The Exchanges

Q And I want to dive straight into it today and start by discussing a framework that you very much focus on at USV. Carlotta Perez is distinguishing between installment and the deployment phase. So could you explain a little to us about that and how this affects your thinking at USV?

A Carlotta is a professor of economics and economic history, and she's really studied the history of how technologies enter a market and And the pattern that she found is that, uh, when a new technology arrives on the scene, there is this initial phase, which she calls the installation phase, where there is a lot of hype, and there's a lot of investment, often associated with a financial bubble. So if you take, uh, railroads, for example, um, there was a big early bubble in railroad stocks, and that bubble helped finance the installation and installment phase of a lot of railroad tracks. Only once those tracks have been installed and, uh, train cars are running on them, do you get into the deployment phase, which is the, what are all the things you can now do now that you have railroads in place? And I think, you know, this pattern is a really super marketly observable pattern. If you think about, uh, the web bubble, there was a huge amount of investment that happened. We had a big stock market bubble, um, but all that investment gave us the infrastructure in terms of cheaper compute, cheaper Uh, connectivity. Um, lots of people with computers connected to the internet, broadband, um, on which, uh, all of the things that we now take for granted, uh, whether that's, uh, YouTube or, uh, you know, some of our portfolio companies, uh, like a Duolingo, you know, all of those wouldn't …

AI assessment note: “the bulk of our investment Investing tends to be in the deployment phase”

Q Can I be blunt, Albert? Do you not think this is slightly idealistic?

A Oh, no, I don't think it's idealistic. I think it's entirely doable, and I think we've done it before. I mean, you know, whenever we've had new media emerge, we've had to go through a period of adjustment. You know, I grew up in Germany. There's a Very famous story around, ah, a good work by Goethe called The Sorrows of Young Werther, which, you know, describes a young man who, um, is unhappily in love and commits suicide. When that book came out, it spiked suicides, because kind of people didn't really Realize that Goethe wasn't kind of, you know, that this was a book essentially. And, you know, you have War of the Worlds, the Orson Welles radio broadcast basically suggesting it's, you know, an alien invasion. And I think we over time figured out how to live with these mediums and how to adjust our individual practices, our market structures, our legal frameworks to get good things out of these and Keep the bad things at bay. Uh, that I think is fundamentally what it means when I call myself a technology optimist. I don't mean that technology is going to solve all problems. I mean that over time, we have the opportunity to make technology work for us as opposed to against us.

AI assessment note: “Oh, no, I don't think it's idealistic. I think it's entirely doable”

Q What else is flat wrong about how we think about climate that you often hear?

A Well, what's flat wrong is that That people seem to think that this is like a nuisance problem and that, you know, the private sector somehow has got it covered. I just think people have no understanding of the actual physics of this crisis. To put this into perspective, the concentration of greenhouse gases in the atmosphere was very, very constant for about a 10,000 year time period. That 10,000 year time period coincides with the rise of the agrarian age. And then, you know, the last hundred years, we've been radically changing that balance during the industrial age. And so, in climate speak, we call this, the pre-industrial baseline, we call this 10 thousand-year period, where the concentration of greenhouse gas in the atmosphere was roughly constant. And so the question is, how much energy, how much heat are we now retaining in the Earth's system that used to go out into space, right? So what greenhouse gases do is they let the sunlight in, so stuff warms up, and then they keep the heat here. They trap the heat instead of the heat radiating back out into space. And so the question is, how much heat is that? And obviously the right unit to express that is joule, but no, nobody has an idea what a joule or a petajoule or, you know, is. So one way to express it is in terms of Hiroshima-sized nuclear bombs. And so, I do this often as a survey in, like, large rooms of people, an…

AI assessment note: “what's flat wrong is that That people seem to think that this is like a nuisance problem”

Q How, how do you think about central bank digital currencies? We've seen a lot in Europe, but now you have your digital passport post COVID. Now we see Rishi Sunak talking about a central bank digital currency. How do you think about these?

