The Pomp Podcast - #377: Geoff Lewis on The New World We Live In

Episode Date: September 4, 2020

Geoff Lewis is a Founder and Managing Partner of Bedrock. In 2019, Geoff was named as one of the Top 100 Venture Capitalists in the world by CB Insights and The New York Times. In this conversation, we discuss narrative violations, inflation, resurgence of religiosity, serological test agreements, 3 paths to live in the West, solopreneur platforms, and Fortnite vs Apple. ============================ Bybit currently has over 300,000 users, with the number growing in double-digit percentages monthly. The exchange has no overloads during volatility and low latency trading plus 24/7 customer live support. At Bybit, we listen, care, and improve to provide the best possible trading experience and create a faster, fairer, and more human trading environment. Visit Now! ============================ Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Jeff Lewis is a founder and managing partner of Bedrock. In 2019, Jeff was named as one of the top 100 venture capitalists in the world by CB Insights and the New York Times. In this conversation, we discuss narrative violations, inflation, resurgence of rigilosity, serological test agreements, three paths to live in the West, Solopreneur platforms, and Fortnite versus Apple. I really enjoyed this conversation with Jeff, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. First up is Bybit. Bybit currently

has over 300,000 users with the number growing in double digit percentages monthly. The exchange has no overloads during volatility and low latency trading plus 24 seven customer live support. At Bybit, they listen, care, and improve to provide the best possible trading experience and create a faster, fairer, and more human trading environment. Go check out Bybit using the link in the description to this podcast. 300,000 plus users. Bybit is here to serve your trading needs. Also, don't forget that I write a daily letter to over 50,000 investors about business technology

and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. you can subscribe at pompletter.com. Again, pompletter.com. All right, let's get in this episode with Jeff. I hope you guys enjoy it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular

investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes. All right, guys, bang, bang. Jeff is back for round two. This time we don't get to do it in person. Thanks so much for doing this, man. My pleasure. Good to be back. Absolutely. For those that didn't watch the first time you were on, maybe give us a quick kind of 30 seconds on your background and then a little bit on Bedrock and kind of what you guys are doing from a venture standpoint? Sure. So founder of Bedrock, we're a technology investment firm that I founded a little under three years ago now. We manage around half a

billion dollars, really invest across all stages, all sectors, frankly, all sorts of different asset classes within technology as well. Some of our more well-known investments include Rippling, RigUp, The Athletic, Lambda School, Cameo, and we're investors in some crypto stuff as well. Before starting Bedrock, I'd been a partner at Founders Fund for a number of years where I led early investments in companies including Lyft, Wish, NewBank, Canva, and a number of others that have ended up being really successful. So my passion in life is finding these these counter-narrative companies, these companies that are somehow overlooked or underestimated by folks that sort of determine what the popular narratives are and backing those entrepreneurs. And we've been at it for a while now, and I love what we do.

So when you guys first started Bedrock, you wrote this epic letter that basically was like, here's who we are, right? And part of the messaging that you guys have really kind of championed is this idea of narrative violations. And there's a lot of people who I think was like, oh, that's cute marketing. What the hell does that mean? But now we live in a world where over the last six months, it's become very obvious some of those narrative violations. And one that you've talked a lot about recently is this idea that all tech is good or all tech can kind of build a better world. Talk a little bit about why you put that in the category of kind of being a narrative violation and what the implications of that are. So I actually did not say that all tech is good.

So what I said is that the popular narrative. So the thing with narrative violations is they exist on this time scale. And so basically, you know, there's a moment that these narratives can go from being very popular to being sort of counter narrative very quickly. And so with technology in particular, you had this narrative in the 80s and the 90s that technology was building a better world. And that was sort of the consensus popular narrative. So if you looked at sort of the media elite, the business elite, the popular narrative was Silicon Valley's good. You then had Google launch in 2000 with the model Don't Be Evil. And then in the early 2000s, leading up to probably all the way up to sort of 2010, 2011, Google was sort of categorically perceived as the don't be evil, very good company.

You had sort of the myth of Steve Jobs. And so there was this sense in which Silicon Valley technology was like they were the good people in business. That was sort of the good, the good hearted, well-meaning, saving the world way to be in business was to do something in technology in Silicon Valley. And that became the narrative on Silicon Valley. Fast forward to today, it's 180. And the narrative on Silicon Valley now today is tech's destroying the world. We have to break up all the big tech companies. They're all monopolies. The tech founders are all evil. And they're destroying the world. And what we would argue at Bedrock, and we argued in our letter, and what I believe is that neither of those extremes is true. And it's this company-specific, company-by-company type thing. The problem for Silicon Valley, though, is instead of sort of all along being like, actually, things are more nuanced, like, you know, Silicon Valley is not definitionally going to save the world, like tech could be good or bad, just like any other business. Silicon Valley writ large bought into this, yep, we are the way to make the world a better place

