The Exchanges

Q When did you realize investing was your calling? Cause you obviously were at Founder Collective for three years and worked with the team there. When was that, this is what I was born to do?

A Well, I, I always thought it was, you know, I'd read about it and thought it was interesting, but didn't have the means or the, you know, it wasn't, well, I, sorry, I worked briefly at, uh, Bessemer Venture Partners as a junior person in 2003 and for about a year. And then But I, I didn't see a path. Honestly, it was a much smaller industry. Um, And, and I didn't, and I thought, I had, I thought that I needed to be an, I wanted to be an entrepreneur and I needed to be an entrepreneur. I thought to be a credible investor. Um, so I left and started a company. They funded me along with general catalyst. Um, and then we ended up selling the company pretty early, um, in 2006. And I, I literally the, I think it was the day after we sold the company, I was on the phone with Ron Conway and I was like, I want to start angel investing. And I think probably four days later I was out in the Bay area and And he was introducing me to people, you know, like, I just wanted to do that. I was working at McAfee, but I also, you know, it's just, it's more of a corporate job at that point. So I had time to do this stuff. Um, so right away, and then you mentioned the founder collective guys, uh, Dave Frankel and Eric Paley, like we had known each other, um, from school and actually had a business plan. Funny enough, like this is, I mean, this would have been a great business, but we, um, 2004, we ha…

AI assessment note: “day after we sold the company, I was on the phone with Ron Conway”

Q I, I think that's important because I, I mean, what does that, what does that look like in reality, Chris? Sorry, just to take it down to a more human level. Uh, what does that actually look like in reality for these networks?

A So for example, I'll just give you an example. We have a, uh, So it's a blockchain based social network called Farcaster is where investors in and Farcaster, if you use it, it, you can download it and use it. Uh, it's, uh, it's, you know, it's got a couple 100,000 active users today. It's, uh, it will feel a lot like a Twitter or something, you know, it's the user experience, everything else. Um, the difference is that you're in on Twitter. When I have C Dixon and I have an audience that's controlled by Twitter and they can change the algorithm. They can change the economics. They can, you know, Change the rules. They could remove me from the platform. On Farcaster, I control my name, and I control my audience. Much more the way, like, with an email list. Like, you think about your, you know, you have your email list on Substack, you own that list. If Substack messes with you, you can switch to another provider. That's how Farcaster works. So there's many, Farcaster's the protocol, and there's many different clients. The same way with email and with web browsing, you have many different clients. And so it provides the kind of advanced functionality of social network that you want and all the features, but it, Pushes control to the users. Um, and, and so they kept choice. They can choose different software providers, right? That's just one example, but there's a, I think there's…

AI assessment note: “So it's a blockchain based social network called Farcaster”

Q Can I ask you, you mentioned that the kind of casino-like culture, and you mentioned the word speculation. Is speculation bad always? Like, can it not be an inroad for interest? You know?

A No, I don't, look, I don't think speculation is always bad. I think that I, I, I would liken it to, um, so the housing market. So, so to me, the point of a blockchain is to enable digital ownership. And so, like an NFT is a, um, is a, A digital object. Um, and it can represent a name and a social network. It can represent a game, an object in a video game. It can represent a piece of art. It can represent whatever the creator wants to represent. Um, similar to the offline world. Like, I think we'd all agree that home ownership is, has a positive societal value, right? Like it's psychologically, personally rewarding to own a home and, and, and, you know, have a family and it, uh, I think we think societally, like people that own homes are more likely to improve their homes and we're lucky to contribute to their community. So home ownership's a good thing. We also have speculation around real estate. People flip houses, you know, REITs and all this other kind of stuff. I don't think we think, I don't think the speculation is bad, but I think that the point is home ownership. And in fact, the speculation pays a purpose, right? You have price discovery, liquidity. Um, and I think generally society, we allow spec, I mean, stock markets are similar, right? Like the, the purpose of a stock market is to productively allocate capital to companies that are building products. The by-produ…

AI assessment note: “No, I don't, look, I don't think speculation is always bad.”

Q Can I ask you, you mentioned that the kind of casino-like culture, and you mentioned the word speculation. Is speculation bad always? Like, can it not be an inroad for interest? You know?

A No, I don't, look, I don't think speculation is always bad. I think that I, I, I would liken it to, um, so the housing market. So, so to me, the point of a blockchain is to enable digital ownership. And so, like an NFT is a, um, is a, A digital object. Um, and it can represent a name and a social network. It can represent a game, an object in a video game. It can represent a piece of art. It can represent whatever the creator wants to represent. Um, similar to the offline world. Like, I think we'd all agree that home ownership is, has a positive societal value, right? Like it's psychologically, personally rewarding to own a home and, and, and, you know, have a family and it, uh, I think we think societally, like people that own homes are more likely to improve their homes and we're lucky to contribute to their community. So home ownership's a good thing. We also have speculation around real estate. People flip houses, you know, REITs and all this other kind of stuff. I don't think we think, I don't think the speculation is bad, but I think that the point is home ownership. And in fact, the speculation pays a purpose, right? You have price discovery, liquidity. Um, and I think generally society, we allow spec, I mean, stock markets are similar, right? Like the, the purpose of a stock market is to productively allocate capital to companies that are building products. The by-produ…

AI assessment note: “No, I don't, look, I don't think speculation is always bad.”

