April 29, 2021
For the longest time, we've only financed personal and professional projects by acquiring debt. But what if, the same way investors bet on super early-stage business ideas, we could bet on high-potential people through an income share agreement, regardless of what those people decide to do in their lives?
Equity-based financing for people is barely talked about, yet Sam Lessin has been practicing for several years. And he believes it's one of the things that can soon disrupt the big picture of the internet.
Sam is the kind of person you go to to get a peek into the next few decades and likely to get your mind blown a little bit. He is a General Partner at Slow Ventures, a VC firm that invested in companies like Slack, Dropbox, Pinterest, and hundreds of others. Sam also writes for The Information, and he built Drop.io, which was sold to Facebook and leading him to become Zuck's VP of Product. Now co-founder of Fin, he is instrumenting and optimizing the future of work.
In this episode:
It's funny because we've known each other for a while now. And I kind of look at you as one of these like really clear thinkers. I got a lot of questions for you and stuff that I'm genuinely curious to hear from you. It's always fun when you have a guest that we were like, 'I really want to talk to this person. I want to learn from them.' So I think our audience will also appreciate that.
I also see you as someone that kind of like has a little peek into the future. Like if I kind of don't want to know what's going to happen and I'm like, 'what is Sam thinking about?' And so I still remember when he came down to Brazil and we hosted you at our kind of Product and engineering Beers and Bytes. I don't know if you remember that.
Yeah, it was fun.
Yeah. And you kind of blew people's minds. It was funny because I was talking to an engineer that used to work for him the other day, actually our former CTO. And he was still remembering that, he brought it up, you know? So you obviously left an impression, but the biggest question I have for you right now, just to kick things off is: I'm glad the family is doing well, but how is your horse Zig-Zag doing?
You know, that's a great question. Let me find out. I don't think my horse is doing great. Let's find out, let's see how my horse was doing.
Can you give some context for people that are imagining this thoroughbred at your San Francisco house? Give some context about Zig-Zag for the audience.
So there is this game that is kind of an NFT-e type game called zed.run. They basically modeled horse racing as an online game with real money, in crypto. There are some Genesis horses that you can buy, and you can buy and sell the horses on Discord, basically. Your horse is something that you own, you own the hash of the horse on the blockchain. And then you basically race the horses and you also can breed the horses to create more horses. People pay you stud fees for the horses. I got excited about this, but I'm not THAT into it.
It's been going incredibly well, it seems like people are very into it. They've been selling tons of horses, the races are always going on. It's pretty wild what's happening. The problem is – don't do things that you're not a specialist in, but it's like: I want a horse. So I went on Discord.
It was like, "I want to buy a horse." One of them is for sale. Someone's selling a horse. And so I buy a horse for, I dunno... like a thousand bucks or something. But of course I bought the shittiest horse. I just like his name, Zig-Zag. But there's a whole hierarchy of how good the horses are, and you breed them up and down. I do have a Genesis horse. I think Genesis horses are cool, and it looks cool. It's got a cool name. If you get into it, it's a Z9, but what you really want is a Z1. Maybe there'll be a Z9 racing league someday. I don't know.
So your horse is kind of getting smoke then.
Well, my horse isn't, even – I have not been racing my horse. I should race my horse right now. I'm going to race it while we talk.
I did put my horse out to stud, if anyone wants to stud with my horse. But apparently I set too high a price, no one wants to pay my stud fees. And my horse, as most of these things, has been a purely money-losing activity so far, but whatever.
Amen. It's fun – I think that I was talking to someone yesterday about this – it's a learning experience that is kind of understanding, jumping and playing around and seeing what you learn. I mean, this whole NFT thing is pretty wild.
I think it's a cool transition to just talk about crypto in general, because I want to talk to you about one thing that is a more serious topic. I was in a clubhouse chat and I heard you chatting about this equity-based financing for people. Share the idea behind it and what needs to change for that to become more mainstream?
What are we talking, crypto or equity? Where do you want to start? Two different themes.
The two themes are definitely different, but they're related. I'm going to talk about something probably that I think I can get my head around a little easier, which is investing in people. Let's do equity. That's the thing that I know as to not appear like a complete neophyte in the questions I would ask around the crypto, let's focus on that. But everyone listening is probably still trying to wrap their head around that.
That's just silly. I think this is the type of thing that is worth – I think people need to take this stuff more seriously. There are people that take stuff very seriously in their life and other stuff not seriously at all. The reality lives in the middle. It is more interesting and serious than most people realize in terms of how it holds a lot of value and assets in the future as we kind of move forward. I mean, that's a whole separate discussion.