and was complicit with the narrative gatekeepers on the propagation of this narrative of tech is the way to make the world a better place. So the fact that it is now exposed to not be entirely true and somewhat more nuanced is a bit of a problem for Silicon Valley, to put it mildly. Yeah, and so one of the things

that you've kind of laid out very clearly is this idea that you've got to live outside of these narratives or live outside of these frameworks because if you don't, then you run the risk of getting framed or labeled and kind of put within the narrative. Talk a little bit about like,

how does somebody do that in practice? Well, the easiest way to do it is to be what I call digitally disengaged. So the easiest way to do it actually to be uh just not not not engaged digitally and obviously uh the ship uh the ship has sailed for you uh pop the ship sailed uh to a much lesser extent for me you're a much bigger digital brand than i am but certainly the way to the way to the the obvious way to do this is simply not not do any not have any online profile or to do it um via entirely via pseudonym so that would be sort

of the the easy way to uh to um to uh to to avoid getting framed by a narrative would be to not have a persona uh that that that that's public and one of the things that um that that uh you know and i've unfortunately i've chosen not to pursue this strategy and it's always difficult to commend a strategy that one's not pursuing themselves but a strategy that works extremely well um is to certainly in a fund manager context, and even in an entrepreneurial context, there are a lot of phenomenal entrepreneurs. There are a lot of extraordinarily successful fund managers that just don't have a public profile, that just eschew all press, that are not on Twitter, not on social media. No one would know who they are, and they do phenomenally well.

I think there's a lot to recommend that in a world where these narratives are forming so quickly, coalescing so fast and can run over anyone that doesn't conform with the narrative there's a lot to recommend that digital digitally disengaged or uh or pseudonym driven type type online online online presence now that said as we know um there's a lot to be said for for having a digital for being engaged online i mean it can bring it can open up a lot of doors it can result in a lot of opportunity. Certainly, it's been very beneficial for me in terms of finding entrepreneurs, building relationships, getting access to opportunities. Probably the same is true for you. And so there are a lot of benefits to it. But then there's always this way in which

you're exposed to the mob in all of these ways. And I think that dynamic just intensifies more and more going forward. For sure. And part of this is, you said that Warren Buffett, we have more to learn about the narrative than the investing from him in some ways. What do you mean by that? Well, I'd say the investing strategy, I'd say, could be summed up as something like too dumb to fail. And that's a credit to Buffett. I really like too dumb to fail things i think that's the type of thing that you want to be investing in but sort of like these sort of blue you know blue chip type assets then smaller smaller companies with just really strong fundamentals that'll last for decades sort of this too dumb to fail strategy with enough

capital to go get get these really meaningful positions or own these own these businesses over over many decades that that to me is sort of a too dumb to fail strategy so credit to him for pioneering it. But then I think more impressive is, A, how he popularized and became synonymous with that strategy. Quite frankly, it was a pretty obvious investment strategy that a lot of folks pursue at subscale versus Berkshire, but certainly became synonymous with that, branded himself around that. And what's narratively brilliant about it as a strategy is It's a strategy that anyone can tap into and execute on a smaller scale. And so it's like, yeah, Buffett's doing it, but I can buy these blue chip stocks also via my 401k or something like that.

So there's a sense in which it's like something that's accessible to any person who's sort of middle class or more, which has a very populist type vibe to it. But the more impressive piece to me is how he's managed to brand himself as just as an everyday Joe who just wants to give away all his money. And if you Google Jeff Bezos' house, you'll see like 50, 60 pictures of various 30,000 square foot plus mansions in cities around the world. L.A., D.C., Washington, Seattle, various international destinations. You Google Bill Gates, his $100 million thing in Seattle, these other properties. You Google these other folks. They've got various yachts, et cetera. You Google Warren Buffett, you see lots of pictures of his admittedly nice, but it's

like, you know, it's a pretty standard suburban house. It's not out of reach for, you know, if you're like a lawyer living in suburban Illinois, You could sort of afford the house that Buffett lives in in Omaha, and there's lots of pictures of that house. He always mentions he drives – he's known for being just very frugal and living this very modest life. That is a narrative, and the Giving Pledge, which Buffett co-founded with Bill Gates, again, credit to them. I think it's great that they're giving away – pledging to give away the vast majority of their net worth during their lives. I mean, that's a wonderful thing. But that is also a narrative. And so I'd say he is the master amongst ultra high net worth billionaires. But to be clear, billionaire is very separate from multimillionaire. And billionaire is very separate from even having $100 or $200 million. It's a totally different category in terms of the degrees of freedom that you get when you're a billionaire. I'm not one, to be clear. um and and um but but i know a few and um and to be able to brand yourself as as sort of

not like the other billionaires super generous um you know just lives a really frugal life you don't really care at all about money i think that is like true narrative mastery and then buffets achieve that yeah one of the uh institutions in um in society that is uh very dependent on the narrative and the confidence game is the Federal Reserve, and this belief in money, belief in their ability to be able to manipulate interest rates and the money supply in order to keep an economy moving in the direction that they want. Obviously, they've been making a lot of decisions and taking action, and a fear from that is inflation. What are your thoughts in terms of, does it happen, does it not happen?

