you have now created by my account at least four billion dollar companies directly probably more than that what would you say you are doing different than the average good founder so it's like i have some unfair advantage right i feel like i could rule where i know i could be what i want to put at all in it like a days off on a road chase joe thanks for doing this man and thanks for inviting me into the the morning workout the cold plunge and and everything in between brett to have here sean so i wanna start with lessons learned you one of them that we were talking about this morning when were doing a workout was making decisions on blended reasons or having like a blended strategy for how you're we're gonna win we're gonna win doing these five things and why that sounds like a good idea to the average person but it's actually a very bad idea can you explain that yeah i wrote this piece online like nine less peter till i sent to all of pal here that's been like companies as well and it's one of my favorite pieces and that's one of them in the and it's one of these logic things where usually there's like one reason that dominates everything else and and that that's just that's just the nature of the world is that is that when something successful it's it's kinda like the power law rule right like an venture capital like fund even there tends to be one thing that successful is like bigger and everything else and that's true inside of companies as well it's it's very unusual like like extraordinarily unusual for there to be like too similarly equal like like like products or revenue lines or something like that right especially early on the company so usually if you if you think you have like two or three reasons we're doing something or five reasons we're doing something what that means is that you actually haven't figured out if no actual reason no there's no strong reason yet like that means you have five week reasons which is not good you wanna find like what's like one really strong thing you're driving towards and that that's how startups work and this is it's a really s trick trick i mean first of all you have to be taking a big risk even do is start feels like rather than like you know most people a lot people like to incubator because they're like oh i don't wanna do one company i'm gonna do ten companies right and like by the way that's like much less likely to have big success because you're not focused and then so but so even within a company they're like they're trying to do the same thing they're trying to be like well here's five ways i'm gonna make money and no you really wanna do a company figure out the way you're gonna make money and that and that tends to be how it works you know and that applies to revenue streams so eight revenue streams means you probably don't have one awesome revenue streams exactly growth strategies if you have seven things we're gonna do for growth means you haven't yet which ones the one that's gonna that's gonna just compound like crazy and it may change it may change over time but what's the thing that's working now you're pushing on yeah and then the other version of that is blended reasons for doing something i think i read once the reid hoffman had it uses the same philosophy and he said he gave the example of oh there's like a trip to china and i'm just deciding go china it's far away it's gonna take two weeks and should i do this trip he's like my chief of staff came with a list of pros and cons yeah it's like multiple pros multiple pros and then a couple of cons that's almost impossible it's a guaranteed way to make mediocre decisions just to do long blended list of if you don't have a key reason to be there and like stick your work yeah exactly that's what he said he's like if i if we don't have one reason that that alone is worth doing then we should just say no is that something you do reid was one of the key key mines at paypal of course with peter t and others so right who knows who actually came out with these ideas and reed ideas and i'm just like it's a very smart guy well i say them as for mine so i think that's best the best way to you know the highest compliment is to meme an idea and to to let it spread and so peter's is helpful with that he's well what are some of the other things like do you remember i mean even at the beginning one thing i i kind of wonder is you've been around a bunch of special people peter teal elon musk all this stuff is it clear and early like in the early days like do you remember the moment where you're like oh this person's kind of different they are that five standard deviations yeah no i or conviction or whatever one of the i mean we all try like set strategies for ourselves and goals and whatnot i'm like i remember in college i thought well this it's a really good opportunity at stanford to reach out to a bunch of successful people and kinda learn from them see who i see who i you admire who i wanna be like and you know i i've met some of the legends of global macro finance who i'm still in touch with i met a bunch of other big business people and run fortune a hundred companies and peter to me had by far the most interesting intellect he was he was clearly just one of the smartest people ever met was interested in some of the same things out you're she's interested in and he need taken some of the logic farther than i ever had so so so i i always learned the most from conversations with him so that so that that's me was one the reasons he was the most trying to try to work with and try to build with and so before you start multiple other companies you do cla which is his hedge fund i guess the way global macro fund yeah global so it's like the most fun part of finance there's all there's lots of parts of finance finances like all sorts of areas global macro is looking from like the highest possible perspective that everything going on in finances like the the bond yields around the world the flows of money around the world how equities are being valued they basically like like just from very top down like what is happening in the world of finance and how do you mapping it out how and you look at relationships you understand you of course like you know the australian currency is gonna be really correlated with the price of metals and there's different ways in which they can get way off and you can create a regression trading system if they're way too far off where you can make money based on the rev version right but then you say normally i trade this but actually this is happening because because china just like you know invaded this thing over here so actually it's not a good time to do and it just it's just really really fun map of the world and we were really interested in like long dated oil prices what was happening with oil we're very interested in how fannie mae and freddie mac which are the two big giant housing groups they've gotten to be much much bigger in the us in early two thousands and they and they they're they had these giant mortgage backed security portfolios these are worth trillions of dollars and they had to hedge these portfolios basically and and but and i i won't go into all lot details this a little bit so esoteric but based on how they're were hedging their portfolios was completely changing the fixed income completely changing the pricing of bonds and we found some really interesting ways to do things there i i i get my my favorite story they'll i'll give you it's just to give so so we're working at the hedge fund markets open we were in san francisco we're in five five five california step yeah a big billing downtown like after after nine eleven i think peter had a parachute in his room and i was told me she pair for us to of anywhere like there's one parachute okay that was just joke but it's probably there but no so it's like cool office in the for second floor and and and the markets six thirty so the traders are supposed to be in at six thirty except the first friday of every month you gotta to come in at five thirty because the non farm payroll come out still now the first friday of every month at eight thirty am on the east coast and it turns out this is a very important number because it shows you what's going on in job growth in the whole economy you know based on bureau there statistics six numbers and and and what was really cool is kevin harrington was our head of research is like genius crazy physics biology interesting guys who's and handed ended up being on the national security council later super interesting smart guy and he like had mapped out this thing had helped him with where we realized that they were adjusting the numbers wrong based on seasonal adjustments and so we were able to predict where the number would hit or miss and and this thing would move bond markets like crazy like like hundreds hundred billion dollars and move around base on this number and we figured out their systematically miss miss doing it this is totally legal you're allowed to do this in finance so we figured out okay this a mistake seventy five percent of time we can make money trading this and then we can adjust make it even better based on where the mark was so the market's gonna be surprised and we could kinda tell a good chance