Best of This Week: March 4th

yeah i feel like i could rule world i know i could be what i want to from at all in and like a day's off on a road travel never looking back hello and welcome to another episode of my million best of the week edition this has ben wilson also known as producer ben and this episode is some the best clips from our episodes throughout the week nothing new just a short rapid fire recap to start off with we have david freed berg founder of can talking about the power of thinking big and more importantly how to actually do it how to think big and why more people don't do it let's give it a listen you know your your team is only as good you challenge them to be and so they'll you know if if you're not challenging your team and you're asking them what do you think you can do they're they're only gonna achieve a fraction of what possible great coaches and great leaders need to kind of and and technology leaders in particular have this unique ability to i think understand the technology and leap several iterations forward to speak to the team about where we're headed and then bring the timelines in and that makes for you know an incredible sense of urgency and outcome and why do you think most people don't do that so thinking big that sounds easy enough to understand sounds fun to do you know i could hear that advice why do you think that's hard to advice staff follow in practice a really important question so one of our principles at t is dare to drain so it's all about creating that audacious perspective you know how big can this be how big should we be and what happens when you set a big goal like let's say i have to go climb to the top of a mountain and i can't see the path from here to the top of the mountain there's a hundred of perm mutations or thousand perm mutations and how you might get up that mountain and you don't know which path is gonna work most people that are smart have been successful and most people that have been successful are not used to not succeeding and so the orientation at that point is that success is all about doing something and getting an action that you expect out of what you just did and so you want you are inclined naturally as a smart person as a successful person to only do things that you know what you're gonna get as an outcome and guess what that does that limits your horizon mh so then you end up saying i'm not gonna take the more challenging route or path that might get me to the top of the mountain but i can see that this particular path gets me you know a quarter of the way up the mountain and that may not miss and you might know however that that means you're giving up going to the top of the mountain but at least you know for sure that if you do x you're gonna get y and i see this all the time i see this all the time at businesses where the teams end up compromising on their big vision and they compromise on the moonshot because they're more likely to seed and they feel more comfortable taking a shorter range narrower horizon and minimizing the opportunity set significantly and saying i'm just gonna go do this because i know if i do x i'm gonna get y and that feels comfortable and i know it's gonna happen and so they minimize the dare to dream circumstance and then they always say well you know what we'll come back and green dig later but guess what happens let's say you're thinking about i'll give you a very specific example because this relates to the business we're announcing this week can dot com which is our our molecular beverage print there but early on there was a a hard push to say look we know restaurant owners will buy this device i don't know if every consumer is gonna buy this device it might be too expensive it might not taste good enough consumers are so you know f if we make a device for restaurants we know that there's an economic advantage there's an roi enterprise based sale let's go selling in restaurants and we'll make a bigger device so it can hold more and we know to worry about shrinking and getting all the technology into a tiny form factor that fits on a kitchen countertop the problem is if you do that and you start selling to restaurants you've now significantly minimized the opportunity to go into the consumer channel because you've now have a customer and the customer is the restaurant and the restaurant is gonna say i want this feature and i want this feature and i want this feature and i want you to do this for me and all of a sudden your whole team is gonna be inundated with product and feature requests that focus on that much smaller much narrower market and you're gonna end up going deeper and deeper into that market and you're gonna lose out on the opportunity to go build for the big market to go build for the hundred x market that can actually change the world and improve the you know the the the problems that we're trying to address with this business and so you know i've seen this at many different businesses we're taking on a lot of technical risk taking on a moonshot project is often fore gong and and you end up you know trading into a much smaller pie and a much smaller opportunity and then you often miss out on that bigger opportunity and so i i i think it's really important for entrepreneurs to continue to dream big and find a aligned capital and align shareholders to let you dream big and shoot for those bigger higher risk opportunities because if they work they're are hundred expected alright next up we got a selection from an interview with raul powell a former hedge fund manager turned entrepreneur and raul is someone who's really interesting after he had made it kind of big as a hedge fund manager he put all of his liquid net worth into crypto and manage