The Prof G Pod with Scott Galloway - Smart vs. Stupid Risk Taking — with Nate Silver

Episode Date: August 15, 2024

Nate Silver, the founder of FiveThirtyEight and Substack writer of “Silver Bulletin,” joins Scott to discuss his latest book, “ON THE EDGE: The Art of Risking Everything.” We hear about the role of risk in shaping modern life, his background in election forecasting, and his thoughts on Kamala Harris’s VP pick. Follow Nate, @NateSilver538. Follow the podcast across socials @profgpod: Instagram Threads X Reddit Subscribe to No Mercy / No Malice Buy "The Algebra of Wealth," out now. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 312. 312 is a year ago belonging to Chicago, illinois in 1912 the titanic hit an iceberg and sank and the girl scouts of the usa were founded why do girl scout cookies taste so good child labor go go go Welcome to the 312th episode of the Prop G Pod. The dog is on vacation. For the rest of August, I go to one of those dog farms where I play with 30 other dogs, roll around and deer urine. You know, the usual. August. Augusto.

All month long on Thursdays, you can expect conversations with blue flame thinkers, innovators, professors, authors, and the like. I didn't write that. I would never say and the like. Today, we're sharing our interview with Nate Silver, the founder of FiveThirtyEight and the New York Times bestselling author of The Signal and the Noise. He also writes the sub stack Silver Bulletin. We discussed with Nate his latest book, On the Edge, The Art of Risking Everything. I could write a book called On the Edge about fucking depression, anxiety, and turning 50 and looking like you're fucking 80 years old. That's what it would mean to be on the edge, Nate. Anyway, we hear about the role of risk in shaping modern life,

his background in election forecasting, and his thoughts on Kamala Harris's VP pick. That's kind of, that's what you call timely. That's why you come to the PropGPod. That's why you come to the PGP, if you will. We really enjoyed this conversation and think you will as well. Nate, where does this podcast find you? At home in New York, Manhattan. You live in the city. Where do you live in the city? What would charitably be called Chelsea, kind of by Penn Station, Madison Square Garden, basically. So let's talk about your new book, On the Edge, The Art of Risking Everything. You investigate the river, the community of like-minded people whose mastery of risk allows them to shape and dominate so much of our modern world. Can you explain what you mean by the river?

So I have a very kind of geographic mind. I have like a good geographic memory and I like looking at maps and things like that. So I kind of wanted to create a metaphorical place where a certain type of person lives. And this type of person has two basically defining characteristics. One is that they're super analytical.

They're kind of in the money ball, math nerd tradition for the most part. So they're playing poker or founding companies or things like that. The other is that they're extremely, insanely competitive, which makes them really risk-taking for the most part. They want to win. They want to prove things to themselves and other people. They aren't afraid to stand out. They can be contrarian to the point of sometimes being more than a bit annoying, I think. But I kept finding the same personality type in all the different fields that I cover. I mean, I kind of started in the world of poker. I actually have a background as a professional poker player.

But if you talk to people in Silicon Valley or people trading crypto or people making sports bets or even the effective altruists who we'll talk to a little bit later and the AI people. They all have this kind of same competitive nerd analytical personality in mind. They speak the same language. And it's a small community. The river is a community of mostly successful elites, I guess you'd call them. And you go to Silicon Valley, it's like kind of a small world still. It's not sprawling through thousands of people. The top VC firms might have a dozen partners or something, but not

hundreds. And so there's more community than I would have thought. And you've seen that community have a rivalry more and more with this other community that I call the village. And talk about the distinction between folks in the river and folks in the village. Yeah. So the village is basically, if you think of it as kind of New York, Boston, Washington, maybe except for like Wall Street. So it's like government, media, and academia. So the kind of quintessential river village rather institutions are like Harvard University and the New York Times. So it's politically progressive for the most part. As compared to the river, it's much less analytical.