How do you think through it? the impact on both early stage and late stage companies, just kind of what are your thoughts on inflation in general? Sure. So with the caveat that I'm not an economist, so I definitely don't view this as any sort of expert, not an expert on this stuff, but I have a few thoughts. One is we just had the announcement today from the chairman of the Fed, Jerome Powell, that they're now targeting higher inflation for the next five years, I think, than historical. So certainly the Fed now is explicitly, now just today, there's now a major policy shift that they're explicitly announcing that they're going to allow inflation to run higher than

normal um and and so the fact that whenever you have a sort of announcement um an announcement saying hey this is like ben and positioned as this is this really good thing we're gonna let inflation go up it's like really positive it's five year new new new thing that we're doing it's really good for everyone just be slightly higher inflation you always want to be skeptical a questionable way so like it's like oh cool like that's gonna helping us out by increasing inflation. Certainly would want to be a little bit skeptical about that. And so the fact that they felt they needed to make an announcement about it, to me, means that it is just going to be this extraordinarily inflationary environment. Because there really, for years to come, because

there really is, at this point, no other option. The money printing that's gone on, the trillions and trillions and trillions in stimulus, there is just no other option than to pursue a monetary policy of inflation. And so there's this question on whether that macro dominates micro for asset classes. And so when you talk about technology stocks specifically, and this is private market companies, public market companies, just talk about technology specifically. In theory and in practice today, in a hyperinflationary environment where digitization trends are being accelerated by a global pandemic, the macro would point to, you know, you obviously can't be in cash in a hyperinflationary environment. So you want to be in the equities that are most linked to sort of

the future and have the most expected value in the future, and that would be technology. So there's a very strong macro story for technology investing, whether you're at the early stage or even in the public markets. I mean, it would have done phenomenally well just investing in the public markets and in technology companies over the last seven, eight months. And then you have to juxtapose that against, I actually don't think COVID's impact has actually flown through on a micro level into the numbers for a lot of these highly valued SaaS companies. So excluding the e-commerce stuff, I think the e-commerce stuff, the things like Zoom is an exception to this on the SaaS side, social media, all of those are

probably just phenomenally accelerated by COVID. But on enterprise SaaS specifically, I think the upticks in churn have really only started to hit these companies over the past few months. And ultimately, you're going to see the SaaS, people aren't going to hit their Q4 numbers for a lot of these large enterprise SaaS companies. And I think the multiples might get slammed accordingly. So I'm much more skeptical of the micro story on tech investing. I think the macro hyperinflation, you know, how do you get a return on one's capital in the future bodes well for technology. So you came up with these five predictions a couple of months ago. Let's just go right down the list and kind of check in on how you think that they're going.

The first is the death of Dr. Lee as the Franz Ferdinand moment in society. uh yeah so you know in world war um you know so there was in in a in a in in um uh so it's early where i'm at i can't i think it was i think it was world war one yeah franz ferdinand so in world war one uh retrospectively the historians looked at the assassination of this um of this uh this austrian austrian duke franz ferdinand is deemed sort of the initial domino that fell that sparked um that sparked world war world war one and um and i would argue that uh i would argue that um that this death of dr lee um uh this uh this um this uh this uh wuhan doctor he was this wuhan i believe he was actually uh an ophthalmologist he was an ophthalmologist in wuhan um very early on

in um in sort of uh in uh in um in sort of december uh between christmas and new year's He was sending warning messages. He was alarmed by some of the cases that he was seeing, even as just an ophthalmologist. And he was sending WeChat messages trying to warn people of this as being a very serious risk of pandemic. And it ultimately contracted coronavirus while treating a patient at his hospital and died. And I believe that that death, that death of Dr. Lee, historians 100 years from now, if we have historians, it's very unclear if we even have historians anymore in the future, but if we even have historians, they will look back on that death of Dr. Lee as a Franz Ferdinand moment for a new major global conflict. That will unfold over the next number of years. And, you know, I'd say maybe the initial domino was, you know, his death is emblematic of the initial domino being, you know, this COVID outbreak being underplayed by the Chinese Communist Party. You know, Dr. Li trying to warn about it, dying of the virus, he was trying to warn about the virus then escapes from Wuhan, spreads globally. There's questions about whether the virus was actually, you know, a bat-borne coronavirus from a wet market, or was it a lab leak? There's all these things that are very weird about the origin story on the virus.