to ten his money or something like that and so on this clip raul is talking about how network effects ensure the success of crypto going forward you know you you notice certain characteristic like crypto tends to be exponential in price so you put it on the log chart it starts to make sense you know you look at things like copper and lumber they tend to be mean reverting assets because you they get met by excess supply with high high prices need to excess supply so right now with oil at a hundred bucks everybody wants to make as much oil as possible so the price comes down over time it doesn't happen with crypto because you can't right so you you need to understand the structure of mark it's where the sentiment is is it overly bearish like day like today he got overly bearish and so suddenly you start to see a reversal so these kind of things are interesting but my big discovery and why i really started loading up on ethereum was another chart which was a understanding that met calf law was the primary driver of all crypto markets and in fact almost all of the tech stocks that we've known today right and once you realize that these are basically networks and once you realize that crypto on networks where you actually own the networks network so facebook is a great network stock and it works perfectly on the log chart as an exponential does all the things as you imagine you can value in met law terms but the fundamental differences shareholders and network users are not aligned the shareholders make the money the network users get the utility along comes crypto you map marry the the network user with the owner okay now you've got network of effects upon network effects this is like behavioral economics right man religion meets met mca gas law right like yeah it's it's really now i'm about the thing it's religion meets capitalism it's basically what it is right so that is incredibly powerful so i start looking at the fact that bitcoin and ethereum charts just at different points when they at the same point in the obstacle cycle were remarkably similar and then it dawned me they're all the bloody same thing they're all about adoption so then so so if you look at it and if you're honest with yourself ethereum if you think about met law it's about the number of users and then the kind of connections between the users and the applications built to create those connections well bitcoin carnival one side one which is a bunch of people own it as a store of value like gold nothing wrong with that but there's not many applications built in it when you look at the ethereum it's like holy shit i mean this is like the internet right that moment is like okay this is far superior beds and so that's why i took that bet and then i eventually shifted majority into ethereum and then took other bets in the space to express macro reviews yeah it's funny i i i have one tenth of the intelligence of you but i did the exact same pattern so you know i heard about it in twenty twenty thirteen bought a little bit dabble sold during when you know i went when i went to a wedding and my aunt was telling me about how great twenty three i was was probably a bubble twenty seventeen twenty eighteen sold for a nice profit was patti myself on the back you know in retrospect worst trade i ever made they should've have just held everything you know started buying back in in twenty twenty twenty nineteen and twenty twenty i kind of announced that i've i'd had moved twenty five percent of all of my liquid net worth into the thing but that was right before you know another another run up and so that became quickly fifty sixty percent and and you know pit peers and some people are telling you you're crazy i'm sure you had the same and same thing you know why are you betting on this are you just kinda speculating and i said no like basically i spent my whole career studying the power of network effects right i'm trying to build marketplaces and social networks in silicon valley because i know that a network effect is the most powerful force imaginable and and then i see this chart this adoption chart of this new money network i like well if this if the if the social network was worth x and the information network was worth y and then the you know the merchant network which is like you know basically amazon what it was worth you know z then then this thing is gonna be the money network is gonna be worth a lot i can tell you that and so i i didn't know much more than that but i just knew if you can bet early in a in a network effect that's still going through it's kind of like excellent you know adoption curve you know you'll do pretty well and so that was kind of my my my bet coming from a you know sort of a different different take but ended up at sort of the same conclusion and i remember being impressed that you were talking about network effects is i didn't really see a lot of people in kind of traditional finance talking about that at all and was i they're missing the point you know really one of the first peoples who really start saying unless you understand network effect you understand what this is at all because everyone's an find weird companies and finally we got sam john talking about the russian oli these are a handful of billionaires in russia who control not only the economy and a bunch of the money in russia but also a lot of the power in politics as well so sam is going over how it is that these oli ga got their money and their power so something that i've always been interested in is the russian a arcs so have you ever studied those folks not steady but you know okay tell me about it okay so this starts i'm i'm reading a thing so you're gonna see me a look off this starts on november third