The Pomp Podcast - Avichal Garg, Managing Partner at Electric Capital: An Ex-Facebook & Google Product Manager Talks Crypto Investing

Episode Date: April 5, 2019

Avichal Garg is the Managing Partner at Electric Capital. In this conversation, Avichal talks about the early days of working at Google and Facebook, building a machine learning company, and his career progression from employee to founder to crypto VC. ---- Totle is a rare blockchain investment opportunity, one that offers a live product, active customers, an established revenue model. Totle solves three significant problems with blockchain asset exchange: 1) Security 2) Complexity and 3) Pricing. Over $4 trillion of blockchain assets were exchanged in 2018 and growth is forecast for at least the next 10 years. Totle’s sophisticated platform powers the blockchain economy with safe, simple decentralized asset exchanges at the best price for traders, wallets, businesses and other financial apps. Totle’s B2C Web App and B2B API are live and serving customers today. Visit totle.com/pomp for more info. ----- Ethereal Summit returns to New York City this May 10th to 11th to kick off Blockchain Week and offer you a chance to go deep into the heart of crypto, blockchain, and Ethereum. Get up close with outspoken crypto leaders like Mike Novogratz, Joe Lubin, Tushar Jain, Danny Ryan, and yours truly Anthony Pompiliano. Ethereal Summit is where you can get in the mix with the builders of blockchain.  Check out Etherealsummit.com with discount code POMP to get 20% off tickets to come hang with the brightest minds in blockchain at Ethereal Summit New York, May 10th to 11th at Pioneer Works in Brooklyn. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Avicil Garg is the managing partner at Electric Capital. In this conversation, Avicil talks about the early days of working at Google and Facebook, building a machine learning company, his career progression from employee to founder to crypto VC, and aliens. His takeaways from working at Google and Facebook are fascinating and Avicil has interesting insights into the diversification and risk mindset of being a founder and a VC. I hope you enjoy this conversation nearly as much as I did. I'm sure a lot of you have used Kayak to find the best flight.

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blockchain and ethereum come hang out with mike novogratz joe lubin tushar jane danny ryan and yours truly you get into the mix with the builders of blockchain and ethereum it's less shiller all killer go to ethereal summit.com and use my discount code pomp to get 20 off tickets i'll see you there on may 10th and 11th at pioneer works in brooklyn 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 only. All right, guys, I'm super excited. I've got a beachel here. Sir, thank you so much for coming on. Yeah, my pleasure. I think that you've got a fascinating background. So maybe let's start with pre-Facebook days, some of the stuff you're working on, and then we can go through Facebook and eventually into crypto. Yeah, sounds good. So I started my career at Google. I worked on search ranking and ads ranking. I have a computer science, machine learning background. I left Google to do my first startup, which was a machine learning plus education company that we sold to a publicly

traded company. And then we started our second company, which was like a TiVo for your phone. It's a company called Spool. And what you can do with Spool is give us a URL and we would crawl whatever's on the other side of that URL and cache it offline for you on your phone. And to do that, we built a bunch of crawling infrastructure. And those crawlers were basically VMs that we ran in remote data centers and instrumented them so we could control the file system and the audio card and the video card and built a bunch of a cool tech there. And then Facebook acquired us in 2012, early 2012, and took all that IP. And then we spent a little bit of time rebuilding some of that stuff inside Facebook.

And then spent most of my time at Facebook, working on the local product team and managing that for the product side of the house. And I was a hobbyist in crypto all along. So the reason that Spool story is interesting is Curtis, my co-founder from Spool and my co-founder at electric we uh we dabbled with crypto after reading the white paper maybe like 20 2010 2011 and it was because we had all these servers that we were running we could spin up thousands of machines and so the idea sort of crossed our minds hey maybe we should just do a bunch of bitcoin mining because we can we can run a bunch of servers at scale and so we played around with it and decided you know what this thing's just way too early this is probably never

going to happen uh super cool from a distributed systems perspective but probably not going to happened. And so we ended up at Facebook and tracked the states for a while as hobbyists and bought some Ether and Monero along the way. And then in 2016, I left Facebook and had some free time and was reading white papers and going to conferences. And I was just blown away by how much things have progressed in 4 or 5 years. And it felt like it might actually be time to tip. And so I went full-time in crypto at that point. And then the rest is history. So there's two big pieces there, I think, right?

One is, let's start with the non-crypto piece first. You had the benefit and luxury of working at two of the great technology companies of our time, Google and Facebook. What do you think are some of the main takeaways you had from those experiences, maybe that other people who haven't worked at those companies could learn from? oh man there's there's so so many i mean i think we can talk about that stuff for for hours people people write books about all those things you know i think kind of even even outside of facebook and google for a second kind of stepping back i think one of the things that makes us a little bit unique in the space that makes both curtis and i unique in in crypto um is we are coming from uh from this perspective of having having seen these

100 billion dollar plus 500 billion dollar companies scale um and going from product market fit and sort of a group of engineers that believed in the thing uh and got to scale and all the other things you have to get right just beyond the technology to make that work uh and so that really i think informs our world view and how we think about things uh and so we're definitely you know that sort of mindset of a small group of people can accomplish really amazing things and then uh really once you have product market fit like what are all the other things that have to fall into place to to actually bring that vision to reality um and we think that's that's something that is not really common in crypto right now i think there is this sort of sense of if you build

it they will come um there's a sense of engineers that that are so technically gifted and so brilliant that they see how all these pieces fit together and they kind of want to build everything at once and a lot of our worldview is informed by actually what most of the time you want to do is solve a really really narrow problem crush it at that problem and then that's actually how you back into building a platform or actually to get these things right you have to figure out what your go-to market is you have to figure out who really needs what you what you're building um and how to identify where those people are and figure out how to communicate that value proposition to them and those kinds of things we think are sort of under indexed right now in crypto and so a lot

of where we spend our time when we're working with some of our early portfolio companies is thinking through how to do those kinds of things and trying to bring some balance to the companies um you know even outside i think facebook and google um i've been a pretty active angel investor for many years um and if i look back at so many of the companies that have turned out to be very successful companies um and been the best return for me it's companies like optimizely or color genomics or cruise which is now gm's self-driving car unit or boom supersonic which is building supersonic airplanes kind of the thing that i think the thread is you know the common thread through all of that for us is really that there are these moments in time where

technology lets people do a thing that they just couldn't do before but what all of those companies got right was the ability to not only build the thing communicate to people why that thing was important and interesting useful even though they may not have initially realized it that they needed that thing I think that's kind of where we are with crypto right now there's a lot of stuff that's possible but we haven't really figured out how to communicate what the really new novel interesting things are that you just couldn't do before and why people might want those things then how to make those really great experiences

And so that's a really interesting way of kind of framing the past successes that you've seen as an investor where Crypto is today. How much of those previous successes do you think founders kind of had this innate ability? They were born with the charisma or the ability to communicate effectively and articulately versus that was a learned skill and something that they kind of built over time in a very intentional way. It's a little of both. I mean, I think it's like so many things where people have natural proclivities and some people are just really good at this stuff. And then they surround themselves with people who are really good at this stuff. But it's actually funny you mentioned that. I think if I look at, in general, I've invested in several dozen startups at this point. And if I look at the single... If I had to pick one thing that correlates the most

with whether or not a company is going to be successful, it's a little surprising, but it's actually the quality investor update. It's so, so highly correlated with whether or not a company is going to be successful. And it's because, ultimately, if you can communicate clearly to your stakeholders what you're working on, what the priorities are, how you've progressed against those things, what's going well, what's not going well, all of that clarity of communication is really preceded by clarity of thought. You can't communicate clearly if you're not thinking clearly.

