How to Invent and Invest In the Future with Josh Wolfe

0:00the cheaper your electricity the more power you have you can desalinate water you could have abundant water you could have abundant crops in agriculture but it all starts with how do we get clean abundant energy and to me the answer is elemental power formerly known as nuclear [Music] thank you so much for uh for taking the time um so so excited to get to have this conversation um and a lot i want to cover with you but you know i thought maybe we could just start uh really with like this idea of your map of reality um you're a really interesting guy really interesting thinker investor you do so many

0:37different things and one of the things i like to just start out with is kind of establish what is someone's map of reality like what has created that for you what has set your map of reality so maybe we just start there you know like as you think of your own map of reality as you look at the world what have been some of the kind of key moments or key points in your life that that help to form that some of this is post-facto so you know staying intellectually honest right the the things that were informing me 20 years ago or 15 years ago or 10 years

1:11ago at the time i might have prescribed or described something different i have always been competitive the competitive nature has uh has always been i think born in one part confidence and one part in security the confidence at times was i would see other people who either had more materially or stability so you know people that came from like a nuclear family or people that had wealth or people that traveled to fancy places or people that had cars and things that i materially did not have and i would look at them and say wait a second they're not smart or they're not smarter than me and

1:45so competitively believing in a system that was meritocratic um you know that i should that the smartest people should succeed or do better that you should get more points you get higher grades that kind of stuff so i think i think part of me has always been hyper competitive in being confident that relative to certain other people i felt i was more intelligent and so i had a sort of chip on my shoulder from that and just not being born into wealth and then the other piece of that which is sort of a toxic combination if in the wrong hands and i think a productive one

2:20if in the right hands is you need confidence to be able to believe in yourself and go and do something and persuade other people you know that you can go do something but you also need insecurity and so there's a ton of stuff that i was insecure about whether i was short or familiar situation or not having money like those same things that i was confident about intrinsic ability relative to other people i was also insecure about and so that to me was one blueprint that just sort of motivated me now in terms of like map of reality you know i don't know the first 20 years

2:51of your life more or less you're being indoctrinated by everything that you're learning and then i think it was probably around 13 that i questioned uh you know i basically took my bromance prominent money and ran i was raised jewish but i'm atheist and none of that stuff made sense that gave me the confidence to basically just start questioning authority of all kind and i was never a kid that was like questioning legal authority or getting into trouble but just i would look at things and say why is that the way that it is and uh and just sort of questioned everything today's episode is brought to you by

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6:27a chesterton fence like sometimes something is there for a good logical reason you just don't know that reason but many times things are there just for ridiculous reasons and i'm always fond of the story of tradition where a guy and a girl are dating they end up getting married years go by every time thanksgiving comes she cuts the two ends off the turkey and he comes to her and says why does why do you do that she says well my mother did it and it was tradition and her mother before her well next year you know he gets to meet the parents and he asks the mother why did you do that she

6:59says was because of tradition you know what and then the grandmother the next year and then the great grandmother miraculously still alive and then she is queried why did you do why do you guys do this right and she's just matter-of-factly says it wouldn't fit in the pan and so something that once made sense you know three generations ago for like an arbitrary or very specific reason then just gets passed down for tradition just like in religion you have you know kosher laws and eating shibboleths and all these kinds of things that you know today that back then would have saved you from trichonosis and today make no

7:30sense so i started just questioning things which i think for me was then an embrace of science because science is not you know contra religion other than being contra dogma but a scientific world view is basically trying to come up with better explanations and at best they can be tentatively held until a better explanation yet further comes along and so part of that is a is that similar mix right of arrogance that you can know better than the other people but also this humility that somebody else is going to come and disprove that and so um that has always been sort of a pursuit and then that led me

8:07that one is so interesting sorry to sorry to interrupt you that one is such an interesting one that i think about a lot because there are things in every era of history that are scientific truths quote unquote or truths societal truths maybe more so than scientific truths but scientific as well like if you think back to you know galileo or copernicus being ostracized like there are things that um we are hilariously wrong about in every point in in history and so i often think about that i had a discussion i think recently with tim urban from the wait but why writer who's amazing about this exact

8:43thing of like what are we hilariously wrong about today that we're ostracizing people that are saying the other side of um but it's interest the way you frame it and the way you talked about that of um constantly adapting constantly changing and you know kind of thinking like what are those things uh in real time and being you know having the humility around it in real time is a is a really interesting pursuit but remember just like being an election it is not just humility it's also arrogance right it's arrogance to say like those people are idiots like i can't believe that they believe that thing

9:17like there has to be you know better and so you know i posted something on twitter uh of past few days that i was just like absolutely obsessed with and it was one of these things like my god you know we're i don't know you know [Music] many millennia into humanity and we don't understand why we dream i mean endless fictions have been written about it beautiful prose wonderful movies um incredible art uh you know lots of scientific speculations and there's like five main theories but there's this fascinating paper that basically came from observing deep neural nets and saying wait a second these deep neural nets that train on a narrow

9:54segment you know like looking at a picture of a cat all day have a problem generalizing because they just narrowly train on that one thing and so researchers end up introducing noise purposefully intentionally into the training set so that they can generalize and then this researcher was basically hypothesizing well what if that's the evolutionary purpose of dreaming you are receiving stimulus all day from your senses you store that as memories and if you narrowly learned what you just experienced then you would be less adaptive than somebody that had noise injected and so what a just you know amazing hypothesis i mean obviously you know it's still sort of a rudyard

10:33kipling just so story but um yeah so i'm i'm constantly just sort of insatiably curious about pretty much everything which is you know a manifestation of lux itself is looking at all of these different disparate fields post facto we can often find this you know nice connective narrative thread but it's what i call randomness and optionality so randomness and optionality is another so you know this mix of being insecure and being intellectually arrogant and then this idea of randomness and optionality is absolutely part of the sort of map of reality which is again a mix of humility and confidence that i have no idea like what the next

