, he's the nerdiest guy. He's like, I'm gonna make a laugh to our cases. And it's like, and I just remember like, there's no idea what I was doing in this town. And you had people trying to help you. And it was, it's very funny. It's like, you had to kiss a lot of frogs in the sense that you had to just like work with a lot of different people. Like not knowing like who actually has the ability to make things happen and do things. There's just so many things. And you're knowing how it works now. It's just so different than obviously what we did.
38:47 We just had no idea what we were doing, but you just, we just were persistent and kept talking to people, kept impressing them, kept finding people with problems, kept solving their problems and impressing them. You know, eventually George Tenet was really helpful early on. He had left the CIA after running it under both Bush and Clinton. You know, he basically figured out, one of the things we had to do was just really get an analyst groundswell. So, you know, here's a bunch of these analysts who need this and if you solve their problems and they all demand it and we like amplify that, like that's gonna help us with this group over here. So, he really helped with some of the strategy with other people. 'Cause there's so many people who say they can help. We don't know how to do it. It's funny though, there's like all these conspiracies online now about how this was like a CIA technology. It was not a CIA technology. Nor were they helping us. It was like disaster. It was so painful. It's just so funny 'cause I like, for the first like several years of this, it's just like so hard and you're doing all your best you can and you're literally building it out of our own, you know, creative minds and iterating to figure out how the best technology could be helping the government. And then you have this like guys online where it's like, there's like conspiracy theorists. Two millions of people follow her and it's like, yeah, and then they took the CIA technology and they took credit for it and they made money from it. And I'm like, good God guys.
39:48 Not what happened. But anyway, it's like it's fine. I guess they shouldn't protest against crazy things. But it's just, it's very funny like how the story is afterwards. It's just one of those things where we didn't know what we were doing, but we did have like, so the best engineers in the world, I mean a lot of persistence, you know? You said you were first going with the government and trying to work with them. You were a bit naive. You didn't really know what, how it worked. And now you do, what do you know now about the government? You didn't know back then. There's some people who have no power at all and some people have real power and there's like, and there's like a lot more power in like the armed services committees than you think. And then in the NDA, they said the budgeting Congress is still very top down there. There's a lot of power in certain parts of the administration. There's a lot of power in certain parts of the service secretaries and the DOD. There's a lot of ways in which generals and admirals can secretly kill things or help things. And there's just, there's like really good, one of the things that's interesting, it's just like really good people who build a reputation knowing what the hell they're doing, who everyone listens to. And you have to like get to those people and build trust with them and trust them. And then like there's just, and it's like, listen, I mean it works very differently now that I did 20 years ago.
40:48 20 years ago, there were all these other ways that primes could just kill anything and automatically take it for themselves. They literally could just go like, "I know you're gonna get $40 million to that. It's not gonna work, it's gonna be a disaster. I'll do it for you. I'll take a hit on it. I probably won't make any profit, but I'll do it for you, make sure it works, and they'll be like sure you take it." Then we just lost the contract spending year on. Because like some guys did that because you're their friend, because whatever, they trust them. Like that's literally how it worked. And it's a disaster. And then they go through and have someone do the whole process of filling out the thing as if they won or something. But it's like, "I'll do the other example." It was like, so Epirus, which is the company we started, which is like the best EMP in the world for shooting down drones. We shoot down 400 drones. You can see it online. We can't say how far they get. They agree on that. But it goes just a down far away. And this is great. We figured out it starts in 2018. So it was kind of neat, because we kind of anticipated what happened in Ukraine, obviously. And so we had this big contest three or four years ago. And it's us. It's Rithyan. It's Northrop. It's like a few L3. And we go out to the desert. And it's a certain size, certain power. And there's hardened drones.