Q I've spoken to many of the team at Founders Fund on the show, and they always say that the best founders don't need their VCs and they don't need help. How do you feel about the best founders actually don't need their VC?

A I think there's a distinction between, do you need advice and do you need sort of network? I guess. Um, like, I just don't believe that if you're, especially if the sort of founders that we Tilt towards, which are technical product founders. They, it's just impossible that they know the right customer prospect at all fortune, 500 companies. Like I just don't. So I think it depends, like the best founders, do they know how to build the product and the technology for sure? And like, for example, I I'll speak for myself and not the firm, but I, I rarely, um, in fact, I'm, I rarely get involved in, in those parts of the companies. And in fact, I, Probably judiciously tried to not comment on that because I think sometimes board members and investors opinions on like this button should be purple or something like they'll say these things and then suddenly it'll become like an organizational priority. Um, so, so I think, I think if you look, but there's just no reason that, for example, a founder doesn't have as much experience with fundraising. They don't know all the investors. They don't know all the potential partners. They don't know all the potential customers. They don't have the same talent network. Like it just, it just almost Sort of, I mean, inconsistent with their, if they're, if they're truly a deep product or technologist sort of, you know, founder, they just couldn't be…

AI assessment note: “I think there's a distinction between, do you need advice and do you need sort of network?”

Q So Chris, as I said, everything is editable. Um, and I asked from pure inquisition because I am naive as fuck on this. If I'm honest, why does everyone throw the accusation then against Andreessen crypto for pump and dump?

A I, that's just factually incorrect. So I, I, I don't know where that, I mean, where they get their, their alleged facts. So first of all, all of our funds are Ten-year venture funds. Um, we, throughout the lifetime of the crypto funds, we could, we today hold 94% of our investments. The length of the lockup in some ways is limited by the market, so we've been advocates. In other words, if we go too far, the entrepreneurs won't work with us, and so we've been, we've been advocating for a long time, uh, for, you know, regulatory guardrails that make longer lockups. Um, I, I don't understand where this comes from. The, the, look, you don't, it doesn't, uh, You don't have to believe that we're good, good people or something, but just look at all the charts, look at the history of venture capital, like selling your winners is the worst possible strategy, and the things that aren't winners don't move the needle on funds. Like, it's just not how venture capital works. There's a J curve, um, and that holding things for a long time is, is always, you know, if it's a growing market, that's, that's, you know, that's growing in value, which crypto has. Is always a good strategy. So I, I, yeah, I don't know. That's just misinformation.

AI assessment note: “we today hold 94% of our investments. The length of the lockup”

Q Chris, we're gonna do a quick fire round, because otherwise I could talk to you all day. One, what have you changed your mind on in the last 12 months?

A Probably a lot of things. Um, I think I, you know, one that might be interesting is I, I, you know, COVID, I, Like a lot of everyone, I guess, we went remote, and I really wanted to believe this was the new world, um, and, and all these kinds of, you know, tweet, tweet threads that you read about how the world's changed, and I, and I wanted to believe that, you know, just that you could have now a globally distributed workforce, people could live wherever they want. Um, I, I've come to think it's, especially in our business, just doesn't work. Um, and that, you know, we've now kind of returning our, like, at least on our investment team, you know, back in one place in New York, um, It's just, you know, the relationships, um, are very hard, you know, it's very, in some ways I think what, what works in remote teams is that you're, you know, you're kind of piggybacking off past relationships and it's very hard to build new relationships. It's hard to sort of share knowledge. This is a quick fire around. I'll try to, I'll try, I'll stop. Um, but, uh, that, that's been something I think I've changed my mind.

AI assessment note: “I've come to think it's, especially in our business, just doesn't work.”

Q What are you most concerned about in the world today, Chris?

A Well, the issue I spend the most time on that I'm concerned about is, are these issues we're discussing? I think So I would call broadly internet freedom, uh, little tech versus big tech. I think that the outside world perceives would say that someone like me and you work in the tech industry. I see myself as working on the behalf of sort of little tech of startups. I think that having a dynamic Internet economy and software economy is good for the world. I think it's good for innovation. I think it's good for a whole bunch of reasons. And I think we're at serious risk of losing that. And I think the two, the, to me, the two issues are, I think that there's a real effort to ban open source AI, and there's a real effort to ban blockchains. And I care a lot about those two issues and spend a lot of time thinking about that and working on that.

