From PayPal Intern to Starting 4x Billion-Dollar Companies - Joe Lonsdale Interview

You have now created by my count at least four billion dollar companies directly, probably more than that. What would you say? You are doing different. Then The average good founder. So

It's like I have some unfair advantages, right? I feel like I can rule the world, I know I can be what I want to I put my law in it like my day song on a roll and it's a little bit more. Joe, thanks for doing this, man. And thanks for uh inviting me into the the morning workout, the cold plunge and uh and everything in between breakfast. Good to have you here, Sean. So I wanna start with lessons learned. You one of them that we were talking about this morning when we were doing our workout was um Making decisions on blended reasons or having like a blended strategy for how you're we're gonna win we're gonna win doing these five things and why that

Sounds like a good idea to the average person, but it's actually a very bad idea. Can you explain that? Yeah, and I wrote this piece online, like nine lessons from Peter Chile. I sent to all palons here. That's been like sent to all to my other companies as well, and it's one of my favorite pieces, and that's one of them in the It's one of these logic things where usually there's like one reason that dominates everything else. And and that that's just that's just the nature of the world is that is that when something's successful It's it's kinda like the power law rule, right? Like in a venture capital like fund even, there tends to be one thing that's successful that's like bigger than everything else. And that's true inside of companies as well. It's it's very unusual, like extraordinarily unusual for there to be like two similarly equal like like products or revenue lines or something like that. Right. Um, especially early on in a company. So Usually if you if you think you have like two or three reasons for doing something or five reasons for doing something

What that means is that you actually haven't figured it out. You have no actual reason. You have no strong reason. You have no strong reason yet. Yeah. Like these that means you have five weak reasons, which is not good. You want to find like what's like one really strong thing you're driving towards. And that that's how startups work. And this is it's a really seductive trick trick. I mean First of all, you have to be taking a big risk to even do a startup, it feels like, rather than like, you know, most people a lot of people like do incubators because they're like, Oh, I don't want to do one company. I'm gonna do 10 companies. And like, by the way, that's like much less likely to have a big success because you're not focused. And then but so even within a company, they're like they're trying to do the same thing. They're trying to be like, Well, here's five ways I'm gonna make money. And like, no, no, no, man, if you really want to do a company, Figure out the way you're gonna make money. And that and that tends to be how it works, you know? And that applies to revenue streams. So eight revenue streams means you probably don't have one awesome revenue stream. Exactly. Growth strategies. If you have seven things we're gonna do for growth means you haven't figured out. Which one's actually the one that's gonna work? The one that's gonna just compound like crazy. And it may change it may change over time, but what's the thing that's working now that you're pushing on? Yeah. And then uh the other version of that is blended reasons for doing something. I think um I read once that uh Reed Hoffman uses the same philosophy, and he said, he gave the example of Oh, if there's like a trip to China and I'm deciding, should I go to China? It's far away, it's gonna take uh two weeks and should I do this trip?

He's like my chief of staff came with like a list of pros and cons. Yeah, multiple pros. Multiple pros and then a couple of cons. That's an almost impossible, it's a guaranteed way to make mediocre decisions is to do long blended lists of the thing. If you don't have a key reason to be there, then like stick to your work. Yeah. Exactly. That's what he said. He's like, if I if we don't have one reason that That alone is worth doing. Then we should just say no. Is that something you do? Reed was one of the key key minds at PayPal, of course, with Peter Chale and others. So who knows who actually came up with these ideas. It may obviously be Reed's ideas and I'm recycling. Well, I say the message for mine now. So I think that's that's the best way to and you know, the highest compliment is to meme an idea and to uh to let it spread. And so Peter's helpful with that. He's um well, what are some of the other things? Like do you remember

I mean even at the beginning One thing I I kinda wonder is you've been around a bunch of special people, Peter Teal, Elon Musk, all this stuff. Is it clear in early like in the early days? Like do you remember the moment where you're like, Oh, this person's kind of different. They are that five standard deviations in intelligence or conviction or whatever. One of the I mean, we all try to like set strategies for ourselves and goals and whatnot. And like I remember in college I thought wow, this is a really good opportunity at Stanford to reach out. to a bunch of successful people and kinda learn from them, see who I see who I admire, see who I wanna be like. And you know, I I I've met some of the legends of global macro finance who I'm still in touch with. I met a bunch of other big business people and run Fortune five hundred companies and

Peter to me had by far the most interesting intellect. He was he was clearly Just one of the smartest people I'd ever met. And he was interested in some of the same things I was just interested in and he'd taken some of the logic farther than I ever had. So so so I always always learn the most from conversations with him. So that's that that to me was one of the reasons he was the most attractive to try to work with and try to build with. And so before you start mul uh multiple other companies, you do Clarion, which is his Hedge fund, I guess is the week. Global macro fund. Yeah. Global macro it's like the most fun part of finance. There's all there's lots of parts of finance. Finance is like all sorts of areas. Global macro is looking from like the highest possible perspective that everything going on. in finance, it's like the the bond yields around the world, the flows of money around the world.

How equities are being valued. It basically just like just from very top down, like what is happening in the world of finance and how do you map it out and how you and you look at relationships and you understand you, of course, like you know, the Australian currency is gonna be really correlated with the price of metals, and there's different ways in which they can get way off and you can create a regression trading system if they're way too far off where you can make money based on the reversion. Right. But then you say, Oh, normally I would trade this, but actually this is happening'cause'cause China just like, you know, invaded this thing over here. So actually it's not a good time to do it. And it's just it's just really, really fun map. of the world and we we were really interested in like long dated oil prices and what was happening with oil. We're very interested in how uh Fannie Mae and Freddy Mac, which are the two big giant housing groups, they've gotten to be much, much bigger in the US in early two thousands. And the and they they're probably they had these giant mortgage backed security portfolios that are worth trillions of dollars. And they had to hedge these portfolios, basically, and but but and I won't go into all the details, it's a little bit esoteric, but based on how they were hedging their portfolios,

was completely changing the global fixed income markets, completely changing the pricing of bonds. And we found some really interesting ways to do things there. I I actually my f fave my favorite story though I'll give you is just to give so So we're working at the hedge fund, the market's open. We're in San Francisco, we're in five five five California, right? Yeah. Big building downtown. Like Uh after after nine eleven, I think Peter had a parachute in his room. I always told him he should have parachutes for us too, but anyway. That was just a joke, but it's probably but uh no, so it's like school office on the four second floor. And and the market's open at six thirty. So the traders are supposed to be in at six thirty, except the first Friday of every month you had to come in at five thirty because the non farm payrolls come out still now the first Friday of every month at eight thirty AM on the East Coast. And it turns out this is a very important number'cause it shows you what's going on in job growth in the whole economy, uh, you know, based on the Bureau of Labor Statistics numbers.