41:49 And we shot down the hardened drone like nine and a half times farther away. It was pretty good. Like, they wouldn't let us into the contest the year before. We spent like 30, 40 million of our own money on this thing. These guys spent billions of dollars. They didn't take us seriously. We crushed it. Like, by all means. Like, all, anyway, you can look at this contest. We crushed it. But right after that contest, like there's a bunch of giant, just a few hundred million dollar things awarded, all to the other primes. And we got like 10 or something. Wow. And then the next year got 50. So it was like, and it's like, but wait a second. Ours is better. And like, well, it was ridden this way. And I go to the guy who's running the Air Force, who Biden later made the Joint Chiefs of Staff. And there was out, I think. But like, but like, I go to this guy. I know he has full power. And I'm like, listen, like everyone knows ours is better. Like, why are they getting a $300 million thing for this? We're obviously betting. He says, well, I break a lot of glass. This guy's thinking I'm about to be, come go command Joint Chiefs of Staff. And I want to have a big feeling of me. He's like, it was ridden that way. And if you look at it, it requires like these things for our contract. And I said, but we replace those things with chips. And that's why ours works better. Don't you want that? And he's like, yeah, I agree with you. You'll probably win it in a couple years, but I can't go back and change it now.
42:51 I'd be like, you can. Technically, he could go back. But of course he's nice. A politician. Like a lot of these guys are politicians. They don't want to change it. So it's like, and so a lot of what we're trying to do now with our friends and the DoD, it's not, I really, and this is really important to me. It's not, I'm coming to talk to you to get money from my companies. It's, I'm coming to like talk to you to make these contests fair, set them up ahead of time so that different ways of doing it, if you win in a way that's like useful for the armed forces, and there's DOW by the way, not DOD, sorry. But if you set it up in a way that's like useful for the armed forces, the winner should get most of the contract, not the other guy. The person like clearly wins. So it's things like that where, and it still isn't worked the way it should, but we're shifting it. But even then, I'll be told that even then, you need to have teams in DC making sure the right people know. You make sure the right people are comfortable with what you're doing, which is not totally insane. You can't just be like a random, because you have to have a company that people are sure about. So it's like, it's like when you build these things, we'll go too long on this, but you build these things, you need to have like a best product in tact, that's sometimes better, and you need to have an A+ team and play in the game in DC. You can have both.
43:51 And it's something that I didn't appreciate before. - Touching on the A+ team stuff, talk a bit about those town classes we just talked about. You're not a left-and-pound team, you start at a part. You also, as we mentioned, you at Scott would take a gap here before college to work with you at A part. - Scott, we were, Scott was this guy, my friend Vlad, it was really good. - They could not have asked me. - And he helped recruit a bunch of people with me. I spent time on it with him, we had the strategy, and he ended up getting a bunch, like six of those stars he got that year. I've gone to build unicorns, it's pretty amazing. And Scott's, I think, is the biggest. So, oh, they guess Alex is the head of Scott for now, but we'll see. We'll see. - What really drives you now, is it this world of, this kind of thought of, I want to fix the Western world, and the ways in which I'll do it, or through some sort of capital deployment, here's talent here, there's sister, or that you're trying to fix. - Yeah, there's really broken things that are hurting people and making the world dysfunctional. I think it's good to believe in truth and beauty, and believe in the greatest Western civilization, and to fix it and make it work. Right, so, like Cicero is all about policies that fix things that are broken, like our prisons, if you're on the left, maybe you want to let more people out.
44:55 We've seen recently why that's not good, if they're criminals, if you're on the right, maybe you want to lock people up. I probably do want to lock some people up more, but anyway, that's not the point. We can both agree that if someone's coming out, we want them to come out and be more likely to get a job and more likely not to come back. And so, how do you measure these things? How do you incentivize these things? How do you have, if you're running hundreds of prisons, like how do you have the better people running them and the worse people not be running them and how do you fix the cultures? This is through prisons, this is through vocational schools. It's like you have to set these things up with the right incentives. Like the right incentives for a vocational school, you could double the salaries coming out, double we've shown. And yet a lot of governments still don't do this. So, there's just so much in the government that's broken. You know, I could fix a lot of things by building companies. I mean, we built OpenGov and we made over 3,000 cities, work better, came out of a philanthropic, vision originally, but realized we had to do a for-profit company and we sold a $1.8 billion to Cox who are putting money into scale it and make the mission go further. So, that was a good exit for us to keep doing this mission. So, some things you can do with companies, but a lot of things you just got to do with policy. That's just where we are. - Excellent. - And so, right now, I'm convinced, I really am convinced that AI could make education work better for everyone, especially like the least of all, especially just random kids in the middle of nowhere who don't have access.