And so I think there's actually this really strong correlation between people who are really successful and people who are able to communicate the value prop of what they're doing. But I think it's actually because from a Bayesian perspective, behind the scenes, the thing that's actually correlated with both of those is that those people tend to be very, very clear thinkers. It's fascinating to hear you say this. My partner and I have talked about this a bunch. And one of the questions now when we do diligence is to have the founders send us their previous updates and past fundraising decks. And some of it is how detail-oriented

kind of concise and clear something is. But also, their ability to explain why certain things they thought were going to happen at some point in time did or didn't happen, right? And kind of talk through, you know, hey, 18 months ago, when you raised your last round, you thought that you were going to be able to use that money to accomplish X, Y, and Z. Why has that not happened? Right? What were you actually able to accomplish with it? And I think it hits at this point that you articulated very well around just clear thinking. And really, it comes down to one of the things from Facebook that I took away personally was just the seeking of the truth. And this fanatical obsession with it really seems to set apart a lot of the great founders.

Yeah, that's actually a fantastic observation. It's one of the things I love most about entrepreneurs. And ironically, I guess, people don't really put entrepreneurs and hedge fund managers in the same bucket. But it is like one of the core properties of both entrepreneurs and investors, like really good investors are the same way. You know, if you're not, because you're betting with your money, right? It's like, if you're not, if you're not trying to figure out whether or not your version of the truth is actually the truth and trying to prove yourself wrong all the time, you're going to lose a lot of money and entrepreneurs are going to lose a lot of time. So entrepreneurs, the best entrepreneurs are a hundred percent obsessed with what are all

the ways that my version of reality is false? Because if I can, if I can falsify it very, very quickly then i'm going to save myself a year or two years of development um and i think that that goes back to the same idea of well in order to do that you have to be able to go through this kind of thought process which is what do i believe why do i believe it what are my hypotheses what are my assumptions and then start to challenge those and to do that you have to be a really clear thinker you have to be like a very structured thing and i 100 agree with you having been at facebook for a few years it's like mark is just so exceptional with that i think the whole management team is exceptional with that and just being in that environment for a few years you

gets so much better. Yeah. And it's funny because it's almost become cool at this point to talk about first principles thinking and all this stuff throughout the startup ecosystem. But when you see it in practice at scale... Because I think a lot of young companies that have 2, 5, 10 employees, it's probably a little bit easier to do that if you've got a strong leader who comes from that type of mentality. But to do it with 10,000 plus employees is a whole different ballgame. And it's pretty incredible to see how the organizational structure, the way that the culture is built, etc., can have that permeate through an organization. And I think that's what makes the Facebooks, Googles of the world so special. Yeah, 100% agree.

I mean, I think those are the kinds of things that I think over time, you're going to see the best crypto companies and crypto projects, not necessarily companies, even in ecosystems and communities, really coalesce around. And I think it's the communities and the leaders that are truth-seeking and figure out how to scale organizations that are truth-seeking and bake that kind of mentality into the ecosystem and their communities. They will ultimately, I think, be the big winners. For sure. And so let's go to, as you were at Facebook and kind of towards the end of your time there, you guys were obviously spending some of it looking at crypto. So, and from what I understand, you really didn't have a desire or a plan to start a crypto fund, right? I think you were kind of just investing in founders, investing in projects, and really

kind of learning and deploying capital and things you thought were interesting. Maybe talk through a little bit how you go from that approach to crypto and blockchain to actually running a fund. Yeah, great question. Yeah, we never actually thought we would end up being fund managers. uh you know we we sort of in our own heads we're still we're still founders and entrepreneurs and we still we actually try to run electric very much like that so everybody that we hire has a technical background and we actually build all our own software and so we're kind of a weird hybrid

between a fund and a startup in a lot of ways um but kind of the way it happened was uh after i left i'd already been a an active angel investor for a few years and just organically over 2016 in 2017, had found myself spending more and more of my time in crypto and blockchain. So I was an angel investor in things like DYDX and Anchorage, which is a custody solution that just launched. Bitwise, which is an index fund. A lot of great projects. And then I was doing ICOs through 2017 and had bought into all sorts of stuff over the years. And then what happened over 2017 was the Silicon Valley VCs that Curtis and I had co-invested with over the years started reaching out and saying, Hey, we know you guys have been into

this stuff for a while. And, uh, you know, having been going really deep on this, can you help me do diligence on this thing? Or can you help me figure out if this thing is real or, you know, should I do this round in this company? And then by the end of 2017, that had really turned into a lot of sort of, wow, this is just a totally different world. Like I, you know, the round constructions are different. Um, the custody is different, you know, what, like one day I'm just going to get $3 million on a USB stick? What do I do with that? And so the VCs, I think, very quickly realized, the traditional VCs realized that if they wanted to do this, it was not going to be a part-time thing. They were really going to have to go deep on it.

And then operationally, they may not actually be set up for it. I mean, you and I have talked about this, but even things like, well, do you want to be a registered investment advisor? And the fact that these are liquid assets, all of a sudden, it creates these knock-on effects where if you're an existing firm, your CFO is going to say, yeah, we're definitely not doing that like our venture exemption is pretty awesome right so um there are all these sort of operational barriers as well not not to mention that you know what do you what are you buying when you buy monero right there's not there's not a company there like what you know what is the thing that you actually just bought or how do you track that how do you mark

that up when it comes time for your audit there's all this sort of complexity there and so a bunch of the vcs came to us and said hey you guys really understand this stuff um there are not that many people who are technically really deep and understand the technology here have actually built and shipped product before and could be helpful to entrepreneurs on the early stage side and have some experience doing the liquid side of it and could be credible at managing that liquidity, you guys should really think about doing this full-time. You're pretty good at it. Your track record is really good and we trust you. So if you ever wanted to do it, we would be interested in talking to you guys personally because a lot of the general partners at the VC

firms wanted personal exposure and they understood that there was this whole world outside of bitcoin and so that kind of kick started it for us we said you know what we're spending all of our time doing this anyway uh it's a lot of fun it'd be great to have some capital behind us to scale up some of the things that we're doing and and be able to hire some people and help some of the companies that we uh that we work with really closely and kind of have some infrastructure there um if we're doing it all the time anyway might as well you know formalize it so that's that's kind of how electric happened um uh like spring of 2018 so like spring of last year we formalized all of that into electric and hired a few people and um we went back to those

same gps at the venture firms and um and said hey yeah we're doing this and they were all the folks who kind of got us off the ground so at this point we have like one or two general partners all of the major silicon valley firms were our first lps that's awesome what um what what's the kind of story behind the name electric that's a really great question uh it's it's multi that's all i do is ask great questions of each no man that's that you know what's funny is um people just assume well there's there's so much that went into it it's one of these things where uh as founders we uh we spent so much time assessing over names and there's so many it's so hard right you could spend months on it and so uh there's there's a lot that went into it

so one the domain was available so electrocapital.com we could actually get um two we think crypto uh blockchain like a lot of this technology is going to be ubiquitous like we're going to look back in 25 to 30 years and it's going to in 50 years it's going to feel like electricity does to us today it's just not a thing that you think about because it's just permeated everything um in the same way that today if if you're a non-crypto investor a company came to you and pitched you and said hey uh we're a we're a mobile company and we use like postgres on the server side with like some mongo you'd be like what are you talking about like none of that matters of course you're a mobile company right you're just a company um and so we think crypto is going to