AI assessment note: “I would call broadly internet freedom, uh, little tech versus big tech.”

Q When did you realize investing was your calling? Cause you obviously were at Founder Collective for three years and worked with the team there. When was that, this is what I was born to do?

A Well, I, I always thought it was, you know, I'd read about it and thought it was interesting, but didn't have the means or the, you know, it wasn't, well, I, sorry, I worked briefly at, uh, Bessemer Venture Partners as a junior person in 2003 and for about a year. And then But I, I didn't see a path. Honestly, it was a much smaller industry. Um, And, and I didn't, and I thought, I had, I thought that I needed to be an, I wanted to be an entrepreneur and I needed to be an entrepreneur. I thought to be a credible investor. Um, so I left and started a company. They funded me along with general catalyst. Um, and then we ended up selling the company pretty early, um, in 2006. And I, I literally the, I think it was the day after we sold the company, I was on the phone with Ron Conway and I was like, I want to start angel investing. And I think probably four days later I was out in the Bay area and And he was introducing me to people, you know, like, I just wanted to do that. I was working at McAfee, but I also, you know, it's just, it's more of a corporate job at that point. So I had time to do this stuff. Um, so right away, and then you mentioned the founder collective guys, uh, Dave Frankel and Eric Paley, like we had known each other, um, from school and actually had a business plan. Funny enough, like this is, I mean, this would have been a great business, but we, um, 2004, we ha…

AI assessment note: “the day after we sold the company, I was on the phone with Ron Conway”

Q What's the biggest lesson from working with Mark and Ben for over a decade?

A Yeah, I mean, so, you know, we used to, Uh, for the first five or so years at the firm, we'd sit in this, you know, in the room and there were relatively small number of us at the firm and just sit around and talk about mostly investing. I mean, like people with entrepreneurs would come in and then we'd talk about it. So I can't, I mean, it'd be hard to enumerate all of the things I've learned and hopefully I've taught them some things, but mostly I've probably learned from them. I mean, we have a couple of frameworks I, I like, there's a, You know, Ben, this is in our, when you join the firm, it's in our onboarding is first class business in a first class way. And it's just sort of everything we do, uh, no matter how seemingly small it is, needs to be conducted in sort of a high integrity way. And I think, I think if you talk to people who interact with our firm, what, regardless of who at the firm, they'll, you often hear, we'll hear that like, it's just, everything is done in a very, um, sort of high integrity, um, Way in which we, and we really care about it, and we care about very much about who we hire and the culture we create. I think, um, we like to say invest in strength, not lack of weakness. Um, that, that, that applies both to, you know, portfolio, like company investing, but also hiring. Um, so we try to find People that have some very special ability. Um, often t…

AI assessment note: “we like to say invest in strength, not lack of weakness.”

Q to the early days of founder collective there and their preference for no reserves. Doug Leoni said before on the show that we have moved from a high margin boutique business to a low margin commoditized industry. I'm just intrigued, given your perspective now over 14 years, having seen the Founder Collective start to the size of Andreessen today, which is immense and incredible. Do you agree with that transition?

A Let me just maybe step back. So my theory, and then this, I'm not claiming this is original. You may have other people say this, but I think the First thing to think about with venture is his bar belt, right? Which is, um, and this happens sort of death of the middle, like this happens in a lot of industries. So the most famous would be retail where, you know, the internet comes along and you used to have JCPenney's and Sears and sort of these midsize retailers that existed for, because you, you know, you need logistics and shopping and that's just the way people bought things was they go to their nearby town and buy something. The internet comes along and you have this barbelling effect, right? So you have the very big winners like Amazon who are very good at Sort of hyper efficiency and logistics. And then on the other side, you have boutiques. Um, and, and the, you know, the, the financial winner there, for example, was LVMH, which is a roll up of boutique brands, right? And it's not a coincidence that the two most successful retailers of the last 20 years, one was on the one side of the barbell, Amazon, the other was on the, the other side of LVMH. I think a similar thing has been happening in venture for the last 10 years as, as it matures. Um, And so there's the A-sixteen Z kind of Sequoia strategy of being a, you know, kind of a big fund and you have a different product.…

AI assessment note: “I think the First thing to think about with venture is his bar belt”

Q Chris, why do you think the best founders in the world pick you? I have many thoughts. Good, good choice, my friend. Uh, I have many thoughts, uh, from, you know, Ron Conway and Alex, but why would you say the best founders choose you?