nineteen ninety five in a remote siberian town called sur basically what happened in the small cabin an auction took place for the right to lend the cash strapped russian government tens of millions of dollars so basically in ninety five the russian government wasn't doing so hot and they needed money and so they got these banks to come to this meeting and they said we need some money we need to borrow some money and also as collateral we're gonna put up shares of some of the large state owned companies because at this point russia was basically going from being a communist nation to being a private country and so they still had some like state owned oil companies mineral companies basically like if you think of exxon mob they like the government like own that and at this point they were trying to figure out how do we make this so private individuals can do this and so at this meeting basically only two bidder showed up and if more bidder wanted to come it was kind of a pain they ass because conveniently there were no more flights the airport shut and you couldn't even book a flight to come into into this small town by the way your camera's okay you're there yeah and so basically what happened at this like small cabin is one company made a bid to buy a or to loan money to the government they loaned they loaned something like five hundred million dollars and that was like a hundred thousand dollars above the opening bid so people were bidding to loan money and so that this these this bank loaned money to the government and then the government had to pay back the loan at a certain point like a something like a year later and if they didn't the bank then was given the the collateral so the shares in this company to auction off and they could keep thirty percent of the prop profits so obviously the government didn't pay back the money and there's like a lot of like wondering why they didn't pay pay back basically the idea is that the current president was like obviously this is all like we're all planning this so don't pay this back and give us a little bit of whatever so they lose you're saying it's collusion but basically there was a a handshake wink wink agreement basically of what's gonna happen here yes and so the government doesn't pay to loans and so now this bank is basically now has a minority ownership and like twelve large state owned corporations and they basically holler at eight to ten guys guys who are already relatively successful and they basically said you you wanna make a bid on this company i'm gonna make sure no one else bids on this company but i'll give it to you you interested and that's exactly what happened and why did they do that why would they hook up these individuals in that way they did it for three different reasons the first reason and a lot of this is just like hearsay say the first reason is the person who was present at the time who was it ben what was his name it was the fact guy who boris y yes he was basically said to these eight or ten businessmen i'm gonna hook you up you guys hook me up when i'm when i'm when i'm in office hook it up i'm gonna hook you up whatever so that's one theory the second theory is that they wanted experienced managers in in to to run these companies and the third theory basically is even though these eight to ten oli arcs put bids on these companies and basically they bought the equivalent of exxon mob so we're talking about like a company that's worth billions of dollars they paid a hundred million dollars for this company and so these managers these a arc these eight to ten folks a lot of them were mildly successful but they were all in on the government they're all friends and friends you know they're all homie they basically they did take on risk so like these companies did have debt and like they had to go and like c glued with other people and fire the rest of the managers of the company so it was basically almost like a pe thing but it was like pretty dirty and the government was like yeah we need we want like these mercenaries to be in power because if they make these cup companies better are you know our government is gonna be better the the russia is gonna be better and so basically profits after after this whole deal profits of these companies grow by fifty x market caps go by a hundred x and so there's here's an example the reason i got interested in this is there's this guy named robin abraham what what's his name ben how do he say his last name i think it's a b so we're gonna call him bro so roman even knows what the hell you're talking about right now is impressive and he's like a he's like a part of your brain that's like outside of your body and you're like brain what's that name oh here roman famous roman owns we're just gonna call roman he owns chelsea the soccer team so he's like a famous guy and he owns like this like you know two hundred foot yeah he's like a big deal and basically he paid a hundred million dollars him and his partner boris paid a hundred million dollars and they've just they came up a little bit of money and then they went and holler at like other rich people and they said hey loan of some money let's buy this company they paid a hundred million dollars for a company that is now like the eighth or tenth largest oil company in the world so imagine paying in the mid nineties imagine paying a hundred million dollars for exxon mob right insane and so the these companies explode now they explode partially because basically what these owners did these eight to ten all what they did was they purposely tanked the company so it's sucks for a long time and then they bought out the rest of the minority shareholders so it's again cro there and second these were government run