be that level of just baked into everything um and then uh it's also a little bit of a nod to uh electrum which is the the first coined money uh in the lydian empire um which was a stamped coin out of uh out of some precious metals and so our our area of focus specifically we think is what we think is happening with crypto is that this is software eating money and so our area of focus was sort of it's sort of a nod to where we think the value is actually getting created that's awesome i like how you guys kind of triangulated there to to the name when you set up the fund and kind of you know and i don't want this to kind of cheapen the way that you guys did it but you kind of professionalized the investing you were already doing right so you

kind of were experienced in doing this and then you decided okay let's raise a fund and and hire some staff and kind of build some tools and you know everything you've described what's the biggest difference you've seen between the way that you guys either evaluate companies work with founders some of the decisions you make like are there noticeable differences or is it pretty much almost everything you were doing before now you just do it at greater scale um you know in terms of the decision making and in terms of working with founders it's pretty similar uh you know the sort of the bar that you want to hold is, is similar. Um, you know, the way that we try to add value in terms of helping people actually think

through their product strategy, think through their go-to-market, uh, you know, helping them raise subsequent rounds of financing. All of that is, is a lot of that is basically the same. Um, you know, I think the two big differences that jump out. So one, uh, a lot of times you have to be a lot more thoughtful about how much capital you can actually deploy into a company or into a strategy. And as an angel investor, if you're cutting $25,000 or $50,000 or even $250,000 checks, the dynamic is just different. Your ROIs can be different. You can get in much earlier at an earlier stage.

You're not really elbowing anybody out for allocation. There's a lot of mechanics there that do change. But that's more from a how do you deploy the capital efficiently perspective rather than how do you work with entrepreneurs and make decisions. It doesn't really change that. And then, of course, the other big difference is you have LPs, you're managing other people's money. And so that creates a whole different level of responsibility in terms of reporting and accountability and keeping other people in the loop. And at that point, there's a whole bunch of infrastructure that you need to be able to scale that up, which is just, as an angel investor, you're not thinking about it at all. Absolutely. No, no, no. I think that makes a ton of sense. And for you guys specifically, right, because you guys have the technical backgrounds and you probably are able to go deeper with founders. So far, have you seen that that has led to a desire to invest in more companies than maybe some of the other non-technical managers in the space? Or does that actually shrink the number of companies that you guys find potentially interesting?

Yeah, it generally shrinks them. And, and, and I think the big reason is, if, you know, we kind of hold the bar of you need to understand this stuff way better than we do. And, and if you can't cross that bar, then like, why are we the investors and you're the founders, right? Like, yep, that that is the bar. And so that all automatically, I think, unfortunately, eliminates a lot of people in the industry. And that's not to say that they won't necessarily be successful. but specifically in the area where we focus which is you know store value coins kind of layer one things that can actually accrue value down to the token and might be these foundational ecosystems in the next decade um we think today to really win at that layer you do have to be very technically deep um in addition to a lot of other things like i think you have to be exceptional building community um you know the leadership skills that are required are different understanding who your users are as developers you know what your go-to market is all of that is also necessary um but the bar is pretty high in terms of being technical and being able to think through

these things and actually deliver um and unfortunately most people even the ones that are operating at l1 um you know i think they're gonna we're gonna find that that they hit a wall on that dimension relatively quickly yeah i mean look your your background obviously investing in color genomics right um in uh was it sonic airplanes i mean just this isn't specific to crypto right i think you've kind of shown that um these backed founders who have very specific skill sets and knowledge in um kind of deep applications of technology even before you were focused 100 on crypto yeah and it's and you know the other thing i think that goes hand in hand with that is the really best founders not only are they really technically deep but back

to this idea of being able to communicate it they're often really really exceptional at being able to communicate why the technologies are useful or what you can do with them or what the trade-offs are that they're making from an engineering perspective and why those are the right trade-offs and so there's a great feedback loop there too where if you're able to sort of suss out here are the people that are in the top one percent or top five percent in terms of understanding the underlying technology just by being around those people for long enough your your depth of understanding goes up and up and up because those are the people that are actually the best teachers um and so you know as an investor just being around those people all of a sudden

you learn really quickly like i was not an expert at uh supersonic airplanes i'm not by no means an expert today um but i've been able to learn so so much just because the founding team at boom is so good at explaining why in very simple terms you know like oh it turns out the reason supersonic airplanes can work now is fuel economy and they can walk you through very quickly in three bullets like why all of a sudden the business model makes sense um and then over you know a couple of years of working with those people, you can go really deep. And I think crypto is the same. Like we're very fortunate to be able to work with a bunch of really great

founders who are also really great teachers. And so we get to learn a lot from them. Yeah. What's the saying that basically, you know, the people who have the deep understanding of a topic can actually describe it in the simplest terms. Yeah, that's right. A Feynman quote. Yeah. Something like that. So, you know, look, you've got a bunch of interesting views,

and I want to kind of run through a couple of them on crypto. One of them is most people today believe crypto will permeate globally in a very kind of distributed or decentralized manner. And this is a global game. I think you probably lean more in the camp of there will be like a re-centralization of a lot of this work in Silicon Valley. Maybe describe a little bit as to what you mean by that and why you've kind of arrived at that idea. Yeah. So what I mean by that is I think there... That doesn't mean that there won't be successful companies in other parts of the world. There absolutely can be some successful companies in all parts of the world in crypto. But I think the biggest and most important companies and ecosystems will have their center of gravity in San Francisco, in the Bay Area, and in China.

Those are the two ecosystems where I think this will re-centralize. And if you look back at the last, say, 20 years, 25 years of the internet, that basically has happened over and over again. Silicon Valley actually is usually not the first mover into these new ecosystems. It wasn't the first mover into share economy or social or mobile. But they're usually the first to jump into it and say, okay, this is real now. And once Silicon Valley sort of says this is real, this horde of talent starts coming in um and it really generally up levels the the quality bar like pretty dramatically usually um and the critical thing that really happens is

if you think about what you need to succeed um it's not just figuring out that there's an opportunity but it's executing on it delivering it and scaling behind it right so um you know facebook wasn't the first social network um you know google wasn't the first search engine you can sort of like play this through history and and really what matters is how do you scale? Once you've figured out that the opportunity is real and you might even have some semblance of product market fit, how do you not just collapse under your own weight? And that is just tribal

knowledge. That isn't written down anywhere. Other than like Elad's book, Elad Gil's book, High Growth Handbook, that's literally one of the few places where some of this is written down. And as you can imagine, that's 1% of what actually exists in Elad's brain. And so the people who actually understand how to build these companies and scale them and scale these ecosystems and think about all this stuff they they exist within like a 30 square mile radius here and so it's not an accident or coincidence that every wave of technology even if it starts somewhere else recoalesces in the bay area or in china because the tribal knowledge of how you actually like how do you coordinate thousands of humans to actually produce meaningful work um how do you

actually scale that culture how do you actually create career paths for people um how do you actually find the right balance between um you know extracting value and creating value in an ecosystem like there's so much that's just tribal knowledge that doesn't exist anywhere else in the world and so i suspect that tribal knowledge will actually be the limiting factor but once we figured out what the killer use cases for this stuff are a lot of those will then scale in southern valley because the tribal knowledge about how to make things scale only really exists here it's funny to hear you describe it this way because um you know when i first went out to Silicon Valley was to work at Facebook. And I think the part that shocked me was it was almost