And and what was really cool is Kevin Harrington was our head of research, just like genius, crazy physics, biology, interesting guy. He's uh and be on the national security council later, like super interesting, smart guy. And and he like had mapped out this thing I'd helped him with. Where we realise that they were adjusting the numbers wrong, uh based on seasonal adjustments, and so we were able to predict whether the number would hit or miss. And and this this thing would move bond markets like crazy. Like hundreds of billions of dollars would move around based on this number. And we figured out they're systematically mis mis misdoing it. This is totally legal. You're allowed to do this in finance. So we figured, okay, this is a mistake. 75% of the time

We can make money. Trading this and then we can adjust it and make it even better based on where the p market was positioned. So if the market's gonna be surprised and we can kind of tell there's a good chance it might be. We take a big position like the night before or whatever, and then like make a ton of money that morning when it worked. And it was at four thirty in the morning. And so if you do it enough, you're gonna do it well over time. And it was the most fun thing because we take these like giant positions on this thing. And you'd be there with like Peter and and Kevin. It's the most funny thing on poker. And you're like literally personally have like a few million dollars running on it at a time as early in my twenties. These guys, you know, Peter probably had a hundred million dollars running on it every time. And it's and you're and you're like high fiving if it goes right, or you're depressed if it goes wrong. Is he sweating or what's his uh What's gonna happen? It's like so exciting and then it ha and you're like you remember so many like celebrations we'd all like go to like our favorite breakfast place afterwards if it worked out. Yeah, what'd you do if it didn't work out? Yeah, sometimes we go there anyway. But but uh for some reason in my mind, this is maybe who I am. I remember all the times it worked out. I barely can remember the times it didn't I know it didn't sometimes but like maybe this is like a

serial entrepreneur sort of thing where you just see how the good memories, you know? Right. So it's like but I remember it was it was it was a fun time that's a s entrepreneur survival uh tactic. Yeah to block out the trauma. All the trauma is the two. Because if you know if you remember how hard something is You're very less likely much license to start it again or do another thing. I would have built all these companies if I had to force myself to like think about that too much. Yeah. You the way you just described like the global macro fund. You're pretty young when you're doing this and that's not what you were doing just before. So it's not like you had tons of experience. My my little brother got me reading like a bunch of economics and finance stuff when I was young. So I kind of had a weird both computer science and finance background. So and I had opinions about it. So that's like we're those are like my two things. It's so I I knew that world pretty well. And yeah, you learn a lot being in it. You just do. You just have to be in it to do it. But it's I mean, credit to them for betting on you to be able to

To do that versus you know, they could have hired somebody who's been doing that for twenty years in the world. This is this is when we talk about lessons from Peter T. I think one of the most important ones I've seen from him that I've definitely taken to heart in what I've done is I'd much rather hire hire I'd much rather hire for talent. And ambition and hard work. Then hire for expertise.

So alm almost and and there's exceptions, right? So if you if you have a company that's already really working and already really scaling. And there's like a machine that has to be run. You want to hire the guy who knows how to run the machine. That's fine. But that's like that's like that's the operator who knows what they're doing already. But when you before you've actually built the machine, Or when you're doing something with a group and like kinda high finance or whatever. You want to hire for raw IQ and hard work and just iterating and figuring it out. And that's that's a different skill set than the people who run the machines.

What's your way of filtering for that IQ? Well, you know, how do you interview or what are the signals you look for? This is like super hard. I think you start with hard math problems at people. What are you doing? We used to do that at Clarion. We had these really hard problems. I remember uh My friend Sugio run Dropbox, one of his partners there, uh his new at his new ventures, Chen Lee was like the highest scorer on on this test I gave. Smart, smark, smart guy. I I uh yeah, we had to do really hard tests. But you know Once I already had around me.

A bunch of people who are really Top talent. It's like they knew people, like, oh, who's the smartest guy in your physics PhD in MIT? Who is you know you know things like that. So it's like it's like you kinda you kinda get a network that's already really solid, and then you go out from there. And so let's go more on that. So y uh two things. One, Ben told me something that like There's some number, I don't know the exact number, twenty, thirty people who have worked at your companies that have then gone on to start.

Like unicorn companies. Dude, what is that what is that number roughly? Oh gosh, you know, I don't actually keep track of the official number, but there's over twenty people who've worked directly for me who've started huge companies, and it's something I'm really proud of, is that we've had a lot of super talented people. And you know, in some ways it's like I like to like back my mind like, Oh yeah, I'm a great guy, I take credit for shaping them. But in some ways it's like they're already really amazing and and you know, and and and so I was like maybe I'm just good at convincing them to have work with me ahead of time. So it's like there's so much. Well there's a nature nurture thing, right? So yeah, there's and there's some of both. I I do like to think that we've given them useful framework, just like I learned from Peter. They might have learned some of these things from me too. But But uh I mean what one of the one and you know not all of them I've even backed. Like some of them I back, some of them went off and then did it themselves. And usually they let me back then. Yeah, that's the worst. When they when you don't you didn't get the call. Actually I'm still proud. I'm still I'm still proud of it like I'll tell you the the guy who came right out of school to help run out of par with me. And And I and I was like he became president of the company, super talented guy.

And uh I did not know what I was doing. Uh even though I just already done Palantir, there's always mistakes I was making because there's like things I didn't realize I had advantages as a palantir and you know, outs multi-billion dollar company now. It's great, but there's things that took longer, there's mistakes, but there's also obviously good things we did because the company worked out really well. And I think he has he had like one off on his own and he had like uh you know, his own tough time or whatever for a little while afterwards. And then he ended up partnering with someone and he started a company that became worth three billion dollars in like four years and he sold it. Wow. Which I'm like, Oh wow, that's pretty fucking cool. So but I was like, and you know, I and I and I he didn't have they didn't bring anyone else into that company, but I was still really proud of the fact that I'd work with this guy and then he'd gone on and had like crazy success. I mean that's a cool feeling, you know But for the record It's always I'm more proud if I got to invest too. I know. Come on. Take care of your buddies. No, most of the like like ninety five percent of'em, it's like people will bring me in and I'll still like help and we'll coach and work with them together. So let's do uh Big hit number two, out of par. Yeah. Um you uh explain like

Explain in layman's terms what even is Atapar, and then I wanna I have some questions for you. But let's first do the the explain like I'm five years old, what is Atapar. So Atapar Is uh is the leading wealth management technology company in the US. And so there's people who work at what are called RAs, registered investment advisors. There's Tens of thousands of these and they will help you or your parents or whoever kind of manage their wealth, they'll give you reports, they'll do your trusts in a state, they'll just do everything d around kind of the wealth planning. Man, it was really freaking hard. We built all this stuff and we like hooked up to Schwab and Fidelity because those are like two of the biggest everyone's heard of those, right? The biggest custodians. And we had all this wrong data in the reports, like what are we doing wrong? And it turned out the data coming from Shual Vidali was oftentimes wrong.

I'm like, what is wrong with this space? It's like it's a whole thing's a mess. So it was it was it was a hard company to build. Took about three or four years before we really got to the point where where it was useful to people. So you didn't give up though during that time. Uh Oh no, that's like the last like you have to have a personality where you're not gonna give up. I mean, I'll give up if it turns out someone else has already solved it perfectly. Like if Adipor already existed, it would have been a stupid thing to do. Then then maybe you give up and pivot. But the fact that it's just a hard problem, you're not gonna give up. You're just gonna like double down and like fix it, you know? Interesting. So you're you're uh You you don't give up if it's too hard, too messy. But that's better. That means once I do solve it, it's gonna have this giant moat. Like Adebar is the biggest freaking moat. We were talking earlier about guys like Rocket Internet will like go around copying things and annoy people. Like good luck if you want to try to copy that. You're gonna get take a billion dollars in ten years, you know? Like no chance.

