This Week in Startups - Kraken CEO Jesse Powell responds to NYT hit piece and breaks down the state of crypto + Alexander Olesen CEO of Babylon Micro-Farms | E1487

Episode Date: June 18, 2022

Today, we recap the Warriors' finals win (2:50) with some potential takeaways for founders (14:00). Next, Jason speaks with Jesse Powell: founder, and CEO of crypto exchange Kraken, and they discuss the state of crypto and the recent hit piece the NYT published on him (48:06). For this week's OK Boomer segment, Producer Rachel sits down with Alexander Olesen, co-founder, and CEO of Babylon Micro-Farms (2:07:41). (0:00) Jason and Molly tee up today’s show! (2:50) Warriors win! Recapping the Warriors’ finals run (12:47) ActiveCampaign - Get 10% off your ActiveCampaign subscription today at https://activecampaign.com/promo/twist (14:00) Downmarket: what can you do? Lessons founders can learn from the Warriors’ leadership (22:37) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist (23:55) Work harder, work smarter (30:25) Microsoft for Startups Hub - Apply in 5 minutes, no funding required, sign up at http://aka.ms/thisweekinstartups (31:41) Toss to Jason’s interview with Jesse Powell, founder, and CEO of Kraken (48:06) Jesse Powell speaks with Jason about his NYT hit piece, crypto, and company culture (2:02:04) Recapping Jesse Powell + Toss to OK Boomer with Alexander Olesen, CEO, and Co-Founder of Babylon Micro-Farms (2:07:41) OKB: Producer Rachel speaks with Alexander Olesen (2:26:00) Outro

Hey, everybody. We got a crazy big show for you. And I got crazy energy. It does. Big championship energy. Warriors won the championship, and I am so excited, Molly. It was a great. It was a great night.

It was a great series. It was great to see Jaramon Green be like, yeah, fans about you gave me a real hard time, Boston fans. But look what I did. I beat you. God, so awesome to see them win in Boston. We'll talk about the game and the series. later in the show. So skip,

you know, skip ahead if you're not a basketball fan. But yeah. It's our, it's our backyard. So we're going to do it. And then we have a really interesting interview for you today. Jason sits down with Cracken CEO, Jesse Powell,

who is, yeah, a great get about this week's New York Times article about how he was handling or maybe mishandling the company. And then also the state of crypto. I mean, there's really a lot of actually enlightening information about regulation and what's happening in the crypto market.

and how he's still buying. And I want to get your feedback on how I handled that interview, interviewer to interview. It's just, I thought it was a great conversation. I think I did a pretty good job using my interview techniques. I will talk about that when we get into the show. But of course, it's Friday. You all know and love what happens at the end of the show every Friday. That's OK, Boomer with producer Rachel, who in true Gen Z fashion has PTO 10.

She's taking a paid day off. As crazy as that is, I don't know, Molly. This whole generation taking pay time off, using their days off. It's crazy. But it's going to be a great show. Stick with us. This week in startups is brought to you by ActiveCampaign. The hardest thing in business is turning a lead into a customer, into a repeat customer.

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This week in startups. All right, everybody. The Warriors won the NBA Championship last. night, beating the Celtics in six games, as I predicted and Molly predicted, fourth rank for Steph Clay Draymond and Steve Kerr and Bob Myers, the architect. Also, Andre Agadallo, I believe, was there for all four. Correct me if I'm wrong. He definitely was, yeah. I mean, I like tears welled up in my weepy little eyes when he came out and was hugging people and giving people just and given Tatum like a pep talk and yeah. I mean, he's just,

so much heart. It's one of my regrets. I haven't built a relationship with Andre Aguado. He's investing now, right? And he's investing, so I don't know the people around Andre, but if somebody wanted to hook us up

just to, you know, like have coffee or something, I'd love to collaborate with him. I have a lot of respect for him. Obviously, I'm in friends with Jaramond and stuff. Yes. But congratulations to the team. It was just great to go to all the home games. Great to sit with you, Molly.

And share that experience. That was so kind. That was such a great name. Well, you know, I really appreciate you coming here. You know, you had like three or four offers and you picked us. And so I have the thing about talent. You know, I want to be treated as talent, you know, really well. You know, I want to be appreciated for my performance.

And if you're appreciated, I think you probably experienced this. You tell me if I'm wrong. But when I feel appreciated, I feel like my performance, I can be more confident in my performance. I feel like I can lean in just a little bit more. You know, I just feel like a little more confident. I know I probably shouldn't care about other people's support of me as, much. But it's just the nature of doing

what we do. If the audience says, hey, I really enjoyed that episode, or if your co-host says, hey, I really enjoyed that, or the producers, or just anybody involved in an advertiser, the sales team, anybody gives me a little like recognition. I just, it just gives me a fill's my bucket a little bit. I get just like a little extra

10%. Mm-hmm. Me too. I think this might be why we're talent because we like to be appreciated. Look, we like to be appreciated. But everyone does. Maybe we do a little bit more, and that's why We became talent, but everyone does it because it's a positive motivation. Like positive motivation totally works.

And it makes you want to do more for the organization or the person 100%. And that's like literally in a management style. Because I listen, I got 10, 20 years left in my career. You know, I put up good numbers in the first 30. But I really want to put up spectacular numbers, less 10, 20, enough to buy the NICs perhaps. And so I'm really been thinking about just talent, get the great people, make them feel 12 feet tall. make them feel like they could literally pull the sword out of the stone, you know. And, you know, I think doing social things or, you know, understanding what the person likes,

and I know you have an affinity for the Warriors, it's just a great experience for us to share. And, you know, it makes us better co-host and stuff like that. And also, you know, if we were recruiting a third person to come here for when we go seven days a week, you know, it feels imminent. And they're like, you know, I'm not saying that I'm going to break every co-host and put them in, course, sight seats. But, I mean, if the show keeps doing well, why wouldn't I? Just saying people.

Just saying people. Yeah. Whatever you're doing now, it might not be as fun as this. Steph won the finals MVP. That's nice to see. Unnecessary for me to see it. He is, for me, top 10 player of all time. Bill Simmons moved him ahead of like five or six people to his 10th position.

Was Bill Simmons as the expert on these kind of things like the rankings in the list and chopping it up. So he puts them right behind Kobe. And there's going to be an argument in the coming years. You know, unless Kobe's tragic death, you know, makes it hard to talk about. But, you know, if you look at Stefan Kobe and who winds up ultimately having more rings or a bigger impact on the game. Yeah.

Kobe feels like just such a fierce competitor. It's hard to think of, you know, displacing him with Steph Curry. but then when you look at Steph Curry and the impact he had on changing the actual game, which is what Bill Simmons and all other experts talk about, I think is the impact on the game itself. I think you would argue pretty easily that Steph changed the game more than anybody,

maybe since, like did Jordan change the game? No, Shaq, I think maybe had to change the rules for Shaq. Yeah. But I don't know if that was a lasting change. Yeah, I don't know. Yeah, I'm not an expert on ranking of list. I don't either, but I do think that Steph's gravity, like his influence and the way that the game has bent around him, the whole league has bent around him, is remarkable.

And, you know, I had a big argument with my brother last night because he's just a buzzkill about, hey, you know, he's like, no superstar has ever needed this much help. And I'm like, that's because it's a super team. Like, there's sort of this, I think it's easy for buzzkills like my bro to confuse the influence that Steph has had. on the game for the idea that he should win it all by himself, Michael Jordan style, when really, I think you and I have talked about this a lot. This is actually relevant to the talent conversation. What they have done is put together a team of guys who can all carry each other and show up and that Steph can then actually be generous, right? He can not take the shot because he's being double or triple teamed and he knows there are people who can. And so you get to like enjoy the rise

of Jordan Poole and Wiggins and these players who are just sort of coming out of nowhere and having this huge impact. And it's just, and GP3, GP2, and it's just like, wonderful to watch. It's wonderful. It's wonderful. And, you know, Dremond had an up and down series. But if you look, there were two of the victories that were just absolutely classic Dremont games, you know.

And so those victories, I think, turned the tide, including the sixth game where I think he did 12, 12 and 8. And he's the heart and soul of the team. He's the engine that gets it going. Yeah. And when you think about his basketball IQ and impact on the game, you know, it takes four wins. Two of them are Draymond games. And I guess three of them are Steph games.

I think Steph just had three colossal games as well. I think he had one colossal game in the loss, too. But anyway, you could say this, you know, 10 ways to Sunday. But what a trio they have there in those three players. I wonder if what we've seen with them is just the greatest team ever assembled, especially when you had Kevin Durant on it. And what a bummer for Durant, like to leave this where they all could have just taken a little less money,

could have worked it out, they wanted him to be there. They could have figured out a way to have those four All-Stars compete, you know, until retirement. I think they could have actually figured that out because to be that dominant, have that many rings, off the court, you could have made the money back. So it was a lost, I guess some people would say it's better for the league for parity

because it did not seem like the Warriors as great as they were were completely invincible like maybe they were previously with Kevin Durant or the first time up. Yeah, I mean, I will confess to some doubts during the series, or at least some concern. Some concern.

The Celtics are a great team, right? They are the team of the future. And that I think my bro is definitely right about. They are the team in the future. Distant future? Or near future is the question. Well, yeah, exactly. They were like the team of tomorrow.

I mean, I don't know. It might be the team of like, because to get past Giannis, Janus, and to get past Kevin Durant every year for the next five is going to be pretty hard. I think they can get back, you know, if they make some good trades and if they stop turning the ball over and they're more consistent offense. Anyway, congrats everybody. We love basketball. We love basketball. And, you know, just Jordan Poole is in the G-Ligley, glad you're starting sometimes for the world. Warriors this year.

Congrats to him. He did only play like 14 games in the G League, to be fair. Like whatever. I mean, but still, he did. I mean, that kid came out of nowhere and you just see the joy on his face.

Like, yeah. Yeah. I'm not here to word against it. They're just absolutely outstanding. And Duran had too many feelings. It's hard. You know,

listen, I'm as somebody who has spent time on all-star teams. Yeah. You know, emotions matter. It's hard. And, you know, you do, it does play a role in keeping a band.

to our team together is just the emotional connection between everybody. And I don't know if it's Kevin's failing or the team's failing or it's just he wanted to do something different. And people are allowed to want to do something different. I just think it may go down in history looking like a really bad decision for him.

But congratulations to Gary Payton, who spent five seasons in the G-League, broke his elbow, I think, fractured his elbow, and then came back. and Clay and Clay and Clay it was so great

to say Clay get that yeah and you know what he's back after whatever a thousand days off and you know it's just amazing

and let's see let's see what happens next year Boston's got a lot of work to do and I just hope they keep the team together here

in the bay to not let them have a chance to repeat you know I hope that management doesn't overthink this

I think you got to keep this team together and just keep working on fundamentals and keeping everybody healthy and thinking about time management for their whatever number of years you can keep this trio together. Try to keep them together to the end. It's not always easy. But you got to get these guys paid. You got to keep as many.

You got to keep the trio intact is my belief. And I know they got to extend, I guess Draymond and Clay are due for extensions. I think whatever it takes to extend the core. Just as a fan, just do it. You know, like don't get frisky and, you know, try to break up what's working. I think you got you got a window here for whatever, four more years to just keep it going. Listen, one of the hardest things in business is turning a lead into a customer, right? You get that lead, but now you got to close that customer and keeping that customer around for the long term, right? It's a funnel. Do people even know who you are? Did you get that lead? Did you turn them into a customer? And did they stick with you? Well, one of the best ways to do that is by having a

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All right. I agree. Two other things, just to touch on. One, the pay time off joke. I just want to let people know I am absolutely a fan of people taking pay time off I'm also a fan of people for each other

I'm like what is about to happen right now No no no Do I need my red flag? I got it right here I got to pull the red flag I just have a couple of thoughts because people are scared right now and I want to talk about leadership you may have seen my post to the general

Slack We're going to talk about Slack because it plays a big role in this Crackin interview with Jesse. But I don't know. I did you see my Slack this morning, just about time management. I share my schedule. So I've really been leaning into like what can you do during a down market? You can focus on your own professional development. Fancy word for, you know, as Scott Adams would say, your skill stack, the cartoonist from, and yeah.

Outspoken cartoonist. I know, I'm like, who blocked me because I got an argument with him once. I'm kind of a fan of his, but yeah. I'm kind of a fan of his, of his stream. I like his like rants and stuff like that. And he's a hypnotist and he's like, you know, self-proclaimed, what do you call it? Persuasion expert. And he actually really is.

He's actually got some really good thoughts on that, although he kind of goes for the crazy Trump support a little bit on the margins. But interesting, Kat, he calls it your skill stack. So your skill stack, which is a great term, is something to work on during a down market. And then just looking at your time and just managing your time and being intentional about is super important. So what I've started doing is focus time, task management, time blocking, and working with everybody on the team to do the same. If everybody on your team becomes 10% better at their job, let's say 5% through professional

development, they learn a new skill, 5% from better time management. that seems extraordinarily easy to accomplish. If a team does that, for but three months, there is this rule of 72. You divide any number of percentage into the number 72, and that's how much time it takes to double, let's say, your money. So if you were getting 7% a month on your money through some crazy crypto exchange, you would double your money in 7.2 months. If you were to do it in the stock market, it makes 7.2%.

In 10 years, you would double your money. And so if you were in a venture fund and you got 15% you double your money in five years, if you're in a venture fund that got 30%, you could double your money every, you know, but two years in change. So anyway, I set the goal of making just for the next three months by September, because it's going to be a gnarly summer of bad news, just trying to charge my teams up 10% better every month for but three months. And we'll see where we are in September and I'll have everybody reflect on that.

So I've been doing that with our team. And so you have to do that as the leader. So if you're a founder and you're scared, because I see the paralysis, Molly. People are scared. And when you're the leader, it gets particularly scary. Now, here's the challenge. We use the metaphor.

I'm not going to use the metaphor now. I'm going to use the plain metaphor. And please help me, Molly, if there's a better metaphor. If you find a metaphor that has to do with yoga or singing folk songs, I'll use it for business. Maybe sports. Like, maybe sports is the source. Right?

Like, we're in a seven game series. We just lost game one of a seven game. Perfect. Perfect. Okay. So now you're the coach. Nobody dies. Yeah. Okay. Great. Right. You're the leader. Okay. You're Steph Curry. You lost game one. You're Draymond, you know, the spiritual leader, you know.