like sports, right? Literally, there was entrepreneurs and executives who had like playbooks, right? And it was like, oh, okay, you found product market fit. Now you run like play, you know, one, two, three, and then you're gonna run, you know, play ABC, right? And I think that there's a lot of entrepreneurs all around the world, frankly, who are trying to figure it out. And, you know, maybe not reinvent the wheel, but just, you know, they don't have that kind of guidance and mentorship there. Whereas, you know, in Silicon Valley, it is very well known, right? Hey, you should run a platform strategy, right? And here's what that means. Here's 10 people to go talk to that have done that successfully. And maybe here's even two or three people who tried it and failed, right? And you can kind of do all of that very quickly. And it really does just that iteration speed is different, right? yeah that's right and all these things are feedback loops right so it's what really matters is not entering the feedback loop what matters is how many cycles through the feedback loop can you make and how quickly can you make those those cycles happen um because all these things have

network effects all of them have feedback loops and and the to the extent that you can avoid all of the known mistakes you just cycle through those feedback loops that much faster and that's really what happens here to your point it's just like you can go talk to a dozen people who have run that playbook. And I'll tell you all the ways that it might apply to your business and all the ways that it might not. And that saves you 12 to 24 months of iteration. And over a decade, that compounds. And that compounding means that everybody else gets crushed. And then the people who are here basically win. Yeah. Whenever I've talked to founders, I always use the example of if you learn one lesson a week, and I learned five a day, who do you think is going to win?

Yeah. It's all about compound growth, right? And just that little 1% or 2% magnified week over week, year after year, just coalesces. And that feedback loop is how you win. And it's so much faster to go through that. And that extra little 2% really adds up. for sure so let's go back real quick to this idea of kind of decentralization and centralization um the other thing that uh i think that you know you spent some time on is many of the big winners in crypto uh may not be decentralized right they may be more like the coin bases of the world um just just kind of elaborate on that a little bit yeah so kind of at a like a hundred thousand foot view uh our perspective on what's happening is uh there's been this massive collapse of trust in society. And there's a lot of Pew and Gallup data. We've been talking about this stuff for years now. But people don't really trust the government the way they used to. People don't

trust the media the way they used to. People don't trust the social networks. People don't trust journalism. There's all these places where trust has just collapsed. And along comes this technology in the last decade, which really is about trustlessness. Just how do I get things done if I don't trust the bank, if I don't trust my intermediary, if I don't trust my counterparty, if I don't trust some third party who may be looking at what I'm doing. And so really for us, it's about solving trust problems. And that's what crypto and blockchain really lets you do, kind of in an abstract way. And then the most interesting trust problem, the biggest market from an investor's perspective, we think, is money.

That's actually how we intermediate trust today. That's actually how we sort of have scalable solutions to trust problems is through money. And so what we think is happening kind of at a first step here is this is operating money. And we're really starting at the base layer of the financial stack, which is if we have this non-sovereign store value that can emerge out of the system, it will create the foundation on top of which we could reimagine things like cash, central banking, derivatives, securities, retail banking. Everything that exists in the financial stack today can now be built in this parallel ecosystem. them um and our our worldview is that at the bottom of that stack these things are going to be very very very decentralized because the decentralization is what gives them their critical uh their critical dimension on which they can beat existing fiat money which is that

they're seizure resistant and censorship resistant and they're non-sovereign and to do that you really do have to be decentralized and um that's why our focus in the near term is relatively narrow there's just not that many things we think that can have that sort of property but as you move up the stack, kind of at the top of the stack, something like Coinbase, which sits on top of this infrastructure and is sort of an equivalent to like a Schwab in the traditional world, right? That's your retail interface into this ecosystem and just abstracts away all the complexity. That we think likely ends up very centralized. For most people, key management is hard. Understanding and getting their heads around how to do this stuff is going to be really

challenging and they need a brand. They need a customer support person that they can email or call. For institutions, they're used to certain back patterns, and they're going to operate that way. And that's okay. We think that as long as the rest of the foundational pieces of the stack are still decentralized, and they're auditable, and they're transparent, even though something like Coinbase looks like a traditional company, it's actually going to have to run very, very differently. And by analogy, I think you can look at something like Walmart versus Amazon. you know amazon is just built on this entirely new infrastructure of the internet that didn't exist when walmart was getting started and you would look at and say well they're kind of

retailers like why can't walmart just do what they're doing and sit on the same infrastructure but it's because everything else in the business would have to change right like who you hire would have to change how you make decisions would have to change who has power inside the organization would have to change the metrics that you look at would change like everything downstream changes and so coinbase just has to operate day-to-day dramatically differently than schwab does in order to actually take advantage of the properties of that underlying infrastructure but our worldview is kind of at the bottom of the stack things will be very very decentralized they'll have these sorts of properties of you know anonymous founders or founders who give up

control um you know pretty aggressively over time but at the top of the stack they probably look like traditional uh venture capital companies um you know like a coinbase yeah and this separation between like what i'll just call it the foundation of value or the unit of value if you will um being separated from the state and then kind of a rebuilding of all of that uh infrastructure applications on top of it um it's pretty fascinating because what you're talking about is a different kind of trust in the actual foundation right it's based on math and software and transparency and kind of all the aspects of crypto that i think people are familiar with. But also, the reason why maybe our parents trusted Schwab, and why we trust a Coinbase,

it revolves around trust, but it's different elements of trust, right? It's not exactly the exact, the same ingredients, which lends itself to crypto in a very different way. Yeah, 100%. Like, I think the sort of end result is the same, but the means by which you build and accumulate trust or how you might lose trust would be very different. I mean, I think it's really, really good net for the world that the next generation of banking and securities and derivatives, you know, if it sits on top of this infrastructure, you can start to ask questions like, well, is my bank actually solvent? You know, is that, you know, like crazy question, crazy question. Really, it's like shocking or, you know, like how much leverage has really gotten

into this XYZ ecosystem where people are taking these derivatives, slicing them up, repackaging them, and then passing them on to somebody. How much of that is actual notional value? How much of this is levered up? Who owns what? Even sometimes, just in some of these ecosystems,

you don't even know who owns what, which is kind of crazy to think about, right? So I think you'll get trust rebuilt, but it'll actually be built on this foundation of transparency and accountability because the infrastructure allows you to have transparency and accountability in a way that you just can't today.

So now it's not... hey, take my word for it. It's no, no, no. I can prove to you. And here's the proof. And I think that's going to create a whole new kind of trust. For sure. And so one of the aspects of money historically has been that a lot of the trust was because money was controlled and backed by the government. And I think that there's an underlying belief that if you separate money from the state, the state will respond in a negative way. They'll come down on it, they'll regulate it, they'll ban it, etc. You know, you've talked about previously the idea that actually one of the greatest threats may not be the government banning crypto, for example,

but it may be them embracing it, right? What do you mean by that? Yeah. So I think a lot of people think that the real risk here is that the government might ban this stuff. And I don't think that's a real risk. You know, I think that if you look at how the U.S. government, just to sort of scope it down a little bit, but sort of, you know, the U.S. government as a proxy for most of the rest of the world has thought about this stuff. They've been very measured and thoughtful, right? They've said, hey, look, here are the things that we think are securities and here are the things that aren't. Here's why. You know, we don't want to do an etf right now because we have certain concerns like they've actually been very thoughtful

i think about how they're doing this um and and i think they're being smart because they realize that there is a significant upside here right there is innovation happening there there are billions of dollars coming into this space there are tier one entrepreneurs coming into the space why cut that off right um and really at this point i think if they were to try to do that the real risk is that another another country opens up and says hey why didn't you guys do this here And now if you're the US government, do you really want that to happen in, let's say, China? Is that really the world that you want to enable? And so I think both from a game theory perspective, but also just from a... They're being smart and rational about this perspective. They're saying, okay, something's happening here. Let's foster the innovation in the right ways and make sure that certain bad things don't happen. And those bad things basically are, what does

