Invest Like the Best with Patrick O'Shaughnessy - Justin Mares - The US Health Crisis - [Invest Like the Best, EP.333]

Episode Date: June 20, 2023

My guest this week is Justin Mares. Justin is the founder of TrueMed and has previously founded three different health food brands that collectively do $100M+ in annual revenue.  Every time I speak with him, he makes me reflect on my own health and the state of our health more broadly. This conversation is no different. As Justin puts it, we're in a health crisis that could ultimately bankrupt our country. We talk about the inputs, incentives, and potential solutions related to that crisis, and then move into his experiences building and investing in consumer brands. We finish with a fascinating discussion on why it's more common to see repeat founders these days. Please enjoy my great conversation with Justin Mares. Founders Podcast Founders Episode 136 - Estee Lauder Founders Episode 288 - Ralph Lauren For the full show notes, transcript, and links to mentioned content, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:03:06) - (First question) - Framing the overall problem of the US health system (00:04:12) - What it would take for America’s health crisis to affect global competitiveness (00:11:05) - Important changes that have contributed to the decline of health in the US  (00:14:53) - Other system settings and incentives have contributed to America’s health crisis (00:16:51) - Thoughts on Ozempic and attempts to engineer solutions for chronic disease (00:20:07) - Mental health decline, infertility, and other problems tied to the health crisis  (00:24:33) - When he first discovered this problem and became passionate about it (00:26:56) - The difficulties of building a health-centric bone broth company  (00:31:49) - Why no one has a built supply chain sourcing service to create scale economies (00:34:44) - Other companies he’s built and other things he’s doing to fight the problem  (00:40:15) - Going to market to simplify the HSA consumer experience  (00:43:04) - The world of water, environmental toxins and forever chemicals writ large (00:47:17) - The difficulty in avoiding forever chemicals in our everyday lives  (00:51:51) - How he searches for and decides on new businesses to start or invest in    (00:56:52) - The growing popularity and promise of psychedelic therapy  (00:58:48) - Personality traits of people who feel most at home in Edge City (01:01:36) - Strategies on sourcing and connecting with ambitious and talented people (01:06:56) - Childhood nutrition and the impact of their diets and health on society  (01:11:26) - Capital formation and creating new businesses in a systematic way (01:19:57) - The kindest thing anyone has ever done for him 

Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO and founding partner of Positive Sum and the CEO. of O'Shaughnessy asset management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum or O'Shaunacy asset management. This podcast is for informational purposes only and should not be relied upon as a basis

for investment decisions. Clients of positive sum or O'Shaunacy asset management may maintain positions in the securities discussed in this podcast. My guest this week is Justin Mares. Justin has built three consumer health-focused brands over the past decade. Every time I speak with him, he makes me reflect on my own health and the state of our health more broadly. This conversation is no different. As Justin puts it, we're in a health crisis that could ultimately bankrupt our country.

We talk about the inputs, incentives, and potential solutions related to that crisis, and then move into his experiences building and investing in consumer brands. We finish with a fascinating discussion on why it's more common to see repeat founders these days. please enjoy my great conversation with Justin Mears. I know we're going to talk a lot about the U.S. health system. Maybe the right thing is a framing because we all live in this system and probably haven't thought too much about it or take it for granted. And I think there's some huge underlying problems that trace back maybe 50, 60 years. Could you begin by just giving what you think is the cleanest frame of the overall problem as you see at having built multiple businesses kind of in and around this space?

I think the core underlying thing that is a massive problem is just that if you look back 50, 60 years ago, chronic disease was basically like not a thing. And it existed in small ways, but it was not 20% of GDP. Kids, 40 to 50% of them are diabetic or prediabetic. It was not like the explosion and chronic illness that we see today across cancer, obesity, infertility, mental depression, all this sort of thing. So to me, I think the biggest question I think exists in the U.S. right now is, what is going on with the health of our population and how over the last 50 years has it taken such a nose dive and gotten to such a toxic place that I think is literally going to threaten the competitiveness of the country. How would that last piece come to fruition? Like in a dystopian situation, what would it take for health outcomes or average health status of Americans to be so bad that it actually affected our competitiveness? That seems pretty intense. I think it's happening right now. But if you look at health care costs, they're outpacing inflation by like, 200%. And so you don't have to fast forward for too long, to get a sense of health care costs are

almost already at 20% of GDP. How much longer can health care costs continue increasing at this pace before it like literally bankrupts the country? And that's not even talking about the human capital issue, which is just if you think about it, the average child being obese, overweight, six and 10 adults have at least one chronic illness. Something like 17 medications are prescribed, on average per adult every year. From a health standpoint, we all know, I mean, if you don't feel your best from a health standpoint, there's no way that you're doing your best, most productive work. You're not your happiest version. You're not killing it at work. You're not doing almost anything with the vigor and energy that probably we want people to bring to their jobs, bring their

relationships, bring to everything. The other thing I think that's just crazy to is I spend so much fucking time, reading labels on food, looking at ingredients, understanding like sourcing. It's insane. The amount of mental overhead that I put in to understanding sourcing ingredients, what went into this? Oh, does this kitchen use seed oils? Where are they buying their stuff from? Is this produce seasonal? Because that impacts nutrient density is an unbelievable amount of mental overhead that goes into this stuff. And if you rewind, like if I ask my grandparents or parents. How did you think about making food and health choices for your kids? It was basically like, we just bought whatever was that story. Yeah, totally. We're talking about it. Yeah, totally. I mean,

you look at old photos of people on the beach in the 60s and 70s, in old TV shows and all these sorts of things. You just don't have to look back that far to reach a place where people were just, for the most part, healthy by default and almost never thought about their food as much as I think about food and consumer products and stuff like that today. And they were still healthy. What about the evidence that we have from the rest of the world concurrently? So like the snapshot of the average health status today, is there any lessons that we can learn from certain regions or specific countries and what that data might teach us about what's going wrong here in the U.S.? I think that the thing that you can see very clearly is that we're exporting a Western diet to other countries and they are starting to feel

and see the exact same metabolic and health issues that we see here in the U.S. Rates of diabetes have gone up something like 10,000 percent in China in the last 50 years as a Western diet has come to mainland China. You see similar things across a lot of the Middle East, many parts of Africa, many parts of South America, even Europe, which many people, myself included, think to a much better job from a food system standpoint than the U.S. does, is still seeing a huge increase in metabolic disease, other chronic diseases and the like. Obviously, this is like an incredibly challenging problem because of its impact, but also it's

really challenging to understand. We can't say for sure it is X, Y, or Z that's causing this. And if you go and do thoughtful research, you can kind of pick your explanation and you'll find great evidence for and against the thing, whatever it is, seed oils or whatever it is, the ratio of macronutrients in your diet as the causal factor for this problem. The problem seems undeniable. Like the data is just really bad. Maybe you can trace for us how you think about answering that question because everyone's like, okay, it's bad. We would love to do something about it, but no one can seem to agree on the reason that this is happening. And there's all sorts of

ancillary factors like business interests and other things that I want to talk about too. But how do you personally, I mean, attack this problem, like this knowledge problem, an epistemology, problem. How do you know what might actually be true? One of the issues that I would take, even with the framing as you approach it, is like you can find all these studies and whatnot, is I think that our sense making apparatus, especially as it comes to nutrition, which is a highly multifactorial complex thing, is completely broken. And it's broken intentionally by big food companies, pharma companies that basically are funding thousands and thousands of studies to make us confused as to are almonds bad, is chocolate bad for you, are ultra-processed foods good or not.

