Uncapped #51 | Joe Lonsdale from 8VC

[00:00] if you like took the normal path without AI and like things we were building and knew we needed to build and like assume we need to build, we're like taking the 2030s and 2040s. We're like packing them into the next two or three years because so much is happening right now. Yeah. And that means we're taking the 2050s and 2060s. I'm going to put them into the end of the decade and the start of the next decade. It's just like, [00:17] There's so much cool stuff. [00:22] All right, Joe, I've been really looking forward to doing this with you. You're one of the most interesting people to me, and I love a lot of the work that you've done. And so really excited to chat and learn with you. [00:31] Thanks for having me, Jack. One of the things I want to start with is I kind of put you in this category of people who are both investors and founders, like the real way. You know, like a lot of people say that, but you really have done it. You've like started many companies. You've you've started companies that you then become chairman. Some you work for a long time on. Obviously, there's Palantir, but there's like there's many others. Then you also have your own VC firm. I'm just sort of curious, like, what's the mindset that you approach? [00:57] company building, company investing with? Where do you start when you think about doing your work? Well, I think starting a second or third company is fundamentally sort of an insane act after you've been successful because you're already [01:09] obviously like have the money you need so like what are you doing because these things are so hard like you almost have to convince yourself every time that it's not going to be as hard as last time even though you know it is i mean i did it once then i remember it's too hard it's like it's like really really hard yeah i really but you kept going you just keep doing well i did like two where i was ceo palantir and out of par and then i did a few where i was chairman and like really in the weeds with open gov i was i was with zach last night who was my ceo at open gov who

[01:39] It was like paddling through the dirt, I was saying. It's like so freaking hard, especially compared to these things today. Like an AI founder who's just like at $100 million in no time. We were next to this kid last night who I'm backing who's like, Joe, I'm not just doubling. I'm tripling revenue this quarter. And I sat on our sleep because it was just like it was so hard. $100 million used to be like eight years of hard work where basically everything went right. [01:57] Yeah, now like one of these kids who worked for me has a billion in revenue in his third year, like, "Screw these kids." I love it. I'm investing in them. They're great kids. But it's like, "They're great. You're adults, I should call them." But no, listen, I think like building is really, really hard. [02:10] There are just gaps in the world that I see, just how my mind works. And there's like, this is a gap. And there's like people who are hurting because of this gap. There's things that are broken because of this gap. And it's so broken and no one else is fixing it. And I have all these really smart friends. Let's go fix it. And so I just can't help that instinct to like, just go fix things. We say it, if you see like the world is broken, let's fix it. That's just my energy. So if no one else is going to do it, fine. Let's get people together and do it. But it's like the last option. You'd much rather back a really competent person who's they themselves are already all in, you know? Yeah. [02:40] investors have this instinct like [02:42] Do you think it's right that most people don't do it or do you think there's actually, you know, more investors who can and should, you know, understand this is an interesting setup, just like get some balls moving and then you can attract people to it? [02:54] or do you think it's like right? I think if you haven't yourself gone all in and built a startup and gone through the pain of that over years, then you probably have no idea how to actually build a startup and you just shouldn't be doing it. And I think the first time you do it and probably the second time, you should just be 100% all in and you shouldn't be distracted. So I think I'm like a really bad example for people. Like you actually shouldn't,

[03:13] try to do these things. But it's funny because even among investors who were former founders or who have done it before, I think many just don't [03:19] take that as one of the options of actually I could just get this thing started, work with somebody, build around it. It takes a lot of energy. It's like you have to pour like a piece of your soul into something to really make it. Not that I do this right every time. Like I make new mistakes all the time, of course, but like every once in a while. And frankly, [03:34] frankly, like the last several times, [03:36] I've been involved. It's not really mine. It's really like, I'm helping assemble the founding team. I'm helping bring together lots of talent. I'm helping bring together the mission. I'm giving them, [03:46] enough upside that it's theirs. And then and then and then so it's just a little bit different than doing it yourself, obviously. So it's gonna be a spectrum, you know? Yeah, totally. I'd be curious to hear a little bit about how you're feeling in this general moment. You know, we were just talking about how hard it used to be to build companies to 100 million of revenue. Now these like AI companies are going so fast. It's like so fast. You strike me as like, you know, kind of like in the sort of [04:06] Peter Thiel contrarian-esque mindset of things. And one of the things that, you know, [04:12] And I wonder is like, is it uncomfortable in any way when the whole world sees something and you're like, we might be in that the quadrant of the two by two that is both like contrarian and right? Like, are you kind of in the mindset of like, AI is actually the thing. Most people have it right. And so I just need to go do it better than everybody else. Or do you sort of take the view of, well, when everybody's here, I should actually be, you know, spending my time here because there's going to be a new wave by 2030.

[04:42] you're all inside the big ai is right thing right it's not it's not like you just have this like super simple model but yeah yeah yes i mean obviously [04:49] This stuff is working in lots of ways in AI. I think people are probably not focused enough [04:54] on productivity as like the kind of like [04:56] grail you should be going after i think they're not focused enough on the moats created just by the very most talented technologists so i think i think and you know going after just the very very best teams and going after problems that are going to lead to higher productivity and then there's just there's just all these nuances for how big industries work and we've been i've been obsessed with a lot of these large industries for a long time so i think we have advantages there and we're but yeah i mean listen it's it is non-consensus there i'm just like really bullish on this stuff right now it's just working yeah it's what we're gonna say it's all working yeah let's [05:26] it and help it. You know, I can't remember where I heard this, but you know, somebody's saying like there's there is a form of contrarianism even among good ideas, which is that you can like believe harder than everybody else. You believe you believe more. You can understand more the nuances of what's working. So. So the thing is and I've got really lucky the last. [05:42] few years because I get no credit for Palantir figuring out what it did the last five years. The only credit I get is that I actually originally built the company. I did hire a bunch of those people who are in charge, but it's them now who've done it recently. But the stuff that we figured out at Palantir and the stuff they figured out at Palantir turned out to be relevant to a ton of other AI companies. So it's kind of the center of the AI world in terms of what's working in many ways was right around Palantir. And so that's just a huge advantage for us. And I think we understand