But equity and investing in people – look, it's pretty straightforward. This is my favorite idea ever. I think it's probably the most disruptive thing that can happen with the internet, big picture, among many huge disruptions, which is thinking about how we finance our lives, right?
People can only borrow at debt. You can borrow money –historically, right – and use it to go to school and educate yourself, to start a business, whatever. But it's all at that phase.
Then you can look at companies. There's obviously debt and equity routes.
The debt route is: if you have an established business, some people are willing to lend you money at some rate. If you are really big, that's super cheap. It's actually an incredibly great way to finance things if you understand exactly how you are getting everything paid back, etc. Because of the market loss we're going to lend to you, especially right now. Debt can be very cheap.
But for most businesses in VC land where I've grown up and what I work on, no one's gonna... there is no such thing as cheap debt really, or even debt availability. For crazy startups. Right? What do you do is the equity model. And you say: "look, I don't know how this is going to go. So you're probably gonna lose your money, investor. But if you don't, you'll make a ton of money and that kind of offsets it." So you share the upside and the downside.
And so if you unwind for a second, how did we end up in this place for companies? Forget people for a second, let's start with companies. For thousands of years, there's been debt, right? To say "I'll lend you some money. I have no idea really what you're going to do with it. I'll try to understand whether you will pay me back or not. Ideally you do pay me back, but I don't have the information necessary to really understand how. I can't account for your upside, I can't even really value your business or your life or whatever.
So it's a low Information strategy. A low Information strategy from a financial market is to lend money. Now, what happened? What happened was: several hundred years ago, they started to be in these opportunities where people were like one couldn't borrow money because it was way too risky. This started with shipping, right?
"We're going to go whaling or shipping. The boat is probably going to sink. But it might not. So there's no way you're going to lend me money. But here's a nice thing that I was thinking about: send the boat out. If the boat does come back and it comes back with oil, tradable goods or whatever, it is super cool. I could actually value it all because it's literally on the ship, coming into the harbor. I'm like, yeah, that's my ship. Let's go look at the stuff and split up the booty."
So it's super measurable. This is the thing people mess up in the history of finance a little bit. It's not just about high risks, creating equity and showing the document. It was also about measurability. "Oh my God, the ship's come in. Let's split up a goodie." And it was a totally alternative finance model and the original venture capital, which was literally shipping stuff around the world at a high risk, whether it was huge returns or if it works.
And what was cool about that is it creates a whole new set of activity that could never have been made possible before, because the debt markets could never have accommodated those types of activities.
Fast forward a few hundred years, the internet. Ok. And where we are today. Well, this is a few key things around that.
One is measurability. It has gone way up so we can historically look at "Brian, what did you make last year?" The government kind of knows from taxes. What are your equity positions worth? This should be very expensive for everyone to evaluate. And you can keep track of like, "Oh my God, I invested in 20 people. Where are they? What are they doing? How do we communicate with them? It'd be very hard to accommodate pre-internet. But with the internet and measurability in communication, all of a sudden, it's not crazy to be like, "Oh my God, I can keep track of tons of people and what they're up to." And therefore, all of a sudden, that measurability thing starts to work.
Then the second thing, which is probably even more important, is that no one has creditors anymore. This idea of "Ok, here's the deal. I'm going to go get the certificate or go to this university, go work at IBM or wherever. And I know exactly what I'm getting paid for the next 20, 50 years." It's all kind of very tracked. That's gone. Which means that it's way harder to think about borrowing money or even lending money to people, because who the hell knows what they're going to be doing over time?
What it's been replaced by, actually, is: if you do well, you can do so much better than you ever could have done before, because of technology and the leverage of finance and tech. But a lot of people don't do that well. It is much more people thinking about their time just as their money. And it's more of a venture capital model than a traditional career model.
So the question is: how do you finance that, very big picture? I think the answer has to be equity investing for people. Which basically looks something like what I do already. I mean, the GPs of a fund – Slow venture is a half a billion dollar, early stage fund. What are we really doing? We're betting on people, we're betting on ideas. We're starting to just do this directly with people.
We're saying we don't have to bet on the company but rather: "Brian, you're awesome. Do you want a million dollars to either take some time off or hire someone or learn something or whatever?" I'd rather just invest directly in you.And then if you do really well, I can take a small percentage. Like a seed amount, 3% or 5%. And if you don't, that's fine. You basically let your super winners pay for everyone else.