A Again, this is a business I think that primarily goes down to founder referencing. Um, and so I'm not on those calls, but I think ultimately, um, when you're competing over, uh, an investment like that, that is the determining factor. And so, um, what those folks say about you is very important. Um, I would also say specific to blockchain crypto, there's a lot of sensitivity around, uh, the fact that every, you know, we've now been through maybe four cycles that this is a bull market. Um, and every time that there's a downturn, kind of a lot of investors leave and That becomes like, I've had a lot of, you know, that, that becomes a big issue. Um, and it's very important to founders that you are high conviction and that, that look, that comes out again in founder referencing. By the way, that's not just my group at the firm. That's throughout the firm. I think there's a kind of a misunderstanding around this, that I see some articles that misunderstand it. We, we are, we, we don't pivot at A-Six-Z, like we've never pivoted. Um, we have, uh, all, you know, we've done AI for 10, since I've been at the firm, since 2013, we've done blockchain, crypto consistently, we've done bio, we've done SaaS, we've done video games. Over time, we've created verticals, like as we think something's working, we've spun out verticals, like crypto, games, bio, um, But, but, you know, we've stayed ver…

AI assessment note: “it's very important to founders that you are high conviction and that... comes out again in founder referencing”

Q I've never been more worried about the size of incumbents. As we mentioned, the size of their data is enormous. The free cash flows of their businesses is enormous. Have incumbents ever been this Dangerously large. And is it not too big to usurp them with a far caster where, or a hive mapper, or you name any of your innovations given the free cashflow machines that these businesses have?

A So, okay, so I have a chapter for those interested in the book on it's called software. It's called community created software where I kind of walk through this, but if you look at the history of the technology industry, it's basically moved to different layers of the competition has moved to different layers of the stack. So You know, prior to Microsoft, the people sold the business of computing was to sell hardware. Companies like IBM would sell mainframe computers. They'd bundle it with software and services, but the business was hardware. The, the contrarian innovative idea of Bill Gates was that software would be the next layer of value, right? And that was the idea behind Microsoft, and it turned out to be correct. And so, you know, they made, they, they had very high cash flows, very high margins, um, and, and essentially began to commoditize the hardware layer. You didn't care if you got Compaq or Dell as long as you had Windows and Office, right? And then the, the, what happened was open source software came along, and particularly like Linux, which is, you know, fast forward today, By far the dominant operating system in the world. And it turned out that that sort of a ragtag group of people could create a better operating system than this giant high cash flow company. Right. And that, and that, that I think is, uh, uh, uh, I think the, the rise of open source softwar…

AI assessment note: “a ragtag group of people could create a better operating system than this giant high cash flow company”

Q I often think like, who's the customer for the book? Is this a net new entry to crypto? Is this an existing crypto enthusiast? For you writing it, who was that customer in your mind?

A I think of it as concentric circles. There's the crypto community, which I think, you know, I think has embraced it honestly in a very nice way as sort of the book You know, that, that the best explainer. Um, and then there's the next ring of the circle is all the people they know. So you're joining Coinbase and your family's like, isn't that the thing with Dogecoin? And you're like, no family member. It's actually more than that. Here's a book to read it. Right. And, and I, and I'm very excited to say that I've heard a lot of, uh, feedback that that's happening now. So it's becoming that book that people kind of give to, to let's call it crypto adjacent People, right? Which there's a lot of, there's, you know, hundreds of thousands of those people, right? There's, there's 50,000 that work in the industry. I don't know what the exact number is, depending on how you count it. Cause it's a lot of, you know, non-official organizations and things, but, um, and then if they all give it to five friends kind of thing. And then, and then look, I also think there's a, you know, people that are tech interested, um, but, but not deep in these spaces who just want to understand something, who are open-minded. I'm sure there's a set of people Who, you know, this is a controversial topic. There's a set of people that won't read it or will, you know, that just won't, won't, can't possibly be,…

AI assessment note: “I think of it as concentric circles. There's the crypto community”

Q I've spoken to many of the team at Founders Fund on the show, and they always say that the best founders don't need their VCs and they don't need help. How do you feel about the best founders actually don't need their VC?

A I think there's a distinction between, do you need advice and do you need sort of network? I guess. Um, like, I just don't believe that if you're, especially if the sort of founders that we Tilt towards, which are technical product founders. They, it's just impossible that they know the right customer prospect at all fortune, 500 companies. Like I just don't. So I think it depends, like the best founders, do they know how to build the product and the technology for sure? And like, for example, I I'll speak for myself and not the firm, but I, I rarely, um, in fact, I'm, I rarely get involved in, in those parts of the companies. And in fact, I, Probably judiciously tried to not comment on that because I think sometimes board members and investors opinions on like this button should be purple or something like they'll say these things and then suddenly it'll become like an organizational priority. Um, so, so I think, I think if you look, but there's just no reason that, for example, a founder doesn't have as much experience with fundraising. They don't know all the investors. They don't know all the potential partners. They don't know all the potential customers. They don't have the same talent network. Like it just, it just almost Sort of, I mean, inconsistent with their, if they're, if they're truly a deep product or technologist sort of, you know, founder, they just couldn't be…

AI assessment note: “if the Founders Funds folks are saying that in terms of product and technology, I tend to agree.”