[06:12] Okay. [06:12] a workflow ontology this area? How do you apply like the FTE motion to this thing? And go deeper on this with a SAS plus FTE? - It is interesting, the FTE thing is just everywhere now. I mean, it's like almost memetic, but it's true. - And Palantir figured out that the way you do these things in AI world, and yet you have to use that. - When you say that Palantir figured out a lot of like the modes of like how AI is working, like what else? Besides that FTE model, what about like the technology itself? [06:34] Well, it's like, how do you... [06:36] How do you like extract [06:38] like the ontology of the workflows and how do you, how do you like figure out where to apply LLMs and where not to apply LLMs to and then, and then what do you have to build for it to work and it's just a lot of stuff that's like, people have got it right. When you talk about like the productivity stuff being like sort of like underexplored and people don't appreciate how important it is. Do you mean like areas of like productivity software? Are you talking about like making individual like professional workers more productive every day? Is it both? Like, what are you thinking about? [07:07] - No, it's definitely both. It's also just like, how should this industry work in 2035? Like, what does this industry look like? [07:14] today and what does it look like if it's doing everything that's possible that we know is likely to become possible. It's like unmet. What matters? 2035 seems like it's so far away now. I can't even think about like May. Yeah. [07:24] - No, I know, it's like we're pulling, if you took the normal path without AI, and things we were building and knew we needed to build, and assume we needed to build, we're taking the 2030s and 2040s, we're packing them into the next two or three years, 'cause so much is happening right now. And that means we're taking the 2050s and 2060s, and gonna put them into the end of the decade, and the start of the next decade. And it's just so much cool stuff. My favorite one this week, every week there's something, my favorite one this week is I was with the guy who runs Joby Aviation, I was actually doing an episode with him, and,

[07:54] And it's just like it turns out there's just going to be all these ways that jets and airplanes are going to be like 10 or 20 times as efficient in the next decade. And like, you know, he's launching in the next year, obviously, these current flying cars. But actually, there's like massive things that would take him three months before. You do it in an afternoon now with his aerodynamicist. It's crazy. Yeah. By the way, it's funny because I feel like before AI took off or like right at the beginning, like right after ChatGPT, so much of the conversation felt like it was around like. [08:20] "AGI, ASI," and is this sci-fi terminator taking over? And then as everything has become super commercialized, and these are great businesses, and it's proliferating the economy, in a weird way feels less sci-fi now, and more just like-- - There's just cool things to build. There's just so much, and people underestimate [08:39] Like really smart people, like he was saying, like his right hand had just like a list of like 50 things he wished he could work on and build. And it just wasn't the resources, wasn't the ability. Now we're going to get through it all. There's so much to build. It's working. What's interesting is that mindset, though, I don't think everybody has it. You can see this actually in high schoolers or something where some percentage of high schoolers, I think, are like becoming like putting on an Iron Man suit with AI. But you can also use AI to just sort of like skate by. And so you kind of see these like big skis. Well, it's like Soma, the sci-fi. It's a heroine, right? [09:09] It's really scary. You can use AI to be your heroine. You can use AI to not have to do much at all. You can use AI to lose all your agency. There's a very negative version of it. And then there's this extremely positive version of it. And this is a cultural thing. We've got to figure out how do we get people to be more agentic themselves? How do we get people to engage and to choose to get dopamine from iterating and winning and not from sitting there and attaching it to their brains?

[09:39] No, I mean, you're saying on X, you go into a video, you scroll, you're like, you're on TikTok again. I've blocked TikTok for years, partially because of the CCP and stuff, but partially because also I don't have the willpower not to freaking scroll these things. So I block it. I block Instagram. I can't deal with it. And I'm an investor with Elon on X. I guess I mean SpaceX now, so maybe it doesn't matter. But it's like, so I have it, you know, and also I'm addicted to commenting my stupid views online. I'm arguing with Paul and G. We were today, whatever. He's a good guy, but I got angry at him. [10:09] And it gets addicted to you late at night too. It's horrible. I don't know. I'm going to have to turn it off. It's terrible. Yeah. I feel like... [10:14] tech probably lost a decent amount of trust with the public as a result of social media and people being like, you know, [10:20] They don't care. Like, the tech industry is just, like, here to, like, monetize eyeballs and make money off of us. You know what's ironic? It's, like... [10:27] generally market forces are really good in our society. Like they cause us to have to work hard to solve problems. They're going to bring down the cost of so many areas if we can get rid of crony capitalism. In the media itself, like with newspapers and in social media, market forces are terrible. Yeah. Because it's like, because it's an attention economy. Your incentive is to like distract people and just like polarize them. So it's just like, that is like the worst area of society for tech. And unfortunately, that's what we're known by. It's really bad. It's also, you know, I'm not like some, I'm not anti-journalist. [10:57] mainstream media or social media particularly. But, you know, it's like even with [11:02] journalists who I really like it's not their fault always but you know they might write a great article and then somebody you know some editor clickbait headline always the crazy headline on top of it because they gotta they gotta grow a business it's it's a very bad incentive and it's actually it's ripping apart our society right now these these bubbles that it creates in social media there's probably half your listeners if they're if you have a typical listeners who are like oh that Joe Lonsdale guy yeah he's like I don't I don't like him he has different views than me and he's offense he offends me yeah and the other one's like yeah you go and

