I put 80% of my money in the S&P

alright sean i have a study that's gonna show why the amount of money that you make is almost entirely out of your control unless you do what i tell you to do how's that for opener i feel like it is like a late night info commercial that just like is about brain wash or something i feel like i could rule to world to i know i could be what i want to put at all in it like a day's off on a truck a intrigued go on what do you mean what do mean it's out of my control nothing's out of my control it's about as out of control as it is your ability to control if you're seven foot tall or not so okay i gotta up to give a shout out to jim o's i saw a clip where he kind like brought me to this topic he talked about the study that i'm gonna reference so in twenty fourteen there was a researcher in sweden named he rick interesting things about the swedes is that they are obsessed with two things twins and money so sweden has this massive twin database where they have many many like hundreds of thousands hundreds millions of twins that they've documented and for some reason you're they track twins i think originally they did it for health reasons where they wanted to track like what type of twins got diseases their studies because nature's is controlled so it's all about nurture yes and so they have this like massive database and they were able to break the database down into fe nocturnal twins which are twins that are born at the same time but don't look like and identical twins they're also obsessed with money they love money and in particular the government loves money up until two thousand and seven they had a wealth tax and as part of the wealth tax sweden basically tracked every citizens entire financial portfolio they laid looked at which stocks you owned the mutual funds that you owned every dollar of savings they basically tracked all of this stuff and so what was interesting is that this guy named he he went he had this premise this idea where he was like how much of investing in savings behavior it's controlled by genetics and so he looked at the differences between f internal twins and identical twins because presumably twins grew up in the same environment in many cases they have the same education levels their parents spoke to them the same way they were loved to similar amounts whatever and then he looked at well how do the f internal twins who only share fifty percent of genetics how do they invest and save compared to the identical twins who have share one hundred percent of dna and he broke it up into six biases so people who held too few stocks excess turnover people who traded a lot performance chasing so people who bought whatever bought that did well the year before over investing in your home country called home bias loving lottery type stocks and then the disposition effect which is refusing to sell losers and he looked at all of this data and i think he looked at it over the course of thirty thousand such twins additionally he looked at outliers so like for example twins that were separated at birth and a couple stuff like that and the results that he found was basically and concluded was that forty five percent of of savings and investing patterns of behaviors was genetic which i find to be astounding and the reason i was thinking about this was you and i i would not i think we both in we both in different ways like investing but we are not i would say professional investors and yeah my portfolio would also say i'm not a professional investor and yeah we love having professional investors on the podcast we both love reading about warren buffett and people like that and i was trying to figure out two things the first is why do i like that so much what what am i drawn to these guys for so much and the second thing was a couple podcasts ago we talked about passion and how to figure out what you're kinda supposed to be doing and i was trying to look for a more scientific reason about why i should do what i do to address the first one of why do we like these investors so much well i think i realized that in order to be a world class investor finances are actually secondary to human nature financial trends changed every decade every handful of decades something will some new thing will pop up you know spa so this new thing so like learning about that is important but that changes every so often but what doesn't change is thousands and thousands of years of human nature and understanding how humans behave and asking yourself why do they do what they do is significantly more important than the financial stuff on this show we have spent hours talking to some of the best investors alive well lucky for you the team at hubspot they have pulled out the principles that matter most and turned it into a very simple easy to read wealth guide it's thirty five principles from the top investors we're talking guys who have been on the pod like howard marx man p bra morgan h cathy wood and a ton others so these are all their frameworks their mental models their rules basically how to play the long game and how to avoid ruin you can get it in the link below there's this great stories from mon p so people who've have been listening to his podcast you've probably seen that mona ish came on the podcast twice i think his two episodes are the most viewed episodes in the history of by first million so he's been this kind of hall guest for us and in the interview i know if you to remember this but he said this thing where he was running a company he was an entrepreneur and he was running this company and he wasn't super super successful but he was like moderately successful i think it was like like a six million dollar your revenue business or something like that now he did this he but he was he wasn't loving it he just assumed this is a normal entrepreneurial burnout you know what working really hard been do this for a long time the shit's hard i probably feel how most founders feel but he was encouraged to do a like a very fancy version of a personality test where they talk to you they to your coworkers as a talk to your parents they talked to everybody in your life is sort of three sixty and they try to understand like a little bit more about you the result came back and they were like you know it's no surprise that you're miserable here this is a game that is completely incompatible for your personality type and it goes what do you mean and they go you like and i forgot the exact des distributor but it was something like you like solo player competitive number games and he's like what and they're like yeah gonna say that again you like one person so you by yourself not team sports you like solo player competitive number based games it's psych things that had a lot of like a math or or a number thing to it and here you where you were running this company so now you're playing this multiplayer competitive non numbers based game and so he he's like okay i don't know what to do this and he decided to start investing on the side and basically it turns out that as he's as he's done in his life he did way better as an investor as a solo investor playing a competitive money in the a numbers space game which was the stock market than he ever did doing this other thing he he really encouraged the sort of know thy self thing which is like you have to know who you are and what you are like predisposed to love and ob over and then find yourself in those types of games and he so i'll give you another example with that when i was there he was like he was telling me about how you've been kicked out of these casinos because he was wanting too much money i was like you were card counting he's was like no i was hard dude you were running around without your shirt on like i i know the let's on a casino that was margarita it's so he was like he he and he off camera he wouldn't tell me on camera off camera he told me he showed me the exact system that he used and then my my wife i've had like friends go and use this system in at these specific casinos played this specific way and it was he had actually found an edge he's like he's like just an intellectual thrill of actually being able to beat the house there's nothing like it you know financially this is not a good decision to spend thousands of hours figuring this out but i just like those single player competitive number based games and same thing with phil he's like when i got into phil philanthropist oh you make money they gotta figure out how to give it away and it's like should i be going to these gala and dressing up and donating to these causes and socializing and like there's a whole social light scene with phil and what he figured out was the version that was fulfilling to him was again a single player competitive napa for space game where he realized the fun part of phil for him was figuring out how to make one dollar that he puts in have the highest economic return in terms of impact anywhere so he figured out was there were kids in india who were really smart had no