And then all of the dominoes that have fallen since in terms of how this epidemic is impacting every facet of geopolitics and every facet of the way we live around the world, that I believe we'll look back on that as a France for a dead moment. So firmly stand by that prediction. The resurgence of religiosity, or basically the popularization again of religion? Well, we're definitely seeing it. There's new religions that have really sprung up, and they're too dangerous to name, so I'm not going to name what they are, but there are certainly new religions that lots of people are really passionate about every night on various city streets, and that's fine. And, you know, if they want to, that's, that's totally cool. Um, you know, um, and, uh, and so there's new religious, religious that have sprung up. Um, I think that people are turning more inward, becoming more, um, uh, more, more sort of spiritually centered, certainly, even though a lot of the churches have been intermittently closed. If you talk to your friends of mine who are

Christians, they're like, uh, the, the, the turnout for the online services, uh, the digitally streamed services is higher than ever. I think people are searching for meaning because basically the frame that we had for a basic stable framework for what reality is, I think it's been somewhat fractured by the global response to the virus over the past seven or eight months. Yep, still stand by that one. Hyperinflation. And maybe caveat this one with US or not US and any sort of idea around timeline. So we're already seeing inflation. So we're not at hyperinflation. We're already seeing inflation. And then I always like to be a little bit hyperbolic with predictions. So it's possible that I was hyperbolic in predicting hyperinflation. Perhaps I should have just

predicted inflation but that would have felt a little bit too boring um you know i i i think it'll flow through over five years so it's sort of again the fiction was time time time um you sort of have to have it was time the time so it's a five-year time scale and um in theory it should be worse and um in theory it should be worse and um you know there's all these southern european countries that that where where in theory it should be a lot worse the number of these developing countries. So it'd probably be worse in other places than in the US. This one is fascinating to me, which is remote work as a narrative mirage. Yeah. So I don't know what it's going to look like, but I don't think this working from home indefinitely thing for all white collar jobs

um is is actually like the new is actually the way it's just going to be going forward so i don't think we're returning to like suburban office parks and uh and and certain and certain like so certainly that's done so i'm i'm very short suburban office parks i'm short i'm short the skyscrapers in in midtown manhattan i am i i don't think it's going to look like it looked before but i do think people want to be um want to have interactions with people that they're working with. And I actually think that there's something fundamental about building a company where you kind of have to have some real sort of in-person interaction. And so I think maybe the one way in which this prediction could be wrong is if VR just gets so good on a

fast timeline that we have these immersive virtual offices that we all just put on our headset and we're in this immersive virtual office. Maybe that's the way in which the prediction could be wrong. But if that doesn't happen, I predict there's some sort of new way of working together that's not fully remote. And I think that ends up being something that we're not expecting. And so on the extreme end, on the extreme end of the way in which this prediction would become true would be actually if AI automates all the white collar jobs that we're now doing remotely. So that would sort of be the, and I do think that's possible on a five-year time horizon. And so I think actually you have a possibility of AI automating just a lot of the white-collar Zoomer jobs such that just, you know, you're still going to need a plumber, you're still going to need a landscaper, but you're not going to need an accounting clerk.

And all of those Zoomer white-collar jobs are just going to go away. They'll be automated. That's one way in which this remote work thing is a narrative mirage. Two is, I don't believe it's a just permanent change. So I think once the pandemic is solved, which again, I think it's going to take a lot longer than most people think it is. I think it's going to take many years, but I think it's going to take less than five years.

And once it's solved, people are going to be desperate to engage again in person. And so I do think it is a overhyped narrative and likely to be a mirage. uh does zoom count as part of that vr experience well my thing with zoom is um i think that zoom is like sort of yahoo so i so so so i i feel i look at zoom as yahoo so like you know yahoo was like the breakthrough sort of web portal and search engine and then it was disrupted by google and the main thing with zoom is it i think it makes at least i feel like it makes me look really ugly and so i don't like to do the zoom things i think it makes my room the room look ugly it makes me look ugly um it's it's not a very good it's

quite kludgy um as a that's a word we'd use the technology of like it's a it's it's not a super slick product experience so i think there's room to disrupt zoom maybe though maybe it's the new vr What do you think? I mean, it's possible, but I just think that I find it hard to believe that the first iteration of the solution for something that was such a shock, right? Like everyone just scrambled and basically said, how do we do this? Solution one is Zoom. It wasn't necessarily purpose-built for this. And so, you know, you got to believe in kind of technological progress that there will be other iterations that are improvements off of this. Now that could be from Zoom or could be from, you know, other companies, but it just feels like sitting and staring at each