There are so many reasons why this now makes sense. Like the creator economy, where everyone's soloing it, in terms of how they're approaching it. These guys have no access to capital, which is what you would want to grow or build a team, because no one's going to lend to them. And there is no company to wrap that around. So getting them access to capital makes sense.
Entrepreneurs: you want cheap capital? I would rather invest in the basket of the things that you're doing forward than a specific idea, especially if you're super early. That's another framework.
This is kind of going all over the place, but there are a lot of trends that are coming together right now, which makes micro equity right, which really resolves to a person and their effort, which resolves to wanting to get people more options. I believe that, especially in this economy, the ultimate currency is freedom. If you have to go to your job every day, you don't have the time or space or energy to be creative, which is where the real outcomes come from anyway.
We can go even crazier and talk about what is the future of UBI [Universal Basic Income]? Everyone's like, "Oh man, basic income. That'd be sweet. Look what happened with corona?" Everyone's got these checks in some way and we'll see what happens. But it's an interesting period, in terms of the popularity of the concept of just giving people money.
This is the private market way to do that, to create more options for them – a set of entrepreneurs, we're financing our first creators. We are basically saying, "look, we'll get you a cheque for a million bucks, 3 million bucks more for up to max 10% of your future earnings, over a long period of time. And we'll just be aligned with you. We want you to maximize what YOU want, there's no control."
Everyone was, "this is indentured servitude." It's the opposite, it's indentured capital. In indentured servitude, you have to do something for me or produce that. Literally, if you don't do anything, if you decide to do nothing, that was a pretty dumb investment decision on my part. But we have no control. It's like seed investing.
Yeah. You know that people are motivated, that they're incentivized to increase their own wealth and opportunities.
Not everyone is, but there was historically this conversation... I started talking about this 20 years ago. I bought the domain lifecapital.com in 2000.
And I was obsessed with this idea. I think I partially got into college because I was like "The debt burden! We need to create options for people and freedom and high risk capital." And I got really obsessed with it way too early. But back then people were like, "oh, the problem is the people who want to do this are the people who are lazy. They're going to just take the money and sit on the couch."
Look, there are lazy people in the world. But I think the world we see now is... If you invest in those people, that's your own damn fault. Don't invest in those people. And that's not how most will behave. If you give these people a shot, they're going to take it. That's my view at least.
I love the optimism there. And it really resonates. There are people that just want to make stuff happen. And if you're able to give them the financial security for them to take the risk... Do you think VC has just become less risky?
In general. This sounds like a more risky idea. Most people hear this thinking this is really risky, but what do you think about the asset class? I don't think it's risky, actually. I get it. I like it. And I want to double click on like the creator economy and entrepreneurs and those two buckets, cause they might be a little bit different. But you think in general that VC is less risky than it historically was?
The reality is: the one macro fact about the world of business is that there's no growth, right? There's no growth. And when there's no growth, then people go to riskier things looking for growth. It's like the quick route.
So you see what's happening in VC. On one hand, you have the big VC firms, right? They're applying ridiculous amounts of capital in the companies. And there becomes a self-fulfilling prophecy of valuation and whatever, and the great business models. And people want to keep giving them money because we're also going to put it right.
I think that maybe it is getting less risky in certain ways. There's also more seed financing than ever in history. Is it more risky or not?
On one hand, I'd say people are way better at starting companies now than they were 10, 20 years ago. And the reason is because there's just been a lot more examples of entrepreneurship done, and poorly. I actually think the whole approach to it... There's more data.
People have more access to actually get advice on how to start a company. So like I'd actually argue in some segments, starting companies has never been less risky. And will just keep getting less risky because there's a class of companies and approaches you can take where you can just follow the playbook. And I think that's going to keep happening if it's pretty low risk.
But the low-risk things are also priced as low risk things. Which means as an investor you're like, "wow, that is a good idea. That will do well." And it's priced to the moon. I think if you're looking for real leverage and upside. With that, then almost by definition, you have to believe in efficient markets to believe that the crazier things are cheaper.
Yeah. Let's talk about that a little bit. You don't sugar coat about how hard it is to build a startup. We both have done it before. We know just how difficult it is. And I saw, you mention somewhere when you were talking to somebody about investing really early, which clearly when you're investing in people, you're investing early. That's like as early as it gets.