the government really care about? They want you to pay your taxes, which is totally reasonable. People should pay their taxes. They want to make sure average people are not getting scammed. Also very reasonable. People should not lose their money to scammers. And they want to make sure that you don't give your money to terrorists. Also very reasonable. People shouldn't give money terrorists. So I don't think their demands or their requests are actually that unreasonable. And they'll put guardrails in place and use things like KYC, AML, and Fiat on-ramps and off-ramps to enforce reasonable rules. So if you sort of say, okay, well, through that

lens, it seems like the government's actually being pretty reasonable, then I say, well, actually if you look at the history of how governments have embraced technology, what have they actually done? And historically, they haven't said, no, you can't do a thing, especially in the last 20 or 25 years if you look at um especially authoritarian governments around the world what they've done is co-opted the technology they've said oh this is really powerful this allows us to have scale and leverage and influence in a way that we didn't before so how can we actually co-opt this and embrace this to do the things that we want to do and so imagine uh you know like a a non-american country like i generally trust the american

government they're obviously you know no government's perfect but generally i think long-term has done reasonable things. But there are governments in the world or leaders in the world where I look at that and I'm like, you know what? I definitely don't think you're doing what's in the right long-term interest of your people or humanity in general. What would those people do? And it's not at all crazy to imagine that certain governments around the world embrace this stuff and they say, you know what? We're going to do a digital fiat. It's going to be sitting on blockchain. And we're going to back it with half a trillion dollars worth of our currency. And so now you can walk into any bank and you can turn this digital money into paper money if you feel like it.

Here you go, developing world. Here you go, Southeast Asia. Here you go, Africa. Here you go, LATAM. Why don't you guys use this? Because your native currencies are hosed. Why don't you use this way better infrastructure? And it works on mobile and it's instant. And look, isn't this great? And what do you know? Now they have full visibility into what's happening in all these different parts of the world. and the average person is just not that sophisticated in the sorts of privacy trade-offs that they might be willing to make and to your earlier point it might look to them like a thing that they understand it actually feels really good oh there's a country behind it there's half a trillion dollars sitting in a bank account somewhere like i can always go get my

money this feels really good but they may not realize the trade-off that they've made um and what the consequences of that are so i actually think if you if you look at how successfully modern governments have been able to embrace technology on the internet the real risk actually is that um that governments get really smart about this and start launching things that to the average person feel really good but actually the trade-off that they're making between convenience and privacy actually moves us more towards like a 1984 kind of world which i think would be really unfortunate yeah i i think it's a really unique view and one that probably hasn't been explored enough um but but definitely has merit um let's touch gears a little

bit and uh one of the things as you know you continue to invest you know initially kind of across sectors and now um much more focused on crypto uh you spend a lot of time with founders and that includes you know vetting them their projects companies uh but also giving a lot of advice and um you know this idea that uh maybe your peer investors or also entrepreneurs don't uh, value or underwrite risk as well as they should. Um, what's kind of the thought process there as to why you think that happens and then to, you know, what, what can they do to actually, um, improve their, their ability to underwrite that risk? Yeah. So I think what you're getting at is this conversation that we were having around. Uh, I

think there's this interesting property I've noticed, and I think it's, it's just a human thing, which is humans have these two interesting patterns. So one is we're intrinsically bad at exponential growth. We don't quite have the right mental model for exponential growth because exponential growth doesn't really happen at a macro scale. Bacteria have exponential growth. We don't really see that in the macro natural world. And so our brains are not really wired for that. And another related bias that we have is we're really bad at long tail probability events. This is like sort of a gambling effect. It's like if a thing happens very, very infrequently, like a lottery, we're just bad at calculating those expected values and understanding what the implications of these tail events really are. And so fear kicks in on very, very low probability events, like a plane crashing, and yet people drive around and don't buckle their seatbelt.

And you're like, this makes no sense. Your understanding of tail probabilities is totally off, intuitively. And so when you mash those two things up, you know, the perfect storm of those, both of those things happening is startups, right? They're tail probability events where they, you know, the odds of creating $100 billion company are so, so, so tiny. And it relies fundamentally on exponential growth for that actually to happen. And so what ends up happening, I think, for a lot of founders and a lot of entrepreneurs and investors is they dramatically overestimate the odds of success for things that look not that risky, like a SaaS business. and they dramatically underestimate the odds of success for things like supersonic airplanes or rockets to take us to mars or non-sovereign monetary stores of value that might actually replace gold one day um and it's because those things just seem so crazy that you say you know

what there's like a zero percent chance that that happens but you've seen south startup before and so you look at it like oh of course like this is far more likely there's like a 10 chance this happens and in reality those probabilities are way way closer um you know staff startups are really hard actually because it's so competitive uh it's really hard to hire you're just you know like the odds of success of any startup are actually quite low um and by the same token uh no pun intended you know a lot of these companies that are getting started they're doing these really ambitious things that look crazy it turns out you have no competition and it's actually the you know what you're doing is not reinventing anything you're actually operating within the

balance of physics um or you know within the balance of technology um and so i think we're actually like as investors and as entrepreneurs our intuitive understanding this risk is totally off and so when i look at something like crypto i actually like that most people look at it and say that's absolutely batshit crazy like there's no way that's going to happen right um to me like when warren buffett says that's rat poison that's actually a little bit of a positive signal right like he missed facebook amazon um you know he bought into ibm and it tanked like you know i look at signals that um say like wow these there are these like weird tail probability things that happen all the time um and as humans most humans look at those and say there's just no way that's

going to happen and anytime somebody says that my ears kind of perk up because i actually think the probability of those things happening is literally order of magnitude more likely than most people would intuitively think i think crypto falls squarely into that bucket yeah it's Speaking of Buffett, the one thing I always think back to, he's got this quote where he says, you know, diversification is just for the people who don't know what they're doing, right? And it really is, when you talk to founders who are building incredibly ambitious, higher probability than not of success type companies, what you find is they don't think what they're doing is risky at all, right? It's actually, they understand it at such a fundamental level that it really is pretty incredible to talk to those people because it just looks like a very different opportunity than to those who maybe aren't as familiar or don't have the understanding that they have. Yeah, 100%. And I think as investors, that's the real opportunity. If you can find those mispricings in the world where you're like, wait a second, everybody thinks this has a certain risk

profile. And when you get up close to it and you start digging in, you realize it's way less risky than most people think. And as a result, the bet is so asymmetric that the return profile is so dramatic because everybody thinks it's really, really risky. And actually, it's not. Those, in my opinion, are the best investments. If I look at my portfolio, I have uh i just stack it with those things it's almost like the black swan approach right the same approach of you know just stack your portfolio with those because it turns out those things happen way more frequently in aggregate than you might expect and so that's where you get self-driving cars and supersonic planes and you know are you really gonna you know

get into a stranger's car and drive around or stay at a stranger's house or like all the most bizarre things to me are actually um the best investments yeah i mean you know one of the things that as i've invested more and more of the years that uh every great investor i've ever talked with has some form of or variation of saying is uh you know you've got to do something that's different and you have to be right and that's really where the returns are uh and the things that are different are usually the things that look weird um dumb you know they look a toy right i mean we've all heard these kind of cliche sayings but but they're all rooted in fact right and kind of true. And I think your portfolio definitely shows that. So let's go to another

group that thinks a lot about risk that you spend some time with is the institutional investor crowd, right? So I know that you've spent some time talking with different institutions. Maybe just give us an update in terms of how those conversations have played out, how the institutional investors are thinking about this asset class, given kind of the performance of 2018. Yeah. So I think over 2018, what we saw in the folks that we were talking to was a really interesting mix shift. So in the bubble era, I think you had a lot of people who were looking at this and looking at the return profile and leaning in. And a certain significant percentage of those people then backed out of the ecosystem as the market corrected in 2018.