46:05 I think it make healthcare, it should make healthcare much, much cheaper, better. Like everyone should be able to afford way better healthcare. The same healthcare, the best billionaire, the best billionaire healthcare is today. Everyone should have that in 10 years if we do this correctly. And so, this is like really cool. And there's like, right now, there's 1,200 laws in 50 states about regulating AI, a lot of which would just set us back by a decade or two and make China win, and make us not be able to do these things. And so, there's things like that where, I mean, you do have to compromise. You have to make people feel safe. You do have to like, you can't just like lecture them and just like ignore their concerns, but you do actually have to make sure we let the innovation succeed and like make our civilization better. And that's like, it's a worthy thing to fight for, you know? - Touching on how you're actually thinking through this, I want to make sure we touch on ABC. This was originally Formation 8, and I was talking to Alex Kolychik about this, or maybe I think Bella had asked him. You said you guys took around 1,000 meetings, or some crazy number, very much back to back to raise this grueling fund. - First fund I ever raised, well, I had a little angel fund called, and my first real institutional fund, when I was doing it as a main thing, was Formation 8 fund 1.
47:10 And I thought I was joining on to like, three other guys who basically already had their money circled, and like my friend's dad gave us 50 as an anchor, and I thought the rest was just going to come. And to my friend's credit, he did bring like another 100 from Korea, but I basically had to run around and raise the other like 300 plus million. And yeah, it took me, I think it was actually 1,800 meetings in a year and a half, and it was, you know, it was what I was doing with a good percent of my time. I was also supposed to be helping run AAPR all the time. I probably wasn't helping doing quite as good of a job as I could have if I'm honest, although AAPR's done great now, so I'm proud of it. But I could get distracted obviously, because I'm like, you know what it was, like as I thought this already going to be done, then I started doing some meetings, then I like I could have just given up, or I could have just gone all in. So I just, you know what, that's who I am. I was like, once I've agreed to do this, now I have to go all in. I'm like, damn it, okay fine. So now let's go all in, let's figure it out, let's write the pieces, let's warehouse the right deals, let's get the right introductions, let's just go. And I just went really hard, and we made it work. But man, raising a big fund one, at the time, it was smaller than my other friends' funds, which we're getting to like a billion dollars then, it's like 2012. - That's the biggest first fund, right?
48:10 - At the time, it was the biggest first fund since 2000. - Why do you think it's so big? - At the time, there's been much bigger first funds. No, my friends were all managing like a billion dollars, so I'm like, okay, 450 is like a reasonable amount. It was called information AAPR 448, we stopped at, like that's seen reasonable at the time. I had no idea that was such a big fund one. Like for the, it worked out, it was a good size for what we do. - How did you think about forming AAPR, and the people you formatted with, the people who recorded it? - Because I was writing information AAPR already, I had learned a lot, and so like two thirds the people came over with me, and then I added on. But like, I wanted people who were more entrepreneurial, create VCE, I wanted people who were mostly, mostly the operator mindset, who were builders as well, like me. VCE was going through a really big change in the early 2010s. I think most of VCE was like smart people, but they would have lots of time for golf, and lots of time, I mean, I'm thinking nothing else, golf, my partner Drew does, no kids, he plays golf, which I know, it's like nothing else. But they had lots of free time, it was like a, it wasn't like a, it didn't seem like a full-time job to everyone who was doing it, but for us, we treated it like a startup, we treated it like a 70, 80 hour a week job, and I wanted that culture, and that's what the entrepreneurial culture is.