You said something to the effect of, they have to be weird enough to be startup founders, but also sane enough to actually build good companies. So what's the magic question that you would ask founders to see where they fit in that, whether they have the right amount of crazy.
I think a lot of it comes down to what are they even pitching you? I think that's a really good indication. I think that what they're pitching you should be really nuts. Ideally. Then how they pitch it and their own sense of self and humility.
When you can find a really sane person pitching you a really insane idea, that's what you want. That's what I want.
But you obviously don't want the opposite. You obviously don't want a completely insane person pitching you this really boring thing. But if you can find a person, like "you're really fucking sane and logical and I get you, and I get why you're doing this." If they have great answers, and you think "this is a very reasonable person" and you're like, "what you're doing is fucking crazy," then I get excited.
I love that. So we know that you like crazy people and we know they have to be sane people with crazy ideas. Let's go back to the creator economy a little bit. So let's take a step back from the entrepreneur...
Before we do that, I was just saying – you want a good example of that? Literally today –I don't know when you're gonna put this out, but – today is the day that Coinbase is going public. Brian's completely sane, the guy who founded. Like, "yeah, you're completely sane, you're a smart operator. You're a good guy, whatever."
But if you go back to the start of Coinbase, it's "this is fucking crazy. You're going to trade these semi-legal, unlisted, maybe securities, maybe – who knows what this is, where people are buying scarce units of digital hash" – that's nuts. And it's going to be a monster IPO. It was a great insane idea at the time, with a super sane team.
Did you get to pick up any Coinbase?
I have some through the funds I'm invested in personally, but not nowhere near enough. I almost bought a ton of it a few years ago, which obviously would've been good. But that's ok.
We all have those. Maybe not the Coinbase moment, but you probably have a couple of those.
I have definitely missed far many magnitudes more opportunities than I've hit, but I've also had some good ones.
You have. So let's talk about this kind of this creator economy and this distinction between – cause I remember talking to you a couple of weeks ago and we talked a little bit about it. I think that just to draw the connection, a lot of our audience is from Latin America.
One thing that I think is a big challenge in Latin America is the capital base. I have a friend that started an education company called Platzi, where I invested. We were discussing the other day. He said, "Clubhouse could never be built in Latin America. It'll never be built in Latin America." And obviously that pissed off a bunch of people from Latin America, because they're like, "why not? We can, we're inventive, we're creative."
But I think his point was that no investor will take the kind of crazy wild bets. Your approach at looking at this is the exact opposite of a majority. Do you think that's because it's an early stage ecosystem and there just hasn't been one or two Nubank Mercado Libre, there hasn't been enough of those yet? What constitutes an ecosystem where you can have that free thinking like that?
Look, I think, yes. I have some exposure to South America. First of all, it seems like things are going pretty well. Nubank is pretty awesome, you started a great company. There are good companies. I saw the guy from Kaszek that just made the Midas List.
Ah yes, Nico.
There's stuff happening. I think it'll come along.
I think there's basically two – I'm just thinking off the top of my head –probably two factors at play. One is you just: you need enough people, I think, who have been through the ringer and actually know how to build this stuff.
This is the fundamental advantage that San Francisco continues to have. I'm a huge believer in the global markets, the distribution of this, it's going to get more global. But where else are you gonna get such a concentration of people that have actually built this shit and know how to build things? It matters.
And so I think you just need enough people with enough reps, to get better at starting companies. And I think that knowledge does diffuse, but it diffuses slowly. And there is plenty of information on the internet, but there's more, much more locked in people's heads.
You understand the growth teams of the last 10 years in Silicon Valley, they were all trained at Google and Facebook. And the ones at Facebook were trained at Google. It's just like this system, where I think there's a lot of people and a lot of talent that has – you just need time to build.
So it's going to take 20 years or whatever, but eventually you'll have a critical mass of those people. I think that really does move the needle. That's one thing.
The second is: look, there's this wealth effect thing that I think is worth understanding.
If you look at crypto – you mentioned crypto earlier –, what's happened there. There's no question that if you look at a lot of the weird shit that's going on and the experiments being run, especially in the last years, a lot of people made a lot of money on Bitcoin and then Ethereum. They're comfortable with it and they're much more willing to experiment with money than I think you are before you have that effect.
When you're at a startup or start something, there's a lot of hard work, but there's also a huge lottery effect to it. And every time, a bunch of people win the lottery – especially if they're young, they then go out and they're like, "okay, I feel like I understand this industry. I want to invest in what I know. And I have a lot of money, I'm willing to spend what seems like a ton of money on random shit to experiment." And I think that's where a lot of good stuff comes from. There is a wealth effect component that I think matters as well.