In fact, it's very concerned about social status and social appearances. The ultimate punishment in the village is to be ostracized or I suppose canceled. That's becoming a little bit outmoded. And it's risk averse. It's kind of neurotic. It was much more cautious during COVID. It's afraid of offending people. And there's a rivalry between these two communities increasingly. When you see things like, I guess it was last year, maybe in January, when you see hedge fund investors attacking university presidents who are speaking before Congress, that's an open conflict, I would say. When you see people in Silicon Valley going more to war with the Democratic Party establishment, we're actually seeing this play out more and more.

I mean, loosely, the words that come into my mind are libertarian versus establishment. Is that fair? I think the river would champion itself as kind of lowercase L libertarian and would champion itself as being apolitical. But of course, it's often hypocritical. People go from being apolitical to being like Elon Musk, where you're very politically charged up on a lot of issues. I mean, if you did a survey of the people I call Rivarians, they'd probably be three to two Democratic before Republicans still, or two to one maybe. I mean, most communities of elites today where you have high educational credentials tend to be Democrats of the United States, but it's notably more varied than the village, which is kind of uniformly 95%

blue, Democratic, progressive. Talk about what you think are the key habits of highly effective risk-takers that you talk about in your book. There's a list of 13 of these in the book, and they kind of fall somewhat into personality characteristics and somewhat into psychological characteristics. From a psychological standpoint, some degree of detachment where you're focused on process and not results. If you play a poker hand, you can play the hand perfectly. And if your opponent makes her flush draw, you're still going to lose that hand a third of the time. That process orientation, I think, is counterintuitive for most people. Personality-wise, some of it does come down to simply being willing to take risks

and being courageous. Maybe the single most important defining characteristic is being cool under pressure. In most walks of life, higher stakes moments vastly outweigh the day-to-day. If you do make it deep in a poker tournament playing for, you know, a million-dollar first prize, it's more important by a factor of 1,000x than your, you know, Tuesday night beer league game, for example. Learning how to handle pressure is important. I mean, I did, like I said, talk to mostly people who are doing analytic, math-oriented things, but I also talked to an astronaut, an explorer, a military commander, people like this, and I heard some of the same things over and over. One thing I heard a lot is don't try to be a hero when you're under pressure, when you're like literally in outer space and some red light is blinking.

Trusting the process, following protocol that kind of frees up bandwidth for dealing with an emergency versus just like winging it. So it's a lot of preparation and experience and coolness under fire. It's interesting because, well, the way I would try and translate that to entrepreneurship is I don't think I'd be nearly as good an entrepreneur now as I was when I was a younger man. Because when I was a younger man, I had a bit of sociopathy in the sense that shit could be awful around me and my business, and we were running out of funding. And I'd be stressed, but I would still be able to sleep at night. I was almost sort of sleepwalking through life, and now I'm too anxious. I'm too kind of concerned about the downside. Do you think there's any truth in that? For sure. I think it's not a coincidence that

more founders are younger, although there's probably some stereotyping that takes place in VCs. Poker players are often younger too, despite it being a game that it takes a lifetime to master. That's partly also a matter of physical fitness, I think. But yeah, the ability to like shut out distractions and be really focused is really hard and maybe not entirely healthy sometimes either. But yeah, I actually gained more responsibilities, right? So I played, as I do most years, I went to the World Series of Poker this year and played, but it's an election year. I have this book coming out. So there were like constant distractions and it was in my best interest to manage those, right? I can write newsletter posts and gain subscribers or book interviews and publicity for the book. But still, yeah, part of what comes with being an adult, I think, is you have a little bit more to lose. That can make you more risk averse. You have more responsibilities.

And that can be okay. But if you're a VC trying to invest in a founder, you want a founder who has kind of literally insane single-minded focus, maybe for a period of 10 years, whatever runway period that you have, and that not be a younger person's game. I've always thought people who are risk-takers and are successful are good at taking smart risks.