Q Chris, why do you think the best founders in the world pick you? I have many thoughts. Good, good choice, my friend. Uh, I have many thoughts, uh, from, you know, Ron Conway and Alex, but why would you say the best founders choose you?

A Again, this is a business I think that primarily goes down to founder referencing. Um, and so I'm not on those calls, but I think ultimately, um, when you're competing over, uh, an investment like that, that is the determining factor. And so, um, what those folks say about you is very important. Um, I would also say specific to blockchain crypto, there's a lot of sensitivity around, uh, the fact that every, you know, we've now been through maybe four cycles that this is a bull market. Um, and every time that there's a downturn, kind of a lot of investors leave and That becomes like, I've had a lot of, you know, that, that becomes a big issue. Um, and it's very important to founders that you are high conviction and that, that look, that comes out again in founder referencing. By the way, that's not just my group at the firm. That's throughout the firm. I think there's a kind of a misunderstanding around this, that I see some articles that misunderstand it. We, we are, we, we don't pivot at A-Six-Z, like we've never pivoted. Um, we have, uh, all, you know, we've done AI for 10, since I've been at the firm, since 2013, we've done blockchain, crypto consistently, we've done bio, we've done SaaS, we've done video games. Over time, we've created verticals, like as we think something's working, we've spun out verticals, like crypto, games, bio, um, But, but, you know, we've stayed ver…

AI assessment note: “it's very important to founders that you are high conviction”

Q I often think like, who's the customer for the book? Is this a net new entry to crypto? Is this an existing crypto enthusiast? For you writing it, who was that customer in your mind?

A I think of it as concentric circles. There's the crypto community, which I think, you know, I think has embraced it honestly in a very nice way as sort of the book You know, that, that the best explainer. Um, and then there's the next ring of the circle is all the people they know. So you're joining Coinbase and your family's like, isn't that the thing with Dogecoin? And you're like, no family member. It's actually more than that. Here's a book to read it. Right. And, and I, and I'm very excited to say that I've heard a lot of, uh, feedback that that's happening now. So it's becoming that book that people kind of give to, to let's call it crypto adjacent People, right? Which there's a lot of, there's, you know, hundreds of thousands of those people, right? There's, there's 50,000 that work in the industry. I don't know what the exact number is, depending on how you count it. Cause it's a lot of, you know, non-official organizations and things, but, um, and then if they all give it to five friends kind of thing. And then, and then look, I also think there's a, you know, people that are tech interested, um, but, but not deep in these spaces who just want to understand something, who are open-minded. I'm sure there's a set of people Who, you know, this is a controversial topic. There's a set of people that won't read it or will, you know, that just won't, won't, can't possibly be,…

AI assessment note: “I think of it as concentric circles. There's the crypto community”

Q What are you most concerned about in the world today, Chris?

A Well, the issue I spend the most time on that I'm concerned about is, are these issues we're discussing? I think So I would call broadly internet freedom, uh, little tech versus big tech. I think that the outside world perceives would say that someone like me and you work in the tech industry. I see myself as working on the behalf of sort of little tech of startups. I think that having a dynamic Internet economy and software economy is good for the world. I think it's good for innovation. I think it's good for a whole bunch of reasons. And I think we're at serious risk of losing that. And I think the two, the, to me, the two issues are, I think that there's a real effort to ban open source AI, and there's a real effort to ban blockchains. And I care a lot about those two issues and spend a lot of time thinking about that and working on that.

AI assessment note: “there's a real effort to ban open source AI, and there's a real effort to ban blockchains.”

Q to the early days of founder collective there and their preference for no reserves. Doug Leoni said before on the show that we have moved from a high margin boutique business to a low margin commoditized industry. I'm just intrigued, given your perspective now over 14 years, having seen the Founder Collective start to the size of Andreessen today, which is immense and incredible. Do you agree with that transition?

A Let me just maybe step back. So my theory, and then this, I'm not claiming this is original. You may have other people say this, but I think the First thing to think about with venture is his bar belt, right? Which is, um, and this happens sort of death of the middle, like this happens in a lot of industries. So the most famous would be retail where, you know, the internet comes along and you used to have JCPenney's and Sears and sort of these midsize retailers that existed for, because you, you know, you need logistics and shopping and that's just the way people bought things was they go to their nearby town and buy something. The internet comes along and you have this barbelling effect, right? So you have the very big winners like Amazon who are very good at Sort of hyper efficiency and logistics. And then on the other side, you have boutiques. Um, and, and the, you know, the, the financial winner there, for example, was LVMH, which is a roll up of boutique brands, right? And it's not a coincidence that the two most successful retailers of the last 20 years, one was on the one side of the barbell, Amazon, the other was on the, the other side of LVMH. I think a similar thing has been happening in venture for the last 10 years as, as it matures. Um, And so there's the A-sixteen Z kind of Sequoia strategy of being a, you know, kind of a big fund and you have a different product.…

AI assessment note: “I think a similar thing has been happening in venture for the last 10 years”

Q So I have two questions on the back of this. One is I have this theory that financially secure, or in other words, rich investors make better investors because they're not scared of downside and they don't bring paranoia and nerves to the entrepreneur, like someone who really needs the money and needs it to work does. Do you agree that richer investors often make better investors?