So it's both. The buttoned up, you actually need the expertise. And then it just really helps to have a bunch of people running around, like super angels or people who have more freedom effectively, which is where you get back to this whole investing in people thing.
Time and space to experiment and also even invest, or experiment with money and time – it's randomly distributed who gets access to it. But in a world of hyper discontinuous outcomes, it's incredibly valuable.
So the more you're like, "look, you weren't born in a rich family or you didn't have some random windfall exit because you were at the right company at the right time. But I can stake you effectively. If you're super hardworking, whatever else you're going to do, you'll do way better with that money than you'd do without it." I think it's an important thing to keep in mind.
Yeah. I love that. And so let's talk about how you would go about doing that just because it is a foreign concept for most people.
This is fun. We're inventing new term sheets and new approaches.
Yeah, tell me the mechanics of it.
The mechanics effectively are – and they're a little bit different if you're a creator versus an entrepreneur, but more or less what you do is – you can't actually invest in a person. So you basically create either an LLC or a C-Corp, and then you have the person assign effectively all their IP and work to that vehicle for the next 30 years.
People always ask "could it be shorter?" Yes. You can do whatever you want, it's super easy. If you want to do less time, then the capital is more expensive. The more I can holistically be aligned long term...
For this to work and be cheap capital for everyone to be able to access and use, you basically need the Elon Musks or the Jeff Bezos of the world to pay for the millions of people that don't make it. You have to not cap your upside because you can cap your upside and the capital is more expensive for everyone. And so that's the framework.
You set up a company. You fund it. The person can do whatever the hell they want with it. It's their company, there's no limitation. The only rule is that you assign your work, the value of your work, to that entity. And that's how you set it up at a high level.
It's definitely one of those crazy ideas with a very clear thinker attached to it.
What you described in terms of your framework for the people, I think that you fit your own framework, which would make sense? What does this look like? Can you talk about if you have started experimenting with this? Who are the people you're meeting with?
We're in process with several of these. You need some creativity and to have a little crazy to do something that hasn't been done before. And there's a bunch of to figure out around it. But the writings on the walls. ISA (income share agreement) already exists.
I love ISAs directionally. They're pretty rudimentary, the income share agreements where you basically say, "look, rather than paying for your school upfront, pay for it if we make you more money over a certain period." I believe in that very heavily. That's a small percentage of where the world is going, but inches in the right direction.
Historically, people would say "it was a cute idea, but when you go and work in a big law firm or a tech company, they're not going to hire your company. They're gonna hire you." But the nice thing about creators and entrepreneurs is they don't really have that problem.
Most creators have a company or should have a company in front of them if they don't already. And things like that from a liability perspective. So the world is coming to this idea. This is going to happen. The details matter, it needs to be done in a healthy way.
I really think that in the next 10, 15 years from now, it might not be ubiquitous, but it won't be seen as crazy. Let's put it that way.
Yeah. That's how good most good ideas are. They start out with a wild idea. They say it's too extreme and then slowly it becomes more mainstream.
I remember talking to Henrique from Brex, back in the day. And I was like, "this kid is just on another level, the way he thinks. I didn't have any liquidity to invest when he was starting his company, but it would make sense for someone like that, where they're just brilliant and they're going to build something super impressive for you to have a share in the upside. And maybe at that time, they need some liquidity to pursue their crazy idea.
There's also an argument that you want... This already kind of happens a little bit, if you think about how secondaries happen. You're an entrepreneur, you're on some rocket ship. You get some offers to buy the company. Your investors are like "no, don't sell the company. We want this to be enormous!" But you're like, "I have no money. Can I have some money?" And they buy some secondary.
There's a little bit of de-risking, which then allows you to take a bigger risk. It's a way to think about it and be along for a bigger ride. I think this is a different version. It's like selling secondary before you have a company.
I've been thinking a lot about secondaries, because of some founders that haven't had liquidity before. And you worry about them selling too early, just because the upside is enormous. But if you're a founder and you've never had money before, it's tempting to just jump in and cash your chips in, because you've never experienced that before.
