The Exchanges

Q Tell us about the inspiration. Tell us about why you did the episode. Obviously, everyone knows Ken Griffin, founder of Citadel, but, uh, what inspired you?

A Because I study psychos for a living, and I love them, and they're the most interesting, fascinating people to me, and so you guys actually made a video on this tweet that got like a 1000001.5 million views, right? It's John Arnold talking about, hey, what did Ken Griffin do when Enron blew up? And he talks about just like, you know, a lot of people are like, oh yeah, I know Enron was making money, uh, like all these, this talent is gonna like, you know, essentially go to the wind. Uh, you know, some people recruit. Maybe they'll build, like, a good commodities business. And, uh, he tells a story where the day it blows up, and keep in mind, in this story, Ken Griffin's, like, 33. He's, like, really, really young. And he immediately charters a Gulfstream jet, goes to Houston, and interviews every single person that was important in the Enron trading business. And then he winds up hiring all the best talent. And in the, in the talk that I used for the basis of the episode, because there's no biography written on Ken, he goes, And since then we've made about thirty billion dollars trading commodities. So the main reason I, I, I wanted to profile him is because, um, I get to meet a lot of really interesting people because the podcast and I always ask the same questions. It's like, who's the smartest person, you know, who has the best business, you know, and if they're into finance,…

AI assessment note: “Because I study psychos for a living, and I love them”

Q done today, they're selling servers for businesses. That's about forty billion dollars revenue. And then, uh, laptops for often computers, personal computers, but for business workers, another forty billion or something in revenue. Uh, he seems much less focused on product design, brand, all the different things that Steve Jobs is known for. Um, is he more of like a private equity financial mastermind? Is that what makes him special?

A No, he's definitely, he's, this is the weird thing too, where again, not really comparable to any other people. He was upset. He was a computer nerd. Like he'd get in trouble in high school because he'd just sit in the back of class and read like bite magazine and like, which is the stuff it was computers, but his parents were successful in business. And so every single conversation they'd have when he was a kid, like this dude was reading fortune and force magazine at 12 years old. And then we didn't even get to the point where, like, he does, he takes Dell private, by the time they, they, they go off on this crazy run. By the time, uh, they start hitting a lot of headwinds, like, 2005. By the time they get to 2012, 2013, they're in real big trouble. And so he takes this huge risk of doing the lever, the, the, the, uh, the biggest technology leverage buyout in history with Silver Lake Partners. So they take Dell private in 2013. Okay. The story gets even crazier. So he understands he was actually preparing for the age of AI like 10 years ago. And so Jensen, I talked about this in the, um, in the episode where I found an interview with Jensen Wong and Michael Dell and Jensen's like, well, there's only one company in the world that can actually build these data centers at scale and give, do every single thing from the storage to compute everything else. And that's a Dell. And th…

AI assessment note: “No, he's definitely, he's, this is the weird thing too, where again, not really comparable”

Q up a fund, size, and outside, outside LPs, you put up some amazing numbers, 20% returns, everybody wants in, Is that sustainable when you take it on order magnitude bigger? Did you get any insight into how Ken Griffin thinks about scale and outside investors? Because at the end of the day, you know, it's his fund. He wants to grow it, but sometimes having a bigger fund is advantageous.

A No, I didn't get, like, there was a couple things where I was kind of getting frustrated with the interviewer because it's like, Ken says, um, he made, he's the most successful hedge fund of all time, which one I asked a friend of mine who knows about this. Like, I thought Renaissance, like, why, like, what's, and he's like, yeah, but most of that was like their own money. Like, they closed, the medallion fund, they closed off to outside investors a long time ago. Jane Streets, same thing. Yeah, and then the other thing Ken said that they, like, please ask, I heard you earlier when you guys were going over the Wall Street Journal article on OpenAI. You're like, follow up. God damn it. Why aren't you following up? It drives me crazy. Like, um, I'm gonna have to do an interview show now, just so I can get these questions out of it. But he mentions this, that like, he made more money than anybody else, but there's also years where he says, I lost over a hundred billion dollars.

AI assessment note: “No, I didn't get, like, there was a couple things where I was kind of getting frustrated”

Q Or is he building his, is he building the biggest house, the most expensive house ever, and he's like, you know, gonna post up there and, and ride it out?

A One of the things, again, like, I, I picked the people I cover very carefully, because like, I want to be inspired by them. And one of the things that I really loved at the beginning of the research, um, was I would watch some interviews and for hours and literally only just like pull out one line and was that he says that he's been obsessed with the stock market since the third grade for reasons I don't entirely comprehend. That's the line. He doesn't even understand. He's like this. There's a great line that Jeff Bezos says that I believe in where it's like, we don't choose our passions, our passions choose us. And Ken clearly is like completely obsessed with this. So where he was even saying, he's like, I don't know if I was interested in entrepreneurship. I was just interested in solving problems. I am addicted to solving problems. And guess what? Entrepreneurship and investing, like he says, the public markets, like that's the biggest, you know, the biggest game in the world with the, the, the, the biggest, hardest problems to solve. So that's what I'm addicted to. Usually people like that, I don't think they ever stop. Yeah.

