The Tim Ferriss Show - #869: Max Levchin, PayPal and Affirm — The Path from The Soviet Union to Building Multi-Billion Dollar Companies (Plus: Real-World Socialism vs. Capitalism)

Episode Date: June 9, 2026

Max Levchin (@mlevchin) is a serial entrepreneur and investor in 100+ startups. He's the founder and CEO of Affirm, the payment network powering consumer purchases and merchant growth. An original PayPal co-founder, Max served as CTO until its 2002 acquisition by eBay.This episode is brought to you by:ProLon: science-backed Fasting Mimicking Diet that helps activate cellular renewal through fasting, while still eating nourishing meals: ProlonLife.com/TimMonarch track, budget, plan, and do more with your money: Monarch.com/Tim Shopify global commerce platform, providing tools to start, grow, market, and manage a retail business: Shopify.com/timTimestamps:[00:00:00] Start.[00:02:50] The Ronin line that rewired how Max makes every decision.[00:06:09] Paprika-style brain-computer interfaces.[00:09:09] PayPal's founders lived inside a Neal Stephenson novel.[00:19:21] Transformation via Neuromancer and Snow Crash.[00:23:40] The book that found Max his wife.[00:29:24] The real secret to a great marriage.[00:38:29] What's worth tracking, and what's not.[00:44:13] A scrawny kid, a clarinet, and a Kyiv velodrome.[00:46:55] What going all-out on a bike actually gives you.[00:51:02] The mantra by which Max rides.[00:53:02] A Soviet kid's fear of socialism.[01:02:48] Making a profit without destroying society.[01:04:31] What is Affirm, and why did every banker say it would fail?[01:20:18] Why the best mathematicians eschew the lending industry.[01:23:50] Does agentic commerce break Affirm, or supercharge it?[01:28:01] A PhD-level financial advisor in everyone's pocket.[01:29:58] How close are we to buying anything through one AI chat?[01:36:32] Improving your coffee: cheap, intermediate, and Bugatti options.[01:44:33] The books every first-time founder should actually read.[01:48:08] Claude Shannon, Ed Thorp, and the joy of playful genius.[01:51:00] Why physical books still beat every digital reading experience.[01:51:44] Parting thoughts.*For show notes and past guests on The Tim Ferriss Show, please visit tim.blog/podcast.For deals from sponsors of The Tim Ferriss Show, please visit tim.blog/podcast-sponsorsSign up for Tim’s email newsletter (5-Bullet Friday) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissYouTube: youtube.com/timferrissFacebook: facebook.com/timferriss LinkedIn: linkedin.com/in/timferrissSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of the Tim Ferriss show, where it is my job to interview and deconstruct world-class performers of different types. And my guest today is someone I've wanted to have on for a long time, Max Levchen. Max was born in Ukraine before moving to the U.S. and settling in Chicago in 1991. He taught himself how to code with a pen and paper, with a pad of paper and a pen under trees in parks. And from those humble beginnings, he has gone on to do a million different things. He founded a firm and slide. He helped create Yelp, and I'll come back to a few of these. He co-founded PayPal, along with people you would recognize, like Peter Thiel, and Neil and Musk and others. He co-created the capture the first commercial implementation, and he has now invested in more than 100 startups. Computer scientists, serial entrepreneur, philanthropist. He does it all. He is also the co-founder and chairman of Glow, a data-driven fertility company. A firm and glow were both created and launched from his San Francisco-based Innovation Lab, Sci-Fi VC. And in 2002, not surprising, given everything I just mentioned, he was named to MIT Technology Reviews. TR100 is one of the top 100 innovators in the world as well as innovator of the year. And in this conversation, we get into a lot of details of how he thinks about productivity, scheduling, his other obsessions, how he applies his meticulous tracking and performance, orientation to other things. There's a lot you can use. Quite a few laughs. We get into the power of fiction,

why time is a zero-sum game, and in some cases, pain with a smile. What does that mean? We're going to find out. So you can find all things max at levchin.com, L-A-V-C-H-I-N.com, and Affirm. You can find at affirm.com. And almost certainly you have used or you have seen a firm. A firm is the payment network that empowers consumers and helps merchants drive growth. And we also get into being born in Ukraine and having front row seats to socialism. What does it actually mean to compare socialism to capitalism? What does it look like in real life? Well, most people treat that as a theoretical exercise and Max has lived both and can tell you all about the comparisons. So with all of that said, what a preamble. Let's get to Max Levchen. Thanks for listening. Enjoy.

Optimal, minimal. At this altitude, I can run flat out for a half mile before my hands start shaking. Can I answer your personal question? Now we'll see an appropriate time. What if I get the opposite? I'm a cybernetic organism, living tissue over metal endosclergy. Me, Tim Ferriss show. Max, it's nice to see you.

And I wanted to kick this off with a thank you, believe it or not, from what you put into my last book, Tribe of Mentors. And it was in response, you had several responses to this, but it was in response to the metaphorical billboard question. What would you put on a giant billboard? Anywhere with anything on it, what would it say and why? Any quotes you think of often or live your life by it? And there was one that I had never come across because I had never seen the movie Ronan.

And the line was, whenever there is any doubt, there is no doubt. have come back to this after watching the movie so many times it's hard for me to even give you an accurate account or even estimate of account but perhaps we could give people some context why was this one of your answers to that question it's a great quote i love that quote yeah it's so good the next line in the movie that's the first thing they teach you i'm only showing off guess i love that quote so much too it's a great quote encapsulates so many different flavors. It's like, don't doubt yourself. The real meaning here is you know the answer. You may be too scared, too embarrassed, too unprepared to sort of embrace the fact that you know the answer,

but you know the answer. So like, let's not mess around. You know the answer. That's layer one. Layer two is make a decision already. Layer three is even if it's unpleasant, you're going to have to do it anyway, so don't delay. It's just like so. many flavors of the same idea over and over again, encapsulated beautifully in just a few words. And so I think it's a great, succinct line. The other thing, I'm a huge fan of studying leadership. A fan of leadership sounded weird. So I love leadership-related lessons.

And there are two movies where leadership, I think, is, or I'm sure there are more than two, but like two of the movies that I fall back on for leadership content is Ronan and Seven Samurai. And Zemarai is hard to quote because it's in Japanese, and you can, you vote your English, unless you're a native speaker, which I'm not. But Ronan isn't English, and so it's great to quote. There's a lot of other great lines, but that's the best one. And one of the layers of explanation that you added to it,

which I ended up applying, it made it very concrete for me, which I think you've already done, but it was when you aren't sure, I'm quoting from what you put in the book here, is when you aren't sure about a key employer or a coach, co-founder, odds are exceedingly low, your mind will be changed for the better. And the way I translated that for myself, and I kept thinking of this, and I modified it slightly for myself,

like, if there is any doubt, there is no doubt, just to say that if you are analytically trying to convince yourself of something that doesn't feel, right? And you have to cross-examine that, quote-unquote, intuition sometimes. But chances are you know the answer, particularly, at least in my experience with employees and hires. It's always, I should have done that a lot sooner, at least in my very limited experience. You have infinitely more experience with that. So thank you for that. And on the Japanophile angle of things, having lived there, I'm still very close to my host family, who I stayed with when I was 15. I am no longer 15. I think some people will realize. But I was wondering, have you ever seen the movie Paprika? This is an old anime. It's from 2007.

six, I believe. I don't think I have. And if you haven't, it might be interesting. It will be not too much of a spoiler because there's so much around it, but here's the basic premise. Psychiatrists invented device called the DC Mini that allows therapists to enter and record patient's dreams. And then when the prototypes are stolen by an unknown dream terrorist A, B, and C starts to happen. What's crazy about this is that they're actually researchers in Kyoto in Japan who have been using. fMRI and waking dream subjects to try to use machine learning to then correlate brain activity to content.

And they've made some surprising progress with being able to do that. It's still very, very low resolution. But I don't know how far away we are from being able to do something like is depicted in paprika, which is pretty crazy. I used to be a voracious consumer of both manga and anime. and it turns out that time is still a zero-sum game for most things. And so I've drifted off my weekly supply of Japanese content production, but I will definitely make room for that one.

The thing with fMRI and brain modeling, at least last I looked, and before I sort of picked to do the thing that I'm doing now with Affirm, I actually look pretty seriously into, I'm a huge sort of a closet fan of brain computer interface and all sort of surrounding ideas and opportunities. I've looked on and off at FMRI and all the other sort of stuff in the domain, and it just seems that your cranium is too dense. It's hard to get signal of a very superficial connectivity from,

and you have to like shave your head, which you've done. Yeah, I face that one. I'm not yet prepared. Of course, you have to experiment on yourself otherwise, what's the point? But I'm actually pretty excited about some of the newer things. happening in brain computer interface, specifically in things like ultrasound, because I think we're finally looking at penetrating is a scary term. I don't mean that like physically penetrating, but getting into, you know, a few inches into your brain versus just scanning the current

of the top of the skull is exciting. Yeah, for sure. And looking at neuromodulation, things like focused ultrasound could hit, say, the nucleus accumbens for various substance abuse issues or addiction issues and so on. So it's pretty exciting. It's definitely front and center of a lot of really cool research and I feel like we're hanging around with them the same. It also sounds wrong, but probably hanging out the same circles. Yeah, I want to actually stay on the fiction thread for a minute because I was actually hanging out with one of our, I suppose, many overlapping connections, Luke Nosek, and I asked him what I should ask you, since you guys go way, way, way back. And here's the question.

This is from him. Well, first of all, I mean, obviously he's a huge fan. Oh, man, so many early memories. I miss working with him. But here's the question. Something I always wondered is that we all had Cryptonomicon as required reading. So I want you to explain that. This is, I love that book.

Went to the Financial Crypto Conference. Max wanted to use cryptography to make a new. money system, how close were we to really solving the same problem as the Bitcoin algorithm or something along those lines? So maybe you could just provide some backdrop here for people who have absolutely no context to put this together. So that was one of the weirder dual track. Like am I in a dream? Is this a simulation experiences of my life? So full context. So Luke and I were classmates. I think it was ahead of me by a year in school. But we were at, you know, of Illinois together and worked on a couple of failed startups together there.

So we go way back. We're really close friends. And as we all made our way to Silicon Valley, I hung around campus because I actually really wanted to do research in cryptography, which back then, crypto meant cryptography, not cryptocurrency. But I've always thought that there's interesting opportunities in currencies, currency to be invented powered by cryptography. So I was obsessed with things like, you know,

David Chom's work in anonymizing signatures. Digi Cash was a thing back in prehistoric times. And what's the prehistoric times? Like what year, roughly? So I graduated in 1997. Digi Cash, which was the granddaddy of all cryptocurrencies. I hope I'm not offending anyone's prior art, but I believe it was probably the very first attempt to make a real digital currency

using cryptography. I believe it went bankrupt in the summer of 98th, the year I moved to Silicon Valley. I actually went to the pouring one out on the curb party held on kind of somewhat less explicably one of the picnic grounds at Stanford University. It happened to be there. It's actually a really good lesson, like sort of took that away with me to PayPal, where there's a bunch of people, people you know today, people who are very active in crypto, cryptocurrencies now, but also just like interesting, famous people, famous today.

We're all very young back then. And the conversation was around this idea, like how the world is not ready for this yet. like the digit cash and digital currency, like people aren't ready. In the 98, you know, this is like 10 years before the Bitcoin paper, so I'm sure they were right. But the conversation was really around. It's obviously the right thing to do the right way to do it. People just don't get it yet. And as a sort of naive, freshly minted computer science graduate, I was like, well, or the user interface sucks.

Like, it's really hard to have this like very, very slow RSA computation happening on your crappy laptop if you're trying to pay for a cup of coffee. It's just too slow. And people are like, ah, heathen, like, you don't understand what are you talking about. No time too long to wait for a digital signature. Non-repudiation. Like, okay, great, but like, seriously, you know, I just want a cup of coffee. So it was kind of an early moment. I feel like some of these things are not like the others.