In other words, to a certain extent, the risks they take, they do the analysis and go, there's a greater upside here. Betting on a team that has a 50-to-1 chance, you get 50-to-1 odds. Seems like crazy risk. But if you actually have done the analysis and say the likelihood is more like 30 to 1, that's a good risk. How would you coach young people around how they approach risk? I think probably 90% of people, of course, it would be your probability. I think probably 90% of people could stand to be more risk-taking, at least in terms of their career lives. I'm not saying, oh, go do drugs or something like that. That's a personal choice. Look, we have a lot

of evolutionary training where we don't live in this kind of world of abundance that we do now, where we don't have as much of a safety net if you fail. And where there was less of a war for taking risks. You go out and get some infection or something something and there's no cure for it and you die. And now we're in a world of abundance and we can afford to think more in terms of expected value, which means kind of what is the outcome you get on average when trying this thing? Because there's uncertainties in the world. If you play poker, then some percentage of the time you're going to win the tournament, more often than not you bust out. But is it a plus EV, positive expected value gamble on average? Now, if you're a founder and you're making these long, prolonged 10-year bets, then maybe it's a little bit different, right?

I mean, the kind of brilliant thing that venture capitalists do is they gather together all these founders who are making long-shot bets with probably positive expected value, but many of them will fail. If you make enough of those bets, then you're kind of guaranteed to do very well for yourself, right? Enough of them will pay off and you have a fund of 15 or 20 or 25 companies every year. Then sooner, and you have your pick of the litter,

you're picking the best founders, then that's a very good business. For a founder, it requires, I mean, I think it literally does require more risk. If you are any one founder, your company may fail, which is partly why, you know, you get people like Elon Musk, who like literally, if you read the Isaacson book on him about Elon playing poker, he would like literally just kind of go in, go all in every hand until he'd lose and he'd walk away from the table and do something else um he's in that 10 group where he's probably taking on too much risk i would think but these are often people that have chips on their shoulder that almost have like an evolutionary or genetic kind of propensity to take risk yeah i wonder if they're to a certain extent i'm not talking about elmas but they have their addicts in the sense that they take risk, and kind of the new dopamine balance after taking some risk is to have that rush.

You have to take more risk. I worked for a hedge fund manager who at one point was the, I don't know, I think the 50th or the 70th wealthiest person, and he kept taking these these just outsized crazy risks until he ended up broke. And he just has like almost a psychotic approach or aggressive approach to risk. I want to bring it down to entrepreneurship because I've been an entrepreneur for most of my life and have raised a lot of money from VCs. And where I thought there was a bit of a disconnect or dislocation between their interests and my interest is that they would always encourage me as the CEO or the founder of a company when it was going well to go bigger, harder, bolder, because they're looking for billion-dollar exits to pay for the 70 or 80% of their portfolio that doesn't even get its money back and half of them

go to zero. And they need those big pops. And I always thought, okay, I don't need to be a billionaire. I need to have economic security. And this is where our interests diverge because I used to advocate for and usually would ultimately would win for selling the company. I sold my first company for 33 million. Our investors were disappointed. I sold my last company for 160 million. Despite my investors tripling their money in 27 months, they were disappointed because I didn't have a bunch of chips on the table. I had one big chip on one number. And so it creates a divergence in risk. Can you talk a little bit about where, you know, are there other divergences, whether it's an employee and you're, you know, of a company or an entrepreneur or founder and VCs? How do you of that VC-founder interaction most of the time. And it's partly why they're picking people who have huge variance in their outcomes. You're not going to pick somebody to run a chain of three ice cream stores in Boise, Idaho or something, where the upside is capped. You want people that wind up on the extreme tails because the thing you hear over and over and over again from everyone in Silicon Valley is like, you can't