A I believe that a lot depends on the specific features of these, right? So if you wind up with a central bank digital currency that is totally centrally controlled and Anybody's balance can be turned off at a moment's notice, and there's no concept of people having, you know, custody, um, or a chain of custody, where I think it will make it far too easy to circumvent law and to use finance as power. I mean, I thought it was a very, very bad precedent for Trudeau to freeze the, uh, accounts of the truckers during the sort of trucker demonstration. And if central bank digital currencies take that form, I think they're very bad because they will, um, further shift the balance of power from the citizens away to the state. So I'm a fan in the U.S. I think that if we got the right stablecoin legislation, let a lot of stablecoins bloom, allow these stablecoins to, you know, have multiple tiers, essentially, where, you know, the government, if it wants to free somebody's assets, needs to take serious steps to do so, and needs to go to multiple people in order to be able to do it. And potentially there's some amount of cash equivalent, digital cash equivalent that cannot be frozen by government just to strike the right balance of power. So a kind of a Chinese style central bank digital currency where the center really does control everybody's balances, I think is the wrong kind of alloca…

AI assessment note: “I believe that a lot depends on the specific features of these”

Q And then, and then the final question before we dive into my favorite quick fire round, uh, it's, it's about, uh, personal box and you've emphasized For the right for people to be represented by, by the personal boss. So why do you think this, and why is it important for you?

A Yeah, so I think what we're seeing is that the foundation of, um, all the systems we're building now is computation. A big question then is who controls what computation? Obviously large companies, whether it's Google, Facebook, uh, Twitter, Snapchat, they control Thousands, hundreds of thousands, millions of servers, lots of computer power. The question is, what do we as individuals control that really acts on our behalf? And in the world of the web, that was actually quite clear. The web browser in the HTTP protocol is referred to as the software that you control, and so that's, you know, why you can do things like ad blocking on the web. On mobile, it's a lot less clear, because on mobile, you're downloading these apps that are controlled by the companies, and you're downloading them onto a phone, where nominally you control the But because you don't control the apps, you're really, by buying a phone and charging it and having a data plan, you're really just providing extended compute power to the centralized platforms. And so I think in order to shift the balance of power back towards, or some of it anyhow, back to the edge, we need to figure out how to give each and every one of us compute that we control and that lets us interact with the other systems through computation that we control ourselves. That's also the primary reason why my, my primary phone is, is not an Appl…

AI assessment note: “we need to figure out how to give each and every one of us compute that we control”

Q And how did the USV story come about then?

A Well, so I knew Brad because Brad had been on the board of, uh, my incubator and we had tried to raise the fund together. And so when Brad and Fred had started Union Square Ventures, uh, they started, uh, in two, three to fundraise and they launched the fund in two, four. Early on, they, uh, got talking to Joshua Schechter, and they asked me about what I thought of Delicious, and I wound up meeting with Joshua, and Joshua hadn't yet, uh, left Morgan Stanley, and I, I said to him that I, you know, um, had worked with Brad, and knew Fred, and then I thought they were great, and so he eventually wound up, uh, quitting his job at Morgan Stanley, and taking money from me in Square Ventures, and I wound up sort of becoming first as advisor to him, And then pretty quickly becoming essentially the president of Delicious, and that was a nine-month glorious ride until Yahoo acquired the company, and I didn't have to go long. The company relocated to the West Coast, and I hung out in the USV offices, started making some angel investments, some of which became USV investments, and some of which were USV investments, so it's an angel in Tumblr, and it's an angel in Etsy, and I brought that deal to Union Square Ventures, and so from there, I

AI assessment note: “when Brad and Fred had started Union Square Ventures, uh, they started”

Q So what, just talking of tempering that, exactly. How do you really then think about contestable markets and what makes a contestable market to you? What are the characteristics?

A Yeah. So the, one of the key importance in making a market more contestable is to reduce switching costs. And, um, one way to reduce switching costs Is to make sure that services have some type of API so that, um, I, as an end user or a customer of some type that has, uh, that is using the service, if I can switch to a, even a potential competitor, and I can potentially switch, and I can use machines to do that because there's an API, then the threat of a new entrant becomes much more credible, and that's what it means for a market to be contestable. A market That has a few number of participants, but has low barriers to entry and low switching costs is a contestable market, meaning there is a limit that the potential new entrants are putting on the behavior of the incumbents. And APIs, um, would seem to be very critical to that. In that regard, it's, uh, very positive that in the, um, Oracle versus Google lawsuit, uh, about the, um, definition of Java, uh, Um, it was made pretty clear that, um, the API wasn't as protectable as Oracle claimed it was. Uh, and it's a good thing because as we've seen, you know, Google re-implementing, uh, some of that same API has created exactly that kind of contest in, in, in, in the realm of Java. And, um, I would argue, and I have argued that we would like to see similar contestability in markets like, um, The right sharing market, um, the, uh…

AI assessment note: “A market That has a few number of participants, but has low barriers to entry”

Q promise. And then a quick fire that you tweeted before speaking of Twitter, it boggles your mind. How many founders think they will be able to raise in 20, 23 on metrics with high valuations. I was literally like, thank the Lord. Someone else agrees with me. Um, so what do you advise them? What should they do? I'm a portfolio founder in USV's portfolio. What do you advise me?