Okay. So Draymond. What do you do in a situation where, you know, maybe people are scared? Maybe you're scared. Okay. We're down 1-0 in a seven-game series to a young team that now is feeling pretty confident. They were pretty confident after that first game, right? Just shooting lights out. The defense was extraordinary. their energy, their size, just everything was just dominant. And then what did that person tell us right before the game started? 72% of the time the team that loses the first game loses the series?

Exactly. Right? So they're looking at the math and they're like, B'bibu. Scary times. Yeah. It's scary. So, okay, if you can admit that things are scary, it's not easy for everybody to admit. But it is scary going into a game behind and facing that statistic.

Maybe not for Draymond or for staff because they're so confident, so successful. But for somebody who was there for the first time, it is scary. So what do you do when you're scared? You got to make a plan. And you got to understand as the leader that you are responsible for the emotional state and for the plan executed by the team. Once you accept that reality that you are in control, you have agency, the fear will come down a little bit in yourself. And that it will also come down in the team because they're going to vibe off of your vibe.

And so what I've tried to do with my two teams, inside.com, you know, and launch. I take it very seriously. I got 50 plus mouths to feed across two teams. People are dependent. Now, God, if I went away and these companies went away, would people survive? Of course they would. So I'm not being a narcissist about this. But people are at the current point, you know, working for me.

So I take it seriously. I have to come up with the plan. The plan I came up with, people can come up with different plans is extreme focus, extreme professional development and being 10%, the 10% more efficient a month for three-month plan. If we do that, well, why would we need, and we stop hiring, we pause hiring, well, then why would we need to do layoffs? We're thinking about hiring a couple of people here, but everybody got more efficient and we stopped hiring.

Okay, now that actually signals like, wait, we're doing more with less and we're better at our jobs and we feel more in control. And here's the thing. If you give people a challenge and they have something to do in an emergency situation, they have purpose. So job one, reduce fear. job two, have a plan. Job three, have purpose.

Okay, one, two, three. Got to address the fear. Got to come up with the plan. You got to get people purpose. And here we go. We all know the purpose here. We're backing builders and inside. We're trying to make people better at their jobs

and make them more informed and solve their business problems. So here we go. You know, you got a plan. You're executing it. At least people can come to work and have something to do every day that feels productive. And in a vacuum, if you're a founder and you're not doing that, Well, that would be like Dremont or Steph and Steve Kerr not getting everybody together during practice and saying,

here's what we're going to do to get out of this one-oh hole. Or here's how we're going to deal with their size. Here's how we're going to deal with their speed. Here's how we're going to deal with them shooting lights out. Here's how we contextualize it, whatever. So you've got to communicate a whole bunch too. And that'll be like my sort of fourth overarching point is overcommunicate. You can't say things once and expect people to internalize it.

They can hear it, but internalizing something, Molly, and hearing it are two very different things. When people internalize it kind of means when they're in the game, they're going to do it every play. You know what the perfect example of that is? The play of one Andrew Wiggins. Having talked to Draymond about Andrew Wiggins and he talked about his podcast, you know, Andrew Wiggins, sometimes you're like, is he in the game, right? You just have these, like, he'll have like one half or one quarter where spectacular, another quarter, you're like, is he playing or not? You know, and he might be maybe deferring to other people, whatever.

And Jermon said on his podcast, which is amazing, the Draymond Green Show, just search for it on YouTube. I mean, it's like a must watch. Put the alarm bell off for that. Subscribe and hit the bell. He's incredible. Future of media. I think that is critical, just a critical, you know, lesson there is he gave them a big speech, big pep talk of every rebound matters, drive the basket, shoot the three when you're open.

And just to remind Wiggins that like, hey, you belong here. I know there's three All-Stars here, you know, but you belong here. You have as much right to that three-point shot. You have as much right to dunk it, block it, take the game over. Because if they're doubling Steph or Clay is having an off night or Draymond's having an off-night or whatever it is, they needed him. And I think there were two games where he was one game for sure. He was a critical factor in game five. I think that was game five when he hit the,

We had like 13 rebounds. Yeah, and the game before that, it's 17 rebounds, yeah. So he's had some just incredible stories. Anyway, that's enough on that. Now is the time to get focused everybody. And yeah, that's it. Competition for great engineering talent is really intense. We all know that.

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Work harder. Work smarter. You know, these two things. And working smarter, the two best things, you have anything under working smarter, the two best things I can think about, the best things I've heard from my research, working smarter.

Time management, professional development. Yeah, training. Professional development, fancy way of saying training. Yeah, yeah. But I do think professional development is a better word for that, because training kind of keeps you in a little bit of a narrower box,

like here's how to use Notion or Coda, here's how to use Slack or, you know, whatever, better, you know, but professional development feels a little more holistic and like, here's how to pick a company to invest in. Yeah. It's a little more growth, right? It feels less tactical.

It includes tactical, but it also feels like bigger picture. So is there anything that you can think of than those two? The only thing that I would add to that, and we've talked about this a little bit with OKRs and KPIs, right? Is that I base a lot of, my efficiency calculations, and you know I'm obsessed with that on outcomes. Yeah. And so I think that in addition to all of that, there's over communicating about process

and improving people's processes to make sure they're more efficient. And then there's over communicating about the goals and measuring the outcome. So it's like, look, we're doing this because X and we want to get to X or to Y. Yes. And so, and we'll be measuring X and Y, right? That this isn't all about like, and you have done a good job of saying. this. This isn't about me looking at your calendar so that I can like add every minute up and be like it's enough minutes. It's about saying, did we talk to this many companies? Did we get this many

of those companies into our funnel? Did we actually convert those companies into investments because that's what makes us money? And I think that for me at least, being laser focused on outcomes helps me prioritize and be at the maximal efficiency. You have 30 years of experience, I think, or 25 maybe. And so you start looking at that. Like, you can, I think you're so far along in your career and such an overachiever, you can look at the outcome and work towards it. And I think some people don't know how to work towards it, right?

Oh, 100%. I think the combination of both is actually outstanding. Like, you do have to have that. And it's so valuable because people don't know. Like, my kid is super ADHD. He gets a bunch of homework and panics and then freezes. I mean, exactly this, right? freezes, doesn't know where to start.

Like, people literally don't know how to start, and they don't know the 10 steps to take to get to the outcome. And then when they get those 10 steps, they're thrilled. It is no, it's, I only outcomes is additive. But giving people a framework to actually accomplish those outcomes is magical. It's also more work. It's more work for the leader. So what I find is leaders can be lazy.

Yes. And lazy leaders are a major, I don't care how. Well, see, so there you go. And so this is like a super productive discussion. If a lazy leader's like, here's the outcome I want, hit 10 million in sales. And but you're saying like, hey, listen, I work to outcomes. Great. There are other salespeople.

Not only. No, no, no, not only. Not only. Yeah. But you could work to the outcome without it. I have a sale. I have, you know, two sales executives here who can work to an outcome. But they've also been sales executives for 20 years or so 15, 20 years.

I don't need to time block their schedules or time management them. They're just so like, you know, weather. and, you know, surly and salty and, you know, battle tested. Like, these are my guys. Sort of like having the bad batch or, like, you know, Navy SEALs who've been through, like, they're like, yeah, it's my 16th tour. Like, I've done, you don't know how many people have assassinated. They're just grizzled.

They're just grizzled vets of the, you know, Cold Wars or whatever. So you can just give them the outcome. Outcome is get Obama, get Osama bin Laden and kill him if you can, right? Like, if he comes back alive, great. If he doesn't come back alive, that's okay, too. falls out of a plane. Always with the killing. Always.

I'm just saying, I'm going back to air. In that case, I came to aviation end air. And he falls out of the helicopter. That was a nice double whammy. Nice double whammy. I literally was talking to a guy. I'm not going to say which unit he was in. You know, it's like a late night discussion.

It's like a really senior guy. We're a couple of McCallon 18 doubles in. And he's like, you know, sometimes people fall out of a jet or a black hawk. you know, we were bringing them in. They didn't want to come in because they don't want to go to Guantanamo, they don't want to face the music, and sometimes, you know,

people do crazy things like jump out of a plane. I was like, a jet? Do you have to open the door? And you're in cuffs? He's like, you wouldn't believe what some people will do. Do you mean that they extrajudicially jump out of place?

I'll just say dread is my favorite science fiction film the last 20 years, along with Prometheus. If you haven't seen Dread, it is extraordinary. You haven't seen Dread, you can't understand Jason's management style. It's so great.

It's so great. I was like, Molly was like, let me take this off live with you. And I literally just said to her the GIF from the Obi-Wan series, where Darth Vader is walking, like,

the caption on it. What was the cat? Look at your phone. What was the caption? Like, walking into Slack this morning. Yeah, I tweeted it.

Sorry, it was such a good. Oh, yeah. It just says, Angry, walking. Angry walking is the caption.

The closed caption. It's like, I think you can tell Darth Vader is not happy. He's, his default is angry. And when he's walking, he's either walking, surly or angry.

There's no delicate walking. So anyway, there's my little mini management, 100% micro lesson for you. I love a ladder. I love structure at work. And this is the reason. Because anybody's,

a structure is a ladder that anyone can climb. If you give people a framework to be successful, you actually equalize the opportunity. You take away the excuses, right? You're like, this is the structure in which you can succeed. And I have given you the structure and done the work as a manager to create this structure so that you can climb the ladder.

And then it's up to you to climb the ladder. When I talk about outcomes, what I really mean is making those clear to people so they feel motivated in that direction when they get tired because they will, because ladder climbing is hard. and then celebrating those outcomes. Absolutely. You got to celebrate them.

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Take a minute to write this down, aka.m.s. This week in startups. No spaces, no dashes. Make sure you use that URL so they know you're a fan of the show. All right, everybody. Next up is my interview with Jesse Powell. He is the CEO and founder of Cracken. and Cracken is, you know, a crypto exchange.

So having him on the show during the, you know, what potentially is the biggest crypto meltdown we've ever seen, I think most people would argue that's, this is the biggest in terms of dollar amounts, maybe not the biggest in percentage for each drawdown, because we have seen a 90% drawdown before in Bitcoin, just to frame it. So that was just great to have him on.

But this is, he came on two days after, I think Tuesdays when this New York Times piece, came out. Some people might say it's a hit piece, but a piece about the culture at Cracken, which is a very unique culture. Molly, you got an early copy of the interview. Any thoughts on my technique or just, you know, the story you obviously worked at the New York Times. We had some discussions about the, you know, just a general negative, maybe overly negative view of tech from the New York Times itself these days or going for clicks. Where do you think this story hit on that? If you have an opinion on it, you don't have to.

And maybe just generally how I handle the interview. Because we're going to be solo doloing interviews for a bit here. So we can get more interviews to the audience. Maximum efficiency. Yeah, I thought it was a really interesting interview. I think that, you know, I mean, I think we are definitely at a time when because things are so polarized and because there is this kind of, this fits into a little bit of what we were talking about the other day when I was like, the thing is a lot of these crypto CEOs. went out in the world and acted like jerks in various ways. And it is not even necessarily the case that I mean Jesse Powell when I say that, right?

Yeah. I mean, there is a there is a reputation that has led to a lack of benefit of the doubt. Yes. And then crypto had said to people, and we have no evidence that Jesse did this, but crypto people writ large, use toxicity, have fun being poor. We don't get it. Okay, Boomer, as their rallying cry. So now on the way down, you know, people are just like, we told you. And they also didn't produce enough value in the world with their products or services.

And there was a lot of grifting and crime going on. Again, not Jesse, but just that's the. That is the perception. And I wouldn't even say, right? Even if it's writ small, that is the backdrop to the fact that this benefit of the doubt, I think, has been lost. And then on top of that, and it was very interesting because I thought you did a, I thought you did a really good job having a very honest conversation with him. Yeah.

and that he did a good job of sort of making himself sound really rational and libertarian. And the thing is, and we have talked about this a million times, it's very easy for someone who's like a wealthy white guy to have a perfectly rational, libertarian, emotionless, spock-like approach to issues that cause people real harm. Yeah, you're not getting pulled over by the cops because you're a white crypto dude. Right. You're not getting shot by your domestic partner because you broke up with them. You're not like there are all of these sort of issues that are wrapped up with in this. And that kind of fundamentally I think is like, so if you already don't have the benefit of the doubt, you do have a media environment right now that is just like, because the fact is so much of the time when people say anti-woke, what they mean is like, I don't want to talk so much about black people.

I'm just not into that. Right. I'm over it. I'm overhearing that. And then you've got a guy like Jesse who's like, Believe whatever you want and say whatever you want, unless the thing that you believe and say is, I am offended by the fact that conversations like this are happening at work in Slack channels that work set up. I think that he finds himself in the same position that Twitter found itself in, which is like there was no moderation. Then there was a correction for an environment that had gotten incredibly toxic and the correction caused a huge backlash. Yes. So this is. And I think he finds himself in a very similar position and also just doesn't have any kind of empathy for the

fact that like on the other side of the equation, there's him being like, yeah, I'm a philosophy major. I just love to talk about this in an intellectual way. Yeah. That for a lot of people, it's not intellectual. It's actual real life and it can suck for them. I was talking before about my emotion in being a performer and how like I, you know, even my performance and I would like to think that, you know, I'm Spock-like at times or I could be driven just perfectly by a logic, but it does matter to me, you know, if people tell me, hey, that was a great interview and like talking to you about my interview technique. Actually, I respect your opinion. It matters to me. There is emotion as part of life, right? And so there is a group of people

who are like, you're being too emotional. Your feelings don't matter. You know, like it's Benchum Heroes, catchphrase or whatever. It's easy to have that opinion, as you're saying, if you emotionally have not been destroyed by, you know, whatever you faced in life over some long extended period of time. And this is where empathy comes in. And there is no benefit of the doubt. And so everything is so polarized. The interesting thing, I think, is we're now getting to the point where people are writing culture docs. I think that I always think about how do we move forward. And one of the things that I think is how we move forward is the recognition that not everybody has to think the same. Not everybody has to, not every workplace has to be the same. Now,

this should seem super obvious to people, but we have not been, I think, considered about this as entrepreneurs or in the capitalist society. We kind of just run these companies, you know, typically like pirates. It's my ship, my rules. I'm Darth Vader, my death star, here we go. And, you know, I'm guilty of that as well. And it's personal. Of course it's personal. Yeah, yeah, yeah. My ship.

I am the captain of this ship. I built this ship. I picked the crew. I'm shackleton. We're going to the North Pole. We might die, but we all decided to go on this journey together. And I'm responsible for everybody, yada, yeah. Totally.