No chance. You talk about hard work. I uh when I was doing research for this, I I called Somebody works on your team and I said, Tell me about it. What's he like? What's it like to work with them? One of the things they said is like he's always on. I've never seen him just go like Go dark, go off, or just like turn his brain off. Or be like, I just want to chill on the beach and just drink my ties and not do anything. Is that like accurate? This is like my game, though. I mean, I think you have to love what you're doing, right? So like You shouldn't play games, you know.

you don't like. Yeah. If you're not playing you're not enjoying the game, you gotta switch it up. Yeah. So this is this is this is this is this is why I'm I'm doing this because I really enjoy it. It's really fun. I'm really good. I think one of the You know Aristotle would talk about how like one of the highest pleasures is like is like using your mind in in its highest capacity. Right. So it's like you explain like you actually enjoy chess more than checkers if you're good at both because chess is it has more levels to it. It's a more complicated game. And so you you want your mind to be engaged in interesting, complex, useful things that are getting things done. It's it's like a positive part. I think it's how humanity works. Right. How do you still um recharge or just get clarity of thought? Cause one of the challenges is if you're always on Uh you might not have that touch to step back and pause and reassess. You do need open time for creativity. I I've noticed when I overchudge myself, I'm not nearly as creative then and I'll the cold plunge help, right? That was a quick uh sixty second fifty one second reset we had. I think I stayed in for the full. Yeah, you you you actually did two plunges, that's pretty good.

What is a s typical schedule? Like uh what's a day in the life?'Cause you got your fund, you got companies, you got all kinds of stuff. You got your buy. Yeah, my n my number one my number one is H V C and A V C has a build program, which is my favorite part of it. A third of our money now goes towards building new companies. So my favorite thing is like the strategy for recruiting talent and then and then strategy sessions with with you know to figure out what we're gonna build. Right. And so when you you said strategy for talent, what was the other one strategy for Building the company is basically a strategy. When you're f the way I look at The way I look at opportunities for new businesses is you're looking for Conceptual gaps in the world. You're saying, like, well, here's here's where this industry is now. Like here's how this thing is working, here's how this process is done in the economy.

And here's where it could be. If it was using like the right new technology or the right new incentives or this or this right new effect of cultures or wh whatever it is that like could be better about it. And the question is not just it's actually very easy to find conceptual gaps in the world, I'll put forward. If you spend some time with like a few smart friends and you like study an industry and talk to people, you're like, you usually will find, oh wow, this thing could be done this way. And so the the harder question is not just

what it could be done, but like what's the path to get there? What could we put in place that would allow us to get it there? How do we build this thing? How much is it gonna cost? How do we how do we make the people want it? So there's a lot of things, for example, on like healthcare and hospitals. That are done completely wrong. But It makes hospitals more money. So so so so it's like so even though it's like clearly not the right way of doing things, they're not gonna just fix it. You have to find some way to get from here to there with the actors being willing to do it. Right.

So let's do an example. So um give me an example either Maybe something that you're the top of mind because you're thinking about it right now. Maybe it's not all figured out. Or a recent one. Yeah, so a recent one. Hundred percent. So uh it turns out that there's tens of thousands of loading yards around the country in logistics. These are places where trucks come, they get in line, they drop things off, they move things around, they they you pick things up and it's just just it's a pretty interesting area. And like the biggest warehouse company in the country is Prologis, and it turns out the founder's investor with me is based in based in, you know, near nearby in California. We're we're back there. And and then it turns out there's like Handful of the biggest carrier companies like Rider, you've probably heard of, and others. And we've actually sold a company to Ryder, so we're close to those guys, too. And so because we knew a bunch of these guys, we started analyzing.

What can we do with AI? To make your yards better. And we what we figured out. Is that if you put just a couple of cameras in. At first we thought we need six, but just a couple cameras, you can kind of watch and map out where everything is, map out how efficient the gate is, map out the processes, create accountability and incentives for people to go faster, uh, create ways of pinging the carriers if it's backed up to like to use the other loading errors nearby. Just like basic little ways on the margins of like making these things work better. And And and and timing on the crane, because you want a little bit of competition, because people always respond well, you know, if you do it properly. And so we've mapped this out.

And we ended up founding a company with a really strong AI team. Uh, and and and we ended up kind of co-founding it with the butt this these like, you know, the warehouse companies, the carriers and others based on their needs. And it's really cool because the way we built it with them is we have like a few hundred million revenue. already built in that we can scale up into their own into their yards they already own. And then we can have something all the other yards want to use as well. Let's More detail. So you you're already kind of in adjacent to that world because you've done stuff, but how does the brainstorm work inside your office? Or where like where when does somebody ask the question? Hey, could you use it?

AI for these loading yards? Like how how do like take me all the way to that. Like where does a question like that even come from? Where does the nugget of insight come from? So my partner Jake's in charge of logistics and supply chain. He's the he's the kind of biggest driver here. And he's you know done some strategy sessions with you know, our our friends running these different companies we're close to will get together. I I have a vineyard in in Napa Valley and we like bring every year like the hundred top logistic CEOs. Drink and Strat to hang out, you know, it's like a good way to do it. And you're kind of are asking them questions to try to find their payments. What are your problems? What works were you spending money on? What are you seeing? And we'll bring like new entrepreneurs and We're backing and like get their take on things and we'll bring what are called EIRs, entrepreneurs and residents, you know, who will like talk with them and iterate on the idea. Right. So we kinda knew the y loading yards is a big thing. Let's go talk and iterate on ideas what we could do to apply new things to it. And uh you know, in this case, there's a really strong AI team that happens to be in the UK that we'd met through other friends that like had worked on some really cool visual problems we thought was very very good for this and ended up recruiting them as co founders, which which worked out really well. So we're we're constantly on the lookout for like separately for times. That's the size of the prize and then that kind of clears a hurdle for you. Yeah, this is this is this is and you know, the other thing here, which I I I don't love, but it's definitely helpful, is California had some new regulatory rules about things you had to actually map out as well. So they're gonna have to do something anyway, but why not create more value based on and then then but then like be the thing they they put in when they're gonna have to do it anyway in the next year. Right.

Yeah, the rules coming up. There's like the you know, logistics has had a few of these things. There had some rule on telematics where you had to like, I think for purposes of not making people drive too long, you had to like record things differently, which was kind of an insertion point for a couple of telematics companies we help back as well, which is the thing that tracks the trucks and stuff. So there's things like that where the regulatory thing was helpful too. And then Yeah, you just you sit down, you map it out. You've kno you've known the people for a long time. I mean Think the one of the unfair secrets of business is the more success you have

The more it's like a platform for a bigger thing you can do next time. And that's just the way it is. You just gotta keep in the game. Cause like it's like the I think when I was really young, I used to think, Oh, I can start a business and make a lot of money and then go to the beach, and then that'd be like fun. And that's like that's not nearly as fun as the fact that once you've always started and successful once, now you get to do like bigger things more easily. Right. So it's like it's like and then that's why like I think when you're young. partner with someone else who already has an unfair advantage, help them use their unfair advantage, right? Build something with them. Now you have all these extra unfair advantages, you could do it again. So this is this is like there's like this naive thing where like you're like this lone business founder. I think you can do that, but it's still hard. Right. Why play the game on hard mode. Yeah why play game on hard mode? Why not why not find un there's so many places in the world where there's unfair advantages. And like And unfair advantage when what I mean by that is like every time you have a success, you now have the respect And attention and understanding. of all these people who will then help you do the next thing, right? And and once you prove you're competent once, then you know, there's you know, there I have a bunch more things I could be doing now. If I had more competent, like young people around me who want to be entrepreneurs and partner with me. We have a bunch of them, but we always need more because there's the thing we lack, we don't like ideas, we don't like money, we lack really talented, hardworking people with persistence, you know?