it might be we take a big position right like the night four or whatever and then like make a ton of money that morning when it worked and it was four thirty in the morning like it's about seventy five percent chance and so if you do it enough you're gonna do it well over time and it was the most fun thing because we take these like giant positions on this thing and you'd be there with like peter and and kevin it's just like the rice skate high stakes came crazy most fun in your poker and you're like literally personally have like a few million dollars running on it at a time is early twenties these guys you know peter probably had a hundred million dollars riding on every time and you're and and you're like high five and if it goes right or you're depressed if it goes long is the most it's like it's just most fun high sticks example because he sweating or what's his everyone's like everyone's like what's gonna happen it's like so exciting and then and you're like i you remember so many like celebrations we all like go to like our favorite place afterwards but worked out it's it's pretty cool because like what different didn't work out it's yeah sometimes we go there anyway yeah but for some reason my mind this is maybe who i am i remember all these times it worked out i barely really remember the times it i know it didn't sometimes but like maybe this is like a serial entrepreneur are sort of thing where you see how the good memories you know right yeah but i remember is it was is a fun that's a entrepreneur survival tactic yeah you your trauma all la trauma because if you know if you remember how hard something is you're very likely to start it again i do another thing would would've have built all these companies that i have to force myself till like think about that too much the way you just describe like the global macro fund you're pretty young when you're doing this and that's not what you were doing just before so it's not like you had of experience my brother got me reading like a bunch of economics and finance stuff when i was young so i kind of had a weird both computer science and finance background so and i had opinions about it so i think that weird those are like my two things and so so you you know the it's so so i i knew that world pretty well and yeah you learn a lot being in just do you used have to be in it to do it but i mean credit to them for betting on you to be able to to do that you they could've have hired somebody's who's been doing that for twenty years this is this is new york can we talk about lessons from peter t i think one of the most important ones i've seen ram hand that i've definitely taken hard and what i've done is at much rather higher higher i'd much rather hire for talent and ambition and hard of work than higher expertise so almost and and there's exceptions right so if you have a company that's already really working and already really scaling and there's like a machine that has to be run you wanna hire the guy who knows how to run the machine that's fine but that's like that's like that's the operator who knows what they're doing already but when you before you've actually built the machine or when you're doing something with a group in like kinda high finance or whatever you wanna hire ryan queue and hard to work and iterating and figuring it out and that's that's a different skill set than the people run the machines what's your way of filtering for that iq well you know how do you interview or what are the signals you look for this is like super hard i think you start with like a hard math problems at people what are you doing we used to do we had these really hard problems i remember my friend su red dropbox one of his partners there at his new it his new ventures generally it was like the highest score on on this test i gave it's smart smart smart guy it i yeah yeah we had really hard test but you know once they already had around me a bunch of people who are really top talent it's like they knew people like oh who is the smartest guy and your physics phd and mit who is you know things like that so it's like it's like you kinda you kinda get a network it's already really solid and then you go out from there and so let's go more on that so two things one ben told me something that like there's some number i don't know the exact number twenty thirty people who have worked at your companies that have then gone on to start like unicorn companies do is what is that number roughly gosh you know i actually keep track of the official number but there's over twenty people who've worked directly for me who started huge companies and it's something i'm really proud of is that we've had a lot of super talented people and you know in some ways it's like i like to like back my mind and like yeah i'm guy i take credit for shaping them but in some ways it's like they're already really amazing and and you know and and and so i was maybe i'm just gonna to convince them to have work for me ahead the time know so it's like there's a nature nurture right yeah there's and there's some of both i i do like to think that we've given them framework just like i learned from peter they might have learned some of these things for me too but but i mean what one of the one you know not all of them even back like some of my back some of them went off and then did it themselves and right you know it's you know usually they let me back them yeah yeah that's the worst i they you even can get actually i'm still proud i'm still i'm still proud of like i'll tell you the the guy who came out at of school to help run out of par with me and and and i was like he's became president of the company super talented guy and i did not know what i was doing you know i just earned them balance there's mistakes i was making because there's like things i didn't realize i had advantages of balance here and you know out par multiple dollar company it's great but there's things that took longer there's mistakes but there's also obviously good things we did because the company worked out really well and i think he had he had like one off in his own and he had like you know his own tough time or whatever for a little while afterwards and then he ended that a partner with someone and he started the company they became worth three billion dollars and like four years and he sold it wow which i'm like oh wow that's pretty fucking cool so so i was like and you i and i and i he didn't have they didn't bring anything else into that company but i was still really proud of the fact that i'd work with this guy right and then he'd gone on and had crazy success i mean it's a cool feeling you but for the record it's always i'm more proud if i got to invest too right now to carry of your buddies exactly not was most of the like the ninety five percent of them it's like people bring me in and i'll still like help and we'll coach and work with them to so let's do big hit number two add par yeah you explain like explain the layman's terms what even is at par and then i wanna i have some questions for but let's first show the the explain like i'm five years old what is out par so ata par is it's the leading wealth management technology company in the us and so there's people who work at what are called r registered investment advisors there's tens of thousands of these and they will help you or your parents whoever kind of manage their wealth they'll give you reports they'll do your trusts in a state they'll do do everything around the kind of the wealth planning man it was really freaking hard we built all this stuff and we like hooked up to schwab in fide fidelity because there's was like two of the biggest everyone heard those right the biggest custodian and we had all this wrong data in the reports like what are we doing wrong and it turned out the data coming from schwab model fidelity was oftentimes wrong like what is wrong with this space it's like it's the whole thing a mess so it it was it was a hard company to build took about three or four years for before we really got to the point where where was useful people and so you didn't give up though during that time oh no that's like the last like you have to have other personality we're gonna not gonna give up i mean i'll give up if it turns out someone else has already solved it perfectly like if a part already existed would have been a stupid good thing to do that and i that then maybe you give up and pivot but the fact there's is a hard problem you're not gonna it i'm just gonna like double it down and like fix it you know interesting so you're you're you you don't give up if it's too hard too messy but it's like that's better that means once i do solve it it's gonna have this giant moat like out par is the biggest freaking up we were talking earlier about guys like rocket internet while like go around copying things and annoy people like good luck if you wanna to try to copy that you gotta get take a billion dollars in ten years you know i no chance no chance you're talking about hard work i when i was doing research for this i i called somebody works on your team and i said talk me about it what's he like what's it like to work with him one of the things i said was like he's always on i've never seen him