The Exchanges

Q Well, that is very, very kind of you. I think I'm more just lucky to love what I do, so I really appreciate that, but I would love to start with a little bit on you. So for anyone that's been really living under a rock for the last decade, how did you make your way into the world of tech and come to found social capital?

A The short version of the long story is that I, like most people, went to school to do what my parents told me to do, and those choices were to be a lawyer, a doctor, or an engineer, and I chose to be an engineer. So I went to the University of Waterloo, and I studied electrical engineering, but also like a lot of kids, I went into the industry that at the time seemed the sexiest, which at the time was investment banking and derivatives And I worked for an investment bank for a year, but eventually reality kind of caught up with me and I realized I hated the job or not so much hated the job, but I really felt underutilized. And so I moved to Silicon Valley and I worked for a small music startup called Winamp, which was bought by AOL and became part of AOL music. And I rose through the ranks there on the product side and the business side until I was sort of like one level below vice president. By this point I was 24, 25. And then I became the general manager of AOL Instant Messenger by the good grace of my boss at the time, Kevin Conroy, who was my mentor. Very important to have those kinds of people in your life. And then I ran AIM and ICQ. And during that period, I thought about acquiring or trying to acquire a company called the facebook.com, which I had met through my colleague, Sean Parker, because when I was running Winamp, Sean Parker ran a company called Napster. And the…

AI assessment note: “I moved to Silicon Valley and I worked for a small music startup called Winamp”

Q And what a journey it has been with social. I do want to slightly unpack chronologically there, because you mentioned your time at AOL, and I spoke to To Chris Freilich at first round before the show, and he asked, what did you learn from AIM at AOL that helped you at Facebook, do you think?

A Well, it was the second product that I worked on deeply that had a network effect. The first one was Winamp. Winamp had a hundred million users, and we were able to use those users to create two ecosystems. One was for skins, which was sort of the UI layer that sat on top of the media player. And one was for plugins, which was all this incremental Third-party technology, acoustics, and other things that you could use to make the product better. And why that was interesting is it basically showed me the power of a distributed and leveraged team because Winamp was eight of us, nine of us, yet we had hundreds of people building hundreds of skins and plugins to make the product better. At AIM, it was a similar kind of idea where you had these tens of millions of users, and because of those users, we were able to keep the product afloat even during times when the product quality was quite poor, The product strategy wasn't very crisp. Our execution was marginal. And despite all of that, the users would number into the tens of millions on any given day. And so when I put those two ideas together, it very much cemented the value of a network effect, which was not very well trod ground at the time in 2005, six, and seven, and not well understood. Now, obviously relatively obvious to most people.

AI assessment note: “when I put those two ideas together, it very much cemented the value of a network effect”

Q Well, that is very, very kind of you. I think I'm more just lucky to love what I do, so I really appreciate that, but I would love to start with a little bit on you. So for anyone that's been really living under a rock for the last decade, how did you make your way into the world of tech and come to found social capital?

A The short version of the long story is that I, like most people, went to school to do what my parents told me to do, and those choices were to be a lawyer, a doctor, or an engineer, and I chose to be an engineer. So I went to the University of Waterloo, and I studied electrical engineering, but also like a lot of kids, I went into the industry that at the time seemed the sexiest, which at the time was investment banking and derivatives And I worked for an investment bank for a year, but eventually reality kind of caught up with me and I realized I hated the job or not so much hated the job, but I really felt underutilized. And so I moved to Silicon Valley and I worked for a small music startup called Winamp, which was bought by AOL and became part of AOL music. And I rose through the ranks there on the product side and the business side until I was sort of like one level below vice president. By this point I was 24, 25. And then I became the general manager of AOL Instant Messenger by the good grace of my boss at the time, Kevin Conroy, who was my mentor. Very important to have those kinds of people in your life. And then I ran AIM and ICQ. And during that period, I thought about acquiring or trying to acquire a company called the facebook.com, which I had met through my colleague, Sean Parker, because when I was running Winamp, Sean Parker ran a company called Napster. And the…

AI assessment note: “I moved to Silicon Valley and I worked for a small music startup called Winamp”

Q expect it this early, but you mentioned forecasting that I work with a ton of early stage founders and they're often concerned about creating forecasts. As you said, it's highly unpredictable. It's very difficult to forecast in the first place. And then also investors bash founders. If you don't hit your forecast, how would you advise founders in terms of forecasting in the early days when everything is so transient?