I love that. Um That was so good. Can I come back for seconds? Can we do another example, another gap or another s uh origin story of of one of these uh ideas that that I think is makes sense? I'll give you another crazy gap. I was pretty bullish. in China like fifteen years ago. A lot of us were. I like I thought I was opening up. A lot of my friends there were like reading Milton Freeman and Free Economy stuff. I'm like, this is gonna be great. There's so many smart people there. So we start making bets there, we start working there.

doing a bunch of stuff. And then this guy Xi Jinping takes over. And then like I'm told by all these different senior people they're like, Joe, yeah, none of the stuff that you want to work on here is gonna be allowed. It can't be foreign. Like, oh, that's too bad. So I just stopped working there as much. And then I kind of hear from them like terrible things are happening, and then a couple of them disappear. And then I hear he's making all these engineers work on defense. Like, okay, this is pretty F up. I'm kinda I'm kinda nervous about this now. Right. And we cover map, you start mapping it out. And at the same time, you know, we've done pounds here.

Start in two thousand three, so it's now like two twenty fifteen, twenty sixteen, and I wasn't I'm not running Pallantry anymore, but I'm still an advisor watching it. And like a few of my guys there are noticing that the fence the defense world in the US has gotten to be like a lot more dysfunctional, a lot more broken. There hasn't really been So what happened to defense is all these companies consolidated the nineteen nineties after the Cold War spending went down. So they all merged and became like these giant primes.

And these prime started acting a lot more like government agencies themselves, like not super nimble, not super adaptive. kinda like the way they get the contracts is by having the right lobbyists, not necessarily But and they have to they have to convince con we call innovation in theater. They have to pretend they're innovating, but they're not necessarily great at innovating because that's not because they're so big, they have no competition. And so we're like, Oh, this is kinda scary. All this stuff Like none of the best engineers are going into these primes. Their stuff's getting worse.

Meanwhile, China has the best engineers that are getting better. This is we better do something. And so so three of my best ex palantar guys They partner with Palmer, of course, start Andril. You've talked to him before. So so I backed them early along with Peter. And I'm like okay, guys, we're back in defense. Let's figure out what the hell else to do here. So we so we basically mapped out like what are twenty new possibilities in defense. I wanna find just to see, and then we're gonna choose what's the most important one. And we by the way, is that something you tell your team like come to the table. I want to hear twenty ideas. You have to have the guy who's helping him. You have to have like advisors who are able to like get them into the right places to talk and explore. But let's yeah, let's talk to our

Let's talk to our smartest friends in the space. Let's talk to our network. I wanna hear you know, you go down here, you know, about twenty ideas or new things, like and I wanna see where we think gaps might be. And we come back and there's like eight or nine pretty good answers or a few of the things that I thought bad answers, but but you know we find some interesting stuff and one of the areas That's pretty cool.

is it looks like there might be new possibilities in uh in in EMP in electromagnetic pulse space. And it's really directed EMP, of course, you don't just want to set one of these off and screw up all your stuff. But what this does what an EMP does is it tries electronics, right? And so It turns out that if you can direct these, what it is that you're taking microwave energy and you're shooting it in the blast. you can actually turn things off. And the government has spent billions of dollars on this stuff But they hadn't really applied any of the new uh any of the new chips, basically. And you want that to protect against like drones, for example. That's one that's one of the really good ways of doing it. So ba basically you can have a chip. You can you can basic control power on very small time scales. You could take

you know, take you know the guy in nitrite emitters and you can build this correctly with a top talent. There turns out there's like a co founder who's a fr a friend of a friend of mine from Stanford who's a genius who helped figure a lot of this out also. And and and and you could shoot down things like ten times farther away. And and and you, you know, theoretically you could use this against missiles and turning their guidance systems off. You could use it against a truck coming to your base really fast, you just blast it. You know, it might be that the truck has a terrorist coming to shoot you and you want to turn it off. It might be there's a pregnant lady they're trying to get to the base to give birth, like you don't want to necessarily have blown it up, right? So it's good to buy blasting it and you're not turning a truck off, you're not killing the person. So pretty cool, like nonlethal. way of like stopping stuff that's giving you trouble. Right. And and long story short, we were able to Put together money.

And you know, with about with less than thirty million dollars in this in the second round, we got to the point where we were we were we fought our way into a contest against the other primes. And so so basically one of the key things in government is like we're always trying to get them to have contests. The Primes do not want contests. How do we compete on merit? Not on longevity relationships. I'm not gonna be better at playing golf with the senator. Right. But if you can let me into the contest, then maybe we can win, right? How do you convince them to do the contest? That you push the the the Congress to like make laws to allow competition, you have There's competent generals, there's competent admirals. Like you know, thanks to Palantir and SpaceX, people had seen outsiders massively outperforming and they're they're more open to the ideas. So we're s we're pushing things in the right direction. Gotcha. And then so they do this contest and like they didn't really take us seriously because the other guys had really spent billions of dollars on this. Like what can you kids do? Right. That's kind of like the old mindset in the US in the 1950s, 60s is like innovation is expensive.

outsiders aren't gonna be able to do. And that was true fifty, sixty years ago. But long story short, Uh we ended up shooting down the hardened drones. nine and a half times further away than the than the other guys. They actually had to have they used to have to use binoculars to like watch the bus, like shooting them down really far away and And the people were just like flower gas. Like everybody was lined up, and it's like, okay, we'll see who who performed. He's like, You're gonna need binoculars to see ours, because it's gonna be out of range compared to whatever else is. I think they and the people were just totally shocked in in yes, that's Epris. Is that the name of the company? Epreus. Epreus is a cool name. Epreus was a name in legend of uh the bow of Theseus. Theseus started Athens. And his bow had infinite arrows. And so this is kinda like a bow with infinite arrows, because you can keep firing the pulses. That's cool. Wasn't Palantir like a g uh uh Lord of the Rings reference? Palantir was Lord of the Rings, so Eperus is more more is more more real mythology. Palantir is more in the fake mythology world, but no, I I have we have quite a few things named after Tokian stuff as an inspiring story.