If you look, there have been 50,000 nutrition studies in the last two years that have come out. 50,000. Many of these are funded by like Big Food and Big Food-related companies. The NIH spends $1 for every $11 that Big Food spends funding nutrition research. And so my takeaway from this, and I'll answer your question in a sec, but my takeaway from is that basically we are operating as a society in a space where our tools for sensemaking research study is a scientific method and the like are being weaponized and like used against us to just muddle and create confusion and make it nearly impossible for one person, one person

who like makes the USDA guidelines that go into kids lunches, for example, to clearly point to causality and go, this is bad and we're going to fix it. And I think that right now Big Food is basically doing and pulling out the playbook that cigarette companies pulled out 40, 50 years ago of let's fund every possible study that makes it unclear whether or not cigarettes are harmful or whether or not there's a link to lung cancer there. And they're doing the same thing with food today. And so what I think about is for me, the core problem is that 50 years ago, 50, 60 years ago, there was far lower incidence of chronic disease, obesity, overweight, diabetes, and the like. in the last 50 years, that has completely changed. Americans are sicker, fat, are more depressed,

and fertile, all these sorts of things, worse than we ever have been before. And the kids that are growing up today are in the worst position of any generation of American kids have ever been from a health standpoint. So for me, I think you look at that and you have to go, what changed? The biggest thing is the amount of processed foods that we eat in our diet today has massively changed. The amount of environmental toxins that we're exposed to have hugely enormously changed. And, I think that you have to start with this. We have a massive health crisis going on right now. That's the core thing that you have to start from. And if you just go back to 1970 and say, let's eat like we were eating in 1970, which is far more whole foods, stuff that is not quite as

processed, stuff that has far fewer pesticides that are sprayed on it, less glyphosate, less environmental toxins and the like, that is probably a really good place to start. If we were to draw a timeline and we could pick a start a date, let's say it's roughly 1960 or something like that. What do you think are the most important changes that have happened, whether that's regulatory changes, whether that's business changes, whether that's research changes, whatever you think are the important things? Because in 1950, let's say, when this wasn't a problem, there are big food companies, big companies of every type. What are the important things on that timeline that might help us understand how this awful change has come to be? One thing I think that was a big

change was food subsidies straight up. If you look, since 1995, the U.S. has spent almost 210 billion on subsidies, primarily that go towards three things, corn, soy, and wheat. Because the U.S. is hugely subsidizing these three crops, it artificially brings the price down at which farmers and big food manufacturers are getting these inputs. Yeah, totally. What you see is around the 1970s, 1980s, many of these big food manufacturers go from using real sugar to using high fructose corn syrup. McDonald's used to fry all of their French fries and beef tallow. All of a sudden, soybean oil and canola oil become far less expensive because of subsidies and a bunch of other things. And you start seeing them using vegetable oils and everything. In 1960, basically zero percent

of the average Americans' calories came from soybean oil. Now that's approaching 20 percent. Where the average American is getting 20 percent of their diet from these, in my opinion, toxic soybean oils that has not existed in the human diet. in history today until now. What is the source of the subsidies themselves? I want to keep digging into the causal chain here. I get that and that sounds really bad. I don't want my kids eating 20% soybean oil. But why were the subsidies there in the first place and are they intractable? Like, is there any way out of this problem? A lot of these subsidies came about in relation to, or as an after effect of World War II. Basically, the government is like, we need to guarantee a food

supply. We need to make sure that it's shelf stable so that we can ship it overseas and it can stay for long periods of time and stuff like that. And so one of the things that the government did and Nixon made a push around this is specifically to make it so that these big food companies were okay in using and testing out a bunch of these different chemical stabilizers. There's this big push towards shelf stability. And then the government was like, we need to guarantee our own food supply. Corn, soy wheat are relatively stable grains that we can ship overseas. We can do a bunch of stuff with. And so like, let's put money behind this to make sure that America guarantees. It's never like an evil start, is it? No, totally. Honestly, I don't think that with some exceptions,

we're going to talk a lot about the food and health care system today. I think that most of the players in the food system and in the health care system are like good people trying to do the right thing. I just think that the system itself has incentives that are so warped that they're creating really bad outcomes and are like killing hundreds of thousands of Americans. On the topic of subsidies, here's a good example where I just talked about how almost $210 billion are spent. spent since 1995 on subsidies for corn, soy wheat. If you look into the subsidies that are happening today, cigarettes, tobacco gets four times more government subsidies, about 2% than all fruits and vegetable crops combined. So if you just look at that incentive alone, the USDA is saying

that about 50% of American calories should come from fruits and vegetables. Yet if you look at how the USDA is allocating funds, 80 plus percent of all of their subsidy dollars are going towards corn, soy wheat, and something like 0.45% are going towards fruits and vegetables. And then we look around as a country and we go, like, why is everyone so sick? Why is everyone eating corn syrup all the time? Gluten allergies are through the roof, weeds and everything. Soybean oil is 20% of American calories. How is this happening? And you just go, oh, that's why. What other system settings, I guess, would be the right term. It could be incentives, could be just something else. In addition to the subsidies do you think have most contributed to this problem? I think that our food has also been

weaponized against us. If you think about, I realize I maybe sound like a conspiracy theorist or something here, but I think that if you look at a book called the Dorito effect or something like that, there's another book called Salt, Sugar Fat, where if you look, these big food companies, similar to Facebook that's getting a bunch of blowback and TikTok and others, have spent hundreds of millions of to try and engineer the perfect, palatable thing that you want to keep going back for. And so not only do we have subsidies, which mean that cheap inputs go into everything, most of those products are controlled by six to seven big food companies that are just mammoth companies that control almost all of our food supply, especially in package form,

but as these big food companies start to swap out real whole ingredients and whole foods for a processed sort of fake version of that thing, their profit margins go up. And so all of a sudden, they have more money to pour into marketing, more money to pour into R&D. It's a cycle, yeah. Yeah, it's a cycle. And more money to figure out how do we make the Dorito the most addicting possible thing that one could put in their mouth? In this book, they talk about how scientists have engineered it so that you have this carbly, nice crunch, and then you have this little oil taste that leaves you wanting more, but it kind of dissipates on the back of the tongue. And so you're always like, oh, I'm like so close.

They've basically weaponized our evolutionary senses to want more and more and more of these toxic, addictive food stuffs. And just like I don't blame a two or five-year-old who gets sucked into TikTok or an iPad or whatever for falling prey to their base evolutionary senses that a bunch of people in Silicon Valley have taken advantage of. I also don't blame people for getting addicted to these hyper-processed, hyper-palatable ultra-processed foods. One of the reactions that we tend to have to problems like this is engineered, just like the problems are engineered, like engineered solutions. What do you think of something like OZemPEC? I think OZemPEC is super concerning. One of the things that generally I would say that we've done over the last 50 years is we've

seen heart disease go up and we've never prescribed more statins than we do today. Heart disease is still going up. You see depression going up. We've never prescribed more SSRIs than we do today, still going up. You basically see all of these issues crop up, and there's a pharmaceutical solution that is proffered in response to this problem. And yet the core metrics on which we measure health and vitality of our population, those things continue to go up. I think that OZemPEC is, on the one hand, set to probably be the most profitable drug or class of drugs, this class of GLP1 Agonis.

I think it's likely to be one of the most profitable drugs that pharma has ever invented. I think think that for two reasons. One, you're seeing a push towards right now the way it works is it's weekly injections that you are on for the rest of your life. And if you get off of it, you gain all of the way back. You're also seeing an incredible push like this one woman. Good business model. Yeah, it's incredible business model. Exactly. Which is why I think you're starting to see a push to prescribe it to overweight 12-year-olds. They'll be on it for literally the rest of their life. we are extremely early in understanding the side effects of something like Kozempic. And one of the most concerning things to me is not only do you gain all the way back after

you get off it, but in the early studies that we've seen, which is all that we have, we have no longitudinal studies for this massive biological intervention that all of a sudden we're suggesting kids as young as 12 get on for literally the rest of their life. But in these early studies, what you're seeing is that 30 to 40% of the weight loss benefits come in the form of muscle mass loss and bone density loss. And now, why that is concerning, if you think about why is it that a super strong fit person can often out-exercise their diet or occasionally can for at least a period of time, in many ways, it's because they have muscles that act as glucose sinks. And so if you're eating a bad diet, your glucose

is spiking, those muscles can basically like soak up and absorb that energy. I get really concerned that we're going to see a future where a bunch of people go on a Zembek, and either they become weaker, their bones become less dense, and that creates a class of health problems on its own, or they try and get off, and they are literally less able to withstand the glucose impacts of their existing diet and less able to actually work through and correct any of these things. The second thing I'll quickly say is that if you believe, which I do, and I think that the evidence is very strongly in favor of this, that obesity is a sense, of metabolic dysfunction, using a drug that you have to take for the rest of your life

to address a symptom of metabolic dysfunction is not going to do anything about the massive issues that we see from a chronic disease standpoint. It's not going to do anything about inflammation and mental health, infertility, and all these other issues that we see that are related to the toxic food that's in our food system. How do you think about those categories that you just mentioned in the relationship to the core problem. Let's assume the conclusion is right that the principal change is things in the environment and things that we're putting into and on to our bodies. Why is that relating to things like mental health, to infertility, to reproduction problems? Like, it does seem like

all these things the data says are up into the right. Someone told me recently, like, came up where the number was, but the percent of Americans on SSRIs, they told me I couldn't believe, maybe you know it. I could not believe it. It was very scary. And those, from what I understand, like pretty much dead in your consciousness. Are these things also from the same sort of problem? Like, is this a food problem? Is it a toxin problem? Do we have any clue? Mental health is extremely tightly coupled with physical health. I think that it's basically impossible or much, much, much harder to be in really horrendous physical health, while also have the mental health of super healthy, like 25 year old or something. It just doesn't

happen. You can look at a couple stats. Male sperm count is down 50% over the last 50 years. Really? Yeah. You don't have to do the math to be like, oh yeah, I can see that has an impact on fertility. Today, 26% of women have PCOS, which is the leading cause of infertility. PCOS is polycystic ovarian syndrome. It's you get cis on your ovaries. And so it's one of the leading causes of infertility. And it's now hugely where, again, practically didn't exist in the 70s. You look at in the past 10 years, the number of miscarriages has gone up 10%. There's even weird things happening around women and teenagers are getting their periods and hitting puberty like one to two years earlier historically.