A Well, I mean, we, we, we held a call early in 20, 22 for all of our portfolio founders. And we had some of the veterans who had managed through the dot-com bubble implosion, and we're like, if you have raised at a high valuation, you, and you have a lot of money in the bank, you have to get a cash flow positive. It's the only safe place. Literally the only safe place is cash flow positive. You know, some people took that advice, and some people immediately implemented, um, you know, rifts and other things, and they're on a trajectory to being cash flow positive, and I think those companies will do well. And some other companies are going to run into a wall, um, at some point where You know, I've been doing this for nearly 30 years, and I've done, like, three downrounds in that entire time period. Downrounds are incredibly hard to pull off. You know, people try to paste over it with structure and so forth, and some of that stuff will get done.

AI assessment note: “you have to get a cash flow positive. It's the only safe place.”

Q excited for the show today, because, um, it was a little bit different in terms of topic type to what we normally do on TwentyVC, and so I wanted to start on World After Capital, and, and actually, you've spoken before about the transition, in particular, from industrial to knowledge economy. I wanted to ask, for those listeners just providing context, what does this transition mean between the two stages?

A You're referring to a book that I've written, and people can find it online, it's called The World After Capital, um, there's also now, finally, a lovely printed version of it available. The book talks about this transition out of the industrial age into a new age that I think could be, if we do it right, the knowledge age. It doesn't, this isn't like, there isn't some deterministic mechanism that will get us there. We have to make a set of choices. We is here the collective we of humanity to get us there. I think the fundamental difference is, and this is why the book is called The World After Capital, is that the constraining factor on humanity isn't how much physical capital there is. We can do amazing things. I mean, look at Germany. Germany just built a whole bunch of LNG terminals in, like, a few months, right? These are projects that people were like, oh, this will take years, and, but, like, what was the decisive factor? Well, the decisive factor was, finally, they put enough attention to it, saying, we need this, and we need it now, right? So, the rate-limiting factor for humanity really is attention, which is, what are the things that we pay attention to, both individually and collectively as societies, and, Hyper-collectively as all of humanity. Uh, and the book makes the argument that some of the most important things that, um, we should be allocating attention to, …

AI assessment note: “the rate-limiting factor for humanity really is attention”

Q Can I be blunt, Albert? Do you not think this is slightly idealistic?

A Oh, no, I don't think it's idealistic. I think it's entirely doable, and I think we've done it before. I mean, you know, whenever we've had new media emerge, we've had to go through a period of adjustment. You know, I grew up in Germany. There's a Very famous story around, ah, a good work by Goethe called The Sorrows of Young Werther, which, you know, describes a young man who, um, is unhappily in love and commits suicide. When that book came out, it spiked suicides, because kind of people didn't really Realize that Goethe wasn't kind of, you know, that this was a book essentially. And, you know, you have War of the Worlds, the Orson Welles radio broadcast basically suggesting it's, you know, an alien invasion. And I think we over time figured out how to live with these mediums and how to adjust our individual practices, our market structures, our legal frameworks to get good things out of these and Keep the bad things at bay. Uh, that I think is fundamentally what it means when I call myself a technology optimist. I don't mean that technology is going to solve all problems. I mean that over time, we have the opportunity to make technology work for us as opposed to against us.

AI assessment note: “Oh, no, I don't think it's idealistic. I think it's entirely doable”

Q Why is it not fit for purpose? Just because it's...

A Well, because, because, look, there's a wonderful book by a guy named John Taylor Gatto called The Underground History of American Education. Gatto was a teacher in the New York school system, and that book documents how we got to the system that we have today. A system that, you know, teaches everybody the same thing at the same time. We're treating kids by manufacturing date, essentially, and that's an industrial age system. You know, there's a wonderful quote, variously attributed, but education is not the filling of buckets, it's the lighting of flames, and that's what we've totally forgotten. Like, we are in a bucket filling system, um, by manufacturing date, and that's not going to survive this transition.