Pelleters is seeing crystals, right? And in the story. This is super dorky, but in the story they're built by like the L's of the uttermost West, and they're basically this thing created for the humans to get rid of the bad guys. But then two thousand years later. a bad guy takes over the technology and is using it for evil. And so the idea with Palantir

As we thought. Yeah, we're very civil liberties obsessed. We wanna build it in a way They were like Go after the bad guys, but but then we gotta be able to watch the watchers and be really careful about how the technology is used, because it's very obvious if you're doing the kill the bad guys that a bad guy could use this for something horrible. Right. And then it's it is a dangerous area. We believed it was a necessary thing to create. And we

you know, we we uh ended up eliminating thousands of terrorists, so we're we're happy with the results. So what's fascinating to me is that not only have you had multiple hits, but they're in areas that are different. But also just hard areas where I don't even those are not even idea. I don't think about these like uh the the logistics yards or EMP pulse technology like These are so in different domains. I'm curious, um Is that uh

Is that intentional, meaning do you like 'Cause most of the entrepreneurs around me in Silicon Valley were like, Oh B2B Sass, you know, what's a problem? Oh, let's make a to-do list app, because I know that problem. I'm so familiar with it. Is it a strategy for you to go where to fish where other people are not fishing, or is that just what happened. No, I think it's definitely definitely a strategy of sorts where

You don't wanna build like yet another like restaurant app or yet another to do list app because it's like That's what every other twenty one year old's thinking about. Like it this is probably why I miss Stripe early on, because we've been at PayPal and I had to like see every payment app. There's like literally hundreds of payment apps. I was like, Oh God, you know,'cause it's like'cause Peter would make me take the meetings after I didn't want to anymore. So it's like, no, you wanna Listen, there's there's parts of the world. That are big parts of the economy. that are very important that that are not as exposed to technology cultures. And so you want to kind of take your our our advantage is we have a really tough technology culture.

Let's figure out how to expose it to something that's that's not likely to to have seen that before and then find ways to work together to fix problems. What are some other ideas? Either um uh I want to either hear ideas that Um, you're not doing just'cause you can only do so many things at once, or it might be That would work. But it's too small for me or it's t it's not like kind of using my my current platform can do bigger things, but This happens to me all the time. I see ideas that

Somebody could do that. I'm tempted to do because it's so clear to me. But it's like That would be not the right game for me to be playing right now. There's there's so many things that if I had the right talent, I'd be doing more. Um You know, I do a lot in the wealth management world. I think that the process

Of starting a trust. And like the actual legal work around this stuff could be very automated with AI. You could have like a smart lawyer and like a few smart engineers. You could like have a whole new trust company and a whole new like estate management company. We we have SaaS software for estate stuff you'd plug into. And I have a lot of distribution for this ready, but I would need like the right engineers and AI people. And I'm not sure if it's bigger than a billion dollar or two billion dollar business, but it's like it's still worth it, you know, and it and it saves a lot of time. So but I'll I'll give you a really big one I wanna do, but I don't have the right people around me. Um

local government was we just sold open gov for one point eight billion dollars and and local government There's a lot of lessons from this company, a lot of mistakes. It took us twelve years. Zach Buckman, the CEO, my co-founder did a great job. Um we learn that you only can really do things they already have a budget for us there's about ninety things local governments pay money for software to do and OpenGov has about forty of them. So we've we learn this steps really well. Like and the law processes.

And And then anyway the idea. is that there's trillions of dollars spent by local governments. and a lot of them can't find the right staff for certain processes. And a lot of them have people are retiring soon, too. So I think I think a BPO, a business process outsourcing thing for certain tasks for local government.

uh they're'cause augmented by AI could be like just a huge business to basically help them with this. And I right now it's not a standard way they work. But I could see if you do it really well, it could become a standard way. And that's the kind of area where you can make tens of billions of revenue before anyone even notices you because it's such a big part of the economy. Yeah, that's another thing. six to twelve months of that company look like. You'd basically have to find early partners willing to trust you and work with you.

on outsourcing some one of those 90 processes. And it'd be it'd be something like where you like augment their ability to do licensing and permitting faster, or you're you're augmenting some of their grunt work on tracking their assets and asset management, or you're doing something for their budget for them automatically. It's way faster. This is a CFO doesn't have to hire three people, they can only hire one person, which is you, or something like that. Like but you have to go in and figure out what processes are city's even willing to let you do. And it's it's a very unnatural thing. Because it's not how they work right now. But it's one of those things where there's like a secular trend towards like you know, local government not having enough money. So if you can find ways to save them massive amounts of money and make a higher quality service.

There could be something there. Right. All right, I wanna play a little agree or disagree game. So I'm gonna say a statement and I wanna hear do you agree or disagree with it. Um So the first one is on on this idea of big swings that are solving like huge problems, mission oriented things. Uh versus like Getting just getting your first win.

uh under belt. A guy came on the podcast and he said My theory is You first you go get your nut and then you work on your noble mission. And he's like, you know, you go and you develop your skills, you get make a few million bucks, you get personal autonomy. And then you should pick a noble mission, a noble quest, and go on that. Agree or disagree with that philosophy.

I I agree. In general, I think it's a really good thing to do. You want to have a solid base before you do something that's like a huge, crazy, risky quest. You don't want to be like poor for twelve years while you're while you're doing something, if you can help it. I mean, I'm not saying that's gonna be the path for everyone, but if you can do what he said, that's a really great way to do it. Okay. Another one. Um a lot of people say that Ideas are cheap, ideas are a dime a dozen, execution is everything and I agree that execution is very important, but I think ideas really matter too. I think that project selection, picking the right market to go after.

is a um is is a huge lever. So I think that the Execution is everything, philosophy is BS. Agree or disagree? That's a tough one because I've seen a lot of good ideas with the with the they're actually aren't worth that much because they couldn't actually bring together the talent to do'em. So I I I I you you do you you

It's necessary but not sufficient. You do need both. Right. The execution is the harder part. But you're right, you can have amazing execution and I've seen this and people going after the stupidest ideas and it and it's not gonna yield something. So you need both, but the ideas by themselves are not that valuable. Okay. Another one. Um Focus is a superpower. And I would say that like we were talking about this earlier

You you recognize the value of focus and just compounding one thing, um, but you've also done a variety of things. agree or disagree that, you know, focus is the way to go. Focus should be the strategy. Focus is clearly the right strategy for The most successful people in the world, if you look at the wealthiest people in the world. They nearly all focused and compounded over a very long length of time.

Uh if you look at Palanter and Adipar are the two companies where I focus full time on them, they're my two of my most important companies. It's uh I I think when you're having impact on the world in different ways, sometimes it's okay to to do different things. I think I think philanthropically, I think for me, coaching entrepreneurs is something I enjoy. I think I'm I think I'm obviously creating a lot of value right now.

