Mar 11, 2024 · 1h 2m · news
Joe Lonsdale: The Future of TikTok; Is it a Danger to US National Security? | E1125 · 20VC with Harry Stebbings
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In this wide-ranging interview on the 20VC podcast, venture capitalist and tech founder Joe Lonsdale discusses his philosophy on restoring America's dynamic frontier spirit, rebuilding decaying educational and policy institutions, and navigating the evolving landscapes of global trade and venture capital.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 14.8% of the talking time here. How this is scored →
Harry as informed peer 3.3 Guest teaching 2.9 Guest disagreement 2.6 Harry pushing back 4.1
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:31 Rejection of university truth-seeking framing
Joe forcefully rejects Harry's suggestion that modern universities promote independent leadership, arguing students are instead conditioned to shut up and virtue signal.
Hardest push from Harry ▶ 43:02 Challenging venture over-diversificationHarry directly challenges Joe's multi-company focus, asking if concentrating efforts on fewer portfolio companies would have produced four-times-larger outcomes.
Biggest teaching moment ▶ 33:02 Historical and structural context of Israeli securityJoe educates Harry on Jewish history from 1948 and Ben-Gurion to explain why Israel views Hamas as an existential death cult rather than a standard political entity.
Harry holds his own ▶ 40:42 Market size versus team quality argumentHarry demonstrates insider venture expertise by countering Joe's emphasis on elite talent, citing cases of mediocre teams achieving billion-dollar valuations purely through market tailwinds.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Joe Lonsdale's Childhood and Early Personality Traits | 1 | 1 | 1 | 1 | Harry opens with light biographical prompts about Joe's childhood, allowing Joe to reflect on his competitive nature and early academic arrogance without friction. | |
| The Psychology of Competition and Success | 3 | 2 | 3 | 4 | Harry challenges Joe's competitive mindset by arguing that comparison causes unhappiness, prompting Joe to counter that comparison is essential to understand what is possible. | |
| America as a Frontier Nation vs. the Core | 4 | 3 | 3 | 6 | Harry pushes back on Joe's frontier ideal by pointing out the safety and quality of life offered by European core welfare states, forcing Joe to reframe his concept into a dialectic balance. | |
| Institutional Decay and Introducing Accountability in Prisons and Policy | 3 | 4 | 2 | 4 | Harry probes the feasibility of Joe's policy reforms, asking whether institutional decay is too entrenched for core systems to accept data-driven solutions. | |
| The 'Woke Mind Virus' and the Culture of Self-Censorship | 3 | 3 | 3 | 4 | Harry questions whether the woke mind virus is as pervasive as critics claim and shares his own experience with self-censorship, prompting Joe to define it as a performative pseudo-religion. | |
| Wokeness as a 'Luxury Belief' and the Cure of Accountability | 4 | 3 | 3 | 4 | Harry offers an economic hypothesis that wokeness only exists in fully developed core societies, leading Joe to push back on the premise of being fully developed while agreeing with the luxury belief framing. | |
| The Crisis in Higher Education and the Founding of UXT | 2 | 4 | 5 | 5 | Harry interrupts Joe to question whether modern universities fail to foster bold thinking, prompting a passionate counter-attack from Joe on campus conformity and administrative bloat. | |
| Stanford Memories, Campus Antisemitism, and Reclaiming Courage | 2 | 3 | 3 | 4 | Harry questions whether ideological capture in higher education is beyond repair, pushing Joe to outline how courageous leadership can roll back campus dogmatism. | |
| Restoring the Frontier: A Scalpel Approach to the Administrative State | 3 | 3 | 2 | 3 | Harry connects Joe's scalpel analogy to the upcoming presidential election, asking for Joe's assessment of a potential Trump presidency and its deregulatory impact. | |
| The China Threat: TikTok's Algorithms, Xi Jinping, and Tech Relations | 2 | 3 | 4 | 2 | Harry raises concerns over Chinese consumer tech dominance in America, allowing Joe to strongly advocate for forcing a TikTok divestment due to algorithmic national security risks. | |
| Deglobalization, Decoupling from China, and the Future of Trade | 3 | 3 | 3 | 4 | Harry proposes that global relations are entering permanent isolationism, prompting Joe to argue for maintaining trade blocs while strategically decoupling from hostile dictatorships. | |
| The Israeli-Palestinian Conflict: History, Hamas, and Radicalization | 2 | 4 | 4 | 5 | Harry directly challenges Joe's argument for military action in Gaza, questioning whether it will simply fuel another generation of anti-Israel radicalization. | |
| On Parenting: Raising Daughters and Cultivating Healthy Drive | 3 | 2 | 2 | 4 | Harry asks a candid question about whether family time feels like an opportunity cost for ambitious founders, leading Joe to explain how he guards sacred family time in his schedule. | |
| Venture Strategy: People vs. Markets, and the Trade-off of Diversification | 6 | 3 | 2 | 7 | Harry demonstrates high sector expertise by challenging Joe's reliance on elite teams over markets and pressing him on whether over-diversification hurt his venture returns. | |
| Net Worth Tracking, Liquidity, and Philanthropy | 4 | 3 | 1 | 3 | Harry presses Joe on his personal liquidity and share selling discipline in Palantir, prompting Joe to confess that selling early was a mistake shared by many tech investors. | |
| Learning from Failures: Lady Gaga's Backplane and the Pitfalls of Consumer Tech | 3 | 3 | 1 | 3 | Harry prompts Joe to address his startup failures, leading Joe to explain the collapse of Lady Gaga's Backplane and his realization that consumer tech was outside his core strength. | |
| The Rise and Fall of Wish: Geopolitical and Management Lessons | 5 | 3 | 2 | 5 | Harry targets the financial execution of the Wish investment, forcing Joe to acknowledge a multi-hundred-million-dollar paper loss due to un-sold shares. | |
| Is Venture Still a Good Business? and the AI Services Thesis | 6 | 3 | 3 | 6 | Harry brings Doug Leone's critique of venture capital into the discussion and humorously mock-attacks founders competing against Sam Altman, leading Joe to clarify his complementary AI services thesis. |
Statements from this episode (41)
Lonsdale: Top University Students Pursue Conformity Over Truth
“I think you're taught to shut up and virtue signal and be very careful what you say. And that's the exact opposite of what a liberal education is supposed to be. You think these kids at these top universities are pursuing truth? They're not pursuing truth. The…”
Max Levchin Initially Rejected Joe Lonsdale at PayPal After Whiteboard Argument
“Max rejected me the first time as a freshman. We had an argument on a whiteboard and I thought he was going to bring me in anyway.”