And then what you had was people who had been tracking in 2017, but said, hey, I think this might be the mania phase. Let me let it cool off. All of those people started leaning in in 2018. And I would argue, actually, the people who are a little bit patient and really tried to understand what was happening and were thoughtful about it, and then started entering the market in 2018 and going really deep on it, I call that really the smart money. So people who are paying attention and taking a very long-term view. And the fact that the asset prices are down gets them even more excited because they're like, okay now is like the place where actually a lot of people are getting scared this is this is the

capitulation and despair zone and that's really when you want to start getting aggressive and so for a lot of the top tier institutions that we've seen uh when we talk to them there are pockets of people inside these institutions um inside these firms inside these um you know uh endowments and pension funds that really really understand this stuff they've gone really deep for the last two years. And they can talk to you about the ETH 2.0 timeline and what they think about it. Or they can talk to you about what's happening with Tezos or how the Merkle mine for LifeGear was super interesting. And they're really championing this internally, and they're pushing it. And they're really, I think, making the case that the fact that this has been uncorrelated in

the ups and the downs for so long is super interesting and additive to any portfolio. and that because the market is corrected um now is actually the time to start leaning in more than leaning out and so we've seen a really interesting shift but the people who who spent a bunch of time understanding this stuff in 2017 and 2018 i think have started to actually lean in pretty heavily um and i think you're starting to see that like if you talk you know most people don't really share who their lps are but if you go talk to a lot of the tier one funds and you start sort of poking around and asking them off the record who's involved, you'll start to see that there's some really tier one institutions that have

started to get involved with these things. It's very, very small exposure. They're not taking very opinionated positions yet, but I think a lot of smart people have realized that some degree of exposure likely makes sense here. Yeah. Well, and I think you and I have talked a lot about a big reason for that is the amount of intellectual capital that's rushing into the space, right? It's the whole idea of just follow the talent. 100%. Yeah, 100%. I mean, and this is this is just one of those other heuristics, you know, like, um, uh, Chris Dixon at Andreessen has this sort of rule of thumb, which is just look at what the engineers do in their spare time and wherever

they're spending, you know, wherever they're spending their spare cycles, that's, that's a great place to be poking around as an investor. Um, and I think a lot of the institutional investors have their own version of that and they look at it and they say, wow, people who were at Facebook and Google and square and, and Docker and all these great companies, um, and have seen those run run ups and have actually scaled those companies and have started those teams and built and shipped those products,

they're all coming into the space. Um, something is going on. And by the way, I think it's very rational. I don't, I don't think it's just a greed for a run up. I think as an entrepreneur, if you look around today, uh, and you try to pick a market, you know, where, where do you actually want to spend your time and you just start running through it and you're like, well, if I do something in social, you know, Facebook probably comes along and has a distribution and do they just crush me? Uh, you know, if I do something in media,

does youtube or enough let's just come along and crush me i try to do something in e-commerce does amazon just come along and crush me um you know if i try to do something in one of these other areas where those guys aren't uh you know i have to deal with bits and atoms usually like genomics or self-driving cars like a lot of where you've seen the best entrepreneurs move in the last few years have this property of being both bits and atoms um and so crypto is really unique in that it's still all bits there aren't any atoms and the incumbents aren't here so there isn't this sort of fear that the incumbent has a distribution advantage or, or all the users already, uh, that they can just steamroll you. Um, none of that exists today. And so as an

entrepreneur, I think very rationally, uh, a lot of entrepreneurs are looking at it and saying, wow, all white space, all bits, no, no having to deal with atoms. And so I can move that much faster and the incumbents can't come after me. And if they try, the incumbents might actually have a structural disadvantage. They may not actually be able to do the things that you need to do to really succeed in crypto. That's where I should be. And so you've just seen this shift, I think in the last 12, 18 months of the highest quality people are at the very least considering crypto. And a lot of them have decided to actually commit to starting companies in the space. For sure. It is. It's something like I haven't seen previously in my career.

I think you're a little bit older than me. And so you were you were able to see this, I think, one other time. But the kind of cascading effect or the acceleration, you know, three years ago, there was people who were, oh, that's interesting, right? I'm aware of it. I'm paying attention through now kind of full-on obsession. And I'm going to go dedicate years of my life to work on this. That transition, I think, happened very quickly. um and to those who are paying attention it's just very obvious um that that's kind of happened on a industry-wide basis in technology yeah absolutely and it's you know if i look at even

my own career uh as as a as an employee and as a founder that has always been the best heuristic right i went to google because i just i did an interview loop there and everybody on the interview loop was was brilliant you just had a conversation with people like oh wow these are all the smartest people are here right now i should just be here i don't know what happens i don't know if the search thing will work but this is like all the smartest people are here right now um and same thing at facebook when we were selling our company you know we talked to a bunch of the other companies in slogan valley and when you went and talked to to the people at facebook you went and talked to mark or um you know chris cox um you know the leadership at facebook in like 2011 you were just

like yep these people are definitely going to take over the world like it's just they are so much better like the amount of talent in this building right now is just so astronomical that they're definitely something is going to happen here and i don't know how long it takes but something amazing is going to happen here and crypto to me feels like that right now if you go to like the really high you know stanford just had the um watching conference and you know it's 150 200 people i think it was up to 400 this year maybe but you walk through the halls and you're like oh my god the brain power in this in this room is just so crazy it's astronomical something is going to happen if you just go to one of these places where it's really high quality people not

the kind of people showing their ico but they're really high quality conferences it's just it's unbelievable the amount of talent in one place absolutely going back to the institutional investors um there's quite a few that listen to uh to the podcast um if i put you in their seat how would you think about gaining exposure to that high quality talent and kind of some of the innovation and opportunities that are going to pop up in crypto let's say over the next kind three to five years? Yeah, that's a good question. I think when we talk to the people that we've built relationships with, generally what we advise is, I think there are different categories of investors here and different ways to get exposure. One is, you might want to have some sort of

really lightweight direct exposure. Maybe that's something like a Bitwise where you're getting market exposure. Or maybe it's you just go buy some Bitcoin and put it in Zoppo. But having some kind of exposure directly to the space essentially for the beta can make a lot of sense and there's some operational challenges about how you do that uh i think there's a category of value that's going to be created here that's going to look like uh traditional venture businesses and so having exposure to venture style vehicles that are investing in those kinds of companies makes a lot of sense and so this is where something like um you know a16z could make sense or some of your um traditional venture funds uh you know like the sequoias of the world or benchmarks of

the world have started to do more of these and get some exposure there. And so looking inside your own portfolio as an institutional investor and saying, which of my existing managers are already giving me exposure here and how much more do I want? But I think there is going to be significant value created there. And then the third is crypto-native, which is where I would put us and folks like the Metastables of the world, where we're doing these things that just... You're buying essentially alphanumeric strengths and you're customing them and you have to write your own software and you're running nodes and it's just like operationally day-to-day what you're doing is different um and the exposure that you're offering in terms of uh for your