A I would put a spin on that. I would say that a lot of issues in Um, like speaking of venture capital, um, a lot of issues are so-called principal agent problems. Um, meaning the individual is not aligned with the kind of the, ultimately with the, you know, with the financial interests of the LPs, because like you're a junior person, you're afraid and you're, you know, you have three shots, a lot of firms, you get three shots on goal or something like that. Right. And you better have a hit. And if you don't, like you're not promoted and you're fired, essentially, you know, that creates a, Kind of a, like we describing, and like maybe this also applies to angel investing, but if you're like, if you're in a business where one in 10, if not one in a hundred, you know, 50 are work really well. And by the way, in almost all cases that I've seen, the, the startups at work go through a trough of despair, right? They go through a tough, tough time. And so if you're in a business where it's like a very low hit rate, relatively speaking, the hits hopefully are so big, they pay for everything. And you have these downturns, right? You just have to, like, the optimal strategy is to, is to, you know, be really calm and, and not panicky. And so, and there are lots of reasons people get panicky. One is maybe, like, like, people should not invest more than some X percent of their savings in this…

AI assessment note: “I would say, what you're saying is true, and it also occurs with professionals”

Q Chris, do you think brand is more important than ever in venture?

A Gosh, I don't know. I haven't, I, I don't think about, I, to be honest, I, I don't think about venture as a category. I mean, I'm thinking about my day job. Um, I think that the internet changed the way that information flowed for sure. And I think probably unbundled a lot of brand and venture. So it used to be like, when I started off, there were just these kind of like, it was just these black boxes. It was like Sequoia and Kleiner and, uh, Benchmark and Excel. And you'd hear rumors about who the people are. You'd hear rumor, literally like rumors about how term sheets work. Cause there was no blogging about it. There, there weren't really books on it. And so it was just sort of like this mysterious, you know, like, like the thing that you, uh, didn't really understand. But you, but the firms carried a lot of weight, right? Like the firm name was the thing, like it was a big deal. And you saw it, you read about the history and the companies they'd funded. And I think that's how fundraising worked too, right? With LPs, they were like, this is why, and this is a lot of what's happened with the unbundling I was talking about before, where you have the barbell and the, like the rise of seed funds, right? Is if you're someone like you, like the calculus has changed versus 20 years ago, where then you had to join a big firm To raise money. And now you don't because you're, you have…

AI assessment note: “I think that the internet changed... And I think probably unbundled a lot of brand”

Q I guess my question is, how do you assess your own relationship to money? And has that changed over time?

A Yeah, I, I mean, I think that, look, I think the healthiest relationship, if you're, you know, in the tech industry and lucky enough to be successful is to think of money mostly as capital, um, as mostly as a way to Invest in people and ideas that you believe in. Um, and so, you know, Mark, Andreessen and I have been for a long time, but first individually and for the last seven years together, investing in funds, you know, supporting new managers, starting venture funds. We do other kind of things like we, I don't know if you've seen this California forever. This was something we did. We, it's a new city in Northern California that, you know, at the time didn't fit into the venture Fun model. So we did that, you know, it was a personal thing we did, um, later on it. That changed and the firm did invest, but, um, I support, you know, I'm very interested in sort of internet freedom, blockchains, open source software, uh, being able to support some of those causes. So I think that's the health, like, I think that's the healthiest relationship with money. I've seen a lot of, uh, you know, if you, as you do this kind of job over time, you see a lot of unhealthy relationships with money and you see people that kind of, you know, make money and, and their career or get on the, you know, kind of, Like, hedonistic treadmill or something, and like, I don't know. So those are, there's lo…

AI assessment note: “think of money mostly as capital, um, as mostly as a way to Invest”

Q Not at all, but I want to start with a little bit of context, and this is a weird show for many reasons, but I want to go back to when you were a child. If your parents would have described you or your teachers would have described you, how would they have described the very young Chris?

A I think I'm kind of a little bit of a stereotype of Tech people, which is, I was into, you know, it's sort of a cliche, but I was super into computers. And so that was a clear part of my personality, you know, programming computers. Um, and then, you know, slightly entrepreneurial, like I had various jobs and tried to start businesses with failed businesses. Um, I, you know, I don't know. I, I guess, um, I, I think curious, uh, slightly mischievous, maybe, I don't know, or something. Um, but, uh, you know, I, I don't think I, yeah, I don't know. I was, um, I think pretty normal in some, a lot of ways. I had a nice childhood. I grew up in a kind of a smallish town in Ohio and, you know, um, generally got a good experience. And so I, I don't think of anything out of extraordinary.