AI assessment note: “teaches everybody the same thing at the same time. We're treating kids by manufacturing date”

Q What else is flat wrong about how we think about climate that you often hear?

A Well, what's flat wrong is that That people seem to think that this is like a nuisance problem and that, you know, the private sector somehow has got it covered. I just think people have no understanding of the actual physics of this crisis. To put this into perspective, the concentration of greenhouse gases in the atmosphere was very, very constant for about a 10,000 year time period. That 10,000 year time period coincides with the rise of the agrarian age. And then, you know, the last hundred years, we've been radically changing that balance during the industrial age. And so, in climate speak, we call this, the pre-industrial baseline, we call this 10 thousand-year period, where the concentration of greenhouse gas in the atmosphere was roughly constant. And so the question is, how much energy, how much heat are we now retaining in the Earth's system that used to go out into space, right? So what greenhouse gases do is they let the sunlight in, so stuff warms up, and then they keep the heat here. They trap the heat instead of the heat radiating back out into space. And so the question is, how much heat is that? And obviously the right unit to express that is joule, but no, nobody has an idea what a joule or a petajoule or, you know, is. So one way to express it is in terms of Hiroshima-sized nuclear bombs. And so, I do this often as a survey in, like, large rooms of people, an…

AI assessment note: “what's flat wrong is that That people seem to think that this is like a nuisance problem”

Q How, how do you think about central bank digital currencies? We've seen a lot in Europe, but now you have your digital passport post COVID. Now we see Rishi Sunak talking about a central bank digital currency. How do you think about these?

A I believe that a lot depends on the specific features of these, right? So if you wind up with a central bank digital currency that is totally centrally controlled and Anybody's balance can be turned off at a moment's notice, and there's no concept of people having, you know, custody, um, or a chain of custody, where I think it will make it far too easy to circumvent law and to use finance as power. I mean, I thought it was a very, very bad precedent for Trudeau to freeze the, uh, accounts of the truckers during the sort of trucker demonstration. And if central bank digital currencies take that form, I think they're very bad because they will, um, further shift the balance of power from the citizens away to the state. So I'm a fan in the U.S. I think that if we got the right stablecoin legislation, let a lot of stablecoins bloom, allow these stablecoins to, you know, have multiple tiers, essentially, where, you know, the government, if it wants to free somebody's assets, needs to take serious steps to do so, and needs to go to multiple people in order to be able to do it. And potentially there's some amount of cash equivalent, digital cash equivalent that cannot be frozen by government just to strike the right balance of power. So a kind of a Chinese style central bank digital currency where the center really does control everybody's balances, I think is the wrong kind of alloca…

AI assessment note: “I believe that a lot depends on the specific features of these”

Q Why have central banks abused their power through quantitative easing?

A Well, there's actually a really interesting new paper that was just published about this. Um, it's because central banks aren't these entirely benevolent, above-it-all policymakers. Cantillon wrote about this in, like, the 1700, that when you print money, basically the people who are closer to the money benefit more. Closer to the money meaning people who Have good relationships with banks. People are already wealthy. And so, uh, this isn't a new idea. This is an actually well understood, longer running idea. And the reality is that central bankers too are people who have friends who have their own finances. And I think they not only saw this as doing their job, but they also like, this seems to be working well for me and my friends.

AI assessment note: “it's because central banks aren't these entirely benevolent, above-it-all policymakers.”

Q GDP is going to climate, or 30%, or 20%, There's the opportunity cost of budget, and respectfully, one of my mentors, I didn't say this, always reminds me something, people are always bluntly less smart or intelligent than you think, um, and 90% of people will be going, hey, what are you doing? You're taking away from my budget, you're taking away from my budget, you would never get elected.

A It's, it's, I, I, I, you know, I, I, I, I don't think so. I think that, um, People want to actually be called upon. People want to be given purpose. Um, you know, this ties into the earlier part of the conversation where a lot of people feel they don't have purpose. A lot of people feel they don't have, ah, hope, ah, kind of a positive outlook in their lives. What leadership ultimately is about is to craft the kind of visions that people can rally behind, and I just think that opportunity exists today, and, ah, I believe Um, we will see people leaning into this. You know, in a way, the success of Trump, which took some people by surprise, was a version of that. Not the kind of version I'm excited about, but it was somebody saying, look, I will take you to a great place. I mean, it was an imagined place in the past, but it was about making radical changes, not about making incremental changes. It shows that there is an appetite for that. So I just think this The idea that people somehow don't get it, or people aren't smart enough , I think that's wrong. I think people do get it. I think people do understand that the thing we've been doing for the last 10 to 20 years of incrementally trying to fix industrial age is not in fact working.