Anyway, and so I had literally within days of that event, I met Peter Thiel at Stanford. He was getting a lecturer. I was hanging around Stanford campus. Luke was actually the connective tissue. He knew Peter, and he went to school. with me. And so he was kind of like, oh, yeah, like, you guys should know each other. This was great that he ran into one another. So the origins of PayPal story were literally being made that summer. And I was still like, sure, I'm going to start a company in Silicon Valley doing something.

I don't know what. But I was still going to like scientific conferences. So there was this one conference called Financial Cryptography. It was held in Anguilla, which is a kind of a small island of British West Indies. And there's all sorts of interesting characters. It probably deserves our own podcast one day, but it's an interesting, hilarious, bizarre story. I'm 99% confident whoever Satoshi is was probably going to the same conference at the same time as we were. But Luke and I were there, and then another year, Peter and I went there. And after PayPal was already a thing, I presented something basically saying, hey, so we build this thing. It has a great user interface. And I was there when Digit Cash failed. And like, I think it failed because

the user interface. And this was now a couple of years into PayPal. And we were definitely doing well. And Digit Cash was definitely dead. And people in the audience going like, boom. you totally don't get it. I'm like, okay, clearly, maybe there's a reason why we're succeeding. Anyway, as we were doing all this stuff, Neil Stevenson publishes the first 100 pages of Cryptonomicomicon. And so as we're coding, and I'm literally coding

24-7 steam cans out of my ears every day because I don't eat, I don't sleep. The six of us are just in the office together, and three of us are basically just typing code as quickly as we can because we have this thing we have to build. And the only thing we take breaks for is we're trying to read Copsonomicon.

And the more we read, the more we think he's writing about us. The first few chapters of Cryptonomicon is like this development of digital currency using cryptography. And he's like literally talking about, I think he actually references digit cache and he's referencing like user interface sucks

and somebody needs to build something more user-friendly. I'm like, am I a dream? Is this real? I remember sitting next to Russ, one of our earliest engineers, who I also went to college with another Luke Nosec friend. And I'm like, if we didn't know any better, this is all just like a big brain and a bad experiment.

We just don't know whose brain it is. It's being described to us in a book as being published online. And then we ran out of pages and it wasn't published for a little while longer. How will we know what to build next? We don't have the book anymore. That's like the extended Cryptonomic story. Wow. And for folks who have never heard of this book, it's an incredible read.

I mean, it's in retrospect, I suppose quaint in some ways, but so, oppression in so many other ways. Just phenomenal. I remember ripping through that book and like all Neil Stevenson books, it's like 5,000 pages long. It's only 4,000. Yeah. It's a great book. It's so good. One name that has come up on this podcast, more than once, is Dr. Walter Longo, USC professor with decades of peer-reviewed research on fasting, nutrition, and aging. And as some you long-term listeners know or readers. I regularly fast. I've done a lot of experimentation with fasting over more than a decade, including intermittent fasting, extended water-only fasts out to 10 days. And I've looked at the before and after. Frankly, the fasting has been one of

the most incredible unlocks that I have found. The before and after, looking at glucose control, oral glucose tolerance tests, hemoglobin A1C, etc. All these things that really do matter for the long term for mental health for physical health have had dramatic, dramatic shifts. And I've talked about that before. But the sad truth, the truth about fasting is that it can be really hard. And that is why Walter is interesting. He's best known for something called the fast mimicking diet FMD, which is essentially a way of eating that produces many of the benefits of fasting while still allowing you to eat food.

So if we look at that a little more closely, he took what he learned in these randomized control trials and so on and packaged it into a five-day program called Prolon, P-R-O-L-O-N. It's five days. So for five days, you restrict your food a bit, and what Prolon does is makes it idiot-proof. Comes in one box, everything is laid out, there's no guesswork, you just follow the packages. And in scientific studies, five-day cycles of the fast mimicking diet, improved markers tied to metabolic health and aging, help people drop fat while holding onto lean muscle, and even associated with measurable drops in biological age. And to put some numbers to it, with glycemic management, blood sugar management, we're able to see in 1RCT improvements in 53% of FMD participants versus

8% of controls. So it does make a difference. You get the benefits of fasting, including autophagy, your body's cellular self-cleanup process while still eating real structured plant-based meals. So you don't have to negotiate with yourself. You don't have to struggle. It all comes in one box, and it's right there. Laid out, simple to follow. And there are other people who recognize friends of mine like Rich Roll, who also have used Prolon. For a limited time, Prolon is offering my listeners 15% offsite wide plus a 40% bonus gift when

you subscribe to their five-day program. Just visit Prolonlife.com slash Tim. That's P-R-O-L-O-N-L-I-F-E dot com slash Tim to claim your 15% discount and your bonus gift. Most people's finances live in say a dozen places. This includes me, accounts, cards, investments, and more that never talk to one another. It's hard to keep track of. This episode's sponsor and one of my team's absolute favorite tools, Monarch, is the all-in-one personal finance app that uses AI to give you a complete, organized view of your money. Accounts, investments, net worth, savings goal, all in one place, always up to date. A bunch of my friends also love this. Monarch

has helped users save more than $200 per month on average. And you can ask it all sorts of things. You can ask Monarch's AI assistant, anything about your money. Am I on pace to hit my savings goal by December? Or how is my travel spend trended over the last six months? You can ask it anything. Monarch then analyzes months of data so you don't have to. And with AI insights, Monarch flags things you don't think to look for.

So it can go beyond your question. And now you can get half off of your first year of Monarch with code tim at Monarch. That's just $50 for your first year at monarch.com with code Tim. One more time, monarch.com. That's M-O-N-A-R-C-H, monarch. Monarch.com, code Tim. My college life was shaped by Snow Crash with probably the thing that really put him on the map.

And I read that. There was like a dog-eared version of it hanging around one of the offices that I sort of hung out in college. And I was like, this is the most amazing thing ever. this book sort of shapes my, at least, software engineering life, and then Krivalramakan was the next one. I was like, all I need to do is just read more Neil Stevenson, and he'll show me the way. There were some really long books after, which sort of were quite challenging to get through. But then we got to Riemdi, which was another gift.

So I'm revealing my preferences here. He's like the digital Nostradamus in the world of fiction. Totally. Snow Crash for people who also are not familiar is where the term. I believe it's where the term Metaverse was first coined. It was in that book. Exactly. And those Boston dynamics, I think that's the company with the cute slash terrifying,

possibly soon-to-be-weaponized robotic dogs. Go check out Snowcrash. There in that book. Yeah, Snowcrash basically presented an alternative to neuromancer. Neurmancer was this dark dystopian. Also, by the way, first book I read when I came to the U.S. Neuromancer? Yeah, yeah.

So two things. So actually, this is, are we in a simulation? So I come to the U.S. July 16, 1991, six weeks, I think, before Soviet Union fails. But I leave Soviet Union, and I come into this, like, dreamland of America. And then six weeks later, my passport is a passport that doesn't have a country anymore. And so I become a man with no state and et cetera, et cetera, makes for an interesting travel existence.

But I'm like an ultra-ultra-nur nerd. And I was like the king of the nerds in my prior life. And this is a summer. so I don't know where I'm going to find my people. But like six weeks go by, Soviet Union fails, and I start a public high school in Chicago. And I'm sort of like casting around for my people. And I run into these guys.

We're still really good friends of mine. And they're like, oh, you're one of us. We have a word for this. You're a nerd. It's great. You like science fiction? Great. You love science fiction.

Have you read Nuremancer? Have you seen Akira? They're like, no. Hasn't made it to Soviet Union yet. I was fluent in English. This was a really not a difficult conversation to have. but they're like, okay, here's a VHS of Akira, here's a copy of Neuromancer, go home,

and like, don't come back until you've been completely filled with these things. And I was like, one, these are going to be my friends for life, which turned out to be true. It's been 30 odd years, and we're still talking to each other every day. And it's like the beginnings of completely different science fiction consumption experience.

That said, for the next few years, I was like, Neuromancer, and everything he came after Neuromancer is the dark, sort of plug your brain in future. And Snow Crash offers this, like, hilarious, completely different consumerist, satirical version of the plug your brain in versus this, like, dark corporations rule the world, ninjas in skin suits and, like, kill you while you're plugged into a deck, trying to hack your way into some corporations.

Anyway, so you're like walking me down to memory lane. some fun reticels. Well, there are a few pieces of commentary on that. Number one, you got to watch Pepparico. Like, this is... It is very adorable in its attempt manually to do what we could do with CGI and so on now. But it is all the more impressive for what it is able to accomplish with hand-drawn cells. I mean, it's just bananas.

So it's worth checking out. Neuromancer also, I believe in, I'm not alone in this, that sci-fi is a great place to go looking for the future. But it's also a great place to go looking for philosophy. So I want to share a couple of things from William Gibson. And these are the kind of quotes that will stick with you. Like when the past is always with you, it may as well be the present. And if it is the present, it will be the future as well. Like, noodle on that for a minute.

And I'm going to get this paraphrase wrong, but I'm going to get it. as they say in Silicon Valley sort of directionally correct, which is the future is already here. It's just not evenly distributed something along those lines. In any case, I'm getting off track. I want to, this is, you probably weren't anticipating nor was I that this was going to be like a roll call of fiction. But I want to come back to something that you had in tribe of mentors. And it's related to books. I asked you what book or books you've given the most as a gift and why. And one that I've still not read, I'm very embarrassed to say this, is the master and margarita. Missing out.

Yeah, so this is now on my to-to-list. I'm going to let you fill in the blanks here, but you said I usually buy Eminem, which even though literally five lines above it, it says the master of margarita, I was like, M&Ms in batches of five. But you give it as gifts to new friends. I do. You always have copies on your desk at work in case someone wants to borrow one. Why? What makes this book so special? Who's the author?

What's the background? It's a great book. It is well translated by a couple of different translator teams. So you can almost not go wrong buying one of the last three translations. There's about six that I remember exist in English anyway. I would not bother with the first three. I think one is Peveyor. Voski is the kind of a canonical, like, great translation into English.

It's a book is actually in Russian originally. There's now a new one. I'll remember in a second with my own OCD exactly who this is, but Peviar Volkonsky is a fantastic, very good translation. Anyway, it was written by Mikhail Bulgakov, who is arguably the greatest Russian language writer of the 20th. a century in my biased opinion. There's a lot of great Russian language writers, so it's a bit of a fish-in-a-barrel type situation, like who's a great Russian author. And there's some fantastic

science fiction Russian authors, incidentally, but he wrote many books, and all of them are really good. The premise for Master Margarita, so it's set in kind of an early 1920s Moscow. So Soviet revolution happened, the Russian Civil War ended, the place is now socialist and sort of slipping into socialist bureaucracy building mode, and yet it's a socialist paradise in the making. And so the devil, like the Prince of Darkness, visits socialist Moscow in a summer of 1925, let's say, with a coterie of characters,

like from what you would expect devil to hang out with, wreaks absolute havoc on the socialist paradise. So first of all, it's a book within a book, which is like one of my favorite plot devices. The main character, the autonomous master, is a writer who wrote a book about the last days of Christ. It's a book about crucifixion. A lot of it is in the book. It's interspersed with the chapters of the original.

And obviously, Abelgakha wrote both. But he is very much referencing himself. So he was in Moscow during the Revolution and on. And very quickly ran a foul of Stalin and was also because he was such a prolific and brilliant author, was Stalin's favorite author, was persecuted, ultimately asked for permission to leave the country because he couldn't be himself, he couldn't write. Stalin apparently permitted it, but then he died before this could happen. It's a little of autobiographical story of the writer himself. It's a story of devil making a mockery of socialist paradise. It's a story of Christ and his last days

on earth told by an amazing writer, both the author of the book and the book's author, also known as the master. It would take many hours. And at some point, I'd be like, you know, well, you should just go read the book because it's so amazing. But it is one of the best portrayals, certainly the earliest brilliant portrayal of homo-Saveticus. What happens to the human mind when exposed to rampant socialism? And it is funny as hell, because having grown up there or spent it for 16 years there, the insanity of living in a socialist paradise, and yet you don't have enough to eat. It's tragic, obviously, but it's also very funny. The book does it amazing justice. And it's super-duper-super-s supernatural sort of science fiction-y in what's possible. There are flights, there are

witches, there is a devil Sabbath. There's all kinds of crazy shit that happens there. It's amazing. Something for everyone. It's an amazing book. And it's shorter than most Neil Stevenson books, at least is my impression. It's like a quarter length or fifth of a short Neil Stevenson product. So it's definitely very accessible. It's also incidentally not to overshare. It is the reason I am married to the woman I am. Okay. I'm not going to let that pass. Yeah, please expand. We met completely randomly through like a sheer accident and both were predisposed to, be like, who is this weird person? Why am I talking to whoever this girl is, whoever this guy is?