other on video while we like type on our computers probably isn't the solution if remote work ends up being the kind of standard, right? Yes, I'm inclined to agree with you on that. All right, number five, serological test agreements, which sounds like it's out of a sci-fi movie but has got to uh probably be uh be somewhat realistic at this point uh yeah i think it's pretty i think i think i think that one was in the uh generally in the right zone but i think i got the specifics a little off so rather than like an sta and what i mean by sta is like just as you sign an nda when you have to walk into an office at a lot of companies they have these digital ndas you used to have to sign back when we walked into offices i imagined a future in this five-year

time scale, where you'd have to pledge that you had antibodies to the coronavirus or had recently tested negative for the coronavirus, I actually think that companies, not governments, are just going to scale up the rapid testing. Now that we have these rapid tests that you get results in five minutes, I actually just think that to go to any workplace, you'll have to do a rapid test before entering. So you go to reception, you do a rapid test, you self-administer it. Maybe, maybe you have to have a medical professional for the first few years overseeing the, the, uh, the, the reception areas of these offices and workplaces. But I do think certainly for me, before I'm ready to like host a big business event or like have, have all of our, our portfolio companies come together for an offsite. i'm not doing that till i have rapid test results on myself and everyone else like come on um so so

i do think that is going to be that is going to be the the future and and and and we're finally getting the testing capabilities are starting to come online to do that and and then ultimately yeah maybe it does transition to more of a a serological test agreement which is what i predicted yeah one of the things i keep thinking through is just if this is persistent um what are the other changes to society that happen. So if you go back, like take New York real estate, for example, there was immense capital inflow from international investors in like the mid-2010s. Builders saw this. They all got super excited. They went and they started building a bunch of stuff. By the time they actually got the buildings built, there was more capital controls in Asia.

A lot of that kind of capital flow got shut off. And now there's this overabundance of empty apartments all throughout New York. And it's just because by the time the demand actually, or I'm sorry, the supply got to the market, the demand had kind of dried up or at least lessened. And it feels like there's the possibility, to your point, even if this virus stays for another year to 18 months, people are making a lot of changes, whether it's to the way they work, to their locations, whatever it is. And by the time they actually get a lot of this implemented, we may be on the tail end of it. And therefore, it's kind of a lot of motion that ends up not actually leading to progress because you almost got to revert back to the world pre-coronavirus.

Yeah. So your point being a lot of these changes, it just ultimately just reverts back. So it's sort of pointless forward motion. Is that sort of the general point? Well, I think that you're basically trying to make permanent changes for what is probably a temporary problem. And so if you don't think of it as a temporary solution, you think of it as a permanent solution, you actually end up doing things that hurt you in the long run because Because you basically reacted incorrectly, right? If it's only a temporary problem, then you should create a temporary solution, not a permanent type solution where, you know, let's say all of a sudden skyscrapers in New York

started saying, you know what, we're actually going to drastically change the way that the floors are laid out. And you can only, you know, now people have to go in and rent four floors rather than two because of the spacing. And then in 18 months, it goes back. Can you actually get back to the norm kind of as fast as you made the change? I just don't know. Right.

Okay. So now I get what you're saying. So, um, so here's what I'd say on that. So I think there's a sense in which that's the exact right frame. And so I think there's a, there's a sense in which if, if, um, uh, there's a sense in which that's the right frame. Um, and, and, uh, because I don't think it changes things in the way that people think it will change things.

And so, um, and so it's sort of like, um, uh, all the obvious things that one, um, you know that that one would do um maybe maybe don't make sense so like uh so sort of like if you were super long midtown manhattan commercial real estate i would sort of be an obvious move to try to liquidate your midtown manhattan personal real estate portfolio now but then in practice there are no buyers for that portfolio and so it doesn't make sense to do that you'd have to sell them for pennies on the dollar sell for pennies on the dollar so the obvious moves just financially don't make sense to make right now. But then I do think there's a, I actually, I don't agree with you that it's, or I don't agree with the assertion that it's a temporary problem. Because

I think that what, I think that plagues, if you look, there's sometimes, there's certain moments where you actually have to really look back thousands and thousands of years and see how things have played out in historical context. And with plagues in particular, they really do change things. Uh, they change, even they change who we are, uh, and they, and they, and they change our, our nature as a, as a society. Um, and, uh, if you look back as far as like the plague of Athens, uh, which was an epidemic that devastated, um, ancient Greece in like 430 BC. Um, and, uh, and, uh, it was sort of came at this in the midst of this Peloponnesian war. Um, it led to sort of the, fall of that empire and um and there's a there are all of these knock-on effects and uh second

and third and fourth order effects of um of these uh of these plagues um that um that are only become clear retrospectively and so i would imagine that a hundred years from now again people will be looking back and like yeah like sure the coronavirus like manhattan like yeah people started working in midtown again and like that but there's there are all these other ways in which in which um in which it just gets uh you know things just get really changed so for for example um you know one one way in which things get really changed in manhattan specifically would be um you know with with the tax-based flight out of new york i don't know how um how they can How the government's going to be able to afford to maintain the cities, really, even at all.