But here's a little punch up there. Be upfront and consider in explaining this to people. when they go on the voyage with you, and on the converse side, as an employee, be thoughtful about where you go to work and where you continue work. Because the captain could change gears. They could send the ship in a different direction.

They could change their style. They could lose their mind. Anything's possible. So both parties have to buy in. That's one of the beautiful things about how America set up its employment law. It's at will. Either party can leave at any time

for any reason or no reason at all. You can fire anybody in your company for no reason. With severance, not severance, whatever you negotiated with them on the way in, and there's slight jurisdiction caveats there. Like if you do a factory shutdown or you let go of a certain number of people, there's a factory shutdown caveat.

Talk to your lawyers always before you do any HR things. But we are at an at-will society, and everybody has to double-opted. So being clear on the way in, you're going to go into a Slack room or a Slack instance and there's going to be a room with people talking about guns why would he have a gun room at work

I don't have a gun room at work why would he have a let's debate gender and pronouns let's debate this he wants to debate that's on him it's his decision it's his company it is worse I wouldn't do it

however maybe it might be productive to move into a mode where there are in fact best practice frameworks for how to do work at a job. Yeah. Right? Like, because we've made everything so kind of like ego driven and it's one captain and that captain sets the whole culture on the way down or whatever, like maybe it would actually

be useful to say, hey, all throughout history, companies that have worked well have done these things, right? People write business books about them. There's like books from CEOs and whatever. And it's like everybody, like a Jesse comes in or somebody comes in and they're like, I'm going to do everything completely different from how business has ever been done. because I'm right. Yeah.

And then they're like, and that's the deal. And if you don't like it, you know, you can say whatever you want at work unless you say. Good stuff. Unless you say this. We put the photos in the prospectus as one because nobody done it. That's why we did it. That's why we did it. That's why we did it.

There's just. There's no universe in which there's no universe in which it's believable to be like, my philosophy is you can say whatever you want. But if you don't like the part where people say whatever they want, then that doesn't count as saying whatever you want. and you should quit. Like, that's just like, it's logically inconsistent. Yeah.

And you should just run a business like a business. And you know what smart businesses do? They don't have gender debate rooms and gun chat rooms at work that do make people feel unsafe. And in fact, there are laws about feeling unsafe at work. Like, it's just like, come on, man. You're trying to invent your company into a society. And it's actually work. I will give the counter.

many people on the other side said, well, you know, BLM matters to me. This social injustice matters to me. The war in the Russian war in Ukraine, that matters to me. So everybody's got their short list of what matters to them. The folks who are passionate about BLM or Ukraine or Taiwan or the Uighurs like I am, they want to talk about it at work. And they don't know why, you know, Brian's saying you can't talk about it at work. So you have two crypto companies.

It's always the crypto companies. These people are unique in the world. You have Brian saying, do not discuss anything but crypto at work. Now you got Jesse saying, we're going to have a room for everything. But where he came to, and this is why I think this is a really good interview to listen to it.

It's a really good interview. Please listen to it. Where he came to was, if you want to talk, he shut some of these rooms down, by the way, because he was like, practically speaking, it's becoming too chaotic. I did it to have a philosophical discussion,

but he recognizes to your point, Molly, like, this is hurtful to some people or triggering to some people, and I'm not using triggering in like a diminishing kind of way. You could be triggered. You make me watch 9-11 videos, I will be triggered. I'm using triggered, not in a diminishing way. I will use triggered in a diminishing way.

Sometimes, but in this case, I'm not. He'll specify every time. I'll specify. With a parody or irony hashtag, I would not, you know, if you're going to, show me videos of people dying on 9-11, please give me a trigger warning. I don't want to watch the videos. It really is hurtful to me and it just makes me feel sad and I don't want to feel sad.

So on 9-11, I don't turn the TV on and I don't, I just think about that day and, you know, because it's too triggering for me. Yeah. So what he came to was, if you want to participate, and I thought this was actually like a real evolution of his thinking, and I kind of appreciated it, it might steal it. He said, if you want to chime in on the discussion about, I don't know, They had one issue, like, should we ask for pronouns during the interview process? I don't have the answer to this question because some people were offended that they were asking for this and other people thought it was great. And he made an interesting point. Like, if you're in a Muslim country, you're like, are you a man or a woman?

People are going to be like, what? Like, you can't ask that in Saudi Arabia or, you know, whatever country he's working in. And some people in America in the South or wherever in middle of America might be turned off by that question. People in the, you know, coastal places, you know, largely might be inspired that you ask that question. What's my pronoun? What he said was, if you want to chime in on the pronoun debate, write a five-page position paper. Take a day. Cite your research.

And you, anybody in the company can participate if you write up five pages. I thought, wow, think about what he just did there. What a great evolution. Put aside whether you think, whatever you think of Jesse. I thought this was a really good punchup. If you are thoughtful enough to write up your five-page paper, the team that's handling that HR, recruiting, human capital, the chief operating officer will read your paper.

And they'll read the other four people's pages, people write, and bring it together. He said he would. Yeah, he said the CEO. To be clear, he said the CEO would read it, yes. And he'll read it and he'll have a conversation with you about it. So he basically just said the benchmark for participation in this discussion is thoughtfulness and research.

I kind of love that. I kind of love that. Yeah, definitely. I don't know. People may not want to give them any credit. I think, yeah. It's a really good interview, and you should listen, and he is pretty thoughtful. I think this idea of what, and there is no doubt that companies have culture.

Yeah. Industries have culture. Yeah. And there is also the reality that, for example, the culture of an entire industry perpetuates stereotypes and harm. And, you know, and that. saying, we only want these kinds of people to work here and not these kinds of people will create for you a company that might end up missing business opportunities because it has created

a very specific culture that over time will become homogenous. So listen, if that's the company that you want to build because you're that kind of pirate, go crazy, but you may be, it may be bad for business. It's such a good term. I think it's such a good observation. And here's the thing that we don't know. Yeah. Capitalism is a competition. Yeah. Nature of competition, Darwinism, human beings are competitive by their nature and their performance goes up in a competition. Period, full stop. Totally.

If that is the case, we're not running an experiment. At one company talk about anything, at another company talk about nothing and everything in between. We might actually find that some companies that are solely focused outperform and other ones that have, you know, Jesse's approach, everybody can talk about. It's a philosopher. They might actually get beat by Coinbase, right? Right.

So we don't know. We're going to find, nobody knows. And I'd say the one thing that is a little bit scary in all this. What if a homogenous group outperforms a diverse group? That's the thing I'm a little worried about here, if I'm being completely honest. Like a group thing, a bunch of Stanford computer science nerds get together and do PayPal. And they're all weirdos, which is what the PayPal mafia said they were. They were unemployable.

Like Saxis said this all the time. We were just unemployable, weird thinking nerds from Stanford, and we kind of hired our friends. Performance in the short term might actually go up. And then you have this modern culture. And there's proving the negative, right? There's the fundamental you're, it's like there is no counterfactual because we don't know what PayPal would have been like had it also had some people in the executive ranks

who were like, hey, we should also target the. banked or we should, you know, we should like reach out to this segment or whatever. It's so it's hard to know the difference. But what I think what we do know is that at work, as arguably with countries, like direct democracy doesn't work. No, that's not going to work. Companies aren't democracies. They shouldn't be. They're not direct democracies where everybody gets an equal vote and you do what everybody says. That's just actually like the thing that we are forgetting, I think in some ways in our kind of like rush to make sure everybody feels good is that hierarchy is real.

You have to have a boss. Some people are in charge. The people who are in charge are in fact allowed to set the rules of the ship and you have to follow them. That's true. Nobody wants to go to a restaurant where it's a democracy.

More salt. Less salt. No eggs. Extra yolk. It's like it's not going to be a good meal. Nobody wants to see a movie where everybody on the team voted for every line.

Right. But there's a big difference between a monoculture and a like messy direct democracy. Right. It's sort of like there's a lot of delta. There's a lot of shades in between this black and white. It's not a black and white. It's a lot of gray in between. All right, everybody, enjoy this great interview.

And thanks Molly for chopping it up with me on the pre-interview. Longest intro interview ever. Enjoy. That's okay. I think it was good. Enjoy everybody. Hey, everybody. Next up on the program is the founder of Cracking.

Cracken is a crypto exchange platform. You may have heard of them, similar to Coinbase or finance, and Jesse Powell is the CEO and founder. And he's having probably one of the most interesting slash challenging weeks of his career. Total complete crypto meltdown this week. And you got some unique coverage in the New York Times. How are you holding up? And I appreciate you coming on the show. Thanks for having me.

I'm doing pretty well, actually. You know, the New York Times quote unquote hit piece actually turned out to be more of a fantastic recruiting advertisement. So we've got a lot of great inbound candidates out of that. And I think things turned up pretty well. All right. Fantastic. Let's start with just where the crypto market is. And then we'll get into the New York Times story because getting to have you here with your insights is just a treat in terms of your understanding of the crypto market.

It seems to me there's been a bit of a contagion. You have, you know, started a couple weeks ago with Luna and Terra going under the so-called stable coin. Obviously, we've had a retreat in the price of Bitcoin. That's been quite dramatic and all other cryptos. Well, for people who have a cursory knowledge of what's happening in crypto, how big of a deal is this current drawdown compared to the other ones? because there is this concept in crypto that, hey, this is a volatile asset class, an emerging asset class, and these things do happen. Is this just like the other ones, or is it different?

Oh, we're not down 90% yet. So I think we're doing pretty good. You know, this is really nothing historically in the terms of drawdowns of Bitcoin or ether. You know, across the whole market. I mean, everything is down, right? This is not just contained to cryptocurrency. the whole market is down 80%. So it's not surprising to see this.

You know, when the equities markets are down, people tend to sell off their crypto positions in order to cover their equities margin. And, you know, we've seen this many times before, you know, for me and for people have been in the industry for a decade, this is nothing new. I'm still holding, haven't sold any coins. So actually, I'm waiting to buy at 20,000.

So hopefully we get there. Hopefully too many people don't get a little. liquidated on the way. But, you know, I'm ready to buy more at these levels. Explain to myself in the audience, this concept of leveraging crypto and staking. It seems like people are aggressively utilizing some of the new features of this virtual currency and this, you know, digital money to do interesting things. Like get 15% of their money by staking it or levering up their crypto. and then automatically having it liquidated.

It does seem like a bunch of that has been happening. And of course, you know, this has to do with inflation, the recession, the Ukraine, all of that contagion. But it does seem that the velocity in crypto can be a little bit faster, I think, because maybe people are chasing returns, am I correct? For sure. That's what people are borrowing the money for mostly. Some people just want to borrow because they don't want to sell their crypto

because of the tax implications of it. You know, if you're holding Bitcoin, You might feel like, well, Bitcoin's going up. You know, Bitcoin's going to go up at least 20% every year for the next 10 years. And so I would be happy to borrow against my Bitcoin at 10% a year if I think that's going to happen. And not have to realize the tax hit on that and, you know, still be able to hold my Bitcoin long term. So there's a lot of that going on. But yeah, as you said, there's a lot of leverage as well.

People are borrowing to trade. And, you know, I think everyone is getting squeezed right now who is borrowing. Obviously, if you were borrowing in something that wasn't really stable or your collateral was in something that wasn't really as stable as you thought, you know, you're in pretty bad shape right now. So, yeah, it's a lot of getting levered up. But, you know, that's just one of us. Do you provide that service at Cracken to give people leverage and how do you think about it as an offering? Because let's face it, a lot of people are new market entrance. Obviously, Robin Hood, I was an early angel investor in, had to deal with a little bit of this customer education.

they see they can take a, you know, get a little bit of leverage, they put it to work. And, you know, we were in a 13 year up market. So do you provide these services and then how do you think about them? And then how do you think about, you know, if somebody is qualified to actually use these? And do they need to be qualified or is it just buy or beware? Yeah. In the United States, you have to be what's called an ECP to trade with margin, which is basically you have to have like a net worth of $10 million or more.

and you have to answer some questions about your sophistication. Outside of the United States, the questions and the restrictions vary. But for spot crypto trading, we offer up to 5x leverage and only on really the more liquid pairs. It's not available on everything. So we don't let you do like 100x leverage for trading Bitcoin. Got it. So if you have Bitcoin, you got a $30,000 coin. You could put 150K to work.

But that means if what percentage of that has to come down from 30,000 to what, before you trigger you have to cover? Yeah. So there's kind of a formula that depends on kind of like the market volatility and stuff like that. But basically, if you were borrowing at 5x leverage, we liquidated at like a 40% margin level. So it would have to come down, you know, 60%. And I mean, your whole total account value. So, you know, we value the whole equity of the account. So, you know, separate from, and almost every asset counts for some collateral value.

So even if you just had like a long Bitcoin position, you know, we wouldn't just be looking at that position in isolation and be looking at the total value of the account coming down to, you know, like a 40% level. Got it. So if you're out, if you had levered it up to $150,000 worth of Bitcoin, hey, if it starts going down, you're going to start selling some of the Bitcoin or at some point all of it, I guess. to cover the loan. Yeah, exactly. And is that something we've seen over the last couple of weeks? Is that happening to a lot of users, or is this, you know, low single digit percentage is just ballpark?

Is it half of users have leverage on or third of users 10%? It's pretty small. It's, you know, probably like 5% to 10% of users use leverage. Yeah, I mean, the vast majority and vast majority are just retail customers who just want to buy and hold Bitcoin. I would assume, though, those 5% if they are, you know, these ECPs, you know, kind of like qualified purchasers, like really sophisticated people, they would have bigger positions. So it might be only 5 to 10%, but it might be a larger position

of the bitcoins you hold in aggregate. So what does it look like from here going forward? We have the buy side has essentially gone away. It seems like the whales are holding. The people who are holders, they're used to this, they hold through it. It looks like a lot of the people who bought recently. I've seen some people cover. like the age of the wallets and the paper hands new wallets seem to sell when things go down and the old ones seem to hold or then eventually accumulate. So what are you seeing in regards to that? Are people starting to accumulate yet or is it just we're still in that hodal pattern?

Yeah. I think we're starting to see some accumulation. But I think people are also, you know, biting their time. The guys that have had Bitcoin for a long time, I think they feel like they don't need to increase their position. But if the price is right, they will. Got it. And so, you know, people that are, you know, if they're holding on to like, you know,

50,000 Bitcoin or something like that, you know, buying another thousand Bitcoin doesn't really change the structure of their portfolio. But, you know, some are kind of ready to do it. You know, I personally have my buy order in at 20,000. So I'm just waiting. If it doesn't hit that level, that's fine. I feel good about it. If it hits it, great.