And so I think that you just look at all of these. You look at the mental health, the state of mental health for the average American teenager. There's incredibly strong correlations between diabetes and depression. You look at that. You look at the stats, the direction these things are going. You also look at the fact that we know that the majority of one serotonin is actually produced in the gut. there's a massive connection between the brain and the gut over something called the vagus nerve.

And I think that you have to conclude that the health of your body is your mental health. These are the exact same things. My doctor, who's, I think, incredibly thoughtful and progressive in both his demand for data to reach certain conclusions, but also like certain realities, not everything can be jammed into an RCT. He's made me very interested in this gut brain thing. How do we know that that's true? I've heard very smart people start to talk about this. What is the best evidence that we have

that this actually matters? Because it seems like people completely disregard the health of their gut. If there is that connection, like that's obviously a bad idea. So how do we know that there is that connection? This is where I would say that I'm not a doctor. I'm not anything like this. We're very early in the study and understanding of the gut and the microbiome. I do think that there are a lot of early but suggestive studies around the impact of gut health on depression and mental health. There was one lit review that came out. It was like a year or two ago where effectively they ran a test and they said, okay, they took people with treatment resistant depression, very depressed people. And one group did a talk therapy intervention and the other did a purely

nutritional intervention just geared towards fixing the diet and fixing and changing like the composition of microbes in one's gut. And the people that did just the nutritional intervention basically had much better results from a curing depression standpoint than those that just did talk therapy. We're very early in understanding the gut brain axis and understanding what does a good microbiome look like. This is just super early cutting edge stuff. But if I had to guess, and I'm willing to be wrong on this, this is like a speculative hypothesis, the way that I am thinking about mental health and physical health right now is that you can think about physical health as a landscape or a football field or something. Maybe like a seesaw would be a better example where if it's

tilted certain directions, if you're unhealthy, that is just going to skew your ability to feel amazing to have like really strong, robust mental health just a little bit. It's going to make your emotions slightly more negative. It's going to make feedback loops that are negative, maybe slightly easier to fall into. I think the opposite is true. When you sort of feel good and you feel healthy, that kicks off a positive feedback loop in your emotions and your mental health. And I think that we're very, very early in understanding this sort of thing. But I do think it's one of those factors that's going to be incredibly important. How did you get personally so interested and invested in this? Or half hour and we haven't talked at all about things that

you've built, which we're going to spend plenty of time on. What was the origin point for you discovering the problem and developing a deep care for the problem? I started this business called Kettle and Fire when I was 26. Kettle and Fire now is the number one bone broth brand in the country for whatever that's worth. And when I started the company, I'll be honest, I was like into health. I was reading about it a little bit, but it wasn't this hair on fire thing that I'd gone super deep on just yet. As I was getting more into the bone broth space and starting this company, looking at marketing points, talking to influencers, talking to people in the health and food world, I kept coming back to what I said at the beginning of the show, which is just I think the greatest

mystery that people are not talking about the Peter Thiel-esque secret is that 50 years ago, we had so many fewer people, resources, everything, to think about health and people were healthier. And now at a time when science has progressed, people are talking about health all the time. There's diet tribes everywhere. The average American is like overweight, unhealthy, and has multiple chronic diseases. It's crazy. And so as I got more into understanding, oh, we're selling a health product. Let me understand like the needs of my consumer. I just started talking to more and more customers, meeting more and more people. And I felt like almost no one was actually looking at this and going, this is wildly fucked up. Sort of everyone is just okay,

maybe, with the average outcome of health in the U.S. being really bad. I was like obsessed with this question of why is it and what don't we know about what is causing chronic disease, obesity, and overweight in 73% of the population today. I just became more and more obsessed with that question. That led me into food, launching kettle and fire. I saw more and more how doing a brand, like we basically launched with super high quality ingredients, organic ingredients, grass fed, grass-fetched bones, all these sorts of things. And as I dug more and more into the food and the food system, I was just blown away by all of the tradeoffs that you're nudged to make as an up-and-coming health food brand. And I was blown away by the number of things. And I was blown away by the number of

that, in my opinion, were messed up in the food system and the structural systematic incentives that nudge people in one direction, which is towards consuming things that are really bad for their health. What's a good example of that that you encountered building kettle and fire? Something that you tried to do that you got nudged a different direction. One really easy thing. We talked about corn, soy, and wheat being the most subsidized crops in the U.S. What that means is if you are a farmer or rancher, all of a sudden, if you want to have your

cows eating grass, something that they've been eating. eating for millions of years, or if you want to feed them corn, soy, and grains, one of those is much, much cheaper to do than the other. And so you have a huge shift over the last 50 years towards farmers feeding their animals, what I would call like ancestrally not appropriate diets. Cows did not evolve to eat corn, soy, wheat. They evolved to eat grasses and other things like that. So that was one area where when we started out, we could have bought bones from grain-fed cattle for basically free. Like we had people just being like, oh, you're going to take the bones.

Boil these. Yeah, like take them from us. Thank God. Trying to find like grass fed and trying to find different ranchers that were doing things the right way, we had to pay a huge premium to do that because we had to compete with these fake cheap crops because they have been hyper subsidized by all these crop subsidies. What did you learn about the nature of demand for a product like this? Like I have no idea how big the bone broth market is, but I don't know a lot of people that

consume bone broth regularly. Why did you pick that product? What have you learned in general, not just through that company, about consumer preferences? If you became an investor that could only invest in food companies, what kind of lessons would you bring to bear with that responsibility? Learned a couple things. One, that people are actually looking for solutions to their health issues. One of the reasons that I find bone broth is interesting is because it's something that 50 years ago, bone broth was like in every soup. The reason that your Jewish grandma would be like, oh, you're sick, eat chicken noodle soup is because that is made with real bones, bone broth, and like the collagen

and amino acids that come in that product. I think that today, if I were a food investor, I would look at products that are solving a real nutritional and health need and where the existing products have not been innovated on for 40, 50 years. Kettle and Fire competes against Campbell's for the most part. Those guys haven't really changed their product for a very long time. And so I think that's kind of an interesting dimension. I think that probably a lot of big food companies have underestimated the power of these food tribes and sort of food movements, whether that's paleo, whole 30, keto, any number of these things. I think that tying yourself to an early trend and saying, okay, this diet tribe has something that is important saying something real. There's this return to

the way that our food system used to be through this product, I think is important. And then the last thing I think, too, is it is important to go where your competition can't go. One of the unfortunate realities is I don't think that investing in food companies is a great thing. Like, I've built three consumer product brands, and I've made three food or consumer investments in my entire career while making 40 plus others in other spaces. And I think the reason is that the deck is stacked against small brands that are trying to build a better food system or build the right thing, because you are paying more for inputs. You have fewer marketing dollars. You have fewer marketing dollars. you're generally a lower margin business because you're not using all of these highly processed

additives and the like. And you're competing for shelf space with some of the biggest consumer companies out there that can just bleed you to death. And so I think the only opportunities that are interesting or worth going after if you're building or investing in a new health food brand is the sorts of opportunities where the brand or company can move in a direction that strategically a big food company couldn't move. One of the things that we did at Kettle and Fire is, is we were the first bone broth company to get certified glyphosate-free. What is glyphosate? Glyphosate is like round up hundreds of millions of pounds that are sprayed on American crops

every year. It's basically going to be banned in Europe by next year. The U.S. has no such bans. So Kettle and Fire became the first bone broth brand that was doing glyphosate-free, certified glyphosate free. Glyphosate is in water. It's sprayed on every crop. It's like fed to these animals everywhere.