A Get better investors. I think the high quality investors also understand the fragility of these kinds of things. And so as a result, don't demand this kind of fake work. And it makes for a much more useful conversation. You know, what I tell the people that I work with at the earliest stages, what I want to see are thoughtful documents that really lay out ideally in prose versus deck form, what they intend to do. And then what I want is a very simple and elegant way of measuring those impacts and being able to then double down on the elements of those that they think are the most impactful. And what it does is it allows us to not work backwards from something that we know is inherently faulty, i.e. a forecast, and work forwards by having a very reasonably detailed product plan along with a way of demarking success and iteration. And I think that that's just a much healthier dynamic to give an early stage founder. The people that rely on forecasts should really be more in the later stages once a business is much more mature and predictable. But at that point, these are things that then get reduced to DCFs and discounted cash flows. And at that point, the investing mindset is very much different. So I think the early stage founder needs to really use something like that as a litmus test for the quality and the intellectual curiosity of the investor that they're going to work with…

AI assessment note: “Get better investors. I think the high quality investors also understand the fragility”

Q Most memorable board member you've sat on a board with and why?

A Easy one. So when I was 33 years old, I joined the ownership group of the warriors. I bought 10% of the business. I was one of six major holders of the business. And my first board meeting, you know, I was one of the first minorities to join the ownership ranks of a professional sports league. So I was checking a lot of firsts, but the first board meeting I ever had at the Golden State Warriors was incredible. I was sitting beside Jerry West. If you don't know basketball, he's the logo on the NBA. And it's just this enormously large imposing figure. And again, you know, he's the logo. This is the entire league is built around Jerry West at some level. So Jerry West couldn't give a fuck. He will talk whenever he wants to talk. He talks about whatever he wants to talk about. He's Jerry West. And I had a brilliant, brilliant time. And it was the honor of my life to sit beside him. And he would, you know, whisper to me constantly about things that he was thinking. It was incredible. It was incredible.

AI assessment note: “I was sitting beside Jerry West. If you don't know basketball, he's the logo”

Q Most memorable board member you've sat on a board with and why?

A Easy one. So when I was 33 years old, I joined the ownership group of the warriors. I bought 10% of the business. I was one of six major holders of the business. And my first board meeting, you know, I was one of the first minorities to join the ownership ranks of a professional sports league. So I was checking a lot of firsts, but the first board meeting I ever had at the Golden State Warriors was incredible. I was sitting beside Jerry West. If you don't know basketball, he's the logo on the NBA. And it's just this enormously large imposing figure. And again, you know, he's the logo. This is the entire league is built around Jerry West at some level. So Jerry West couldn't give a fuck. He will talk whenever he wants to talk. He talks about whatever he wants to talk about. He's Jerry West. And I had a brilliant, brilliant time. And it was the honor of my life to sit beside him. And he would, you know, whisper to me constantly about things that he was thinking. It was incredible. It was incredible.

AI assessment note: “I was sitting beside Jerry West.”

Q No, I like that addition. And penultimate one, what is the future of Silicon Valley in your mind? Is it always going to be the center of tech? Are we seeing the decentralization of entrepreneurship?

A I think we are seeing the decentralization of entrepreneurship. I think that entrepreneurs come in all forms, genders, races, colors, sizes, sexual orientations, and they all come in every geography. And I think there are really great initiatives like Y Combinators, Startup School, Things that are sort of abstracting the fundamental building blocks of being an entrepreneur to something that can be consumed by many, many people all around the world. And in that, I think that there is an enormous momentum and pendulum that's swinging towards global innovation. The thing that I think people need to realize is as that happens, returns will decay. And it happens in every market when you expand. So real estate used to generate 30% IRRs. Now they generate high single digit IRRs. But the asset class and the category is a hundred times bigger than it's ever been. Private equity used to generate 30 or 40% IRRs. Now, again, high single digit IRRs, but the asset class is bigger than it's ever been with trillions of dollars. Similarly, I think we want innovation and startups and company building to be a global endeavor where we can absorb hundreds of billions of dollars a year, trillions of dollars a year. I think the reality that people need to confront themselves with, though, is that this is going to be a business that generates single digit IRRs. But that's good because the net impact f…

AI assessment note: “I think we are seeing the decentralization of entrepreneurship.”

Q expect it this early, but you mentioned forecasting that I work with a ton of early stage founders and they're often concerned about creating forecasts. As you said, it's highly unpredictable. It's very difficult to forecast in the first place. And then also investors bash founders. If you don't hit your forecast, how would you advise founders in terms of forecasting in the early days when everything is so transient?