schooling like india has got you know over a billion people so a lot of people just live in rural india that are very intelligent but i've no access to good education or a pathway to to better their lives they're just gonna end up on a farm and what he realized was that if you could identify the smart kids for like three three grand a year he could put them in like a competitive school so they started these competitive mass schools and they got them into it and it is this feeder system to like the best jobs in the world if they can go get visas and basically for three three grand he can up the that family's earning power from ten thousand a year to fifty thousand a year so he could five vaccine can create like you know fifty thousand per year for a one time three three thousand dollar one year like acceleration in training and his like admit rate you know the normal it is harder to get into than harvard then san a hard harder to get into than any us college so it's like whatever point whatever percent admissions rate typically and i think cases this is like eight percent or something crazy like you know like a ten x larger admit rate so even that was a a single player game or whatever and it really got me thinking about this idea of how do you know yourself enough to know what game you should and shouldn't be playing which is kind of a spin off of what you're talking about right yours well that's like step one yeah i had another the kind of mentors got james curry he told me the same thing last week he goes i wish somebody earlier in life had told me who i really was i what he like i didn't know what you've meant and he this could go a lot of ways right here what are you about to say and he was like you know i played soccer in my whole life competitively and what i realized is like you know i was actually not very att to playing soccer but i was actually really good at racket sports i had long wings span good hand eye coordination and i should've have been playing racket ball early on he it because the same thing happened to my career you know i was doing these types of businesses when i really should've have been doing this type of thing he gotta be wondering wow there's probably billions of people walking around who never discovered what game they're actually great at and never got into that game and therefore like kinda of life passed them by isn't that sort of a a tragedy yeah well like i don't selfish i think about other people i just think about myself i'm like where i'm like i see be more important man than me but that's but that's what everyone you know they think like okay but how does this supply to me and i think it was andrew wilkinson said who told me about that self assessment thing which i really dig did you do it yeah it was awesome well what's like the when you're like a team and you're like discovering yourself if you get a little curious i think we're both a little curious here yeah i'm little mike curious right now there's two of us therefore we are by curious so so what game do you think you would be just about i don't even know what the options are right like i don't think i'm single player competitive numbers based game that's not me but i even know what the menu looks like so so what do you think yours is researching i i think it'd be like a a new topic and going super deep and ob assessing over one topic and coming to it try to trying to come to a conclusion right so naturally go run hampton yeah you're describing like sitting alone on a couch with a book and thinking and really look like finding your joy and you're you're being the best at that and then you're like so i'm gonna go and sit in an office with fifty other people i think i'd my my c founder chose the ceo so he runs hampton but it's when we like are gearing up to launch something new like i'm in my zone venus when i'm like researching how others have done something similar to us and where they failed them one than one and then going talking to experts and we my way into conversations of people who have been there done that and being like tell me tell me like the mistakes that i'm going to make thank you and i are both similar in this weird way i i thought this was completely normal and tell somebody pointed out that hey that's probably not super common i was talking to this guy who's a a book developer one thing this one of the things this guy is done ac he's written some of the most popular books as a ghost writer for smart successful famous people okay great so i'm talking to him and he's like okay so what's your book i i'm telling him my book idea and i i talked him a couple of times over the over a couple of years it's like has seen me talking about a couple of different book ideas and he goes you know maybe we say this for later he goes but i think the most interesting about you is and i'm like he pauses if this is very instinct me because this guy's job is to spend time with really smart people and he lets them talk for hours and hours and hours and then he's like oh the real story here is x and they're like really that he's like yeah that's the that's the most interesting part about this and that's his gift so he goes the most like inquire about you is you have some weird pre election for reverse engineering businesses or reverse engineering he goes everything you do you seem to reverse engineer as a first like as a first instinct whereas most people i don't think do that and he's like whether it's like something in life you know it could be family oriented you told me this it could be creatively this it could be investment and sam you're the same way where it's like i think our first instinct when we wanna do something it's like alright let me go studying in history how other people have done this let me go talk to the other people who've have already done this and i'm gonna reverse engineer based on the principles that they tell me i know what to ignore of what they're gonna say i know what to focus in on wanna gonna create my own system on my own understanding and then i'll just do that and i think we both do that as our default mode and it's what we enjoy doing and i don't think that that's common and here's an example whenever we have someone in the podcast and they explain they'll ask for advice or something like that instead of saying like well you should probably raise your capital or you shouldn't you should probably do this the first question is always like well how would you define success in five years like what like what what backwards yeah like what's the definition of success to you and then let's figure out there's what the rules will be to the game then we will can can give feedback but the reason why i've been always obsessed with this is i've noticed in my company the times that i have issues which is all the time the times that i have breath yeah every time i screw something up every day i i'm like i have to change the business i have to change the people i have to change all of these external things but the reality is and this is why i think i like capitalism so much is that the business that you're controlling if you are controlling it's just an extension of your personality so if you have trust issues then your your coworkers are probably gonna think that you're micro managing them if you have trouble committing then they're gonna think that you're absent minded the issues that you have in the company they are an extension of the issues that you have in vice versa if you are a kind person you're gonna have a kind culture i think and i think that what what investing habits are are just human nature habits and that's why investing is really interesting and so even though the study was related to finance it's the exact same thing so if you tend to have excessive turnover your stocks which is one of the six biases then perhaps you struggle having steady relationships if you tend to over invest in like stocks in your home country which they call a home bias the likelihood that you have moved from your hometown is actually quite low and so what i have found is that the best ways to make change in these issues for one it's not just reading and so i wrote down this line which was that change requires pain not words because according to the study what they found is once they normalize for education meaning they took two people who both had business degrees if that's if if person number two went and read a bunch of business books they wouldn't necessarily be a better investor what they found was that the only thing that made a meaningful difference other than genetics was people who worked in finance meaning you have to like you have to experience a loss like oh i i did this i got burnt i can't put my hand there again versus just constantly reading about burning your hand you'll still burn your hand even in the book thinking fast and slow he even says he's like i'm writing a book on biases but i suffer from all these same things and i and i have to work on this all the time and so the best way i think or the there they're i