AI assessment note: “The idea that people somehow don't get it, or people aren't smart enough , I think that's wrong.”

Q Yeah, no, no, I, listen, I totally agree with you there. I think, you know, the other thing that, um, I'm hearing is, you know, bluntly, ah, we always knew crypto was for scammers. Look at FTX. Like, you've been in crypto for so many years. Like, how damaging is FTX, do you think, for the crypto ecosystem?

A I think it'll be a blip, um, in the long term, and it'll be a blip, you know, much like, you know, web van imploding, or a flooz.com, or whatever, you know, pick your favorite .com, you know, thing that imploded. I just think there were, you know, we've been through two crypto bubbles, essentially, and whenever you go through a bubble, it attracts all sorts of, you know, people, some people from the beginning are scammers, some people Bumble themselves way into being scammers, you know, I'm not trying to pass judgment on which one SBF was. I'm just saying, when the bubble bursts, all those people get washed out, and, ah, that's net positive, and I think a few years back, nobody will care.

AI assessment note: “I think it'll be a blip, um, in the long term”

Q promise. And then a quick fire that you tweeted before speaking of Twitter, it boggles your mind. How many founders think they will be able to raise in 20, 23 on metrics with high valuations. I was literally like, thank the Lord. Someone else agrees with me. Um, so what do you advise them? What should they do? I'm a portfolio founder in USV's portfolio. What do you advise me?

A Well, I mean, we, we, we held a call early in 20, 22 for all of our portfolio founders. And we had some of the veterans who had managed through the dot-com bubble implosion, and we're like, if you have raised at a high valuation, you, and you have a lot of money in the bank, you have to get a cash flow positive. It's the only safe place. Literally the only safe place is cash flow positive. You know, some people took that advice, and some people immediately implemented, um, you know, rifts and other things, and they're on a trajectory to being cash flow positive, and I think those companies will do well. And some other companies are going to run into a wall, um, at some point where You know, I've been doing this for nearly 30 years, and I've done, like, three downrounds in that entire time period. Downrounds are incredibly hard to pull off. You know, people try to paste over it with structure and so forth, and some of that stuff will get done.

AI assessment note: “you have to get a cash flow positive. It's the only safe place.”

Q excited for the show today, because, um, it was a little bit different in terms of topic type to what we normally do on TwentyVC, and so I wanted to start on World After Capital, and, and actually, you've spoken before about the transition, in particular, from industrial to knowledge economy. I wanted to ask, for those listeners just providing context, what does this transition mean between the two stages?

A You're referring to a book that I've written, and people can find it online, it's called The World After Capital, um, there's also now, finally, a lovely printed version of it available. The book talks about this transition out of the industrial age into a new age that I think could be, if we do it right, the knowledge age. It doesn't, this isn't like, there isn't some deterministic mechanism that will get us there. We have to make a set of choices. We is here the collective we of humanity to get us there. I think the fundamental difference is, and this is why the book is called The World After Capital, is that the constraining factor on humanity isn't how much physical capital there is. We can do amazing things. I mean, look at Germany. Germany just built a whole bunch of LNG terminals in, like, a few months, right? These are projects that people were like, oh, this will take years, and, but, like, what was the decisive factor? Well, the decisive factor was, finally, they put enough attention to it, saying, we need this, and we need it now, right? So, the rate-limiting factor for humanity really is attention, which is, what are the things that we pay attention to, both individually and collectively as societies, and, Hyper-collectively as all of humanity. Uh, and the book makes the argument that some of the most important things that, um, we should be allocating attention to, …

AI assessment note: “the rate-limiting factor for humanity really is attention”

Q Why is it not fit for purpose? Just because it's...

A Well, because, because, look, there's a wonderful book by a guy named John Taylor Gatto called The Underground History of American Education. Gatto was a teacher in the New York school system, and that book documents how we got to the system that we have today. A system that, you know, teaches everybody the same thing at the same time. We're treating kids by manufacturing date, essentially, and that's an industrial age system. You know, there's a wonderful quote, variously attributed, but education is not the filling of buckets, it's the lighting of flames, and that's what we've totally forgotten. Like, we are in a bucket filling system, um, by manufacturing date, and that's not going to survive this transition.