A Get better investors. I think the high quality investors also understand the fragility of these kinds of things. And so as a result, don't demand this kind of fake work. And it makes for a much more useful conversation. You know, what I tell the people that I work with at the earliest stages, what I want to see are thoughtful documents that really lay out ideally in prose versus deck form, what they intend to do. And then what I want is a very simple and elegant way of measuring those impacts and being able to then double down on the elements of those that they think are the most impactful. And what it does is it allows us to not work backwards from something that we know is inherently faulty, i.e. a forecast, and work forwards by having a very reasonably detailed product plan along with a way of demarking success and iteration. And I think that that's just a much healthier dynamic to give an early stage founder. The people that rely on forecasts should really be more in the later stages once a business is much more mature and predictable. But at that point, these are things that then get reduced to DCFs and discounted cash flows. And at that point, the investing mindset is very much different. So I think the early stage founder needs to really use something like that as a litmus test for the quality and the intellectual curiosity of the investor that they're going to work with…

AI assessment note: “what I want to see are thoughtful documents that really lay out ideally in prose”

Q fantastic people. Everything was going great. I remember being in the Valley when I was 18, and social was absolutely the top topic in Silicon Valley, and bluntly every venture firm was worried about you coming in. So I guess my question is, With everything's going so great, what was that realization moment that the way that you were building it at the time wasn't what you wanted to build?

A I think it was exactly that. When everybody is clamoring to do the same thing and copying, I thought to myself, what have I really done? And I think what I had done was build a very capable and very competent asset gathering machine. The problem is that that would have required me to give up the rest of my life to become the manager of said asset gathering machine. And in order to run that machinery, I think that there's a fundamental element of sales and a fundamental element of traveling and a fundamental element of storytelling that you need to fall in love with. Now, the latter I do love. I think I really love communicating and getting my ideas across to people. But to be very honest with you, the first two were not things I was very passionate about. I wanted to build a kind of organization that, you know, in some ways was a mixture between Berkshire with respect to its Capital and capitalism philosophy. The developments that are like Koch Industries with respect to its view on amalgamation and building conglomerates. And frankly, a view that's in part like the Red Cross or Doctors Without Borders, which is sort of a selfless, mission-driven organization that is trying to do the good and right thing all around the world. And those goals and ideals were just not possible with the lens with which I was viewing the world when I was running a traditional venture capital organi…

AI assessment note: “I had done was build a very capable and very competent asset gathering machine.”

Q that you've enjoyed, everyone can tell you you're wonderful and how smart you are and how brilliant you are. How do you like manage your own psychology, especially, and I don't mean this kind of sycophantically, but when you get to your stage when everyone can suck up to you and be nice to you and tell you those nice things, how do you check yourself at the door almost?

A It has become less and less of an issue because it doesn't really hit me, meaning if somebody gives me a compliment, I know enough to be thoughtful and gracious to accept it, but if you could walk through what's happening in my mind, imagine there's me standing there with a big glass dome, and somebody's throwing something at me, and what I hear is, bing, it just bounces off, and the reason is because I've really come to believe That the only person I'm really trying to impress is myself. It doesn't mean that I don't care what others think, or that I can't be a good, honorable person to the people around me. That's not what it means. But it just means that if I look at my desk, I have one piece of paper, and I've written on it the following things, which, and I just told you what they are, but I'll say them again. This one piece of paper on my desk says the following things. Calm, humble, focused, kind to myself, vulnerable, authentic. And it's a way of reminding myself every day who I'm battling, and I'm battling myself to find an incrementally better self on these dimensions every day. So that's how I kind of think about it.

AI assessment note: “the only person I'm really trying to impress is myself.”

Q Can I ask, did having children change your perspective and your reflection on your own childhood? And also, how did having children change your operating mentality? Because it's such a life transition.

A I think that children in many ways are the best and worst reflections of you as a parent. So what they can give you is complete, unfiltered, non-judgmental love. They look up to you like a hero, and it's an incredible sensation because probably in most of our lives, unless we were some famous singer or athlete or whatever, we probably weren't adored by anyone really until we had a child, and when you have a child and you see them look at you, you are the single solitary thing in their life. And it's an incredible, incredible feeling. And so for me, it was a realization, actually, Harry, about how much I didn't have growing up. Emotionally. And it was what really said to me, I have to go on this journey and figure out what all of this means. What does it mean to have grown up the way that I did? What does it mean to not have had a childhood? How do I think about giving a childhood that's light and free and full of possibility and love to my children? That's the best gift that I'll give them. So they did that for me. The other thing that they did was really help clarify for me what was important. Because what wasn't important was then any sort of monetary or other demarcation. What was really, really important was the ability to sort of allocate my time so that whenever I was making sacrifices for my family, it was resulting in something that mattered to them. And what matters to…

AI assessment note: “it was a realization, actually, Harry, about how much I didn't have growing up.”

Q What's your biggest strength and your biggest weakness, do you think?