And then I thought she was quoting Master Margarita. And it was like, before I found my way way out of this conversation, I've got to find out. It's my favorite book. It's always been my favorite book. Like, how can I not? So because I know the book as well as I do, because we're speaking in Russian, I quoted the next line. And she's like, oh, my God, Master Margarita. That's my favorite book. Like, no, it's my favorite book. It's been 27 years. to a children and a very happy life together. Incredible. So this is a book that many things in my life are owed to.

By the way, to give credit where it's due, she's the one who said, oh my God, that is the best line I've ever heard in a movie referencing whenever there's doubt. There's no doubt. So she deserves full credit for this. Full circle. Oh, boy. Yeah, the Brain and the Vet question just keeps popping up.

So let's actually talk about your wife for a second and your relationship for a second because I was texting with another mutual connection, Sami Incanan, who is also a absolute monster endurance fan. And we were texting back and forth about that. I was chatting with him. And I know you're an investor in Verda Health, which people should check out also. Let me just pull it up here because he shot me over a couple of different options for questions. I asked him the same thing. And I'll give you a sample. and then I'll indicate the one that most caught my attention, right? I asked him about what it's like to cycle with you.

And he said, well, if you're going to be riding with him, just know he pretty much goes all out always for the first 90 minutes, no matter who he's riding with, but enjoy. And I was like, I'm not going to be riding with him. Don't worry. And then he had a number of questions, right? He grew up a super intense engineer, now a well-rounded CEO leader. What did it take to go from one to the other? Cycling, why did he go like fully all in a few years back?

Which is actually kind of an interesting question, because I know that's been part of your life really, really consistently on a near daily basis for much longer than a few years. But third, this is the one that caught my attention. He's essentially working with his wife on sci-fi, you know, his family office VC. What's his advice after years of experience regarding working with a spouse? So that's the one that I wanted to hit next. You got to marry right. Otherwise, it's hard to work. No. Well, what's your, what are your thoughts on marrying right? If you have thoughts on that. I do. Actually, I've spent a lot of of time thinking. I mean, I spent a lot of time thinking about all kinds of random stuff,

and this is no exception. The line marry up is a line people use all the time, and I think that's kind of a, that's cute. What it really, and I agree with it, I just think it deserves unpacking. I was asking myself actually a question, like, why is our relationship as good as it is, and it is really good? And is there anything to learn about co-founding companies? Like, you're co-founding a family when you marry someone, you know, you get together with someone. And are the parallels and I was contemplating all this stuff? And I sort of realized that I've had many co-founders over the years and some were amazing relationships and others didn't work out.

And it's always tempting to sort of blame yourself, but you obviously have to examine it through the lines of like what fell apart as a relationship between two co-founders. And I realized that the secret for my marriage is I'm still trying to impress this girl. Like every day I wrote about thinking like, well, I'm like, how did I get this? Like, this is definitely better than I should have gotten. And so clearly, I got to work on this. Like, I can't let her find out that she married down. And so the attempt to impress your mate on a daily basis is the secret to the best marriage.

And I think that the good ones are where both sides are kind of secretly thinking, I definitely locked out. Like, this is so much better than I should have gotten. And so if the feeling is mutual, you're going to go very far together, just constantly trying to grow. And, you know, come up with new tricks, new ideas, new. You don't let yourself be stale because you're watching the person next to you grow and become more well-rounded, more intelligent, more successful, et cetera, et cetera. So that's sort of a secret to our relationship. And everything I've accomplished in my life since we've met has been modulated by her.

We keep on referring to this her. So her name is Nelly. I think I suspect many of our mutual connections refer to her as the sort of the actual reason behind anything. that I've done successfully in my life. It's true. She's been extraordinary at both calling my BS out when there is some and pushing me at the, you know, things like whenever there's doubt, there's no doubt situation saying like, hey, trust your gut, make a decision.

This isn't the right person. This isn't the right idea, et cetera, and so on. One fun fact. So we met in a very early days of PayPal. So that same sort of the summer of 98 is when the seeds were in the ground for PayPal, early 99 when we started. My wife and I met in mid-99, so exactly a year after I moved to Silicon Valley.

And so she witnessed the entire PayPal saga from the front row of seat. After PayPal, like anything but financial services, I'm going to go build some other stuff. But like I can't allow my sophomore act to be in the shadow of my freshman act. And she sort of said, you know, like do whatever you won't.

Like obviously you have a right to come up with anything. But I'm just going to tell you, man, like that's clearly where you're meant for. And so like, you know, you go on. So seven years later, after I've been meandering through a desert, she's like, you know, I think I said it before, I just want you to know, it's still true. Maybe you should go do what you're good at.

And I affirm is very much a product of that conversation. I was like, I think she's right. I think I'm a one-trick pony. And the trick is a good trick, though. So here it is. Anyway, trying to impress your mate, trying to impress your co-founder every day because you can see the other person progressing in front of you

and get better and smarter and more intimidating by way of just being so much sharper, so much more interesting than they were when you met is a great motivator. It keeps you on your way, it makes you work harder at improving yourself. And on top of that, what have you learned about working with a spouse or collaborating with a spouse, right? Because sometimes spouses can be often very well matched and have a dynamic like the dynamic you describe, but they have some compartmentalization or separation. And I've met so many friends and even have some neighbors where they've just, quote, unquote, attempted to retire, sort of like a failed retirement.

And then one neighbor was describing this to me, his wife is also very active, has got tons of big projects she's working on. And he doesn't know what to do with himself. So he'd like sit down at the breakfast table while she's on her laptop. And he'd be like, so what are you up to today? And she was like, took off her glasses very slowly. And she said, you know, I'm not used to checking in with you every morning. You need to get a job. So working together is a very different thing when you have that. And maybe I'm overstating the extent to which you guys sort of collaborate in that way. But any thoughts or recommendations for people who are entering that type of relationship with the spouse?

It can definitely get hairy for like a better term if you're not thoughtful about it. So you have to think through, you have to talk through kind of what makes sense, what doesn't. We're well-matched. because I am quite technical, have lots of interest in sort of the technical depths of matters that we work on together, she works on, I work on, etc. And she has an extremely strong finance background and understands business models and kind of a philosopher of business these days.

And so our conversations are very rarely about checking each other's work, which is where I think you could really end up with, like, why are you checking my homework? Netpicking, right? Don't micromanage what I'm good at. And she also, she's an incredible empath. And I'm not. Like, I frequently be like, so I'm dealing with this in my day job.

Why is this person not happy? Can you explain to me? And she's incredibly good at that. And so I think because we are such kind of non-overlapping areas of strength, we end up being very complimenter. If anything, we tend to be like, wait a second. Like, we're on your stuff. Why are you bouncing to mine?

Like, we need to finish that threat. Both of us have preactive professional lives, and so we're constantly discussing them. But we don't, I think, ever run into or step on each other's toes. She doesn't ask me, what's your token budget anymore than I ask her, how did you make this hiring decision? Or how do you decide that this was a bad investment opportunity with all? I'm pretty sure if she looked at it with all the tools she's gotten, they're better than mine. But you have to be prepared to communicate, and it does not hurt.

to be direct with one another. And so you have to be able to take on directness without hurt feelings and a great one-liner, another gift from my wife. She didn't come up with it, but she had read it somewhere and she was like, here's a new model for our family unit. Don't go to bed angry.

Stay up and fight. You guys put that into practice? We don't fight too often. But we definitely don't let curfew prevent us from hashing out whatever it is our difference are of the moment. We try very hard not to let things fester, and that works really well.

If you're going to overlap familiarly and professionally, you better deal with conflict or disagreement quickly because you're accruing areas of negative overlap faster than most people do. Like, I hate the way you chew, but I love you all the other ways. Like, we've got to talk about that, but it's not an important thing. It's like, I hate the way you chew. And by the way, you've belittled me by checking on my

who can budget. It's like compounding frustrations and marriages fail because people just don't say out loud. Like, here's the thing that I'm not sure I'm, I'm prepared to put up with. Just got to stay up and fight. Get it out there. Stay up and fight. It'll be the title of this podcast, Michael McClift. And stay up and fight. You mentioned earlier, time is a zero-sum game. I want to talk about obsession and analysis and tracking for a second because ultimately the question is, how do you choose what to track? This is pulling from a men's journal piece that came out in 2018, so some of it is dated. But today, if you can name it,

Lefchin is quantified at food. He spent weeks using his iPhone to photograph all of his meals and snacks and later engaged in nutritional values. Sidebar from Tim, I did that too. I still can't believe that, say, the Dexcom app doesn't give you some estimate of caloric content or macros. It's just like, you ate chicken.

I'm like, that's not helpful. Anyway, coming back to sleep as an overtaxed entrepreneur, as the parent of two children under the age of five, Lefschin determined his minimum rest threshold by shaving five minutes off of each successive night. Interpersonal relations and time management,

Levchen says he once spent a month grading every business and personal meeting on a scale of one to ten on several metrics like usefulness, intellectual stimulation, and social stimulation. It sounds like a weirdo, but I feel like,

that's a whole true, man. So I've done lots of this, too. I'm just curious how you have over time determined what to track and maybe what you're paying attention to outside of a firm business metrics and things internal to affirm. And we'll get to a firm. But I'm just wondering for yourself outside of that company professional context, how do you choose what to track? I've definitely gotten much better at deciding what matters, what doesn't. So when this article was written, I'm sure. No metric looked dumb. No metric looked superfluous. I was like, great.

Counting the number of times I trimmed my fingernails. Hmm, what if there's a signal in that? As you age, you replace raw compute in willingness to engage in raw compute with pattern recognition and occlude paths that you don't need to travel down because you know there's nothing there. Like, there's absolutely no value in tracking your fingernail clippings or rate they're off. I've become more focused on tracking sleep because there's more and more science showing that that's really important. Even that, I sort of used to obsess over a bunch of metrics. And I think at this point, the sort of reasonably cutting edge and, you know, better than I do, I think these days, resting hard rate and hard rate variability are the two really good anchors. If you keep one down, keep the other one up, that predicts your recovery, predicts your intellectual capacity for the day really well.

So I track that pretty obsessively. I try to stay in bed right number of hours. I'm a lot less obsessed with I don't need to sleep more than X, so better be bullet out of bed by X plus one second. I'm also not precious about, you know what, I don't feel like I need any more sleep. I'm just going to go and tool around and do more stuff. So I've relaxed a bunch on things that I found to be less impactful to my own life,

but I have the benefit of spending a bunch of years obsessing over everything and deciding, well, it doesn't seem to matter that much what I eat, for example. So for a long time, I was obsessed with the exact sort of caloric and macro targets. And then at some point, I had to travel a lot more than I used to. And obviously, I go out the window because he can't bring your favorite yogurt with you everywhere you go. And so you end up like, well, I'm just going to have to have some fermented foods from the assortment available in this geography. And it turns out that basically your gut health is going to be okay if so long as you're having enough fermented foods versus like the fermented food you've selected for yourself. So you relax some constraints and move on to a,

spending less time thinking about them. I track sleep. I'm still an obsessive cyclist, so I track every metric you can imagine. I become more obsessive as a cyclist. Actually bothers me a little bit, but because I'm unwilling to believe that I'm ever going to age properly,

I keep on looking for marginal gains by like obsessing over the exact crank length adjustments I can put myself through just to return some of you marginal watts that I lose with age. I've gone from believing that all you need is cycling to widening my physical training routine too. So it's maybe slightly more brain allocated to like what's the right day to lift heavyweights versus the right day to not do that. Not to be a salty old dog, but in the early 2000s, back in the day when I was running my own e-commerce business, the tools were atrocious.