11:13thing that i'm going to receive from somebody that's going to you know spark some intrigue or interest what random person i will bump into i always loved an excerpt from the david geffen book the operator where he's talking about a met erdogan who was sort of his mentor and he's walking uh in his office and he says david sit down and they sit down from a you know across from each other and then ahmet just starts to walk very slowly to geffen and he repeats this like three or four times and kevin's like what are you doing and he's like i'm trying to saliently make a point to you

11:45that you should walk slow because you never know who you will bump into that will change your life and like the history of david geffen's life was like meeting all of these incredible artists but many of those things post facto you know we're totally random this is the same thing for us in in venture capital and entrepreneurs you never know well i met i mean it's the uh i i call it engineered serendipity but that same concept of like uh engineering environments and situations where lucky things quote unquote lucky things can happen and like in that case you know it's walking slowly because you never know who you're going to bump into

12:18but there's you know a thousand ways that you can do that like rather than sitting on the couch at home one night go out and you know go to the event that you were not gonna go to and you might meet five people and maybe you end up talking about something with one of them that changes your life you don't know and you wouldn't know if you didn't go into it um the dream thing you said is fascinating so the dream state uh hypothesis i think is so fascinating because more broadly it just makes sense right that like it's sort of the whole idea of like taleb's

12:48idea of anti-fragility uh you like inject chaos like if humans are kind of pro-entropic uh you know in our ability to benefit from chaos like that injection of chaos in the form of noise uh intellectual noise whatever it might be is beneficial to your ability to adapt and become more adaptable during your waking state it's such an interesting theory of uh yeah i mean that's why we do that the person that is walking on constant straight you know um unfettered ground is at a disadvantage from the person who's walking you know on cracks and uneven you know surfaces and and so you've injected some randomness in you

13:23know a path instead of just walking on a city street you know if you can find the quote unquote off the beaten path then you will arguably be neuromuscularly more adaptive when you encounter that kind of you know surprise and so yes the same thing intellectually uh where uh you know if you're narrowly training on one thing and then you wake up the next day and the brain has uh again maybe it's engineered serendipity but uh has injected noise it would make sense that biologically that was actually uh adaptive for organisms that could do that whereas the ones that didn't have that you know just narrowly trained and then there was

13:58an outlier stimulus or situation in the real world those people perished so um provocative hypothesis they they they the guy calls it it's eric hoel he calls it the overfitting brain hypothesis which is um uh in data science and machine learning or statistics just the phenomenon of overfitting to a data series and um hewing too perfectly to it i think about it a lot in the context of like i write about and think about cognitive biases a lot i know it's something that you think about i've seen you write about it in different investor letters in the past um and i think about it in the context of

14:32like context switching over millennia or over hundreds of years because you know a lot of the cognitive biases that we have today that we bemoan were evolutionarily highly effective like i think about fundamental attribution error as a big one like we we cut ourselves a break and hold others to the fire that was probably a good thing that kept you alive like if someone did something that was kind of an move and then you were like hey you're an i'm never going to talk to you again or go near you or and just completely avoid you probably kept you alive in certain instances because maybe on the off chance that person was

15:07thinking about killing you you would have avoided them and now in a workplace if someone does something like that and you act that way it's actually not a great thing to do on the first instance and so i you know i often think about it because several of the you know a lot of the cognitive biases we have were evolutionarily quite effective in a different era and now will hold you back from you know achieving things or uh getting different places meeting people maybe you you know you kind of slow down your progress in a lot of ways and so that context switching and being able to adapt over

15:39shorter periods of time than our evolutionary uh you know ability to adapt works is actually quite interesting well that is that is correct and everything from you know fear in our ancestral environment to fear today you know the things that the stress in our ancestral environment stress today you know there's a wonderful book um you may have read but robert zepolsky why zebras don't get ulcers and the basic premise of sapolsky was really a primatologist was studying the stress response and the hormone response in chimpanzees and bonobos and ultimate humans and uh we get stressed about you know i've got this deadline i have to write this you know i got to record this

16:15podcast i've got this company that might be failing uh you know i'm gonna lose this deal to a competitor whatever it is like those modern stresses like our ancestors would have been like wait you're freaking out about what like i don't have food or my god like a tiger is chasing me or lion is chasing me and many of those things that kahneman has um uh cataloged and you know colloquially we know is like type 1 or type 2 errors and you know you think about if you heard as led zeppelin would have said you know bustle in your hedgerow you know it was adaptive to get alarmed now right and

16:50not to sit and think and ponder and be reflective because if you sat and thought when there was a bustle in the bushes you got eaten by the tiger and so uh yeah you know the things that you were talking about too about uh you know if somebody cheated you in our ancestral environment uh you know you go to like a dunbar's number of i don't know 150 people you had a smaller group of people and so it was more effective to punish a cheater and they would be publicly ostracized you know from a small group today you know a cheater can go and just you know

17:21find a different tribe the mobility is much greater it's not as effective similarly evolutionarily like you know bludgeoning somebody if they you know uh went after your mate was effective you know we have this new invention called civilization you know with societies and laws that are meant to uh bring out you know the better angels of our nature and suppress the sort of innate savageness that we have yeah absolutely absolutely so much to unpack there too um i do want to go back to something you said at the very beginning um one of the quotes that i think i've seen you tweet about write about in the past and say is this idea

17:56of like chips on shoulders put chips in pockets and you talked about it at the very beginning how growing up you had this chip on your shoulder whether it was about you know being short or not coming from money or whatever it was you kind of used that and you used that insecurity as fuel to motivate you to go and build did that play out like as you go went to start lux which i i want to talk about and you know what you've built today uh did that continue to play out in your life because at that point you had clearly achieved quite a bit you know