AI assessment note: “Usually people like that, I don't think they ever stop.”

Q we just need, Hey, it's okay to pay yourself a really like reasonable salary. Uh, a lot of founders are out there kind of like starving even after they've raised twenty million dollars. What do you think about the structure of Silicon Valley? Like is the Silicon Valley playbook setting us up for, to create the next James Dyson or the next, uh, or, or, or the next Todd Graves?

A So when you say, what do I think about that? I don't think about it. So it's really bizarre to me. Again, like I have an unfair advantage because essentially I just talk to dead people all day. I have one sided conversations with history's greatest founders, right? So like for like the first four or five hours of my day, I'm usually just reading biographies and then, uh, I usually have lunch and then in the afternoon I like reread highlights of the stuff I've read over the last like eight years while building the podcast. Um, and one of the main lessons from all that is just like, they do like the people that usually get to the top of their profession are the best of what they do. They do what's best for them regardless of what works for other people. And so the weird thing that I have is like when I open up Twitter and people are arguing about like, you should raise from this person or you shouldn't raise at all, or you should do this. It's just like, you should do whatever's best, whatever is best for like whatever mission you happen to be on. Um, so I don't have like an opinion of like how other people should do it other than like, what do you actually want to do? And then figure out what's the best way to go about doing that. And then this is, this, this is my issue was like, uh, remember when Paul Graham released like found the founder mode episode or a essay, so many peop…

AI assessment note: “They do what's best for them regardless of what works for other people.”

Q a killer, but I think killer can have plenty of different definitions. I, you can think of a killer as like somebody that just like figures out how to win and is aggressive. But then I, I still think of someone like Eric Glyman as like a killer, but he's also extremely kind. And so it's possible to be like kind and a killer. How do you describe Ken Griffin?

A I think every single person that I've profiled on founders is a killer. And I mean, it is not a pejorative. I mean, this is like, they take what they're doing very seriously. The greatest, uh, I, I, this idea really stuck in my mind because there's this biography of Bernard Arnol. It's called like the taste of luxury. It's like really hard to find. I think it's like 3000 dollars online. And cause very few biographies of them in English. Right? And this one ends when Bernardo is like, 40, and at the end of the book, he calls his shot. You guys were just mentioning it earlier, I heard you on the show, it's like, well, if you wanna, like, do a competitor Rolex or some kind of luxury brand, like, you had to start a hundred years ago. And Bernardo had that insight, you know, 40 years ago, 35 years ago, and he's just like, oh, these things are very valuable, I think they're gonna get more valuable in time, and I had no competition because you have to start them, you know, two centuries ago, or two generations ago. And, but there's a line in that biography, I never forgot, where they were describing Him. And they say only killers survive. Um, so what I mean by killers, like, uh, we, I was actually out to dinner in Miami on Saturday, Sunday, Saturday night, the night before I was going to record the, this episode. And I mentioned somebody came over from the table that we know. And he w…

AI assessment note: “I think every single person that I've profiled on founders is a killer.”

Q Can you break down doing, how did he manage, I haven't, I've been so, uh, focused on TBPN this week, I haven't been able to listen to the episode yet, I'm gonna get to it this weekend, but how do you go from zero to netting six million Uh, or, or grossing six million in the first year. Like, what does that even look like?

A It's even crazier than that, where like, he started the company with a thousand dollars, no co-founder, no VCs. Okay. So like, this is what I mean. Like, uh, I, I, I, I've been getting a bunch of text messages and one of them was like, I don't think there's another, uh, like fucking startup story like this ever. I forgot what the text said. It's definitely an F word in there. And I posted it too. Um, because I, I just can't think of another, like that successful, that fast with so limited means. And he's, his head competitor was compact, which was, he's in Austin. He, he launches down in his, in his, uh, dorm room. Austin's our, uh, Dell, uh, compact is in Houston. They raised, I think, twenty-five million initially. So I think twenty-five million at the beginning, and then in the first early years of Dell, they'd already raised like a hundred million in capital, and he smokes them. Um, they wind up getting bought, and then, you know, Dell still is thriving, and Compact no longer exists. But one of the things that, um, is obvious in, in the stories is like, he, a lot of these outside successes, obviously, like, you have, you have to be the right person with the right set of skills at the right time. And You know, in 84, the personal computer, his, the first time, the first very popular personal computer, computer appliance is what Steve Jobs called it, was the Apple II. That's …

AI assessment note: “It's even crazier than that, where like, he started the company with a thousand dollars”