You know, I'll take Bitcoin at what I think is like a steep discount. Why has Bitcoin been, you know, of all the cryptocurrencies in your mind so resilient? Is it, is it a technical reason? Is it that it got the largest base of intelligent holding users? Does it have, you know, the best architecture? When we look at the entire market coming apart, you know, dramatically, you know, it's off from the peak of, what, 69, 70K, it may have hit at the peak last year. and it's down from whatever, $30,000, $30,000 earlier this year.

Why does it have staying power? Like, why hasn't it gone down to $10 or 15? Well, we've seen pullbacks like that in the past. You know, there was a time where we went from $1,000 down to under $100. The 90% pullback, yeah. Yeah, I mean, it's not like unheard of, and it's still possible. I think over time, these pullbacks get smaller. and I think people continue to see that

anytime someone's thinking about buying Bitcoin, I say, look, can you hold it for five years? If not, then maybe you want to think about how much you put in because it could drop 50% tomorrow. But if you look at the chart over the last decade, I mean, it's just outperforming everything else. So if you've got a long- When you zoom back, you get a pretty good view of it.

Yeah. What about regulation? You operate in America with U.S. customers. A lot of your contemporaries may be less so, or maybe they have two company structures. You have to compete with a group of people who are offshore.

You're more regulated. Talk to me about the state of regulation. What regulation is working for you running Cracken? What regulation do you wish existed today to kind of even the playing field maybe? Yeah. So, you know, we do have our ultimate parent company in the U.S. We have a U.S. operating entity

and we also have entities around the world that serve their local jurisdictions, you know, for example, in Japan. We have an entity there that has licenses there that serves that jurisdiction. Yeah, you know, I think that the problem with regulation in the United States right now is that there's still a lot of uncertainty,

you know, 13 years on for Bitcoin. We still don't have clarity on some things. And the CFTC is fighting with the SEC about who's going to regulate it with FinC and the states. You know, everyone is sort of this, land grab for like who's going to who's going to regulate it and everyone can make the argument that crypto fits into their bucket. So you end up with like 20 different regulators for the same

thing. And you know, the SEC is talking about laws that were created 80 years ago pre-internet and trying to apply those to crypto and, you know, it just doesn't make any sense. So I think we need, you know, you can't ask the regulator to change their mind. You know, their job is to enforce. And they will tell you, you know, if you don't like the law, go talk to the legislators. Legislators. And, you know, that's what we're trying to do. I'm trying to lobby to get the laws changed to get clarity there. Because from the regulators perspective, their job is just like, you know, put notches in

their belt and, you know, collect skulls. So what clarity would you most like to see? If you could have one or two things to get really good clarity on here in the United States, what would those be? I would love to have one regulator for crypto, you know, just totally, clear, like no disputed territory. And I would love to have clarity around like what actually is, how are the assets classified? You know, like, look, there's over 10,000 coins out there. And so it might be too much to ask the regulator, go coin by coin and do an analysis for us, but just some

clarity on, you know, like, we do an analysis ourselves and we try to decide, you know, is this, Is this a security or not? Is it a commodity? Is it a currency? And we do that for a lot of countries to try to determine, you know, what are the rules that are going to apply to a particular asset. It's a huge lift for us. And even when we do that, there's no way to have absolute certainty.

And I think there needs to be some kind of just like a reasonable safe haven or or sandbox or something where if a regulator hasn't come out and said, like, this is illegal, that you can just fall back on your analysis. If you've made a reasonable effort to determine the situation, then I think that should be good enough. Now, as it is, you know, we've seen the case of Ripple. The SEC came after them, you know, seven, eight years after they had been operating all this time. And, you know, to say, hey, like, I mean, they even had conversations all along the way with the SEC. And, you know, for them to come back, you know, seven, eight years later and say, oh, that stuff you've been doing all this time that we knew

about all this time, now we have a problem with it. Yeah, that's suboptimal. Yeah, they should give them clarity earlier on before they build this business for sure. Absolutely. I mean, and that kind of contingent liability is extremely chilling. Imagine you're thinking about investing in a project or a crypto company, and you've got to think, wow, stuff that happened eight years ago, could the SEC could just decide that that stuff was illegal. And, you know, the fines are astronomical. Yeah, I mean, could possibly include jail time if this is a security and you're doing, if you're selling it as it's a utility token, nobody's, the people who are buying it are buying it for speculative reasons to see it go up.

I think that test matters too, doesn't it? Like, what is the intent of the person buying it? Yeah. You would agree that that matters too. And I think that's where this all gets kind of a little muddy because majority of people buying XRP are buying it to see it go up. and maybe they're buying some story XRP is going to become the money exchange of the future. They're building software for banks, but that's not why they're buying it. They're not using it for that reason.

It's not a utility token for them. They're buying it as a security in my mind, like to, as if they're buying into XRP. And then it would be better if they, I think, had marketed as a security and just followed securities law. But again, it wasn't a clear situation. I think that's your point, right? Yeah. Just give them clarity.

The problem with the securities laws, and I'm hesitant to agree with you that it would be a security technically. But the problem with the securities laws is just extremely limiting. I mean, you know, from being an early stage investor that there are all these rules about how you raise capital when you're selling securities. And, you know, generally you can't just go out and get money from the little guy who, you know, I was out raising money for Cracken back in, you know, 2011, 2012, 2013. and all of Silicon Valley was like, what is Bitcoin? Why should I care about it? How is this thing ever going to work? How is this not going to get shut down?

And so we ended up doing our round largely from early crypto investors, you know, early angels that really believed in Bitcoin. And so I think like there's a place in the world for, you know, individuals to be able to invest in things and not, you know, I mean, you know, the accredited investor thing is just, and saying that you have to... That is the craziest thing. Yeah, it's your money.

You should have some agency. I think the easiest thing in the world, and I've talked to about this for God, going on close to a decade now, we license people to drive a car. We license people to cut hair. We have all kinds of tests for being a sanitation engineer,

a teacher, etc. If you want to invest in risky alternative assets, How about a 75 question test? It doesn't have to be series seven. Could be something you read a book. I was thinking you scuba dive at all? You're Patty certified by chance? No.

Like if you scuba dive, you got to read a book. You got to answer questions. You go on a couple of dives. It's not hard by any, but it does take a day or two, you know, basically two days. So read a book, take some quizzes, do some actual practical applications. Wouldn't that be the easiest thing in the world if they just, we had a financial literacy driver's license where people understood the concept of diversification, the concept of a risky asset, concepts of accounting and debt and

different types of stock and what senior to other stock, right? This would be the easiest way to do it in the world. Completely agree. And I would be happy to just call everything a security if we can get past this accredited investor thing. And let's do a license. Let's put in a test. Let's require a day of education.

whatever. Like, let's... Online education, pretty simple. Take a course online for 50 bucks. Maybe Cracken would sponsor a Coinbase or Robin. Who would certainly, you know, do it for free for you. And, you know, everybody puts up videos and we just... I mean, that's one of the things, I think, that crypto and Robin Hood and the day trading

and stonks and all this stuff don't get enough credit for, this next generation feels incredibly literate when it comes to finance. You would agree. Yeah. Now, they may be making some pretty speculative bets, but that's, kind of how you learn. I mean, if you play poker at all. Yeah. Yeah. You've got to take some bad beats. It takes

all of a sudden you start learning a lot about variance when your aces get cracked. And if it happens to you two or three times in a row, you're like, okay, now I understand what a 20, you know, now I understand what 80, 20 means or 70, 30. People were shocked when Trump won and I was talking to Nate Silver.

He gave him whatever, 15, and then it became 30% chance. And people were shocked, Nate got it wrong. I'm like, I think he did say it had 30% chance. Like, have you not flip coins that's a pretty good shot and with two cards to come you know you have a couple of things here

which agent you mentioned agencies like pick it pick an agency do you have a preference for which agency would be most qualified or maybe the creation of a new one I think the creation of a new one would probably be best which would come with just brand new brand new laws and you know they would have a dedicated

understanding of the market you know these other guys are they're distracted you know they're covering they're covering a lot of stuff, and they generally don't have the expertise to evaluate this stuff. They kind of come with their own interpretation of it, which is really a layman's interpretation in most cases. They require a tremendous amount of education.

And so I think a dedicated organization would probably be the best way to go. My second choice would probably be the CFTC, which I think is used to regulating things. I think they're a bit more open and they're a bit closer to the things that, you know, kind of the currency and commodity aspect of crypto, which I think most of the coins are closer to that

than they are to securities like, you know, stocks, like, you know, shares of companies. And, you know, there's overlap with the CFTC and, you know, all this energy stuff, you know, that plays into this. So I feel like they would probably be the best regulator if we can't get a dedicated one. Let's touch on stable coins.

We had the algorithmic one, Lunatera collapse. There's tether, which has had a very mixed reputation, some securities action against them, Canada, New York, state. And they do very light attestations, basically a screenshot of how much money

having the bank out of one moment in time. And there's been this never-ending speculation of, hey, maybe they didn't run the company perfectly in the beginning. And then this other speculation that maybe they did so well, you know, in terms of what they placed bets on that they have more than enough in reserves, but maybe they're, you know, the speculation that maybe they're covering up kind of how they got there. But they're very opaque, let's say. And then you have U.S. D.C., I guess Jeremy O'A.S. Stable coin.

in America, I think he's doing a pretty great job of keeping it super regulated and auditing stuff. How should these coins work? Because you have one complete utter failure. You have one that people are really concerned about. And then you have Jeremy's, which seems much tighter and maybe he's taking it a little more seriously. Are you concerned about Tether and maybe tell us what happened with Luna and then we'll go to USDC? Yeah. I mean, there's been a lot of thought about Tether over the years. I think the Bitfinex guys and the Tether guys have have just proven over the years that they can handle a crisis. I mean, I have no reason, knowing what I know about their business, just as another exchange, I feel pretty confident that those guys are profitable and

probably doing pretty well. So I'm not personally worried about it. You know, I think there was some incident where they had like $800 million like confiscated by the government from this crypto capital collapse thing. And so I don't think that was like really their fault. That was like, you know, another custodian that they were using basically got, you know, I guess like rated or something. So anyway, I think unless they've completely mismanaged everything behind the scenes, that they've got to have like more than enough money.

Of course, I would never like personally vouch for anything because I haven't seen anything, you know, like. Well, isn't that the problem? Do you think these stable coins should have to do audits if they're going to present themselves as like we're dollar by dollar back? An audit seems reasonable to me. Would you be in favor of that?

Oh, for sure. Yeah, I think, I feel like they have done some audits. I don't know if they're to the extent that circle. At test stations is what they've done, where they kind of grouped together in a two-page PDF and then somebody in the Cayman Island says, hey, yeah, we saw this amount of monies in the account. So it's very, very, you know, not detailed.

and I think the issue was, hey, they had a lot of this commercial paper, which I guess pays a high dividend, you know, a high coupon. Yeah, they say something like they're not holding actual physical dollars in a vault. It's like dollar equivalent assets. Yeah, so that's where it gets a little bit scary. Yeah. So then let's do the other two. We've got two other sides of inspection.

You've got tether, you know, it's a little bit of a black box. But Luna, complete collapse. when people are looking at that in the crypto space it seems like a lot of people saw this coming and they thought algorithmic stable coins were I don't want to say a scam but maybe not sound or

architected or didn't make sense what did you think when you heard the concept and when you're shocked when you saw it implode yeah I think you know there's an attraction to stable coins to these algo stable coins because you know the idea is that you pegged to something that is presumably

stable, like, you know, until recently, let's say maybe like the dollar. And, and, and, but you don't have to have dollars in a bank account. You need, don't, you need no connection to the physical world and to the legacy banking system, but you have something that is like, kind of resembling, uh, the dollar in terms of like, its value and stability. And, um, you know, that's, that's pretty attractive because I mean, the ultimate dream is just that we completely escape the legacy system and, you know, there's no kind of central guy controlling a bank account somewhere, that it's all just, you know, algorithmically automatically determined. So I see the attraction to that.

But, yeah, I mean, how you come up with this algo and what are the oracles that you're using to determine, you know, the source of truth, basically, like, you know, what is actually, you know, they're all using some kind of numbers that they're getting from somewhere. And those sources could be flawed or manipulated in some way. So, I mean, it's just like, you know, if you were, if you were trading a futures contract or something like that. You know, you'd want to use like an index. You wouldn't want to just say like the price according to Jason, you know, on this day. So yeah, they're definitely, I think, more risky than something like USDC, which is just like, you know, basically dollars in a bank account

because something could always happen with the ALGO. Yeah. Are you seeing a trend happening where people are maybe going to USDC because it feels like it's more stable and more trustworthy? Is that happening in the industry? USDC has gained a lot of traction over the last few years. I think most people probably see it as good as dollars.

Certainly, I personally, I trust Jeremy. I think he's running a really great operation. If I had to keep my dollars in something, it would be USDC. and I think that a lot of people are attracted to it being U.S. based, it being regulated. You know, Jeremy's got a great reputation. He's out there. He's well known.

Yeah, he's going on CNBC. He came on this podcast. He's willing to talk. Whereas when you, the tether CEO is nowhere to be found. I did have Doe Kwan on from Luna. And I couldn't understand it. It was one of those moments where I'm like, you know, I invest for a living and I'm having a hard time understanding where the 15% staking has come from,

coming from. So let's hit staking. When you hear this, like you're getting 15% and it's being staked, is this believable? And, you know, where does the 15% interest come from? Because that seems like a unique offering in all the world.

And do you participate in staking or how do you think about it at Cracken and offering those kind of services or access to those services? Yeah, we do have staking at Cracken. So if there's a blockchain that supports proof of stake, you know, where you basically commit your coins to usually some, there's some lockup period where, you know, you're dedicated for some amount of time. You know, it's an alternative to the proof of work system. And, you know, we will manage that for people. So basically, you know, you don't have to go into the command line and figure it out yourself. We just give you a simple interface to do it.