AI assessment note: “I think curious, uh, slightly mischievous, maybe, I don't know, or something.”

Q Speaking of the timing and, and moving more to crypto specifically, You said to me before that big tech is stifling the internet, that blockchain networks can break the stranglehold. Again, moving to very much today into the crypto space. Why is big tech first strangling the internet? Just so we have an element of causation.

A Yeah. So, and this is, you know, in, in my book, my, in rewrite on, I go through in the first couple of chapters to try to sort of die, I guess the book, I sort of think of the book is split between on the first half diagnosing what happened. So how did the internet go from an open and democratically controlled system in the nineties to, uh, you know, uh, internet that's essentially controlled by five companies today? Um, the five, you know, the, the big five companies have 95%, five percent plus of the traffic and the money. And, and I think that will, that's, you know, AI is exciting as it is. We'll, we'll very likely, um, accelerate that consolidation because it rewards companies with large Stores of data and capital. And so, you know, why did that happen? I go through in detail and I think it has to do, my argument is, you know, we started off with the, the internet is a network of networks. So like the, the, you know, there's the base layer, the internet protocol that connects hardware, and then we build networks on top. And in the nineties, the dominant networks were email and the web, which are what I call protocol networks. People call them protocols. Um, they are networks that are, that are more like, you know, they're standards among a community and the, and the network effects Which is don't accrue to a company. They accrue to the community. And then in the 2000, the…

AI assessment note: “why did that happen? I go through in detail and I think it has to do”

Q I ask, what do you think is the biggest challenge to the next generation community built services layer that we both want to see? Is it, uh, the talent acquisition from the community platforms? Is it the cashflow machines? Is it the distribution of the cashflow machines? What are the biggest barriers That the community led next generation has to break to enable or to be what it could be.

A I think actually, I think there's two things I think. Um, so I would describe it. So in the, in the book, I have this, I talk about the, what I call the computer in the casino. And so this, this idea is that around blockchains, there are two communities that have developed. The casino is a set of folks who are more interested in kind of the trading and gambling aspects of meme coins and, you know, and like, I think You know, to me, this is where FTX and Luna and a bunch of these catastrophes kind of came out of that community. And the computer is people who, like me, view blockchains as a computing movement. I was just at ETH Denver. Ethereum has these series of community organized conferences. You go there and it's, it's awesome. It's like early Linux days or early, like, it's like, you know, thousands of, like, You know, nerds talking about computing and stuff. Like, I love it. Um, and that world is kind of ignored, I think by, I think most people that think about the blockchain world don't realize that exists, how big it is and how lively it is. That's the world I'm part of. That's what we invest in. I think that, so I, I think of it as there's the blockchain as a computer movement. And, and then we're on the one side, we have people that are, I think, co-opting that movement for this kind of casino activities. And on the other side, we have, you know, basically the sort of …

AI assessment note: “I think there's two things... co-opting that movement... policy makers, the media, the establishment”

Q I guess my question is, how do you assess your own relationship to money? And has that changed over time?

A Yeah, I, I mean, I think that, look, I think the healthiest relationship, if you're, you know, in the tech industry and lucky enough to be successful is to think of money mostly as capital, um, as mostly as a way to Invest in people and ideas that you believe in. Um, and so, you know, Mark, Andreessen and I have been for a long time, but first individually and for the last seven years together, investing in funds, you know, supporting new managers, starting venture funds. We do other kind of things like we, I don't know if you've seen this California forever. This was something we did. We, it's a new city in Northern California that, you know, at the time didn't fit into the venture Fun model. So we did that, you know, it was a personal thing we did, um, later on it. That changed and the firm did invest, but, um, I support, you know, I'm very interested in sort of internet freedom, blockchains, open source software, uh, being able to support some of those causes. So I think that's the health, like, I think that's the healthiest relationship with money. I've seen a lot of, uh, you know, if you, as you do this kind of job over time, you see a lot of unhealthy relationships with money and you see people that kind of, you know, make money and, and their career or get on the, you know, kind of, Like, hedonistic treadmill or something, and like, I don't know. So those are, there's lo…

AI assessment note: “think of money mostly as capital, um, as mostly as a way to Invest”

Q If you could make one change to the regulatory environment today, what would it be?