just go like go dark go off or just like turn his brain off or be like i just wanna chill on the beach and just drink my ties and not do anything is that well this just like accurate for freezes like my game though mean i you have to love what you're doing right so like you shouldn't play games you don't you don't like right on if you don't you're not enjoying the game and you guys switch it up yeah so this is this is this is this this is what i'm doing this because i really enjoy it is really fun i'm really good i think one of the you know aristotle would talk about how like one of the highest pleasures is like is like using your mind in in its highest capacity right so let's like you explain like actually enjoy chess more than checkers if you're good at both because chest is has more levels it it's more complicated game so you you want your mind to be engaged in interesting complex useful things that are getting things done is as it's like a positive part think it's it's how you many right how do you still recharge or just get clarity of thought because one of the challenges is if you're always on you might not have that touch chance to step back at a pause and reassess you do need to open time for creativity i've noticed when i over overturn myself i'm not nearly as creative then and i think the cold plunge help right find that was a quick you're and you're in there sixty second one second reset we had i think i stayed in for the fall yeah you you you actually did two plunge that's pretty good what is this typical schedule like what's a day in the life because you got fine you got companies you got all kinds of stuff forget your buy yeah and that my number one my number one is vc and has a build program which is my favorite part of it a third of our money now goes towards building new companies so my favorite thing is like the strategy for recruiting talent and and then strategy sessions with with you know to figure out what we're gonna build right and so when you you said strategy for talent what was the little strategy for building the company yeah you're basically a strategy when you're the way i look at the way i look at the opportunities for new businesses is you're looking for conceptual gaps in the world you're saying like mh what here's is here's where this industry is now like here's how this thing is working here so this process is done on the economy and here's where it could be if it was using like the right new technology or the right new incentives or this or this right effective cultures or whatever whatever it is that like could be better about it and the question is not just it's actually very easy to find conceptual gaps roll i'll put forward if you spend some time with like a few smart friends and you you're like studying industry and talk people like you usually will find oh wow this thing could be done this way and so the the harder question is not just what it could be done but like what's the path to get there what can we put in place that would allow us to get it there how do we build this thing how much is gonna cost how do we how do we make the people want so there's a lot of things for example on like health care and hospitals that are done and completely wrong but it makes hospitals more money so so so so it's like so even though it's a clearly not the right way of doing things they're not gonna just fix it you have to find some way to get from here to they are with the actors being willing to do it right yeah so let's do an example so give an example either maybe something your this top of mind because you're thinking about it right now maybe it's not all figured out or a recent one yeah so one gap and a path that you kinda figured out hundred percent so it turns out that there's tens of thousands of loading yards around the country and logistics these are places where truck come they get in line they draw things off and move things around they they you pick things up and it's just it's a pretty interesting area like the biggest warehouse company in the country is pro largest and it turns out the founders investor with me is based in based in you know you buying in california we're we're back there and and then it turns out there's like a handful of the biggest carrier companies like ryder you've probably heard of others and we've actually sold a company to writers who we're close to those guys too and so so because we knew a bunch of these guys who started analyzing what can we do with ai to make your yards better and we what we figured out is that if you put it just a couple cameras and first we thought we need six but just a couple cameras you can kinda watch and map out where everything is map out how efficient the gate is map out the processes create accountability and incentives for people to go faster create ways of pinging the carriers if it's backed up to like to use the other loading errors nearby i just like basic little ways on the margins of like making these things work better and and and and timing on a crank because you want a little bit of competition could people always respond well you know if you do it properly and so we've mapped this out and we ended up founding a company with a really strong ai team and and and we ended up kinda c founding it with the this these like you know the warehouse companies the carriers and others based on their needs and it's really cool because the way we've built it with them is we have like a few hundred million revenue already built in that we can scale up into their into their yards they already own and then we can have something all the other yards wanna use as well let's do more detail so you you're already kind of in adjacent to that world because you've done stuff but how does the brainstorm work inside your office or where like where when does somebody ask the question hey could you use ai for these loading yards like how do how do did like take me all the way to that like where does the question like that even come where does the nugget of insight come from so my partner jake's and charge of logistics supply chain he's he's the kinda biggest driver here and he's you know done some strategy sessions with you know our our friends who run different companies we're close to we'll get together i i have a vineyard in in napa valley we like bring every year like the hundred top logistics ceos which and you know drink and strategist a hang out you know it's good way and you're kind of asking them questions to try to find their payroll what are problems what works so you're spending money on what are you seeing we'll bring like new entrepreneurs and we're backing like get their take on things and we'll bring what are called e on as residents you know who talk with them and iterate integrate on the idea right so we kinda knew that you loading ours is a big thing let's go talk and iterate an idea is what we could do to apply new things to it and you know in this case there's a really strong ai team that happens to be in the uk that we've met through other friends that like had worked on some really cool visual problems we thought was very good for this and and ended up recruit memphis as c founders which which worked out really well so we're constantly on a look lookout for like separately for someone like napkin and math you're like okay so if we can improve the loading yards by this that's the size of the prize and then that kinda clears a a hurdle for yeah this is this is this is and you know the other thing here which i i don't love but it's definitely helpful it's california have some new regulatory rules about things you had to actually map out as well so they're gonna have through something anyway but why not create more value based on and but then like be the thing they they put in when they're gonna have to do anyway the next year right they have other rules coming up like you know logistics has had a few of these things they're had some rule on tele where you had to like i think for purposes of not making people drive too long had like record things differently which was kind of an insertion point for a couple of tele max companies we held back as well which is the thing tracks the trucks and stuff so there's things like that where the regulatory thing is helpful too and then yeah you just you sit down and you map it out know you've known the people for a long time i the the one of the unfair secrets of business is the more success you have the more it's like a platform for a bigger thing you can do next time and that's just the way it is you just gotta keep in the game like and it's like the i think when i was really young i you to think oh start business and make a lot money and then go to the beach and then that'd be like the fun and that's like that's not nearly as fun as the fact that once you've voice started successful once now you get to do like bigger things more easily right so it's like it's like and then that's why like i when you're young part with someone else who already has it on unfair advantage help them use their unfair advantage right build something with them now you have all these extra unfair advantage you could do it again so this is this is like there's like this naive thing where like you're like this loan business founder i think