miss out on the 1,000x, x-ing your money opportunity. You cannot let Mark Zuckerberg walk through the door. So the downside of that is you sometimes get a Mark Zuckerberg and sometimes you get a Sam Bankman Freed or Elizabeth Holmes or whatever else. I mean, even in my own world, I kind of run, I guess, my own content business and realizing that it's actually a much better business where it's smaller scale, right? I keep more of the profit myself. I don't have a bunch of employees whose marginal contribution can be debated, I suppose. And so, yeah, I found that when I'm smaller, I actually am happier and more successful financially. But the obsession with scale, especially in the media business, which is maybe its own special beast, but the obsession with scale makes sense in most

contexts from a VC standpoint, but may not be in the interest of the founder. In terms of your own personal life and risk-taking, I've always bifurcated it, and it may be incorrect. But again, just trying to reverse engineer this into actionable advice for young people. There was my risk profile before kids and then after kids. And I left investment banking, which on a risk-adjusted basis was what I should have stuck with, but I wasn't enjoying it and I wasn't very good at it. And then I moved home with my mom because I'm like, oh, I don't know what I'm going to do. And not knowing what you want to do and quitting doesn't pay well, so I moved back in with my mom. And I took risks. I applied to graduate school, started businesses. My first business, I didn't have any money, but my girlfriend was making money, so I could

take that risk. Once I had kids, and I think this is the correct instinct, I'm like, okay, shit just got real. Me and my two sons can't move back in with my mom or it's going to be very uncomfortable. And it absolutely changed my risk profile. A lot more anxiety, a lot more concern around risk, but I think that was the correct emotion. Would you describe other seminal moments in your life that you want to think about risk before and after? And doesn't this all add up to when you're young? Is it time to take risks? I think so. I mean, I don't have kids, and so that's like one more reason to kind of gamble on your upside and not necessarily worry about a secure paycheck,

I don't think. Yeah, look, I think that heuristic is basically right, that when you're younger, you have more opportunity. I mean, look, I think people sometimes set the bar too low as far as life outcomes that they're satisfied with. Because my first job out of college, I had a consulting job. I was something called a transfer pricing consultant, which is about as boring as it sounds like, and quit that to play online poker, basically, where I was making more money and to work for a internet startup that wrote about baseball statistics. So quitting a safe consulting job is a somewhat risky endeavor, but it proved to be a better decision. But I think people need to have a higher reserve price, to use a slightly technical term, for how they're spending their time. There's also studies. I mean, Stephen Levitt of Freakonomics

did a famous paper where he would actually have people literally flip coins to make major life decisions. So should I move across the country or quit my job or get divorced or get married? And found that when people flipped a coin, they told them to make a change, they wound up being happier on average. The importance of quitting. I don't know if you had Annie Duke on the show, former poker player who now writes business books, wrote a book called Quit. Getting out of a bad situation while you can or maybe, you know, half a move ahead is an underrated skill, I think. I think people are too willing to muddle through, not have a long enough time horizon and wind up being mired in an unhappy place. I think that's a great insight.

And I just wanted to stop on that. There's this mythology from Donald Trump down, like never give up. Oh, there's a time to give up. I mean, absolutely. There's a time to leave. And I would say that's where a kitchen cabinet comes in to advise you that, okay, you're banging your head against a wall. You need to move on to different opportunities. Several chapters of your book focus on Sam Bankman Freed and the crypto world. What do you think people miss about FTX and Sam Bankman Freed and how it relates to risk? So he is certainly on the extreme right tail of risk-taking, where he literally said in repeated interviews that if he could push a button and gamble for the future of the universe,

and either the universe is destroyed or 51% of the time it winds up being twice as good, then it's a positive expected value bet, so he'd make it. That's a pretty insane way to look at life. And I think people were too unwilling. I think there was a little bit of a kind of boy genius myth around Sam. And there was a little bit of a bystander problem where it seemed like all these people are vouching for him, therefore he must be smart, and therefore people weren't willing to point out sometimes crazy and kooky things that he was willing to say. And it's a little bit of a cult of personality, the cult that the village or the river would think it avoids, it actually winds up having with founders like SPF sometimes. I think he was also not a very good risk assessor,