[11:32] is the middle of the bell curve, who is neutral on Joe Lonsdale, is not going to get shown this because that's not how the algorithm is going to work. They're going to show everyone who either loves me or hates me. Probably. You know, it's like in general, I think. I'm going over some haters maybe. That's right. Yeah, we'll try. That'll be our goal here. We'll run a survey afterwards. Thank you. I feel like that is probably the problem with social media, though, is it just amplifies extremes. And like a middle of the road, neutral, agreeable take is not incentivized. Yeah, I know. Most people are boring anyway. That's true. [12:02] But here's the thing. I was on a walk with one of my mentors at the dish just before this. And she comes from the moderate left, and I don't, obviously. But I actually think most issues, there's a dialectic where there really is truth on both sides. And what I'm trying to do lately is actually step back and just, what are the dumb people on each side, but what are the smart people on each side? And I think social media does not do that. I wish there was a way for it to do that. So relating this to AI, I feel like-- [12:25] the tech industry has some currently missed opportunity to do a better job with our relations to... We need people to love AI more because otherwise we're going to ban it and it's going to hurt us. And they don't love AI. All society is going to hurt us. I don't think America loves AI right now. Not enough people. Yeah, I think not nearly enough people. They're scared, right? It's understandable. I think they're scared. Why don't they like it? There's a threat for jobs, obviously. And so if you're in an industry where it looks like you're seeing all these headlines... Do you know anyone personally who's worried about their job being lost?

[12:55] be totally honest. Like, oh, my life's going to be tougher. Because everyone talks about it, but no one knows anyone. Everyone thinks it's not coming for me. Exactly. I think everybody believes it's going to happen to everybody else. Who are we afraid for? I'm actually really curious. Who's the architect? Because if you walk through it, it's hard to get to the person. You know, what's interesting is we should be, you know, software engineering, let's take as a good example of, like, it's probably the best application of AI right now. I just saw a chart that, like, you know, job postings for engineers are going up and are, like, as high as ever right now. There's so much to build right now. And so, you know, then you have the question of, are we basically just, are we basically [13:25] is amplifying the value of that function, and so there's going to be more demand because it's more valuable. There will be. Oracle did cut, I think, 30 or 40,000 people because there were things that they [13:36] had to do with 30 people that have to do with three people now. And they just don't have as many of those things to do. So there definitely are already things where you're seeing [13:42] some cuts for sure the question is can those people now in this economy do better and i think most of them can yeah but that's but that's been another agentic question we have to ask about [13:50] But so then why do you think we're sort of like failing to make AI look like a positive force for the world? Because everyone hates tech from social media. I think social media has had a terrible impact on our democracy. [14:04] It's ripped things apart. It's like very distracting for people. It's not good for kids. It's like terrible for young girls, especially. I have five daughters and a son. And it's like, I'm not letting my young girls on social media just for everything I've seen. I think it's poison for them. [14:17] And so,

[14:18] this is like their last consumer experience with us. And now that this is like the next social media to them, of course they're afraid of it. Like, I think that's the energy. Yeah. You were mentioning to me before that China likes AI more than America likes AI. Yeah, some surveys show me it's like 75 or 80% positive and we're like 30% positive. Now, they may just take better direction from their leaders than we do, which is a cultural question. But I also think they're just more optimistic about how they could build with it and create wealth with it, which people should be here too. I think this is gonna, so the last time we had productivity go up a lot [14:48] 30 years, it was like the working class person, the median was like 2.4 times wealthier. There was 1870, 1900. So more than twice as wealthy [14:56] Real terms for working class. I think it's going to be more than that the next 30 years. I think it's going to be like... [15:01] four or five times wealthier in the next 30 years, if we allow this to rise. This is amazing. I think people will start to see, hopefully, if we don't make it illegal, just what it could do the next five years. I think it's going to be really positive. It's almost like we need it to proliferate quickly, though, because to that point, we were just talking about these founders who are having these explosive businesses. You have a lot of people who are resistant to AI. That sounds like the beginning of wealth inequality to me. [15:24] This is why we have to actually make sure that the applications of AI that help the middle class, that help the working class, you know, win faster and make sure they're legal. So right now, for example, like the number one thing I think AI could do for 350 million people in the U.S. is we can make health care like half cost, like really fast. Like health care should cost half as much and it should be way better. It should be way more convenient. How? [15:45] Well, there's a bunch of different levels of this, but we need healthcare services and AI. We need to actually have primary care, work with deterministic AI, where you're allowed to start a business that has one doctor and has a bunch of nurses and a bunch of others, and it has input through AI, and they optimize it. And they do things through AI that we know are safe. And we prove out, here's 100 different workflows. So Utah just allowed one workflow. They allowed...