But behind the scenes, we're staking those coins for you on the blockchain. chain. They earn a return. So there are a couple different kind of versions of this. You know, some are just basically to run the blockchain. They're just doing voting and, you know, not doing anything exotic. There's not really like a chance of the whole thing blowing up because of there's some like weird algo going on with a peg to something. And then others are sort of like contracts that are like lending contracts basically. They're for like, you know, earning yields in some way through some kind of lending or commitment of your coins to something. And these are the ones that kind of tend to blow up where, you know, something in the algo gets

out of sync or the Oracle gets compromised somehow and, you know, someone's able to, like, take advantage of something and, like, extract a lot of value. As an exchange, how do you think about what services you offer? because a lot of these are new. In many cases, unproven, there are vectors, as we've talked about, where they can be exploited. And I think sometimes when people get listed

on Crackin, Coinbase, etc., in fact, XRP was trying to pay and to try to, you know, lobby to get listed. That was like a big, in the SEC document, it's a big part of it was they were allegedly, I don't want to say bribing, but incentivizing heavily to get listed on exchanges, and that seemed really to be part of the SEC's problems with them,

with some of those behaviors. But how do you think about what you offer? And I think your apologies are pretty libertarian, so I think you want people to have to do what they want to do with their money, but how do you think about your responsibility and how you vet them? You said you were trying to vet these coins and 10,000 of them, and you have a hard time with it. So how do you think about that?

because a lot of it's new. And then you must have consumers demanding, like, hey, I want access to this. You want to give them access to as much as possible. But, you know, they will think whether you say it or not, that listing them is an endorsement, right, for a certain extent. Yeah. Let me be clear.

The listing, anything is not an endorsement. And I think NASDAQ and NYC would tell you the same thing, that, you know, there's a process that we put coins through. We don't accept any kind of payment for, listing. We have our own pipeline of things that we're looking at for various reasons. There's a scoring system of like all kinds of stuff. How hotly demanded is it from our clients?

Do our competitors support it? What's the trading volume look like in the market? Is there something like novel about this or like especially interesting about it? There's a ton of things that kind of go into the analysis of like what order we're going to list things in. And, you know, and then there's like a very comprehensive review process for legal, you know, regulatory, technical. A bunch of stuff goes into the review. So, you know, I mean, it's why we have only 200 out of 10,000 coins listed. But, you know, I would love to list more coins.

It's, it's, I think, you know, 95% of the interest is, you know, in just kind of the very top. of the coins and then there's just like crazy long tail but the thing about the long tail is like you just never know when something's going to have its moment you know and uh i mean like doge coin we had doge coin listed for years nothing happening suddenly like Elon goes nuts about it and boom like thank god we we were there because you know we would have missed the wave if we just tried to like get it up um after after the wave came so you know a lot of things work like that you know there might there might be nothing happening. And then, you know, once or twice a year,

they have a day that, you know, where they do a million dollars in revenue or something like that. So there's incentive to list everything. And there's also this kind of competitive thing too. Like clients will say, hey, I just want to trade that one coin. If you don't have that one thing that I want to have, this one new thing, I'm going to take my entire portfolio away to this other venue that's doing everything plus that one thing.

So there's this competitive thing going on. as well where, you know, it's not just like you miss out on that incremental revenue of that one new thing. It's like, if you don't do that one new thing, you might lose all of your revenue for everything else. Talk to me about money laundering and the protections against that we just had. I think it was the firm that Reuters had reported. They had maybe $2 billion in transactions, finance, I think it was. They had upwards of $2 billion. Again, this is all alleged. of, you know, dark transactions, money laundering, you know, bad stuff, let's say. So, obviously, people who want to move money who are in that, you know,

line of work are going to try to use these systems. How do you protect against that? And for you, how big of a reality is it, you know, because it is something that the press wants to cover. It is something that gets headlines. And it is something real, right? And the offshore places seem to do it quite freely, but you're in multiple jurisdictions. So how do you think about it?

And then how big of a problem is it practically in terms of, you know, if a billion dollars goes through your exchange, you know, how much of it would potentially even be in those categories? Because it's not zero, right? You have to deal with people doing bad things in the world. So and then I guess the third part will be like, how do you actually deal with it with, you know, governments and agencies and how often do you have to deal with it? Yeah, you definitely can't prevent 100% of it. But, you know, I think we get a relatively small amount of that coming through.

We've got pretty tight controls in place. You know, I think the game is really just not being the lowest hanging fruit. You know, this money, you know, when we find it, we freeze the accounts and law enforcement takes over. So, you know, they're not great returns if you're trying to launder money through crack and, you You might just end up with your money all frozen. So it tends to go through the channels which are open. And so, you know, I think the guys that are worst at catching this stuff are, you know,

their numbers will be 100 times what someone who's good at it just because, you know, the guys, you know, the guys laundering money, learn their lesson. They got burnt once or twice trying to launder money through Crackin. And now they're just like, all right, we don't want to lose any more money. Let's just go where it's easier. You know, that said, I think some of the headline numbers, are inflated. You know, they tend to count like,

I feel like the numbers that should be counted are like deposits and maybe withdrawals. But I've seen them count trading, you know, one guy I'll deposit some, the deposit some stolen money or something, trade it a million times. And then they're counting all of those transactions adding up, you know, and then he just withdrawals like the same amount he deposited. So it kind of depends on how you count it. But, you know, I think I, in crypto, I think chain al,

did a great report on this. It's just, it's just minuscule compared to the legacy banking system. You know, and crypto's so traceable. You know, I think there's this misconception, which I think is going away,

um, that, you know, crypto is somehow like totally anonymous and like can't be tracked. But I mean, as we've seen, uh, you know,

like there was this, uh, the BitFinex hack, the Mount Gogh hack. I mean, they, they chased these guys down years later because they just slipped up one time. They bought,

they bought Bitcoin with coffee and oops. I used the wrong wallet. That was the wallet I stole all the money with. And, you know, and then they're busted. So it's really not a great way to launder money. And I think it's really nothing compared to the legacy system. All right. So let's, let's, this is an incredible, by the way.

Thank you for being so open and honest and informative about the crypto space. Let's talk about this New York Times article. As we were getting the tail into discussion here, I think you're pretty libertarian in your views. and you also operate in many different jurisdictions. The New York Times wrote this article, and I think what was the origin of the article and what was right about it, what was wrong about it?

Yeah. It got almost everything wrong. I mean, there are very few, you'll notice very few actual quotes in there, a lot of editorializing, a lot of missing context, and, you know, I don't know if people just took cherry-picked snippets

from chat that happened like, you know, over the course of weeks or if they gave everything, you know, to the reporter and he did his own cherry picking. But... This is Slack, right? I mean, people on Slack at work, I always tell people, like,

get rid of the random off-topic channels because, man, if anybody's corporation had those dumped, it's just going to be employees letting off steam around a water cooler and one person likes the Chappelle show and the other person doesn't. And then all of a sudden, you know, just out of context looks really bad. Or can be a kind of headline in the New York Times.

So this is basically employees who were disgruntled leaked your Slack chats. Yeah. Yeah, basically. Yeah. So there was like weeks, many weeks of conversations about a number of topics, which, you know, I think got kind of like kicked off about. there was a debate going about whether, you know, men and women think about finances differently. Okay. You know, which got into like whether or not there's actually like differences between biological sex

or differences in the brain chemistry of men and women or like actually differences. Is it all nature or is there some nurture in there or is it vice versa? And there were some people who like actually 100% believe that the differences between sex in men and women and humans is 100% nurture. And like, if you just start as a baby, you're basically like identical. And there were all these like papers shared, you know, all this research shared.

Right? If it was all inside of you, two twins put in two different locations, they have the same outcome. Nurture would be how you were brought up, right? So basically people go into the third rail of biology. You know, are you born this way? or did your parents in the environment have an impact,

something that is becoming very challenging, the book, the bell curve, intelligence, gender differences, and just even the concept of there being a gender difference for some people, you know, that is very offensive. And for other people, it's, like, offensive not to recognize that biology plays a role. Yeah, absolutely. And, you know, no one ever said in the course of all of these discussions that men are better than women or women are better than men

or, you know, one's smarter than the other. It was, it was strictly talking about, like, are women better at this thing? Are men better at this thing? Okay. Or do they think about these things differently? It wasn't ever like, you know, one's better than the other. And, you know, as you might imagine,

we've got employees, over 3,000 employees in 70 plus countries that speak 50 plus languages, and people have different views about things. And, you know, like you just said, you know, some countries really embrace differences in, gender. And, you know, that's just a core part of their culture. And it's something they laugh about and talk about all the time. And, you know, other cultures, you know, I think largely like West Coast United States really, you know, seems to feel like, you know, talking about any differences of

the biological sexes is just taboo. Yeah. And I think you jumped in. The actual quote was most American ladies have been brainwashed in modern times. I guess you're referring to how they think about this issue. Well, this is like completely taken out of context. Actually, you know, I was joking about how, and by the way, I think we're all brainwashed. I consider myself heavily brainwashed. Okay. So it's not like I was hauling out, you know, women specifically, and I even, I said this as well. Of course, it wasn't included in the article, but what I was joking about was that I think looking like a pirate is cool. I think being disheveled and having a beard and like, you know, just looking like a pirate, I think that's cool. And I think a lot of guys think that's cool. But women, on the other

hand, in America, the women that I know anyway, might not think that's so cool, you know, because of brainwashing of thinking what like a good looking man, you know, looks like or, you know, what level of clunliness is appropriate, you know, for a man or whatever, you know, it was a total joke, completely taken out of context. And yeah, I think we're all brainwashed and I wish more people would appreciate the pirate aesthetic. What channel is this occurring in? Is this just like the random channel? People are just talking about stuff? Like, or is there a channel for, is there a channel that cracking more gender differences or third real topics? Yeah, yeah, there are a lot of channels. Actually, we try to like anytime a particular topic comes up, you know, create a dedicated channel

for people. And, you know, actually, we're going to stop doing this because it's just gone like totally off the rails. Apparently. You know, we had the last, the last one of these was the gender, the pronouns debate channel. Oh, great. Wow. So you went biological differences between genders to pronouns.

Well, that kind of, yeah, I mean, it kind of like segued into the pronoun discussion. And, you know, I found out that people on our recruiting team were actually offering, offering candidates, you know, saying, hey, these are my pronouns. what are your pronouns? And we had a lot of people report into us like, hey, why are you asking me? I'm a job candidate. Why are you inquiring about my sexual identity?

It's a little bit intrusive, yeah. Intrusive. And a lot of people, you know, I mean, insulting in some cultures. You know, imagine you're, I said this on Twitter. Imagine you're from a very, you know, traditional Orthodox, you know, Muslim, back on your, you're living in Saudi Arabia, whatever. and a woman who's interviewing you for a job says, hey, are you a man or a woman?

You know, while you're sitting there with your beard and everything? Like, I mean, come on. Like, it's done in the name of inclusivity, but like, I think we've lost the sense of like sensitivity of like, you know, cultural relativism and like being sensitive to differences, you know, not trying to, you know, I think, I think Americans, I don't know if it's in our DNA or what, but we love to export things.

And we love to export our culture. and I feel it's like a very colonialist thing to do is to just try to impose your culture onto people. So we got a bunch of complaints about this, about the request or offering, even offering of pronouns because, you know, if you're not American and a lot of, you know, people in 70 plus countries,

people have different levels of English abilities. You know, they would say like, okay, what, your pronouns are what? Like, I've never heard of this concept of like, you can choose your own pronouns. So now I'm like, I'm trying to think, I'm trying to speak English to you as my second language. I might not be that comfortable with it.

And now I'm like, you know, maybe my native language doesn't even have gendered pronouns. So I'm just like, you know, and I'm like, okay, what? Like, okay, I've got to speak more slowly. I've got to think about if I'm going to offend you. I've got to have anxiety about this job interview that I'm in. Like, if I get your pronouns wrong, right, while I'm trying to speak English to you,

am I going to lose this job? Yeah, so maybe just not have it in the application. Like, is it even relative, is it, I mean, even knowing the gender, I mean, I think I've heard arguments in HR that you shouldn't know the gender or the last name because you don't want to buy his hiring. I think that's ideal, yeah. They literally will put Susan S, you know, James, H, Joe, P. And, you know, even that in most cultures would tell you if they're male or female,

based on the, you know, with a pretty high level of certainty. So, you know, there's also doing reviews without even having the name. So you actually are looking at the merit of the candidate. Of course, you decided to make this a general debate dash pronouns on Slack. might not have been you like to debate stuff apparently you like to talk and debate stuff I asked you to come on the pod

you're like yeah let's do it check out and we just talk for half an hour about the hardest topics to crypto and you engaged everyone in a very like honest way you like to debate I was a philosophy major in college

explains everything this is your kill zone you love to debate I love to debate however you know in hindsight I've changed the rules now there's no more there's no more debating policies on Slack. If you want to change the policy, you now have to submit a paper to me, a minimum of five pages, and I'll read it. You have to, oh, that's interesting. Why five pages?

Yeah. Because I think, I think you have to, I think you have to be able to lay out what you think the current state of affairs is. Got it. You have to be able to lay out what your argument is. Any sources for that? I just feel like five pages is probably, you could try to do it unless, I just feel like if you did it unless, it probably wouldn't do your argument justice. So this is like the Amazon 6-pager. You've got the crack in 5-pageer. If you want to change policy, there's a benchmark other than sniping off three quick Slack messages. You've got to actually construct your argument in order to engage the argument.

Yeah. Yeah. That seems like a good evolution of your policy. Yeah, having everybody in a free-for-all in a Slack room could be distracting. It turned out to be distracting. Yeah. You know, I thought there are no policies that I've created at the company that I'm not, like, incredibly well informed on. Yeah.

And so, you know, I think when I opened it up to debate, you know, I'm just thinking, maybe people will have better ideas than me, you know? Maybe I'll get to like creating a better policy. But, and even before. That was your intent. That was to have, like a sincere discourse about this. Your intent was not to be a troll or something. No, yeah. And we created a separate channel for it.

And I said, I'm going to create this separate channel. channel. There's going to be a lot of controversial stuff set in there. You might find it offensive. If you're very emotionally attached to your position or to this debate, like, don't join this channel. Don't come look at it. Unfortunately, I feel like that probably had the opposite effect that I wanted because I think I created like a clickbait for people. They're like, oh my God, there's going to be some hot stuff set in this channel. I better get in there and see what's going on. And I think people just couldn't help themselves. And the debate, which I hoped would be. like a very logical informed debate

just quickly devolved into like I'm offended, why don't you respect people you know, whatever and so had homin and a cacks. Yeah. People's feelings which are super valid but could be a very wide range of feelings on these topics and people could have

personal trauma, personal history. They could have been attacked because of their gender or choices. So yeah, it's a minefield and I think that's a pretty great lesson for you to go for the... For sure.

I mean, this is one of the, I think, things that happens at a startup. You have 3,000 people or something in that range? Yeah, 3,200.