despite thinking of himself as one. I talked to a lawyer, right, as his criminal trial in Manhattan was taking place, and the lawyer said he should not take the stand. He should cut his losses and try to minimize his sentence at five to 10 years, because if he takes a stand, he's for sure going to perjure himself, which he did. And he wound up getting like 20 years instead. Um, when I talked to Sam in Palo Alto, you know, six months before the trial, I said, what if you were offered a two year plea deal, two years, and then, uh, then some restrictions on what you can do afterwards. So kind of more than a slap on

the wrist, but not that much more. And he said, I'd have to think about it. Right. So, I mean, he was 10 X off of what the realistic outcome was going to be. He got 20 years, of course. And I think, look, as a poker player, I've seen lots of people in the SBF typology. So kind of smart, nerdy, maybe a little bit on the spectrum, neurotic, Adderall, whatever, quick on his feet. And not all of them are as smart as they're cracked up to be. So I think people need to have more skepticism of him, both kind of before, during, and after the bankruptcy. I would argue that's a perfect example of just ridiculously stupid risk-taking. I can't imagine how frustrated his lawyers must have been. Like, okay, you are doing everything wrong here. I'm curious, have you tried to relate some of your thoughts and

analysis around risk-taking to people's relationships or personal life? You said you don't have kids. I don't know if you're in a partnership, but have you thought about approach to risk as it relates to relationships and outcomes? Yeah, I've been in a long-term relationship, no kids. I guess I'd say, frankly, not as much. I mean, I'm trying to keep, it's already a long book, it's like 500 pages, so I'm trying to keep the scope of it somewhat narrow. I think some of it does apply, that people probably are settled a little bit too easily sometimes. I think the importance of what I call, or not what I call,

the importance of optionality, I think is really important in both business and interpersonal affairs, where are you walking down a hallway where there are a lot of doors open, right? It's kind of a stupid analogy, but I've lived in New York for 15 years now. So my partner and I, we have a pretty good group of friends. And so let's say you don't have plans on a Thursday night. Well, there's a whatever one in three chance that someone will text you and say, Hey, I just made a reservation at this new dinner place, or you want to go to the Yankees game. Just these kind of cool opportunistic things. Let's go to an art gallery that you don't have if you haven't facilitated

different options in your life. We'll use the word optionality. You're an analytics guy. Do you think it makes sense to get married? We'll be right back. We'll use the word optionality. You're an analytics guy. Do you think it makes sense to get married? Probably for tax purposes and stuff like that i mean there's still i mean probably my partner and i should should think about it at some point um yeah i think there are still benefits uh from being married in terms of just the way the tax code treats it and things like that which i know is like a very very very clinical answer. You know, I do think sometimes commitment is also, can also be a good thing. I mean, I think there can be paradoxes of choice where

you have too many options. That's actually kind of one thing I worry about out there in the world a little bit is that like, if you're somebody who's really good at taking advantage of optionality, then the world's kind of your oyster now, right? Now you can work from home and have five different jobs, which I kind of do now. And it's like, but it's a lot to balance. And if you're under duress, right? If you do have kids or an older relative that you're taking care of,

if you're injured somehow or incapacitated somehow, then it becomes a lot harder potentially. So I wonder if it leads to like a little bit more of a, even though like Scott, you might take advantage of it or I might, I wonder if it leads to a little bit more of like kind of a winner take all world. I think you see that on online dating. It's great to be, I mean, there's income inequality gone crazy in online dating. My understanding

is the top 10% of most attractive males, if you will, get 80% of the opportunities. Oh yeah. That wouldn't surprise me one bit. And in some sense, I mean, look, the capitalist internet-driven economy is extremely effective at delivering whatever the efficient outcome is. And mostly speaking, I am pro-market, but we should think about situations where the efficient outcome, the market efficient outcome is like not serving the greater good necessarily. And that might eventually kind of market correct itself somehow. I'm not quite sure how. I've been in the same relationship for a long time now. But yeah, that's a great microcosm of it. I agree. So let's shift to politics. So Nate, who's going to win the election? How's that? Let's kick off there.