you can do that but it's so hard right why playing on with hard mode yeah white clicking on hard why not why not fine on there's so many places in the world there's unfair of angie and an unfair of advantage what do i mean by that is like every time you have was success you now have the respect and attention and understanding of always these people who will then help you do the next thing right and once you prove your confident once then you know there's you know i have a bunch of more things that could be doing now i have more competent young people around me you wanna be entrepreneurs and part with me we have a bunch of them but we always need more because there's the only thing we lack we don't like ideas it's been like money we lack really talented at hardworking working people of persistence you know i love that that so good can i come back for seconds can we do another example another gap or another origin story of one of these ideas that that i think is makes sense i'll i'll you another crazy i mean these are these are i'm i'm i'm thinking big swings right now these are gonna sound a little crazy but like i was pretty bullish on china like fifteen years ago a lot of us were i'd like the i thought i was opening up a lot of my friends there were like reading milton freeman and if you're a free economy stuff i'm like this is gonna be great to so many smart people there so we start making bets that we start working there doing a bunch of stuff and then this guy xi jinping takes over and then like i'm told by all these different senior people there like other this stuff that you wanna work on here is it's gonna be allowed i can't be foreign and like else too so i just stop working there as much and then i kind of here from them like terrible things are happening and then a couple of them disappear and then i hear he's making all these engineers work on defense like okay this is pretty fucked i'm kinda i'm kinda nervous about this now right and we currently me off to start me mapping it at the same time you know we've done pal here started in two thousand and three so now like two twenty fifteen twenty sixteen and i wasn't i'm not running pound anymore but i'm an advisor watching it and like a few of my guys there are noticing that the defense the defense world in the us has gotten to be like a lot more dysfunctional a lot more broken there hasn't really been what happened in defense is all these companies consolidated the nineteen nineties after the cold war spending went down so they all merged and it became like these giant prime and these prime started acting a lot more like government agencies themselves like not super nimble not super adaptive kinda like the way they get the contracts is by having the right lobbyists lobby not necessarily but after that to convince con we call innovation in theater have to pretend they're innovating but they're not necessarily great innovating because that's not like because they're so big they're no conversation and so we're like this is kinda scary all this stuff like none of the best engineers are going into these prime they're stuff getting worse meanwhile china has the best engineers are getting better this is we better do something and so so three of my best ex pal guys they partner with palmer of course start you've talked to him before so so i backed them early along with peter and i'm like okay guys we're back in the defense let's figure out what the hell else to do here so we so we basically mapped out like what are twenty new possibilities in the defense i i wanna find i'm to see and then we're gonna choose what's the most important one and and and by way i said something you tell your team like come to the table i wanna hear twenty ideas you put you have to a guy whose job you have to have the guy who's helping them you have to have like advisors were able to like get them into the right places to talk and explore but let's yeah let's talk to our let's talk to our smartest friends in the space let's talk to our network i wanna hear you know don't hear you know about twenty ideas of new things like and i wanna see where we think gaps might be and we come back and there's like eight or nine pretty good answers or a few things that i thought bad answers but you know we find some interesting stuff one of the areas that's pretty cool it's it looks like there might be new possibilities in in in em and p a electromagnetic pulse space and it's really directed e of course i just wanna set one of these off and it's it it's dropped by yourself but this what e and p does is it tries electronics right and so it turns out that if you can direct these what it is that you're taking microwave energy and shooting it in the blast you can actually turn things off and the government has spent billions of dollars on this stuff but they hadn't really applied any of the new any of new chips basically do you want that to protect against like drones for example that's one that's one the really good ways doing it so basically you can have a chip you can you can base control power on very small time skills you could take you know take you know the guy and i tried to emit and you could build this correctly with a top talent there turns out there's like a c founder a friend of a friend of mine from stanford is just genius to help figure a lot this out also and and and you could shoot down things like ten times far their way and you you know theoretically you could use this against missiles and turning their guidance systems off you could use it against a truck coming your base really fast you just blast it you know it might be that the truck has a terrorist coming to shoot you and you wanna us turn off might be there's a pregnant lady they're trying to get the base to give birth like you don't wanna necessarily blown it up right so it's good to buy blast and you're not turning a truck off you're not killing the person so right pretty cool like non lethal way of like stopping stuff that's giving you trouble right and in long story short we were able to put together in money put together a prototype and you know with about with less than thirty million dollars in this in the second round we got to the point where we were we were we fought way into a contest against the other prime and so so basically one of the key things in government is like we're always trying to get them to have contests the prime do not want contest how do we compete on merit not exactly you longevity any relationship i'm not gonna be better at playing golf of the senator right but if you can let me into the contest than way we can win right how you convince them to do the contest that you push the the the congress so they make laws a lot competition you have there's competent in general there's competent rules like yeah you know thanks to pal and spacex people had seen outsiders massively outperforming and they're they're more open to the ideas so we're we're pushing things in the right direction gotcha and they say so you do this contest and like they didn't really take us seriously because say other guys had really spent billions of dollars and this like what can you kids do right that's it's kinda like the old mindset in the us in nineteen fifty sixties is like innovations expensive outsiders aren't gonna be able to do and that was true fifty sixty years ago but long story is short we ended up shooting down the hardened drones nine and a half times further away than the than the other guys they actually had to used use bin ocular to like watch like shooting them down really far away and and people were just like fl gas like everybody lined up and it's like okay we'll see who who performs she's like you're gonna need bin crs because it's gonna be of range compared to whatever else is i i think i think their people were just totally shocked in in yes and that's same power is that the name the company ep ep is a cool name ep was a name in legend of the bow of dc started athens and his bow had infinite arrows and so this is kinda like a bow with infinite arrows because you can keep firing the pulses that's cool they're ten thousand if it wasn't pal like a laura of the rings reference pal yours lower of the ring so upper ep empress is more is more more mythology pal is more of the fake mythology role but no i have we have quite a few things named after tokyo stuff is inspiring story they deal with pal here pal a seeing crystals right and in the story this is super do but in the story they're built by like the elves of the outer most west and they're basically this thing created for the humans to get rid of the bad guys but then two thousand years later a bag takes over the technology right and they're using it for evil and so the idea with pal here is we thought we're very civil liberties obsessed we wanna to build it in a way they would like go after the bad guys but then when we gotta gonna watch the watchers and be really careful about how the technology technologies use because it's very obvious if you're doing something killer bad guys the a bad i could use it for something horrible right and then so it is a dangerous area we believed it was a necessary thing to create and we you know we we ended up eliminating thousands of terrorists so we were happy