3,200. I mean, I think this is what happens when a company grows quickly and the founder wants to give everybody a chance to chime in. And it's one of the great traditions

of Silicon Valley. These open Fridays where you get to, like, attack your boss and ask them like crazy questions, and there's no holds barred. And it was one of the beautiful things about Silicon Valley

and technology was, hey, And anybody could engage anybody in management with any debate. And Slack obviously supercharges that. And so do these open Q&A forums. But it can also become a huge distraction. I think that's why Brian Armstrong, who have had on the pod twice now,

all in end this week in startups. He was just like, you know what? We got a singular mission here. We need to stay focused on it and enough of the distraction. So you knew this story was coming. so you decided to do a preemptive, like, tweet storm about the culture. Where, how do you define the culture? And how did you come to that culture, you know, for Cracken and for what works for you and your team?

Yeah, I mean, I think it's pretty much, it's pretty much been there since inception, you know, in the early days of the company, it was really hard to get people to come to work for a crypto company. And so, you know, the people that tended to join were people that were true believers in, in the mission of, you know, all the good that Bitcoin could do for the world. And so, you know, it wasn't really a problem early on to get people that are really ideologically align. And, you know, I think here for a greater purpose. I think as things went on, you know, more people started to join the space, especially in

the last year or two. And I think, you know, some of the problems are compounded by the fact that we just haven't been able to get together in person because of COVID. And so, you know, pre-COVID, we were getting together several times a year. and able to build this rapport and able to understand, you know, we're all coming from post-COVID. You know, we had a lot of people come in during a time of the extreme hype in the crypto market, who I think, you know, while fantastically talented, just, you know, we're not necessarily believers in the mission or really, really that into crypto.

They just, I think, saw it as a great opportunity in a growing space. And I think that combined with the fact that we just weren't able to get together in person, you know, we didn't have that that connection. And so I think people just, you know, we're more misaligned. And so, you know, I kind of felt that through, you know, some of the discussions that happened in Slack. And so, you know, we developed this program. We call it jet ski.

And so, you know, we've tried to do everything like nautically themed. So if you don't like working here, we said between June, first when we announced it. And in June 20th, you can take the jet ski and sail off, you know, into the sunset, happy, happily ever after, find something that works better for you. And, you know, a jet ski costing probably three or four grand. So you're basically saying, we'll, we'll pay for your jet ski to zip out of here. Could be, could be a pretty nice jet ski.

I mean, it's four months of severance. So, okay. It could be a, yeah, that could be a little boat. You get a scorpion for that. So basically paying people, a lot of Tony Shea, rest in peace. just paying people to leave, giving them an incentive to leave, just to test if they really want to be here. And it's definitely, you know, when the company gets bigger

and people communicating electronics, you go remote, it's impossible to, or it's very difficult to create culture. I wouldn't say impossible, but it's a different type of culture that's both then employees become transient. Yeah. You know, the idea of working at Cracken versus working at Google versus working at Uber is a matter of logging out of one slack and logging into another. and logging out of one

notion instance or Google Docs instance into another. It's a different world right now. So what has the reaction been? Let me ask this. Do you feel like the New York Times treated you fairly in their reporting? And if not, what do you think was unfair? Definitely not. I mean, it is totally a hit piece.

I think the author had made up his mind about the narrative. You know, I think he said he only talked to five people in the whole company. Out of 3,200, yeah. Out of 3,200, um, you know. 1% would be 32 people. So this is, yeah, 10 business points. And as of, as of like an hour ago, I checked how many people have taken the jet ski for cultural reasons, culture or mission fit reasons.

And it was 31 people. So, okay. So, yeah. Sub one percent, um, of people. And that's with a four-month severance be on the offer at summertime. I mean, literally, at any given point in time, if you were to offer at any company four months of severance, I think you would get the same number. I wonder if that number correlates at all with the story or not.

Well, yeah, there have been additional people who take it, you know, for other reasons. They just say, yeah, whatever, I got, you know, family thing. So I'm going to, I'm just, now is a good time. They're going to leave anyway. And so, you know, they're taking advantage of it. But, yeah, 31 that said specifically for the reason of culture or mission, misalignment. Got it.

Oh, so you asked them on the way out, hey, just, we'll give you the jet ski. Just tell us. And 31 said, hey, culture mission. That's great for you and for them. Why should they be in a company that they don't believe in the mission and your mission? Pretty clearly stated, our mission is to accelerate the adoption of cryptocurrency so that you and the rest of the world can achieve financial freedom and inclusion. So you even have inclusion in there.

And I think a lot of the folks in crypto are really about helping underserved people, a very diverse group of global people and the unbanked, which by definition are from, you know, some of the poorest countries in the world, right? Absolutely. The emerging world. We don't call it the third world,

we use the word emerging world. These emerging, you know, countries really need crypto. And every crypto person I talk to, that's on the top of their mind. I'm assuming that's a big part of your mission as well, right? Yeah, absolutely. You know, I've traveled extensively,

visited, you know, like 40 countries. You know, my last business was selling virtual stuff, you know, World Warcraft Gold and stuff like that. You know, I did that for a decade. It had tremendous, tremendous problems with the payment system and international buyers, international suppliers of virtual goods and that kind of stuff. And, you know, really came to be aware of all of these problems with the legacy financial system through the last business and through traveling. And, you know, I think that's lost on a lot of Americans who aren't as well traveled.

We even talked to somebody in the Treasury Department in the United States who said, my bank account and credit cards worked just fine. Why would anyone use Bitcoin? And, you know, I mean, like, how privileged do you have to be? Yeah, not everybody can get a, not everybody gets seven credit cards mail to them every month with $3,000 and some blank checks in it to pay off the previous ones. Like, we live in a pretty robust economy, in fact, the most robust economy in the world, you know, at least over the last century.

You say in the document that you believe in rights like free speech, free markets, liberty, self-defense, and limited government. Yeah. Pretty controversial to be in favor of the U.S. Constitution these days, apparently. Oddly enough, it is. Did you basically lift that from the Constitution just to troll people? I mean, pretty much. I mean, we stay in there.

You know, this shouldn't be a surprise to Americans. You know, these, these. And, you know, there are some people in other countries who have totally different views about gun ownership, you know, the right to self-defense, the right to bodily autonomy, the right to not be forced to take a vaccine. You know, there are widely different views out there in the world.

Our positions basically have whatever views you want is, you know, you're not required to have a gun to work at Cracken. You're not required to get a vaccine to work at. crack in. In fact, you know, our retreat policy says, like, we're not going to discriminate at all. We're going to have retreats in places where there's just no, there's no requirement either way to get in. So, you know, if you don't have a vaccine, that's cool. If you do, that's cool. We're not going to ask. And, you know, I think, yeah, there's just, there's a lot of different views on it. You know, we want to prepare people up front for what to expect. And so, you know, I think

if you are, if you would be highly offended by a corporate retreat involving an optional gun range as part of, you know, the program. Yeah, yeah, don't come. I did that. You know, I like play pigeon shooting. Uh, I've always wanted to be, uh, learn how to be a sniper. And so at my angel, uh, summit where, you know, like 150 angel investors come and hang out and, and learn from each other and do some, you know, uh, whatever, I have activities in the afternoon. And when I went to, you know, a famous Banks retreat. They took me a clay pigeon shooting. I was like, this is so much fun.

So I set up clay pigeon shooting. I also said up snipers. Nobody complained. It was an adult. There was also a painting and a cooking and a wine tour. It was Napa. You get to pick. It's no big deal.

But you are putting that out there up front. I like this one, or at least as a discussion point, we will advertise with and sponsor controversial television programs, podcast, influencers, and events if it furthers the mission. Okay. This means you've had people complain that you sponsor, some other podcast might I guess Joe Rogan or Ben Shapiro or something?

Yeah, I can't think of one in particular but it's something we've talked about doing and I go on other controversial podcasts or TV programs occasionally and which one would be the most controversial that we'd know. I don't know, probably Fox News would probably be the most controversial to the people who care. But we're not talking about Alex Jones.

or somebody like hyper polarizing. No, I haven't. That would be entertaining. I would do it for the entertainment value. What about Steve Banning? You know, I would, I would do that. I find Steve Banning, like, the most fascinating character. Either he's like a James Bond level villain strategist, or he's just a complete shubb,

you know, blogger. I can't tell. Yeah, I know people that know him. And I think he's their read. I think he's, you know, the man behind the, you know, the man behind the, curtain kind of like, you know, subtle genius guy is what I've heard. I've never talked to him, you know, I don't know. But he worked with Brock Pierce on that company he did with the gaming and the mining

of gaming stuff. Yeah, back in China, back in whenever 2000s. Yeah. So it's really interesting. All roads lead back to Brock in this case. Okay, so that's an interesting one. But I guess people on the staff could complain just like people who work at Netflix. I complain about Chappelle and people at Spotify might complain about Joe Rogan.

so you're kind of intercepting that. Yeah. Yeah, like we may incorporate firearm and self-defense training into corporate retreats, okay? Someone must be offended some of the time. If nobody's ever offended, we either don't have enough diversity of thought or we don't have enough transparency and communication. Explain this philosophy. I think this is one of the more interesting ones in the culture deck.

Yeah, so, you know, not that we aim to offend everybody, but I think, you know, there's some people who feel like they should, they should be able to have a workplace where nobody is ever offended, period. And, you know, I think being offended is a very subjective thing. You know, people in different cultures have all sorts of obscure things that offend them, you know. You know, in the Arab world, showing someone the bottom of your foot offensive. You know, and people do that, you know, that crossed their legs. I mean, shaking hands.

Yeah. I mean, spitting on the ground in some places common. Eating and meeting. Yeah, I mean, anything could be, yeah. Yeah. Talking with food in your mouth. Yeah, everything could be offended to different people. So the idea here is, you know, sometimes people being offended means we're talking about the right topics.

Yeah. Yeah, exactly. And, you know, we got, again, 70 plus countries represented in the company. Why, you know, probably double that, at least in terms of, like, ethnicities and, you know, different cultures. and we just don't aim to not offend anybody. I think, you know, to target zero offensiveness would be to just shut down the whole company, you know, and we just got to, I think, we just got to become more resilient, I think, an understanding of each other. Yeah. So I guess your concept here is, hey, let me just warn you up front.

This is going to be a intellectually full contact employment experience. you're going to be with people. I'm a philosophy major. Other people are libertarian. People in crypto tends to attract. People who have unique thoughts about the world. Some of them are pirates. Some of them are radicals.

Some of them are anarchists, whatever. Just be prepared if you come to this company. It's going to be a full contact intellectual debate at times. You might get offended. But we're all adults. There's no harm intended. If you are harmed, I'm speaking for you, like we could talk that out and make sure that, like, we understand your position.

maybe avoided in the future? Like you said before, you're not trying to offend people. You're just letting people know that if you are offended, it's not the end of the world. Yeah, absolutely. And I think, I think people should work these disputes out as adults. You know, and sometimes it's just having a one-on-one conversation with someone on video to just talk something out, you know, like, why was that offensive to you? No one has ever saying things in an intentionally offensive way. You know, I think people 99.99% of time, everyone has good intent. No one's intentionally saying things offensively. And I think two adults can work out their differences. And, you know, sometimes you just don't have to work with people. You know, in a company of 3,000 people, if you don't, if you have a problem

with what's being said in the guns channel, like just leave the guns channel, you know. And there's like a thousand other channels you could be joining, you know, puppy photos or whatever. You don't have to like engage in all this stuff. Fascinating. So what happens after the story? comes out. I mean, there's a fear where there has traditionally been a fear, like a story from the New York Times comes out like this. This is, I'm talking about like 10, 20 years ago. It's the end of the company. It's the beginning of the end. CEO is going to get fired. The company is going to, you know, the board is going to go crazy. It's, you know, it's a New York Times story. It's a New York Times quote unquote hit piece. What is the, or I guess they would put it under their culture piece,

But what was the ramification net net? Because you don't seem like you're resigning over this. You seem like you've doubled down. It's actually made you more clear or more intentional in your approach to running the business. Yeah. I mean, the response has been overwhelmingly positive, actually. You know, I think people see through the article. It's just very light on actual details, you know, heavily editorialized,

very few actual quotes. Most people that have responded have said, yeah, so when's the hit piece coming? Because this looks just like an advertisement to work at Crackin for me. So, you know, I think it's had more positive result than negative. And I think there's been a lot of backlash

about this kind of coverage recently. So I think people are kind of over it. I think that's one of the problems I have with the New York Times. Like, I would, and the way I structured this interview with you, when I asked you on, my intent was, I'm a former journalist, editor-in-chief,

an investor now, an entrepreneur. My intent was, I'll just tell you my game plan. Let me talk to you about what you're an expert on and learn as much as I can from you. And then go in with an open mind to what you're doing in culture and why you're doing.

Seems like we had a pretty reasonable conversation. Now, with this New York Times speech, you would think that you were the most sexist, racist, insane person running like a company where all the employees hate you. But the statistics don't show that. And the conversation, you seem pretty level-headed and reasonable. So I don't think you're snowing me.

I think you're presenting yourself as you truly are. And I appreciate you're being candid and having the discussion. I think this is one of the reasons people are a little frustrated in the tech community, specifically with the New York Times, is that these stories feel like they're never-endingly looking for a negative story. Now, I'm not saying there's not negativity in tech. there's negativity in media, there's negativity in the energy industry,

there's bad stories in politics, there's bad stories in entertainment, movies. Every, you know, every industry's got some dark stories to be told, I suppose, but there's so many interesting stories to tell as well, and I just feel like the percentage of coverage is a little out of whack.

They do seem to go after women a lot harder, too. So I think they may be, went easy on you because you're not a female founder. I've noticed that. It's really rough out there for the female executives who I think just get beaten up for things that the male execs do as, you know, as a matter of normal ordinary business, you know, holding people accountable, having high standards.

It's like, why is this woman, you know, such a B word? You're holding people accountable? Can I invest? Wait a second. You're hard driving? You demand results from team members? Like, isn't this one option? Wait, you ask people to, yeah, double down on their skill set and,

work harder. Like, I think this is the recipe for winning in the competition called capitalism. Like, if you're not holding people accountable on a basketball team or in surgery at a hospital, like, you're not doing your job. It's the same thing in entrepreneurship. You have to hold people accountable. When they went after the away CEO, because I don't know if you read that one, but they went after the- I did. Totally shameful coverage. And I'm just like, why are they attacking her for telling everybody they need to work hard over Christmas and the holidays, which is when they make

90% of their money. They don't have a, the job is to work those days. When I worked at a restaurant, my dad had a restaurant in Brooklyn, we worked Mother's Day, we worked Father's Day, we worked New Year's Eve,

we worked Thanksgiving. Why? Because we made a ton of money. And then we would have Thanksgiving on Friday. And we would, you know, and we'd celebrate Father's Day on Saturday

or Mother's Day on Saturday so we could make the money to keep the family going. The Away story was like, well, to make money. These are the perfect gift. Luggage is a great gift. Anyway, it's just crazy.

