Joe Lonsdale: The Future of TikTok; Is it a Danger to US National Security? | E1125

1. 0:00 – 0:45

   Intro

   1. JLJoe Lonsdale0:00

      I think you're taught to shut up and virtue signal and be very careful what you say, and that's the exact opposite of what a liberal education is supposed to be. You think these kids at these top universities are pursuing truth? They are not pursuing truth. They are pursuing how to advance themselves by shutting up and going along. It takes courage. It takes one person saying, "No, this is ridiculous," and being willing to stand up and be that leader, and others can say, "Yeah, I agree with him. That's ridiculous." So I mean, the question is, do we have enough courageous people to lead us out of this?

   2. HSHarry Stebbings0:26

      Joe, I've been so looking forward to this. First off, thank you so much for joining me today.

   3. JLJoe Lonsdale0:31

      Thanks for having me, Harry.

   4. HSHarry Stebbings0:32

      Listen, Shayan gave me many suggestions of some tricky questions, so we're gonna have a lot of fun.

   5. JLJoe Lonsdale0:36

      Uh-oh. (laughs)

   6. HSHarry Stebbings0:36

      I wanna start though with- with- with- (laughs) with... Yeah, be nervous. Uh, but with one which is like... (laughs) I don't really know how to say this, but you are one of the most fascinating

2. 0:45 – 3:09

   Joe’s Childhood

   1. HSHarry Stebbings0:45

      people in tech. Now, I wanted to start with children and what you were like as a child. How would your parents or your teachers have described you?

   2. JLJoe Lonsdale0:54

      Listen, I was always probably an overconfident child. Like, I- I- I was lucky to be born gifted. I got, you know, 99s on everything and skipped some grades in math with my friends. And, you know, my friends and I were chess champions and math champions, and I- I always had a lot of opinions. Um, you know, I generally... You know, my- I generally felt like I was probably smarter than my teachers, so very obnoxious kid, right? Lots of- lots of confidence there. My- you know, unfortunately, my grandma finally passed last year at 103, and she would always tell... But I called her my bubbe because that's a word in Yiddish for grandma, and she would always tell stories of me- me wowing her and impressing people at age two, three, four, five. So I guess I kinda grew up with, like, a lot of confidence. I was the oldest in my generation, the oldest of 20 cousins on one side and nine cousins on the other side. And, uh,

   3. HSHarry Stebbings1:39

      (laughs)

   4. JLJoe Lonsdale1:39

      and so I- so I guess I've always been lucky to be a leader, been talented, and- and have lots of opinions, which we got to hear today.

   5. HSHarry Stebbings1:45

      Did it ever catch up with you? You... Everything came easy to you 'cause you were very talented. Did you ever-

   6. JLJoe Lonsdale1:51

      Well-

   7. HSHarry Stebbings1:51

      ... land in a new industry and...

   8. JLJoe Lonsdale1:53

      We were very- very competitive, so I think- I think when you're pushing yourself and you're competitive, you're always hyper-aware of your failings, right? So I- I guess, yes, I was always talented, but I was always very aware if something wasn't right or that I couldn't do something yet, or there was people who were better than me at something, 'cause you know what, there's always someone who's better than you at whatever you're good at. Maybe in- in some ways I was just very, very aware of what I needed to be better at if I was gonna- if I was gonna get to be the best, you know. I mean, even when I t- by the time I got to Stanford I was feeling very good about myself in math, and I took the hardest math class. There's 30 kids that... You know, back then they would get together in one class, and I was- I was probably somewhere right in the middle, which was very annoying, and I did not like being in the middle of any class, you know. There were people who were clearly just always going to be much better than me at that. I realized I was not gonna be a mathematician. So, you know, I- I think part of being very competitive and talented is you're constantly aware of the fact that there are people, much like Elon Musk here and Austin is far ahead of me as an entrepreneur, even though I've also started multiple billion dollar companies. Uh, there's still a long way to- to go to get better, you know?

   9. HSHarry Stebbings2:49

      To what ext- I always think that comparing yourself to others or competition is the secret to unhappiness.

   10. JLJoe Lonsdale2:54

       (laughs)

   11. HSHarry Stebbings2:54

       Um, I could compare myself to Alex Huang at scale and, you know, the dude has created a multi-billion dollar company, where I've created a fucking podcast and a fund. Like... (laughs)

   12. JLJoe Lonsdale3:04

       (laughs)

   13. HSHarry Stebbings3:04

       Which I love, but, like, let's just call a spade a spade. But, like, actually, not many 27-year-olds

3. 3:09 – 4:18

   Importance of Competition & Self-Awareness

   1. HSHarry Stebbings3:09

      have done what I've done, so it's like, is competition-

   2. JLJoe Lonsdale3:12

      I think you're an amazing guy, Harry, and I think you should feel really good about yourself.