with the results so what's fascinating saying to me is that not only have you had multiple hits but there in areas that are different but also just hard areas where i don't even those are not even idea i don't think about these like the the logistics yards or em and p pulse technology like these are so in different domains i'm curious is that is that intentional meaning do you like because most of the entrepreneurs around me in silicon valley were like oh be to be saas you know what's a problem oh let's make it to do list app because i know that problem so familiar with it is it a strategy for you to go or fish or other be not fishing or is that just what happened no i think it's definitely definitely a strategy of sorts where you don't wanna build but yet another like restaurant app or another to do of this app because it's like that's where every other twenty one year olds thinking about like like it's probably why i miss stripe early on as we've been in paypal and i like see every payment app there's like literally hundreds of payment house i like oh god you know because it's like because peter would make me take the meetings out they don't won't to do anymore so it's like now you wanna listen there's there's parts of the world that are big parts of the economy that are very important that that are not as exposed to technology culture so you wanna kinda take your our our advantage is we have a really tough technology culture let's figure out how to expose it to something is that's not likely to to seen that before and then find ways work together to fix problems what are some other ideas either i wanna either hear ideas that you're not doing just because you can only do so many things at once or it might be that would work but it's too small for me or it's it's not like kind of using my my current platform can do bigger things but this happens to me all time i see ideas that somebody could do that i'm tempted to do because it's so clear to be but it's like that would be not the right game for me to be playing right now there's there's so many things if had the right talent i'd be doing more you i do a lot in the wealth management world i think that the process of starting a trust and like the actual legal workaround this stuff could be very automated with ai you can have like a smart lawyer like a few smart engineers you could like have a whole new trust company and a whole like a state management company we we have saas software first aid stuff you'd plug into and i have all lot distribution for this ready but i would need like the right engineers ai people and i'm not sure if it's bigger than a billion dollar or a two billion dollar business but it's like it's still worth you know and it saves a lot of time so but i'll give you really big one i wanna do but i don't have the right people around me local governments we just sold open up for one point eight billion dollars in local government there's a lot of lessons for this company a lot of mistakes so took us twelve years zach book and the ceo my c founder had a great job we learned that you only can really do things they already have a budget for there's about ninety things local governments pay money for software to do and open up about forty of them so we learn steps really well like like the big right a law processes and and then anyway the idea is that there's trillions of dollar spent by local governments and a lot of them can't find the right staff for certain processes and a lot of now people are retiring soon too so i think i think a bp a business process outsourcing thing for certain task for local government they're because augmented by ai could be like just a huge business to basically help them with this and i right now it's not a standard way they work but i could see if you do well it could become a standard way and that's the kind of area where you can make tens of billions of revenue before anyone anybody even notices you because it's such a big part of the economy so i know that's with the first like six to twelve months of that company look like you'd basically have to find early partners willing to trust you and work with you on outsourcing some one of those ninety processes and it'd be it'd be something like where you're like augment their ability to do licensing and permitting faster or or you're augmenting some of their grunt work on tracking their assets and asset management or your doing something for their budget for them automatically it's way faster to see photos doesn't have to hire three people they only hire one person which is you or such something like that the right but you have to go in and figure out what processes our cities even willing to let you do and it's it's a very unnatural thing because it's not how they work right now but it's one of those things where there's like a secular trend towards like you know local government not having enough money so if you could find ways to save the mass amounts of money and make a higher quality service there could be something there right alright i wanna play a little agree or disagree game so i wanna say a statement i wanna hear you agree or disagree with it so the first one is on on this idea of big swings that are solving like huge problems yeah the mission oriented things versus like getting just getting your first win under your belt a guy came on the podcast and he said my theory is you first you go get your nut and then you work on your noble mission and he's like you know you go and you develop your skills you get make a few million bucks you get personal autonomy and then you should pick a noble mission a noble quest and go on that agree or disagree with that philosophy i i agree in general i think it's a really good thing to do you wanna have a solid base before you do something it's like a huge crazy risky quest you know wanna be like poor for twelve years as while you're while you're doing something if you can i i'm not saying it's gonna be the path for everyone but if you can do what he said that's a really great way to do it okay another one a lot of people say that ideas are cheap ideas are a dime a dozen execution is everything and i agree that execution is very important but i think ideas really matter too i think that project selection picking the right market to go after is a is is a huge lever so i think that the execution is everything philosophy is bs agree or disagree that's a tough one because i've seen a lot of good ideas with the with they're actually aren't worth that much because they couldn't actually bring together the talents to them so i i i i you you you you it's necessary but not sufficient you do need both right the execution is the harder part but you're right you gonna have an amazing execution and i've seen this and people going after the stupidest ideas and and it's not gonna yield something so you need both but the ideas by themselves are not that value okay that's say another one focus is super superpower and i would say that like we were talking about this earlier you you recognize the value of focus and just compounding one thing but you've also done a variety of things agree or disagree that you know focus is the way to go focus should be the strategy focus is clearly the right strategy for the most successful people in the world you look at the wealthiest people in the world they nearly all focused and compound that over a very long length of time you look at pal and out a part that two companies where i focus full time on them they're two of my most important companies it's i i think when you're having impact on the world in different ways sometimes it's okay to to do different things i think i think philanthropic i think for me coaching entrepreneurs something i enjoy i i think i'm i think i'm obviously creating a lot of value right now but i think i think as an entrepreneur as a business person in general it's you you especially if you haven't already had like a giant win you should just focus and get that giant win compound your friends with elon what what's something you've learned from him or as something you admire about him maybe that the rest of us don't know by you know we're only known from the outside yeah i i mean i guess i'd say i'm really admire his bold in his like obviously it's it's she's really good focus she's really good to saying no even to friends about anything it's just not like tied to what he's like really passionate about and focus on to win and he's just really really bold at like clearing like nonsense out of the way and clearing mess out of the way and just like going right for the thing that that matters right for the substance so i think i think most people in my life would be i think i'm maybe too bold or too direct or too extreme and elon like a whole stuff sorry which i think it's great to see i'm like okay i could do better there's more here yeah i could be i could be more myself in that direction and and i'd be more successful highway you know i'm obviously done very well but but but i think he's a whole our level of bold and that's something that it's good to see that for me because it reminds me that that's like a that's a good direction for entrepreneurship you know easy focus though because he's got like five things know he's