companies so they're a shit and so these private individuals they did a pretty good job of making them better and they became far more profitable and this created like eight to ten guys that were worth like up to forty billion dollars so at one point one of them one's worth eighty three billion dollars and you know things have changed but it created so much wealth between these few folks and it also like trickled down so here's the craziest part is that a bunch of the man of the company so there was like the pre there was like the the minister of oil or something like that as a government official he becomes he sets up this the these one of these companies he eventually becomes president of one of the companies and now it's worth eight billion dollars even though he was like a a government official so i thought it was interesting because i actually wanted to read a book about these folks because i'm like oh who's this like rich guy that owns chelsea football let me like go and learn from him and when i realized is like i pretty much can't learn it from him i i could maybe learn some up but like his process is not like replica i can't replicate it because he was like thirty eight and russia had just fallen and he basically turned zero dollars into he's worth now like twenty billion dollars all through this cro but i thought it was incredibly interested have you not heard about these folks i've never heard any of that in my life crazy it's like a it's like the big bang for like russian rich oli arcs it's like there was just one meeting and it kicked off this series of events that like you know seems kind of unfathomable how that would be allowed to happen or just happen but then they also consolidated power right didn't putin basically like take all their money and consolidate here's power here's the second interesting part of the story and i actually learned this from listening ben's podcast so basically putin was considered like the anti corrupt guy for for for a minute like when he was elected it he was like you know i'm not gonna stand for that nonsense and he made an example of one of the guys one of the billionaires last name starts with the k i'm i'm not gonna try to pronounce it it's it's a challenge he put this guy in jail for fourteen years and he literally put them into in russia for some reason they put you in these like cages and you could like take pictures of these folks have you ever seen that like a like a russian serial killer picture or anything like wait so it's like visible from the outside you mean yeah it's like the mug shop but it's like literally a cage that sits on you and people can come and like take pictures it's weird and anyway this guy was worth at the time like fifteen billion dollars and putin arrested them for not paying taxes things like that and put them in jail for fourteen and he goes to the other guys he goes you want that to happen to you no alright let's play and so a lot of people think that putin is the richest man in the world right and he owns one of the most expensive homes in russia in in the world it's like a billion dollar two billion dollar house and people were like well how'd don't you do that and it's a lot of people think dollar house yeah ben tell me all about like a billion dollar house wow i don't even realize that it's it's it's not like it's got ice it's yeah it is this kinda complex it's got private beaches it's got like pools on pools it's got guest houses basically got a hotel on it it's like a house is maybe not the right way to think of it but it is a house it's a private residence putin and but basically like there's no proof of this but a lot of people because even when the panama papers release they couldn't find putin's accounts but basically a lot of people are like well so he made an example out of this one guy and he went to the rest and goes y'all all wanna play let's play and and and now roman by the way really hoping you'd attempt to put an accent there kinda this morning not gonna lie the story is good but it's just missing that little something i think that you been given it a shot then i think you have a little a bit of the russian twins and you're speaking you could yes they same me i they told me i speak good in russian accent and i will is this like racist can i do this is this okay i don't know story it's borderline i don't think it's a race this this we are we have the the cancellation vaccination you're allowed to do a a funny funny accent here and people as long as this russian if you're listening and you took that too seriously just swipe over and delete the podcast and go on with your like yeah and to wrap this up basically the way that these guys all work now is a lot of these all arcs are part of like the peace keeping like they're they're part of they're helping putin like negotiate peace so like the inner inter the way that the shit's intertwined is just bananas it's crazy and i was like trying to learn about these folks and i was like oh like there's nothing to learn here i can't i i can't do this like there this is just crazy and these guys are so wealthy and and so it's trickled down but if you basically a lot of them when it happened were in their thirties like thirty five thirty eight years old and that's why i got interested within this because i was i remember years ago reading about these folks i'm like how does a thirty eight year old become worth three billion dollars what the hell how did the thirty eight year old become ceo of a diamond mining company okay that's it for this week thanks so much for listening and have a great weekend i feel like i could rule where to i know i could be what i want to from at all in it like a days off on a road travel never looking back