[16:06] If you have a chronic disease and you've been prescribed medicine by a doctor, your re-prescription can involve AI. It doesn't have to involve a doctor. And they're testing it out. So what I'm pushing right now is a healthcare AI sandbox legislation. You know, we have Cicero Institute, which gets things done in like 20 states. So we're trying to get a few states to create an AI sandbox where we can very safely prove out. [16:26] dozens and then hundreds of kind of primary care workflows. And then that would allow huge cuts in costs for these things. And then there's a bunch of other areas of health care, of course, it goes after as well. But this is-- you generally can have AI practice more safely for a bunch of things where it's actually better. [16:40] Yeah, I mean, I think there's going to be so many of these. We just have like, there's like a marketing problem right now, it feels like to me. Well, you guys are the better marketers than me. I need help on that. Well, I don't know either. [16:50] I mean, you know, like let's fight. Let's fight to actually bring down costs for people. That's a good marketing thing. One thing I don't think helps for, you know, you were close to this, obviously, you know, if we can talk about a little bit, you know, at a high level, at least about like the Department of War thing that just happened. I mean, I'm actually interested to hear. So you think it doesn't help because I look bad or bad or what? No, I don't think that I think it's I think what what it is, is when you have two companies or, you know, other, you know, where you see them at odds and you see everybody fighting or fighting. And there's this dynamic of like when, you know, the pigs roll around. [17:20] in the mud, everybody's messy kind of thing. And it's just like-- - Just a negative energy around it. - It's just like everybody's like telling each other, everybody is trying to project that like,

[17:27] the other side's terrible. You know what's funny is that the positive is that it is still being used right now with Palantir and Anthropic. And it's working like really, really well. This is like one of the most accurately fought wars with least civilian deaths and the most bad guys falling so fast, which is amazing. It's like there's all this positive for the U.S. if you believe in the U.S. You know what it's like? It's like a nasty primary election before the general election. It is like that. You know? And it's like, hey, like there's this sense I have where I'm like on some level, like if we all really care about AI getting there, [17:57] You don't want a really nasty primary before the general. It doesn't help. It doesn't help. And so I think there's a little bit of that. I'd be curious, because you're obviously very close to the Department of War. And so like-- My friend Emil and then Depsek Feinberg, and all these guys in the middle of this. Yeah, and so it's like with most people in tech, it's like people have got sort of their-- [18:18] tribe to some extent or whatever and that's fine. We were talking about this ahead of time. That is my tribe but I was trying to tell you ahead of time that even though I am on [18:25] And I can explain why. I think they're right and Palmer's right. I actually introduced Dario and Palmer and was trying to get them. I was trying to get them to get on. And it's like how you're saying you appreciate the moderate left and you want to hear the good side of the other side. I think it's really important in this state. If you've heard about the D.O.W. and Anthropic battle and you only think there's stupid people on one of those sides. You have to assume it's smart people who want good outcomes for the world. Smart people want good outcomes, who have their good point of view. So my main point of view, supporting the Department of War ultimately, [18:55] is that

[18:56] you can't have the gray, complicated, nuanced decisions about what's allowed being made by the company or having the company involved in those. You have to be able to make those nuanced decisions at the Pentagon at the end of the day. And I think that's a fair, totally correct viewpoint. But stepping back, like, listen, originally Anthropic came from, like, a much more effective altruist. I'd call it very left, very, like, different perspective. And originally they had, like, I don't know, like 50 pages of demands for the Pentagon, which were ridiculous. [19:26] A, he went and worked with the Pentagon ahead of time more flexibly. He was trying to help America. He does believe America is better than CCP. B, he got all that 50-page of nonsense after lots of iteration with his team and lots of work down to just two requests. Yeah. [19:39] And he really has boundaries of why they created Anthropic and what their boundaries should be. And that's in his mind. And he's managing a bunch of co-founders who have different views. Yeah. You know, and they got them all the way there. They were working with them. They tried really hard. But at the end of the day, like when they're in the room with the male, there's 20 people. And, you know, the two demands were like no autonomy, no surveillance. [19:59] and no surveillance, and they'll say, okay, well, [20:01] for autonomy, let's say we're going to be using one of [20:04] Palmer's autonomous fighter jets and something we're planning, and Anthropics involved in planning the whole thing. [20:10] Is that not allowed? Or let's say we're using some autonomy in how we respond to attack and the old last offense. It's OK. Well, what if we're doing an attack? But then as part of the attack, we're using autonomy to respond to things. There's all these nuances. And Dario's response. Just call me. We'll work it out. Just call me. And the secretary's like, well, I can't just call you. I'm in charge. Not you. I can't have a CEO making a decision. So sorry, spec where Dario's coming from. But I think the part of where I had to make the decision I had to make. I'm very sad. I got into all the months. I'm very sad about that.

[20:40] Going back to the AI thing, it's where I hope there's some way for the industry to just want to think of it as all on a team of this is going to be something that's good for the world. Yeah, I think it's good for the world, but I think we have to have debates. And it's fair to have debates. And there's going to be really tough debates about how this is going to be used. And I think Dario is right. There are laws Congress does need to pass that it has not passed yet because it hasn't even anticipated some of the nuance of how can you even do surveillance and things with these tools you could never have done before. [21:10] points on both sides here. We're going to have to work together and hopefully our republic can [21:13] Yeah. Figure out some good rules. I hope. Well, I think it will on the defense side. Yeah. [21:17] You know, obviously you've been involved in a bunch of companies like Palantir, Andrel, Sironic. Yeah, I started. [21:22] Palantir and Serana, can I only invest in Yandril? Only invested. [21:25] Too bad. And everyone in the early rounds. So those guys are crushing it, man. It's so impressive to see. You know, three of them used to work with us, a palatier. And then Palmer's a good friend. And it's just, yeah. And then Dino at Saronic. He's built more big ships than anyone else. That's great. Fastest built ships since World War II that are big. It's so fun. Yeah, I mean, I wasn't doing venture projects. [21:43] 10 years ago, obviously, but like, seems like there was no interest in this stuff now. And now outside of AI, it's like, how does it wasn't just that there was no interest. Like when I wrote the check in Neanderthal, I had multiple people tell me they would never work with me again, and to not even talk to them about their next round, because it's so evil to be working in defense and working on weapons. It was like, you had to basically be willing to just go completely against the cultural zeitgeist and be, and be excommunicated, basically. It's like, because it, which is like, but by the way, sometimes that's the most valuable things to do is when you do stand up to