And so, you know, maybe like, yep, there's still lots of skyscrapers in Midtown Manhattan, but they're all occupied by government agencies and sort of Albany expands to Manhattan and sort of AOC's office is in the penthouse of the Vampire State Building or something. I don't know, but I think things change just not in the way we think they will. That would be epic. And I don't know if a good way or not. But in terms of going back to the technology world, pro-startup, anti-big tech, that is a very, very popular narrative today. I think you've said you can't really have that stance. Those are contradictions to each other, being pro-startup and anti-tech or anti-big tech. How do you kind of settle that or balance that idea? Yeah, I mean, the whole idea of like what we do at Bedrock, what I do is we're investing in these super early companies. Sometimes it's just a few ladies in an apartment in Brooklyn where they're quarantined, working on coding something to get coding something up. And it's really just a bet on the people and the idea and the market opportunity. And implicit in doing that, you have to believe that it will one day be a big tech company. And so implicit in doing the early stage startup investing, in order to have that be a profitable endeavor, one has to believe that some of the companies that you're investing in, when

it's just a few you know uh men ladies um you know uh um whatever uh for anyone to identify you know their gender you know a few people working together on something um uh when there's really nothing other than just their vision them they're like raw abilities and a market opportunity and you're giving them you're writing them a chat just based on that you've got to believe like implicit that you hope that one day will be a huge tech company. And so I find it like this very convenient, but like completely incoherent position when I see technology investors who are just categorically like we have to break up all the big tech companies, all the big tech companies are evil, but make their livings by investing in these early stage tech startups. Like that to me

just seems like an incoherent position. And there actually are more than a few. Again, I don't view myself as a venture capitalist i'm a i'm an investor you know some people get to self-identify as vcs i just self-identify as an investor um that's my personal identity and i'm weighing claim to that but uh but um but certain vcs uh certain vcs out there are pretty vocal about the fact they they think all the big tech companies are evil and need to be government broken up by the government but are but are making their living off investing in startups and and that feels very coherent. Now, that's not to say that some of the big tech companies have done bad things and deserve to pay a price for doing those things. But I don't think being categorically anti-big

tech is a coherent position. Well, and it leads to this kind of thing that people forget, which is that every challenger or disruptor, if successful, becomes the man, right? So I think that's kind of your point here. And we're seeing this play out perfectly with Apple versus Fortnite. And Apple is, you know, they used to be the people in the garage, right? They were the ones who were going to go disrupt the tech world and kind of the computer science and software world. Now, everyone's pointing the finger saying, you're the big bad person who's, you know, preventing me from running my business the way I want to run my business. And so how do you analyze Fortnite versus Apple?

I know you called Fortnite's thing the greatest corporate propaganda ever. I tend to think when I saw it that it was absolutely awesome, the way they kind of executed this whole thing. But talk a little bit just about that showdown between two really just heavyweights over the financial relationship that they have. yeah i mean um it it is uh it's uh it was a brilliant move by fortnight you basically have this situation when you have apple um you have apple uh has been this just really important distribution channel um for for these for these for these companies these games these businesses and um and uh and the reality is that um the reality is that uh sorry the The reality is that when you're generating the demand, as Fortnite's doing, when you're generating the demand, you're able to capture more of the value.

And so there's this 30% tax that Fortnite has to pay Apple, that Epic has to pay Apple to have Fortnite on the App Store. and um and and yet they're able to generate their demand for fortnite via all these different paths you know they've got consoles they've got other um other develop other other mobile devices um all sorts of ways people can engage with fortnite they are not to completely path dependent on ios um and um and um and so there's a sense in which you know my partner eric stromberg has this My partner at Bedrock has this great website, ScreenshotEssays.com, and he would sort of, I think, term the App Store like it's becoming more of a dumb pipe for media companies like Epic, like Fortnite, because they just have the leverage to negotiate down the tax. They're not fully path dependent on the App Store. And so, you know, as Eric says, Epic was the first to make a move here, but they're not going to be the last.

Yeah. I also love the whole, it was such bait, right? It basically was like, let's negotiate, let's negotiate, let's negotiate. Okay, you're not going to cave. They just waited. And it's very obvious. They had the lawsuits ready. They had the marketing video ready. Like everything was lined up and they went ahead and they just said, we're going to do it anyways. And then I didn't know this until recently. They actually sent an email to Apple saying, we just did this. So they didn't even wait for Apple to go find it. Like they basically like, you know, said to him, you know, we're putting the middle finger up. Apple took them off. And then that's when they kind of unleashed everything. And look, that's like, that's something you would have expected from Apple 30 years ago.

