The Exchanges

Q So I want to break into the strategy component of this too, because this does bleed into your investment thesis and like how you're looking at companies, I would believe. So, like, what, what are the main strategies that you go after? Like, what are the competitive forces, and like, how do you look at maneuvers?

A Well, I don't look at maneuvers. I look at when I was doing the, the venture investing thing, you know, 90 eight percent plus of my decision was based on the strength of the founder. Um, like, do I have, when I have a conversation with that founder, do I believe that they would just like crush at what they are doing? Do I believe that they are the best in the world at something novel? I mean, it's still what I'm looking for right now, even though I'm not doing direct investing, but do I think that they are the best in the world at something, whatever that is, and do I think they can leverage that To build one of the world's greatest companies.

AI assessment note: “Well, I don't look at maneuvers. I look at... strength of the founder.”

Q And you don't want to start a band?

A I do not want to start a band, but I hope my kids are in one if they want to, right? Like, you know, I, I really like this whole, Going into a world where businesses kind of AI dominated, the reason I built this music studio was I don't care if a machine can make music better than me. Who cares? I love doing it, right? And so I like humans figuring out and using this next gen, you know, using whatever comes next as a way to figure out like, well, how can we be truly happy and how do we focus on the things that make us Truly happy and truly who we are. And so, like, for instance, like, if my kids are super into music, which they might be, right, and they want to join a, start a band, hell yeah, right? If they want to, you know, any, I'm, I'm, I'm as bullish on them being involved in anything creative, arts, as I am, like, academics, right? Like, I would almost say that, like, having an awesome music department or an awesome art department is even more important than Having an awesome math program right now.

AI assessment note: “I do not want to start a band, but I hope my kids are in”

Q Okay. Silicon Valley is a collection of characters. Who are the most interesting ones, whether they're in your portfolio or otherwise?

A I mean, Silicon Valley is a collection of characters. I mean, I, I think that, I don't know who the most interesting ones are. I mean, I think everybody is, Here, let me tell it like this. I think Silicon Valley is full of a couple of different types. There's a lot of sheep in Silicon Valley kind of just going where, you know, wherever they're supposed to, but there's a, there's definitely a lot of people in Silicon Valley who are truly unique and who are truly the best in the world at something, right? And I just love that. Like, I love meeting the people who are the best at what they do in a way that I could never do. Right? Like, I, I feel like, whoa, you know, these are the people. And so, without saying best, I mean, there's a reason, there's a reason why Peter Thiel is the greatest venture capitalist in history, right? And talk about cast of characters, I mean, that's one of the things that attracted me to Founders Fund to, to begin with, was like, each of these guys seemed like the best in the world at what they were doing. Um, when I did get to meet Elon and learn more about SpaceX, it was extremely clear That there was nobody else like him, uh, on the planet who could actually pull something like SpaceX off, and so I'm not gonna get into, like, who the favorite best, but yeah, I mean, it definitely, we can go through specific people, and I can try, that I know really w…

AI assessment note: “there's a reason why Peter Thiel is the greatest venture capitalist in history”

Q So what are you looking for in these founders? Like, what are the main convictions?

A What was I looking for? I mean, I'm not doing pitch meetings anymore. Um, what, I mean, I was looking for, it's hard to put into words. Like, I think we had a, one time I had an author come into Founders Fund to try and help us put into words what these found, what, what, what is a Founders Fund founder? And we never could figure out the proper words for it, right? Like, it was just always a, But we all kind of, the, the one thing about us is like, we all approach these things from slightly different perspectives, but we could all generally agree on, whoa, this person is actually really good, right? And I think that's what, the other thing, part that made Founders Fund work is like, all these contrarian people with no cohesion around the type of business, right? Other than the monopoly thesis and all that, but where we all did come together was, We were all a lot on somewhat the same page with, oh, this is an actual A plus founder. Not just like an A minus founder, but an actual A plus founder, of which I think there's very few.

AI assessment note: “we never could figure out the proper words for it”

Q How did you pick out each of those games? Like, how did they, how does this all start?

A I don't know. I think you play one of these and then you start being like, oh, that's interesting. And then, you know, especially once they became, uh, once they became online or computer versions of these, you could just play them so much that you could actually get good at them. I don't think you could, but back in 1995, it was pretty impossible to get like really, really, really good at something like Settlers. Like the people who are good now would have, it's not, it's night and day. Right. And I would not be able to compete at all. Um, right now, but once kind of online gaming took off in a really big way, um, it was, you were, you were able to play enough of these things that you got really good, much to, like, my wife's chagrin, right? I would play these things. To get that competitive at these things, you have to play them.

AI assessment note: “you play one of these and then you start being like, oh, that's interesting.”

Q I've listened to many of your interviews For preparation of this. And you're like reserves. We don't care about reserves. We're just going to raise another fund. So like, how did you think about that? And like, what were the biggest allocations?

A Venture capital to me has put the most money into the best companies possible at the best price possible. Nowhere in that is like portfolio management and reserve calculations and ownership percentages and all that nonsense. It's like just, no, it's pretty easy, but the most money into the best companies possible at the best price possible. Sometimes the best price possible is More than what you want to pay? You know what? If it's a great company at the end of the day that you see is going to be one of the greatest companies of all time, that's okay. So it's the best price possible. That's venture capital right there. All the other stuff is just nonsense. The other thing is that we realized that, I mean, we just knew from early on, first of all, it matched our style, um, like having no fear on these things, but also just like, You know, a venture fund, like, three X's over the course of, like, 10 to 12 years, I don't even think that that beats the S&P. I'm pretty sure it, like, loses to a Vanguard no-load index fund. No, seriously, it's just like, you get all these people talking about, like, woohoo, you know, our fund three X'd over these 12 years. It's just like, ah, so you're, it means your investors essentially lost money because they could have easily scaled money into an S&P no-load index fund. We knew that. Beating the market is hard. Let's just be clear. Beating the mar…

AI assessment note: “Nowhere in that is like portfolio management and reserve calculations and ownership percentages”