A My biggest strength is that I think I have a very good mind for understanding risk and what is a good risk and what is a bad risk and how to make risk-adjusted bets and You know, I played poker for a long time, and I've refined it there, where I put people to the test for huge decisions, huge amounts of money, and vice versa, I've been put to the test. And so I've learned to really assess risk and what I know and what I don't know. So I think I'm pretty good at that. I think my biggest weakness is that I still have these pangs where, because of these self-worth issues, I can be somewhat destructive, and I give myself a harder time than I need to. And so I have these inferiority complexes, and that's probably my biggest weakness still.

AI assessment note: “My biggest strength is that I think I have a very good mind for understanding risk”

Q No, I like that addition. And penultimate one, what is the future of Silicon Valley in your mind? Is it always going to be the center of tech? Are we seeing the decentralization of entrepreneurship?

A I think we are seeing the decentralization of entrepreneurship. I think that entrepreneurs come in all forms, genders, races, colors, sizes, sexual orientations, and they all come in every geography. And I think there are really great initiatives like Y Combinators, Startup School, Things that are sort of abstracting the fundamental building blocks of being an entrepreneur to something that can be consumed by many, many people all around the world. And in that, I think that there is an enormous momentum and pendulum that's swinging towards global innovation. The thing that I think people need to realize is as that happens, returns will decay. And it happens in every market when you expand. So real estate used to generate 30% IRRs. Now they generate high single digit IRRs. But the asset class and the category is a hundred times bigger than it's ever been. Private equity used to generate 30 or 40% IRRs. Now, again, high single digit IRRs, but the asset class is bigger than it's ever been with trillions of dollars. Similarly, I think we want innovation and startups and company building to be a global endeavor where we can absorb hundreds of billions of dollars a year, trillions of dollars a year. I think the reality that people need to confront themselves with, though, is that this is going to be a business that generates single digit IRRs. But that's good because the net impact f…

AI assessment note: “I think we are seeing the decentralization of entrepreneurship.”

Q fantastic people. Everything was going great. I remember being in the Valley when I was 18, and social was absolutely the top topic in Silicon Valley, and bluntly every venture firm was worried about you coming in. So I guess my question is, With everything's going so great, what was that realization moment that the way that you were building it at the time wasn't what you wanted to build?

A I think it was exactly that. When everybody is clamoring to do the same thing and copying, I thought to myself, what have I really done? And I think what I had done was build a very capable and very competent asset gathering machine. The problem is that that would have required me to give up the rest of my life to become the manager of said asset gathering machine. And in order to run that machinery, I think that there's a fundamental element of sales and a fundamental element of traveling and a fundamental element of storytelling that you need to fall in love with. Now, the latter I do love. I think I really love communicating and getting my ideas across to people. But to be very honest with you, the first two were not things I was very passionate about. I wanted to build a kind of organization that, you know, in some ways was a mixture between Berkshire with respect to its Capital and capitalism philosophy. The developments that are like Koch Industries with respect to its view on amalgamation and building conglomerates. And frankly, a view that's in part like the Red Cross or Doctors Without Borders, which is sort of a selfless, mission-driven organization that is trying to do the good and right thing all around the world. And those goals and ideals were just not possible with the lens with which I was viewing the world when I was running a traditional venture capital organi…

AI assessment note: “When everybody is clamoring to do the same thing and copying, I thought to myself”

Q a much calmer conversation than I anticipated, so that's super nice. I do have to ask, in terms of the integrity element there, I'm really interested. When you think about human psychology, the human assessment, how do you assess for this level of integrity when evaluating either people to join social stay, founders to invest in? Are that kind of leading indicators signals that you've learned signal high integrity people?

A Well, one of the things you have to decide is whether you're hiring for functional role and competence, or whether you're hiring for a set of behavioral markers. If you're hiring for the former, for example, like, you know, you're going to hire an engineer, and you need to understand whether they're a good front end engineer or not, or they understand a very specific tool chain better than other people. The concept of integrity actually doesn't have much place in the world in the hiring decision, and the reason is because the surface area with which they exhibit integrity doesn't really exist. I mean, I suppose that they could, you know, produce a bunch of fake check-ins, but at the end of the day, if you can't build features properly or you've completely lied about your capabilities, you'll get fired. The judgment is in the technical execution, but those are very binary outcomes, things that you write either work or don't work. If, however, you're hiring for what I was hiring for, which are partners, Open-ended thought partners who will be there. Then it's much more about character. And the only way that you can find people with high integrity is to spend enormous amounts of time with them over a longitudinal period of time. So it's not about two weeks of 10 hours a day. It turns out to be five or six months of many, many, many hours every week. And the reason is because event…

AI assessment note: “only way that you can find people with high integrity is to spend enormous amounts of time”

Q I guess the question I have was like, How did you deal with that? And bluntly to math, and you know, I open up on the show sometimes maybe too much, but my mom's got MS, multiple sclerosis, and it's super tough to go from being the child to being the adult much earlier than you thought. How did you deal with it? And how did you get through it?