And because of how prevalent this stuff is, a big food company to compete with us, if that is a dimension consumers care about is like, oh, I don't want glyphosate in my body, then a big food company would have to completely change their supply chain, the way they manufacture, the way they source, the way they like buy their inputs to try and match us from a glyphosate-free standpoint. And even then, if you're Campbell, you're doing, I don't know how much in revenue, like, $8 billion a year or something. It's like, are we really going to go after this tiny portion of consumers that care about being glyphosate-free and rejigger our entire supply chain to do so, like, of course not. It's bad capital allocation if they were to do that. However,

I think those are the areas, and in my opinion, the only areas that small upstart health and wellness food brands can actually outcompete the big guys. Why has nobody built some sort of supply chain service or like sourcing service that the whole goal is like create scale economies to then sell to entrepreneurs who want to build a consumer brand? Because it seems like a big barrier to entry here, you just said it yourself, you're a position to pick all the best companies here. You've only done three. It just seems like the most talented people get attracted to places where their ambition can be most fulfilled and they have the most leverage. And basically what you're saying is the business model inherently is bad. And so talent doesn't get attracted to the space.

And part of that is the margin problem. And part of that is the cost of goods and there's no scale player. So why doesn't someone build the scale player? Because I think it's incredibly expensive and it takes forever. One of the challenges about this is these are not technology businesses. If I said right now, I want to build the largest supply chain of regeneratively grown beef in the U.S. Or I wanted to have a certified glyphosate free supply chain that was also organic. I would have to acquire the supply. You would have to turn over every single crop input that you had for at least three years for something to get certified organic. You would go through multiple years of having your yields be lower while your fields transitioned from relying on chemically intensive

monocropping sort of agriculture to a more regenerative approach. Like the yields catch up, but it takes a couple years. You would basically have to wean an entire herd of animals off of corn, soy wheat that you've probably been feeding them, acquire a bunch more land to put them on grasslands, feed them that way for two to three years so that they can be certified grass fed, grass finished. And only then, think about the amount of capital that you have to outlay to make that happen? And only then do you have the raw materials ready to go? We're not even talking about one of the big issues in the sort of meat supply chain, at least, is that you get such incredible economies of scale when you're processing meat at a very, very high level as opposed to a low one.

And so small bison beef cattle ranchers and the like are often paying like two to three times what a massive meat conglomerate is paying to get each one of their cattle processed. oftentimes they're not even able to make the same like grass-fed claims or they're taking animals that have been very humanely raised just on grass and pasture and sending them into a processing with a bunch of other people that are just grain-fed and all of a sudden they can't make the claim that this is like grass-fed, grass-finished animal. So I would love to see it happen. I think the truth is that it would be such an intensive capital outlay to get something like this going. And at the end of the road, you have a slightly better.

raw materials supply chain resource. If you look at how a lot of these businesses trade, the biggest meat processor sort of trade at, it's like not great. If you're a hyper ambitious person, this is not a good business in general to go into. I mean, that's a huge problem. Market capital is a system thrives when there's a match between the profit motive and the outcomes, I guess, that you achieve for people. And it sounds like what you've described so far is this is broken. Maybe you could argue that like what's broken is the regulatory side. And if we didn't have the subsidies and we didn't have these non-market forces in there, like everything would be fine, I guess what are you doing? What other companies have you built? Maybe tell us a little bit about each

of the companies. I'll address something you said first, then I'll talk about the companies. So one of the things that I think is true is there is a massive, massive negative externality that's created here by big food companies that they don't pay for. Kind of similar to how companies in the 60s and 70s were polluting rivers, they weren't paying for it, then we introduced regulation that made them pay for sort of the negative externalities that they created from a pollution standpoint and like the pollution problem got better. I basically think that big food companies, Coca-Cola and the like, are creating huge, hugely negative health externalities that are not priced into their products, that they're not getting fined for, that they're not paying the cost

at all of feeding people stuff that is making them sick. The ability for a Coke to be cheaper than water in many parts of the U.S. is purely because Coke externalizes the negative health outcomes of that Coca-Cola onto the U.S. taxpayer via the health care system. And I think that's super fucked up. What I'm doing now, so I started these food companies, started kettle and fire, which is a bone broth company, perfect keto, which is food and supplements for people on a keto diet, and then a non-alcoholic wine brand called Shirley. And all of these were in the realm of how do we make people healthier from a food and sort of consumer product standpoint. What I'm working on now is trying to level up and look at the system a little more holistically

and try and fix the incentives that are endemic in the system and fix these incentives that are making everyone fat sick, infertile, depressed, unhappy, all these things. What we're doing now is basically started a company called TrueMed. At TrueMed, we sort of believe that food is medicine, lifestyle is medicine, sleep is medicine, exercise medicine, like all of these things. There's this idea of if exercise was a pill, everyone would get prescribed it. What we're doing is we're trying to create a financial product, a financial tool that allows people to spend tax-free HSA and FSA funds on things that keep them healthy, things that treat

or alleviate specific disease conditions, which almost everyone has right now, whether that's metabolic dysfunction, not sleeping properly, eating a bad diet, lacking certain nutrients, not getting exercise, whatever. And so as a consumer today, walking the aisles of a grocery store, when you go to buy kettle and firebone broth versus an off-the-shelf kind of a store brand, you're going to pay a premium to buy kettle and fire. It's hard and it's expensive to be healthy. And so we started TrueMed to make it slightly easier, slightly more affordable for the average person to invest in their health by using tax-free HSA and FSA funds

to buy things like bone broth, healthy food products, supplements, 8-sleep, Peloton, all of these sorts of things. And so that's what I'm working on now. Who decides that an 8-sleep mattress you can buy tax-free and whatever the other mattress companies are called is not. You can sleep on that other thing, too. Like, how come I can't for that tax-free? Like, where do you encounter regulators and people who have to set rules that you have to live within? So the HSA and FSA are IRS-created accounts. There are tax-advantaged accounts that the IRS regulates.

What the IRS says is that at the discretion of a medical practitioner, you answer a couple questions or tell us, what's your family history, what are the risk factors, how are you feeling, whatever it is? And a medical practitioner can look at how you answer those questions, your risk factors, your family history of disease, all these sorts of things, and decide to write what's called a letter of medical necessity that enables you to fully compliantly spend your HSA FSA tax-free dollars on a food, supplement, fitness, wellness, sleep product that is going to help treat or alleviate one of the conditions that you struggle with. So I'm going to give you a sense,

the standard of care today is if you walk into a doctor's office and say, I have a family history of high cholesterol, or even just I'm worried about my cholesterol, they don't have to take any tests. They don't have to do any measurement. They can just prescribe you a statin right there. We basically think if you look at thousands and thousands of studies that point towards lifestyle interventions, sleeping better, supplementing with X, eating a whole foods diet, cutting out processed food, exercising for 150 minutes a week. All of these things work better to treat the chronic conditions that are crippling Americans than almost any pharmaceutical that is on the market today. And therefore, people should be able to use their tax for HSA and FSA funds on this class of lifestyle

treatments. But you're not relying on a change. This is already true. This is already true. Yeah, yeah. So what it takes right now is it sounds like what you're facilitating is the ease of payment. Yeah, we're facilitating the ease of payment, the ability for a medical practitioner to write what's called a letter of medical necessity, which may sound trivial. It's not. 80% of medical schools in the country have zero nutrition classes. Even though nutrition is the thing underlying eight of the 10 most common killers of Americans today. And so we've sort of assembled a team and a group of functional medicine and other practitioners that understand food is medicine, lifestyle as medicine, and can look at and decide to issue a letter of medical necessity that allows some of our customers to buy

food, supplements, exercise equipment, and like using tax free HSA and FSA funds. So how do you go to market with this? What is the chain of people you need to sort of convince of X, Y, and Z, and what do you supply each of them with. The way that we're going to market is very naturally for me as someone who started a couple of consumer health brands. We're basically partnering with brands that are selling health and wellness products and giving them the ability to offer their customers a way to use HSA FSA funds to buy whatever they're selling. Just like you'd use like PayPal or something. Exactly. Yeah, like a firm or Klarna PayPal. Right now, if you go on kettle and fire.com, you'll see the ability to check out using TrueMed and basically use your HSA and FSA funds to pay