Right? Like that was a very Apple-esque move. Not, you know, but today they're just the man. Yeah. Well, they're the man. They're the man acting like they're not the man, which is the right way to do it in today's world. Absolutely.

Absolutely. Solopreneur platforms. You've got a couple of tweets out there of these things just taking off, right, throughout the pandemic, kind of up 200% or more in many cases. We're talking about the Shopify's of the world, etc. Kind of how do you view that? Is that something that is a narrative violation and will kind of come back down to reality? Or is that a change that is likely to stay? um i i think that that is a new reality so i i think like but whereas before you would have opened up a you know you would have opened up a a coffee shop or um or some some sort of uh you know a comedy club or something like that in a city um these businesses are just going to be built online and so the new way to build a small business is online but different from you know So that sort of platform dependency for IRL SMBs, for like real world small businesses, the platform dependency is basically on local government. So you sort of are dependent on local government, set of local government regulations to operate.

So that is a platform dependency, to use tech jargon. And then you're dependent on like you need a landlord if you have a physical space. So that's just a platform dependent on real estate and energy infrastructure. but you need sort of power and electric and that stuff. And now there's a new set of platform dependencies. If you're doing a Shopify store or if you're doing a rolling fund or if you're doing any of these new or podcast business,

there's sort of a new set of platform dependencies that you have as a solopreneur, whether that's Shopify, Plaid, Stripe, distribution for a podcast, Spotify, App Store, whatever. like whatever you're there's a set of platform dependencies so i think the solopreneur thing was always a trend we just didn't call it solo being an entrepreneur starting a small business as an individual or with with a loved one or with a friend that's always been a thing it's now just migrating very quickly to this new set of platform dependencies online and uh and i think what what

you want to be very careful of is if when you're going down one of these solopreneur paths just be like thoughtful and strategic about what platform dependencies you have and like epic like fortnight i ensure that you're not overly dependent on one platform for distribution so like fortnight was able to stick the middle finger up at apple with this ad because they know that they can survive without the apps or distribution you never want to make a threat unless you're actually willing to follow through on it and so like they know they can survive without it and so there's a lesson for every solopreneur from that fortnight uh fortnight's position where you never want to be too dependent on one of these platforms absolutely and and do you feel like those

platforms uh they're the ones who kind of build uh greater and greater product suites if you kind of look like a square right they've been able to build a whole suite of financial services uh versus uh maybe something like a robin hood just say just in brokerage right and that's in the fintech world but when you move to these uh platforms around these solopreneurs will we see that Shopify is kind of build an entire product suite and kind of go full stack where somebody can just show up and just use Shopify and build out their entire business? Or will we see kind of multi-platform dependency? So I need Shopify, I need Stripe, I need Plaid. I kind of need all of these different pieces to build my platform rather than just I can go partner with one and

just use that one platform? Yeah, I mean, I'm not sure. I think the reality is that it would be better for the, well, it'd be more work and annoying for the solopreneurs to have these different platforms they have to work with. It's actually better for them because you're not giving any one platform like Shopify too much power. But in practice, I think what will happen is they'll all build out these full stack suites. And so you will be able to just choose yeah i want shopify for everything if you're doing an e-commerce storefront or like i or or one of the other options or i want stripe or paypal or whatever for for all of my my payments rails and all that so i do think they increasingly end up just becoming directly competitive

as they as they scale over over the next number of years i mean if you just think about like banks as an analog like there are like lots and lots and lots and lots of banks in the united states with total assets that are over a billion. There's something like 40 banks that have over a billion dollars in total assets in the United States and sort of like lots and lots of banks with multi-billion dollar market caps.

And there should be lots of these enabling. And if you're a small business owner, you typically would only work with one bank. And so similarly, I think you would generally, you'll have one of these platforms that you're more dependent on. Got it. What areas are you guys looking at right now in terms of if there's entrepreneurs building in certain verticals, you guys would love to talk to them or learn more?

Yeah, I mean, we're much more just opportunistic. So we feel like we're not really very good at coming up with ideas. So we tend to just be much more opportunistic and like to just see things wherever. A few areas where we've been more active recently have been in the defense sector. Just given our view that globally things are becoming more unstable, it feels like there's more room for innovation in the defense sector and that we sort of do need new technologies. That's an area that we've recently become more active in. Another one would be, you know, we talked about one of my predictions, resurgence of religiosity. So given we have a prediction there, people are more interested in faith and meaning, trying to find it in new places.