They tried it hard. What man was it bad? to cobble all sorts of stuff together, I could only dream of a platform like Shopify. Shopify is the commerce platform behind millions of businesses around the world, and now 10% of all e-commerce in the U.S. is on Shopify. Now, back to the early 2000s, then nobody even thought of AI. Who could have predicted, even in the last 24 months, the magic that is now possible with AI? Shopify has been ahead of the curve, and they are packed with helpful AI, tools that will accelerate everything, write product descriptions, page headlines, even enhance

your product photography. Best of all, Shopify expertly handles everything from managing inventory to international shipping to processing returns and beyond. If you're ready to sell, you're ready for Shopify. Sign up for your $1 per month trial and start selling today at Shopify.com slash Tim. One more time, Shopify.com slash Tim. In 2026, stop waiting and start selling with Shopify. I'm curious, and I've never asked you this before, but when cycling entered the picture, because in doing some research for this conversation, I can just pull. This is from, I believe, a alumni magazine, but behind the curtain of Savita or Ukraine, and then your full name, which I cannot pronounce, is born to a family of physicists. As a child, you struggle to overcome

life-threatening respiratory diseases, and parents are told you won't live past childhood, and with your mother's urging, and determined you on max begins playing the clarinet to build lung capacity. So, I mean, that doesn't seem to have the makings of a serious cyclist. When did you embrace cycling?

And what does it give you also? There's an interesting origin story that actually kind of intertwines Ukraine and clarinet and everything. So I did have some fairly gnarly respiratory stuff when I was a kid. And I think my parents probably were scared into kind of throwing everything in the kitchen sink into it.

The nice Jewish boy from Ukraine, I probably should have played the violin, but clarinet is a reasonable close second. They're like, oh, but lung capacity, great, let's do that. So that's how I got into clarnet. There was like literally something that will feed the stereotype, but also help the lung capacity development. And so I think my VO2 Max at the time must have been, like, in a single digits or something. Because, like, I remember just trying to open up my lungs and breathe in it.

Like, it didn't work. And then, like everything else I do, she's like, oh, well, I can just, like, obsess in measuring it. And VO2 Max is definitely not a thing so in Ukraine really measured, but they did have, like, the basic approximation, like blow into a tube and see how far you can push the ball, like all the physics equivalents of lung capacity measurements. And so I was already looking at quantify itself from a long capacity perspective as, like a seven-year-old kid or something. All of this while living in an apartment complex that overlooked Kiev's only outdoor Velladrome. And so my platonic ideal of a manly man who was like a sports phenom was these dudes who would like get on the boards of a Kia Vellodrome and just put their wads down and like go for an hour or two just ripping

through this thing. I was like, wow, like one day when I'm not a scrawny little kid with a clarinet, I'm going to be like that. So I used to sneak into the velodrome when it was closed and try to ride my bike there, except the cranks would touch the woodboards. Like, one of the worst accidents of my childhood was, I had a giant wood splinter in my butt because I crashed at the top of the velodrum trying to do loops

and slid down. Of course, these weren't well-finished boards, and it was outdoors, so, like, the elements, the rained on it, probably not PG-13 after this. But anyway, so I always thought, like, cycling, like, I didn't grow up with a ton of sport in my life. Like, soccer is prevalent, obviously, in Eastern

Europe, but, like, cycling was right there on display every day. If I wanted to see someone who looked like just full of life and vigor, I would see a cyclist. And so I always rode a bike as a kid and always wrote a bike in college. And sort of as I got into sort of busier and busier where this notion of like how do you stay sane became an important part of the consideration. Like if you're going to work for three days straight without sleep, like you got to offset it somehow. And you can't just like sleep it off. you also need to do something to your body versus your brain. I sort of naturally looked at cycling. And then back to Nelly, when I left PayPal after we got acquired by eBay, I definitely hit

like a very low point where there's nothing going on in my life that was worth staying up all night for. And she pointed out that I have this amazing bike hanging on the wall that, you know, it had since, I think before we met, she's like, why don't you like get back on a bike and see if you can find joy in that. And she knew my stories of rolling around the Kia Velodrome. And so I got on the bike. And it was one of these most of the most of the most of the most of the moments where I went for a ride with a bunch of people, and there were all, like, very serious road jewelry, as the saying goes. I've never heard that.

It's like if you're buying more of a bike than you deserve to ride, like, that's nice road jewelry got there. I was on, like, on a beater bike, relatively speaking. I think I brought her from college, actually. And I sort of dropped everybody on the first hill. And I was like, oh, yeah, I know how to ride a bike. I have big lungs. That clarinet really paid off.

And so that was like, I should, like, really invest. some time into getting better at this thing. That's how I got into. But I am exactly what they call a hammerhead. So, you know, if I see a road, I can't not go fast or at least try to go fast. What does it give you in terms of dividends, just on an ongoing basis? A couple of different things. So it's definitely, I mean, it's a low impact sport. So you can ride a bike for six hours and no part of your body will be like an absolute shreds the day after if you at least somewhat know what you're doing. So it's a great just, if you have the time and if you're interested in it, it's not a self-destructive sport, which some sports are more and others are less.

There's definitely one of the less self-destructive on the actual physiology. Part of why I like to go hard on the bike is it actually allows me, at least, to clear my head. It's one of the few times when I'm not constantly playing with some work-related concept or thinking through some future ideas or whatever. It's a moment where sort of everything gets tuned out and it's just, just me and the pain in the legs and sort of you're telling yourself go harder or manage your energy, but there's not enough time or cycles left. And like, also, what if we went to this market now? It's a moment to go into like a pure moment of, you know, flushing the whatever's left in the head.

And it does keep you healthy. It's a great way to stay alive and be healthy. And then more and more these days, it is a lifestyle sport of CEOs and leaders and people who sort of read the same kind of books. and it's another form of a community where if you don't have the time to sort of join clubs and I'm not a big foodie, I'm not a big drinker, I'm not a, I don't have a ton of time for these protracted social events. I try not to go to too many conferences, and yet I'm human, I enjoy human company. And so riding a pack of people who are interested in similar things is another form of staying engaged. So I imagine that's a being near people, not a talking with people, type of situation if you're going as hard as I suspect you're going, right?

Part of the trick is if you can still talk and they cannot, then you're doing it right. Cycling takes place over hours, and so you can spend some time talking. There's also an important part of cycling culture is the coffee shop ride where you sort of you hammer to a coffee shop and then you sort of everybody falls in their chairs and gets their pinkies out and sips espresso. I love coffee almost as much as I like bikes. that's a part of it. If we have time, we'll come back to coffee because I did dig into that in the research. Two other quotes that you gave for your potential billboard answers, you said, if it were in Marin County.

And I'm going to mispronounce this, so you can correct me. But it's either Jens or Yen's Voigt. I'm not sure, but you can correct me in a second. So two quotes from him, legendary cyclist. Number one, when my legs hurt, I say, shut up legs. Do what I tell you to do. That's the first. The second is, if it hurts me, it must hurt the other ones twice as much.

That's a great one. It's so applicable in so many contexts. Am I saying that name correctly? Probably not. I think it's Yens. I think he's East German. Yenz Vot. One of my proudest moments on a bike is I rode with Yens a few years ago now. He used to hang around Northern California. He's a lot of fans, actually. He's transcended the very specific sport of cycling into having a fan base worldwide because he's such a character. The shut up legs, like I own multiple pieces of clothing with shut up legs that I did not personally. personally produce. He's famous for that line, but he's a very funny. He's now primarily a commentator in bike races,

but he is a great embodiment of this culture of endurance, pain with a smile, if you will. Pain with a smile. Before we move on, because I do want to ask you a bunch about affirm and broadly how things you've done with affirm reflect your thinking and ability to see things that others don't see, perhaps. But before we get there, I wanted to come back to Eminem. This book we were discussing

earlier, and for people who are like, oh, yeah, I meant to write that down, the master in Margarita. You wrote here, just to reiterate some of what you already said. It's a fairly short novel, remarkable in its exceptional depth, exploring everything from fundamentals of Christian philosophy to the fantastical and hilarious satire soul-corrupting 20th century Soviet socialism. So my God, that's really well put. Yeah, I don't think I'm alone in watching some of what's happening in the U.S. and elsewhere with respect to this embrace of socialism or things that go by the name socialism. Perhaps you can apply other labels. And while capitalism is not a panacea for all things, and there are plenty of warts and risks and humans respond to incentives, as someone who came here at 15 or 16, I would just love to hear you speak for a few minutes on what you're seeing and what your thoughts are. I'm pretty worried not to sort of go all dark immediately,

but I think people without the questionable benefit of growing up in the collectivist paradise to quote the current mayor of New York don't understand just how corrupting it is. The ideas of socialism are amazing. It's this, you know, me for my fellow men and share and share alike and do the right thing because it's the right thing to do, not because there's a financial incentive to it. All those things sound amazing.

And so it's seductive, the idea of a workers' paradise without the greedy lenders, capitalists, bankers, sort of all the sort of things we were fed as children or I was fed as a child in Soviet Union. At first, Blashears were like, yeah, it makes sense. who work hard should have more and people who are great, even though they're not capable of producing valuable things in society, because they're good people should have everything that I have, even though I'm working harder than they are. Those things sound pretty good, but they inevitably require a bunch of structural change that just does not work, thanks to human nature

and many obvious things like it. For example, one of the greatest mental mental images I have from growing up in Soviet Union is if you went to a government-owned store, and every store of course owned by the government, you would very quickly notice that the people whose job was to sell you things from behind the counter were always very fat, while everyone you knew in your life was always very skinny. And you sort of like, this doesn't make any sense. Like, how do these people who happen to work in food stores are always really well fed? Like, well, because they're stealing. They get access to the food. And It expands that notion of, you know, this idea of everybody just pulls all their work product into one big pool.

And then someone's in charge of fairly distributing it to everyone who needs it. That's the, you know, from each according to their abilities to each according to their need is kind of the socialist slash communist motto. And it works great, except people who are doing the actual redistribution get to keep a lot for themselves. And it doesn't matter how honest they begin that journey. by the time they get to real power, they become profoundly corrupt and steal and keep and redistribute primarily to themselves.

And so that alone is just like an indictment of socialism that you cannot get around, but it gets worse because markets, free markets, capitalism, you know, whatever term you want to use, inherently forces competition. If you believe you have a thing that you can sell at a lower price than the other guy,

you get the market's attention, you get the business that's available to you because the thing is worth buying by someone, you're going to work on creating a margin for yourself by lowering the cost of production, finding efficiencies, finding some ways of making the thing cheaper for you and we're cheaper for the buyer so you can compete on price. So all those things do not exist in socialism because it's all centrally planned. We're going to make this many widgets and then we're going to have someone redistribute them to all the right people full stop. And what happens is there's never the pressure to improve. And so you always make stuff at the government-mandated cost and the government-mandated price is what's being used to sell it. And so you have natural stagnation.

You have a system that rewards graft, gives power to people who are most likely to become graft-driven, and prevents anyone else talented or otherwise from trying to innovate and improve the efficiency of the system itself. And so it just does not work. And the thing that worries me in the U.S. and the world. This isn't unique to us here is the headlines that make you feel like, wow, I would love to live in the world where everyone is fed and everyone gets more or less the baseline of good living is very compelling. It is easy to agree with.

The recipe for that remains to be, the best recipe we know, the best recipe we've discovered as humanity is capitalism, a force for constant creative destruction where you build the next thing better than the other guy. Yes, his business may be put out because your business thrives, but the beneficiary is the buyer or the user of the product, the buyer of the widget, because you're constantly working to make the whole thing more efficient. If you eliminate the ability to, or you eliminate the need to create efficiencies, you just stagnate.

And the death of Soviet Union was surprised to exactly zero people because we knew as people who lived there more than most that nothing ever changed for the better. Everything was the same price, the government-banded a price. And we were still using phones that looked like they were made in 1950s and moved to the office. Like, oh, you have buttons on your phones? That's amazing. We still do the click.