We could go on for hours. I feel like the world has gone a little bit crazy because reading this story, I was like, I wonder how weird this guy is. Like, you really painted you to be like really strange and like, you don't seem as strange to me. By the way, like the policies, the policies that I set for the company, you know, I'm thinking about it from a public policy perspective. Like, we have to make a law for everyone.

It's not about what I would do. individually, you know, if Jason says he, him or she, her, or whatever, like, cool, I'm happy to accommodate that, you know, but it's like, what am I willing to impose on the whole company, you know, and thinking about like, how difficult is this going to be if 3,000 people take advantage of having custom pronouns and how difficult is it going to be for people who don't speak English that well or who have, you know, a culture or religion, you know, that really is going to be offended by, you know, something there. You know, so it's not just like, I think people, I think people look at the company's policy and are like, you know, why would you not enforce this

on everybody? Yeah. And, you know, I'm like, you know, legislated morality is a contradiction in terms. You know, we can't force people to be moral. I think we can just say, we can encourage people to accommodate their fellow people. But like, you know, ultimately, everyone has a different, you know, different reasons for why they might want to or might not. And so, you know, we try to be hands off about as much as this as possible. And, you know, what I would do individually is not necessarily, you know, what I would enforce on the whole world. I guess the one thing that they did go after you for was like the Slack group,

like trolled group, and said, and you throw out 14, I was full of trolls. What's the context there? Because the New York Times didn't provide much context here. What's the story with the trolling? Because I'm on a bunch of like group threads where people share memes and some of them are a little out there. You know, it's kind of part of internet culture. So what's the story with the trolling Slack room?

Do you still have it or? Yeah, it's just set up as a joke. There's nothing going on in there. Basically, there's a bot in that chat room or when you join it, the bot says, I'm extremely offended that you joined this chat room. And that's basically all it does. There's really, there's nothing more to it. And the interesting thing is the New York Times then makes the jump. Yeah. Forchan, quote, known for hate speech and radicalizing some of the gunmen behind mass shootings.

So are you in favor of mass shootings? Guess is what they're saying? No. No. Yeah, definitely not. I mean, yeah, they really, it's so. They're trying to tie this together. Yeah. That you are joking about trolling in Forchan. 4chan has had some number of members joking about or they participated in radicalizing gunmen behind my shootings. I don't know if that's ever actually been proven, but okay, let's say it was.

Like, are they kind of trying to make a jump here? This is like putting you next to. Yeah. It's by putting you in proximity in the sentence. Like, this is the game, I think. Yeah. Is how close can we put you to that? Because, yeah, I don't get the sense that you're, even though you like to shoot guns.

which I do too, and I'm a gun owner. I'm a responsible gun owner, like, for good reason, you know. Yeah. People know who I am. Like, somebody might try to jump the fence someday. For sure. That would be a really bad idea.

Just putting it out there for the person. Like, why would they put this known for hate speech and radicalizing some of the gunmen behind mass shootings? It's like almost like they're trying to make this jump. This is a really big jump to make. Oh, yeah. It's so intellectually dishonest. And it's just, it doesn't even clear the bar for,

like, you know, basic journalistic integrity. I mean, it's, presumably this went through an editor as well, you know, who said, cool, yeah, let's publish this. It's so, it's so crazy. It's not even, it's not even news or reporting anymore. It's just opinion pieces. I mean, it's like, oh, this person was at a party. And I don't know, this person who later turned out to be a serial killer had gone to that

restaurant and was known for going to that restaurant. And I was at a party at the restaurant. Like, well, I'm sorry. Sorry, Jeffrey Dahmer ate at this restaurant and I went to a birthday party at this restaurant and the restaurant is known as the place where Jeffrey Dahma, you know, ate? I mean, come on. Like, what's the relevance here? I mean, it's just, yeah, I think they're trying to paint you into maybe something you're

not or maybe you're snowing everybody and you really seriously are. Yeah, I think if anything, I'm overly, I'm irresponsibly transparent, if anything. Well, I do think, actually, I was going to tell you that. I think, you know, there's two ways to handle these things. One is to be radically transparent, which is what you are. The other is to just say, like, listen, we're going to shut down everything. We're not going to talk. We're going to just go dark.

And I know a couple founders who have now chosen to just go dark. They tell people don't list your company name on your LinkedIn. Do not talk to the press. They don't engage in getting press. They're high profile. They could get benefit from the press, you know, covering them or their services. But they're just like, it's not kind of. kind of worth it.

So they just cut off complete access and just go dark. It's really is like the two techniques, I think, when you're dealing with this kind of situation. But listen, I wish you're the best with the business. Thanks for being so transparent and honest and coming on. Absolutely. Thanks for having. And you've gotten many, you told me before, we were in the green room,

many more people have applied to come work there. Yeah. I think, you know, we'll fill all these vacated roles with people who are, you know, I think abundantly aligned with the culture and the mission. So, you know, I think this is as adults where everybody is getting to with employment, whether it's 37 signals, which is, you know, far left, I would say, or Cracken or Coinbase, which I say are probably libertarian, dare I say. And there are people who are on the right, you know, Ben Shapiro's company, whatever. I think people are just trying to realize as adults,

we can pick where we work and we do not have to work at places where we disagree with the culture and people print culture documents now soon. And you can, ask about the culture before you go. They talk to 10 people who work there. Yeah. You know, think of it like, you know, dating. You know, if you're in a bad relationship, you know, maybe you want to ask some questions up front before you get married.

But if you find yourself in a bad relationship, there's a million other options out there. Now, we're using the dating analogy. We might want to go back to pronouns for nature versus nurture, Jesse, before we get ourselves in trouble. Yeah, that might be too heated. Might be too heated. No, literally in the line of business I am with, is investing. We really use the analogy of, you know, getting to know somebody, dating them, getting engaged, getting married as like this courtship process in terms of investors and founders getting to know each other. It was completely innocuous. It wasn't meant in any kind of sexualized or gender or any kind of way.

And then people are like, whoa, do not use that. It will trigger somebody. Yeah, we can't talk about dating a female founder. Well, or just dating in general, right? And then, you know, you know, as. particularly like a lot of people met their spouses at work and like, can we have an adult discussion about that? And it's like, you know, I know people who I just found a couple who got married and they had to keep their relationship, you know, hidden for a long time because it was a founder and it was a female venture capitalist.

And they have a wonderful family and they met in, you know, in business, but they were just scared to death, I think that like, whoa, if people find out that we fell in love, and we happen to meet each other in a business meeting and then had kids together and family. It's like, I was like, you know, I think if you get married and have kids, you can meet at work. I think it's only if it doesn't work out

that you're going to be admonished for it. But it's a really charged subject, you know. Yeah, it's kind of silly that it always comes down to the gender thing because, you know, I'm extremely tight with my co-founder. You know, we are like 100%. We have each other's back on everything. And why isn't anyone complaining about that? You know, people should say,

You guys are like way too tight. You know, this is like, you guys are irresponsibly tight. You know, you never see that come up. It's a little weird for us. You guys are like going on walks together

and having lunch too often. You seem way too happy in your relationship. Yeah. All right. Listen, yeah, no, it used to be the ways you met your partner was in the rankings.

I'm Gen X. I think you're maybe a little younger than me, but that was the number one way. It's like meeting at work. And now it's like last. I think it's an app is how you meet your spouse now. All right, Continue your success. If you want to work at Cracken and you dig, Jesse, go there.

If you want to work somewhere else, go work somewhere else. The end. Yeah. All right. Good luck with everything. Appreciate it. See you next time. Thanks. Have a good one. Okay, Molly, what did you think of the interview? Good stuff. I mean, really, a very good conversation. I actually, if anything, I was wishing I could listen to it in reverse because I wanted to

hear the like culture part before the crypto breakdown. But good conversation on the crypto breakdown. Here's my technique as an interviewer. I was like, we have. have two great topics. Let me warm up myself, the subject, and the audience with just covering all the hardest topics in crypto. If Jesse, who I know to be a pretty candid individual, if he can be candid, we'll get into a nice rhythm of a candid back and forth. And this is called pacing and therapy and psychology.

So I was pacing with him. You may notice in the interview, I explicitly try to go at his speed. I'm not going at my speed. My speed's faster. I was going at his speed. So I'm pacing with him. And this is really how I think about interviews. It's like, can I get into that little tennis volley, I imagine?

Okay, I ask him a question. He gives me a great answer. He starts to run out of steam with the return. I give him the next question. Boom. So we just started getting into that with Defi and Luna. and tether and stable coins and regulation and what coins they list. Okay, now we're going to go into the discussion, the harder discussion, and let's see if

that pacing and that nice volley can continue on in the interview and then will it be productive. And I felt like it was a very productive discussion and he was super candid. And I think I would, I really hope the people who wrote the story at the New York Times listen to that. And then consider how they presented him. Now, I don't think that he sat for an interview with him, but they had an adversarial approach. And then you look at my approach,

which was, I'm just trying to have a thoughtful conversation. I think this is why podcasts win, and why the audience loves podcasts, and they just don't like clickbait media on either side. I mean, there might be tribal people on either end. But I do think you get- I'm like, I think everybody likes it.

That's the problem. It's part of the problem. I do think there's a group of people who prefer what we do. here on podcasts, which is to have a thoughtful discussion. And you can see the clickbait can make somebody look crazy or demonize them or make them look like a genius and laud them too much, whereas the conversation, the awful conversation lets you kind of make your own decision about the person and lets the person maybe be better

understood. I think if you take the two pieces of media and you had 100 people, listen to the podcast, 100 people read the story, out of those 100, how many. would say I had a better understanding after the interview versus the story. Yeah. I think we know the answer to it. Yeah.

Or if you take them both together and then you draw, you know, I actually prefer. That's another thing to do is triangulation. I think having triangulation is actually the key because you will find. Follow him on Twitter.

Read the New York Times story. Listen to the pod. Come to your own conclusions. Such a great punch-up. Magic. You know, magic. You have your moments where you like punch out my thinking and just make me a little crisper.

I like it. Teamwork. It's teamwork. It makes the dream work. Okay, next up, speaking of teamwork. Speaking of which. Everybody loves OK Boomer. Producer Rachel on PTO, as many Gen Z, millennials will do.

They'll just take off a Friday when they have the Monday off for June. Listen, I got to stand up for my home. Rachel here. It's like the first idea. She's taking off. And not only, not only during this live stream, I have in my inbox four different emails that she just sent booking guests for Molly on. On her day off?

On her day off. That's what I like. This is how I judge people, Molly. When you're off, how could you do your response? Absolutely not. No, you got to stop that. The weekend. Response time on the weekend.

Weekend response time. W.R.T. Illegal in France. Legal in the U.S. I'm not saying I base compensation on it. You're responsible for your own boundaries and health. Yes. Treat your health accordingly.

But I am responsible for how I judge you. And people who respond to the CEO quickly. Oh, I like it. Anyway. My lord. Anyway. Rachel, I hear the word union. I forgot to bring the word.

Oh, God. You really are. I am going to go union. I would never union bust. Here comes to red flags. But I would union retire. If anybody wants to start a union, here's my response.

You should totally start a union. I support you starting a union. I'm retiring in 60 days. Everybody has, 60 or less days to work to wrap everything up. I think they're all means unionized because I am not having it.

They're not coming to work ever than talking to a union leader every day. F that. Union equals Jake Al retires. The good news is I don't have to respond to this because you just said don't say the U word and I'm definitely not going to. It's not even going to say it.

So Rachel, who kicks all kinds of assets It looks really, really hard all the time. Yes. He has a great OK Boomer for us. I'm actually super into this concept. She sits down with Alexander Olison, the founder and CEO of Babylon MicroFarms, the platform that makes indoor farming simple and accessible to enable anyone to grow their own fresh food. You know, I'm a prepper.

I love this. I'm really excited to hear this interview. I'm going to listen to it for the first time right now. In three, two. Okay, Boomer. I understood the assignment. Well, thank you so much, Alex, for joining OK Boomer today. Alex is a UVA grad and CEO of Babylon MicroFarms,

which is an intelligent platform that makes indoor farming simple and accessible, enabling anyone to grow their own fresh food. Thank you for joining. Thank you very much. I'm excited to be here. So I'm actually really interested in this topic because a few years ago, I got to learn about food deserts at school, and food deserts are in these geographic areas where people

basically have no convenient options for securing affordable food or healthy food, especially fruits and vegetables. This is really why I was interested in talking to you. And there is some pretty interesting data from the Association of American Medical Colleges and USDA. It says that 54 million people are food insecure and 23.5 million people live in food deserts. And that means that one in six Americans are struggling to eat daily. So any technology, you that can help with this. I'm a big fan of anybody that's helping businesses with this. I think it's a really cool idea. Can you talk a little bit about what makes Babylon different than the rest of vertical farms? Yes. So as in the first, like, you know, you look at the scale of the problems. You mentioned there are food deserts all across the U.S. up to 50% of produce gets wasted before it reaches

the plate. So it's a really inefficient system. And vertical farming provides an opportunity to short that supply chain and grow food in cities right next to the consumer. So that's a really exciting thing for the industry. And for what we do, we're focused on on-site vertical farming, which is a new kind of category that's emerging, and that is basically building vertical farms in or adjacent to the point of consumption. So we help businesses and communities to grow their own food by using modular vertical farms that literally attached to the food service operation.

So there's no supply chain at all. And they're able to have their own self-sufficient supply of like herbs, leafy greens, and other perishable produce items, on-site oil. around. So it is a much more localized way of growing food that's closer to the end consumer, you know, it pretty engages in inspires the communities. And yeah, we just remove that supply chain altogether. So it is much more resource efficient. Yeah, it sounds a lot more sanitary too. You think about how far your food goes. I go to the farmers market a lot and I live in New York City. And sometimes I see where the farmers are coming from. And I'm like, oh, man, like this food came

on a truck from a pretty long way. I wonder where it's bad. So how much money can if you know this, can companies or people save by using a vertical farm versus having to invest in that supply chain aspect? Yeah, so it really depends on the produce variety. One of the advantages of our model is that we can grow north of 50 varieties of herbs, microgreens, and a lot of those things you can't source. So the ROI on those kind of highly perishable, like, heirloom varieties is really high. Comparatively, you know, do bulk, lettuce, things like that.