[22:13] something recently that's basically about like you want to be funding people who are you know saying the thing that's not popular and not exciting and it's going to be the creation of the next i love this is one of my favorite things it's like what does no one else want to do that is really important to do yeah and by the way to me that's like a definition of leadership it also um like but it both means you're playing in a space that other people aren't playing but it also reflects a personality type that has like you're willing to just say you guys are all wrong yeah support can i give you a crazy one right now that we're doing this working that's what i want [22:43] COVID ended up cutting off a lot of things from us. And they had this whole big strategy of like going after our biotech sector. And one of the really key things you need in biotech is to do primate testing. And this is very controversial in the US because obviously you're hurting monkeys. But like my five-year-old daughter, by the way, gets it. I say, if mommy, [22:59] had a very bad disease and we had trying to work on a cure. Do you want us to test the cure on mommy? Or do you want to test on the monkeys first in case it kills the monkey? Would you want to know that instead of killing mommy? She's like, she's like, test the monkeys. I'm like, how many? And she's like, hundreds of monkeys. Yeah. Hundreds of monkeys before mommy. What's the ratio? It's high. It's very high, right? Because it's mommy. And it's, and actually, but there's like wisdom there. Like I think human life is more important than, even though I feel bad hurting a monkey. Yeah. So, so again, you don't test the monkey right away. You obviously are. No, of course you do all these other things first. You try to use, you try to use AI to

[23:29] Anyway, there's not nearly enough primates now and no one will touch it. [23:32] So we started a company to provide safer human medicine, it's called. And we're providing like massive numbers of primates, working with a bunch of biotech firms. And we're breeding them here and bringing them over. And no one will touch it because they're afraid. It sounds scary to do, right? But guess what? Would you rather save your sibling or the monkey? That's a very taboo idea. [23:50] But it is working. We're making tons of money and it's not evil. It's like people might say it's evil. It's not evil. It's actually good. It's human. Well, it's funny. I think a lot of ideas. There's a whole category of idea that sounds really bad when you say a snippet of this evil man is doing his defense and killing monkeys. You hear the whole. Yeah, exactly. [24:08] - I failed again. - That thumbnail will get us a lot of clicks. That'll be perfect. But there's a lot of ideas like this where they sound bad if you take a certain snippet of them, but if you think the whole thing through, [24:20] You're like, actually, that is an increase in overall morality. It's really good. That's the type of idea that sounds like it could flip. And it's critical for like bio supply chain. This is like actually something our defense department is even aware of. We need a supply chain for our industry. Literally, I've actually. So we're going to have to do the next round ourselves. I think even though it's crushing it, no one will touch it. Yeah, that makes sense. Everyone's a coward. Yeah, it's crazy. Also, I'll make all the money myself. But then I guess, I mean, with these defense companies, it's like eventually it flips and then there becomes an insane amount of capital. And there's too much. And there's too much money. Then you can't even take all the money people want to give you. [24:50] like billions and billions of interest for the next round. They're going to crush it. So guys, you know, it's still a great investment here. I don't know a ton about defense in general. Is it a space where there will be like a thousand blooming flowers? Or is it a space where there will be a small number of companies dominating? There will be like a dozen neoprimes that will completely crush it.

[25:04] And I think it'll be that many, though. [25:06] Yeah, I mean there's already probably like eight or nine that are just really crushing it. I think Andrel is the biggest Neoprime and it's gonna make the most money. Yeah. And [25:13] I think Sironic is going to be a massive, massive company. I mean, we're trying to 100X our shipbuilding capacity. I think a lot of ones like Sironic are already trying to work not only in defense but figuring out how to work commercially. And, you know, Chaos is crushing it. Epirus is doing really well shooting down drones with microwave. Why can't the incumbent primes catch up on the technology? So what happened was in the 90s is that like 80 of these companies merged to become like eight primes basically. And then you had the tech wave and like all their core tech talent left. [25:43] have [25:44] computer science talent and they don't understand what computer science talent is. So you've seen this like when you start a really top tech culture, like why can't, you know, why can't Anthropic be built by IBM? You know, it's like, come on. It's not going to happen. Even easier things than that. You're like, why can't. [26:01] a [26:02] 30 billion market cap incumbent system of record. Why can't it build one of these applications that 30 engineers at a startup are building, even though they're putting 200 engineers on it? - But how do they hire those right 30 engineers? How do they give them the upside? How do they have the culture? Like the engine that we track, I'm sure you guys do too at Benchmark, we track at 8BC. [26:23] Thousands of talented engineers. We have all sorts of ways of doing it. We try to get a map of what they're doing and I've been doing this for 15 years Like none of them are going into the primes and there's very few that did they would leave very quickly because they'd be rejected They wouldn't get they wouldn't get an upside they wouldn't get the right culture building they wouldn't get treated the right way They basically be like the kid in the basement being yelled at who has to like earnest stripes for 20 years Like why would they do that? Like these cultures are broken there. Yeah, and