lps is just often a very different set of stuff um and and the tactics that you're using to do that are very different so i kind of think of those three buckets so you might just want some broad beta exposure you probably want some venture exposure specifically from experts in the space folks like chris dixon who really get it and have gone deep on this and katie khan and ali and dennis and all those folks at 816z um and then there's a category of um sort of crypto native like doing a little bit more esoteric but um really interesting stuff that doesn't quite fit into one of the existing buckets and that's kind of how i think about it and then it's a really question of how you size that position for sure um yeah it's fascinating i spent a lot of time

thinking about let's call it you know mid 90s um the people who started uh what became the globally dominant investment firms. They didn't look very much like the ones who came before them, right? And it was kind of a new approach, new structure, new skill set, kind of new frameworks, all that stuff. Yeah. Well, and actually it happens every 10 years or so, right? If you look back at, you know, whether it's sort of actively managed funds or index funds, or then kind of the hedge funds and then high frequency and then on a venture side, you know, like the nineties was sort of the beginnings of like the venture capital era into, you know, the early 2000s. And then mid-2000s was the rise of the micro VC for the cost of doing a business

really, really plummeted. And that's where you got the Y Combinators and the SV Angels and the initialized of the world. And now we're seeing this next wave. And each time through, it is very much this like, wait, this looks a little different. Really? You're just going to give people $10,000 to start a company and give them three months to launch? That's not what a VC does. That's weird. Or really, you're not going to hire traders you're going to hire a bunch of phds and you're gonna you're gonna write code and the code is going to do the trading right like they always at the beginning looks a little weird um but i think uh you know it happens it actually happens about every 10 years that you see these

kind of openings happen as the market shifts absolutely well and and what ends up occurring is the things that looked weird right just like with the companies the funds as well that becomes you know whether it's the standard or or uh becomes more popular over time um And I think history tells us that's likely to happen. Yeah, I agree. All right. So before we wrap up, two non-crypto things I want to talk about. One is, what's the most important book you've ever read?

Oh, most important book I've ever read. That's a great question. You know, I have to think about that for a minute. You know, honestly, this is maybe a weird choice, but it might be the Bible. i'm not actually christian uh but i think it might be interesting why explain that more um i think it's it's so religion to me is fascinating in all sorts of ways but um for if you think about uh religion or you know a community of people managing to survive for thousands of years through various degrees of of um of oppression or intolerance it's a pretty

fascinating thing whether it's you know judaism or hinduism or buddhism or christianity um and Christianity having had the impact that it's had on the world for the last 2000 years, um, sort of going to the seminal text of that and understanding it and looking at the properties of it and how it emerged like as a historical thing and how it's managed to survive and evolve for 2000 years. I think it's pretty amazing. Um, and so it just has like a collection of best practices and a collection of knowledge that billions of people around the world sort of snap to and uses

their framework to interact with, with the world day to day. I think it's like, um, to understand that deeply actually helps you understand a lot of the world. for sure the um that's a really fascinating way to look at it um and then uh speaking of fascinating i don't want to uh over promise and under deliver on you but uh you are somewhat of an alien expert oh man so uh those who uh who listen to this quite often know that i usually end up uh i ask about aliens and then i let you ask me a question but uh but with aliens tell us kind of your uh your theory and why so uh so interested in uh in all of that yeah and actually um oh man i could talk about this for hours too we should do a separate we should just uh we should

do an hour on just aliens at some point um so absolutely down people will hate it but i'm in oh yeah that's yeah it might have to be a one-on-one we'll go get some beers or something so um so it actually it comes from a really similar uh place as the religion thing which is i think aliens are like the modern form of religion uh like it's like a technologically sophisticated uh master race that has solved a bunch of problems um and there's if you look at it kind of like maps really similarly in a lot of ways where um you can sort of like ascribe the things that you would have ascribed to god or religion or um you know uh whatever and you can sort of ascribe it to a technologically superior master race but i think um kind of

more from like a science perspective i think it's one of these things that if if we were to find uh intelligent life somewhere i think it would it would like really really reset how humanity thinks about humanity like it would put us in a totally different context i think positive or negative i i think positive i mean i'm long on humanity so i tend to be an optimist about this but i think in a very positive way actually because i think all of a sudden we would realize we're maybe not that special um and we would start to have to think about what are the consequences of this um and it would actually i think create you know i think like ronald reagan had that quote in the 80s it's like um you know what would happen if all of a sudden you know would the

nations of the world all of a sudden put down their arms if we all of a sudden realize that there were aliens and there was potentially an alien threat um so it opens up a whole interesting set of questions but anyway that sort of sparked my my interest years and years ago and um and i kind of went down the rabbit hole and have read everything about the space um and i'm you know i think i'm i'm basically convinced at this point that i think inside our solar system we're going to find microbial life and i give that like a 98 chance like in the next 10 years i think we'll 10 to 20 years i think we'll find that maybe it's inside you know under the surface of mars or maybe it's in europa but i think somewhere in our in our solar system we'll actually find microbial

life which i think will be amazing and we'll reset humanity in a new way um and i think the odds of intelligent life existing um outside of our solar system but inside our galaxy is probably 50 percent um the really interesting question in my mind is do they coexist with us on the same time horizon right we've only really been around as an intelligent species for 10 000 years let's say 10 000 years as a civilization um and so you know i think it's basically 100 that an intelligent species existed somewhere inside the galaxy at some point over the last 10 billion years um uh and and there's you know i would say 50 chance that somewhere uh you have an intelligent species that exists right now um probably separated by a significant distance that we

can't actually meaningfully interact with them but um unless we've been you know faster than speed travel or something but um but i think that's actually like 50 50 so i i think it's actually we'll figure a lot of the stuff out probably in like the next 30 to 50 years i think we'll we'll stumble into the microbial thing for sure and i think there's a 50 chance that we figure out that there's actually intelligent life somewhere else so i'm definitely on board with the microbial life uh i'm actually shocked at how many people don't think that's going to happen um which you know kind of makes me question why i believe so heavily that uh so good to know that there's somebody else out there that means well it goes back to what we were talking about

before man it goes back to that tail probability event right it's like we if you think about where we have existed as entrepreneurs and as investors everything that's happened like positively in our lives has really been this really low probability tail event uh that really shouldn't have happened you know like facebook shouldn't have ever been as big as it is google should never been as dominant as it is the internet may never have happened they're like all these things that just such crazy things had to happen for all those things for the world to be as it is today but i think we're probably primed to think about these things as much more likely than most people yeah no i think it's fair um all right so with the uh the alien vent the reason why i started

talking about it uh at the end was uh one night i was laying in bed and i had this thought that almost every time that we've seen um aliens represented whether it's movies you know sci-fi etc they are in a uh human-like form right we basically think of them they may look a little weirder maybe their heads are a little more um kind of oval and slimy right all that kind of stuff but i never saw alien pets and so i started thinking about you know are there is are aliens a multi-species type um you know thing that's going to show up and you know do they actually have pets or not. So given all of your years of deep, deep education and interest in aliens, what's your take on the alien pets? My answer would be yes. If there ends up being any biological form

that emerges that's intelligent and sophisticated, I think the leap from single cellular life to multicellular to really complex life is such that you're not going to get just one animal that emerges. You likely get multiple life forms that emerge into that sort of multicellular stage. Um, and I think any, any sort of intelligent life form eventually evolves to this place of realizing its place in the universe, uh, and seeking sort of like that kind of connectedness. Um, and it's like, it sounds a little hooky, but I don't think that's like that, that crazy. Um, and so I don't think it's that crazy to imagine that if there is intelligent life, that they have something to the equivalent of pets that give them companionship.