AI assessment note: “A system that, you know, teaches everybody the same thing at the same time.”

Q GDP is going to climate, or 30%, or 20%, There's the opportunity cost of budget, and respectfully, one of my mentors, I didn't say this, always reminds me something, people are always bluntly less smart or intelligent than you think, um, and 90% of people will be going, hey, what are you doing? You're taking away from my budget, you're taking away from my budget, you would never get elected.

A It's, it's, I, I, I, you know, I, I, I, I don't think so. I think that, um, People want to actually be called upon. People want to be given purpose. Um, you know, this ties into the earlier part of the conversation where a lot of people feel they don't have purpose. A lot of people feel they don't have, ah, hope, ah, kind of a positive outlook in their lives. What leadership ultimately is about is to craft the kind of visions that people can rally behind, and I just think that opportunity exists today, and, ah, I believe Um, we will see people leaning into this. You know, in a way, the success of Trump, which took some people by surprise, was a version of that. Not the kind of version I'm excited about, but it was somebody saying, look, I will take you to a great place. I mean, it was an imagined place in the past, but it was about making radical changes, not about making incremental changes. It shows that there is an appetite for that. So I just think this The idea that people somehow don't get it, or people aren't smart enough , I think that's wrong. I think people do get it. I think people do understand that the thing we've been doing for the last 10 to 20 years of incrementally trying to fix industrial age is not in fact working.

AI assessment note: “I don't think so. I think that, um, People want to actually be called upon.”

Q Why have central banks abused their power through quantitative easing?

A Well, there's actually a really interesting new paper that was just published about this. Um, it's because central banks aren't these entirely benevolent, above-it-all policymakers. Cantillon wrote about this in, like, the 1700, that when you print money, basically the people who are closer to the money benefit more. Closer to the money meaning people who Have good relationships with banks. People are already wealthy. And so, uh, this isn't a new idea. This is an actually well understood, longer running idea. And the reality is that central bankers too are people who have friends who have their own finances. And I think they not only saw this as doing their job, but they also like, this seems to be working well for me and my friends.

AI assessment note: “central banks aren't these entirely benevolent, above-it-all policymakers.”

Q Yeah, no, no, I, listen, I totally agree with you there. I think, you know, the other thing that, um, I'm hearing is, you know, bluntly, ah, we always knew crypto was for scammers. Look at FTX. Like, you've been in crypto for so many years. Like, how damaging is FTX, do you think, for the crypto ecosystem?

A I think it'll be a blip, um, in the long term, and it'll be a blip, you know, much like, you know, web van imploding, or a flooz.com, or whatever, you know, pick your favorite .com, you know, thing that imploded. I just think there were, you know, we've been through two crypto bubbles, essentially, and whenever you go through a bubble, it attracts all sorts of, you know, people, some people from the beginning are scammers, some people Bumble themselves way into being scammers, you know, I'm not trying to pass judgment on which one SBF was. I'm just saying, when the bubble bursts, all those people get washed out, and, ah, that's net positive, and I think a few years back, nobody will care.

AI assessment note: “I think it'll be a blip, um, in the long term”

Q What do you think was wrong with Twitter?

A Well, I think what was wrong with Twitter was that it was trying to provide all the features inside of Twitter itself instead of making Twitter more programmable. Um, that was my, my number one misgiving. And my number two misgiving was that I think really basic things had been botched. Like the blue check program was just a Complete, utter fiasco. And then I also think a lot of the approaches that Twitter took to content moderation, I think were started with good intention, but were not executed very well at all. I do think there were a number of important things wrong. I also think it was wrong how heavily dependent the company was in advertising and so forth. I still believe that there's an opportunity today, even after all the damage that has been done both by the prior regime and by the current one, I still think it's not too late because Twitter is Hard to kill. It's a network of networks. I do wish very much that, um, Elon would basically sort of say, look, we're moving this to a steward ownership model, and we're going to basically make it so that it becomes fully programmable again, and we make it so that, you know, the verification makes sense. I think that's not too late, but, you know, it's, it's an, it is going to be too late at some point. Now, whether or not it's It's possible to do this for him, given the financial structure he's created, that I don't know, but …

AI assessment note: “I think what was wrong with Twitter was that it was trying to provide”

Q And how did the USV story come about then?

