The Exchanges

Q buildup, tech boom, then we get COVID, we get SVB, and we're up and down and up and down, now we're having tariffs and, and Trump pump and Trump dump, um, Does it feel like we're moving into a permanently new regime of higher volatility because of some of the, some of the, ah, factors that you mentioned, or is this temporary and maybe it's smooth sailing in the future?

A Well, I think you, what you mentioned there that's interesting is you feel like it's been like that for the last 20 years. I would say it's been like that for the last 200 years. Whenever we have market data, it's always been like that. So yes, what you just described for the last 20 years is accurate. Before that, there was the, the SNL crisis in the 19 eighties, the inflation in the 19 seventies, there was a boom, the like the sixties were a wild boom period. World War II, the Great Depression, like it's always been nuts. There's never been a period Of smooth sailing and the periods that we associate with smooth sailing, like the sixties and the nineties, we know in hindsight, we're just the precursors to a giant bust that happened. So every time in hindsight that we're like, man, why couldn't it have been like that? Like actually that time was a terrible time in hindsight. That was what you wanted to avoid. And so it's never going to be a case that it's more that it's, it's, it's smooth sailing. Like it's an inherent feature of capitalism that you have volatility and booms and busts. It's not fun. It's not enjoyable, but the, Absence of that is even worse. I wrote about this in my first book. There's a great economist guy named Hyman Minsky, who I'll say very quickly came up with this idea called the financial instability hypothesis, which was the more stable the economy is,…

AI assessment note: “it's an inherent feature of capitalism that you have volatility and booms and busts”

Q post. Uh, out of the air, you know, and read it on the plane, right? So it's like, how do you, how do you get people to sort of, like, understand, uh, the, the change that's happening now, and, and the coming change, and does that, and does, like, kind of helping people understand that excite you, or do you not feel like you even have the clarity, uh, yourself?

A I definitely feel like I do not have the clarity myself. And my, my take on this too, is I'm not sure anybody does because the history of every big innovation is looking back in hindsight, virtually nobody got it right. And even the most diehard optimists underappreciated how much change it was going to bring. My favorite example of this is when the Wright brothers created their plane, they virtually, they only marketed it to the U S army because they themselves, the Wright brothers did not see much commercial use for the airplane. They knew you could strap a machine gun on it and drop bombs out of it. And then the army would like it for that. But the idea that the Wright brothers themselves foresaw Delta airlines, like traveling, like absolutely not, not in the slightest. That was true for cars. That was true for computers. It was true for the early internet that even the pioneers who are the crazy wild maniacs underappreciated how much change it was going to bring because every new invention, it's not what you create. It's what other people like manipulate Like, like what you do. I remember one example, it was, um, for Photoshop, a lot of the, the, the, the engineers at Adobe, when they make new tools for Photoshop, they have no clue what artists are going to do with those tools, but they're like, let's just find every way to manipulate an image and someone else will figure o…

AI assessment note: “I definitely feel like I do not have the clarity myself.”

Q for investing too? You hear about these legendary deals. Uh, they had drinks, they did some napkin math and it was the best investment ever. The, the deal that they were in the DD room for sending doc sends back and forth, like it was just a mess. Um, is there something more broadly applicable to this idea of like simplicity breeds genius or, or like, you know, um, inspiration?

A I think what's true, especially for very smart, educated people is that the harder you work at something, the more opportunities you have to fool yourself. So if you're very smart and you have a one 40 IQ and you went to Harvard and you work at Goldman Sachs and you spend six months doing due diligence on this deal, you are going to convince yourself of whatever you want to convince yourself of, because you have so much mental horsepower that you can create any model, come up with any theory that justifies what you want to see. And so it's like the harder you work, The more likely that your final result is going to be fooling yourself. I've, I've seen that.

AI assessment note: “the harder you work at something, the more opportunities you have to fool yourself.”

Q Um, what, what, what immediately comes to mind when somebody says, uh, Five simple words, short term pain, uh, sorry, six, short term pain, long term gain. How does that make you feel?

A Nothing's good. Nothing's good is going to come from that. Wasn't it Xi Jinping just like a couple of months ago with all the youth unemployment? I think the phrase he used was eat bitterness. That's what, that's what they use should do is like, you should just eat the bitterness that you have and enjoy it. Nothing's going to good from is nothing good is going to come from that. Of course, there is logic to the idea of like invest in the short term, sacrifice in the short term for long-term gain. I'm not sure that's what's going on. Today with what's happening today. I don't think this is seven dimensional chess trying to get some sort of long-term plan. I think this is, this is, that's, that's a different topic. And I, I think there's a difference between, you know, investing for the long run and like foregoing consumption so that you can grow your money and like, you know, hitting your kids with a belt to instilled grit in them. That's, that's not short-term pain for long-term gain. So there's, there's, there's a balance that needs to be struck here.

AI assessment note: “Nothing's good. Nothing's good is going to come from that.”

Q Can you talk just a little bit about how you're personally using AI? What, what, what, what tools and models are working their way into your daily stack, if anything?

A Mostly it's just kind of fun and amusement. Um, and in terms of work, I I've, I've tried to do a few things. I've uploaded book chapters or articles into chat GPT and, and, and several other models and just said, Hey, give me some feedback on this. And I found that it's pretty good for what I would call micro feedback of just like, Hey, you probably needed a comma here. It's not that good for macro feedback of like, Hey, was this chapter good? Like, did it make any sense to you? It's like, so far it's not that great for that. I'm sure that'll change, and there's probably other models that are better at that. Um, and so it's, it's, it's, it's, it's pretty good for, for, for writing, for, for my profession. You know, it's going to differ for everybody. Um, I, I, I use it quite a bit as, like, a, as, like, a thesaurus of, like, I'll, I'll be, I'll, I'll have writer's block on a sentence, and I'll, I'll put in my partial sentence and say, finish this for me, and that is actually pretty good at that. So it's, it's good at all these, like, little things for writing. It's obviously going to be, this is such a, a, A dumb take, like an obvious take that the people who are going to do the best are the ones who use their personal skill and then use AI as a, as a tool to leverage it rather than the ones who are using it to replace it. So use, if you're writing and you're writing your own s…

AI assessment note: “I've uploaded book chapters or articles into chat GPT”

Q about, uh, entrepreneurial storytelling? It seems like it's an incredibly valuable skill, but then some founders get maybe lost in the sauce and wind up just focusing purely on storytelling, and then that needs to be handicapped. Um, what, what advice do you have for founders, uh, when, when, when they're, when they are trying to tell kind of that definitive optimist vision of the future without seeming not credible?

A I think, I think we've actually gotten much better in the last couple of years at separating storytelling from just charlatan bullshit. And like, there was a period when we weren't like, we were not very good at that. Probably, you know, late, late twenties, early twenties, we were, we were not very good at that. And there were a lot of people who got away with a lot of things that they should not have. But I think our, our threshold for BS has dropped as, as an industry and in a very good way. And people can see through things very quickly. And so it's always going to be the case that, you know, Steve jobs was the best storyteller and he was the opposite of a charlatan, the, the, the polar opposite of a charlatan. And I, I, I definitely feel like there is a world where yes, you have to be a good storyteller, but there's a much stronger sense of put up or shut up. Like you have to show me the numbers of what you're doing. You can't just keep the story going forever. So that's, that's a great thing.

AI assessment note: “put up or shut up. Like you have to show me the numbers”