worked down like four ways that you could like prevent this but one are the biggest ways to harness this is what warm warren buffett said he just said actually again we invest in our zone of genius and what that means is warren buffett is a slow and steady type of guy so he invest in slow and steady type types of things which it would entirely explain why he's adverse to bitcoin which it would entirely explain that if he were a typo of if he were eighteen or twenty five nowadays he probably would not consider having a ai startup up that raised lots and lots of vc the people who do that tend to be the ones who want dopamine a lot faster who maybe care about glory and you have to optimize the thing that you're working on for the personality that you have but the other ways that you get rid of this i think is that you have to pre commit so the future doesn't decide basically don't go to a grocery store hungry so like when you make a decision you write it down like if i'm gonna if i'm gonna fire this person in month three after hiring them if they don't hit these requirements did they did they not hit the requirements you stick to it not if you're like predisposed to like you know not like confrontation another one would be to shorten the feedback loop so you're able to like see points of the score board very fast and get new information quick and the last one you can't play games where your bias will be fatal and that sort of means like for me i'm a control freak i'm a little bit of a slow and steady type of guy raising lots of vc where i'm not in control and i'm expected to go really really really fast that would potentially be a fatal game for me so i'd be setting myself up to lose that's really interesting so i i i like the the two premises you have one the problems you see in your situation whether that's your life or your work workplace is a mirror the mirror the problems you have in your psychology and then the the then the four or five tactics you just described are like okay what's the remedy and and also you know the insights which is i think morgan h book is this which is basically getting wealthy through the money game and investing is far less about strategy and far more about behavior and it's your own bet it's your own poor behavior that leads to poor financial results not poor strategy he says it in a much better way which i stole from him i wrote it down here i said personal finances is more personal than it is finances right yep exactly so i think that's great it it's also interesting because you said like you know the best investors weren't necessarily the ones reading more books at the same time all the best investors talk constantly about the books are reading and i i actually thought about it while you're saying it the it might be a a weird thing so it might not be that the knowledge in the books is super important it might be that one of the biggest leaks in investing is too much activity and the remedy for too much activity is actually too just busy yourself with bridge and books and and and and playing pickle ball and doing other things so that you are not prone to just sitting there and pushing buttons because it's the pushing buttons that's the problem and so it might be that reading it might not even matter what you actually are reading but just simply that it takes you away from constant activity is actually the best part of the the reason why all these great investors read so much or put differently if you found a company that's going well which that's the situation i'm in i've noticed the best thing that i can do is to do nothing because sometimes times when i met it gets screwed up or if you like let's say that you're trying to get popular on social media and you notice that when you post three times a day you get growth it's like just do that don't do other things like this idea of like it's working just continue and that you need something else to do in order to have your playground where you're allowed to mess something up but don't mess up the main thing yeah there's a great example of this i just picked up buffet did an interview with the berkshire thing and he talked about this which was like because but berkshire has i think almost four hundred billion dollars in cash and it's just been piling up over the last five years and they just haven't deployed it anywhere i wonder what that even means like where does it it have four hundred billion dollars in like treasury bills basically is it's treasury yeah wow i wonder what percentage of like the us treasury that that makes up i don't think it's that much there's trillions and two bills you he's not not zero but it's not not more than like five percent so he he was talking about like well well you know we we don't do anything unless there's something to do and he was talk he was talking about this there's an of jeff bezos just gave this interview and he said the same thing he goes early in amazon's history jeff wi came to me one day and said jeff you have enough ideas to destroy amazon and goes what he said you have enough ideas per minute per day per week to destroy amazon i said what do you mean he goes you have to figure out how to release the work at the right rate that the organization can accept it because every time i released an idea i created a backlog a queue a work and process a distraction and it was just stacking up it was adding no value the way i was doing it in fact i was creating distraction so i had to learn how to prioritize the ideas better keeping lists of them keeping those on myself until the organization was ready for the ideas and i saw this and i was like oh like your honor i plead guilty because you know of the same thing if you're if you're very generative with ideas feels good and and the ideas themselves might be great ideas might be might be a very sound idea and so it seems like you're doing nothing wrong but you can literally drown your company in ideas and i've done this many times especially like the growth teams of the marketing teams like here's fourteen marketing ideas and then every day two more are coming and then and then i'm gonna send you a tweet about something somebody else is doing that you guys should check out and then i'm gonna tell you this and then i'm gonna have an event you should go to and then there's this guy you should meet and then there's this thing we should try and then did that ever work we should try that again i can literally suffocate an organization by releasing too many ideas into the organ at once right it's just again like you described like a personality defect that becomes a culture defect a operational defect i read that same quote i think six months ago and so my c founder joe who's the ceo we set up this meeting every thursday and it's the only meeting that him and i have together and it's just when we go through a running list of ideas and it's a he's like just say anything you want we can say anything we talk about anything you want and it just in this room we can do hello yeah we'll talk about anything you want we i don't think we're gonna do any of it but maybe we will but like let's we can get it out and don't slack me any ideas though but is like just have a a running yeah and and we'll we'll go through any idea that you want and then maybe we'll maybe we'll do something alright let's take a quick break and i got a question for you when a buyer asks ai for a solution like yours does your business come up most companies have no idea by the time they found out they've already lost the deal to another company that did hubspot has ae which helps you show up in the moments when drag buyers are looking for a company like yours before the first click before they fill in the form that is the moment hubspot ae is built for check out hubspot dot com the agent customer platform for growing businesses i have a different tactic with these research papers which is i basically read it and then i say does this serve me and like if the conclusion of that was that your genetic disposition determines half of your financial success you know i tend to just throw things like that out the window partially because there are some great lies and statistics right like howard marx who was on the podcast described he's like oh what's the s and p's average annual return and we're like ten percent he's like yeah but do you know how often ten percent happens and it was like pretty never the actual the actual annual returns very widely so it might be the mean but it's definitely not the median or the mode and and so like you have these numbers and do you expect it's gonna be nine ten percent and it's almost never i'm upset over performs and owner performs and an average is out to that and same thing like you know many men drown in in the in the pool that was crossing the river that was on average five feet five feet and depths because averages don't tell you so much and so there's all kinds of these like statistical things that can mislead you that just because something is a norm or an average or was