The rotary. Yeah. So, anyway, I can't say enough how the seductive story of socialism really appeals, and I can understand why. But if I didn't have my day job, but spent a lot of time screaming from every street corner, don't fall off with the trap. It's a sure-fire way of getting to no progress at all.

So a firm, you know, in some levels is a, I don't want to say a response, but it's a solution that replaces potentially predatory practices. And we're going to get to that. But I'm wondering how you would explain the current apparent wellspring of attraction to, just to keep it simple, socialism in the United States. Are there structural or systemic problems that have contributed to that? Is it mostly sort of demagogues? using whatever talking points they think they can leverage to attract votes, et cetera. What are the ingredients in the cocktail that are contributing to this current phenomenon in your mind? I'm confident I don't know every strand of this particular disease. It's a complicated issue. And I think it is definitely the case that the brochure looks great, the storytelling of, do you know someone who is poor? Do you know someone who deserves better?

Do you know someone who's been laid off? It's the case that capitalism can be profoundly unfair, at least to an individual. As a system as a way of improving the world, it works amazingly well. We've not created anything better. But you get thrown off the bus if you build something that gets outmoded or outcompeted by another participant in the market. And it can hurt. For the entrepreneur, it looks like failure,

which we are wired to accept, but it still hurts. For a worker, it looks like being laid off, which could be catastrophic for a family. For people who sort of misinvested their money or something went wrong, it doesn't look, doesn't taste good. And so the idea of social safety net,

the idea of welfare is natural. Like, you hate seeing your fellow men and women starve or not do well. So I understand the definition of the problem and the notion of income inequality and like all the things that we see in Silicon Valley firsthand is very real. It's not like how are you complaining? Like there are a lot of people who are not doing well and every new disruptive change from the industrial revolution to the AI revolution, there's always someone on the receiving end of the efficiency because their work is no longer required or their products or their ideas are no longer relevant. And so socialism is a compelling story of how to protect

those people, how to prevent them from suddenly being on the outskirts of society or worse. And I think there's definitely a lot to do to make sure we don't leave our fellow humans behind. Certainly my love of capitalism and free market does not obviate my humanity. I care about people just because I am also human. And I see it as part of my job to ask the question, can we do better? can we provide the social safety net for everyone. We're creating more and more efficiency. We're creating more and more value.

There have to be ways of helping people who are thrown off the bus to make sure they don't end up in a gutter. And I happen to have some solutions that I love and solutions that I think are worthless. The idea of let's concentrate it all in the hands of the government, give a handful of people the right to redistribute it all, and will do better, doesn't work.

And I lived to tell the tale. I do think that things like philanthropy is profoundly important, and the more disruption we're going through a society, the more important philanthropy becomes. And I think in that sense, not an especially outwardly religious, but I think religion provides a really useful set of frameworks around how to think about it. Every organized religion has a version of what it means to be philanthropic. And the older I get, the more I start respecting the thought that's sort of been aggregated over the thousands of years that most religions existed. So I think that's super interesting and important and worth participating in. On the other side of it is I think capitalism in particular has created opportunities for products to develop where these are optimizing up and to the right of the most profit at lowest cost ends up building products that are actually devolved from not just their economic platonic ideal, but societal ideal. And I don't think we have to compromise by saying, well, you know what, I don't actually care that this is harmful to someone because it's the most profitable market efficient thing to do.

And my theory for a long time has been that you can build products, certainly financial services, that are optimal, not just from the lens of most profitable, but also most societally beneficial. And that's not uniformly distributed. There are plenty of products that look like predatory lending and all the other things. or just make money because the underlying customer doesn't understand what's going on, doesn't have the capacity to deal with the complexity of the math involved. And affirm is the answer to that question. In some ways, what we are doing here is trying to say, look, you can optimize a product beyond just making the most money.

In fact, it's okay to make a little bit less money if you are able to create something that's societally more successful, more important, because in a long term, I think you will have retention that consumers will not go to a cheaper product or a product that is less profitable for its shareholders because it's so societally important. So I am to at least some extent embracing the ideas of pro-social product and engineering. I just choose to do it strictly through the lens of capitalism. I'd like to go to early, early a firm. This is parallel to PayPal, which looking back, could say early fundraising for PayPal. It wasn't exactly like every door at Sand Hill Road was opened with a red carpet. I mean, it was incredibly hardgoing. People were like, yeah, no way,

possible. It's not going to work. I mean, I've had conversations with Reid Hoff and about this. Just like, yeah, no, like at every turn, no chance. And, I mean, ultimately, with Peter pulling from the hedge fund and stuff, I mean, it's a hilarious story and incredible. A firm early on, similarly, it was not obvious. A lot of folks would be of the opinion. Credit cards just fine, late fees too profitable. And what I'm wondering, this applies elsewhere to your investing in involvement with companies like Yelp and so on. What are you seeing? What gives you confidence? And of course, there's a bit of a, in the phrasing of the question, a survivorship bias. So putting that aside for the moment, but what gave you, we could use a firm as the example, but like what

What gave you the confidence to keep driving? What did you see that other people didn't see, or what were assumptions you made or hypotheses that you felt just were worth continuing to hammer on and test because you had some degree of confidence? And what does a firm do? Maybe you should explain that first. Well, there's this acronym BNPL by now, pay later, that we kind of invented the genre about 15 years ago. And the basic idea is, at the point of sale, most of us, pull out a debit card or a credit card. And those who pull out a debit card, generally speaking, think themselves financially responsible and thinking, if I can't afford it, I'm not going to pay for it. So, like, if I don't have enough in my bank account, just not got to buy it right now, I'm going to

save up or maybe buy something cheaper. If you fill out a credit card, the minority of us who are for all of his purposes are independently wealthy, just say, I'm going to put on my credit card because it's easy, and then I'm going to pay it off at the end of the month, and I'll get some free float on that, but I'm not going to pay interest or pay over time. The huge percentage of Americans that pull out their credit card and say, I'm going to add it to the giant pile of revolving debts that I already have, and I'm going to pay interest on it, and I don't really know how to calculate that, and I have no idea when I'm going to be out of debt, but I need that thing, and I'm not disciplined enough to pay for it with cash, right? I just don't have the

cash, and I need the cash, and I need the new bicycle, which we can maybe postpone, and sometimes the thing is like I need a pram to put my baby in, and yeah, I'm just going to have to buy it one way or the other. And so the idea of a firm was and is, and it's worked amazingly, 15 years in, that what if there's a third way where what if you could have the same transparency and responsibility and clarity of a financial decision making with a pay over time product that you do have with a debit card? So what if we added the idea of I want to pay for this over time, but I don't want it to revolve and I definitely don't want to be confused as to when I'll be out of debts, essentially turning every transaction into a simple plan, pay for

my baby pram for over six months, let's say $100 at a time, doesn't break the bank, exactly six months out, I'm done, that's it, I'm not revolving, I'm not paying any more interest or anything like that. And as we sort of described the idea, sort of thought, well, like if you're going to do it right, how about you build it so that there is no revolving possible, there's a fixed schedule only, that every charge action is pre-priced. So if you're paying interest, you know exactly how many dollars of interest you'll ever pay. Even if you take longer, that can't change, that shouldn't change. And if you're late, there shouldn't be any late fees. You should just be motivated to pass on time because if you take too long and you're late

all the time, maybe we won't lend you next time. So it was sort of almost like a too simple, too black and white a way to lend money as an alternative to credit cards, which is a very long way of answering the question. But it is available now at three quarters of old e-commerce checkouts in the U.S. and Canada and rapidly expanding into U.K. we've announced we're going to go to a bunch of European countries, and there are plenty of competitors to do the same thing. But we were kind of the first, I think. There were some obviously logical and spiritual predecessors to this idea,

but we sort of purified it down to no fees, no revolving, simple schedule. Everything is pre-priced, everything is super transparent. And this year we'll do almost $50 billion of these transactions. So it's definitely, it's worked out. It seems to be working. It seems to be working. We've probably traded, quite profitable, have been profitable for a bunch of time. the last 10 quarters, we grew 30 plus percent year over year or faster. So it's like, it's both

very big, growing really well, still never charged a penny of late fees, never charged a penny of revolving interest. So we're still true to the idealistic nature. And so as I was describing the product, I talked to a bunch of banking people who laughed at me and be like, okay, dude, you don't get it. You've obviously never lent money for a living. Late fees is where the profit is. Half the profit comes from late fees. So like you're just cut your profitability opportunity by half. So putting that aside, if you don't revolve, what are you going to do when people take too long to pay you back? You want them to take forever. You want them to make minimum payments, so the principal keeps being big and then interest will compound into principle. It'll be amazing.

Like, yeah, all that sounds crappy. Like none of this sounds transparent. None of this makes any sense. And people in Silicon Valley who generally speaking don't need these services, kind of don't get just how significant the cost is on your regular consumer that doesn't have a seven-digit salary, etc. And so as I was sort of trying to raise money for this idea, I would talk to VCs, and they're like, I don't know, why can't they use their platinum amics? Like, they don't have a platinum amics. Like, yeah, but why don't they have a platinum am? I'm exaggerating, but only slightly. Right, right. Anyway, so that was kind of, the difficulty raising money for this financial service company, unlike PayPal, was, I couldn't convince anybody this was

a thing that normal people would use. How did you land on this, though? How did you even get to the point where you're like, this is the deck I'm going out with and this is what I'm pitching? The earliest version of this thing is actually pretty funny. Abridged since it's a colorful story. Actually, Luke is involved. Like, weird, Luke makes another. I like colorful stories. We're not in a too much of a rush.

Yeah. Take your time. Right after PayPal went public, Luke and I, I mean, Luke is a wild and crazy guy. You've met him. I think he talked to me. I'm going to go with he talks me into, but I'm already dating Nelly. I'm trying to impress Nellie. I'm still trying to impress Nellie every day.

But I decide the way to impress Nellie is to get a really cool convertible. And so Luke and I find this convertible. Mercedes just launched their first hardtop convertible. So we fly to L.A. With a view to buy these two identical, we can't have the same color, so we need to like take who. So we get to L.A., we go to the dealership. We want to buy this cool hardtop convertible from Mercedes. Like a mechanical folding hardtop.

So it's like a thing that, like, transformer, call. becomes a convertible if you press a button. Super cool. So we get there and they're like, okay, Mr. Nosek, here's your auto loan. Here are your keys, Mr. Lefchen. Your credit sucks. So we're not going to sell your car today. Like, wait a second. Like we literally just took PayPal public. I'm okay. I've paid off my student loans and everything. Like, yeah, but your credit is really, really bad. So if you want to buy a car today, you're going to have to wire the total amount of money, which is like my future wife, then girlfriend is like, ooh, okay. You didn't tell me that part of your biography when we just heard getting to know each other. What did you do?

I started this company in college with Luke knows who's in the room. And he knew and I didn't that if you don't pay your credit card bills on time, it'll come and show up on your permanent record. So I have to, in fact, wire money. And like as this dealership was wrapping up on the day, they're like, oh yeah, we finally got your wire. Okay, here's your keys. So we drove from L.A. to San Francisco on five, basically racing each other at some ungodly speeds and got pulled over. at two o'clock in a morning and the cops were very upset with us, but actually let us go because they were similarly fascinated by these cool new cars. So we didn't actually get into a lot of trouble,

but got into a minor amount of trouble for going way too fast at two o'clock in the morning. But the story stuck with me because I was fine financially, better than fine. I was mid-20s and just never needed to work a day in my life. And yet the car dealer who knew who I was, like he looked us up, but he was like, oh yeah, I know you guys, you're PayPal kids, cool. Yeah, you can't buy a car. Sorry, your credit's stuck. And I'm like, why does my credit report or my credit score not reflect the fact that I'm basically independently wealthy now?