A It's a really thoughtful thing you just said. You know, I was robbed of my childhood, Harry, and that may seem like a really dramatic statement, but when I see my children, there's a level of lightness that my children have as they approach their day-to-day life. They can run and jump and swim and play, and they don't live with a scepter of fear. And my childhood was largely about making sure that I understood where my dad was in his psychological state. And that was the only way to protect myself, physically as well as psychologically. So it robbed me of a childhood of that lightness. But what it also did, it forced me to become extremely superficial. In the sense that I didn't learn how to build any intimacy with people. What I was taught very early on was that adults will let you down. What I was imprinted inside me was that I was pretty worthless, because why else would somebody treat you like that? You must not be a very worthwhile individual. And all of those things created enormous dysfunction that cascaded into my adult life. What I would tell you now, though, is that I wouldn't have changed it for the world Because it was in that struggle that I've learned that these are the things that really matter. And in fixing it, I found things that I never thought existed in the world. So emotional intimacy, deep sort of sensations of like love and kindness and the ability to be…

AI assessment note: “And in fixing it, I found things that I never thought existed in the world.”

Q Can I ask, did having children change your perspective and your reflection on your own childhood? And also, how did having children change your operating mentality? Because it's such a life transition.

A I think that children in many ways are the best and worst reflections of you as a parent. So what they can give you is complete, unfiltered, non-judgmental love. They look up to you like a hero, and it's an incredible sensation because probably in most of our lives, unless we were some famous singer or athlete or whatever, we probably weren't adored by anyone really until we had a child, and when you have a child and you see them look at you, you are the single solitary thing in their life. And it's an incredible, incredible feeling. And so for me, it was a realization, actually, Harry, about how much I didn't have growing up. Emotionally. And it was what really said to me, I have to go on this journey and figure out what all of this means. What does it mean to have grown up the way that I did? What does it mean to not have had a childhood? How do I think about giving a childhood that's light and free and full of possibility and love to my children? That's the best gift that I'll give them. So they did that for me. The other thing that they did was really help clarify for me what was important. Because what wasn't important was then any sort of monetary or other demarcation. What was really, really important was the ability to sort of allocate my time so that whenever I was making sacrifices for my family, it was resulting in something that mattered to them. And what matters to…

AI assessment note: “it was a realization, actually, Harry, about how much I didn't have growing up.”

Q What's your biggest strength and your biggest weakness, do you think?

A My biggest strength is that I think I have a very good mind for understanding risk and what is a good risk and what is a bad risk and how to make risk-adjusted bets and You know, I played poker for a long time, and I've refined it there, where I put people to the test for huge decisions, huge amounts of money, and vice versa, I've been put to the test. And so I've learned to really assess risk and what I know and what I don't know. So I think I'm pretty good at that. I think my biggest weakness is that I still have these pangs where, because of these self-worth issues, I can be somewhat destructive, and I give myself a harder time than I need to. And so I have these inferiority complexes, and that's probably my biggest weakness still.

AI assessment note: “My biggest strength is that I think I have a very good mind for understanding risk”

Q I'm struggling with is like the velocity of funding rounds today is so fast that you don't have the time with the speed of rounds and the execution of them to really understand the psychology of the founder and determine the integrity between the two of you. How do you think about like the velocity of rounds? And is that not a fundamental challenge to the determination of their integrity?

A It's a fundamental challenge. And I think that the reality is though, that the surface area again, Is relatively small for these kinds of decisions. So I don't worry about it as much between the founder and the investor. I think between the investor and his or her partners, it's a much more important decision. And the reason is because again, it's much harder in 2020 to start a company and fundamentally cheat and lie. You can't steal money or embezzle as easily as you could have in the past. You can't fake a product. You can't fake customers as easily as you could in the past. So The basic questions of integrity I think are relatively well answered because the work product is so iterative and tactical, and there are so many things on a constant basis that an entrepreneur has to do to make a company successful that it's very hard to lack integrity. That being said, to be a partner in a venture capital firm, it's very easy, frankly, to lack integrity because there are no points of demarcation, and you only learn about your fellow partners In very sporadic bursts over very, very long periods of time, largely when it comes to money and credit. So, you know, ego and compensation tend to be these things that are highly amplified in these traditional partnership structures. And it just takes a long time. So if I was a VC, what I would tell myself, my job is to make sure I don't miss. …

AI assessment note: “It's a fundamental challenge. And I think that the reality is though”

Q that you've enjoyed, everyone can tell you you're wonderful and how smart you are and how brilliant you are. How do you like manage your own psychology, especially, and I don't mean this kind of sycophantically, but when you get to your stage when everyone can suck up to you and be nice to you and tell you those nice things, how do you check yourself at the door almost?