18:29you had gone to school you had started to you know have the early signs of being a successful person quote unquote did you feel that same energy and that same insecurity when you were starting and building lux in the early years yes and and by the way uh you know we've achieved a lot more success i've made a lot more money i my reputation has grown and i still have that same insecurity and drive and so uh this is something by the way that i feel very strongly about that society benefits from everybody being plagued by these kinds of things because it leads to human progress and

19:04you know woe to the bay area you know uh adherent to mindfulness and meditation you know to find calm and peace like we don't get peace from progress you need tons of disaffected individuals that are like super bitter with something to prove and so it's good for the individual it's not good for society to find you know your breath and meditate and be peaceful and be stoic um one of the big chips for me was broken family my parents split when i was two and a half my father was sort of the inverse of everything that i as a husband and father saw to be i wanted a big nuclear

19:41family i was an only child my mother and i moved in with my grandparents in coney island brooklyn my grandma was a meter maid and my grandpa was a um a night delivery man for the daily news my mother was a public school teacher teaching special ed and so the uh four of us lived in a you know one and a half i mean two-bedroom uh uh apartment with one bathroom and i you know it was it was a loud household everybody's screaming and yelling at each other there was a lot of debate a lot of um just uh but also very high expectations for me to do well and i was that was

20:13probably the luckiest thing in my life is i had a mother and a grandmother in particular who just absolutely smothered me with love and had very high expectations but i grew up very bitter and envious of other people around me i grew up bitter of people that had nuclear families i resented the absence of my dad um and so yeah i mean one of the proudest moments i would later sort of rekindle a relationship with my father that is a little bit to this day just antiseptic and cold and controlled by my choosing but i remember he telling me that he had met somebody and that person was

20:45like oh are you joshua's dad you know and that reframing of his identity relative to mine was like such a a win for me um and so yeah that that idea of chips on shoulders put chips and pockets i could see very early on like my highest performing peers my the people that i admire the most even the most famous people like when you look at you know larry ellison steve jobs elon musk oprah like they all came from backgrounds you really wouldn't want to wish on like your worst enemy like we celebrate these people in part because of their successes but their actual process versus those outcomes

21:21you know i mean oprah was raped lost a brother to aids like just horrific most of the others were adopted uh or had abusive you know parents that they were trying to escape um and so if you are you know the only minority kid in a mostly homogeneous white neighborhood if you are the obese you know kid in a friday night lights you know texas town um if you are you know the gay kid in a in a mostly religious you know community whatever it is where you feel like ostracized that is real physical not just psychological but physical pain and either you get fortunate that you

21:58find a mentor or somebody that is an escape valve or a group of people that might be similar disaffected uh similarly disaffected or you know they're sort of misfits and outcasts and that oftentimes give people the permission to continue to be these outsiders and embrace that identity sometimes you know it goes deviant and really negative and sometimes it has this fuel that i just have found in those people it never gets put out and that fuel is basically i'll show them it is looking at the people that are in the masses or the mainstream or the popular kids and basically just saying like i will show them it's it's it started you know

22:36i mean it started forever ago but in modern times it was steve jobs and bill gates it was the revenge of the nerds you know it was the rise of the technology guy as a uh as a hero and and i always think like the underdog is always the most interesting to root for i mean literally like i'm a new yorker through and through right like i joke like new york for life is like tatted on my on my stomach and i love the nets and i like the knicks and i'll root for all the teams but like you bring me to a game whoever is the

23:09underdog in every situation is who i'm rooting for and so it's the same thing like i love the the odds of the entrepreneur who just it's it's completely improbable the incumbent has all the resources they got all their reputation they got all the attention they got the best people and then somebody comes along and is like this thing sucks i'm gonna do it a better way which is arrogance of the highest order and i want to root for her him that's doing that and so i just love that ethos and i have found that those people no matter how much money they make no matter how much reputation they

23:40get that fire never goes away and and sometimes they lead productive lives and have good families it's what i hope i'm doing and other times you know society like i mean look at steve jobs i used to have this debate with one of my best friends like steve jobs is celebrated by all of these strangers but hated by the people that loved that were supposed to you know he was supposed to love the most and so there's these weird paradoxes in that um and i want to be loved by the people you know that i love the most um but i'm also you know petty and vainglorious and jealous and

24:13competitively motivated and i want to be celebrated by other people reputationally you're a human all of those things that you just said i mean so what actually motivates you you know you mentioned you're an atheist um i'm always deeply fascinated by people that are uh incredibly high achievers uh you know hard-working driven um post-economic in a lot of ways right like you don't need more money i mean you could i don't i don't know how much money you've made but i'm sure you could go live out the rest of your life and be fine um on a on a global scale for sure um so what motivates you on a daily

24:49basis like is it continuing to prove people wrong and go build the most amazing you know investment franchise in the world like what is it that actually gets you out of bed and gets you energized so materially it's interesting because i've never been into cars i've never been into watches i've never been to boats or houses money matters because it gives you freedom and so you know probably for me you know just being able to go wherever you want wherever you you know whenever you want and um and and and provide for your family in a significant way there's a paradox of that is which is you want

25:22your kids to have the same sort of grit and scrappiness and i i don't know right people ask like how are you i don't know if we're doing it right um there are people that lie to their kids about money there are people that are straightforward about it we've generally been very honest about a lot with our kids lauren and i don't always agree on on on that but you know we talk about death and sex and money and um and so anyway the things that that drive me are more ideas and so i'm very intellectually competitive when i find somebody else that like knows something

25:52that i don't know i either want to be that person's partner or i want to beat them and so it's a little bit psychotic but i just psychotically competitive in anything like you play chess you know we race we play basketball like whatever it is like i want to beat you and and or i want to respect you because i admire like there's no way i can beat you and so i i really like just people that are driven by excellence and competitiveness um here we don't play to play like we're not doing this for charity the the scoreboard here is results for our lps but we are playing