Lonsdale: A Peter Thiel-Backed Restaurant Lost $7M Over Chef Conflicts
“There was a restaurant that I think ended up losing seven million dollars because the chef got into arguments with people.”
Lonsdale: The United States Functions Best as a Frontier Nation
“So America is best as a frontier nation.”
Lonsdale: 90% of United States Prisons Are Non-Profit Facilities
“People can blame for profit prisons, but 90% of them are nonprofit.”
Lonsdale: SPC Will Buy a For-Profit Prison to Tie Profits to Recidivism
“We have a group we're sponsoring. Social, social profit corrections, SPC. What we're doing is we're taking a nonprofit. We're going to buy a for-profit prison and we're going to run it as if the only way to make profit was pay for performance was lower recidiv…”
Lonsdale: The Cicero Institute Currently Operates in 19 US States
“We have a group called the Cicero Institute. It's one of the top state policy groups in the U.S. It's nonpartisan. We're in 19 states right now”
Lonsdale: Wokeness Prioritizes Virtue Signaling Over Competence and Societal Function
“And it's a problem, Harry, because it's basically focusing on virtue signaling and focusing on things that, that don't matter as much at the sake of competence or the sake of a functional society.”
Harry Stebbings Self-Censors 90% of His Thoughts Fearing Woke Backlash
“I don't say 90% of what I think because of the backlash that would come from the one percent woke. I think every CEO that I speak to have on the show is the same.”
Lonsdale: Speaking Publicly Has Not Hindered Building Billion-Dollar Companies
“I say the vast majority of what I think, as you could tell when you go and look at things that I've gotten in trouble for now, it hasn't stopped me from building many, many billion dollar companies. It hasn't stopped me from raising a lot of great funds becaus…”
Lonsdale: California's 2009 Probation Reform Saved $1B and Reduced Prison Re-Entry
“And you know, it basically saved the state a billion dollars over the next decade. It sent tens of thousands of fewer people back to stay at prison.”
Lonsdale: Institutional Accountability Eliminates Wokeness by Forcing Operational Focus
“When you make these things accountable, whatever they are, they become less woke because they're now focused on, on actually getting things done.”
Lonsdale: The University of Austin Has Admitted Its First Undergraduate Class
“We've been starting the University of Austin. It's going extremely well. We've admitted a big part of our first undergraduate class for this fall.”
Lonsdale: Yale University Now Has More Administrators Than Undergraduate Students
“There's now more administrators at Yale than there are students, and almost as many at Harvard”
Lonsdale: Two-Thirds of University Students Report Self-Censoring Their Views
“The students, you know, two thirds report self-censorship to not just not say what they think because they're afraid to get in trouble at these places.”
Lonsdale: Elon Musk Leads the Resistance Against Ideological Conformity
“I think Elon Musk has done more than anybody else to model this behavior, to stand up to this nonsense and to call out things you're not supposed to call out and to reveal things you're not supposed to reveal.”
Lonsdale: The US Administrative State Is Captured by Corporate Interests
“The administrative state has millions of rules. They've been captured by corporations. They've been captured by special interests.”