Who do you think is going to win? I can give you the honest dodge, which is our model as of this morning we're taping this. It's literally about 50-50. Joe Biden had been a pretty heavy underdog to Trump, and his position, in fact, was worsening. In our model, he was at about 25%. I think it might have actually been high given that he, his fundraising had dried up that he wasn't really capable of running a full-fledged campaign. With Trump Harris, it's a lot more even. It's important for Democrats to remember that Democrats have a disadvantage in the electoral college. So she is a favorite to win the popular vote. She is ahead for right now in most polls of the popular vote. But the electoral college,

Pennsylvania, Wisconsin, Michigan, Georgia, et cetera, is liable to be very close. So yeah, I wouldn't want to wager a lot of money on this currently, but she has had momentum. I mean, it's been a pretty good rollout to her campaign. And by the way, I mean, this was an example of smart risk-taking from Democrats, right? Is pushing Biden aside. And they did push him aside. I don't buy this rhetoric that like Biden benevolently decided to resign. I mean, Nancy Pelosi and Chuck Schumer were, yeah, it was kicked out. They were pulling every lever they could. And that's bold from a party that's often kind of triangulating and risk averse. And so, and so credit to them for giving

themselves a 50-50 coin flip instead of a personally, I think, very likely loss with Biden. Now they have a real chance. Speaking of sort of triangulating and taking the less risky choice, I was really hoping and thought it would have been a great move to choose Governor Shapiro as the VP. And they've picked Governor Tim Walz, who, by the way, I think brings great sort of like dad energy. And my guess is they're banking that he has regional appeal across the border states. What are your thoughts on the VP pick? And do you think it, I mean, at the end of the day, my gut is that we always tend to overestimate the impact it's going to have. But what do you think of the Walz pick relative to kind of risk-taking and moving her chances up or down? No, I'm 100% aligned with that take of yours, Scott. I think Josh Shapiro is a star talent,

and he's demonstrated empirically his popularity in the most important swing state, Pennsylvania. And Pennsylvania, by the way, it's a swing state for a reason, which it has urban areas, it has some diversity, It has rural areas. It has suburbs around Philly and Pittsburgh, obviously. So he has an actual demonstrated empirical track record. And look, I think Tim Wells is a pretty good pick in a vacuum. But I did think it was a little bit risk averse. If she was a 70-30 favorite or an 80-20 favorite, that's when I thought it might have been the right choice. That's when it's like a do-no someone who kind of really gets moderates excited

because actually the Democratic base isn't as large as it once was. And if you look at the voter registration numbers, then it's more even now than it used to be. And a tie goes to Republicans in electoral college. So I don't think it's a terrible choice. I think I'd give like a B minus, C plus. But I think there was like a slightly riskier,

but higher expected value option in Shapiro that she declined. So the Trump campaign calls you, and then the Harris campaign calls you and asks for your advice on the two or three things that you would do in terms of messaging or tactics to improve their likelihood of a good outcome. First to Trump, they call you nate what are your thoughts on what we should be doing more or less of i'd say lay off the um anything involving race gender sexuality i think that's the trump campaign at its worst and the temptation to do that with uh you know black indian american woman as the other nominee it must must be tempting. I think Trump has continued to pivot to the center on abortion to some degree. Of course, his party was happy about Roe v. Wade being overturned, but he's tried to downplay that. And I think in general, moderation is smart.