studied once that that's that is i guess i should draw a conclusion from that and i i'm a big fan of basically like productive placebo so the question is not what is the situation is what what do i need to believe in order to do the things that will lead to a good result right and so yeah i don't need to know everything i don't need to know even what's right what's true true of who cares what's true it's what's useful is what matters and so i try to find what are the beliefs that i need to stuff in my brain that is gonna lead to me doing the things i wanna do to have the life i wanna have dude that's so weird that that's your takeaway i my takeaway is the opposite which is if these are the facts then how do i use the facts just to continue to get what i want first of all there's like this huge replication crisis where who knows if these are even the facts and then secondly even if they were the facts if the facts that start telling me that it's out of my control and that you know whatever my dna was was imprint you know half it's kinda like you know lloyd and dumb and dumb like so you're saying there's a chance it's like oh so there's still fifty five percent in my control fantastic so it's like why did i need to know any of that all i needed to know was that here's the here's the behaviors that lead people to make money here's the behaviors that lead people lose money do the ones that make money to avoid the ones that lose i think what you're saying is that your genetic disposition is gonna like bias you towards maybe failing in a couple of these more than others and be more on guard of those is that the takeaway yes which of those five or six are you most guilty of because i was guilty of all of those every one of those i i do wrong what do you mean i haven't spent enough time to think about this but in pretty full country bias i'm not like buying like industrial in indonesia but that's i mean i think the bias i don't that's not how bias work where it's like you only do these and not all these obviously you do all of them it's just what you skewed towards i would say probably refusing to sell losers like i don't i'm pretty good actually no i mean i do what no what i'm saying is i do all of them but i do some more than others i'm gonna think which ones do i do most mine's definitely the activity one over activity i don't have that issue but and i don't have performance chasing i do like stick to what i know and i i've i've i've always done that and i do refuse to sell losers i i get emotional about like the things that i like right i'll let me ask you this you you sold the hustle six years ago five years ago what was it february of twenty one alright so let's call it five years has that performed well because obviously you got a huge slug of capital dealt in the five years are you yeah like well assume that eighty percent went into the s and p five hundred yeah it's double is it up seventy five percent yeah i i think the s and i mean just whatever the s and p is up eighty percent of my portfolio is up that amount right i'm curious how you feel you know how our boris came on and he said hey the s and p five hundred right now is a bad bet and so here's you got a guy who's whatever nine hundred years old who's got all of the experience and all of the knowledge and he says as it comes on our podcast and says to our face the is a bad bet right now and he says it's because it's valued at you know twenty three times pe ratio whatever it is on average it was in august that he came on and he said you know the the ten year the history history tells us the data tells us that the next ten years will fluctuate between minus two and two percent when the s and p when you buy in at this valuation is it like yeah sure but like but here's my counter argument or it just like la my ears is it just i don't know enough i'm just not gonna worry about it like for peace of mind like what was your reaction to that so just i went into the math just so you know the market's up twelve point five percent since he said that yeah no if he's say ten years right so it's not like a five month thing when he says that i think i don't i don't care i think i know that like i study america i study history history will probably continue to read repeat itself for the while i'm alive and if i'm i think america will continue to exist but the s and p five hundred at this point is not an american index it's a global index and so i just think that it's just gonna keep on going and i am chasing eight percent nominal return every single year and if i get that which i feel quite high that i i will that i'm very happy and that fits within my personal plan that i set out when i was when i before i saw i study history he's saying the history shows that it's not just eight percent it depends what your entry point valuation is which makes sense right obviously but one but but but he but he didn't say that it's not going to be that way for the next fifty years what i'm looking at is if you're just saying like longer time horizon longer than just a decade yeah that's what i what i look at is to where i'm a hundred basically when i was twenty one years old i set a target where i want this amount of money while why i'm thirty and if i get that amount of money at the age of thirty that will grow eight percent a year which means i can spend this amount on my life and i could still have x y and z which i can leave or give away and i just don't think that what howard mark says which if he is right it won't break that plan and as long as plan yeah as that as long as eight percent per year over forty years on average as long as that happens which i believe it will then i am happy i love that if you wrote like a book on investing and you like open it up it would just be like mer it would be like the the first page right s p five hundred tonight is apple american company of course not yeah do you know what mean is it's a toyota a japanese company of course not they make toyota here in america you know i lived in tennessee nearby the disarm player like it's if a company is headquartered here vast majority of employees are here vast majority of revenues here vast majority of profits is here it's for all intents of purposes it's an american company whether that number not a hundred percent but is it sixty percent seventy percent still a majority i just don't know what means to me like you just said a lot of words that to me vague if the profits are here if the mask buying the iphones right like where are the i don't i don't if the don't know if the answer is material let's ask let's ask claude here so forty three percent of total revenue comes from american sales fifty four percent of the like operating income okay so let's just say half on both accounts it ish give or take ten percent i don't know is that an american cut company both right when you sold what percent is it up based off of whatever you did it which i don't know what you did with it my net worth is up forty times or something since we sold right this up a lot but the problem is huge percentage of that probably seventy percent of that came from companies we started or we we own and not like i oh i'm a good investor in the public stock market so you know i i don't know do you consider private companies to be part your net worth yeah of course dude i don't calculate that but i don't liquid net worth right i have liquid net worth that's one whenever i do my like every two months when i just feel like i need more money and then i go okay let's go see how much money we actually have let's go see what's going on and go and i calculate liquid net worth and i calculate the the ill liquid net worth i look at them separately because like the ill liquid one like that one thing can go wrong in two of these businesses and that can get wiped out right i can it can go way down like like our e commerce business was a much bigger percentage of net worth but it's gone down because it that business hasn't performed as well as the other businesses is because when tariffs hit and you know consumer sentiment has changed and our margins shrunk a little bit like you know it hit a a little bit of a plateau like there was been changes and that so okay we have to mark that down internally of like how much we think that's worth we thought it was worth x now it's worth a little less than x thanks podcast guess is bought to you buy my friends at mercury they make the world's best banking product i think you know this already i used mercury for all of my businesses i i have like maybe seven or eight businesses we use mercury as our business banking across all of them and now they actually just launched a personal baking account so i have my personal account there i moved off of wells fargo in chase i'm just all in on mercury why i like products that are easy to use i like products that get me and the problems that i have so like very easy to make a joint account with my wife very easy to been up virtual cards one click and i get savings yield it just has all the stuff