And that really stuck with me. And so I had a version of this conversation, including the, and then Luke Nosek had a sweater wrapped around his head because it was really cold on five. The middle of the night and cops were really worried about him. Anyway, and so the story comes up. came up over and over and over again. And it's something like, I should do something about this. Like, there's got to be a credit score to be built around, like, came to the U.S. as a teenager with no record of any kind,

and $600 for a family of five. And now independently wealthy Silicon Valley entrepreneur. Like, it was like a five or seven-year window between those two events. So it's not weird, but it's super weird. It's seven years. Like, hello, I got a computer science degree. I was imminently employable. I started a bunch of companies.

not all of them failed, and like, why did it did not catch up to me at all? In fact, it seems to have had no bearing on my ability to borrow a fairly modest amount of money relative to, you know, everything else. That's been, like, sloshing around my head for years, and I finally sat down with another Luke Nosec friend from U of I. It's like, what if we built a better credit score? And so we're like, yeah, it wouldn't be too hard.

So, like, all of us are CS majors. We all have some number theory background, therefore machine learning, therefore AI. And so we built a score and it was like, just use some publicly available data, a little bit sort of some other secrets of us. We built the score and like, oh, well, now we should like make people lend money using our score because it's cool. And so I talked to some bankers, which is how I began the sort of like, you're doing it wrong kid conversations.

And like, yeah, no one's going to lend money using a score that no one else is lending money against. Like, what if it's a bad score? What if it doesn't work? And so if you tell an entrepreneur over and over again, this thing will never work unless someone does X, the natural response is, well, I will do X and see if it works. And so like, I guess we're going to lend money. And so I'm just going to go and get into a lending business.

At which point, I was like, oh, I got to understand how this stuff works. I've never actually looked at lending very carefully. And that began the journey of like, okay, so how do credit cards really work? How did I manage to mess up my credit at the right age of 18? And like, by missing three payments, how did that happen? And so a year later, I was like, oh, my God, this whole thing is so broken and no one even knows it. revolving on a $1,000 draw and finding yourself with a $3,000 debt a couple years later and you can't explain it, or getting a 0% loan, but not realizing that if you're a dollar short or a minute

late, it will compound retroactively from the time it was written to you. So there are all these things that the industry built over the years that are just profoundly anti-customer. It's one of the only industries in the world, actually, like a great way of thinking about I think I heard someone else explains to me this way, but it's the industry where you and your service provider face each other, and you're like, hey, I want to borrow somebody. You're saying, great, I'm going to bet on you failing. I'm going to give you a loan.

But I want to believe that you're, you're not going to fail completely, but you're going to be really late. Ideal you take forever to pay the loan back, because I make more money that way. Optimally, we sneak in a few things you don't notice, and it's all in a fine print, but I hope you don't read it. It is a very, very strange vestigial. Capitalism is supposed to get to efficiency. This got us into a bad part of the decision tree.

It was like, what if I took a bunch of steps back into the branching point where you could have done the more consumer-friendly thing and just did that over and over and over again? What product would I end up with? Like, oh, I ended up with a firm. That's how we got here. And what was your confidence in market adoption? So going out, you're pitching a firm for fundraising.

And I mean, there's so many questions I could ask. You're at a point where you could probably self-fund for a while, but what were some of your assumptions correct or otherwise that underpinned turning it into a business. So you have identified perverse incentives and predatory fine print and so on. So there's a problem. But then there are the bankers who are saying, hey, look, this will never work. But you're like, well, if I have to do X and get into the lending business, I'll get into the lending business. So maybe that answer is the fundraising question, actually. But how did you have confidence that there was a there there from a business perspective?

I would pitch this idea in its various forms. First of all, I did have to fund for a while on my own, which I didn't mind doing it because I was getting completely obsessed with the idea. So as such things go, that was a small price to pay, relatively speaking. But I would keep on telling the story to somebody who was like a CEO or former CEO of a bank or somebody who managed a credit card portfolio. And they'd be like, okay, you're doing it wrong. all the money's in the late fees, the money's in delinquency, it's just like,

eh, come on. And I had two ideas that both turned out to be amazingly right. By the way, every business is like, there's like a moment of luck where people's like, yeah,

I don't really want to admit to it. And there were ideas that I'll claim some ownership over, but I had no idea if I was right. And the first one, I read this study that said that millennials hate banks.

And like, it didn't really explain why. It was just like, millennials hate banks. Like, they hate a lot of things. Like, Every generation has a list of things we want to complain about.

I'm like, ah, these complaining millennials, I'm not a millennial. I'm a, I guess, young Gen Xer. But millennials are definitely like, oh, they're such whiny people. But they were willing to participate in some study where they ranked all the things they hate. And the number one thing they hated, like 70% of millennials, according to that study, hated banks. So every time I would ask a banker, why can't this exist? Why can't there be a lending product that doesn't take advantage of people's unwillingness to read, find print, and do exponential math? they're like because banking is like the stickiest thing in a world.

You bank where you live and like, yeah, you kind of like your bank. It's where your parents banked. Like you go to marble hall and the vault and you like it. It's likable. I'm reading a study here that says that they hate you. Like all the people that are going to be shopping and buying stuff 10 years from now, five years from now, they hate you. 78% of them think banks are terrible.

They should go kill themselves. None of these people were like, I don't know. Like I don't believe that study. Like, okay, I mean, they surveyed like 10,000 people. Like that's a pretty stat-sig. study. So, like, if I'm right, and I do a thing that's like even slightly better than the existing thing, I have a ready-made audience of people that are going to be like, cool, I hate the other one anyway. At some point, I need to, I need an explanation beyond they hate it. And so

what I realized, and I think this is the part that I was lucky because I didn't know any better in the beginning, but I've since sort of confirmed this to be true, millennials were early teens during the great financial crisis. And so if you are getting booted out of your house, in 08 and you're like an impressionable youth and you're asking your parents like what's going on why do we have to live in a motel now parents are like because the bank they just took the money they took my house away and the embarrassment and the horror of telling your kids we're going to move to a smaller house or to a rental or to like we're going to live on the streets god forbid that's a horrible impression to have in your most impressionable years and so I think there's a lot of people who are

like actually quite genuine in the I am willing to try anything but the thing that my parents got the sharpen the stick for. And so that was kind of luck number one. And I really believe that from the very beginning. And it turned out to be true. Like if we build something that normally you have to market it, you have to convince people to trust you and all stuff, like, I think they don't need any of that. They just need the belief that there's a better thing out there that exists. And they'll give it a try because they are predisposed to not liking the other part. And that turned out to be completely true. The other part, if you are unwilling to profit from all the sort of wacky externalities of financial services, you better be good at underwriting.

So if you're lending money to someone, you are paving over underwriting mistakes or lack of underwriting or poor credit score. Can you define underwriting here? When somebody shows up and says, I'd like to borrow $100 and you want to respond to them in real time, you have some giant machine learning model or a small machine learning model, decide yes or no. And what that practically means is it has to take whatever available data that person is willing to share, be it public or private data, run it through some form of a classifier,

or these days, all kinds of interesting architectural sort of ideas exist in underwriting, and say yes or no, but yes or no is actually not enough. What do you really want is a price of risk. So it's some, for simplicity, expected value or expected loss. If I give you money today, what are the odds, what's the expected value of you bringing it back to me with the appropriate amount of interest if that's what the price of the transaction is. And so underwriting is discipline of doing that at scale, in our case, completely in real time. That's the score we built. The underwriting score, the credit score was that. And the theory that I had was credit scoring is hard, and you would have to have the absolute best people working on it. And yet most of the time

when you encounter people working on underwriting or credit scoring, they're not as impressive as people I'd met in my wondering is looking valley up until that point. And they're like, why is that? It's an interesting problem. It's quite mathematical. There's some very smart mathematically, client people I know. And the best I could get to was it's embarrassing to talk about that you're working on loan and credit underwriting stuff at cocktail parties. Like when somebody asks you, what do you do? You're a math genius. You went to school for applied math or computer science. What do you do? Like one answer is, well, I went to Wall Street and I build real-time trading models. Like, that's kind of cool. Maybe it's like not societally important, but you're doing something

interesting. And there's all the other answers. I worked for the NSA and I break codes. Like, that's what I wanted to do when I was in college. if you're like, I make lots of loans and I make sure that they're underwritten well. And by the way, I make most of my profits by charging people late fees and sneaking in nasty terms. So there's got to be a latent pocket of talent, people who would absolutely work on underwriting, because it's a really hard and really interesting problem. But they won't join the industry until someone shows up and says, I'm going to strip it of all the gunk. I'm going to make it completely transparent.

I'm going to be super pro consumer. I'm going to take a lot of pride in the brand that we have, which stands for transparency and honesty and all the good things you can do if you would just sort of take a broom to the whole thing. And so as I sort of formulated the product, like I'm going to get my unfair share of really brilliant mathematicians because they're not going to go to Wall Street

because it's kind of a so hollowing thing to do to squeeze pennies out of the market. They'd rather come to work for me and build underwriting models with me trying to help people in normal America borrow money and not feel screwed or not get screwed. And they were totally exactly right. Like we have people who have been here

for 10, 11, 12 years, doing that job who are like still, I'm so proud of what I do. I'm a mathematician and I'm putting my big brain to work on making honest financial products. So those two things were like, they're good ideas, but they're also a lot of luck. Those quarter on quarter growth rates that you're mentioning are kind of nuts. I mean, seems really remarkable. And I'm wondering, looking at through your scrying ball into the future, what do you think e-com looks like. This could be, as it relates to a firm, it could be more broadly speaking, in two to three years. Who knows? Right? Let's just pick that as an arbitrary timeline.

And does agentic commerce, if that's actually going to be something that takes hold quickly, if you think, really affect a firm, or do people state preferences in advance? So, not really. It's just maybe the way that people purchase things change. But honestly, for you, structurally, things don't really change. I mean, how do you think about the future of e-commerce. First of all, the reason the growth rates are compounding at a almost $50 billion mark, 30 plus percent of year over year, quarter after quarter after quarter is pretty awesome. It is a staggeringly good growth rate. It is made better by way of noticing that our credit-related losses are super consistent. It's easy to grow. The top line, you know, I've lent more money

this quarter than I did last quarter. Great, but will it all come back? It's a really important question. And the way you measure the success of these underwriting models is you ask the question, okay, so you made a bunch of loans last quarter, last year, average half life of our loan is like five months. So, you know, five months back, you get a pretty good picture of like, how good are you relative to today's macroeconomic reality? And if you look at our loss numbers, or delinquency numbers, whatever metric you want to choose, they're really, really consistent. So we are, in fact, very good at underwriting. And yet, even at 50th billion, we are but a footnote. So the overall credit card debt in the U.S. last I looked was like $1.3 trillion.

So we're like scratching at the total size of just a credit card debt. Not all credit card transactions become debt, and there's plenty of debit card transactions and, and so the overall size of commerce is enormous relative to where we are. And so our growth is not a surprise in a sense that what may have been a surprise at some point was people actually like this product. There are reasons to believe or reasons to say that this product is harder to use. So credit cards and debit cards, for that matter, is the single best financial interface ever created? If you think of the level of complexity that takes place when you take out your card and tap a checkout counter and just walk off with your cup of coffee, there's a lot of stuff that happens underneath. There's an acquiring bank, there's the issuing bank.

They're talking through a network. There's all kinds of complexity, just at a technical level. And then there's credit and blah. There's like layers and layers of many decades worth of innovation that make an incredible, single transaction happen in like a tap and off you go. And so when you introduce by now pay later, which is this idea, every transaction is separate. You're conscious of every transaction. You understand how long is going to take to pay this transaction off. You're actually creating friction. You're giving people more steps. So one counterargument to why this thing makes any sense at all.

Like, why would you want to trade the beauty of tap and go with us like open your app and do some stuff? And the answer is simple. The industry devolved, and you don't really trust what's going to happen to you after you tap. So you hesitate and you're like, am I going to really be able to afford it? Or is my card going to work? Am I going to get declined? Or am I going to go into debt that I probably shouldn't go into? A firm offers the antidote of you go into the app.

You look at your purchasing power. You know exactly what we are comfortable lending to you. You get explicit approval. Next transaction is guaranteed to work. And by way of saying, we're not going to charge your late fees or change any of the pricing. We're actually telling you you should. feel very good about this transaction. We are going to make less money for a minute late. We'll make no money if you don't pay us, and we feel good about lending you this money.