[26:46] And they're not showing any signs of fixing themselves. There's certain things they're good at. They're not doing the other stuff. Yeah. What else are you interested in? I mean, we could talk about AI too. I don't know what to, but outside of AI, what are the other areas like bio, robotics? Yeah. Well, everything is like tied back to AI in a way because if you're doing things in robotics, like our best – we have one robotics investment called Bedrock. And it's a bunch of guys from Waymo with me, Boris. And he's like doing excavation and it's working, right? So it's AI-driven excavation, which is 25% of the construction spend in the U.S. [27:16] By the way, it seems to me like robotics should be like a bigger category than like software. [27:20] Yeah, I think eventually. I think most of it doesn't work yet. It might take 30 years. None of this stuff works. Yeah. I mean, his thing's working. It's my first big investment I made. Most of this stuff doesn't really work yet. That's the problem. I've looked at hundreds of things, like not personally, but my team and I. Don't you just think like Elon will figure this out? You know, like, he'll figure out a big piece of it, I think. And I love Elon and I back. I'm not saying he'll make that there's no other robots available. I'm just saying like, don't you think this? Why would this not end? Why would robots not end up working? [27:44] I mean, no, I think the world models are harder than people think. It's obviously... [27:49] And I've tried to back everything Elon does. I think it just takes longer than even he thinks for some of these things. And it's just like we can say the estimates are really hard to get right. I don't know what's going to be there by 2030. I'd be surprised if we don't have some really cool robotics companies by 2040. It's like it's clearly coming.

[28:06] Yeah. What about other things? Like, is there anything in like bio that you're interested in? There's a bunch of stuff going on in bio. But again, like the discovery rate of discovery is just like AI enabled. I think Demis is a Nobel Prize as well deserved. Right. I think we had like 213,000 proteins we'd like mapped out and understood how they work and understood the mechanism of action over like many, many years of hard work. And I think his AI mapped out like a 200 million of them just like all of a sudden, you know, just from figuring it out. And so like we're still in the dark ages of we're just figuring out like I saw like a small model the other day. [28:35] with all this bio data. And they were like, how do you make a protein do these two other things to go after this disease? And it just redesigned the protein and figured it out. And we don't even know why it figured it out, but it did. So it's really cool. So it's like-- so I mean, bio is-- I mean, listen, it's not just an AI story, but a bio is an AI story. I mean, for example, if we can-- [28:55] if we can recreate a cell in a computer. [28:59] That should unlock so much speed, I would think, to drug development and things like that. I mean, I guess other stuff we're doing, just like competent people at execution. So, I mean, Quince, we were the first big investors in. That's good. [29:09] That's like, did you have you bought stuff from there? Yeah. My wife has her house full of Quinston. 100% my wife is obsessed with it. She's like, look, Joe, I'm making you money. I'm like, yes, darling. She knows she's joking. But it's like, no, it's like, well, I don't know what this public there, but it's like more than doubling again this year and the billions of revenue. And it's just such a great executor. No AI story there, is there? [29:29] I mean, internally, of course, you're using it to execute well. But really, it's just a good business with good people. It's just like really good. Listen, the real story there, by the way, is that I was the first big investor in Wish.

[29:38] And I led the seed in the A. And then it went all the way up and all the way down. And there's lots of reasons why. I did basically trying to subsidize the Shein and the Temu competitors, basically. And there's weird postal changes. And then the CEO probably didn't hire enough people around him to replace himself. So when he had to kind of a breakdown, the whole thing kind of crashed. So that was tough. But we learned a lot of lessons about how this stuff worked. And so actually, my partner Drew with Sid came up with the idea. [30:01] for uh for quince after that it is like a more really high-end luxury yeah type thing with a similar framework so that if anything that was like my redemption story after having like personally made and lost hundreds of millions of dollars on that damn thing that's all right yeah it seems pretty good it's like it's yeah it's good i need doing well [30:17] Yeah. [30:18] And what about energy? It seems like that would be natural. Like you're in Texas, like, you know, and I know there's all this cool energy stuff going on. And like, we kind of need energy for AI. We need it for other reasons. I love it. It's actually really, it's actually really funny, Jack, because it's like, [30:28] I'll, like, go and they'll have me speak to, like, these, like, 200 guys. And there's, like, all this really complicated tech stuff to explain that we're doing and how it works and how hard it is. And they'll just, like, with a slow draw, just feel like, you know, but, you know, but they'll have, like, $5 billion of energy assets. And they just realize that, you know, your stuff's really complicated. But I got a lot of energy. It looks like we're going to make tens of billions of dollars on this. Yeah, it seems like a better business. It's like, oh, man, that's, like, actually, maybe the Texas guys are smarter than me.

[30:58] we talk about six levels, right? So we do energy as the base, we call it zero, then chips, and then data centers, and then the models, and then software infrastructure, and then apps and services, right? And so there's like zero through five, six levels. And we're obviously mostly level four and five. I have a few bets at level three with Elon's XAI, with Anthropic, and et cetera. [31:17] Yeah, unfortunately, all my friends were involved. Open AI was a nonprofit. I stupidly didn't get into it early on, but then I should have done that. And then like, [31:24] The data center stuff, I don't really do. And then chips, we're doing a little bit because it's pretty interesting now. I think NVIDIA, AMD, and Intel are like 99% of the value right now. That 1% is probably going to change to like 15% or 20% from new things, is going to be my guess because there's so many new architectures. So we're doing a little bit there. And then we've done a few things around energy. I think around nuclear, there's stuff with uranium that's interesting that we're definitely working on. I think General Matter we're invested in, which I think is doing really important stuff. Yeah, Fusion Works, that'll be a mega unlock. [31:54] I like the monkeys, by the way. It's like a controversial supply chain. You can get monkeys, you can get uranium feedstock. So I think these are good things to be doing. If you do it with the top people, I think Scott's been great at General Matter. [32:06] So we definitely will try to touch the things that aren't there in energy. I would say like at HVC, it's not really our job to do like the natural gas turbines and stuff. I think that's a great thing to do. [32:16] Looking around like the venture market now, you've obviously been doing this for a long time. And we're in like a kind of chaotic moment. It's really fun. It's chaotic. It's a fun moment. Well, it seems like this is what, you know, if you can't enjoy it now, like when can you enjoy it? If you're not going to be enjoying it now, you should retire. This is like the best time of whatever we've done. Compared to what I imagine 2022 or something was like. It was actually pretty painful like four years ago because it was like.