that i need in one place so if you're looking for the best banking product on the market it's definitely mercury i will fist fight anybody who dis disagrees me on that go to mercury dot com slash personal and learn more mercury is a fintech not an fdic insured bank banking services are provided through choice financial group and call them an a members fdic what what was your topic what i wanna talk to you about is a couple of business ideas that broke my brain and these come from the yc request for regardless if you don't know why yc the most successful accelerator invest early stage investor in the world and the history of the world they help see the airbnb and dropbox and they were the first investor like two million dollar valuation in these like you know hundred billion dollar companies now great so they every year release these request shops and and i've been looking at these lists for like ten years right and in most years it's kind of like you just not along you're like oh okay cool you're like you every semester or every quarter they they have fall summer spring winter right and they used to do it a little bit less often and it would be things that were like hey better software for lawyers hey somebody should make a a tool that helps this person do this it is normal sounding businesses well some of them are not some of one of our three years ago was a way to end cancer i like okay so so over time they've been getting progressively more i don't know if you wanna say like ambitious or just impressive i i like you know just sort of breaking my brain so the one i wanna talk to you about the most which i think you have a bunch of ideas around but i i have i three that i i wanna talk you about i'll start with a fun one and then we'll go to the most brain breaking one at the end fun one is this this isn't on their list but it came from one of the the x y guys daniel gross who who's great he he's talking about aesthetic data centers and so he there's this problem right now in the world yeah where we need way more data centers and we need way more power in order to like quote unquote win the ai race and the problem is that most americans actually hate ai it's crazy like they use ai but they hate ai they don't like ai they don't like what's where it's going they don't like the big tech companies it's like all the big big become big tech backlash is just like ratchet it up for some reason if you go read like the tiktok comments about anything about ai it's unbelievable people really do not like ai they don't like ai art they don't like hey music they don't ai like ai you know productivity they don't like data centers they think it's taking their it's gonna increase their power bills it's gonna like use all their water there's all kinds of different things even though the data would say the opposite right like you know golf course is use a hundred times more water than data centers but nobody's out here like protesting a golf course and so there's this problem which is that these big companies need to build data centers but the towns all have the sort of like not in my backyard mentality when it comes to data centers so somebody brought up dana gross brought up this idea he's like i think that we need to if we look at these data centers the spend is so high to build them right we're talking like billions of dollars to build one the incremental extra to make it like architectural beautiful or interesting or like something that helps the like like feels good in the neighborhood type of deal is very small and we should really be considering this and it's thought there's like really interesting idea i never thought about i thought you as a man of style history and culture would appreciate this that there's probably some historical like comps to this that i don't know about that you might be able to think about where companies sort of figure out how to like almost like create a public good or create public art in a way to like yeah almost like corporate wash their like agenda i give you a great one yeah so john rockefeller he was sort of like the jeff bezos of the nineteen twenties he started standard oil which by the time he was fifty years old it was the largest company in the world so large that teddy roosevelt became a monopoly buster and the non monopoly act in america was created because of him so he had this really bad energy about it him where people thought he was just like you know sc mc guy well he also was part owner of a mine i think it was in colorado and they were basically standard oil was so big they needed to create their own mine in order to get the chemicals they needed to make the ovens for the to to make the you know to make all their shit anyway john d junior was the predecessor he was the son of john senior and he takes over the company and he's he's a good guy he's john d senior he actually was a good well but he goes to his son he's like i need you to figure out how to do good it in this world and like bring our name back and and do what's right well junior goes to this mind and he sees that like tens of thousands of workers are living in sq it's horrible horrible and the reason he goes there is because i believe that there was a flood and like two hundred people died in this little crappy mining town which is basically a company town and john junior goes there and he's like this is horrible i can't believe we let this happen i see why you guys die this is this is garbage the way you guys are living i feel so bad we have to do something about this and he does do something about it but his reputation is truly harmed well the great depression happens in new york city a lot of jobs get screwed up and a lot of blue collar workers go on are fur load and and just laid off and he's like we gotta do something and he comes up with this idea with this for an architectural project and he builds this massive tower in midtown new york city and he's like we're gonna make this amazing it's gonna be one the greatest things ever and we're gonna employ like ten thousand people we're gonna revitalize the city and that is rockefeller center and rockefeller center is a huge tower surrounded by smaller towers and in the in the beginning or sorry in the the the courtyard there's a man lifting up the world it's like supposed to be like atlas you know and he was sort of like this signifies what we're trying to do we are trying to take like the bad in in this area in this era of time we're gonna try to make this amazing so john d rockefeller is an example of who of someone who has done when i call reputation laundering he right like he he took something that was bad and so john junior actually has a great reputation and a lot of people believe it's in part because of rockefeller center that's a great example i asked ai also for some other examples of this and it talks about one funny example that i didn't know about was when cell phone towers were needed like everywhere right like phone phone towers people didn't like these ugly steel towers that put up so they created have you ever seen a mono pine or a mono palm it's basically a cell tower that is like a halloween costume thick it looks like a palm tree or a pine tree at the top they just like fake put like bark they put fake bark and fake branches and fake fake plastic you know pine needles so that it looks like a tree and not like a ugly steel thing and that's how they got through and building out the infrastructure needed another example was carnegie so carnegie obviously had carnegie steel and then he built twenty five hundred libraries across america while while running carnegie steel and it served as like you know a good to each of the communities and this is while like there was like huge strikes happening because like they had pretty brutal labor practices with he was deal he was such a hypo critic he was like gonna do all those stuff for the world but he had this famous quote where he would say if you watched the cost the profits will follow and for him the biggest cost was workers cost and he was known for being a a a kind of a jackass when it came to workers and so and so i think there's i think this is something very interesting i i i would predict is gonna happen i don't know what they're gonna do i don't know if it's like park spaces or if the if they're gonna design the actual data centers to look like the bird's nest or whatever i don't know what they're gonna do but it does seem like they're gonna have to do something it totally can be done have you been to the like do you know the paramount in oakland the theater where you used to host my event do you remember how beautiful that is that's from the nineteen thirties but like up until like the nineteen fifties i would say before like right before the end of world war two a lot of these buildings were gorgeous i live in the upper side of west new york city and the architecture from any they called a pre war building they're absolutely gorgeous and so i just i i don't know why like this minimalism took place where like