for bone broth, which is highly nutrient. high in protein has a bunch of amino acids that the average person needs, assuming you qualify for a letter of medical necessity. So it's very much like a firm. Like you go to the website, answer a couple questions about your health issues, history, concerns, family history, and the like, then you basically complete the checkout and you'll receive or not a letter of medical necessity via email in the next couple of days. And TrueMed basically helps you submit that receipt and that purchase for reimbursement to your HSA or FSA administrator. year. The lowest friction version of this would be I'm a consumer and I have an HSA account,

come back to that in a second by default. Like when I'm buying something healthy, I just do it that way. Brands of your partners, obviously they're incentivized to have low friction ways for customers to pay them more. That part's probably pretty easy. What about the HSA side and the FSA side? How old are those things? How big are they? How many people have them? What direction are they heading? Obviously, that's a key part of this. Tens of millions Americans have HSA or FSA accounts. there's about $150 billion in HSA and FSA accounts, even though, in my opinion, 91% of HSA accounts of the $100 billion that are in there

are just sitting in cash, basically unutilized. These things are hugely underutilized accounts. And so there's tens of millions of people using them $150 billion in these accounts. And one of the aspects that I really like about HSA and FSA is that it is one of the only places, possibly the only place in the entire healthcare system, where the consumer who is receiving a service, whether that's healthcare or merchants we've partnered with, where they're actually receiving a service that they pay for. Money comes out of their HSA FSA account. They receive the service directly. And there's no weird network of like payers and

intermediaries, all of this sort of mess that has created the incredible rise in healthcare costs that we've seen over the last 50 years. And so I'm really excited about the potential for HSA and FSA accounts in general. The IRS is starting next year going to be increasing the size of these HSA and FSA accounts by about 30 percent because they recognize too that paying for health care has become obscenely expensive. And the IRS says we're trying to make it easy so that people can use these tax-free dollars to buy and keep their health before they lose it. One thing I forgot to ask about earlier is water, something you and I've talked about offline quite a bit, something we all take for granted and consume every day. What do you think is interesting about?

about the world of water, maybe explain the history of water to us, whatever you think is relevant. This is not something I had ever really thought about and now have thought about it a decent amount as a result of our conversations. Maybe give people a window into that. One of the things that I think is highly concerning and that if I had to place a bet, I would place on a health trend that is going to be increasingly important over the next decade. I would place a bet on the fact that environmental toxins like endocrine disrupting chemicals, phallates, a class of chemicals called PFS, polypholaral alcohol substances. Effectively, we are going to find, have huge, huge, huge linkages, and are causal to cancer, infertility, neurological

conditions, and a bunch of other things that we don't like. And so, unfortunately, these compounds, you'll see them in the media referred to as forever chemicals. You just can't get rid of them, basically. Quick side note, one of the concerning data points to me is if you look at places where these compounds accumulate in the body, prostate, testes, breast, stuff. like that. They're also body parts that tend to have the highest rates of cancer over the last 20 to 30 years. And so I think that we are just on the precipice of understanding how bad these things are for you. And they're everywhere. They're in like almost everything that you put on your skin where they're in all of your water, 93% of streams. It's in their drinking water.

It's in the water that you're showering with using on a daily basis. And the concerning thing is we talked a little bit about the differences between Europe and the U.S. earlier from a health standpoint. The concerning thing to me is that these substances, PFAS, glyphosate is another one, are really, like, tolerated in the U.S. in a way that they're not in Europe. And I think that is going to drive a huge, huge number of different health outcomes over the next decade. To give you a sense, there's 28 countries in the world that have banned the use of glyphosate entirely. And the EU has limited the exposure to glyphosate to very minuscule amounts and is banned. planning glyphosate in the next couple years. The acceptable levels of glyphosate in the

water in the U.S. guess how much more tolerant the U.S. is of glyphosate in the water from an order of magnitude standpoint? 50 times. 7,000 times. So, 7,000 times. So the U.S. basically says that there's a 700 parts per billion permitted, is the permitted level for glyphosate in U.S. tap water. I'm just going to like quickly run through some studies. Different studies run by the detox project, which is an incredible group that's doing glyphosate advocacy work, the detox project found that 0.1 part per billion amounts of glyphosate in the water altered the gene function and created severe organ damage in rats. Point one part per billion is also the permitted level for glyphosate in European tap water.

10 parts per billion created toxic effects on the livers of fish. And this stuff is in like 91% of streams. It's almost certainly in almost all the seafood that we eat. And then 700 parts per billion is the permitted level for glyphosate that is in U.S. tap water, where the government goes, yep, that's fine. Beyond that, there was a recent study that showed that 100% of cereals in the center aisle of a grocery store tested for above tapwater levels of glyphosate. 100% of cereals have massive amounts of glyphosate around the order of 1,125 were found in almost every sample of chirios that was done for this study.

So we are just loading ourselves with these toxins and chemicals that we don't understand the long-term impacts of them, but our early studies point towards really not being good. These things certainly bioaccumulate, meaning it's really hard for the body to get rid of them once they're in. And even scary to me is we don't understand any interaction effects that are going on between these chemicals. You think of you take a drug, if you have a pharmaceutical, you take a drug and they're like, oh, are you also on any of these drugs because it causes side effects?

when mixed with X, Y, or Z, we're basically running that experiment of like, what do all of these toxins and chemicals and things do when interacting with one another? What sort of negative health outcomes do they create when working in conjunction or compounding or anything like that? How hard is it, on a scale, let's say, one to ten, in your opinion, because I know you've tried, to live a life where you mostly avoid this stuff? Can I actually say one quick thing on water. This stuff is in everyone's waters. There are very few sorts of filters that make good use of this. And I think that if someone were to create a P-FAS-free or like microplastic free water brand, it would absolutely crush. How hard is this stuff to avoid? Unfortunately, it's incredibly hard.

There's no regulatory bodies that really in the US at least take a hard look at this stuff. In Europe, their approach to novel chemicals is basically like, hey, we are going to assume that these novel compounds that you're introducing into our population are potentially concerning until proven otherwise. So guilty until provenness? Exactly. Yeah. Or the opposite.

Yeah, exactly. And that's how we regulate. We do a bunch of stuff where it's like, hey, you have to show that this thing is safe before we can use it on our entire population. The U.S. takes the opposite approach. Not only do we say chemical is mostly good, you can use it in small quantities or whatever until we find something is unsafe. But additionally, the way that the EPA and the FDA rely on. food and cosmetic and other manufacturers to do this is via self-reported safety studies.

And so if you're a company, a cosmetics company, a water company, whatever it is, packaging company, it's basically on you to run a quick, dirty thing to show, oh, this is safe, and then you can put it pretty much in as many products as you want. And so as a result, these chemicals are fucking everywhere. This is why this stuff is so hard to avoid. They're in water. They're probably on the clothing of almost everything. every brand of stuff that you wear, especially a lot of the athleisure stuff, unfortunately.

They're in almost every, like, soap, shampoo, food packaging, plastic container that you're using, lining of cups that you're drinking coffee out of. There was a study that showed something like 10 trillion microplastic particles were released when you pour like hot coffee or hot tea into one of those paper cups that are lined with these different plastic liners. So they're really everywhere. And it's incredibly hard to avoid these things. I'm going to make up three levels. Okay, level one is ambivalence. You just live with what the world gives you. That's probably what most people do. Level two is like, I care. And when I have the capacity to make a choice in one direction that's good, I do it. So like if I'm at Whole Foods, I buy organic. But I'm still just going to Whole Foods or wherever shop right. It doesn't matter.

And then Level three is like really strict about what goes in and on in your body. What are the best things to do to get towards level three? That seems to be the hardest switch. Going from two to three, is really difficult. Most people don't have the time or energy to, like, do the research you've done. Is there an 80-20 rule? You do these 20% of things and you get 80% of the benefit? Yeah, definitely. I mean, I also don't want to, like, overstate the problem. I think that this stuff is really important.

I think it's going to become increasingly important and known over the next decade. But the body is also relatively resilient. This is not the type of thing. We're not dropping dead. Yeah, totally. I mean, you can look around and you go, like, okay, these things have been in our food and water and whatnot. and like, yeah, health outcomes are really bad.