that's a theme that we're actively that we're actively pursuing um and then we do actually think that these enabling infrastructure companies you know you have you have shopify that help um sort of our you know you had this wave of um you have this wave of like uh of um of uh of um of centralized sort of things the centralized e-commerce thing with amazon there's a sense of which shopify is the decentralized e-commerce thing you know there's a sense in which plaid is like enables, you know, any, any app to let you connect your bank account. I think these sort of core infrastructure type, type things, there's, there are more opportunities for that. So we're always interested in these new, new areas that are going to be core online infrastructure going

forward. Got it. And then in terms of the current portfolio you have, you've got a bunch of businesses that end up appearing, at least from the outside to be well positioned for a digital first world that we've moved to. So things like Lambda School in the education space or the athletic on the content side? Maybe talk whatever you can share in terms of how the portfolio generally has been able to benefit from some of this shift, as have many of the technology companies in the public sector, et cetera. Yeah. I mean, I would actually sort of argue that some of the bigger positions were maybe more exposed to COVID risk than uh then then then i then i would have loved so you know for example so for example well the

let's take the athletics you have a you had a shutdown the shutdown in sports so right now we've got the nba bubble right it's sort of so it's a sports subscription media site um and then there's there's no sports and so and so so there's a sense in which like it it is um uh there's a sense in which uh that that's not great for the athletic as a business when there's no when there's no sports. So now all of that said, what I've been shocked by is how resilient that the companies have been, including the athletics. So like, you know, they've, they've, they've, they're still growing. You know, now you've got, you've got the, you've got the NBA bubble stuff is driving more coverage. And, and I do think sports are very much on track to come back and, and reopen more,

more across the board. And so even that business has been quite, quite resilient. I mean, land a school, um, there's, there's sort of this sense in which it's like, um, there's, it's like, there's like going to be, there should be like unlimited demand for like a product that enables you to, uh, you know, you don't have to spend anything up front. Um, your, your, your, your risk is that you're putting in your time and they only succeed if they help you earn a lot more money if they accelerate your income um so in theory like if they can actually deliver on that promise like to a mass customer base there shouldn't in theory be unlimited demand for that again there's still a lot to prove but in theory should be unlimited demand um and then there's

this sense in which the one that i'm um the one that i'm actually uh you know the trend that i'm like most bullish on is i do think there are all of these like essential workers that that have to work in the real world still um and uh and and do jobs for us like the people who keep the power lines up and uh and um and those folks are actually really important and we it's easy to forget about them when everyone's locked at home on zoom and we have a company in our portfolio rig up which is one of our largest investors there's a platform for those workers that matches them with jobs provides them with a suite of services and benefits sort of two-sided labor marketplace for um for um for the for skilled trade workers um you know renewable and renewables construction

defense energy etc um and uh and i'm actually very bullish on that area because i i do think somehow we we uh we it's easy to forget about about all those folks i think that plays a role for them as well yeah that makes a ton of sense and it feels like uh when you look at each individual business. I think your point about the resiliency, the one thing that as soon as this all started, I said to somebody that I don't think a lot of people outside of venture investing understood was like, these businesses are built in many cases to lose money for long periods of time. So in the non-venture world, like going to zero revenue is absolutely catastrophic. Like you have no cashflow, you can't operate your business, you don't have big reserves, you know, small

businesses, they have basically like three weeks of cash on average, all this stuff. Venture capital businesses are capitalized in a way where sometimes they're going 18, 24 months with burning the cash that they've raised. And so in some weird way, they were actually set up to withstand it a little bit better structurally. But obviously, if you cover sports and sports are gone, that's not good either. Yeah. I think in our portfolio, it's been a major accelerant for maybe 40% of the portfolio. It's been neutral for maybe, uh, you know, maybe 30% of the portfolio. And then it's been pretty bad for maybe 30% of the portfolio. I'm being honest. Yeah. I think that's a pretty, uh, pretty fair distribution. Um, all right. Any, uh, any hot

takes or, uh, or, or last, uh, opinions in terms of where the world is going, uh, or, uh, or things you're thinking about um uh uh the um the world's too dangerous for hot takes right now it's my hot take you're not wrong my friend you're not wrong uh where can people find you or find out more about bedrock if they want to get in touch awesome so i have this you know desperately trying to get subscribers for this nascent youtube channel that i just launched a few weeks ago Jeff Lewis TV, Jeff with a G, G-E-O-F-F on YouTube. Subscribe to me on YouTube. Follow me on Twitter, JustGlue, J-U-S-T-G-L-E-W.

Thanks so much for having me on, Pomp. Always a pleasure. What is on Jeff Lewis TV? I'm going to go tweet this as soon as we get done, but what is on Jeff Lewis TV? Dude, a bunch of my temperature checks. It's the new, I'm going to make it one of the new distribution pipes. So we got to get, we're going to be adding a lot more,

a lot more interesting content. So we got to get that, got to get that out there. I appreciate any help you can offer. All right. We'll do it again in the future, Jeff. Thanks so much. Thanks. Bye.