it's things a lot more plain but i this is a great idea shout out to david per and cultural tutor who are who are on a crusade right now to bring beauty back to to the world and so if you haven't seen go watch there go go look up cultural tutor i think on youtube yeah and watch the this sort of the stuff they're putting out it's got millions of views people really resonated with this like why does everything look the same and why does everything look so bland now i would have never guessed that that would touch such a nerve but it definitely does they found like something that the that people resonate with a lot and they're building like a whole like i think they're doing like a movie on it or something like that they're doing something cool with that alright can i give you two of these other ideas that kind of broke my brain a little bit so one is the company brain i think you've been thinking about this how do it now we we have it now there's and there's a bunch of different ways to take this so what what does this mean so there's two ways to take this i'll just describe the first one the one that's more interesting to me today ai is seen as a very smart assistant so it's someone you go to when you have a question and it'll go fetch you the answer it's somebody you go to when you have a task and you delegate the task and it'll try to do the task for you so it's kinda like this junior everybody gets a chief of staff everybody gets an assistant who smart always on and doesn't talk back fantastic and that's what it i think the the mental model most people have of how ai is gonna going to gonna work and some people sort of see it as like oh it'll be like you'll have digital employees like oh we'll we'll probably hire fewer people because they'll just be like kind of these workers these ai workers these these guys in the coal mine just digging for us this is so great we're gonna have so many we're gonna have so much productivity and i think actually it's going the other way which is it's not that the ai works for us but that we work for the ai and people are gonna hate that sentence but let me just describe what that means ai is very good at understanding a broad set of information having eyes and ears everywhere reading everything knowing everything and making decisions today we use it as the sort of junior employee but it does seem like the way this is going is that ai becomes the boss jack do sees is probably the most vocal about this right now so we laid off tens of thousands of people at block and i think he's trying to like change the way the the the you know like the org structure looks inside of a company and i i i believe maybe i have this wrong sam you can correct me if i'm wrong i believe what he's saying it's basically that the ai is the brain and the rest of us are giving context to the brain so we're out we're trying to feed it the right information so that it can make the right decisions and that we go do tasks and those tasks also produce information that comes back to the brain the brain sort knows everything that's going on in the company can weigh all the different factors and can make awesome decisions at high speed with less bias with less fatigue with less stress than the rest of us and it does seem like this is the way the things are going i could say this only just for my own use which is i started out very much in a hey go do this or hey tell me this type of mode and more and more i basically say hey can you ask me questions i'll give you some answer then you can you help me make this decision hey can you tell me what the right move is here and it's very good at doing it right and so the question is like our company is gonna work this way and i gonna give you one last story that's on top of this so i don't know if you remember but a few months ago there's this research arm called cy katrina that put out this research that put out this this blog post and the blog post basically described this sort of almost like a bit of a doom day scenario but basically what they described was that you're gonna get all this productivity from ai which means you're gonna have fewer people working at these companies say you're gonna have less people earning wages which is what you need because the wages of one person become the spending in the economy which becomes the wages of the next person and so when you have fewer employees then you have fewer wages i when you have fewer wages you're gonna less spending when you have less spending you have less revenue and we have less revenue then you're gonna tighten the belt even more and cut more staff and it creates this downward spiral spiral and maybe they said it's smarter than that but ultimately this is the the sort of conclusion that they had of how you might get this productivity gain and it still might result in the economy going down this i don't know if it triggered or created or maybe just coincidentally there was a huge sell off in the stock market like the stock market went down like a huge percentage of on the back of this because people got pretty worried about what's gonna happen in the us economy because again that's p five hundred is an american index alright let's go back so so so you you hear this and you're like wow that's pretty bad and basically they they wrote this thing was kinda depressing for everybody i asked ai to summarize it in threes sentences visit imagine that the bulls are right in that ai works exactly as everyone predicts that's precisely what breaks the economy the white collar guy jobs get gutted displace workers earn far less consumer spending collapse and the productivity gains flow entirely to the owners of compute rather than circulating throughout household right and so there's big markets sell off everybody gets mad at to training people whether if you agreed with them you got mad at their conclusion if you disagreed with them you got mad at them for spreading you know doom and gloom and they i imagine we're short right i'm not they sell the research so i don't think they they they sell the research i think they might have like a capital arm but it's like pretty small if i remember correctly it's like it's not a huge thing so the then a few months later they go viral again in this it was for the analyst number three where they basically they sent a researcher out to the strait of h moves this guy went on this like you know jason bourne mission and he sneaks across the border of oman and he bribes this guy to take him out a boat into the strait and he tries to collect first first party data and he says oh wow look it's not open or closed but it's functioning as a bit of a toll route where if you if you are from the right country and you pay the right bribe you get through the straight it's not fully closed and it's not fully open and they found this and they they fed that information back and people again got mad at them and they go look first you got mad at us for telling you that the white collar jobs are going away and then you get mad at us when we show you the only types of jobs that are gonna be left which is basically feeding real world information and context back into the in into the engine and that's what the future of analysts look like is not guys sitting at spreadsheets because guess what the ai is much better at sitting at they're looking at a spreadsheet reading every earnings report listening to every earnings call on earth simultaneously and coming up with the right decision it's gonna far outperform an analysts so what does an analyst need to do now you better be in the field getting better information higher quality first party data to give back to the ai so it can make a better trading decision that's what an analyst is gonna be and i just thought oh that's really interesting how that like the reframe of like what a job was and what a job is gonna be and then you know what does that look like across other jobs so i just find this whole idea of like the company brain the ai brain is basically the ai management software what jack do i think he originally said this on brian hall podcast and i think he said what you're describing is the way that you previously and i previously used ai but a lot of people are doing it this way is you are the human and you are in a circle and there's nodes connecting to you and you are this decision maker and the ai machines and agents are feeding you new information to help you make the bright decision as the ceo right as the ceo or business owner or project manager and what they're saying is that's all wrong the ai should make the decision and the human should be around the ai the ai should be the company brain all we are doing now we are the line we are the nodes we are just giving it new information and in some ways the ai is making this decision but also gonna execute or we will be in charge of the execution but the ai is the thinker not us right and the reality is is i believe that except that humans will have editing capabilities sure sure yeah it's not all not all one or the other that's