There's also a bunch of people that are seemingly healthy and fine-ish that are probably getting massive amounts of these toxins exposed to them at all times. It's not cyanideon. Yeah, right, exactly, exactly. The key things I think to do are look at products that you're using on a daily basis, shampoo, hand soaps, lotions, face cream, stuff like this, and try and make sure that there's no, like, PFS or other sorts of things, just use clean ingredient, skin care, shampoo, soaps, things like that.

I would also look at the pots pan stuff that you're cooking with in your house, make sure that you're using non-toxic versions, a lot of ceramic or stainless steel are pretty good options, and then spend a lot of time looking at a water filtration, especially if you're in a high toxin residue area, you can look, this is publicly available information. You just look at like the EPA's database and you can see like what's the score, what are some of the things that are present in high concentrations in your water. And if you use reverse osmosis with mineralization or re- mineralization system, you're probably going to get almost all of these things sort of out of your water. You can set up a whole house filtration system if you want to like get really crazy. But I think basically you look at how am I getting exposed to this stuff and you take steps to remove it. And then on the other side, you look at how do I get this stuff out of my body? And that's generally sauna, sweating, drinking a lot of water that's from a clean source that helps pass and get some of the stuff out, maybe supplementation, stuff like that. How do you, stepping a little bit aside from the Pure Play Health stuff, how would you describe the way in which you search for and decide on business opportunities?

What is your like model for navigating you're an ambitious guy? You've started a bunch of companies. Probably will keep doing that. What is the sort of method that you've developed for searching and deciding on a given opportunity? I definitely have a process where I test ideas. I wrote a blog post about how I validated my idea for kettle and fire. I basically put up a landing page, said we were selling bone broth. It was at an crazy price point where I was like $20 a box. Like we can definitely make money doing that. And then I bought a bunch of Google ads about $1,000 worth just to see what are our cost per click? What's our cost per acquisition? And when people land on this fake website selling a fake product, do they click buy?

And basically the numbers that I was testing on all of that, we had a bunch of people place orders, after which I emailed literally all of them and said, hey, I'm the founder. I'm working on this. What are some characteristics of a bone broth that you're looking for? Like, what are the attributes that are important to you? And by the way, this is not going to be ready for six months, which if you want to wait, I'll give you like 50% off your order.

If you don't, here's like a full refund, fine. Thanks for the conversation and like the time. But I basically just wanted to validate. Is this something that people care about? And will they actually take out their wallets to pay me if I were to spend my life energy building this product? And that's kind of the approach that I've done from a validation standpoint. for all of the brands that I've started. I think a lot about this idea of a Thelian-esque secret.

And for me, when I was working on, just had the idea for kettle and fire. One of the things I like to reflect on is, is there a reason that I would have this idea or I would think this is a good idea where other people would not because they're not as in it. They're not as passionate about it. They don't know as many people. My friend and I have this concept of living in edge city, which is basically like if you're on the edge of a given area like domain, like health or nutrition, or exercise or longevity or whatever, it stands to reason that if you live in Edge City, you are probably going to get experience to stuff that other people around you are going to be interested in five, ten, whatever years from now. And so when I was living in San Francisco,

I spent my time like reading health blogs on the internet. I was going to CrossFit at San Francisco CrossFit. I was talking to other athletes and stuff there about what they're doing from a nutrition standpoint, how are they doing recovery. They were talking about gut health in like 2014 and stuff. And it was there at San Francisco CrossFit that one of the people told me about how he was incorporating bone broth into his diet. And so that was a big criteria for me is like 2014 San Francisco CrossFit box is like among the top point 0.01% of most forward thinking people in the health arena in around 2014,

2015. For me, that was good validation or a factor I think about. of is it likely that I am one of the only people in the world that is exposed to this problem and thinks that this might be an interesting idea or solution to solve it? What are some markers of edge city? Really interesting concept probably exists for everyone. Probably everyone could say like, do I live there or not? Every curious person. How do I know like what my equivalent of CrossFit 2014 San Francisco Bone Broth guy is? How would you advise that people find their way to their edge city?

One of the best markers is basically if your friends, people you know, are asking you a lot of questions about a given topic. And when you sort of return the favor, oh, what do you think about for you? It might be investing or something. When you ask the average person about investing, you're probably bored. They just haven't thought as deeply about it. I think that that is a really good way to figure out what are the areas in which you're living on Edge City, where you quickly are in conversations with people where they're asking you a lot of questions and things about things you know and believe and think about in a given domain, but where you are, find very, very few people in your life that you are like, wow, that was a really interesting insight in this domain that I care about. The other thing I think about is I often find that it's a good signal that you are living on the edge of something when you meet someone who is hyper successful or really interesting or somewhat famous. And you're not talking about the thing

that they're famous for, but you end up talking about a thing that you've just gone super deep on. If you were to talk to a movie star or someone, I would imagine, they could ask you, questions about investing and you guys would connect and you'd be like the high status person in that conversation. And I think that's very true. Where does your status outstrip what normal social rank or social status? Which friend of yours was this that you came up with this idea? Came up with it with my friend Dylan Bynin who started the first ketamine-assisted therapy company in the country called Mind Blum. Talk about Edge City. Yeah, exactly. What do you make of that whole world? I think psychedelic therapy is one of the most important

and profound potential treatments that we have to address a bunch of issues that we have in the U.S. We truly have a mental health crisis in the U.S. And if you look at the efficacy of psychedelic-assisted therapy for PTSD, treatment-resistant depression, anxiety, addiction, substance abuse disorders, and the like, the evidence is incredibly clear

that these sorts of substances and treatments are extremely effective, better than SSRI, better than almost anything that we have to offer someone today who struggles with mental health. I think that they are going to, over the next decade, become an increasingly large part of the toolkit that we use to treat people that struggle with these different mental health and other disorders. If you think about it, if you walk into a doctor and you have a broken leg, basically they're like, oh yeah, yeah, we know what to do with this.

We'll look at the leg, we'll take some x-rays. We'll give you a cast. There's a treatment plan that in 99. whatever percent of cases results in Patrick has a leg that is like whole and working mostly almost as well as it was before. If you look at the average person that is depressed and walks into a therapist or has a mental health issue, the medical world does not look like that at all. SSRIs, sort of a cornflip, if they work or not. Talk therapy statistically is like also a coin flip doesn't really work for most people. We don't have anything even resembling a model of what works well to take someone from a place of depression and unhappiness and anxiety and whatever to, oh, this human is like fully functioning and in a really good place again. I think that psychedelics right now are the best

tool and the most powerful tool that we have that somewhat resembles the acute medical sort of treatment analog of this person has an issue. We're going to run this treatment or intervention on them and it will almost with a high degree of certainty result in a better outcome for this person. What are the personality traits that you found of people that feel most at home in Edge City other than curiosity. I think that it is a extreme openness to being wrong. Literally, I would say 100% of the things that I've said on this podcast, I am open to changing my mind on in the next 10 years.

There's a chance that it is true that ultra-processed food and vegetable oils and all these sorts of things are actually like... Fine. Fine. And that it's like some crazy environmental chemical that is just wreaking havoc on the average American. a glyphosate and it just happens to be more in like corn, soy, and wheat, which means that it's in more processed foods. And so when you look and you go processed foods, vegetable oils, probably

bad, it was actually just like no glyphosate's in every processed food and it's just destroying people. I would say there's a chance that that is true. Do I think it is probable? No, but I think there's a chance. And so I think that there's a openness to new ideas and a curiosity and sort of like a low ego willingness to be wrong sort of search for the truth and willingness to like talk to people, have my ideas change, push them on their ideas, that it's very fun. And I think those are like the main characteristics of people that tend to live on edge city and that are people that I tend to really enjoy being out. Who is the most out there friend of yours? And what is his or her main idea? I have a friend Mike Johnson who is probably my most out there friend.

who is the sweetest, deepest thinker I have ever met in my entire life across multiple domains and it's not even close. He started a consciousness nonprofit and a research institute that, as he said, is trying to do to consciousness what, like, chemistry did to alchemy. Alchemy, we basically were like throwing shit at the wall. Oh, I think this works. I think this doesn't. There were no underlying principles that made alchemy in the words of Carl Popper falsifiable, predictive science or way of thinking. Chemistry changed that. Right now, consciousness and the experience of qualia, the experience of being conscious has a very similar thing. It's very similar to the mental health thing where we don't understand the underlying what's going on from a mental health standpoint.