A It has become less and less of an issue because it doesn't really hit me, meaning if somebody gives me a compliment, I know enough to be thoughtful and gracious to accept it, but if you could walk through what's happening in my mind, imagine there's me standing there with a big glass dome, and somebody's throwing something at me, and what I hear is, bing, it just bounces off, and the reason is because I've really come to believe That the only person I'm really trying to impress is myself. It doesn't mean that I don't care what others think, or that I can't be a good, honorable person to the people around me. That's not what it means. But it just means that if I look at my desk, I have one piece of paper, and I've written on it the following things, which, and I just told you what they are, but I'll say them again. This one piece of paper on my desk says the following things. Calm, humble, focused, kind to myself, vulnerable, authentic. And it's a way of reminding myself every day who I'm battling, and I'm battling myself to find an incrementally better self on these dimensions every day. So that's how I kind of think about it.

AI assessment note: “the reason is because I've really come to believe That the only person I'm really trying to impress is myself.”

Q And what a journey it has been with social. I do want to slightly unpack chronologically there, because you mentioned your time at AOL, and I spoke to To Chris Freilich at first round before the show, and he asked, what did you learn from AIM at AOL that helped you at Facebook, do you think?

A Well, it was the second product that I worked on deeply that had a network effect. The first one was Winamp. Winamp had a hundred million users, and we were able to use those users to create two ecosystems. One was for skins, which was sort of the UI layer that sat on top of the media player. And one was for plugins, which was all this incremental Third-party technology, acoustics, and other things that you could use to make the product better. And why that was interesting is it basically showed me the power of a distributed and leveraged team because Winamp was eight of us, nine of us, yet we had hundreds of people building hundreds of skins and plugins to make the product better. At AIM, it was a similar kind of idea where you had these tens of millions of users, and because of those users, we were able to keep the product afloat even during times when the product quality was quite poor, The product strategy wasn't very crisp. Our execution was marginal. And despite all of that, the users would number into the tens of millions on any given day. And so when I put those two ideas together, it very much cemented the value of a network effect, which was not very well trod ground at the time in 2005, six, and seven, and not well understood. Now, obviously relatively obvious to most people.

AI assessment note: “cemented the value of a network effect”

Q I have to take this opportunity to ask this. I've just joined my first board over the last two years. Fundamentally, I'm very, very insecure about it. I sit with people who've been doing it for 20 years and sound very smart. What advice would you give me really looking to be the best board member that I can be?

A I think that governance really matters, especially as a company scales, because people will use success as a reason to not compound integrity. So I think learning from someone who really understands that integrity is not a question of leverage. It's sort of a binary decision. And so I would make sure that you really understand what's right or wrong, and you stand up for yourself because there is no board that's worth sitting on when they start to behave in a way that violates your moral compass. It's just not worth it. And invariably the best CEOs see it and then they appreciate it because in many ways, a lot of CEOs test the boundaries almost in a curious way to see who has the balls to tell them no. And I think that's a really important thing to learn. The other thing is that I would really encourage you to get the CEO to write a multi-page prose memo before every board about what he or she is thinking about the company. And I would study that, and I would be really prepared. I think that not enough CEOs do it, and then as a result, not enough board members are really prepared to really help understand their point in their own psychological journey in running a company.

AI assessment note: “get the CEO to write a multi-page prose memo before every board”

Q Can I ask, do you like to structure those moments of inaction? In terms of the structuring of the research, the structuring of the work that you do in that time, and has there been like a couple of lessons that you've drawn from maybe specific occasions where your mindset has changed either positively or negatively in those moments of inaction?

A Yeah, in fact, so inaction doesn't mean you sit around doing nothing, you're working out, or you're playing bridge online. I wish my life were that easy, but it's not. The things that we work on are complicated enough that, at least for me, I don't know them well enough, and so I am trying in a short burst of time, i.e. three to six months, Become expert enough to make qualified decision on a large quantum of capital. And so the way that I break down my periods of inaction is essentially a learning process. And what we're first trying to do is understand the broad landscape. And then we're trying to refine very specific ideas that we then go deep, deep, deep into. And we find experts all around the world, whether they're university professors or scientists or other entrepreneurs, and we just try to learn. And we, you know, we ask as humbly as possible for them to teach us. And that process takes another two or three months. And then we take all of that information from the first four months. And then I essentially try to write a narrative that explains an understanding of a market or a particular opportunity in a way where it becomes investable. Because then that narrative, six or seven pages of single spaced writing become my way of distilling many months of knowledge and inaction into some potential action. So that's how it works for me. I'm not saying it's the best and I won…

AI assessment note: “the way that I break down my periods of inaction is essentially a learning process.”