Yeah. I think if somebody can get to the point where it's more than 50, 50 odds that aliens exist, they've got to be pretty heavily weighted towards uh like that it'd be you know alien pets right i get really scared uh uh josh brown um actually came on and he swore that he thinks uh ghosts are more likely to be real than aliens and i banished him from a podcast he's not back anymore that blasphemous view that's hilarious um all right man uh so before you finish up uh i usually let everyone ask me one question anything that uh you want to talk about yeah i i have two questions i'm really curious what your favorite book is your most influential book as the first question

uh so actually it's pretty similar to yours in one way um it's got to be uh guns germs and steel And it's probably similar in the sense that it's kind of the evolution of humans across different geographies and different societies. Not as much of what I would consider the religious or kind of, you know, moral and ethical bent and more of just like science and facts, etc. But I remember reading it years ago and just thinking to myself, like, wow, like, not everyone has lived the same life that we've lived, right? You kind of like, you know, the idea of the people who dominated early kind of ancient civilization, they just figured out how to get from one island to the other, right? they figured out how to sharpen a weapon i mean just very simple things like that um i think that had a really uh really profound effect and just you know you put some context things like the internet right like crypto etc um so i'd have to go with that one okay okay so my i'm just curious about that one my real question for you is what do you think is like the craziest thing that you believe that most people don't actually believe other than crypto yeah yeah so crypto there's

try a whole bunch of stuff. Look, I'm actually probably, it's similar to some of the alien stuff in that I am more in the Elon Musk camp than most, I think, of this idea. Maybe not so much that we have to be a multi-planet species, but that it's a good idea and that it is likely for us to, uh, accomplish that in my lifetime, right? Like the idea that, um, it's probably not a huge colonization. Um, it may be just science, you know, only type thing. Um, but, but I just have this like inevitable feeling, um, around, uh, Mars and kind of the colonization of Mars. Uh, and then actually kind of tangentially related to that, uh, also there's like inevitable feeling, um it's probably not this idea of like curing death if you will but more of just like a

significant extension in life expectancy right and so you know it almost fits in the conversation of like once you've seen a number of these kind of outlier situations become reality um or outlier uh potential everything else becomes more likely than not right or maybe not more likely than not but just like it's not as big of a stretch that the stuff that happened and the idea that like i don't want to bet against technology i don't want to bet against innovation and progress and so those two things are probably you know when i talk to other people uh some of the more far out things um we actually invest i invested in a company that uh it um uses uh some special technology to deliver like cryogenic freezing to the brain and so then you you're gonna love this

right so literally uh what they basically do is um they have a way to structurally preserve the brain and they started out doing this with you know like a rat and a pig etc oh is this a yes it is actually and yeah and really the the thought process behind it was like there's a bunch of science that needs to be figured out how to just human brains you know how do you deliver the technology etc but really it was could you once you preserve the brain structure could you actually download um the electrical connections and the memories and the knowledge and the frameworks and and kind of all that stuff to uh preserve it and i don't know they're the probabilities probably less than 50 percent today right that that stuff is possible or going to

happen but if it happens one it's super powerful and two um at the rate that technology is advancing uh i probably feel like every day or every year it gets more likely than it was the previous year um and so i think that stuff is you know one just personally interesting to me and then two um you know i don't think there's a lot of people who walk around uh thinking we're going to be on mars or you know the life expectancy is going to be 200 years type stuff yeah yeah yeah i agree i agree um but all right man listen this was a lot of fun we're gonna have to uh do this again we might even do a alien special at some point looking forward yeah listen i'm a huge fan of what you guys are doing i think that um you know you guys are definitely at the forefront of a lot

of this uh in the crypto space so i really appreciate you coming on there's a lot to do it again all right looking forward thanks for the time all right still there yeah still there Okay. All right, cool. Give us two seconds here. Let me just make sure. Mike, are you there? Yeah. Let's see. We've got somebody who's recording it remotely, and I want to make sure that before we hang up that he's got it here. Let me call him. Who knows? He might have fallen asleep. he must say we're really boring

hey pom what do you think the odds are that that aliens have actually visited us oh man so one basis point i i don't know no i i listen it it's the number one thing people ask me about aliens after listening to me joke around about alien pets uh is like you know what if they're already here type stuff um i'm probably in the camp of like they haven't visited us and like revealed themselves to us there is probably a higher potential that they are aware of us and we're unaware of them yeah like the zoo hypothesis basically we're like quarantined off yeah like like you know the uh the whole thing with like harder professor who's you know doubling and tripling down and swears that uh you know that

that you know unidentifiable unidentifiable object was like a spaceship right yeah i mean again you can let the conspiracy theories run wild but that's a pretty big claim and like even more important double or triple down by somebody who's very well respected and so maybe he's right maybe is wrong but that probably is worth paying attention to yeah what do you think i think it's probably unlikely that like any life forms actually visit i think that the odds that it's like a robot probe is is definitely pretty high i mean we've already made it outside of our solar system so i don't think it's crazy that like von neumann probes are floating around and inspecting stuff and they're pretty sophisticated about being able to hide themselves

yeah i mean look that would be wild if uh we uncovered that basically they were somewhat aware of us but we're uh trying to figure out more i mean now you know because part of it is uh also it's not just like the fact that we now know that and so what are all the reactions that we have to that but it's if the public knows what happens yeah totally well i mean this is this is the um yeah i mean this is this is the the sort of conspiracy theory around like how the military is just 10 years ahead of where everybody thinks they are right it's like they actually have acquired some of this tech um which i don't think is actually true but um i mean even some of the stuff that the military can do today is just so crazy relative to what people think the military

can do exactly so to me it's like the tie back to aliens is like basically if that's what humans can already do and we're i mean we're really only i don't know 300 years into science like how how old is like modern science really yeah that's actually a very good point um like we're actually not that far along how old would i'll call like telescopes and kind of you know things that are not the naked eye and our ability to probe just outer space not even you know galaxies etc it can't be that old yeah let's say galileo galileo was like 1560 ish that's like when he was born so you know he's an adult so like 1600 let's say is the telescope so that's you know that's only like 400 years old man we're uh we're pretty that's like but that's crazy progress in 400 years we

went from like figuring out that you could look through a lens to look into space to like going to mars in 400 years that's bananas for sure and part of it too is um you know the part i think with musk that just absolutely blows me away the you know when you were talking about this idea of like the first principle stuff is the guy just literally gets right to the point of okay so the most expensive part is the rocket why is the rocket so expensive oh because uh we can't reuse it well why don't we just put a reusable one another word from our sponsors at total they're kind of like kayak which helps you find the best flights but total helps you find liquidity by aggregating decentralized exchanges and optimally routing trades for execution remember that's

total.com slash pomp t-o-t-l-e.com slash pomp go check it out let me know what you think tweet at me i'll drop you some fire emojis total.com slash pomp ethereal summit returns to new york city this may 10th and 11th to kick off blockchain week and offer you a chance to go deep into the heart of crypto, blockchain, and Ethereum. Get up close and personal with outspoken crypto leaders like Mike Novogratz, Joe Lubin, Tushar Jain, Danny Ryan, and yours truly. Ethereal Summit is where you can get into the mix with the builders of blockchain and Ethereum. It's less shiller, all killer. That's a trademark. Less shiller, all killer. And it's way more than just a blockchain conference. Check out etherealsummit.com with my discount code POMP

to get 20% off tickets to come hang with me and hundreds of the brightest minds in blockchain. at Ethereal Summit, New York. May 10th and 11th at Pioneer Works in Brooklyn. Les Schiller, all killer. Etherealsummit.com. Hey, everyone. Pop here. If you like this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off The Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate

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