49:15 - How do you build that team up? The people who work at AAPC are ridiculously loyal, and they're very mission aligned, how do you-- - It's good to hear. - How do you assess people of that nature, and how do you build a team accordingly? You are very principled, and the people at AAPC are very similarly-- - Yeah, I think you want people who are principled, I think you want people who are principles driven, I think you want people who are extremely intelligent, hard workers, I think you want people who are really passionate about what they do, and-- - But how are you tracking this network? You sort of built affinity eventually to do this, and kind of, okay, I know all these people-- - Yeah, between Formation A and AAPC, it was when Drew and I launched Affinity, which like 3,500 funds use now, it's good, like AAPC around, and so yeah, we track our networks really well, we, like every night I'm here, I'm doing stuff, like you know, it's now we have cognition, and a bunch of guys there, and we have a bunch of talents, and it's just, you know, every, you just have great people, and you get to go, you know. - Who are you excited about the most right now? - You can't have any one of your kids be a favorite, I have six amazing kids, and I have dozens of amazing companies, obviously Scott's very exciting, he's doing really cool things with cognition, you know.
50:23 At a part, I'm still very excited about it, we just crossed $8 trillion last month, it's growing very, very well, I'm very proud of Palantir, even though I wish I owned more of it these days, you know, but it's great. There's a lot of these AI services, companies with a few really particularly great ones, where, you know, I probably talked about this too much in another context, but basically, like, I'm really bullish on using AI to fix different large services sectors of the economy that are worth $100 billion, and so there's things like, you know, Candid and Loop, and others, they're just crushing it there. There's newer checks, we're writing into new companies, and they're gonna piss everyone off, and I'm mentioning them, you know, we just did an investment, I guess it's not announced yet, but, yeah, I don't think you'd mind me saying it, like we're investing in Bobby Art, it's something I'm really bullish on, where it's a great example of just like an app company that like has really strong AI talent, and it's just growing really fast, and I think there's, and it's actually like a much bigger part of the economy, and people realize, so there's just a lot of fun stuff to do right now, you know, AI companies are growing much faster than I'm used to. - Mm-hmm, there's a common question that this interviewer called Patrick Gashonisi loves to ask, a lot of his people he interviews, and the question is, what's the kindest thing somebody's done for you?
51:32 - You know, it's really nice when people reach out, and say nice things, and say they appreciate stuff you're doing, which, you know, there's some people who've like reached out, and like, you know, donated and supported our work at the University of Austin, or our work at our policy group at CISRO, which I really, really appreciate, and it's really kind when they come, and they help with that. We dedicated part of like the archeological dig at the Western Wall that I'm really inspired by to my late mother, and that was a really special thing to be able to do, and to be able to have that, and so, being my father, you know, I used to have mom taking care of my dad the way she does it, and the way she helps our family, it's like really, really kind, so it's just, it's tough, there's a lot of good people in our lives. - Yeah, how do you think about sort of, you know, paying forward that kindness in terms of, you know, higher education at the University of Austin? - Yeah, well, I mean, we're trying, I mean, my best way to pay it forward is to do what I do best at, which is to fight for our civilization, and try to make, I think on the margin, when you make your civilization better and more functional, and you fix things, you end up like touching, you know, millions of lives, and you end up having on the margin, like, people get cured, it wouldn't get cured because there was more wealth and more confidence to have these diseases handled, and these things didn't break down, and there was these wars that didn't happen, and there was these attacks that didn't happen when we could be poundheirs, stopped dozens of major attacks, thanks to the work of my friends and I there.
52:46 I think it's good to be kind in person, too, and to be generous people in your life, so I think you really want to be generous people who are working with you and for you, and find ways to take care of them, and make sure they're successful, and their families are successful, so I think that's maybe a form of kindness, that's like more personal, and I think it is important to have a personal touch, too. I think you can probably judge people by how they're treating people who are really close to them and work with their families, so I think that's important, but I think most of my effort, like, intellectually, goes towards these bigger battles that hopefully make things more functional and more beautiful for everyone. Yeah, that makes sense. What is the thing that keeps you most busy now? You said you only want to have one failure point at any given moment. APC, no, I run APC, or venture firm. We start companies, invest in companies. You know, my other two things is I'm chairman of university and chairman of a policy group, but Carlos runs our university, and there's like, you know, I have great people running our policy group. So I run the venture firm, and there's 70 people there, and so running a venture firm is a lot of work. So that's, listen, I'm building a new company, Thor, in there that's trying to help make me and other leaders more productive that I'm very excited about.