got twitter he's gonna spacex he's got tesla he's got deer link he's got boring companies he's got so many things what is how do you square that is that is it focus or is it i i think he was insanely focused for a very long time on on the things he he was doing and on scaling them and i guess get sure there were two companies for a very long time after doing one company for very long time and you know he's at a level of success again societal where there's things that really matter right for society that only he can do so it makes sense if he would expand that i i told you earlier you know my partners are allowed to work out to six things at once and i think when you're like coaching and like managing things and stuff i think it's about the right right out i think if you're just operating you wanna do like one or two of right yeah last question because i think we gotta go but what the whole my whole thing when i come to an interview like this is what's the one question that really matters like forget the hour like what's the one question that really matters and all the questions have asked you've been beating around the bush of this one thing so now i'm gonna ask you directly which is you have now created at by my account at least four billion dollar companies directly probably more than that i call that the entrepreneurs grand slam you have done something that anybody who wants to make one successful company would be would be en of wow how does he do it you know you see also a lot of other founders you meet them through your fund or just people would probably come up to you what would you say you are doing different than the average good founder so this like i have some unfair advantages right and and it's it's actually not that hard was you've been really successful to like to do it again relative the first time but what am i doing differently i have a huge town apparatus so we have people at like dozens of universities we have all sorts of you know things we do people at university who like what are they doing it's like you'll have who apply you'll have people who run your program there you'll host parties and meet talent you'll you'll have a certain playbook we've built since talent of knowing how to show up you have like a scouting department yeah you have like a huge talent guy department and works in different ways different places and and and really talented to people we spend a lot of time in each of our partners and and and i that's our job is to scout for talent to use our network the more wins you have as smart people the more you get to meet their smart friends and so so we have a huge advantage in talent first of all because that's really key we have a huge advantage of like knowing the people who run a lot of big industries and like having good relationships with them having them as advisors having them as being part of things we've done where we can like understands what's happening those industries get quick feedback and integrate ideas like like one of the biggest mistakes founders make they have an idea and then afraid someone's gonna copy if they're afraid the ideas is valuable it's really dangerous thing that ideas are too valuable because then you just don't share them you think that they're yours and so one of our advantages is that is one of the peter t thought experiments was a i imagine is five founders so each have an idea and like four of them are like secretly working on it and and one of them are just like talking to everyone and iterating like who of the five is gonna win right so it's clearly the guy is iterating a ton is wife of five people the same idea we're able to have that same idea and then like iterate faster than anyone else because we know everyone running everything and and we know how to get back back you know have know how to get to the writing us answer much much more quickly so not all only the have the best talent but we are able to iterate ideas with people who respect us with people we involved and then whenever we start a company maybe this is a mistake because i maybe i could have had a lot more money but i've always been like a minority owner of my companies i've always been like someone who might have like then when we started out the build program or fund might take twenty percent and our and when my team and i might take ten percent so we might have thirty total and like maybe thirty five or forty but like but we have something where less than half and we're very generous with the founders with the early employees with the advisors for the partners so like when we start these things like just even from the beginning i don't have to wake up in the morning being the only one worried about this thing there's like not thirty smart people waking up who that's their focus and they're and they're on it and that's such a big advantage to like have other people like ob obsessed over this thing and are people who truly feel like c cofounder founders by the way i it's one of the big mistakes you're like i'm the founder and you guys are the you're working like like what are you getting from them other than your other than your ego like much rather there's so many companies than people don't even know the founder of and and the people and that's way better because first they're not gonna harass me that stuff and and like there's people who are proud founders who get to be out in the press doing it and and and they're when they're going to sleep quarterback about this is their reputation and their focus in the intro i'm gonna say something like this guy has started over billion dollar companies than anybody in america which i think is an amazing claim to fame but forget about a billion let's talk about a million the name of the podcast is my first million and i went and read a quo answer that you did somebody said if i wanna make a million dollars how should i invest my money mh and you said something like this you said i'll pull it up you go if you wanna make a million dollars it's not about how you invest your money it's about how you invest your time and you said it it's about how disciplined you are with investing your time how should somebody who wants to make a million dollars invest their time you know it's yeah it's right you can't just make a million dollars from investing for probably the average person maybe you can't over like fifty years or something like my grandma passed a hundred and three last year and she was a multi millionaire having grown up in the depression just from saving money and cut coupons that decker could work for a hundred years thrift think thrifty like that is the thing like over a very long time horizon i think you said like she bought one stock or something else like like grandfather worked for abbott and she held it for like sixty years that happened to work really well great you know really good for my for my cousins and they're inherited but you know she was a wonderful lady but you know in general that's not probably how you wanna make make money you wanna make money especially these days i mean gosh going back back to then was probably a lot harder but these days there's so many places with your time you can learn how to help build things how to help create things how to help be useful to other people and like that's what you wanna be doing you wanna be finding what are you passionate about what are you good at you have to be figure out what you're good at if you have to be willing to say this is i'm not gonna at i'm good at and then who else is good at this too who i could maybe learn from who i could be like and spend your time trying to find a way to help those people try and way to learn how their businesses work be part of a business in growing it and that's how you see how everything works and you know if you're talented enough then that the people you succeed with they're probably gonna be able to help you do something new later and that's what happened to you right that's how you spend your time my understanding if we if we walk back in the journey it's you're in college you go to stanford and you you end up working at paypal you become an intern at paypal i i tried a couple times they're rejecting me the first time i apply well what happened why do they reject as a fresh man is stanford and i remember being at a whiteboard for with max le and he probably us remember this he was a c cofounder with peter on the tech side and arguing about some tech thing it was paypal already a big deal is that why you wanted to wear her it wasn't that much of a big deal yet like peter teal wasn't who he was elon musk wasn't who he was like those you know there's companies combined to start it but i saw like all the smartest people all always these people admire and all always these kind of like icon class going there like people who thought differently you know and so you you try when year rejected try again the second of year you're in what's your job you're in internet paypal what you doing is not glamorous at all they basically had me setting up the peoples soft instance which is terrible but you know i sat next to this guy we were in like so roll off who's was now like star partners sequoia was a cfo and we were kind of in his domain at first and i sat next to this guy