A Well, so I knew Brad because Brad had been on the board of, uh, my incubator and we had tried to raise the fund together. And so when Brad and Fred had started Union Square Ventures, uh, they started, uh, in two, three to fundraise and they launched the fund in two, four. Early on, they, uh, got talking to Joshua Schechter, and they asked me about what I thought of Delicious, and I wound up meeting with Joshua, and Joshua hadn't yet, uh, left Morgan Stanley, and I, I said to him that I, you know, um, had worked with Brad, and knew Fred, and then I thought they were great, and so he eventually wound up, uh, quitting his job at Morgan Stanley, and taking money from me in Square Ventures, and I wound up sort of becoming first as advisor to him, And then pretty quickly becoming essentially the president of Delicious, and that was a nine-month glorious ride until Yahoo acquired the company, and I didn't have to go long. The company relocated to the West Coast, and I hung out in the USV offices, started making some angel investments, some of which became USV investments, and some of which were USV investments, so it's an angel in Tumblr, and it's an angel in Etsy, and I brought that deal to Union Square Ventures, and so from there, I

AI assessment note: “I knew Brad because Brad had been on the board of, uh, my incubator”

Q And then, and then the final question before we dive into my favorite quick fire round, uh, it's, it's about, uh, personal box and you've emphasized For the right for people to be represented by, by the personal boss. So why do you think this, and why is it important for you?

A Yeah, so I think what we're seeing is that the foundation of, um, all the systems we're building now is computation. A big question then is who controls what computation? Obviously large companies, whether it's Google, Facebook, uh, Twitter, Snapchat, they control Thousands, hundreds of thousands, millions of servers, lots of computer power. The question is, what do we as individuals control that really acts on our behalf? And in the world of the web, that was actually quite clear. The web browser in the HTTP protocol is referred to as the software that you control, and so that's, you know, why you can do things like ad blocking on the web. On mobile, it's a lot less clear, because on mobile, you're downloading these apps that are controlled by the companies, and you're downloading them onto a phone, where nominally you control the But because you don't control the apps, you're really, by buying a phone and charging it and having a data plan, you're really just providing extended compute power to the centralized platforms. And so I think in order to shift the balance of power back towards, or some of it anyhow, back to the edge, we need to figure out how to give each and every one of us compute that we control and that lets us interact with the other systems through computation that we control ourselves. That's also the primary reason why my, my primary phone is, is not an Appl…

AI assessment note: “we need to figure out how to give each and every one of us compute”

Q as a starting point. I saw one of your other interviews, and you said kind of two symptoms of the transition is one income inequality or wealth inequality, and then two, which is mental health. My question to you is, do you believe that, like, the unequal distribution of wealth is the single greatest problem of the transition, and how do you assess income inequality today as a broad statement?

A I should be clear that I don't, I'm not arguing for that we should have equality of distribution. Um, I, I think that's, Not a desirable, um, type of society to live in. Um, I just think, you know, you can take things too far, right? So you can have a healthy degree of income inequality and you can have an unhealthy degree of income inequality. And I think we have sort of entered the unhealthy territory in this. The reason I think it's unhealthy is because we wind up paying too much attention through various mechanisms to the people who, um, have a fair bit of capital. Part of it is that they can, um, have large influence operations, right? Directly by contributing to political campaigns, indirectly by funding think tanks through personal foundations that pursue agendas largely outside of the democratic process. So I think that's sort of a problem. And then there's a problem at the other end of the distribution where we just don't have a floor, right? So we just make it so that you, especially in the US, you can just completely fall off And, you know, we have a huge, um, problem with people being unhoused. We have a huge problem with medical debt. People can't afford access to health care. My view of society is a sufficiently technologically advanced society, such as the U S ought to provide a floor for everybody. And, and Susan, my wife and I have been long-term advocates for …

AI assessment note: “And I think we have sort of entered the unhealthy territory in this.”

Q I'm intrigued there, because you said frothy environments there, and at what stage does frothy environments become too frothy to invest in? When does kind of speculation become irrational exuberance?