a pretty brain breaking concept to me because it's just so just flips the the model the world model upside down of how how i thought the world works and would work do use anything for this i use victor i have no connection to these guys it's get victor dot com v i k t o r and it like connects to all these tools and in slack everyone at my company just asked information i don't use any of those because i i don't trust them i'm kinda of waiting to see kinda how this plays out try i try not to give startups like too much information because startups are just like super leaky buckets in general and i you know i've been inside startups and you could just like you know some random employee can see everything and and you know they're not super concerned about security because they don't know when they're you know they're trying grow is generally how things go no matter what they say like i remember once i use some like telehealth thing and our buddies see behavior if it was like bro whatever whatever you got everybody that startup up now knows what you got he's like you what what do you got a fungus they know you got a fungus you gotta you got a virus they know you go a virus whatever you got they know and i was like he's still right you just have to assume that that's true if you're gonna use a start product dude it to every once in a while i'll i'll buy something from a company like and like they're day i bought shoes from someplace and they emailed me the founder was like oh i love your podcast so i'm thankful that you shopped here and i was like you're trying to trip me nicely and that that's wonderful but what if i was buying a cream you know what mean like this i i wouldn't i don't want you to do this i admit medium not a large alright alright what's the other one that you like the other ones i would say are the scary ones so one here is like drone swarm defense that they they talked about the story i hadn't actually heard about which was that the iranians sent a small shitty drone swarm and took out a aws data center that didn't have like drone defense protection they just blew it up and they're like that's gonna happen more and we need a defense for low cost drones and what they talked about was like the us military is almost built wrong like i forgot what the name of the the whatever the missile is that but like we basically send like two million dollar missiles to knock out two hundred dollar drones and like that's just they're gonna make that trade every day they're like great exhaust yourself that's expensive for you and it's cheap for us and so just this idea of like wow war is really gonna change and then you know got you got like and and others trying to build these like defense systems and there's many companies like this that many startups that are in this field but just reminding me there's gonna be a lot of these like and integral type companies because it seems like the nature of war has changed and like all of the if you go look at like the decorated generals that are buying you know that that lead lead our stuff like i wonder if that's the right person you know and i i believe that respectful way possible but like if you fought a war and you what you know about wars from a completely different tech thing like you're gonna be obviously playing catch up and i'm sure they are i'm sure they're asking all the right questions and trying to get up to speed but it's almost like end game in a way where you you kinda need people who have a bit of a blank slaves didn't can think from first was like where are the attacks gonna come from what are they gonna look like and like you know people who grew more on video games and less on the battlefield right because it's it's gonna look more like cyber hacking it's gonna look more like drones than it is you know brave heart carp the pal guy put out this like twenty one like rule or his manifesto and like one of the rules was that or one of the points was that silicon valley should be more involved in like with the us military of the us government it's kinda crazy now that like the nerds are gonna be involved like that it's it's just this really like interesting cultural shift now where it's the nerds are into like the government and like defense tech that's a very strange i'm very curious how how that impacts things well the reason i bring it up is just because sometimes like the the ground moves under your feet and i remember feeling this when i i moved to silicon valley and i i think i was pretty dumb and i i i i guess i was i had read about what jess worked and i was like that's the thing to do and of course like you know peter seal famously and said he's like the next mark zuckerberg won't build a social network the next interesting things are gonna be look not like the last wave of interesting things because the opportunity space keeps moving these windows are opening and closing and the the opportunities move and so i remember working on one batch of ideas that sounded really good based on what had happened in the last seven years and then all the new things that popped off looked nothing like that so if you you know like just as like kind of like before and after you know the before was sort of like the facebook's twitter's dropbox of the world those were like the the winners and then the next wave of winners was air airbnb b was like renting out your couch to strangers in the real world like marketplace and uber was a real world marketplace and lyft and there was that's what worked was this like thing that looked nothing like and you had to go city by city the with the winners had to play by a different playbook right the people who were good at it they would go into cities and they would bootstrap like how do we get how do we put free donuts out here to get the drivers to come and then we're gonna incentivize the drivers and then that we're gonna do that we're gonna throw parties in every city in order to get this thing to work you had to be good at that playbook which was so different than the playbook that you needed right before that and then that way ended and all of sudden is about crypto and i was like oh the people who got rich were the people who really understood like what money even is and like what fiat currency is and what's going on with pro you know what is the double spending problem and crypto and then crypto had this way even and it looked absolutely nothing like it because bitcoin wasn't even a company it was like not how do i invest in that it's like well you'd buy the currency why had no idea how to even become successful in this because the game had changed again and then with ai it seems like the game is changing again and and and so i think with ai the reason i bring up this kind of this idea of like the using ai as the company brand of the management saw tool for the for the company because that sounds so unfamiliar that it sort of leap my my spidey sense says hey maybe the game maybe the the floor is moving again and the opportunities moved over here similarly with with hard tech or like you know defense tech this is something when we moved to silicon valley nobody would do and and if you did it you seemed like a sort of call in a way and then palmer lucky made defense cool if you like would just show up at a meetup or like i remember people showing up at a start up wearing a suit and tie because they didn't they were either like a potential customer they didn't understand the nomenclature or they didn't understand the culture and i remember they they would we would joke about it and they would have to explain like oh i don't just did this on accident i don't actually work for the government or i like they i like you a cop like it was like a joke it's like twenty one jump street yeah as a arc yeah but now it's different now so now i think it's the hardware the robotic is obviously like massive i think all the war stuff is massive i think you know crazy ai stuff so it's just it's just clear to me that the the the ground has shifted again the if the ground is moved and that the things that are gonna be really interesting in the next ten years they're not gonna and and by the way this also just happened with the ai labs it's like turns out the best startups in the world the whether you're investing or or joining or starting was to create a you know the first one was a non nonprofit research entity for artificial intelligence open ai right and ant t and like these were the big winners so they looked nothing like the winners of the the last generation it's like open source profit what like what does that even mean and and that was the thing to join right that was the thing just to start that was the thing to invest in like when we were in silicon valley how many people do you know that were investing in working on starting a research lab zero zero i never met anyone that did that i didn't need to hear those two words together that sounded like something they're you're supposed to do in university for science like i didn't understand even what that was