26:28to win and so playing to win means that we are the partner of choice beating out another firm to lead a company's round it means um that you know we have a target to recruit a particular woman as ceo and we land her uh you know to get this particular board member to join to win a particular deal to open a door whatever it is like you know you're basically trying to fight somebody from saying no to you and so you know being being influential to me is a is a driver being able to pick up the phone and access somebody and make a call and and and for them to

27:04say yes um and then the most important for me which didn't exist when i was younger because i didn't have them and didn't know i could intellectualize all i want but it's my kids and i want them to be proud of me i see the antithesis i see people whose parents are financially successful and the kids resent them want nothing to do with them don't want to follow in their footsteps it is just like utter pride and joy when um you know our kids are like you know i mean i'll give you an example in my middle was like so we got two girls and a son and my middle was like that i want

27:38to do what you do because she's very stem oriented good time on task totally into engineering she's like you know i love biology and robotics and we make stuff on 3d printers and uh and then a few weeks ago she actually came to me she said you know dad i i thought i wanted to do what you did but um you know i was talking to mom and it took you almost 20 years to make 4 billion i'm like no no i didn't make four billion dollars we managed four billion and she's like but it only took mom like two and a half or three years

28:06to make three billion i'm like no no she okay she learned about leverage yeah so so she she thinks mom's more successful right now and and so she wants to do what mom's doing but um but just making the kids proud um i love and it's actually a lens that i look through when we fund companies is this something that is going to make the history books is this something that somebody's going to look at and be like my dad funded that my dad put that guy or girl in business like that to me feels just super meaningful so you know the three things you could

28:38really make you can make money and that can lead to gratifying things if you spend it wisely whether it's philanthropic i started a school in coney island where i came from driven by some personal principles wanting to root for the underdog and make them competitive against the kids that were born in greenwich connecticut with a leg up wow and you can make money you can make meaning and you can make memories and the memories piece for my kid is you know adds to the second one which is meaning and then funding people that are literally inventing the future and coming up with the craziest that you can imagine is super meaningful

29:11so i want to get into that last point because you guys are doing something so ambitious i mean as an investment fund doing something that just looks so different and ambitious relative to most i mean when i think of venture capital and i assume most people that are listening to this when they think of venture capital they think of people like you know funding software companies and and sort of like you know when you think of atoms and bits funding the bits um all of these you know technology startups etc when you look at the lux portfolio you see this unbelievable array of like seemingly ridiculous things uh you know

29:48like a sale drone like a massive drone sailboat uh all of these incredible space related companies i mean it is truly remarkable i would highly recommend people go check out luxcapital.com and go to the companies tab and just go tick through it but it is this amazing physical infrastructure big swing unbelievable things in the atoms world what inspired that focus has it been a deliberate focus and what is getting you most excited to be investing in the world of atoms so historically it started with that same competitive spirit looking what everybody else was looking at and when we started lux it was coming off of the last

30:29well you know 20 years ago now um dot com boom bust which was you know opticalnetworking.com and um nobody was really physically funding the physical and material sciences so i was like look the two areas that actually 20 years ago intrigued me the most were artificial intelligence and then conception this was pre-cuda pre-nvidia pre-gpus pre-deep neural nets pre anything that would you know lead to insights for novel researchers on dreaming and and nanotech and nanotech was interesting because that was my first purview of really being able to delineate between the doers and the bluffers there was a whole cohort of people in nanotech that were like these sci-fi fringe people these

31:13extropians and um i mean they just like the stuff that they were talking about was like out of science fiction but it just didn't obey the laws of physics but at the same meetings you would have people who were like nobel prize winner rick smalley from rice university who discovered the bucky ball the fullerene carbon nanotubes and these people were just like way more scientifically credible and what was interesting at the time back then was they were chemists material scientists physicists biologists and they started to rename what they were doing nanotech because it was getting money from the government and so i remember writing this piece a little bit

31:48cynically for forbes again almost 20 years ago that you know a nano rose by any other name still arose but that became the nomenclature and it led us into this field where there's these incredible serious scientists distinct from the bs people that are like speculating about the future which are important and they were actually at the same meeting but you don't want to fund these people and you do want to fund these when these people were at the intersection of disciplines they were computer scientists that were doing uh in silico modeling so using a computer to model new materials so that you could actually then produce it you

32:20know on a on a on a wet bench and then during that process interestingly i met a guy larry bach and larry had a tremendous impact and it's like one of these things like i don't know like if there was a different person that i would have met that that um you know could have shaped me i can't run the counter factual but larry was a serial entrepreneur he was employee number 50 at genentech he mostly focused on biotech through most of his career but then ended up founding a company called illumina which we now know is the prominent gene sequencer illumina was not focused on gene sequencing when they

32:54first started they were doing like chemical sensing and other kind of random stuff that was the intersection of like microfluidics that were based on a microchip and biotech and and then ultimately genetics and that synthesis at the intersection of disciplines was something that larry was interested in because other people weren't and so larry had founded this company nanosis and uh he had gone to all these universities and government labs he had unlicensed intellectual property from mit harvard berkeley and elsewhere and he and i were both on the circuit speaking at the same conferences and he was super credible as people would later describe him he was this mensch on a

33:32mission he was probably 10 or 12 years older than me maybe maybe a bit more and i just admired him and then i met his family and i saw how he lived and this was a guy who had made hundreds of millions of dollars and had founded 17 companies from scratch taken 14 of them public cumulative market cap over 50 billion dollars illumina pharmacopia uh ida and athena neurocrine just incredible and had the credibility and he was a complete prankster and and jokester and just like had the best sense of humor in the world wife and two daughters um and i just admired the way that they lived it was

34:08humble like you'd meet him you'd be like this guy made that amount of money and did all these things it was just a wonderful character huge inspiration for us at lux in doing company creation and looking where other people weren't looking and so larry gave us a little bit of gravitas and credibility because people had no idea who we were um when we went out to fundraise i always joke that we went after friends and family money and you know we had a reasonable amount of family and a bunch of friends none of them had any money i went and met a guy bill conway and bill