But I think I think as an entrepreneur or as a business person in general, it's it you you especially if you haven't already had like a giant win, you should just focus and get that giant win and compound. Um, you're friends with Elon. What um What's something you've learned from him, or something you admire about him? Uh Maybe that the rest of us don't know, but you know, when we only know'em from the outside. Yeah, I

I mean I guess I'd say I really admire his boldness in his like obviously it's it's it's he's really good at focus. He's really good at saying no even to friends about anything. It's just not like tied to what he's like really passionate about and focused on to win. And he's just really, really bold at like clearing like nonsense out of the way and clearing mess out of the way and just like going right for the thing that that matters right for the substance. So I think I think most people in my life would be

think I'm maybe too bold or too direct or too extreme. And Elon's like a whole step further. Which I think is great to see. I'm like, okay, I could do better at this point. There's more here, yeah. I could be I could be more myself in that direction and and I'd be more successful if I was, you know, I'm obviously done very well, but but but I think he's a whole nother level of bold. And that's something that It's good to see that for me'cause it reminds me that that's like a that's a good direction for entrepreneurship. Uh you know, is he focused though,'cause he's got like five Things you know he's got Twitter, he's got SpaceX, he's got Tesla, he's got Neuralink, he's got boring company, he's got so many things. Um W is how do you square that? Is that is it focus or is it I mean I think he was insanely focused for a very long time on on the things he he was doing and on scaling them. And I guess yesterday there were two companies for a very long time after doing one company for a very long time. And uh

You know, he's in a level of success again societally, where there's things that really matter for society that only he can do. So it makes sense. He was expanding. uh w earlier. you know, my partners are allowed to work on up to six things at once. And I think when you're like coaching and like managing things and stuff. I think that's about the right amount right amount. I think if you're just operating, you want to do like one or two at most. Right. Yeah.

Uh last question because I think we gotta go, but What The whole s my whole thing when I come to an interview like this is What's the one question that really matters? Like forget the hour. Like what's the one question that really matters? And all the questions I've asked you have been beating around the bush with this one thing. So now I'm gonna ask you it directly.

Which is You have now created at by my count, at least four billion dollar companies directly, probably more than that. I call that the entrepreneurs grand slam. Um you have done something that Anybody who wants to make one successful company would be would be envious of how wow, how does he do it? You know, you see also a lot of other founders. You meet them through your fund or just people who probably come up to you. What would you say

You are doing different. Then the average good founder. So I have some unfair advantages, right? And and and it's it's actually not

that hard once you've been really successful to like to do it again relative to the first time. Um, but what am I doing differently? Uh, I have a m huge talent apparatus. So we have people at like dozens of universities, we have all sorts of you know things we do. What does that mean? People at universities. What's what are they doing? It's like you'll have fellows who apply and you'll have people who run your program there, you'll host parties and meet talents, you'll You have a certain playbook we've built since Palantir of knowing how to show up. Yeah, you have like a huge talent scouting department and Works in different ways, different places and

And and really talented people that we spend a lot of time and each of our partners and and and I, that's our job is to scout for talent and to use our network. And the more wins you have with smart people, the more you get to meet their smart friends. And so so we have a huge advantage in talent, first of all, because that's really key. We have a huge advantage. knowing the people who run a lot of big industries and like having good relationships with them, having them as advisors, having them as being part of things we've done where we can like understands what's happening in those industries, get quick feedback and iterate on ideas.

Like, like one of the biggest mistakes founders make is they have an idea and they're afraid someone's gonna copy it. They're afraid the idea is valuable. It's really dangerous to think that ideas are too valuable, because then you just don't share them, you think that they're yours. And so one of the our advantages is that Is that one of the Peter Chale thought experiments was imagine there's five founders who each have an idea and like four of them are like secretly working on it, and uh and one of them is like talking to everyone and iterating like which of the five is gonna win, right? So it's clearly the guy who's iterating a ton, and five people have the same idea. We're able to have that same idea. And then like Israel.

faster than anyone else because we know everyone running everything and and we and we know how to get back back, you know, how to know how to get to the right answer much, much more quickly. So not only we have the best talent, But we able to iterate ideas with people who respect us, with people we involve. And then whenever we start a company, Maybe this is a mistake. But I've always been like a minority owner of my companies. I've always been like someone who might

Have like Like when we start out the build program, our fund might take twenty percent and our and when my team and I might take ten percent. So we might have thirty total. in like maybe thirty five or forty, but but but like but we have something where it's less than half and we're very generous. with the founders, with the early employees, with the advisors, with the partners. So like when we start these things, Like just even from the beginning.

I don't have to wake up in the morning being the only one worried about this thing. There's like a there's another thirty smart people waking up. who would and that's their focus and they're and they're on it. And that's such a big advantage to like have other people like obsessed over this thing. And our people who truly feel like co founders, by the way. I think it's one of the big mistakes you're like, I'm the founder and you guys are the you're working like like What are you getting from that other than your other than your ego? Like I'd much rather there's so many companies that people don't even know I'm the founder of. And and the people and that's way better, because first they're not gonna harass me about stuff. And and like there's people who are proud founders who get to be out in the press doing it. And uh And and they're what they're going to sleep boring about because this is their reputation and their focus. In the intro, I'm gonna say something like this guy has started more billion dollar companies than anybody in America, which I think is

an amazing claim to fame. Uh but forget about a billion. Let's talk about a million. The name of the podcast is My First Million. And I went and read a Quora answer that you did. Somebody said, If I want to make a million dollars, how should I invest my money? And you said something like this, you said I'll pull it up. You go. If you want to make a million dollars, it's not about how you invest your money, it's about how you invest your time.

And you said Uh it it's about how disciplined you are with investing your time. Um How should somebody who wants to make a million dollars Invest their time.

You know, it's yeah, it's right. Oh, you can't just make a million dollars from investing if you're probably the average person. Maybe you can over like fifty years or something. My my grandma passed away at a hundred and three last year and she was a multi millionaire having grown up in the depression just from saving money and cutting coupons and that could that could work for a hundred years. Being thrifty. Being thrifty like that that is a thing, like over a very long time horizon. I think you said like she bought one stock or something. also like she's my grandfather worked for Abbott and she held it for like sixty years. It happened to work really well. Great, you know, really good for my for my cousins and their inheritance. But you know, she was a wonderful lady. But you know, in general, that's not probably how you wanna make make money. You wanna make money, especially these days. I mean, gosh, going back back to then it was probably a lot harder, but these days, there's so many places with your time you can learn how to help build things, how to help create things, how to help be useful to other people. And like that's what you wanna be doing. You wanna be finding What are you passionate about? What are you good at?

You have to figure out what you're good at. There's you have to be willing to say, this is what I'm not good at, this is what I'm good at. And then who else is good at this, too, who I could maybe learn from who I could be like, And spend your time. Try to find a way to help those people. Try a way to learn how their businesses work, uh, be part of a business and growing it. And that's that's how you see how everything works. And you know, if you're talented enough and that the people you succeed with, they're probably gonna be able to help you do something new later. That's what happened to you, right? That's how you spent your time. Uh my understanding if we if we walk back in the journey, it's You're in college. You go to Stanford and you um

You end up working at PayPal. You become a an intern at PayPal. I I tried a couple of times. They rejected me the first time I applied. W what happened? Why did they reject you? Was PayPal already a big deal? Is that why you wanted to work there? It wasn't that much of a big deal yet. Like Peter Teal wasn't who he was, Elon Musk wasn't who he was, like those you know, their companies combined to start it. Um but I saw like all the smartest people and all these people I admired and all these kind of iconoclasts going there, like people who thought differently, you know. And so you you try one year. Rejected. Try again the second year you're in. What's your job? You're an intern at PayPal. What are you doing? Oh, it's not very glamorous at all. They basically had me setting up the PeopleSoft instance, which is terrible. But I you know, I sat next to this guy. We were in like so Roloff, who's now like Star Partner Sequoia was a CFO.