A Well, I, you know, I think that, um, first of all, we need to distinguish from the societal level versus individual investors. So, um, these sort of, um, frothiness in the installation phase is good from a social perspective, because it means that A lot of capital is allocated very rapidly to a sector, and then subsequently you can build, um, interesting things on top of that. Uh, from an individual returns, um, perspective, uh, I, I think it just means that those people who get the timing right will do quite well, and those who don't will lose a lot of money, and I think we as a firm like to invest more in situations where we think that there is sort of a longer-term perspective, so the deployment phase tends to be much longer Many decades, and where you can sort of slowly build a company over time, you know, being sort of the musical chair, like, if you think about self-driving cars, how many self-driving car companies will there ultimately be? It's probably not a large number, and so if you're in the installation phase, you know, you have to get very lucky to pick the winner, and, um, and then even within picking the winner, you have to get the timing right. So a good example of that is if you take a totally different area of There was a huge bubble in three D printing stocks. So, um, publicly traded companies like three D systems and Stratasys, their stock went up massively…

AI assessment note: “if you're in the installation phase, you know, you have to get very lucky”

Q as a starting point. I saw one of your other interviews, and you said kind of two symptoms of the transition is one income inequality or wealth inequality, and then two, which is mental health. My question to you is, do you believe that, like, the unequal distribution of wealth is the single greatest problem of the transition, and how do you assess income inequality today as a broad statement?

A I should be clear that I don't, I'm not arguing for that we should have equality of distribution. Um, I, I think that's, Not a desirable, um, type of society to live in. Um, I just think, you know, you can take things too far, right? So you can have a healthy degree of income inequality and you can have an unhealthy degree of income inequality. And I think we have sort of entered the unhealthy territory in this. The reason I think it's unhealthy is because we wind up paying too much attention through various mechanisms to the people who, um, have a fair bit of capital. Part of it is that they can, um, have large influence operations, right? Directly by contributing to political campaigns, indirectly by funding think tanks through personal foundations that pursue agendas largely outside of the democratic process. So I think that's sort of a problem. And then there's a problem at the other end of the distribution where we just don't have a floor, right? So we just make it so that you, especially in the US, you can just completely fall off And, you know, we have a huge, um, problem with people being unhoused. We have a huge problem with medical debt. People can't afford access to health care. My view of society is a sufficiently technologically advanced society, such as the U S ought to provide a floor for everybody. And, and Susan, my wife and I have been long-term advocates for …

AI assessment note: “I think we have sort of entered the unhealthy territory in this.”

Q My question is, you mentioned obviously the second being, you know, mental health and the state of mental health today. I'm fundamentally pretty terrified about this too. Um, how do you evaluate this today? And is this not only getting worse?

A Well, in the book I talk about, ah, kind of three freedoms that I believe we need to invest in so that we can, um, make this transition. I call them economic freedom, which mentioned that briefly, that's universal basic income. Informational freedom, which we can maybe come back to, which is about who controls computation. And then I talk about psychological freedom. And it's very much the case that our brains didn't evolve in this kind of information environment, right? I mean, our brains evolved in an environment where when you saw a cat, there was a cat. Right, and now the internet can produce an infinity of cat pictures for you. Uh, and we are maladjusted to this information environment, just we're like, we're maladjusted to an environment that has a lot of, um, high fructose corn syrup and everything, right? So that means we need to develop practices that allow us to live in this kind of environment, and to live healthily in that kind of environment. That means some type of form of mindfulness, which is a much abused term, But really what it means is, you know, being able to recognize that you can turn your phone off, that you can set your phone to do not disturb, that much of what you see online isn't real, never was real.

AI assessment note: “we are maladjusted to this information environment”

Q Albert, can I ask, you saw that bust. We're now going through a downturn of sorts. I've never been through a downturn. Many listeners have never been through a downturn before. How does it feel? What's different? What's the same?

A I think that the dot-com bubble bursting, it felt somewhat dreamlike in the sense because it was such a short and super intense period of a few years. You know, the hangover was, um, pretty dramatic. Now we're coming off a very prolonged period of time. I also think that when the dot-com bubble burst, um, there was in fact a lot of opportunity. I think what's different now is that we've actually had a prolonged period of, uh, exploring and building in lots of opportunities, and I'm not sure, you know, it's not to say that there aren't opportunities in software left, there always are, but it feels very, very different. Now, Um, contrast that with crypto for a moment. Um, crypto, we've just come out of a bubble as well. Um, but in crypto, it feels like there's a lot of opportunities, a lot of building, there's a lot of things, um, and this new cycle, you know, feels like the beginning of that, it feels very similarly to me, where we are in crypto today, feels very similar to me where we were in the web post-implosion of the outcome bubble.

AI assessment note: “I think that the dot-com bubble bursting, it felt somewhat dreamlike”