34:35was one of the three founders the carlyle group and it was luckiest day of my life and again don't know the circumstances of his proceeding 24 hours whatever influenced him you know good meal good news whatever meet him and he's like i hope you make a billion and you know to this day he is our patron saying i just saw him here at lux last week he's just an absolutely incredible guy he really invested the money he was like the chief investment officer for carlisle dave rubenstein the more famous one who raised all the money and bill asked us the two most important questions why should you exist why does

35:04the world need an incremental venture fund and what's going to be your competitive advantage and and we spent a lot of time thinking about that ended up you know building the firm really based on answering those questions and in that process met this other guy larry bach that i was just describing and those two men just played an absolutely critical role and and both uh larry sadly maybe seven years ago passed away uh from cancer but both i think of every day i i literally think again i'm not a religious but in the same way that people say like what would jesus do like i think what would

35:34bill do and he's a deeply religious guy and his ethics and morals in it never mattered what the deal doc said like he just he did the right thing and i've never met anybody that has not said like bill what an incredible guy same thing for larry i've never met anybody that was like that guy's an everybody thought this was a guy that was a mensch on a mission um i don't have that personality innate because i'm competitive or because i you know have this these insecurities with the chip on my shoulder like there are a lot of people that are like that guy sucks like i hate him uh and thankfully

36:05i've got a partnership that is more you know balancing for me but but i just admired both of them immensely and um and that's what set us on this on this path to go after some of these crazy areas that nobody else was and and to have the conviction that you know funding these crazy scientists that had real work that other people weren't looking at if we were right could be really successful if you're anything like me your portfolio is a mix of the usual suspects stocks bonds and mutual funds maybe you've even dabbled in some alternative assets like crypto but those investments can be incredibly

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38:51listeners a free sample pack with any order that's 8 single serving packets free with any element order it's a great way to try all eight flavors or share element with a salty friend get yours at drinkelement.com happens this deal is only available through my link you must go to drink l m n t dot com slash happens to take advantage of this special offer try element you won't regret it well for what it's worth i have never heard anyone say anything but glowing things about you so i i i i can give you one piece i haven't talked to elon musk he might not like you uh but uh but

39:33other than him i've never heard anyone say a negative thing about you um and no i mean i think i have learned an immense amount from you from just being around you a little bit and reading your work so i i thank you on behalf of of everyone who has had a similar experience to me um you know one of the things that i've seen jump out recently from your work you know as an extension of what we were just talking about and some of your big bold bets for the future is this whole idea of nuclear energy and the future and where energy creation is

40:04going and you hit on something that isn't is a really uh good lead-in to that point which was the nanotechnology point where you kind of talked about how it became a branding thing like nano became this positive branding thing that all of a sudden accelerated uh capital coming into that space and i think about it now in the context of what you've been referring to as elemental energy elemental power uh and this rebranding that needs to take place around nuclear so can we talk a little bit about that and what is getting you excited about that space and the potential for a rebrand to accelerate it

40:39you know this goes back credit to um two two guys mark mills and peter huber they wrote a book called bottomless well and mark is a friend peterson's past peter was a polymath i mean just brilliant um lawyer scientist engineer i mean super like rare individual not a lot of people like this exist today mark uh lives on and and just came out with a new book i think all the crowd wrote cloud revolution but they wrote this book i want to say 0.607 or thereabouts maybe 08. um and the bottomless well and it was at a time when oil prices were rising and they were basically making this point that um

41:15energy was abundant and uh and it was and also at a time when al gore's movie had come out and everybody was talking about you know climate change and that we need to get off fossil fuels and they were sort of taking the julian simon uh paul ehrlich bet and they were taking the simon end of that and as you know and others know you know the basic bet here was that there is one inexhaustible resource and that is human ingenuity and that in the presence of problems people and more so than ever today because we're interconnected and we can have both adversarial collaborations and we can

41:45amplify good ideas and suppress bad ones particularly in institutions that support that construct like science um that that you had this bottomless well uh and that people would figure it out and when they looked at the physics of energy density you know you had lots of famous people that were talking about building fields of fuel where you would have biofuels you know to replace um fossil fuels in liquid fuels you had people that were talking about um uh solar you know having large farms of solar energy but the the densest form of energy just looking at the simple physics of this was nuclear and so i got

42:21enamored with nuclear in part because this was the signal where everybody else was talking about you know solar wind biofuels ethanol batteries electric cars which mattered but the the thing that i heard sort of like the sherlock holmes you know the curious incident and the dog in the night the thing that nobody else heard was uh was nuclear and so the absence of people talking about it you know john doerr was giving his famous ted speeches vinod khosla was writing op-eds and these were like famous venture capitalists uh garnishing you know huge amounts of money behind their reputation and none were talking about nuclear so then i i dug in and i started looking

42:56at every part of the fuel cycle we started with uranium miners mostly we found were hucksters and fraudsters in new mexico and nevada we then looked at modular reactors great idea for society i mean instead of a gigawatt power plant that might cost you a billion dollars to serve a million people you could have you know 30 30 megawatt plants uh each you know smaller and built out and we already have modular reactors there's 104 navy nuclear subs that are going around with with small modular navy nuclear reactors then we decided that that was not going to make sense because it was going to take too much money too much regulatory

43:28risk you had this weird chicken in the egg problem that in order to get the nrc the nuclear regulatory commission to actually say yes to a reactor you need to have a sponsor but to get a sponsor you needed pretty high assurance that the regulatory commission was actually going to say yes so we thought that's probably best for sovereigns or billionaires but um you know you got all these existing reactors then we said what about the waste everybody's complaining about the waste and that is another prime you know going to your sort of models of reality like i look around all the time and i listen very carefully for