And because we don't understand it, we basically throw treatments at the wall that are not predictively working. We have a really good model of how bones break, how they regrow, how tissues heal around that, can use that knowledge to actually fix leg breaks and stuff like that in a very like certain predictive way that's extremely effective. The same does not exist of consciousness. The same does not exist to mental health. The same does not exist of any of these things. And so I've been working on a theory of consciousness that is incredibly dense and very interesting. That is unlike anyone that I've ever come across. It brings to mind a question about talent. We were talking a little bit before we hit record about the value of the Teal Fellowship, just as an example of incredibly

high signal of the chance of being a really interesting person. There's studies out there that if you just invested in the index of Teal Fellows, mostly because of Figma and Ethereum, still, that's the whole game. You've got to hit like the outsized winners. That's right. You'd have this incredible outcome, but there's tons more from that group as well. What have you learned about talent networks, clusters of talent, finding talent, any strategy? there because you definitely, based on some mutual people, we know traffic in out there talented people. A large part of this is kind of what we were talking about of oftentimes talent and the most ambitious talented people cluster in Edge City. They sort of end up at the frontier of ideas

that are interesting to them because they've been bored by everything else. If someone else has already mastered a domain or Google has already figured out search or whatever, is a super ambitious person going to go like work for Google? You know what I mean? Operated in a domain that humans already broadly understand? No, they get attracted to areas that are illegible, that are untractable, that are hard, that reward original thinking, where an existing player has not already exploited the search space or the tradeoff space of a new idea. And as more and more people cluster in these domains, turns out that these weird, curious people like being around one another and like spending time in these sorts of domains. And so I would say that I don't have a talent source,

Well, I have one talent sourcing strategy, which I'll talk about in a second. But for the most part, Mike Johnson is a good exemplar. I was not sourcing him as a talented person. I read his blog, which was on the symmetry theory of valence, which is a new theory of consciousness that Mike Johnson is writing about. That's like a 40-minute read on this blog, open theory.net. I don't know how I found, but it's certainly not in the New York Times. And I emailed him after reading that post. You said this. Well, what about this? My model of the world is different here. And when we met up for the first time, he was like, I've gotten like two emails all year from this thing that I've put 30 hours of writing and thinking time into. Well, writing time, probably way more from a thinking

thousands of hours. Thousands, totally. I think that people don't appreciate how the extent to which, if you're a curious person who is trying to understand what's going in the world in a domain that's not fully mapped yet, if you just go in and start asking questions of these people, everyone's like, oh, thank God. Like, I would love to talk to more people about this weird out there. idea that almost no one understands and that you're putting in the effort to actually understand. And I often find that so many times you will find someone who is an interesting thinker in one domain, who is open and like thinking at the edge of X space, who also has really interesting ideas in like six other domains. And I think that is fascinating. And so if you just find the areas

or the frontiers of like a couple things that you're interested in or find exciting and plausible or that you're curious about, it's amazing the extent to which these people will also have heterodox ideas in other domains. Back to health, what have been things, ideas or theories you've encountered recently in the last a couple of years that you think are maybe crazy and out there, but at the least a little bit intriguing to you? There's a couple. I would say that this glyphosate theory is a pretty interesting one.

There's people out there that Zach Bush is one of these people that talks about how glyphosate, he thinks, pulls apart and creates a lot of opportunity for gut dysfunction. And gut dysfunction is the underlying driver of a lot of these chronic inflammation, illness, a lot of food allergies, things like these that I think are pretty interesting. There is something called terrain theory that I found out about a couple weeks ago over lunch, where someone was saying that they don't believe in the germ theory of disease. They basically think that the terrain theory says it was apparently a competing theory by another Frenchman at the time of like Pasteur who came up with germ theory, that there are small particles

in your cells, basically, that create the terrain to which bacteria and viruses are attracted. And that terrain is sort of the thing that causes disease, not bacteria and viruses themselves. Meaning there's bacteria and viruses no matter what, we can't avoid that. Exactly. It's the susceptibility. It's basically like if you were to break your ankle and go to the doctor's office, germ theory says, we think that this break is what's causing the swelling and is the thing that we need to fix, whereas terrain theory would say, we think the swelling is what caused the break and we need

to address the swelling. They kind of look at the environment and try to say that is what's causing the issue versus the actual thing. Seems crazy. Which I think seems crazy. But the other thing I try and keep an open mind about is it may be that that specific instantiation of the way that Bechamel, the guy who came up with terrain theory, it may be that his instantiation, knowing what he knew in whatever it was, like 18 something or the early 1900s, what he knew about disease and whatnot wasn't accurate then. But he may be onto something. It may be true that a more, and it probably is true, that a more inflamed person is also more susceptible to disease. Is that a bacterial thing? Or does that have to do with the terrain of the organisms and the cells and all these sorts of

things? I don't know. And I'm open to being wrong on that. Like, I'm pretty sure that terrain theory as it's presented today is wrong. But I'm also open to changing that. We haven't talked at all about the childhood nutrition aspect of all of this. Everyone cares about their kids. But as someone has kids, the work burden of making sure your kids eat the right way, let's say, is actually that much harder than even it is for yourself. Most people don't do it for themselves. And so it's really freaking hard.

I'm in some top percentile by like knowing and caring about this stuff. My kids still eat the occasional Pop-Tart and Doritos and like all the things you mentioned earlier. it's just freaking hard. So what do we know about that world and the impact that not caring or not acting is having? What can we do to change that? First off, I'd say, as far as kids nutrition, one of the saddest statistics in the U.S., I think, is the fact that today, if you rely on school lunches as a main source of nutrition and calories, that is a risk factor for childhood diabetes, the same as being born to a parent with diabetes or any of these things. Crazy. What that means is that our school lunches and the school lunch program that feeds tens of millions of kids in the country

is literally poison. I think that that is wildly concerning to me. If you think about so much of a human's cognitive development happens before the age of five, so much of one's immune system development and gut function and all these sorts of things happen before the age of five or six, if you look at studies that show that parents who eat a bunch of junk food, their children are more addicted and more likely to get addicted to junk food. They have a higher tolerance for it. They need to eat or feel a craving to eat more of it than kids that were raised off of junk food. I think that, and you combine that with looking at how many children are now diabetic, pre-diabetic, have fatty liver disease, things like this, that 25% of kids have pre-diabetes, 45% of kids

are obese or overweight. We are stacking the deck against our kids by feeding them toxic food that is making them sick. And we're doing that at a societal level. to the almost majority of children that are growing up in the U.S. today. And I think that is incredibly concerning. Is there anything else about the health landscape that we haven't talked about that you think is consequential that has your attention, your curiosity? We talked about obviously a ton of different areas that things have gone wrong and could be improved.

Anything we haven't talked about? The core thing that I would say, every player in the healthcare and food system today makes more money when a consumer is sick. if you think about structurally, how much money is the healthcare system making on you as a healthy guy, probably rarely interacts with the system, just pays your insurance premiums and moves on, versus someone that's on 17 medications, kept alive, goes in for a couple surgeries a year, and the like, the healthcare system just makes way more money, treating people that are chronically ill than they do healthy people. This is why I think you basically see almost no money, like less than 3% is spent on prevention. 97% of all health care dollars are spent to treat someone after they're actually sick, and that leads to people treating symptoms, not treating underlying conditions, and millions of people getting treatment after treatment, pharmaceutical prescription after pharmaceutical prescription, and the whole country gets sicker at the same time. I basically think that this health issue, if I had to choose, this is the most likely issue to end the American experiment or, like, cause real

structural problems where the U.S. becomes non-competitive, becomes sick. We cannot have a healthy society made up of sick people that can't function, are overweight, mentally ill on 18 prescriptions, all this sorts of thing. I think that this is truly like a crisis that the U.S. should be gearing up to solve and take it seriously as it has defense over the last 50 years or any number of things that the U.S. has kind of approached head on and tried to fix. The last thing I'll say on that is that I think that this is truly like a national issue until like the 1970s, health was basically you were born with health. It was like your God-given rate. And that is no longer true. So many kids are being born without this thing that our grandparents, great-grandparents, all these people just took

for granted. I think that it is up to us to properly understand and account for the externalities that are being created by our toxic food system. And for the U.S. or some organization, TrueMed is a small part of this. But I think it's vitally important to the success of our country that we have a food system that makes people healthier and not sicker when they engage with it. And that is not what's happening today. You mentioned earlier that you've only been able to invest in three of these companies that only chosen to invest in. Only chosen to invest.