So what we sell or what we offer to the consumer end of this is certainty and sense of control by way of creating some incremental friction. Fast forward a couple of years. I don't have enough of a clear crystal ball to know exactly what agenda commerce looks like, but I know a lot of it is happening already and I think a lot more will happen. The discretization of transactions and this incremental friction will be reduced. don't actually have to do all the manual labor we are putting you through right now because your agents will do it for you. And so today, we're offering a thing in exchange for some friction. In tomorrow's world, we're offering the thing that obviously works. Fifty billion dollars can't

be wrong, but the friction will go away or largely go away, which I think is just going to accelerate this whole approach to financial transactions. And the way people think about money will change towards, I know exactly what the total financial state I'm in. I have agents that are looking out for me. They won't get me into debt that I shouldn't be in. They will get me out of debt the second I should be out. I will have a PhD in consumer finance embedded in my phone looking out for every penny I got. There'll be no slop.

And by God, no one's going to fool me again with fine print-driven business model. So the world in which you have AI looking out for all of your financial concerns is a beautiful world. because we are already there by way of not having any dependency on I. You're too dumb to know what's happening to you. So just pay up. That's how the industry, a lot of the industry works today. So I'm very excited about the world where you don't have to change your business model because suddenly no one's getting fooled because that was never a part of our business model.

I'm going to ask you, might be naive, probably annoying, but it's going to be a like how long until X happens type of question. So I apologize in advance for that. But I look at, say, China and we chat. It's like the interface to everything. in terms of purchasing, you name it. It's incredible what they've been able to do, and there are a lot of reasons for that. And then I look at, say, chat GPT,

I look at Claude, and as you mentioned with that tap to pay, like a lot has to happen under the surface. So when people say, oh, well, chat GPD can just put ads into the LLM responses. I'm like, you may be underestimating the relationship building that Google has done over decades and decades and decades.

There's a lot that goes into it. But I am curious to know how far away you think the reality is wherein someone can pull up a clod or chat GPT and ask questions and make purchases directly from a single interface. I don't know if that's the form it'll take. I suspect it'll probably be, at least it'll be attempts made to create something like that. and then everything will happen in the background, including presumably some type of a firm-like option,

if you select to do that. How far off do you think that is? It's very close. It's very dangerous to consider commerce as this uniform fabric that just kind of won a thing, buy a thing. One of the dangers, by the way, of building on mass market products in Silicon Valley, if you're not inventing the future,

in which case you're Greenfield, blank sheet of paper, if you're trying to improve something that exists and has existed for a while, it's essential you travel to where normal people live and see what they do because we are not normal in Silicon Valley, and a global Silicon Valley. This is not limited to San Francisco and the Bay Area. We think you just want a thing and buy a thing. And if that thing is $10,000, great.

And if it's $10,000, well, you know, we get paid a lot. So, okay, just buy the $10,000 thing. And like, you care about speed and efficiency and less distraction. and normal people actually hang back and like, whoa, it's $10,000. First of all, that's an incredible amount of money. And by the way, for someone who is not within these hot, you know, beds of growth and opportunity, maybe $1,000 is an incredible amount of money. Maybe $500 is an incredible amount of money depends on where you are.

And they sort of, ooh, I got to think about this. I want to make sure I'm not exposing myself to a bad financial decision. I also want to make sure I'm getting a good deal. How am I going to pay for this? How long is it going to be on my? personal balance sheet before I'm done paying for it. Like those are all questions people are very conscious of. And so for a lot of people in every part of the U.S., Agenda Commerce is here when you tell Instacard, bring me a sandwich, or bring back your groceries and DoorDash, bring me a sandwich,

or vice versa. And that's like the threshold of, is this enough money for me to sort of hang back and ask these questions? So it's who it is too much, they're probably not using these services just yet. For whom it's sort of like, yeah, I want a sandwich. I want a sandwich. I want to it now and like I'm going to outsource the rest of this to an agent, be it a human or a robot, don't care. Like you have my credit card number, bring me a sandwich. And I think that's here today. And we will see more of that become a thing and many things like real time delivery or

near real time delivery. If you go to other markets, you have, I think in India, somebody launched a like six minutes or less delivery service, which boggles my mind. but their storage of mass market goods to buy. And edge has got to be just like an exercise and extraordinary logistical prediction. Anyway, that stuff is here. It's coming and more will happen.

I want to know what I'm getting into. I want to have agency in selecting a thing. My taste matters to me is a thing that probably will always involve humans. Like I need a pair of pants is not actually a thing 95%. If you're Silicon Valley engineer and you're too busy coding and you just, you know, you have a big hole on your butt, you got to need some pants. Agent, bring me a pair of pants. Like, sure.

For mostly, like, I want them to make sure they fit, and I want them to be my favorite color, and I also wanted to match the rest of my ensemble hair and so on. And so, and it goes up from there. Like, I need a bicycle, but I have brand preferences, and my components are important to me, et cetera, et cetera. And so AI will not replace the need for decision-making and thoughtfulness in consumption. It will obviate some pieces. like who has the best price on the bicycle I want with the componentry that I prefer

is a thing that you will gladly outsource. Like you need to make sure it's real. You need to make sure that the data you know, LMs are fetching for you is current. But that's what we're working on today. But at some point very soon, you'll say, hey, Chad bot of the moment or of my browser or my desktop, I would like to buy a beautiful-looking Italian-made bike with Shimano components. I want a good deal. I'm probably going to pay for it over time because it's expensive. And I definitely want to pay no late fees. And ideally, I don't want to pay any interests.

I'm bringing my business to someone who should be so lucky because multiple people will sell me a beautiful Italian-made bike. And go to some comparison shopping for me, bringing some images of beautiful bikes. And I want to lust after all of them and then pick the one that gets my business. That's a great task for AI. The building blocks for that will include something like a firm where the AI will say, all right, so all these people offer someone. ways of paying. Some of them offer a firm, which has no late fees, and by the way, has negotiated a special deal with a manufacturer or the seller where they will pay your interest for you. So they're actually covering the time value of money. So the plan is interest-free, which a lot of our transactions are interest-free exactly this way. They're funded by the retailer or the manufacturer.

And we're like grasping in that future right now. We're certainly building a lot of the pieces, so I tend to be slightly ahead of schedule as far as the future I want to live in. I'm trying to pull it in here. But this is quarters, not years. Incredible. Man. For the foreseeable future, there's so much to build. The thing that irks me the most in today's media is the SaaSpocalypse,

whatever, but the jobpocalypse people are proclaiming is so goofy. There's so much opportunity to build so many exciting things for everyone, not just Silicon Valley startup. Everyone from the oldest companies to the youngest ones are like, oh my God, there are all these pieces of software that I had to buy from someone who did a bad job or that I could never buy anywhere and I wouldn't

know how to start with. Like, well, now you have all these amazing tools that just like birth it for you straight from your head. Speaking of things you can put on your brain, very soon we're going to have ultrasound, mind reading that spits code on the other side of it. That's what I'm waiting for. It seems a lot closer than I would have predicted if you asked me just a few years ago. It's wild. The world changed a bunch of times of the last 12 months but I think like the Claude Code moment

last December was like a big like whoa it really is here the ability to produce something from glimmer in your mind to like a thing that actually works

reasonably well and has only improved since was like a big breaking point the one before was obviously Chad GPT and so on a couple of rapid fire questions for you

coffee we're going to short change this one I apologize maybe we do another podcast solely dedicated to coffee, but for people who want to improve their coffee experience, cheap option, intermediate option, Bugatti option. Any thoughts on improving coffee experience? I'm not paid by any of these brands, so I just wanted to make it very clear. I have some very strong opinions. You? Strong opinions? Come on that. Yeah, exactly. All right. So,

first of all, this is primarily relevant to espresso. I love all coffee in all forms. I happen to prefer espresso as a beverage of choice, but I don't judge. You can have your lattes, your Americanos, you know, whatever. But from the point of view of espresso and espresso-based drinks, the single most important thing is the grinder. And so you can get a fantastic grinder like a niche or kind of these $600, $700, $700 that will elevate your game to an incredible level. If you have a grinder that you didn't pay a couple hundred dollars for, got to go do that. If you want to get to like a demonstrably better grinder than sort of the the $600 range, go get something that looks like a Kaya orbit.

That's like a $1,600 to $2,000 grinder. That's a gray grinder. You can swap out burs, so switching out burs is really important. But even if you're never going to replace your burs, you still want something that's a fall-through grinder. And a good one will cost you on the order of $2,000 plus or minus. And then if you're like, you know what, no price too large, I'm going to get me the absolute fantastic home grinder. I mean, obviously there's like industrial strength stuff that's even out.

Out there, there's a thing called Weber workshops that produces unbelievably expensive, but unbelievably good stuff. So if you want to Weber, God bless, that's a great product. The same company that makes the grills? No. Different. It's got to be. It's totally different.

I had this exact question yesterday. Anyway, so Better Grindr goes a very long way. After that, go invest in skills. So there's an incredible number of online resources that'll teach you how to do a great job. I'm but a student of those people. there are many, many, many great videos you can watch on YouTube that'll teach you how to make a great cup of espresso.

Before you buy anything else, just go watch all that stuff because it'll teach you a lot of things you don't know about. After that, you're probably going to want to buy a good espresso machine. The great news is that there are many, many, very good espresso machines.

I don't want to begin religious wars here, so I'll state my preferences, but these are preferences. I prefer 58 millimeter port of filter diameter. Many people now swear by a 54, 53 millimeter. You can go up or down, but I stick to the classics. I think the finest,

most reliable home machine is made by Lamar Zoko. That is definitely in the multi-thousand-dollar range, but that's what I have on my counter, and it's never failed me, and it's beautiful, and both inside and outside, there's lots of cool, like if you're a super nerd and you really want to nerd out on the metrics, decent espresso is a fantastic product, really fun, but it's like an Android tablet that happens to be attached to an espresso machine, basically. Lamarzocco is old school. That is the logo you'll find in every self-respecting coffee shop, like the long red typically spelled out La Marzocco. That's a granddaddy of them all. It's amazing. And so on. There are many, many other brands that will sell you a good espresso machine. If you're trying to go down market a little bit,

but like bulletproof, we'll make a good cup every time. Breville, people tend to sort of hate on it a little bit because it's so consumer, but it makes great coffee. Yeah, Breville's surprisingly good. It's very, very good. I mostly just wanted you to showcase my obsession. Yeah, your obsession. I'm going to force your hand, though, on one year. We're going to take a side quest away from pure expressive territory. Chemics, French press, or aeropress if you had to do coffee with one of those three?

Chemics. Chemics. Why chemics? If you're going to go for a light roast, I mean, each type of roast, each type of bean speaks to a method. So I happen, it's like another heresy, by the way, in the modern day. I like medium dark roast for my espresso. I love the honey viscous. Feels like it's too thick. You can almost chew it.

I love that in espresso. Like that's a great cup of espresso. For non-espresso drinks, I actually love thin, high clarity, low body. Just give me the pure essence of like, not diluted, but like the bean in water. And chemics are probably the best one of those. It's totally the most controllable. Beyond that, French press is great. I mean, that's like a campfire type setup.

And Airpress, if you're going to go there, just get an espresso machine. ChemX, for those people wondering, will cost less than $600. And I will say also that you can get, correct me if I'm wrong, you're going to know this better than I do, but you can get, they're not going to be anywhere near as sophisticated as the devices you described. But if you are using, for instance, a blade grinder. something that is not a burr grinder and you get a handheld burrinder, which you can probably buy for $100 or less, the difference between those two will still be noticeable. What would you think? You're like in the territory where I probably be like, you know what, no coffee today.

I'm kidding. I've been known to exhaust the local supply of pre-ground pods in hotel rooms. So there's coffee and all the beauty of it, and then there's caffeine, and then, you know, I need both. They're not the same. The spice grinders, as they're known, you can definitely make a cup of coffee with that too. But that said, by the way, if you must have a thing that is not an electric grinder,

get a manual grinder. Like, those are very cheap. I think Lido, if I were correctly, as a brand, that'll sell you like a very, very high end, but like still an aura magnitude cheaper than any of the stuff that I threw out. I mean, it's a little bit of a, you know, Good workout, but you'll make beautiful coffee with that.