43:56like what sucks what is the thing that people are complaining about and uh and people were complaining about um about what you do with the waste and it turns out that there's two kinds of waste there's um uh low-level waste which is uh inside of the nuclear power plants and there's 104 domestic reactors just like our nuclear subfleet and there's 440 globally and then there's all this pre and post cold war bomb making waste from uh uh places like hanford savannah river idaho national labs in the u.s cellar field in the uk lahog italy as well and so i ended up looking around for a high-tech

44:34company to fund couldn't find one we ended up creating one from scratch we named it carry on after madame curie in licensed intellectual property from universities to some government labs and then hired a team amazingly there was this massive labor arbitrage in nuclear everybody was like over 60 and not entrepreneurial at all and the super young smart people all went to d shaw and you know two sigma and renaissance and the quan chops i was able to field the team that was under 60 but in fairness they were like 56-57 they were not you know that that young it was close and uh we we put a total of

45:05three million dollars of invested capital a million and a half from the fund a million i have from a few of our lps in a fund that was um a hundred million dollar fund it was our second venture fund uh we also took founder stock because we uh conceived of this it was a brain fart here in our new york office and uh you know hired the first 20 people populated the board the advisors and licensed the technology did all the company building work and then you know things were going good it would have been a great business but then all of a sudden march 11 2011 you know just uh 11

45:34years ago earthquake tsunami fukushima disaster like three weeks later i'm on the upper west side of manhattan and uh the ceos like i'm flying to tokyo their the tepco government uh japanese government and tepco which is the authority overseeing the fukushima disaster saw our technology and um and wants to buy it and anyway we end up going from a million in revenue to 40 80 120 160 uh 40 million of a dollar we sold that for 10 times ebitda to uh violia just an amazing experience of truly matter that matters i mean this thing that was just conceived in our new york office ended up removing 99 of the radiation from the

46:14fukushima disaster particularly around cesium and strontium and it's crazy the technology without going into it between material science and isotope separation and robots and chemistry and it's just absolutely wild we we had a giant sci-fi it is unbelievable we had to spend a million dollars a day just to rent uh a giant ukrainian airplane many of which have actually been blown up during this current war oh gosh by russia that um we're shipping our our crazy engineer systems over there anyway uh that was very gratifying and so i really was just absolutely obsessed with nuclear and in particular what i studied was that in 1979 you had three mile

46:53island in the u.s this was a disaster you know little d disaster versus chernobyl in the 80s which was a certifiable disaster uh there was no radiation leak there was nobody that died in three mile island but two things happened number one there was a movie called the china syndrome in 1979 that came out movies are very powerful for influencing people and it negatively influenced people against nuclear the third thing that happened was a no nukes concert in 1979 which was really important because they were really protesting nuclear war i want to protest nuclear war nuclear war is terrible nuclear power is amazing and so you had

47:28you know joni mitchell and james taylor and all of these like post woodstock you know folk singers that my mom grew up on or made me listen to and and they were all protesting nuclear and it just got conflated nuclear war nuclear power the environmentalist movement roves up in part because there were no nukes and um and it just you know this has persisted now for for 40 years and so i started looking at this and i'm like seeing all these people that are well intentioned that are funding new reactor designs and new technology and i'm like you know it's not really so much even a technology or an

48:01engineering problem it's not we have hundreds of reactors that are working globally and we have decades of safety experience and know-how and even though you have an aging workforce there's just like tremendous talent what we have is a pr problem and so i was just kicking around and i'm like you know what it's it's literally elemental energy like you're talking about an element in this case uranium that you enrich zero carbon you use it to heat water the water produces steam steam terms of turbine the turbine spins and you get electricity elements are also you know uh the sun solar wind wind uh water hydro uh so the

48:40environmentalists should love that and so if i could put nuclear in this tent and rebrand the entire thing you know elemental energy element power maybe you get this uptick and and it seems to have been taken off last week the washington post had a feature piece on it and so if your name made you a new friend in jeff bezos too i saw that he followed you on twitter that was great help help spread the word you know elemental energy uh there it is i mean it's a fascinating case study of like storytelling in action right like a story perpetuates so much more than the reality and with nuclear i mean it's

49:16just people as soon as they hear nuclear they think about mushroom clouds and they think about chernobyl and they think about disasters they don't think about the potential for you know small amounts of water to literally provide the energy an energy source for the entire country um and they don't think about the potential for this to completely transform how we think about the survival of humanity over the next you know several centuries or millennia right if elemental energy or nuclear power were discovered today people would be running around being like oh my god this is magic this is the most incredible thing it would be on

49:49every it would be you know times person of the year would be the atom uh i mean it would just be the most magical thing and you are correct that if you have cheap electricity unlike the de-growth people that want to send us into the dark ages the cheaper your electricity the more power you have you can desalinate water you could have abundant water you could have abundant crops in agriculture but it all starts with how do we get clean abundant energy and to me the answer is elemental power formerly known as nuclear and it's interesting too when you just think about um you know geopolitically

50:19as well that the impact that this might have if you know if one country uh you know and honestly the u.s like if the us is continues to be obstinate about this we will literally fall behind the rest of the world and you will see the global order dramatically shift like if china decides to be really proactive if india decides to be really proactive if other large global powers decide to be proactive about this and progressive about it and the us gets held back by you know nimbyism and and whatnot there will be a massive shift in the geopolitical order in the next really i mean 10 15 20 years well it already has

50:56happened and so china is building dozens of nuclear power plants they're also building despite their jaw boning on green enormous numbers of coal plants but they are focused on how do we get low-cost energy for our people they're also looking into you know pakistan and other regions where they're basically making sure that they capture hydro uh but the geopolitical order did get reshaped in part because you had germany which was one of the few nuclear powers alongside france you had the rise of the german uh green party over the past 15 years if you were putin the smartest thing that you could do the lowest cost highest leverage thing that