You've seen a lot. But that also like bad business, hard business, fewer ambitious people are drawn to it. You and I have also talked a lot about different models for capital allocation to create new businesses, incubators, studios, investment firms, serial entrepreneurship. There's lots of different ways to attack this problem. Based on all those conversations that you've had, and you've probably met even more people than I have in that area, what conclusions have you reached about the different models for capital formation and allocation to start great new businesses in like a systematic way? I actually think that the question of like capital allocation

and formation around starting new businesses looks a lot like it has for the last several years around investing in people and investing in great founders. I basically think that it is true across domains that the easier something becomes, the more often people will do it. If we can make it easier to spend HSA FSA funds, hopefully more people will use those funds to invest in their health. As it becomes easier for the average person to start a company to build software, to launch a consumer product, a consumer brand, whatever, you're going to see way more people do it. And I basically think that the barrier to entry has never been lower, where I think for the first time now, you are going to be able to see, especially with the rise of like GPT

and a bunch of these other productivity tools that make building software or other things easier, I think that you are going to see the rise of the like multi-company founder become a much, much more common thing. And I basically think that people talk about power laws and company outcomes. I think that there are power laws in people that exist to a crazy degree. And I think we all implicitly agree with this and almost no one like explicitly states it. And I think that it is going to be way more true that someone like Elon Musk is way more likely to start five massively important companies. Which he has. Which he has.

I think we are going to get used to and see more Elons that are starting multiple companies in an important domain than we are going to see like five discrete people who all arrive at the same viewpoint and then start these sort of one-off careerist founder types. What are the variables that drive that power law do you think? It's easy to say with Elon, obviously he's hyper-intelligent. he's incredibly disagreeable. You see what I'm getting at. What do you think are the traits of the kind of person that can do that? Is it vision? Is it tenacity? Is it intelligence? Is it all those things? I think it's all those things. And I think that kind of similar to the edge city comment,

people tend to cluster and have heterodox ideas in multiple domains. I think the same thing is true of founders. Maybe this isn't true in B2B SaaS or something like that. But in some of these frontier tech things or companies where you have these hardcore technologists that are trying to build things that don't exist, it's kind of weird when you step back and think about it, that Jack Dorsey has the idea for Twitter and also has the idea for Square and also is like an early Bitcoin adopter. Why is it that we have some of these figures that have all of these overlapping frontier sort of interests? And I think that that combination of curiosity, intelligence, network, getting exposed. Once you're doing a thing that is a new and interesting

idea in a space, you just get exposed to way more new and interesting ideas than people in that space. And I think that we are at a phase right now where in 2008, even earlier than that, as software was just starting to become a thing, if you knew how to code, you had a better chance of building a valuable company in a space that you didn't understand than someone who deeply understood a space, but didn't understand how to code because software was such an incredible tool. I think today that has sort of flipped where I think that deep domain expertise, the huge outcomes that are driving a lot of startup returns today, are often being created by people that have deep domain expertise and know how to wield software as a tool. And so I'm kind

bullish on people like Elon or people like a Ryan Peterson or Jack Dorsey or some of these types. Sam Altman. Sam Altman, exactly, who like have deep domain expertise, have, vision and then have the ability to like pull together capital and bet on people in their network and be like, hey, whereas 15 years ago, maybe Sam goes, I can't remember his name, but the guy who's working on the longevity company with him, I'm going to fund you and you run at this thing. Here's $5 million. Now he can be like, I'm going to co-found this thing. We're going to raise $150 million.

And I'm going to put my network, my brand, my reputation, my capital on the line with you, empower you to run at this thing with me as this enabling chairman, co-founder, sort of master apprentice role, I think stuff like that is going to become much, much more common. Really interesting perspective, especially because it runs very counter to something you hear a lot. The returns come to focus. Each of those people you just listed are pretty clear, at least counter examples or exceptions to the rule that are doing several things. Does that then mean that what we should think about not is like how do we mechanize or

systematize a process like an incubator might? We studied seeing the same companies. They're trying to effectively like print companies. in a systematic way out of a central hub. And instead, we should focus on building tools. I'm talking about writ large here. We should instead focusing on building tools that enable the next Elon. Focus more on the person, less on the system.

That's my view. I basically think that the more mechanized you make something, if you have a machine that can do the thing, if someone else can build the same machine, they're going to compete you to death. I kind of think that the returns to focus, the advice of focus, you know, all the returns come from focus. It may be true that it may be the right advice for the vast majority

of people, but also not at all apply to these like lalapalooza outside returns that you see Jack Dorsey and Elon Musk and Sam Altman and all these types kind of driving. I think that it's probably pretty cool to run Vista private equity or like fractal software, one of these things that's just executing on a strategy like, hey, we buy or build a B2B SaaS business, we raise the prices, We hire salespeople. We make money. It's like a cool cash generating machine and I think it's awesome. I also think that the type of person that builds Vista is probably not at all the type of person that is like a Sam Altman or an Elon or someone that if they had more resources and infrastructure would just continue spinning up companies that no one else has the vision, thought, or ability to

start. I basically think that there is a class of company that the average person can't start because it's too ambitious or requires too much capital, or they don't have the vision for it. Who are some people that aren't yet in that class of name that have been recognized and started proving your point, that have yet to prove your point, but might? Who does that bring to mind? Interestingly enough, you see this a lot in biotech. It hasn't come to the technology world yet, or like the software tech world yet. A lot of these venture studios or incubators like a flagship pioneering or something in biotech have had some of the best returns of any investment vehicle ever of the last like 20 years. And they just create Moderna, they create Indigo Bio. They just create all of

these companies over and over again seemingly. That's because I think they take a fundamental insight, build a system or infrastructure that allows them to turn insights into companies. I think that as more already successful founders can tap into infrastructure that allows them to systematically turn their insight into other companies, you're going to see way more examples of this. And I think people that are doing an interesting job of this who are starting multiple things. Atomic is probably a really good example. Like they've spun up 50 plus companies that seem to work relatively well. Brian Armstrong is already doing this.

He's like starting a longevity company while also running Coinbase. Ryan Peterson has done this incubated previously while starting running Flexport. Yeah, I think that this is something, it's one of those things that it's not obvious yet that a lot of people are doing this, but they're starting to. I'll throw out an example because it's someone I think so highly of and know pretty well, which is the founder of Spotify, is running an early screening healthcare company in Stockholm. Couldn't be more different from Spotify. He's also running prima material, which is tackling like incredibly hard science, material science and other similar problems. And I think your insight, which I've never encountered or thought about until now, is right. You earn something through the process of building something really distinctive and big that you cannot be. taught through a book or through a podcast or any other means, and that the leverage now exists to be a repeat serial entrepreneur in a way that just wasn't possible historically. Pretty cool to think about.

I think that's kind of an interesting place to wind down the conversation. Every time I talk to you, I'm like, fuck, you know, I need to reform, which is always like my favorite kind of person that just gets me thinking about vectors of improvement. And so I always just so appreciate the time together. I think you know my traditional closing question, what is the kindest thing that anyone's ever done for you? When I was in college, I was starting my first company. I was 22 and it wasn't working. And I was paying myself $600 a month. I'd raise like $25 grand from basically a sympathetic local accelerator that was going to give money to like anyone that said they would build a company in Pittsburgh. And one of my mentors, I was on a run with him. And I was like, this just isn't working. Should I get a job?

and he said two things then. He was like, one, you should continue going with startup entrepreneurial stuff. And secondly, if it turns out that this fails, see it through to the end. And I will just either hire you and pay you more than you will get in a job out of college right now. Or I will cut you a $25,000 check that you can just use to coast until you figure out what's next for you. And although I never took them up on either of those offers, just that vote of confidence and the ability to know, because I knew he meant it, that if things went badly for me, if I was really flailing and needed to get a job, needed to pay rent for a couple months while I applied to different places, that alone, that guarantee alone, gave me the confidence to keep trying to do my own thing. And I think kept me on an entrepreneurial path that had I fallen off at the age of 22

or whatever I was, I think would have been really hard for me to get back on. Justin, thanks so much for your time. Thank you. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.