Lonsdale: Donald Trump's Team Is More Likely to Fix Broken US Institutions
“I think Trump's extremely imperfect. He has all sorts of issues that bother me. You know, I think it's very problematic. I wish we had other people, but I think his side Is more likely to push these things in the right direction in terms of the stuff that's re…”
Lonsdale: China Controls TikTok's Algorithms to Brainwash Tens of Millions of Americans
“Yeah, I would force them to divest of Tik Tok. I think that, I think that's fine for Americans own Tik Tok. I think right now, China controls the Tik Tok algorithms. I don't care if the guy's based in Singapore, some of the data's here. It's very clear China c…”
Lonsdale: China Is the Single Biggest Threat to the United States
“China is by far our biggest threat to have that kind of dictatorship. A lot of people like to pretend that it's just like, oh, Americans are just being like nativist or hawkish or whatever. No, this guy was hiring a lot of his best and brightest to build milit…”
Lonsdale: Chinese Technology Companies Are Now Innovating, Not Just Copying
“There's real innovation happening. They're not just copying there like they were 20 years ago, a lot more.”
Lonsdale: AI and Automation Will Enable US Manufacturing to Return Onshore
“I think there's some legit arguments that AI with manufacturing can bring some things back on shore in the U S and the U S more than any other nation.”
Lonsdale: Prolonging the War in Ukraine Is a Terrible Mistake
“I think the idea that we want to keep the conflict going is a terrible mistake.”
Lonsdale: The Russia-Ukraine War Was Unnecessary Under Savvier US Leadership
“And I think that this conflict was unnecessary if we'd had a president who was savvier about how to handle it”
Lonsdale: Israel Will Keep Fighting and Completely Wipe Out Hamas
“The way it stands now is, is we're going to keep fighting. We're going to wipe out Hamas and hopefully we can work with others to have a government there. That's not, you know, does not allow terrorism.”
Lonsdale: Anti-Israel Hatred in Gaza Stems From School Indoctrination
“I think basically what creates a generation of civilians that hate Israel is you have the schools in that area have been run by people who teach people that Jews are pigs and Jews are wrong and our religion hates Jews.”
Lonsdale: Addepar Will Be Worth $20B to $30B by 2030
“I think it's going to be one of the biggest fintech companies. I'd be very disappointed if it's not like a, you know, 20, thirty billion dollar company at the end of the decade”
Lonsdale: Defense Technology Startup Epirus Is Valued at Over $1 Billion
“Started EPRS, which is probably the most important EMP defense company in the world that sh Val is a unicorn.”
Lonsdale: Biomanufacturing Company Resilience Is Valued at $8B to $9B
“Resilience bio. I started with Bob Nelson and my team is valued at, you know, eight or nine billion dollars.”
Lonsdale: 95% of His Net Worth Is Illiquid Due to Reinvestment
“I'm kind of one of those crazy guys who's 95% illiquid because I'm constantly putting money into new things and building things”
Lonsdale: Passing US State Legislation Costs a Few Hundred Thousand Dollars
“For a couple 100,000 dollars, you could take a law that's a really good law. It's going to help a lot of people and hire people and go testify. And there's a good chance you can get it done in, in a state where you're making a big difference”
Lonsdale: Venture Investors in Great Tech Companies Should Hold Shares Longer
“The lesson was that I probably should have held everything for an extra 10 or 15 years, and I, and Peter Thiel had the same lesson, and I've learned a lot from Peter, and he obviously sold out of Facebook too soon, too”
Lonsdale: For-Profit Startups Generate Greater Positive Impact Than Non-Profits
“OpenGov actually had more positive impact than the nonprofit ever could, because with OpenGov, you can get a bunch of best engineers, a bunch of the best business and salespeople, and you actually can get something that's self-sustaining to go to thousands of …”
Backplane Tripled Lady Gaga's Merch Sales Before Failing With Other Artists
“And it turned out we were able to triple her merch sales by like getting feedback from other people that we tried to apply to other artists and it just totally failed.”
Lonsdale Invested in Wish at a $6M Post-Money Valuation in 2010
“So I invested in wish at six million dollars post in 2010 out of my angel fund.”
Lonsdale Lost Hundreds of Millions by Holding Wish Stock Post-Distribution
“I personally did not get any out. My angel fund was able to get a lot out to, for everyone else. And I took the distributions, didn't sell them. So unfortunately I didn't end up, you know, I probably lost a few hundred million dollars from not, For not selling…”
Lonsdale: AI Will Make Existing SaaS Companies Worth Significantly More
“AI, first of all, is going to help All of those 500 companies and still have good tech cultures do a lot better. So it's going to make the existing SaaS companies worth a lot more”
Lonsdale: Founders and VCs Should Explicitly Target Weak Competition
“As an investor, as an entrepreneur, you want easy competition. You want To compete against things that are broken.”
Lonsdale: 8VC Identified 12 Sectors for $100B+ AI Service Displacement
“We've identified about 12 areas like this where we think there's gonna be more than a hundred billion dollars pulled out of those areas in terms of being able to go after them and create more efficient things.”
Lonsdale: China Is Likely to Launch a Military Strike Within Four Years
“I'm very concerned about the geopolitical situation with China and Russia and the potential of war. When I was in, you know, a country in Asia, I won't say the name, seeing our ambassador there, who's on the other political side, but a very smart guy. Even he …”
Lonsdale: Having Multiple Reasons for a Decision Means You Have None
“Usually there's like one reason that dominates all the other reasons. And if you have three or four reasons for something, that means you have no reason for something. Like if you have four ways, you're going to make money. You have zero ways. You're going to …”