Yeah, and I also think, talking about a bigger version of the world and how this stuff works... It's obviously going crazy right now, it's an important moment: take Bitcoin. How many of the people that were in Bitcoin in 2011, or earlier on, actually held Bitcoin all the way through? Not that many, right? Because if one Bitcoin goes from zero to 1,000 and all of a sudden you have a few million dollars in Bitcoin, you're like, "oh my God, I've never had money before. This is amazing. I need it. I want it."
It's a big unlock for people. I don't know the math in this, no one knows what the math is. My bet is that for way too many people, who really were true believers, the numbers got pretty big and it was irresponsible for them to not diversify or de-level to some degree.
Whereas if they had some money already they'd be like, "fuck it. Let it ride." And they would've made 60 times more money or a hundred. And this happens all the time. This is why a big fund that can hold on for long periods of time, end up making such huge amounts of aggregate dollars. That ability to say "okay, I'm secure enough." or "I can keep playing the risk game on things I believe" is one of the key advantages of already having money. Or being safe. At least in America, we don't have that net. People are like, "oh my God, I have something. I need a cash in on it, cause it was dangerous not to."
I think just to frame it real quick, it permits you to just be super long-term right? Real value unlocking happens when you're just playing a different game than everyone.
There's something that I heard from some old guy a long time ago, his family was in the real estate industry: "The more money you have, the longer-term game you play. If you have no money, you're playing for tomorrow. If you have a little bit of money, then you're playing for five years now. If you have more money, maybe you're playing for your retirement."
You keep playing out. His was a real estate family. He's "look, our family, we're playing like a five generation game. We have so much money that we sink in decades or even a century, not a year." And I think that getting people to think longer term is something you can do through UBI, so everyone feels safer, and has more access to money. You could do it through better investment. You do it through what I'm talking about, which is effectively staking people up in their careers. These are all strategies to get people to be longer-term thinkers. Again, in a world of discontinuity, where things aren't guaranteed, I think this seems to be more and more important over time.
I really love this because you're able to bet on the human potential. That's really fun and exciting because people can do amazing things. We've seen it time and time again. And if you give people the opportunity, it's like magic. Imagine what really brilliant people can do that they just haven't had an opportunity to do it.
So I guess that's part of your motivation. You said that you've been thinking about this for 20 years. You're definitely like living in a different parallel universe to me because 20 years ago, this whole concept, I would have never probably even understood it at the time. But where does that come from?
What is the most exciting element to you and why are you deciding that this is going to be something you're going to double down on over the next decade?
At the end of the day, I think that one thing we've historically done for the last 30 years is people systematically underappreciate the impact of the internet. Just systematically. Because it is so crazy and so deep, that it's really hard to think about. And I think this goes into a place of "okay, the human superpower of being able to speak to everyone instantly for free and process all the world's data and remember everything – what does that change about society?" I consider myself a technologist. I program a bit. I am a technologist, but I'm much more interested in the social impacts of technology than I am in technology itself. I don't get that excited about the bits. I'm much more interested in what this mean for the world? And has this changed how we live?
Because we spent literally hundreds, if not a thousand years, building a whole world and social ecostructure, the way we relate to each other, when we do things based on a set of primitives or beliefs about how the physics of the world work. And we just shattered how the physics of the world works.
It changes everything. We do plenty of SaaS, software investing. There's plenty of things we do that are more traditional VC tactical, but the really interesting stuff – and I also think the biggest business opportunity, when you're like, "holy shit, this is fundamentally different."
We've been very active crypto investors. Why? I started crypto investing, I don't know... I was one of those class of 2011-12 people, seated ripple personally. Small check, but still involved in that stuff.
And you're just like "actually, this is crazy. This fundamentally changes the world and challenges a bunch of very core premises about finance and how people store value in the world works and that's worth betting on and that's worth investing time." I think that investing in people fits at that level.
And it's also good because when you see something that most people think is bad, but some smart people think is good, that's a great place to spend your time. We're finally at that point where like most people dislike this idea for one reason or another. But some people think it's a pretty good idea.
So that's where I spend my time, when I can find themes that fit that paradigm. For me, Bitcoin was an obvious example. When I really got serious about that coin, most people thought it was a joke. But some of the smartest people I knew in the world would sit together and be like, "this is definitely not a joke." I'm like, "perfect. I'm in."
Wences Casares, who was an angel investor in my company, he's probably one of those people that you mentioned, of the people in the world that actually held Bitcoin all the way through. I think he's been one of those people. And he sat a bunch of people down, like at a conference and they were moving $250,000 a Bitcoin to different people.