so you have to be really att to the shifts if you wanna be a part of the big waves do you wanna wrap up with this ai personalized medicine intelligent agents are enabling a new level of personalization in medical care we can now use an agent harness like cloud code to analyze personalized health data whether that be a diagnostic test a scan ehr data or wearables that are highly accurate and user specific so do you know who he didn't a nat freeman is right yes yeah he he was telling the story he he did yc guy now or no i know what his story was he did a startup jobs acquired by microsoft then when microsoft bought github for like whatever billions of billions of dollars he became the ceo of github and he famously like kinda like turned it around in a like really like injected a lot of life into that company and people really like praised his tenure there so then him and daniel gross go and they start investing in ai stuff they created like a like a small fund for ai they got into a bunch of interesting companies then they joined il when he left open to start his new like whatever lab is competitor open ai then facebook tried to buy that thing for like whatever thirty billion dollars pre product pre anything emilia said no but daniel gross and that freeman were like we'll go you still got two seats and that car as we'll go and so now they run the meta like they're like one of the the brain trust of like the facebook meta ai program okay so him and daniel gross they run like the super intelligence program so okay that's a long story so he was he's on he's on stage and they were like tell him how you're using like open claw he tells his story he's like yeah alright this is gonna sound weird but here's something i did he's like so i gave claude code like all my genetic data and my blood test data and i was like analyze this and it's like okay cool like genetically here's such a blood test it seems like you're it is basically it was like you're dehydrated we think you're like chronically dehydrated and that's showing up in all these like symptoms or these like these these signals are telling us that you're probably dehydrated so he was like he tells open claw he goes okay do whatever you need to do to make me not dehydrated which is like hilarious if you've ever heard of like the paper clip maximize problem or you like basically like you end the world by giving it this like you you give it a like do this at all cost and it like you know to make more paper clips at all cost and it starts like crushing buildings and cars to generate more paper clips like it goes a little too far so similarly he tells the open cloth thing help me be not not d dehydrated do whatever you must do so he connected and so open claw is connected in his house so it has access to it all of his tv screens it has access to all of his cameras so he could see him and it could display things to him at all times could talk through he's like you know he's like alexa whatever to him it could text him on whatsapp i could do whatever so he's it's just like hey you've been sitting there for four hours and you haven't had any water i need you to get up and go to the kitchen and have a glass of water can he just put up like a post signal note on the refrigerator door that says like drink a glass he goes so i did so i got up i went had water and the camera watched me drink the water and it came back and it goes good job i'm proud of you for drinking that water does myself this hilarious the hell hilarious thing that's super easy to make fun of by the way like the jokes write themselves about these tech nerds have taken it too far yes sure all true also little peek into what the future is gonna be when an ai is in charge of running your health which it will be we we talked about what's the guy's name from get not github git lab is it git lab yeah who on cancer were there i don't know if it's cured yet is it cured i think it is cured yeah wow okay so this guy had he's a billionaire there sid he had cancer and he said i'm going founder mode on my cancer which is pretty a pretty cool article and he has been talking about the journey i have a a friend who has cancer and they got connected and they've been working together like you know they've been helping each other my buddy you i told you that he was doing this and you asked me how it was going and i was like well i don't really ask him i love him come to me it's going great the it's cancer is going away it's not gone but it's like he got great news and so like of the what the ai stuff helped him with or through what him and sid and a few other guys have have done and like if he's while my buddy works in the ai field i don't wanna to say too much about his information but he is a he's been an ai professional we could we'll say and he's been like you know being a nerd and using an ai he's been helping get rid of his cancer it's not gone but it's it's it's he's getting great news every couple months which is pretty amazing but wait you know when everything works out well we can well like talk about him like deal like shouldn't we all be screaming about this from we've talked about it three times on this podcast but like seems like you know like if you watch sid thing it's like in a powerpoint in a webinar somewhere it doesn't like anyone paying attention to like what sounds like some pretty incredible stuff like the guy who heard his dogs cancer went kind of viral that's cool was like like he made viral where he was like on the today show not like getting a nobel like you know prize i i was actually thinking about the today show that's what i meant i was like he was on the he was like mainstream people care about this he was on australia's version of the today's show by the way he it wasn't even the american one yeah i i do australian an accent there i was excited to hear that i and i'll leave the impressions up to you i can't believe how little the deal that was made though there's that great phrase which is the future is already here it's just the uneven distributed that's feels more obvious today than i've ever felt it in the past which is the future is here people are doing crazy things with ai it's just not evenly distributed i'm not doing it there you know it's not made its way out to the world yet there was another thing this this that matt freeman said that i thought like he just said casually that i was like what he told the story about well again it was like hey you need to be taking this sup this magnesium sulfate whatever supplement and he's like okay i don't have it and then it he was in his self driving tesla and he had given it access to his tesla and he just saw the direction changed there's a whole foods nearby and it's just like gosh reroute his car his open call reroute his car to the shop and then he bought it and he was like whoa what just happened yeah like i am on board with this but i i am on board i would let i i would let ai control a lot of these things no but you can't do it when you have like a wife maybe there is just a threshold of wealth where it's like listen you like all these this is a good life we right i'm gonna have the open cloth like tell me when to drink wall i'm gonna have the cameras on you know like i'm gonna do some weird shit from time to time because for the record there isn't a good guy the way there's there's a personality threshold there's no money threshold it's like are you willing to do like if there's a number there's that yeah there's a there's like a an e q number but it but it's definitely not a a dollar there's no value know when elon was on s snl and he goes you know i built rockets that can you know go to go into space and electric cars that drive themselves would you think i was just gonna be a normal chill dude and i thought like socrates aristotle like that's up there and the quotes for me the pant of like oh yeah that makes sense if you find a man on top of a mountain don't assume that he's gonna be reasonable or normal i think that that's fair to say like if you if there's if there's a great artist i don't expect him to show up on time all the time correct alright i gotta go i gotta go on a fly alright that's it that's a bad piece i feel like i could rude where i know i could be what i want to put at all in it like a day's off on a road less travel never look at hey let's take a quick break i wanna tell you about a podcast that you could check out it is called the science of scaling by mark robe he was the founding ceo of hubspot and he's a guest lecturer at harvard business school the guy smart and he sits down every week with different sales leaders from cool companies like cla and van and open ai and he's asking about their strategies their tactics and how they're growing their companies as you know head of sales or chief revenue officer if you're looking at to scale the company up if you're a cro or a head of sales just look at a level up in your career i think a podcast like this could be great for you listen to the science of scaling wherever you get your podcast