And I think focusing, I think the two big liabilities for Democrats, maybe three actually, immigration is one. I still think the economy is potentially a big liability for Harris and Democrats. It's good by some measures, not as good by other measures. We, of course, are facing a lot of volatility recently in the stock market. Who knows? It'll be up and down on the day that people are listening to this. And focusing a little bit too on tying Harris to Biden, because Trump was beating Biden by four points or something like that in national polls by the time that Biden quit the race. That she's been the vice president, that you don't get like a race board once you've been the vice president for four years, that you kind of own that track record. Maybe even owns the fact that like Biden's health and fitness are things that the White House has not been entirely

straightforward about. So those seem like it's pretty basic stuff, but tack to the center, avoid creepy race stuff, and focus on the problems she inherits from Joe Biden. Now do Harris. Go back in time and pick Shapiro, but I guess it's too late for that now. I think they have otherwise run a pretty good campaign. They have kind of unapologetically triangulated to the center a little bit more. They have tried out some new arguments. This argument about calling Republicans weird, for example. I'm not sure it's fantastic.

And objectively speaking, kind of most people who are into politics are pretty weird, the Democrat or Republican, but it's a new look. And I think she appreciates or her campaign team appreciates how much young voters in particular were tired of the same playbook for three elections in a row, right? In 2016, younger voters wanted Bernie, but it was, oh, you have to hold your nose and vote for Hillary. In 2020, they wanted Bernie again. Oh, it's a pandemic. You have to hold your nose and vote for Donald Trump, right? In 2024, no primary process at all. And Democrats were asking way too much of voters, I think, to ignore the fact that Biden had clearly lost a step or two or three or four, and it just wasn't working at all. And he was losing support among core demographic groups like young voters, especially younger voters, Black voters, Hispanic voters, Asian American voters of color. So I think she's been pretty smart so far, apart from the VP pick, I'd give her a, you know, a good grade for the first two or three

weeks of the campaign. So I agree. I thought Shapiro was a shoo-in. I just looked at all of these boxes he checked, including, you know including being this incredibly popular governor that would have delivered whatever it is, the 19 delegates in a swing state. Have you done any, my guess is they looked, they're hoping that Waltz has that type of appeal across the region, that he helps their case in Wisconsin and Michigan. Have you seen any analysis around whether his popularity in Minnesota is cross-border and is regional? I tend to doubt it. I mean, remember, Wisconsin and Minnesota are big rivals in football and hockey and things like that.

And even the home state VP effects are fairly small. I mean, look, I want to read more reporting on why Shapiro wasn't chosen. If they did a bad job of managing the internal process, then it is like, I think, a little bit more worrisome for Harris because it certainly seemed like that was the direction she was leaning. She scheduled a rally in Pennsylvania. At one point on betting markets, Shapiro was up to like an 80 or 90% favorite. So if they got cold feet, then I want to learn more about that. Because if you do get cold feet, I mean, there might have been like

better ways of framing that decision. I mean, maybe say that Shapiro has some ailing family member he has to attend to or wants to focus on 2028 or something like that. But it was pretty strange to like tease at this kind of

obvious seeming bolder choice and then kind of losing at the bolder choice and then and then kind of losing at the altar i i think maybe that is a little bit worrisome for how they for how they manage that but we don't know i mean there could have been like a a vetting issue um they also moved up in the polls with the course of making the pick so they're a little bit ahead of trump so a little bit behind that might have made them more risk averse and that's a bit more rational but but yeah it But yeah, it's somewhere between it's fine and maybe a more major mistake, depending on the reasons behind it. And given the timing of the show, I haven't had reasons to read

much reporting yet about exactly why she made this move. We'll be right back. So Naive, you're one of those guys who I imagine our listeners, we have a lot of young people listening to the pod, who look at your career and think, wow, you shaped a really cool career for yourself. Give us a little bit of the origin story about how you got to where you are. What do you think the most positive influences and decisions you made and maybe some of the mistakes you made? Because you've carved out a really interesting seat for yourself.