Q Yeah, no, listen, I, I do agree with that, but very pleased to hear about the budget base as well. Final one, what do the next five years hold for you and for social? How do you think about that exciting roadmap ahead?

A In the next five years, what I would really like to prove to myself is that I can do these large concentrated investments in a Or two decisions a year or every 18 months, I basically have a very, very high hit rate. That's what I would like to prove over the next five years. And I think at that point, that's a really good demarcation where if I think that I can continue to grow as a person at the same rate or even half the rate that I had over the last couple, then I think I'll be in a really good position to take that next step, take the business public and get this piece of paper off my desk.

AI assessment note: “In the next five years, what I would really like to prove to myself is”

Q I guess the question I have was like, How did you deal with that? And bluntly to math, and you know, I open up on the show sometimes maybe too much, but my mom's got MS, multiple sclerosis, and it's super tough to go from being the child to being the adult much earlier than you thought. How did you deal with it? And how did you get through it?

A It's a really thoughtful thing you just said. You know, I was robbed of my childhood, Harry, and that may seem like a really dramatic statement, but when I see my children, there's a level of lightness that my children have as they approach their day-to-day life. They can run and jump and swim and play, and they don't live with a scepter of fear. And my childhood was largely about making sure that I understood where my dad was in his psychological state. And that was the only way to protect myself, physically as well as psychologically. So it robbed me of a childhood of that lightness. But what it also did, it forced me to become extremely superficial. In the sense that I didn't learn how to build any intimacy with people. What I was taught very early on was that adults will let you down. What I was imprinted inside me was that I was pretty worthless, because why else would somebody treat you like that? You must not be a very worthwhile individual. And all of those things created enormous dysfunction that cascaded into my adult life. What I would tell you now, though, is that I wouldn't have changed it for the world Because it was in that struggle that I've learned that these are the things that really matter. And in fixing it, I found things that I never thought existed in the world. So emotional intimacy, deep sort of sensations of like love and kindness and the ability to be…

AI assessment note: “In fixing it, I found things that I never thought existed in the world.”

Q Can I ask for you though, when you think about kind of rolling this out and doing a lot more aggressively or just moving forward, using it more as a structure, is it not frustrating that it's like one at a time and you have to raise them one by one? And how do you think about kind of gaining velocity of SPACs over time?

A I can't say that I have the answer. The reality is that the SEC has very strict regulations with how many of these you can do at the same time. So to your point, it's not as if software could automate this where you could have a thousand, or even a hundred, or even 10. But I think that that's also right, because I think that if that happened, you'd have a bunch of fly-by-night folks who viewed this largely as a scheme to get rich, and I think whenever that happens, a market can get perverted by those kinds of actors. The reality is these things take time, they're a little bespoke, each one, they are handcrafted, And so they take people who have an interesting cross section of skills. You have to be, particularly if you're going to work with a tech founder, you have to be on the one hand, relatively savvy on the capital markets and a decent investor, but on the other hand, a good translational layer that can explain the product and the technology and help the CEO transition them into being public. So that's a unique skill set that I don't think many people have. I do think some people and a handful more than I, but I think it's a unique enough thing where if we can do our part in getting that 4000 Closer to 8000, I think we'll all be better off.

AI assessment note: “The reality is that the SEC has very strict regulations with how many of these”

Q Can I ask, do you like to structure those moments of inaction? In terms of the structuring of the research, the structuring of the work that you do in that time, and has there been like a couple of lessons that you've drawn from maybe specific occasions where your mindset has changed either positively or negatively in those moments of inaction?

A Yeah, in fact, so inaction doesn't mean you sit around doing nothing, you're working out, or you're playing bridge online. I wish my life were that easy, but it's not. The things that we work on are complicated enough that, at least for me, I don't know them well enough, and so I am trying in a short burst of time, i.e. three to six months, Become expert enough to make qualified decision on a large quantum of capital. And so the way that I break down my periods of inaction is essentially a learning process. And what we're first trying to do is understand the broad landscape. And then we're trying to refine very specific ideas that we then go deep, deep, deep into. And we find experts all around the world, whether they're university professors or scientists or other entrepreneurs, and we just try to learn. And we, you know, we ask as humbly as possible for them to teach us. And that process takes another two or three months. And then we take all of that information from the first four months. And then I essentially try to write a narrative that explains an understanding of a market or a particular opportunity in a way where it becomes investable. Because then that narrative, six or seven pages of single spaced writing become my way of distilling many months of knowledge and inaction into some potential action. So that's how it works for me. I'm not saying it's the best and I won…

AI assessment note: “the way that I break down my periods of inaction is essentially a learning process.”