There's a really nice correlation to the lower the RPM, the less you're damaging, if you will, the bean as you're grinding it. So you can actually get some amazing taste out of manual ground beans. It does take like 10 minutes per cup, though, so you got to be ready. Yeah, this is what I'm talking about. This is exactly what I'm talking about. So I wasn't totally miss speaking. Yeah, the Lido-OG manual coffee grinder.

Yeah. This one's 273. There are some other options that I found at slightly lower prices, which I thought did a nice job. It is a workout. It is a workout. Yeah. But hey.

Switch arms every once in a while. If you're going to go into the ritual of it, I know people who have traveled with something akin to that, an aeropress and some other stuff. Airpress, great campfire attraction, for sure. All right. I'm going to destroy any shred of respect that you have for me with respect to coffee by also saying, like, if you want something simple,

Cometeer, actually, I really enjoy some of their stuff. These frozen, oh, the face, if you guys, are watching video, the response that I just... You know, by the way, so I grew up drinking not just instant coffee, which was hugely popular in Eastern Europe. I occasionally was exposed to chicory coffee, which I don't know if you've ever tried that.

Popular in New Orleans. Except there's no coffee in it. It's just chicker in. Oh, God. So it's just like placebo. Yeah, it's like kind of sort of tastes a little bit like coffee, maybe? Like you put enough hot water in it.

If it's hot enough, you're like, ah, it doesn't smell right, but whatever. Yeah, it was in Soviet Union, it was one marketed under, uh, coffee light. Coffee beverage stock. Something meant to, uh, evoke some plant component that both coffee bush and chickery's would, would share. So like, well, you know, they both have it. So it's good enough.

It was disgusting, but it'll wake you up. So there is that. Yeah, chikery is pretty interesting from a fiber. perspective, but I'll leave that for another conversation. Max, last question, this might be a terrible question to end on, but I am curious, for someone who is technical or just a individual contributor in the sense that you were very technical and then grew into the CEO role and running a public company, let's put that aside, because that's a whole kettle of fish by itself. But any books or resources that you would recommend to people who are hoping to become a CEO for the first time slash founder?

Yes. So here's a couple. There's not a panacea, but I will preface this by saying I have extremely low degree, by which I mean like zero to negative of respect for business books. Vast majority of them are far too long, present company excluded. Business books that are verbatim anecdotes of people who've done it are actually high value because I think it's very hard to distill what is. inherently a collection of unique experiences. So, like, you can edit it down, but you can't make it generalize it. Yeah, if you generalize it, like, you're robbing the reader of the true history of what really happened. So I'm a huge fan, actually, of what you do in your books because there's always so much color directly from the source versus I think this person meant X when they talked to me,

and I'm not going to print anything they said. Anyway, that said, I'm a big fan of business books that have been distilled to business essays because then I feel like the author did the work of like, I'm going to generalize, I'm going to really generalize it. There's this book called Seven Powers by Hamilton Hemler. If you haven't read it, it's a really worthwhile distillation of what it takes to build a competitively lasting business. It talks about why network businesses are longer living than non-network businesses and what brand actually means. I'm going to build a brand.

Why do you care about having a brand? And so it's a great book. distills a ton of these things that you kind of thing you know, but like they need names and terminologies. And it's idiosyncratic in a sense that I didn't think of the word power, didn't think the term power until I read his book. And I found it to be a great kind of a distillation. It's very short, slightly shorter than master of margarita. So anyway, that's a good book. Another good book that is off the beaten path, but a great one called a failure of nerve. It's a book about leadership. And it really postulates this concept of differentiated leader. As a CEO,

as a founder, a lot of times you find yourself at odds with your own team where you're making an unpopular decision. You're firing a beloved employee. The sort of whenever there's doubt, there's no doubt, then you go do it and you're like, holy crap, what have you done? So you find yourself in these moments where you have to persevere before and then after a decision that you made and many, many flavors of it. It's a good book that kind of teaches you how to think about it, how to tolerate the stress that comes with it, how to sort of put up with the pressure you're going to get and not lose your humanity and not become a tyrant, but also not be someone who is easily bowled over into like, okay, okay, I'll reverse my decision because then

you lose the confidence of the people you're supposed to lead. So that's a great book. I am sure it's in your list and everyone's list, but you should read, if you haven't read it, if you're trying to start a business, you should read Influence by Chaldeen because that is probably the most important social science book published in the last 50 years. So good. It's a great book. I'm shocked that I had never heard of seven powers. And I just looked it up, the forewords written by Reed Hastings of Netflix, had never even heard of it. That's shocking. There you go. I'm excited. If there's one thing you find in this podcast, any biographies, they don't have to be business related, but biographies that have informed

how you approach leadership or running companies, it could be indirect too, right? It could be a and how it informed your view on persistence, right, through stories or anything. So, Cherna wrote a bunch of these, like, tomes, speaking of enormous books. So there's like everything from the JP Morgan, Hamilton. Yeah, yeah, exactly. Washington, a life, Grant, Mark Twain. Yeah, so Mark Twain is a great one. Titan is a huge one. So Titan is probably the one that's closest to like business advice. It's a bit of a like how to be ruthless, basically, but that's, that's besides the point. Yeah, it's the life of John D. Rockefeller.

The cover photo looks just like the vampire and nosferatu. It's terrifying. But yes, exactly. Kind of apropos. Those are great books. There's a great book called A Mind at Play, which is Claude Shannon's biography. By the way, when I was preparing for our conversation, not usually as well as you are, I was listening to your conversation with Ed Thorpe, who I knew a little bit about it,

but I was like, oh my God, that guy's flipping amazing. I want to be when I grew like him when I grew up. He's now like one A of the list of people I'd like to meet at some point of my life. So incredible. It just seems like an unbelievable guy. So he was friends with Claude Shannon, that alone makes him unbelievably interesting. So Claude Shannon is kind of like a platonic ideal of what I thought it was going to be

before I left academia because like the guy is just like brilliant in every way. Like everything he touched became this flower of intellectual brilliance. American polymath and mathematician, right? Yeah. Why does Shannon stick out? to you so much. Fun fact, you know,

Claude named after Shannon. I did not know that. That's incredible. I didn't like learn this from anthropic people, but I would be shocked if that's not the answer.

Claude is not a common name. And Shannon is obviously the inventor or the postulator of the information theory. Right. Father of information theory. So anyway, so he is a great example

of someone who worked on some very serious stuff and was always playful. He's like Richard Feynman of computer science. So Feynman was famously brilliant and there's a great quote from Murray Yellman. Somebody asked him like, what's your algorithm for solving really hard problems? Like encounter really hard problem. Step two, give it to Richard Feynman, step three, receive solution. And so Shannon was kind of bat in computer science. Protro computer science, obviously. He was building this in the 40s, 50s, 60s. And he managed to remain fun. He managed to have fun.

He was just this unbelievable fountain of fun ideas, and he was like a hardware tinker and made card counting devices and all kinds of hilarious stuff. Yeah. Makes sense that he would know Ed Thorpe, right? Who beat the roulette table? Of course, exactly. And so that's a good book about him. These days, it's so hard to read books because there's so much content online and podcast and blog form that you're sort of like, I'll get to this thing. It's content online feels ephemeral.

So you're like, I must read this now because it might scroll off and I'll never see it again. a book is in my hand. I have books in my backpack that I travel with that I've been meaning to read for half a year now and I still haven't opened them and just carry the weight.

I have a 500-page graphic novel that I'm going to be lugging to New York City because still the digital experience just doesn't do it, but the burden I bear. I keep on looking for

a great digital graphic novel consumption experience, but it does not come close. It's not there. We'll be able to replay our dreams before we get that. Max, so much fun to hang. Thanks for taking the time.

And where would you like to point people? We've got Levchin.com. We have sci-fi.com. We have various social. Affirm.com. There's a lot we could point people to. Anything else you'd like to add, whether it's pointing people somewhere

or closing comments, anything at all? No, my work is out there. I try to build in public. If you're interested in a firm, obviously afirm.com is where you find that. I tend to go deep, so my project list is short at any given moment, but left chin.net, lefftron.com, either one is the list of those things. Amazing.

Max, thank you again for taking the time and everybody listening. We will link to all of the things we mentioned, books and resources and people and everything else, affirm, of course. And on and on and on in the show notes, as per usual, at tim.com. com. Just search Levchen, I can promise who if he will be the only one. I might be the only Max, in fact, on the podcast so far. We'll find out.

I might eat my words. And until next time, of course, thank you for turning in. But be just a bit kinder than is necessary to others, but also to yourself. And that's all for now. Thanks again, Max. Great to see you. Safe travels. Hey, guys.

This is Tim again. Just one more thing before you take off. And that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend. Between one and a half and two million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kind of like my diary of cool things. It often includes

articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and on that gets sent to me by my friends, including a lot of podcast guests and these strange esoteric things end up in my field and then I test them and then I share them with you. So if that sounds fun, again, it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about. If you'd like to try it out, just go to tim. dot blog slash Friday. Type that into your browser, tim.blog slash Friday. Drop in your email and you'll get the very next one. Thanks for listening. Most people's finances live in say a dozen places. This includes me, accounts, cards, investments, and more that never talk to one another. It's hard to keep track of. This episode's sponsor and one of my team's absolute favorite tools, Monarch, is the all-in-one personal finance app that uses AI to give you a complete, organized view of your money. Accounts, investments, net worth, savings school, all in one place, always up to date. A bunch of my friends also love this. Monarch has helped users save more than $200,000.

per month on average. And you can ask it all sorts of things. You can ask Monarch's AI assistant, anything about your money. Am I on pace to hit my savings while by December? Or how is my travel spend trended over the last six months? You can ask it anything. Monarch then analyzes months of data so you don't have to. And with AI insights, Monarch flags things you don't think to look for. So it can go beyond your question. And now you can get half off of your first year of Monarch with code Tim at Monarch.com. That's just $50 for your first year. at monarch.com with code Tim. One more time, monarch.com. That's M-O-N-A-R-C-H. Monarch.com, code Tim. One name that has come up on this podcast, more than once, is Dr. Walter Longo,

USC professor with decades of peer-reviewed research on fasting, nutrition, and aging. And as some of you long-term listeners know or readers, I regularly fast. I've done a lot of experimentation with fasting over more than a decade, including intermittent fasting, extended water-only fasts, up to 10 days. And I've looked at the before and after. Frankly, the fasting has been one of the most incredible unlocks that I have found. The before and after, looking at glucose control, oral glucose tolerance tests, chemoglobin A1C, et cetera. All these things that really do matter for the long term, for mental health, for physical health, have had dramatic, dramatic shifts. and I've talked about that before.

But the sad truth, the truth about fasting is that it can be really hard. And that is why Walter is interesting. He's best known for something called the fast mimicking diet FMD, which is essentially a way of eating that produces many of the benefits of fasting while still allowing you to eat food. So if we look at that a little more closely, he took what he learned in these randomized control trials and so on and packaged it into a five-day program called Prolon, P-R-O-L-O-N.

It's five days. So for five days, you restrict your food a bit, and what Prolon does is makes it idiot proof. It comes in one box. Everything is laid out. There's no guesswork. You just follow the packages. And in scientific studies, five-day cycles of the fast mimicking diet, improved markers tied to metabolic health and aging, help people drop fat while holding on the lean muscle, and even associated with measurable drops in biological age. And to put some numbers to it with glycemic management, blood sugar management, We're able to see in one RCT improvements in 53% of FMD participants versus 8% of controls. So it does make a difference. You get the benefits of fasting, including autophagy, your body's cellular self-cleanup process, while still eating real structured plant-based meals. So you don't have to negotiate with yourself. You don't have to struggle. It all comes in one box, and it's right there.

Layed out, simple to follow. and there are other people who recognize friends of mine like Rich Rollo. Who also have used Prolon. For a limited time, Prolon is offering my listeners 15% offsite wide plus a 40% bonus gift when you subscribe to their five-day program. Just visit Prolonlife.com slash Tim. That's P-R-O-L-O-M-L-I-F-E dot com slash Tim to claim your 15% discount and your bonus gift.