I appreciate that, Scott. I mean, I think, look, I think I also got lucky in a lot of different ways where I quit my consulting job in 2004 to play poker, mostly internet poker. Were you one of these guys in Costa Rica that was just online all day long trying to take advantage of idiots like me that occasionally play online poker? I was living in Chicago, not Costa Rica. I should probably have played more, right? I probably should have played, like, around the clock, because it was a bubble more than a boom. There were so many new players

that, like, you were just printing money. You probably had an expected value of, I don't know, $150 or $200 an hour, which is very hard to achieve when you're in your 20s or something. So I probably should have played even more hours and grinded even more out. But what happened instead is that in 2006, the US Congress passed a law that basically banned payment processing to poker sites online. So basically caused the games to get much worse. Now you had to have a shady workaround to deposit your money. And so some of the weaker players left the game. But that

actually sparked my interest in politics. And it's 2008. I'm living in Chicago. There's a youngish guy named Barack Obama who taught at my university, University of Chicago, who's running for president. Meanwhile, this is kind of five years after Moneyball, and it's a time for the Moneyballization of everything. So I had time for, with my poker career having dried up, I had time for something else and started FiveThirtyEight. And so there was a lot of luck and a lot of serendipity. But look, doing something you're passionate about and where your incentives are aligned, I become literally like free access productive, I think. I get a lot done over the course of a day or course of a week. And it's not like I'm... I'm not necessarily working 24-7. I

leave time for socializing and things like that. But owning your own work product... And by the way, the biggest mistake I think I made was going uh, going and having five 38 be attached to like a giant corporation called the Walt Disney company for 10 years, they were offering, um, a guaranteed paycheck, but no actual business plan, no actual incentive compensation or anything like that. And I did work really hard for them for probably the first eight and a half out of those 10 years. But now that I'm back on my own and have a newsletter subscription business and have my own podcast and do some consulting on the side, you know, it turns out that actually I'm doing a lot better financially than they were paying me because the incentives are there. And because like, you know, I kind of own my own image and work product and, and it just way more, it's way more my speed to be a little bit more

entrepreneurial. I'm not quite sure what I was expecting to get out of the big kind of corporate experience. And just as we wrap up here, given what you know about, you know, you write about politics, you write about technology, your advice to someone coming out of school or a younger person, where do you think, when you look at different industries, do you think that someone who's risk aggressive in this industry could do very well generic piece of advice, but, you know, finding things that you're passionate about and things that you do like uniquely well, right? You know, if you can be the best person ever writing about, you know, women's curling or something like that, then it probably won't be a career for you, but you at least positively differentiate yourself. One of the smartest things I did for the book, by the way, is just kind of talking to smart people a lot. So, you know, having good conversations, but I think we're in a world now where particularly with the rise of AI and I'm kind of a, you know, I'm not like a AI doomer. I'm also not an AI is going

to conquer everything person. I'm kind of uncertain about it. But I think that will increase the premium on not being average because the AI will give you like a very good above average version of average, if that makes sense, right? It can kind of synthesize all the text on the internet and put it together in a way it's a little bit dry and boring, but, you know,

plausibly pretty good. And so do you kind of provide like a unique vector, I guess, in the world that can't be replicated anywhere else? I think that's a valuable skill. Yeah, I like what you said there.

I've always found that the specific crowds out the general and commit to owning something, like you said, women's curling, commit to being, you might think that's too niche, but if you're the best in the world at covering it, then eventually you'll start covering ice skating or something, or people will want to know your take on different things. Nate Silver is the founder of FiveThirtyEight and the author of the New York Times bestselling book, The Signal and the Noise. He also writes the sub stack, Silver Bulletin.

His latest book, On the Edge, The Art of Risking Everything, is out now. He joins us from his home in Chelsea adjacent. Nate, I really enjoyed this conversation and congrats on your success. Thanks so much, Scott. It was great. Talk to you soon.

This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer and Drew Burrows is our technical director. Thank you for listening to the PropG Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn. And please follow our Prop G Markets pod wherever you get your pods for new episodes every Monday and Thursday.