[32:36] It was like not clear to me yet, like how you could do AI or how AI was going to work. I was, unfortunately, it wasn't as smart as some people about how it's going to work. And then like. [32:44] And then you couldn't really start a new SaaS company. Because I was trying to convince everyone, if you start a SaaS company now, you're competing against SaaS companies now. Which is much harder than competing against things when we first started them. So there was a couple years there where I was like, oh, this is like-- Yeah, it was like most of the good stuff was picked over. And I had to like-- so I started Saronic then because I spent a lot of time on it because I had a lot of extra time back then. Because there wasn't as much else to do. And that worked out. The defense was the right thing, I think, to do. [33:05] But yeah, but now it's like there's so much, and yeah, we're like two thirds of just like, [33:10] AI productivity type stuff. Yeah. What do you think is like the... [33:14] either the sort of like structure of firm or individual that is like best equipped to succeed right now. You need a lot of young people on your team who are friends with the other young people who are the best programmers and who are in the networks from... [33:27] Talent. I just think you do. It's going so young now. I mean, you even look at these accelerator programs. They're getting extremely young. I mean, these kids who are 18 but are AI native and have been programming for a long time. I actually hired Scott Wu as an 18-year-old 10 years ago. He'd won the gold medal three years in the world at IOI and top in the world the previous year. And this guy, Vlad, on my team helped me hire him. And actually, Alex Wayne came to that same class and all these guys at Adapar. And it was seen as a really weird thing to do back then, but it was really productive. At that level, they were still really, really good back then.

[33:57] Now it's just like 10 years later, it's obvious because like a lot of these people are just so good, even when they're younger. I know. Yeah. I mean, there's some counter example. You know, I had them, Brett Taylor on the show and he's, you know, an example of somebody like, you know, you can be in your 40s and fully readjust. As a 43 year old, I'm not totally washed up. But it's rare. It's like, and I think, by the way, for the subset who do that, I think it's like a massive superpower because you have all these networks and talent, capital. [34:27] as a venture capitalist to be in the game. 10 years older than you, you're saying. There's people in their 50s. There are some who are doing it. I think it's just really hard to be in the game. And frankly, it takes a lot of humility. You also have to be. You have to convince all these 22, 23-year-olds that hang out with you. You have to go chase 22-year-olds. [34:42] Which is hard, I think. Well, some of them are used to that in Miami, but this is a different version. We'll cut that. No, I'm just kidding. [34:49] No, it's like, I mean, one of my favorite CEOs last night at an event for a friend, and I think he's 22, and I think he's the one who's tripling revenue this quarter, and he's an AI CS genius. You need to be working. By the way, there's a big advantage that these kids, adults, that you have if you're that age, because you never saw the old way of doing it. I know. [35:12] where you're not unwinding anything. - And to some of their credit, like to his credit, [35:16] He wants to learn from me where I think the old way is still relevant, which I appreciate as the old man now. So I think there are some of them who's like, okay, we're going to do all these things all the new ways. But then you can kind of step in and say, well, here's a couple of lessons. I do think you still want to mold it, but you do need to rethink from first principles, almost everything right now. And by the way, every few months, because it's changing every few months when it's possible, which is a weird time. I'm fidgeting around on this podcast because I tweaked my back out. So you need to do peptides. Yeah, peptides. What do you think about all those peptides?

[35:46] right now do you think this is like gonna be like a huge we're gonna learn that it was all like a huge problem or do you think this is like next coming of like the great wave of medicine so so I first had some peptides because I tore up my knee hellas king and then you know so I'm like I got to heal and and not only did it like make me heal faster like fix my back problem it's like oh this is interesting I should study these things and one of our other friends actually you know as well Matt Mizeo he [36:11] I had gotten pretty overweight, bad blood markers, not in shape at all, working too hard, making too much money. So he took some time off. [36:18] started taking a bunch of peptide stacks and exploring it. And all of a sudden, seven months later, he's lost over 60 pounds. His blood markers are perfect. The girls in the office were asking who he was. He's married girls. And he's in great shape. He's crushing it. [36:32] And so he's actually our new CEO of a peptides company that he's founding with us. And it's called NoHo Labs. And it's like growing like crazy. This is one of the, I mean, listen, GLP-1s is one of the biggest markets in the world. One of my bioinfrastructure companies I built makes billions of dollars producing GLP-1s. So I'm watching peptides from that side. And now it turns out a bunch of these other peptides are also, I think, going to be [36:54] you know, market worth hundreds of billions of dollars and we're going after it. [36:58] Yeah, it's growing. It's one of the fastest growing consumers I've ever been part of. You can go online. We want to make we're buying our own compounding pharmacy because we want to like have everything done here, everything legit, everything super careful. Listen, like RFK himself is rumored to be on these. I'll say I won't give any inside information. He runs HHS. I mean, these things are going to become a bunch of these peptides, you're saying. [37:15] He's rumored to be on a bunch of himself. A lot of smart old people are lost. A lot of a lot of a lot of my billionaire friends are all on these things. It's like it's a legit thing. Was there some unlock that just like made us discover made people discover like a bunch of these things. And now we're just like, you know, there's there's this just like proliferation of new ideas happening at once. Or what happened here?