51:32you could do to deliver europe to you who controls an enormous amount of gas for the world as a major exporter particularly to you europe providing over 25 percent of their electricity needs is just get the green party to shut down nuclear and that's literally what they did you had an engineer's chancellor in merkel and the political opposition to nuclear grew and grew and was fomented let's say it was mostly organic and mostly domestic with a tinge of foreign information operations to foment it that's all you had to do in germany start shutting down their nuclear power plants the first thing they did was import electricity

52:10from france but the next thing they did was become dependent on russian gas and so the geopolitical order has changed in part because of the aversion to nuclear and i hope that people wake up to this and quickly yeah and it was immediately after fukushima right germany made some pretty dramatic decisions immediately after that they basically fell victim to this you know pr event rather than continuing to think about the science behind it so it is it is pretty shocking um well one of the things that um i want to talk about before i before i kind of wrap my time with you is is your

52:44willingness to um be vocal about things that you you believe in uh elemental power has been one of those you know you've been very vocal um you know the the crisis in ukraine and the war and and russia's involvement etc you've been vocal the other one which is very top of mind right now is elon musk and uh you know his recent kind of foray and do buying twitter and involvement in the social world it kind of merges several things that i've seen you talk about at length one being like the jonathan hate article um about the kind of downfall of society over the last 10 years and social

53:20media's influence in that and the other one being you know elon musk and his uh i don't know what you would call it all you know his capital raising efficiency and um you know his ability to weave really powerful stories in that in that vein so would love to just hear you um speak a little bit on how this all comes together in your mind why you're worried about or not worried about elon musk's involvement with with twitter with free speech and your general perspectives on that let me say elon on the whole is a net positive there's no debate that pushing forward electric vehicles and beating

53:57the incumbents i mean literally a chip on his shoulder um is a net positive for the world and it will force all the other brands and all the oems to play catch up and they all whether they end up beating him in the end or competing with him in the end or not yeah that will drive the world forward so net positive uh spacex absolute net positive i mean returning the ability for launch capability to the u.s particularly with what we see now with russia a net positive so one would say what's my quibble and the quibble is with his relationship with the truth and i look

54:29at gates and i look at bezos both of whom i admire for different reasons bezos in particular who i consider one of the greatest and most rational capital allocators the amount of capital that he raised in an initial ipo you could add stock-based compensation into the mix to say another source of capital early debt um that you know today is a fraction of what it was this is somebody who compounded enormous amounts of internally generated capital and earned incremental returns on that incremental invested capital that are truly worthy of studying as a business so if you are a business student if you're a student of businesses

55:05to look at what amazon has done is just absolutely incredible in the way that you would study many of the other you know classic operators or the outsiders like john malone or buffett people that have compounded capital and rationally allocated i think deserve to be admired elon has not done that and people believe that elon has and so part of my frustration is the same way that you might see incredible wealth from a sunday preacher and i always rail against this but you know joel osteen and ted haggard and all of these sort of mega church preachers they do a service they they provide people a sense of meaning they provide

55:36people a following they provide people a sense of community um and they built them from their money okay and so there's just such a and maybe this is growing up in coney island squinty eyed and watching the carnival barkers and you know run their game and con people but i see so many people conned and fleeced and so far it has been working because the stock has been going up but um you know from the solar city shenanigans to full self driving a lot of people say well look you know this is just a guy that exaggerates or has very high standards you know and and uh will hit

56:12them it just might take longer and and there's something that to me has a witting misleading of people that he's just been exceptionally good at he's one of the great storytellers he's created an absolute cult following anytime you criticize you know the fanboys come out in mass it's it's in in fact protecting not only him but in many cases their identity as being a fan or associate and um it's really just what i consider to be the mendacity and um it's the same thing when you get frustrated at a politician or you get frustrated as a preacher when you see that otherwise credulous people are innocently being duped i just look

56:49at it and i'm like there's no reason you know he could just say hey we're going to lose money for a long period of time we're going to do something hugely important you know uh i need to raise billions if not tens of billions of dollars but it's like the subtle dishonesty over so many years that he just keeps getting away with it that's the part that to me i don't want my kids to celebrate that part the ambitious part absolutely you know the um the high performance or um uh high pressure you know culture of expecting more the chip on the shoulder going up against all of that is wonderful

57:24but it's just the honesty piece and and there's other heroes that have been incredible company builders i mean you look at henry singleton intelligent like that should be celebrated and um this sort of cult aspect of it just invokes the sort of um monorail man from the simpsons or sure your sunday preacher and and that's the thing that i just music man i see i see it and it just there's that like hustler huckster piece of it that just rubs me the wrong way yeah i guess the question is i mean you alluded to it at the very beginning the net positive of some of the things um

58:01you know with the electrification of vehicles with spacex and what it's done for the space economy um you know all of these different projects he takes on the question i guess i would have in the back of my mind is net of everything assuming you know assuming there is negative intent or there's you know open dishonesty in his own mind around things he's saying is it a net positive in the aggregate behind all of it that you know people are inspired to go take ambitious swings because they see him and the wealthy's accumulated you know an incremental entrepreneur is born uh on the back of his boundless you know

58:37kind of excitement and and energy around these things and does that offset the negatives of all that the people who've been screwed over the people who bought doge at a dollar or whatever the hell it went to you know on the back of his pumping around it um that's the question i guess i would and i don't have an answer to it i don't know the answer to a fascinated observer but it's interesting you you can point to you know jobs as well who is renowned for a reality distortion field you know in all kinds of sort of tricks when he would go out on stage for products that

59:06maybe weren't fully functional or didn't exist yet we've glamorized that as a society huh i mean ever since jobs like the reality distortion field is a weird thing to glamorize in in a sense well it is you know like even elizabeth holmes but it doesn't exist it doesn't exist in a siloed vacuum it can only exist because of the belief of people and so you know people want to believe in big ambitious things and that's that's a beautiful thing um people wanted to believe that you know this this phone or the capability that jobs are showing off would exist and so um you know people want to believe that