53:49 And so that's like, it's like the most exciting thing I'm building. That's the thing I'm building inside of ABC right now. It's the same way I've built a FIDD in the past, and it's a great company, but yeah, APC is like my job. People give me money. People give you a billion dollars to manage at a time. That's important to do, right? Yeah. There's a couple of stories I've heard of you. I forgot where it was. Maybe you were in North Bay with Vivek, and there were a bunch of mosquitoes, and you wanted to build this little mosquito zapper. I've been wanting to build a mosquito laser for quite a while. The problem is that it's illegal for consumer use to have lasers above a certain power level, and I'm pretty sure you could have them just blow the power level on all like triangulate, and how like eight of them hit it at once, so you'd probably get it. It'd probably be safe. So I'm not convinced this is impossible, but the law makes it somewhat difficult. But this is just like, yeah, if there's a problem, you should figure out how to fix it in a smart way. Are there any things that are really exciting? I know like Thorn is one of them, but where do some companies want to incubate? Sironica's been doing amazing things. I mean, America needs to be able to produce warships again. I mean, you need to produce hundreds and thousands of them. I need to know how to produce ships in general again.
54:49 What's something people aren't doing that you think people should make? And maybe ABC will incubate this. His way, I start like four companies a year, so there's a lot, there's a lot of stuff. What's top of mind? The thing that hasn't yet been done that really has to get done. Yeah, well Thorn's most top of mind, just literally like figuring out how to support leaders. I think it's like engineers are very egalitarian, so anything that like supports a leader of their team is like unintuitive to them because they want to build things for the common or for the average, not for like the leader. So that's like, that's a big, big gap. There are probably other things like that, like building for an egalitarian, building for the fact that the world is not equal and that there's not equal in all senses. Obviously there's equal human dignity, but there's inequalities and that's in less different ways. And I think people don't build enough for that probably. If there was a book about your life, what would the title be and why? Well, we're not done yet. I don't know, I'm still, I'm still, we're still just getting going because I don't have an opinion on that yet. Is there any common themes that you would posit that you would say are common themes in your life?
55:50 Obviously I've put some out, just like follow talent and ecosystems, like follow these archaic industries. What would you say are themes? Well, I think courage is really important. I think we, I think you have to be courageous to go after things that are broken and you have to be courageous to, like the things that really matter in terms of philanthropy and in terms of building is the stuff that others are not courageous enough to have done for whatever reason. And there's a lot of them right now. There's a lot of, there's always billionaires, I got in trouble for like lashing out at Mark Benioff. I felt bad, he reached out, I got used to it recently, but it's like a lot of philanthropy, a lot of people like him have done. It's like the popular thing to do, it's the current thing. It's the thing everyone's gonna laud by default. And so it's like, it's like it's frustrating because he's so smart obviously in some other areas. Like you can't build Silver Speed what it was without getting a lot of things right. And yet it's clear he's not really using the full power of his brain and/or he's just not willing to be controversial. So if you find something that's broken, but there's like, but it's like there's special interest that would attack him, you're just like, "Oh, go away, don't do it." And that's like, that's most people. - Yeah. - It's actually fascinating, like most, I was asking Karplein, why don't these billionaires stand up and like fight these policy things I'm trying to fix?
56:55 So why don't they build new universities? And why don't they like go after the stuff we all know is broken in these different areas? He's like, well, a lot of the billionaires, first of all, they might be their money in ways they're not proud of. They don't want everyone looking at them and attacking them. Second of all, they might have complicated private lives. Maybe they have mistresses or whatever. It's gonna come out when people attack them. And then third, they're mostly like too old at this point. They're not entrepreneurial anymore. They got, they did it doing one thing and they can do other things. And I think he didn't say it to me, but I think the fourth is like most people are cowards. - Yeah. - So I think for me, like being able, like I think what a leader does, like what a good king does is you pick up the sword, you charge the front. And I know we don't do that anymore because of machine guns and other things and more, but like that was like what a king's job was. And to me, that was how my dad raised me. And that is why I'm able to like solve a lot of problems. And I want to try to keep doing that. And you know, every success I have is a bigger platform from which to fight and fix things. And so I think we're just getting started. (upbeat music) (upbeat music) (camera clicks) (upbeat music) (upbeat music) (upbeat music)