And we were kind of in his domain at first. And I sat next to this guy who was managing all the money on on Bloomberg, like a treasury thing. So I got to learn finance and treasury. And then and then what was happening is is the big challenge in the company is we were going bankrupt because the Chinese and Russian mafia were stealing all of our money at the time. And so I ended up like hanging out after working with these all these guys who are like working on how do you stop the bad guys. Cause PayPal's like a honeypot. It's got all the money. So like you go to seven eleven. And the clerk there is like maybe having a maybe having a bad year and like, you know, angry at capitalism, who knows? And so they're writing down secretly the numbers on the credit cards, and they write down five hundred of these numbers. They can sell them each online for five or ten bucks. The Russian mafia is buying them up. And then all of a sudden you get a chargeback that says$200 uh on PayPal to something, and you're like, I didn't do that. So you see you charge it back. And then PayPal's left for the bill. Right. And this was like costing PayPal several million dollars a month, and a lot of our competitors went bankrupt. And so we got to learn at the time how to basically stop the bad guys, which was a kind of a fun problem, too.

And so w I like what you did there, which is Uh one of the ad pieces of advice I give in in on the pod is you've got to work on the A plus problem at any company. So regardless of what your role is, you should try to at least know what is the A plus problem. And then try to be helpful on that. That's like'cause that's the needle mover and that's where you're gonna get the most learning, the most action. And and I didn't necessarily do this on purpose. I actually wanted to quit at first because the people saw the thing was so dumb and so horrible and I couldn't figure it out. And my dad convinced me, don't quit, just like do what you can to be helpful otherwise there. So that was a good dad advice. Dad's an eighteen year old. Yeah. You uh uh I almost quit college for the same reason and my dad was like'cause I was like, you know, I'm pretty mediocre here. I was like, I'm used to being good. Then you go to a group like you go to a top school. You didn't feel like you were the best. Now I'm just these were all the best high school kids. Now I'm kind of in the middle. So I was like, you know, maybe it's too expensive. Maybe I shouldn't be here. He's like, that's exactly why you should be there. You want to be surrounded by people who are Better than you. So one of the things Alex Carp had an insight on my co founder of Palantir, who was really good.

is you can't really appreciate a talent unless you're within two standard deviations of it. So you think of talent as being on a normal curve for any typical typical skill. It could be for math, could be for podcasts, whatever it is. And like so you kind of have a natural level of talent you could shift slightly. And so the very best people in the world at something might be fourth or fifth standard deviation. But if you yourself are second or third standard deviation, you can at least start to appreciate that. Whereas if if if if let's say you're not great at physics, I don't know, if you meet like Albert Einstein versus a top physics professor, you're gonna have no idea which one's Einstein. Right. So it's the same thing in any other area. But if you can differentiate. Exactly. But once you can recognize that talent, that lets you then harness it for things you're building and doing. So it actually is very useful to be very good at something, even if you're not the best. Right. Okay,'cause you can notice what that's'cause you can understand. This is actually the five standard deviation talent. I was good enough at computer science. Like I got able to get A pluses at Stanford. I had friends who were way smarter than me at computer science, but I was good enough to know who those kids were and how to harness them and how to hire them. Right. So there's things like that. That's interesting. The next thing you do, you go and you start Palantir, which Yeah, well, actually, actually I worked for Peter's family office for a while and he was the first investor in Facebook. And it was just his family office. There's tons of crazy shit going on. It was really fun. It was like, you know, a really expensive restaurant that went bankrupt. There is like a spam company someone was starting. There is like there's all sorts of crazy shit. And I was there and like

Peter's a genius, but he's not really a manager. So I started like I was like, you know, okay, I'll just I'll take charge here. So I started hiring people with him and kind of helping him run things. And some of the older guys like, Who the fuck is this 21 year old kid? So we ended up working on a project that summer. to map out like what if we'd taken all the stuff we did at PayPal for anti fraud and we and we generalized it to like for the intelligence community, what would that look like? And and my roommate Stefan and I from Stanford design were like sketching up all these cool products and we were building prototypes. And that was kind of the the genesis of Palantir. Oh interesting. Okay. So you guys you basically had the PayPal showed you a bit of a bit of the problem. So they like show us a solution to a problem. They're like, wait a second. Because because basically what happened is like also know all these guys at PayPal, they're in the secret service and FBI. Those are the two groups that are in charge anti-fraud of like arresting the mafia guys. And these guys would come to us and ask us for advice on other things, because it was like

You know, it's kind of fun. It's cops and robbers. Like every I don't know if every young man likes this, but I know of course in teleworld, of course. You want to help kids a bad guy. So, like so, like we were teaching him about cyber fraud or whatever you call internet fraud in two thousand, two thousand and one. And they start coming to us. And then nine eleven happened. And then the government started spending billions of dollars on like supposed solutions to catching bad guys, watching what's going on. And we knew these guys and we watched what they were spending money on and we were like, Oh my God, this is stupid. Like this is way behind Silicon Valley. Not that like I'm so smart, but Silicon Valley itself had gotten way ahead just because it brought talent from all over the world. So whatever was being done in what we call like the the the beltway basically in DC with the old integrators, they're still doing stuff from twenty years ago. And we're like, Oh my gosh, this is like our nation's under attack.

Uh and we're wasting billions of dollars on stupid shit so that's so that's when we said, Okay, well let's get together, let's draw up like what we could actually be doing here if they did better. What happens next? So like walk us through because to okay, we see today. It's a I think I looked this morning, it's a fifty billion dollar market cap company. That's a amazing. But it's also twenty years later. So if we rewind the clock to where most of the people who are gonna listen to this are early stage Trying to figure things out. Unclear which pathway to go, unclear if this is even gonna work. Take me back to that. What what did you do to what was it like and how'd you figure out like the first few steps?

Well there's lots of different ways to build successful companies, right? So I don't I don't ever want to be like, this is the path, but Our path was We were kind of watching all these companies come out of PayPal. So I was very lucky to be sitting there seeing like these guys, you know, doing Ironport and like Dan and YouTube and Yelp and et cetera. So like watching these. And the ones that I could tell were more successful. uh that was we were obviously at the time, were the ones that are attracting the very best engineers. It's almost like

engineers were lined up trying to get into these companies. Right. So you you think like a lot of times people have a business idea and you're like, how do I hire an engineer? And like and like it's the opposite. It's like the ones that are crushing it. It's like a nightclub where the engineers wish they could follow those people in and we're and and and it's those cultures, something about them, it's just the whole It was just so dynamic. It was like they're able to try ten times as much really quickly. You can just kinda tell, like, wow. Like you can be really smart at business, but like if you could try like 10 times as many things, like you can be like slightly less smart business and still succeed, right? Cause you could iterate. So like, okay, we need to build somehow a really top engineering culture. Like that was like one of our

core principles ear is how do we We used to say the engineer is king. Like how do you how do you have a culture that h that attracts the very, very best and and respects them and like makes them partially in charge of the company, you know, with with you. And so we spent a lot of time on that. Um, it's a little bit chicken and egg. We obviously I was lucky to have a bunch of my friends from growing up who are national math and chess champions and all these smart guys. And like so we bring this really core culture together. Convince some of these really top PhDs from MIT. Like what's what was the quick version that was getting them excited? Uh it's