who's was managing all the money on on bloomberg like a treasury thing so i got to learn fine treasury and then and then what was happening is is the big challenge in the companies we're going bankrupt because the chinese and russian and mafia we're stealing all of our money at the time so i ended up like hanging it out after working with these all these guys who really like working on how do you stop the bad guys because paypal it's like a honey it's got all the money so like you go to seven eleven and the clerk there is like maybe having a maybe having a bad year and like you know angry capitalism and who knows and so they're writing down secretly the numbers on the credit cards and they write down five hundred of these numbers they can sell them each online for five or ten bucks russian off is buying them up right and then all of a sudden you get a charge back that says two hundred dollars you on paypal to something and you're like i didn't do that so you so you see you use you charge her back and then paypal left of the bill right and this was like costing paypal several million dollars a month and a lot of our competitors went bankrupt and so we got to learn the time how to basically stop the bad guys which was kind of fun problems here and so i like what you did there which is one of the pieces of advice i gave in in on the pod is you gotta work on the a plus problem at any company so regardless of what your role is you just try at least know what is the a plus problem the real problem they're trying to be helpful on that that's like because that's the needle mover and that's where you're gonna get the most learning the most action and and i didn't necessarily do this on purpose i actually wanted to quit at first because the people saw thing was so dumb and so horrible i can out my dad obviously if we don't quit just like do what you can to be helpful otherwise there so there was that was a good dad dad eighteen year old year you i almost quit college for the same reason and my dad was like because i was like you know i'm pretty mediocre here i was like i've used to being good and then you go to a group like you go to a top school you didn't feel like you're are the best now i'm just these are were all the best high school kids now i'm kind of in the middle so i was like you know it's too expensive maybe i shouldn't be here he's like that's exactly why you should be there my challenge you wanna be surrounded by people who are better than you so one of the things alex carr had inside on my c founder pal here who is really good is you can't really appreciate a talent unless you're within two standard deviations of so you do you think of talent is being on normal curve for any typical typical scale could be for math could be for podcasts or whatever it is and like so you just trying to have a natural level of talent you could shift slightly and so the very best people in the world at something might be fourth or fifth stair deviation but if you yourself are second or third standard deviation you could least start to appreciate that right whereas if if if if they say you're great physics i don't know if you meet like albert einstein versus a top fix professor you're gonna have no idea which one's einstein right so it's the same thing in any other area but if you reg differentiate exactly but once you can recognize that talent that lets you then harness it for things you're building and doing so it actually is very useful to be very good something you even know if you're not the best right okey okay because you could notice what because you can understand this is actually the five standard deviation talent i was good enough to computer science like i got able to get plus stanford i had friends were way smarter to make computer science but i was good enough to know who those kids were and how to harness them and how to hire right so there's just things like that's interesting so now you the next thing you do you go and you start pal which look yeah well actually well actually i worked for peter's family office for a while and he was the first investor in facebook well was just his family office there's tons of crazy shit going on it's really fun it is like you know a really expensive restaurant that went bankrupt there is like a spam company so i was starting there is like there's all sorts of crazy shit and i was there and like peter's a genius but he's it's not really a manager so i started like i just you okay i'll just i'll take charge here so i started hiring people with him and and kinda helping her run things and some of the older guys like who the fuck is this twenty one you're right kid so we end working on a project that summer to map out like what if we taken all the stuff we did at paypal anti fraud and we and we generalized it to like for the intelligence community what that look like and and my roommate stuff and i from stanford to design where were like sketching up all these cool products and we're building prototypes and that was kind kinda of the the genesis of pal here oh interesting okay so you guys you basically had the paypal showed you a bit of a bit of the problem it's was like they so it's like show us a solution to a problem they're like wait a second because basically what happened happens is i got some know all these guys at paypal they're in the secret service in fbi those are the two groups they're in charge answer fraud of like arresting them mafia guys and these guys would come to us us for advice to other things because it was like you know it's kinda fun cops and robert like every i don't every young man likes this you know tell world course you wanna help gets a bad guys they're like so like we were teaching them about cyber fraud or whatever you call internet fraud in two thousand two thousand one and they start coming to us and then nine eleven happened and then the government starts spending billions of dollars on like supposed solutions to catching bad guys watch what's going on and we knew these guys and we watch what they're spending money on and we were like oh my god this is stupid like this is way behind itself i'm not they're like i'm so smart but silicon valley itself right had gotten way ahead just because they brought town from all over the world so whatever was being done and what we call like the the the belt way basically in dc with the old integrator they're still doing stuff from twenty years ago and we're like oh my gosh this is like our nation's under attack and we're wasting billions of dollars stupid so that's that's when we said okay what let's get together let's straw up like what we could actually be doing here if they did better what happens next so like walk us through because okay what we see today so i think i looked this morning a fifty billion dollar market cap company that's amazing but it's also twenty years later so left if we rewind the clock to where most of the people are gonna listen to this are early stage trying to figure things out unclear which pathway to go unclear if this is even gonna work take me back to that what what did you do to what was it like and why how'd you figure out like the first few steps well there's lots of different ways to build successful companies right so i don't don't ever wanna be like this is the path but right our path was we were kinda watching all these companies come out of paypal so i very likely to be sitting there seeing like these guys you're doing our important linkedin dan and youtube and yelp and etcetera so like watching these the ones that i could tell we're more successful that was we're were obviously at the time were the ones that are tracking the very best engineers is almost like engineers were lined up trying to into these companies so you think like a lot times people out the business they like to hire an engineer right and like and like is the opposite it's like the ones that are crushing it it's like a nightclub where the engineers wish to could follow those people in and we're and and and if those culture something about them it's just the whole it was just so dynamic it was like they're able try ten times as much really quickly you can just kinda tell like wow like you can be really smart at business but like if you could try like ten times as many things like you can be like slightly less smart business and still succeed right because you could iterate so so like okay we need to build somehow a really top engineering culture like that was like one of our core principles early on is how do we we used say the engineering is king like how do you how do you have a culture that that attracts the very very best and and respects them and like makes them partially in charge of the company you know with with you and so we spent a lot of time on that it's a little bit chicken egg we obviously i was lucky to have a bunch of my friends from growing up for a national math and chest champions all my smart guys and like we bring this really core culture together convince some of these really top phds from to them like what's what was the quick version i was getting them excited it's because you need a magnet something to bring the talent in the government spending tens of billions of dollars in this area they're way behind what we figured