[37:33] You know, I think a lot of them have been around for a little while and people just started like [37:38] sharing more stories. And I think maybe the fact that people are willing to do the GLP-1s and they work so well, because that is a peptide, and that's like the cultural phenomenon. [37:45] kind of open people's mind up to the others. And now the HHS, the unlock, is that they are taking some of them off the schedule to like [37:52] make it more legal to sell them and stuff. And so I think it's more of a policy has been holding it back as well. I mean, listen, we have an NIH in this country, which is National Institute for Health. And like if you're on [38:03] different political side, you can yell at me for what this administration is doing. I'm not agree with all of it. There's like different things. But like, the one thing the NIH should be doing is there's something like peptides, which no one's allowed to patent. [38:12] because the IP already exists, they should be studying them more. If there's tens of thousands, a hundred thousands of Americans using something, why the hell do we not have the NIH studying? For me, that's why government exists, is to do the tragedy of the common type things. And I think they're, and the secretary agrees with me, so I think they're filing it and start actually doing a lot more studies too and approving, which is great, because then we can start approving these and make them safe. And listen, it seems obvious to me that they're super helpful. Yeah. [38:34] You lived here for a long time. Obviously, you still spend a lot of time here. By here you mean Woodside. That's right. We still have a house somewhere near here. But, you know. But, you know, now you spend most time in Texas. I'm curious. We're based with our six kids in Austin. Six kids in Austin. My brother Max lives in Austin. I feel like [38:52] there's probably some changes to your mindset. I had imagined by being out of California. I'm just curious if it like does it like help you think more clearly? Do you feel more in touch with like the world outside of tech? Does it change anything? Is it just a place to live? Does it is there anything about it other than it's just a place to live? Oh, it's definitely a definitely different culture. You definitely.

[39:13] You definitely see, I mean, I'm talking, it's partially because of my policy work as well. I talk to a lot of people from a lot of red states and purple states, like in different parts of the country, and you see the skepticism of tech. You see the things they're afraid of, and you kind of see more clearly to them, it's just such an alien. [39:30] thing and how certain things come across like much more nightly than I would see it coming from here and kind of knowing the insiders realizing what's going on is not as scary as they think. And so it's definitely given me more perspective on, I guess, like you said, we really probably should be doing a better job marketing some of these things for our country and coming across in the right way and respectfully to people. Listen, it's also a more sane place. I think there's like a really healthy middle class in Texas. I think I have people who work for me there who can live 10 minutes away, even though you only pay them $100,000 a year. Whereas [40:00] way. And I think so. I think it's just a healthier, better place for society the way it works. I mean, we also, I think, have more... [40:06] more more aggressive and challenging with political swings happening here in general and um you know you've obviously [40:13] been sort of focused on politics for a long time, like back since Stanford Review. I'm just trying to bring common sense, man. That's my point of view. Yeah, we actually had someone intern with us who was editor at Stanford Review recently. I love it. It's an all cap before benchmark. I love it. And I'm like, you know, it's like really good. Anyways, but so like I'm, I'm like familiar with like the school of thought and I think it's great. And, you know, I'm just curious, like, as you've watched us go over the last few years through the sort of like, [40:38] you know, swings of politics and political correctness and all of it. [40:43] Where are we now? Like, do you think that like

[40:45] Do you think people can more or less say what they want to say now? Do you think there are still like the Overton windows, not where it should be? [40:51] There's still a lot of things that I think polite society won't [40:56] talk about, I won't want to understand. You know, there's a lot of the reasons for why things are broken. There's a lot of stuff in California that's very corrupt. I think people here [41:05] are just starting to appreciate. Like, they don't realize the billion dollars for San Francisco to NGOs is not to help the homeless. It's to help a very powerful political class of people who control things. You don't realize that, you know, that the government worker unions here just really run the state and really just light insane amounts of money on fire. The budget's got up 75% here in six years. 75% in six years. And it's like, things are getting not better. What have we gotten? Well, you get much better paid civil servants and you get a few million of them with much better pensions, which is great, except for the fact you can't afford that [41:35] things. And in Texas, you'll have things like, in Texas we had something where [41:40] The cities were which cities are always a little bit blue and they weren't permitting things because the people are in MB So we said listen if a city won't get back to a permit in 45 days You go around it to the state and the state will approve it really quickly and we passed this law in Austin Building exploded the last three years the prices are down 20% in Austin Not because people are leaving but because there's just so much more stuff we brought online and here and I and I by the way Of course, Sironics building there always companies are building there the things that we're building there and [42:06] Really fast you still like five to ten years later be in permit hell if you're trying to do in California So we and we have to fix sequo in California I don't think the fact that people still don't know what sequo is very much. I'm not sure things have shifted that much like this California environmental quality act It's like there's just crazy things in there where you're like, you know talking to like 14 Indian tribes and you're like in Years and years and years of lawsuits to pay off environmental lawyers. I mean the whole thing just broken still so yeah So I and by the way there are candidates here even on the left like yeah

[42:36] But he like, he like gets it. He gets it. These interests are broken. So I think you're having some people come around. Will the people here support the moderates on the left to get it? Because I don't know. Yeah. I mean, there's sometimes I hope that we're on like a better path, but it's not like it's it's not getting there as quick. We need the leaders. Things take a while. We need the leaders to actually win. And we need people to wake up and actually fight for it. And too many people here are too scared to fight for what makes sense, even in a moderate way, which which is that's why it's still broken. So but we need more more courage, man. More courage. All right. Well, this was super fun, Joe. Thanks for doing this with me. I really appreciate it. Thanks so much. [43:06] Bye.