'Cause you need a magnet. Something to bring the talent in. The government spending Tens of billions of dollars in this area. They're way behind what we figured out how to do in Silicon Valley. It's clear there's going to be

uh a multi billion dollar company. That solves this problem. And you just describe the problem to m as very hard technical thing that if we have the best engineers, we're gonna be able to do it. And we're iterating closely. you know, with the national intelligence, with defense agencies, and and you get to go and solve this problem and if we succeed, we're gonna save thousands of lives and and we're gonna protect civil liberties. That was that was that was a high level. It's like you know, it's it's a fun big mission. One of those things you said is we're working closely with these agencies. Like how easy was it to work with them? Cause you know, you're Young. How do they even take you seriously? You're young and you're different. You have a different approach. Yeah. So so is so maybe it wasn't entirely the case that they're iterating as closely as as I'd like them to be with us for the first year or two. So Alex Carp was very good at this. Alex was

I was at first just an advisor. to us helping us and then and then and then Peter uh kept trying to like get us to hire a CEO because Steph and I were twenty one and you you couldn't really have a twenty one year old running something working with like senators and the defense department. But like these guys, these generals or former admirals would come in and they just did not understand tech culture. And I'm sure they were great guys. They just wouldn't have fit at all with us. And so finally Alice Carp uh had been like helping Peter raise money for things or friends from law school. And you know, he was uh he was a PhD in philosophy in Germany. And in in Europe, a lot of the billionaires like to pretend they're philosophers. It's like the high status thing to do. Kind of like here they like to pretend they're podcasters or something. I don't know. But so basically basically like he knew all these wealthy people and so he started advising us how to talk to them, how to meet them, how to think about how institutions worked. And he had all these like casting things in terms of like how you ought to approach people to take you seriously, which What do you mean by that? I I don't understand.

Like If we show up and we're like These like quirky twenty one year olds from Silicon Valley. That's like that's like that's the wrong casting. Whereas if you show up and you h walk in the door with you, the former head of the CIA and and and Peter Thiels made the intro after the being a PayPal and another one of his friends who's senior has like

has explained to them that this is a project that they're helping that it's gonna help in this way based on this big advancement made in Silicon Valley, and they've been and that they've already been talking to a bunch of people at the FBI and et cetera, and they want your feedback. Like that's like a that's like a high status way to come in the room. Right. Whereas if I come in the room and be like, look how smart I am, look how right this is, this is better than what you're doing. Like look at how smart it is. Yeah, exactly. Yeah, it I I I guess I guess a lot of young people maybe underestimate the substance is important, but it's you can't lead with substance because substance is not taken seriously. So you have to have the substance to win, but you have to have all the trappings of why they're taking it seriously and why they're comfortable doing it and why they're why you know why it makes sense. So anyway, there's these things like this about how the world world works and and who to talk to in the institution, who to get your help. So I Alex just had like this wisdom about like people and institutions and how to navigate that like the rest of us, we had the best tech culture. We didn't have that. And so We actually convinced him to pretend to be CEO for a few years so that so that Peter would stop trying to hire like a really like senior like military guy. But then he was such a good CEO then he actually he actually was he's still CEO twenty years later. Right. So it worked out. And you mentioned Peter. Peter was not active day to day necessarily. No, but he was critical for the company. What was he doing? Peter was like first of all he's the financial support that no one would give us crazy kids. Like I told you, there's all these crazy projects going on. Like a lot of people around him are like, This is the craest thing you're doing. Like it's one thing to waste money on a restaurant, but the you're sending these kids to pretend to be spies and build things into like what are you thinking? There's no such thing as a company that does this. So so like you have to give him credit for like

being a little bit on a crazy idea. He put a lot of money into it, right? Like it's it was several million dollars early on, which to the point which is like And then and then and then we had then this fun start putting things alongside others. But I mean, yeah, that's a that's a huge amount of money for like Crazy kids, this what are we doing? And and then and and then like Peter was really good for strategy. He was really key on I think one of the most important things is he stopped us from a couple of early partnerships. This is one thing that people screw up a lot with startups.

A lot of startups when you're getting going. You wanna like You get really excited about some partnership on the table and you think it's gonna really help you, but But a lot of partnerships will cap your upside. A lot of partnerships will limit your ability to iterate and to try other things. And I think because he had the experience and he was going for multi-billion dollar win, he was really able to like. steer us away from a a lot of big mistakes early on. Like what would have been a a

partnership that would have been maybe. Like we would have like spent like all of our time selling our interface in in Europe that gave them all the rights to it. And we would have had to fly over there and support things they were doing. Or just like random things that like sounded really good because when you're getting going, you're desperate for that first five hundred thousand million revenue and stuff. And like but you have to make sure you get it in a way that's gonna actually scale into something much bigger. That's not like a mess that's gonna distract you. Right, right. And um Peter is uh he's an interesting guy for sure. He you said restaurant. Curious, like I mean, there's everything. I think so. This is this is like not unique to Peter, by the way. This is a really common rule, is that whenever someone becomes very successful,

For the first time. Um They usually become more expansive if they're an entrepreneur. I mean, all of us we like to build things or we like to create things and so it's once you have success, you're like, Okay, I'm really good at that. I probably could be really good at these six things as well.

And then I think we all forget, okay, the reason I was really good at this first thing is because I was like obsessively working on it for eighty or ninety hours a week and I brought like thirty of my smartest friends into it and we all iterated like crazy and we almost died multiple times and we barely made it work. But kinda forget that you kinda forget that part and you're just like, Oh yeah, oh I did this. And you just think you do all these things. Snap my fingers and we're gonna do this, this, this, this like it's like playing risk, you know, where you're conquering and like it turns out that's not That's not a good way, but this is what I've seen almost everyone go through this. Like unless I I'm lucky to have watched multiple other friends go through it. So I I still made the mistake in different ways, but you but so so there was very expansive, and there were some things maybe didn't make as much sense. And and and then of course, but then you don't be so freaking smart that some of them didn't make a lot of sense. If you wrote the first check on Facebook at that time, so I mean give me a break, you know, you can you can I mean everyone in venture is not gonna have a hundred percent hit rate and so you so so you need to learn from your mistakes. Were you around when he wrote that check into Facebook? Yeah, I mean I I get no credit for it. And like at the time did it seem like a big deal, or was it just like one of many things that he was doing and was unclear that that was a

It was one of it was one of many things. They seemed particularly smart and interesting and I you know, I was I I can't say I thought it was gonna be as big as it was. I don't think anyone realized that, but but it was it was clear they're really smart, really interesting guys who are very aggressive. And so it was it was a fun thing to be exposed. So I think one of my good friends who actually helped Peter write the check He's played in the movie by by an African American guy, I think, which he jokes about, but it's like no it was a good time to be there. It was fun. He's like a five four white guy. Sorry, James, no credit for you. If anyone out there wants to rewrite me as like a super handsome black guy, I would love that. Exactly. Thank you for doing this. Awesome. Uh the highest compliment, which is I learned a lot today. Uh that's my goal with all these is what are some of the things that, you know. So thank you so much for doing that. Yeah, I know.

I feel like I can rule the world, I know I can be what I want to I put my all in it like my day's off On the roadless travel, never looking back

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