This is what I hear. And that probably was like a wake up moment for a lot of people. The people just haven't had that exposure. And I still have this discussion with my parents about Bitcoin and they're starting to warm up to it when they hear it on the New York Times, the podcast, The Daily, but it's a challenging thing.
I think it's a personal investment decision. If I look at my personal track record, what I've gotten right and what I've gotten wrong, I think the other thing I've pretty consistently done wrong and missed huge opportunities because is when I say something like, "oh my God, I love it. But it's too late." The reality is if you're in the right networks, you version of too late is still dramatically early.
So I think that that's another thing to keep in mind. There are things you are legitimately early to and there are things where... I felt that way about Uber. When Uber was a several hundred-million dollar company, I was like, "I love this. This is like everything I believe in, but my God, it's too late. It's already done." Well, that would've been a great fucking investment at $500 million.
I have the same feeling about Rappi. I remember when that they were raising at a couple hundred-million dollar valuation and it was just "I missed it at this point." But you get that feeling if you're onto the right sector opportunity, usually there's a lot of upside.
You've got a couple of other roles: there's Slow, you've got Fin, but I want to ask you about one of your really important roles, which is your internship that you have. For the listeners there, The information is an amazing resource for a lot of entrepreneurs, investors. It's one of the first examples of incredibly good journalism in a specific sector like tech.
I just wanted to hear, you've got this kind of pension for writing. How did that all come about and how did you get hired as the intern?
Simple answer on the hiring: my wife founded this publication called The Information. She was a veteran Wall Street Journal reporter, covering tech. I would argue probably one of the best in terms of track record of breaking news.
It was 2012-13 and she was like "look, I really believe in the subscription model. I think people like high-value subscriptions. In the future, if you value information, you should pay for it. So I'm just going to go and start a publication with a few people that's super high end. They're people who actually value truth and reality, we're all going to go break a bunch of news no one else is going to have, and people will pay us for it." And when she launched it, literally, there were articles written, making fun of her, as if she was some sort of joke, saying this is like a ridiculous thing.
This was in an era when no one was doing subscriptions. Everyone had been convinced by Google to just make everything free on the internet and monetize ads. And so this was completely counter-intuitive. It goes in the category. When everyone thinks you're wrong, except for a few smart people, that's a great thing to go do.
So she did that. And a bunch of years later, it's a great business. She owns the whole thing. She's built it from scratch because of that. There's no conflict. It's her thing. And they have, I would argue, probably the highest quality subscriber base in tech and finance out there. And it's just what they care about, it's the people who really care about this stuff who read.
My internship, it turns out, if your wife runs a publication, you can get the internship. And I'm the only one who's not a reporter. I just write opinion pieces or columns for them, which they're now expanding. I'm not the only columnist, but it's just my thoughts in the world, what's interesting to me. I love doing it. For me it's easy to bullshit when you're talking, and yada yada yada your way through anything.
The reason I write is the discipline. If I'm going to say something, in clack and white, which I can't change later... It's just what I'm saying, and I'm going to do it, I'm trying to communicate it clearly. And by the way, I'm gonna be held accountable because the people who are gonna read or have access to it, I care about what they think of me.
It's like a rigor thing. It's kinda like exercise more than anything else. I'm glad some people enjoy what I write, but I really write this for myself. I actually want to think about a problem. It's gotta be in a format that's readable and not bullshitable. And then it also has to be in front of an audience I care about.
Brian Requarth: It's a high-caliber audience you have. The expectation is pretty high. If you think of the people that read The Information.
I'm wrong all the time. But the key is that it's okay if you're wrong, as long as you're wrong logically.
That's a good point. That's a good point. And it also stimulates debate and you get people commenting on it and then you get to a better position, maybe.
And I learn so much. When I put things out and I'm very wrong, that's when I learned the most. I put it out there and in return I get educated.
That's great. Let's transition to the last piece here. Tell us a little about what you're building with Fin. What's the thesis behind it and share with the audience so they know, because I think it's a super cool business and concept.
I started Fin when I left Facebook, with my co-founder Andrew Kortina, who founded Venmo. I was Venmo's first investor, we go way back and we wanted to work on a project together.
So we basically just did a second-time entrepreneur thing: we're going to raise a bunch of money and we're going to go experiment with stuff in human-in-the-loop we're really interested in. We kinda think AI is bullshit. But we don't think that human-in-the-loop, meaning using software and light machine learning, etc, to augment human knowledge work is the future.