It is, you know, less high. we're kind of reaching for parity with wholesale produce and as our cost-ful, that's kind of where we're trying to aim is just to make this a reliable and cost-effective way for people to grow their own fresh food. So there must be like a sustainability aspect to this as well. And like you said, this is cutting down on supply chain, which I can't imagine that's very good for the environment, having to move all these things with trucks all the time. Are you guys any more sustainable than the typical approach?

Yeah, way more sustainable across a number of different fronts. firstly we grow plants using hydroponics. So that's growing plants in water instead of soil. Oh, wow. Yeah, and that method uses up to 95% less water than conventional agriculture. There are no pesticides or chemicals. And the plants grow two to three times more quickly. So that method is super resource efficient.

And then by growing it on site, we have no plastic waste. We don't need to wash it. There's very minimal spoilage. And of course, no pesticides. So, you know, it is a much more sustainable way in that sense. And there's no transportation as well. So we're really like eliminating that supply chain, all of the different steps that come with it, resulting in a better and more sustainable product for the end consumer.

Gotcha. So you graduated from UVA just a few years ago. How did you find out that this was a problem? Like this doesn't seem like a typical problem that most college students recognize. Yes, I was studying social entrepreneurship. And one of the projects was exploring how to use hydroponic farming in refugee camps to be people. And so the initial insight was where we were trying to calculate how big could have farm. be the feed person to sustain a family or support a small business.

And that was a very different way of viewing this industry. And the status quo in the industry is still bigger as better. So these are massive Cappex projects. We saw a different way. We saw a way to basically leverage remote management technology and sensors to run these forms through the cloud, eliminating the barriers to entry and really enabling businesses, and empowering them to grow their own food. Got you.

So did you start this when you were a college student, were you out of school by the time you started this? Yes, I was 22 in my last year of college when I started the company, and we kind of bootstrapped in the early days, just trying to win competitions and grants and so forth. And then here we are five, six years later, and it's come a long way. So are you guys venture-backed, or have you been able to do all of this off of the grants? Yes, we've raised about $9.6 million to date in equity,

which is just kicking off our Series A. We hit a lot of proof points on the technology side. And, you know, it's really starting to scale up now. So it's very exciting. Yeah, interesting time to be raising, right? Yeah, it is. Although, you know, I think for us in the industry, these sustainability tailwinds are a lot longer time than the current macro environment.

So we're pretty hopeful. So I know VCs are always hesitant to invest in anything with like a hardware perspective. How do you get around this? Are you actually the people that own the vertical farms? And for those people listening that don't know what vertical farms are, I guess I should have explained this in the beginning, but they basically look like these boxes that you're growing vegetables in. They're probably a little bit bigger than a vending machine.

right? They're a little bit bigger and a lot better looking. You'd actually want to have one of these in your lobby or whatever it might be. So our business model, we sell the units and then we have a software subscription with them. And then we can also release them. So if you look at it as kind of a connected device, it's really the bulk of our margin and our revenue comes from those long-term recurring revenue contracts. Gotcha. Yeah, yeah, that totally makes sense.

And how many companies, how many people, I guess, do you think that you're feeding to date? So we did about half a million servings of salad last year, I can tell you that much. And we should be about 3x that this year. So we're scaling up now. We have farms in about 30 states, over 100 locations, and we should be a couple more double that this year. And clients like Aramark, Sodexo, IKEA, you know, and Naman Marcus, they're all kind of adopting this and pushing it out to the location. So our impact is growing with our farm fleet. Do you mean this would be like in an IKEA, like the store?

Yeah, so right. Bok in IKEA and I'd see this like over where they're selling like the Swedish meatballs. That is exactly it. So yeah, when you get some dill and parsley on top of your Swedish meatballs, they'll be grown in our farms. And, you know, IKEA's a great kind of thought leader in this. They came to us being like, we want to be self-sufficient in these ingredients. Can you make it happen? And we can.

And so, yeah, they're now installing the farms in their on-site restaurants. How long do you think till we start seeing this like for individual use to like people have these in their homes? So we've designed a lot of flexibility into our remote management tech so we can power other hardware. So the consumer application is definitely on the horizon. I think a lot of it is about scaling up the hardware and the manufacturing math that comes with that. So our costs are falling already. And over the next couple of years, as we ramp up, those costs are going to continue to plummet and eventually unlock markets. They're a little bit more price sensitive like the consumer.

So you're obviously very future-driven. Do you guys have any other plans for the future? Yeah, so we're actually working on some new products now. We've got some really exciting corporate clients who are actually driving innovation for us. So as we look at this on-site farming category, we're seeing our clients now recommend solutions for that. So things that are slightly high volume, optimized for ROI, and then also some on the educational side. But they all run on our software so we can help them kind of deploy these on-site farming systems within their client base. That's awesome.

So I talk to a lot of founders, too, that are around your age, but not. None of them were in this, like, food tech, tech space. Has it been difficult to navigate, like, this landscape as a young founder? Yeah, I think there are some real challenges with running kind of an operationally complex and, like, industrial-based business, right? We have hardware, we have software. We have a kind of connected device offering, which is orders and magnitude more complicated than, like, an app or something. Yeah. You know, and we love that.

You know, we have a great, young, talented team, and we also have some experienced people around us. So there are challenges, but, you know, it's a lot of fun. Very cool. Do you always know that you wanted to be a founder? Yes and no. I don't think in like direct terms, I wasn't studying startups when I was like a kid, but in hindsight, as I hear about the sort of traits that lead to people being founders. I was like, oh, yeah, there's some patterns there that makes sense.

Very cool. And how do people find out about Babylon? Because one thing, again, that's very different from you than some of the other people I've had on are people have been bundling their social media. we talk a lot about brand building with certain founders. You guys seem to be absolutely freaking killing it, but are pretty under the radar. So how are people finding out about you?

Yeah, so we're big on LinkedIn, Instagram, you know, Babylon MicroFarms is the company name. And, yeah, we're very under the radar. We're based in Richmond of the Junior. And I think now that we're scaling out with some of these clients, it's really time to kind of get some more exposure. It's so interesting, though, seeing, I feel like sometimes it's very easy for,

especially young founders in particular around our age, to get stuck in this, like, Twitter reverse, where as a founder, they're really engaged with talking about building in public and things like that. What are your thoughts about building in public versus staying under the radar? So I personally don't do social media. I do LinkedIn is the one that I just have to. So I'm all about building under the radar until you're ready to show people what you're being working on. Gotcha. Is there a reason for that?

I think it's just a distraction. I think what we're doing is so engaging. I think we get a fair amount of coverage now, especially sort of really, really. new products and stuff, but it is a huge destruction. Yeah. And I actually met you through somebody else who I'll be having on the show in the future. And he has a video game company. And it is, I believe he must have been.

He is also from Virginia. Don't think they went to school with you. They might have. They did that. That's what we met. They did. So you're obviously plugged into the founder network in Virginia. What is it like being a founder that isn't based in New York or SF or Miami?

How do you see any differences there? Well, I'm from the UK originally, so I have a very mixed view. It's different. I think Jared, who you're talking about, he went off to YC in California. So he's kind of done that wall. And we've stayed on the radar. We stayed in Virginia. And I think there are a lot of funds that are looking just for that, right?

There's this whole kind of rise of the rest. And I think we're embodying that down here in Richmond. And I think, do you know what you want to do? And it's just about execution. It doesn't really matter where you are. Do you have any advice for founders that aren't based in necessarily like target cities for other tech people to be living in? Like how does, especially advice honestly on hiring, that would be really interesting to hear about. Yeah.

And it's very company specific, but I'd say for us, we leverage the resources in Virginia very well. You know, one of the few kind of ag tech companies in the region. We also were taking things fairly slowly, right? Your first, you know, 10 and the first 100 customers, I'd say, you know, most of them are in. the people we knew and we went and built those relationships, I don't think there's any advantage to being in a big city when it comes to finding those initial early adopters. And I think the cost of hiring and cost of office space,

all of those things are much lower. But we're an at-work company, right? We have people in the office and we have done for the last two years. So that has presented some challenges. But I think that the talent pool is much bigger than people think in some of these cities that are a little bit off to be in track. I totally agree. I have one of my best friends on Shimmel,

went to Richmond and absolutely loved it. Richmond, the university is actually a little bit farther away from Richmond downtown, which I think is really sneaky there, how they get you there on your college tour. Where's Richmond? They're like, not that close, actually. But we got to pass to Richmond a few times. And I really, not only is it just like a beautiful area to live, but I would definitely want to work there.

Do you find that it is? You said, are you fully in person then? We're fully impossible. And I do think if you're a founder in a small city, you can travel. Like, it is easier for me to go to new. in San Francisco regularly and have the office base here. And I think that's a setup that's really worked for us. How often do you have to leave?

I don't have to leave ever, but I choose to leave probably a couple times a year to New York, London and San Francisco. Nice. That's awesome. Do you find that it's difficult to attract talent when you're in Richmond as a company? I think there are some challenges that, and I think COVID didn't help actually because now the expectation is that you have these remote roles. So we're kind of adjusting.

accordingly, especially when it comes to like software hires, but you know, for a lot of our hardware and operations, they have to be in person. I think there is a, there are a lot of people that actually still really enjoy coming into the office. So as long as you're a flexible workplace, then that doesn't seem to be too much an issue for us. I'm one of those people on them. I've never worked in like a traditional office, except for, I guess when you've come interning, I interned out of bank, so I had to go into office there. But when the pandemic hit, I was a senior in college, so I've actually never worked in an office. and I like working from home.

I don't know if I like working from home, though, because it's the only thing I know or because I actually like working from home because sometimes I go to WeWorks and I'm like, wait a minute, like getting out of my bedroom would be kind of nice sometimes. For the most part, I really do enjoy the flexibility.

So I'm really interested to see, like, the landscape of hiring in the future, especially with our generation. I think it's going to be interesting. Obviously, with hardware, that is a completely different beast. Do you have any other founders that you look up to

in this space? I've gotten to know a couple of more manufacturing-oriented founders as temper pack here in town. They've been a fantastic resource to us. And, like, you know, those are companies. They have to, you have to go into work because it is a product that needs to get made by someone. And I think, you know, that and for companies across US, we can't just have a permanently

remote workforce. It doesn't work for the economy. Especially with, like, you keep saying, like hardware. Like, it just doesn't work. And we've talked about this on the show before, how there's been some companies, I believe it was Apple that we were talking about on the show. We, I mean, Jason and Molly, not me in that conversation. I'm not sure in the episode, but they were talking about how some Apple employees didn't want to go back to the office, but it was one of those things like

they kind of had to because they were working on hardware teams and there's still like that friction. I'm like, that's so interesting. You're working on a physical product and you still don't want to go into the office. It's not like you can have that same kind of collaboration at home. Yeah, undoubtedly. And I think if you look at where things are heading and from infrastructure investment, new technologies, all of them are going to have hardware and software components. And so that's the trend that's in motion. And companies need to adapt to that.

And I think Apple and others realize that the water cooler chat, all of that creativity is where a lot of the value lies. And so you need to kind of foster that, especially if you have a hardware component to your business. Yeah. I totally agree with you. I think that's really interesting. And what do you think that we should be spending? more time on in the vertical farming space. Do you see any subject within there that we are just not focusing on enough? Yeah, I think the opportunity for government subsidies is massive.

If there were even a fraction of the subsidies available that you see in like wind, solar and other renewable energy sources, it would completely blow up the industry. So I think that's a topic that needs a lot more attention. And then also at the corporate level, you know, vertical farming is a very broad like industry. And I think you look at what we're doing and you look at potential for individual companies to invest in produce sourcing and make their supply chain more resilient to have a better quality for their own consumer. That is a huge opportunity that would be helped by subsidies, but it would also directly benefit solutions like ours. So, you know, look at what IKEA is doing. Look at what Aramarkasidex are doing. They are using

vertical farming as a way to source produce more sustainably. And that really could apply to anywhere that consumes fresh produce. So I'd like to see that be a big topic. in the future. Do you think that, or have you seen restaurants, like, really jump on this kind of technology yet? Yes, I think at the high end. Like, look at Chef Dan Barba, these other kind of mission-in-star restaurants where the whole thing's farm to table. And that's amazing. And I think it shows that it can be done. But what we're trying to see is how does, how do you move from that to more of a mass market appeal? And a lot of that's driven by cost. A lot of it's driven by, you know, the dates collection and the tools haven't been available. And I think that's why companies like

us exist, right? We're driving that change, we're making it more accessible so that your everyday restaurant, grocery store, even a consumer can eventually start growing their own food. Yeah, no, that's totally unacceptable. I don't really have any more questions for you. I just think this is the most interesting industry. I'm really excited to see what you guys do. Like I said, we were introduced by a mutual friend that's coming on the podcast soon, and excited to see you guys are like polar opposites. He's from Brooklyn doing stuff with iOS games, and you're out here doing vertical farming. So I'm very happy that we were connected because if it weren't for him, I definitely wouldn't have gotten to know you. And if anybody's interested in looking to connect

with you or to find out more about your company, where would they look? So Babylonmicrofarms.com, we're very active on LinkedIn as well if you want to follow us to. Awesome. Well, thank you so much for coming on, Alex, Alexander. This was a really interesting conversation. I hope to catch up with you in like a year and see how many IKEA's are, you know, embracing a vertical farming. Calm wait. Thanks so much for each of all along. Yeah. Thank you.

All right. Thanks for listening, everybody. Make sure to tune in on Sunday. We do have an episode, another awesome edition of V.C. Sunday School and then a super high energy this weekend climate startups. That's right. And we will be off on Monday for Juneteenth. So check back on Tuesday for a recap of the news that happened over the long weekend.

And please reflect on June 19th about our country, race, equality, and all these important items. We just take St. Patrick's off. I'm an Irish guy. We say Columbus Day off. We never had a Greek holiday here. I think everybody should take June 19th off. That's just my personal feeling. I think it's a good day to reflect. Do some reading. Do some reading. Reflect on it. Be open-minded. Be thoughtful. But we're taking it off. And I think maybe for your company, consider it for next year. Maybe you take it off next year. Yeah. And enjoy the weekend, everybody. We got a lot. a lot of great guests coming up on the show too i hope you enjoyed today's interview look for more of that there's going to be a lot more yes have a great have a great weekend everybody and we'll be back

on sunday and tuesday rest up everybody