59:43we're going to go to mars uh people want to believe that full self-driving is going to exist and so there's a part where he's just selling people what they want to believe and so can you fault him for that and there's just this subtle line between the again the honesty and the humility of just saying like you know we're not there yet but we're going to get there is so different than like this already exists you know send your money and you know i think history will probably show that it's a it's a it's a distinction there you know difference with without a distinction to me it's

1:00:16just a line of like it's like somebody looking at the floorboards when they're telling you you know uh you know you mentioned twitter like the freeze i don't believe that the twitter thing is at all about free speech yeah and it's it's a um it's a line as you said and it's like it's a very very fine line and you could see it if you like find that archetype of personality you can see it cut one of two ways and there's really no middle ground and in the end it falls on one side of the line one way or another so yeah i mean it will be interesting to see the next you

1:00:50know 5 10 15 years how this all plays out i mean i think the twitter thing frankly if i was a tesla shareholder i'd be pissed um because like taking out a twelve and a half million dollar margin loan i mean i spent the first seven years of my career equity it's not fun just announced today that he's looking at other financing packages so that he doesn't have to mortgage as much you know this tesla stake yeah i mean i'm assuming there's a bunch of private equity funds and large institutional investors who would get on board with a uh you know private twitter plan um if

1:01:23it means that they can do you know take bigger swings around monetization and get away from the traditional ad model so maybe something will work out there but man look anything is possible you can believe i don't know what the implied odds right now on the merger or above this was but you know it was down to like 85 percent likelihood that the deal was you know still very high but 15 probability that it wasn't gonna actually happen you know he has sold eight and a half billion dollars of stock this is a wonderful way just like his twitter poll before to sell stock to get out of uh twitter now you could i

1:01:52mean sorry to get out of tesla so again he's a master of diversion right you don't i mean the ledger domain and the magic tricks and the illusion the prestige is it's it's it's it's admirably done if you you know are our student of magicians and illusion like it's it might deserve criticism for the dishonesty it's sort of the difference by the way between pan and teller and david blaine david blaine will actually tell you that what he's doing is real and penn teller will show you with clear cups and balls that they are completely tricking you okay and and i just have more admiration for the pen and teller approach to magic

1:02:32or or the bezos approach to the magic of technology than i do the elon approach so again to me it's a very big distinction uh but but i would watch to see if this deal ends up happening and if it does if you truly care about free speech is the answer really to saddle this company with tens of billions of dollars of debt i just it doesn't make sense i thought that that was the funniest jack dorsey tweeted um something about like uh taking taking twitter back from wall street is a great first step and i thought about reply i didn't want to and i didn't

1:03:08reply i should have and i was like i don't know how i must have missed how like 25 billion dollars of new debt is taking it back from wall street because like i it was over my head if there was who who owns twitter you know actually i mean your point is a really strong one which is the people that own twitter are blackrock fidelity retirement my mom's pension plan you know the united federation teachers like the people that are going to own the syndicated loans are going to be barclays morgan stanley like the bank so you're delivering senior in the capital structure to wall street you know that you're

1:03:48demonizing it with covenants but real covenants but it'll return the light of consciousness yeah yeah absolutely well look i i know we're running up against the end of time i do have to end with um one kind of bigger picture question so you're someone that thinks about the future a lot um give me your like one or two big bold predictions for the future and what what it looks like well i'll tell you the thing that i'm obsessed with and i finally found the team and i hope that i can share more very soon but you know you know i've talked about publicly which is actually a

1:04:22strategy right i throw theses out there the digitization of human scent is coming it's true for shazam for smell shazam for smell the ability to identify a single molecule in a room is coming the ability not only a single molecule that has meaning to you i mean literally a molecule a structure actually conveys to you you know a good smell a rose a wine a food a perfume a cologne and a bad smell right um from i mean you know if you ever ride the new york city subway you know lots of bad smells but um that is coming and i think it's going to the ability to give machines

1:05:00that sense a sense of smell i think is going to be a really big deal so absolute undeniable arrow of progress that that will exist the other thing which i increasingly i'm really inspired by is and and i think i think there will be fierce debates that almost are like keats accusation of scientists unweaving the rainbow i'm in the firm camp that the more we know the more mysteries you unfold you know the more awe we feel um you know when you finish a mystery book you never read it again right but when you learn something about the cosmos or the universe like it just creates more awe

1:05:38and wonder so so i'm firmly in that camp but the area i'm talking about is this intersection alluding to what we were talking about before about dreams and deep neural nets i think we are going to learn more about human consciousness as we interrogate the systems and try to understand how much of the modern approaches in ai are working to sense make models make predictions on those models iterate and learn and i think that it's going to reveal some of the mysteries of consciousness and um and i think that that will unsettle a lot of people because in the same way to learn that dreaming is not

1:06:12this mystical and again not to say to learn is not fair because it's a theory but to have a believable or plausible hypothesis that dreaming is not some you know uh mystical entrance into this other realm of hallucination and you know but but actually something that biologically was adaptive to introduce noise into your daily pattern to make you i mean those are the kinds of things that we're going to start to understand and suddenly be like oh uh the reason we do that you know actually had this evolutionarily adaptive function and for some it will seem you know unromantic and i think for others like me it'll inspire more more

1:06:52awe so well i i am going to sleep very differently tonight after uh after having learned that so i i appreciate so much your time this was fantastic i look forward to getting to do it in person soon um post baby for me um but uh but looking forward to seeing you and you'll see a few more gray hairs on my head by then so thank you congratulations man it's it's the most important thing i think so huge congrats to you guys thank you thanks so much for listening to today's episode if you have any questions that you want featured in a future episode email us at hi

1:07:26trw leave us a review at apple or spotify to help us grow the reach of this podcast until next time we will see you [Music] misery love the soon think on it prey on it simple cup of tea