A bunch of years later, that's now standard at the time everyone thought that we were six months away from self-driving cars. It's just clearly bullshit. So we went out and did a bunch of experimentation and the thing we kept figuring out in the experiments we were doing, in the system that we built is that: if you come from a pure software world, you're used to scientifically optimizing systems. You have instrumentation on everything.
So when you want to improve a system, all right, what's broken? What's the slowest query? Let's go fix it. Let's make sure it was fixed, etc. The second you put humans into a system, customer service, operations lawyers, you name it… you've no fucking idea of what's going on. Because you have a process. Was the process of running properly? That was slow. Why? There's this huge data gap around the – actually ironically – most expensive thing in the whole company, which is the people.
So we basically built, sitting on top of the browser, an instrumentation framework where we can measure by person by task every single thing a person does to solve a case, to fix a problem, to do their job. And then we use that data to help companies optimize people processing tools.
We help them say: where are your workflows bad? Where could you improve it? What tools are broken that need fixing? What people need coaching on what things? That's how we approached it.
On one hand, this is not rocket science. This is how you improve. This is time and motion studies. This is six Sigma. This has been done forever. And this is the way you improve things scientifically. On the other hand, it's pretty cool when you can do it from a big data approach. If you sit there with a stopwatch, which is shockingly the state-of-the-art in a lot of places, you're like: how do you do this thing? Can I help you make it faster? How does Bob over there do it? Because we learn something about him. Like people do it manually, and it's mind blowing, because it's super imprecise and very hard to actually measure and optimize.
What we do is super easy. Let's build an enormous dataset of how everyone's doing everything. And then let's be really smart about how we use that data to help organizations perform better. And so that's what it has become then.
What's the most popular use case of the product? There's a lot that goes in, mapping all of the things that you could possibly...
The process is a really cool secret weapon though, because it standardizes so many interfaces. And the more you believe the browser... the answer is we're very far along. We have some really awesome marquee customers, who have tens of thousands of seats with us and are running us continuously. We help them optimize customer service, operations, things like that.
The big picture is: what do you have to believe? It's simple. If you instrument things, you can improve them. No one's going to disagree with that. And in the future – 5, 10, 15 years in the future –, if you go and you're doing a knowledge job – anything when you're in front of a computer, your job is to do some sort of process in front of the computer or do stuff, whether it's email, I don't care what it is –, you will not want to work at a company that doesn't instrument your work and give you continuous feedback and isn't using that data to improve it.
Right now, you're like, "oh my God, that sounds like big brother. I would never want that." Bullshit. In the future it is going to be the opposite: "I don't get continuous feedback. You're not going to tell me how to improve specifically. My tools suck because you won't understand my process. I don't want to work here. That sounds terrible. I want to be focused on being the best at my job and having the best software in schools. And if you can't provide that, then I don't want to play." So I think that's going to be a complete inversion.
Love that. Let's just finish up here. I have one last question for you: how do you manage all of that? You're breeding horses on the internet to building a crazy product that's gonna create massive efficiency in these companies, to a venture fund, and then you're investing in creators. I'm actually just curious because I have trouble staying afloat with my podcast and my angel investing and everything else. So what is your secret here?
Partners is the easy answer. I think the key is to know what you're good at and then do a lot of it. And then just work with great people. That means low ego. That means not everything is yours. You bring people around the table, you try to work in communities, you focus on where the value is. But like my busy view is yeah, I like doing lots of stuff. And I believe that things intersect in interesting ways. And I learned through that intersection.
But at this point, Fin has an amazing CEO. It's not me. I helped found the company, but I'm not the CTO. Slow ventures, there's three of us that are GPS. Two great partners. They cover a lot. The Information is not mine, I'm just the intern. So my kind of trade in life is I get to do more and cross pollinate. But the thing I don't get as a result is I'm not the go-to guy of anything. I prefer it that way. I think that's overvalued. Not by everyone. You need great leaders and I think it's amazing that people do that, but that's the trade, right?
I like it. If you're honest with yourself in that. You strike me as someone who is just too curious to... you're always just picking it, looking at things.
And I think that fits your personality in terms of your thirst for information. I think that's a smart way to manage that. You've got a team, you've got people you work with, and you can all support each other and it allows you to play in different spaces.
I think that's great and community is important. That's one thing that I've really focused on at Latitud and that's what we're building. Trying to build a community for everyone to elevate each other. That's part of the kind of ethos of what I'm building. So man, thanks a lot for the chat. I think this was a really fun one.