out how to do in silicon valley it's clear there's going to be a multi dollar company that solves this problem and they describe the problem him this it's very hard technical thing that if we have the best engineers we're gonna be able to do it and and we're iterating closely you know with national intelligence with defense agencies and and you get to go and solve this problem and when we succeed we're gonna save thousands of lives and and we're gonna protect some liberties that those that age it's like you know it say it's a fun big mission one of those things you said is we're working closely with these agencies like how easy was it to work with because you you're young i don't even take you seriously you're young and you're different you have a different approach yeah so so is maybe it wasn't entirely the case that they're reiterating as closely as i'd like them to do with us for the first year or two so alex carr was very good at this alex was alex the first just an adviser to us helping us and then and then and then peter kept trying to get us to hire a ceo because steph and i were twenty one and you couldn't really have a twenty one year old running something working with like senators and the my defense department but like these guys these generals or four round rules would come in and they just did not understand tech culture and i'm sure they're were great guys they just wouldn't have fit at all with us and so finally carr had been like helping peter raise money for things our friends from law school and you know he was he was a phd in philosophy in germany and in in europe a lot of the billionaires like to pretend their philosophers just like the high status thing to do kinda like here they like to pretend their podcast or something about on ours i don't know but but so basically basically like he knew all these wealthy people and so he started advising us how to talk to them how to meet them how to think about how institutions worked and he had always like casting things in terms of like how you add to your approach people to take you seriously which what do you can by that i i understand like if we show up and we're like these like quirky twenty one year old in silicon valley that's like that's like that's the wrong casting whereas if you show up and you walk the door with you the former ahead of the cia and and and peter t made the intro after the being a paypal and another one of his friends whose senior has like has explained to them that this is a project that they're helping and that's gonna help in this way based on this big advancement maine in silicon valley and they've been that they've already been talking to bunch of people with the fbi and etcetera and they want your feedback like that's like a that's like a high status way to come in the room right whereas if i come in the room and be like look how smart i look how right this is it's better than what you're doing like look at how smart it is like you're wearing a hoodie yeah exactly like they're like they're like yeah i i i guess i get the a lot of young people may underestimate the substance is important but it's you can't lead with substance because substance is not taken seriously so you have to have the substance to win but you have to have all the trapping of why they're taking it sir and why they're comfortable doing it and why they're what know why it makes sense so anyway there's these things like this about how the world works and and who to talk to you them the institution who to get your help so alex just have that this wisdom about like people in institutions and how to navigate they like the rest of us we be the best tech culture we and have that and so we actually convinced him to pretend to be ceo for a few years so the so that peter would stop trying to hire like a really like senior like military guy but then he was such a good ceo then he actually he actually was she's still ceo twenty years later right so it worked out if you mentioned peter or peter was not active day to day necessarily no nobody who was critical for great it's incredible what was he doing peter was like first of all it's a financial support then no one would give us crazy kids like i told you there's always crazy projects going on like a lot of people around them like this is the craziest thing you're doing like it's one thing to waste money on a restaurant but like you're sending these kids that were pretend to be spies and buildings things intel like what are you thinking there's no such thing as a company that does this so so like you have to give them credit for like being willing bet on a crazy idea he put a lot of money into like is it was several million dollars early on which to the which is like and and then and then we had they of these funds started putting things alongside others but mean that's that's a huge amount of money for like crazy kids is what are we doing and and then like peter was really good for strategy he was really keen on i think one of the most important things is he stopped us from a couple early partnerships this is one thing that people's grew up a lot startups a lot of startups when you're getting going you wanna like you get really excited about some partnership on the table and you think it's gonna really help you but but a lot of partnerships will cap your up so a lot of partners will limit your ability to iterate to try other things and i think because he had the experience and he was going for a multi billion darwin win he was really able to like steer us away from a a a lot of big mistakes earlier like what would have been a a partnership that would have been made we would have like spent like all of our time selling our interface in in europe to give him all the rights it and we would have to fly over there and support things they were doing is this just like random things that like sound really good because i when you're getting going or desperate for that first five hundred thousand million revenue and stuff and but you have to make sure you get it in a way that's gotta actually scale them something much bigger that's not like a message kinda distract you right right and peter is he's an interesting guy for sure he you said restaurant curious like i mean there's everything i think so this is this is like not unique to peter by the way this is a really common rule is that whenever someone becomes very successful for the first time they usually become more expansive with they're an entrepreneur i mean all of us we like to build things where you like to create things and so i so once you have successfully like okay i'm really good at that i probably could be really good these six things as well and then i think we all forget okay the reason i was really good at first thing because i was like obsessively working on it for eighty or ninety hours a week and i brought like thirty of my smartest friends into it and we all iterate like crazy and we almost died multiple times so we barely made it work we kinda forget i forget that far and just like oh yeah oh did this and you you do all these things snap my fingers exactly like when gonna do this this this this this like it's like playing risk you know where you're talking and like it turns out that's not that's not a we're good way but this is what i've seen almost everyone go through this like unless i i'm lucky watched multiple our friends go through it so i i still made the mistake in different ways but you so so there was very expansive and there were some things maybe didn't make as much sense and and and then then of but that you don't be so freaking smart that some of them didn't make a lot of sense of growth the first check of facebook at that time so mean give me a break you know you can you i mean everyone in venture not gonna have a hundred percent hit rate and so so so you need learn from your mistakes when you were around when he wrote that check at facebook yeah i mean i i get no credit for it and like at the time did it seemed like a big deal dealer was it just like one of many things he was doing it was unclear that that was a that that was it was one it was one of many things and they seem particularly smart interest and i you know i was i i can't say thought it was gonna be it's because it wasn't nothing think anyone realized that but but it was it was clear they're really smart really interesting guys who were very aggressive and and so it was it was a fun thing to be exposed so i think one of my good friends who actually helped peter to write the check he's played in the movie by by an african american guy i think what he jokes about but it's like was a good he was a good time to be there is fun he's like a five four white guy just i need the little jewish guy he was like i ultimate a compliment sorry james no credit for you anyone out there wants to rewrite me as like his super black i would love that exactly thanks for doing this awesome thanks the highest compliment which is i learned a lot today that's my goal with all these is what are some of the things that you know couple of golden nuggets that that that come out of so thank you so much yeah i feel like i could rule word i know i could be what i want to put at all in it like a days off on a road travel never looking back