A I mean, we have a bunch of specific, you know, proposals. I think these, these, I think, look, I just think the main thing is that as an entrepreneur, and this, this ends up affecting our business because like, as an entrepreneur, you don't want gray area. Um, gray, if you're a, you know, top computer scientist, and you're choosing what sector to go into, and one sector, there's gray area, so there's some percent chance that no matter what you do, you get a subpoena or something. Um, a lot of people just won't do that. And on the flip side, with the gray area, if you're a bad actor, and You know, your other career choices are stealing money or something like creating a meme coin seems like a good idea, right? And so what happens with these gray areas is that it just took me a while to appreciate. I had to work in the space. Like I didn't understand how kind of policy worked and how policy interacted with entrepreneurship, but I will say that my chief learning there is that gray areas, um, discourage good entrepreneurs and encourage bad actors. And so my main thing is we talk about this a lot like clarity. Now, obviously we want a Not just like clarity, bright line rules. Here's what you do. Here's what you don't do. And of course a pathway, it could be a lot, it could be a owner's pathway, but a pathway to building these products. Um, and so there's very specific proposals that…

AI assessment note: “bright line rules. Here's what you do. Here's what you don't do.”

Q show because I just get to ask the smartest people in the world questions that I have naturally, and I just remove the schedule. You said that about the trough of sorrow. I'm totally with you, uh, which leads to my no reserves model. I don't think that you can accurately pick your winners early. If you acknowledge the trough of sorrow, how do you think about effective reserves deployment?

A It's funny you bring it up because like with founder collective, this was always a question and like early seed fund, like, I, I guess I would, so you're talking about follow-on investing specifically, like how do you do follow-on investing? You know, I, I would say, honestly, I started off like back when we started Founder Collective, one of our tenants was to not do reserves and follow-ons. And, and the argument was that we would be fully aligned with the entrepreneurs, right? We weren't trying to like, like we do the first investment and we want to see the next valuation be higher. And so we're fully aligned. And then the other argument was, Your argument, I think, essentially, that like, it's, you know, markets are efficient, and You know, like this, it will, it will drag down our returns because we're going to be averaging up our cost basis and, you know, the real alpha comes from being early in seed investing. You know, I tend to, I, I kind of don't think, I, I just think that there's more being involved w you know, with a company there's just, you know, just seeing like the ability to see an entrepreneur over multi-year process and how they handle things. Um, I don't know. I would say the data also that I've looked at, you know, from my own history doesn't, you know, because the winners can be just so if you're good at it, the winners can just be so big that you want to …

AI assessment note: “I do think I probably lean more toward the reserves and the prorata”

Q Ron actually told me that you are a master of conviction and quote, you have remained undeterred in the face of the most adverse conditions. I mean, it's a very nice thing to hear. Uh, uh, my question to you is, when the world and the market tells you you are wrong, how do you retain that untattered conviction?

A I think there's different ways to do this job. Um, and, and, and different ways can work. Um, and, and I think a lot of people in the industry today Uh, they, they'll say things like, I don't try to predict the future. I just try to predict the present. Like, or I look, you know, there's a lot of focus these days on metrics on, um, as you know, ARR and all these other kinds of things. And there's a lot of kind of moving around to different areas. Um, and that can, that can work and it has worked for people. Um, I have a different view, which is I do try to predict the future. Um, and I do, and I spend a lot of time thinking about that. And I, um, it's, I think, I think as I recall Peter Thiel, I think in zero to one, he has this Part about it, about sort of a deterministic or indeterministic future. Like, I fall into the deterministic camp. Like, I think that, you know, people should, I, I'm not saying everyone should do this. I, the way I approach it is I, I have a view of the future, and I want to get to that, that future. And I, Spent a lot of time, like, you know, my book and other places you'll see this, reading about the history of technology, trying to understand it. Um, a lot of that is to try to understand how the future might play out, is to, is to look and study the patterns and to study the, um, the kind of the underlying forces. Um, I think that's, you know, when y…

AI assessment note: “I fall into the deterministic camp. Like, I think that... I have a view of the future”

Q Speaking of the timing and, and moving more to crypto specifically, You said to me before that big tech is stifling the internet, that blockchain networks can break the stranglehold. Again, moving to very much today into the crypto space. Why is big tech first strangling the internet? Just so we have an element of causation.

A Yeah. So, and this is, you know, in, in my book, my, in rewrite on, I go through in the first couple of chapters to try to sort of die, I guess the book, I sort of think of the book is split between on the first half diagnosing what happened. So how did the internet go from an open and democratically controlled system in the nineties to, uh, you know, uh, internet that's essentially controlled by five companies today? Um, the five, you know, the, the big five companies have 95%, five percent plus of the traffic and the money. And, and I think that will, that's, you know, AI is exciting as it is. We'll, we'll very likely, um, accelerate that consolidation because it rewards companies with large Stores of data and capital. And so, you know, why did that happen? I go through in detail and I think it has to do, my argument is, you know, we started off with the, the internet is a network of networks. So like the, the, you know, there's the base layer, the internet protocol that connects hardware, and then we build networks on top. And in the nineties, the dominant networks were email and the web, which are what I call protocol networks. People call them protocols. Um, they are networks that are, that are more like, you know, they're standards among a community and the, and the network effects Which is don't accrue to a company. They accrue to the community. And then in the 2000, the…

AI assessment note: “adopted, um, internet services that had a different architecture that were controlled by”