Q I'm struggling with is like the velocity of funding rounds today is so fast that you don't have the time with the speed of rounds and the execution of them to really understand the psychology of the founder and determine the integrity between the two of you. How do you think about like the velocity of rounds? And is that not a fundamental challenge to the determination of their integrity?

A It's a fundamental challenge. And I think that the reality is though, that the surface area again, Is relatively small for these kinds of decisions. So I don't worry about it as much between the founder and the investor. I think between the investor and his or her partners, it's a much more important decision. And the reason is because again, it's much harder in 2020 to start a company and fundamentally cheat and lie. You can't steal money or embezzle as easily as you could have in the past. You can't fake a product. You can't fake customers as easily as you could in the past. So The basic questions of integrity I think are relatively well answered because the work product is so iterative and tactical, and there are so many things on a constant basis that an entrepreneur has to do to make a company successful that it's very hard to lack integrity. That being said, to be a partner in a venture capital firm, it's very easy, frankly, to lack integrity because there are no points of demarcation, and you only learn about your fellow partners In very sporadic bursts over very, very long periods of time, largely when it comes to money and credit. So, you know, ego and compensation tend to be these things that are highly amplified in these traditional partnership structures. And it just takes a long time. So if I was a VC, what I would tell myself, my job is to make sure I don't miss. …

AI assessment note: “It's a fundamental challenge. And I think that the reality is though”

Q of their redacting his posts, unlike Twitter maybe, comes about the question of discussion on really platform versus publisher and whether you can be both. To me, maybe I shouldn't say before I hear your answer, but to me, you can't be both, and maybe Mark was right. How do you view maybe The decision, whether you can be both platform and publisher, and how maybe you would have acted?

A I'm not sure about the semantics, Harry, but here's what I will say. I think that all of these online social networks are coming to a fork in the road, and the fork in the road is balancing the morality of the employees and the board and the shareholders and the rest of the stakeholders, and in that balancing act, different sites will make different decisions. And I think what you're going to see is a distribution of outcomes where you will have more left-leaning sites, more right-leaning sites, and more centrist organizations, and they will reflect their moral and ethical view into the product and the business decisions they make as a result of it. And I think that that's no different than what you see in the media landscape today offline. So you have left-leaning papers, right-leaning papers, centrist papers, libertarian papers. You have the same for Radio. You have the same for magazines. You have the same for broadcast television. And I think it stands to reason that what's really happening right now is the same decomposition and fragmentation of the online landscape that frankly has happened to use TV as an example. We used to have one or two or three broadcast channels and fast forward, seven years later, you have 700 channels. And it's probably true that there isn't a one size fits all social networking product for information consumption for everybody. And as a result o…

AI assessment note: “I'm not sure about the semantics, Harry, but here's what I will say.”

Q that you have is like, in your mission to really make social into the Berkshire of our generation, which I've heard you say before, is the SPAC strategy one step on the milestone process to getting there? Or is it the step which scales with the size of the SPAC itself? How do you think about the milestones to get to that end goal of the Berkshire of our generation?

A It's sort of a tool. It's not the end in and of itself. I think what I do with these SPACs is continue to refine our toolkit of investing, continue to understand how to punctuate long periods of inaction with things that are highly accretive. I think that's a definite skill. If you think about investing more broadly speaking, it's an infinite game. And the only real competitor is yourself because the only thing you're really fighting is not really market gyrations, but it's your own psychology. And if you can manage your own psychology, you have the ability to survive. And when you're trying to win an infinite game, the only marker of success is survival, right? Because by definition, if you get sort of to the end of your life and you're still in the game, you've won. And it doesn't matter how much you have or how much you lost. It's just that you never lost the game. And unfortunately, I think a lot of people treat investing as the opposite, which is a finite game. Where you're trying to sum up something, your net worth, or your assets, or whatever, and I just don't think that's what it is. I think the financial markets are a beautiful test of your ability to self-actualize, and to psychologically evolve, and survive, and to build true emotional resilience. Because if you do it, I think the best investors have that, and you know, Buffett is a perfect example. So When I talk ab…

AI assessment note: “It's sort of a tool. It's not the end in and of itself.”