   3. HSHarry Stebbings3:15

      Uh, thank you, thank you, that was fishing.

   4. JLJoe Lonsdale3:15

      Uh, I feel pretty good about myself too.

   5. HSHarry Stebbings3:17

      (laughs) But-

   6. JLJoe Lonsdale3:17

      I- I got... You know what's funny? When you- when you posted you were gonna interview me, you get all these trolls online, like, trying to poke you and hit you, and I got a few really nasty comments in reply. Which I actually appreciate 'cause you kinda- you kinda need the haters to- to drive you to kind of sh- prove them wrong and keep going, you know? But- but, uh, no, I think, listen, you gotta compare yourself to others to see what's possible, to challenge yourself. Uh, it doesn't mean you can't feel good about yourself too. I think it annoys people that I feel good about myself, but I do. I think it's cool.

   7. HSHarry Stebbings3:42

      I have a lot of McKinsey consultants who message me and they say, "I'm gonna start the 21-minute VC." And I'm like, "That's awesome, but, like, if you were entirely logical, would you not start the 19-minute VC?" That would be more compelling, right? (laughs)

   8. JLJoe Lonsdale3:54

      No, no, these people clearly don't know the secret of your success. (laughs)

   9. HSHarry Stebbings3:58

      (laughs) Question for you. What was the biggest needle-moving moment in your career? I do think careers take step functions. What was a step function for you that was the most significant?

   10. JLJoe Lonsdale4:07

       You know, being allowed in at PayPal was a really big deal. I think Max rejected me the first time as a freshman when we had an argument on a whiteboard, and I thought he was gonna bring me in anyway. I don't think he remembers this. Uh, this is-

4. 4:18 – 6:07

   Biggest Needle-Moving Moment

   1. JLJoe Lonsdale4:18

      this is, you know, Peter's co-founder of- of- of Confinity, uh, at the time. Um, you know, so being at PayPal and learning from people there was really important. Peter, uh, taking me to work for him directly afterwards, and, you know, I got exposed of course at that point to, like, the Facebook people and to the Kevin hearts at Zoom and all these guys I was getting to work with, uh, in the macro fund. And then, you know, convincing him to fund Palantir and keep it going when a lot of people were trying to fight against it. You know, at- at the time, you- you probably know, there were all sorts of crazy projects that, uh, were going on in kind of Peter Thiel world. I think there was one thing that was giving people nightmares and other things that... You know, some brain stimulation, there was, like, a spam company, there was a restaurant that I think ended up losing $7 million 'cause a chef got into arguments with people. This is, by the way, very typical. Peter's a genius, I've learned a lot from. There's very... When you've had success, you have a lot of stuff you try. Uh, people around you try things. But- but imagine Palantir was, like, these, like... I think three of us who are, like, 21. I guess Nathan was, like, maybe a little older. Maybe he's late 20s. And- and we were all just, like, building things for spies, for intelligence, so that sounded probably even crazier than the restaurant and- and the brain stimulation thing, right? We're trying- we're trying to get a budget to travel to D.C. and talk to the spies, so people were trying to turn it off. So convincing them to keep that going, I think that was really critical as well at the time.

   2. HSHarry Stebbings5:31

      True, but if it works, you can see margins. Restaurants, as Peter says, still a pretty shitty business, um, so yes.

   3. JLJoe Lonsdale5:38

      It could- it could be more-

   4. HSHarry Stebbings5:39

      Yeah.

   5. JLJoe Lonsdale5:39

      It could at least be more fun and- and- and... But no, you're right, that probably... I think the lesson for me is if you're gonna do a restaurant, don't spend millions of dollars on a buildout. That's probably not the best idea.

   6. HSHarry Stebbings5:48

      Listen, I want- I wanna start today on something that you've said before which I think is really important, which you've said America's a frontier nation. If we start here, what did you mean when you said frontier?

   7. JLJoe Lonsdale5:58

      So America is best as a frontier nation. So, you know, human nature is such that you have...... these places that are the core. They're, like, the cities. It's where

5. 6:07 – 9:35

   America as a Frontier Nation

   1. JLJoe Lonsdale6:07

      the committees are in charge, the people who are playing status games. There's lots of NIMBYs around, saying no to everyone. Uh, it's really hard to change things and get things done. But things are safer in general. You don't ... Maybe not today in the city, but in general, in the core, things are safer. Things are protected. There's rules. Where on the frontier, it's a place where it's dangerous, where you're constantly able to try new things. It's ... You can have one bold man, uh, go out and actually start something and, and prove it. And there's accountability on the frontier. On the frontier, if something doesn't work, uh, it fails. Uh, you could, you ... If something doesn't work with a new settlement, people could die. If you go to Jamestown, you know, and have a settlement and it's not working, the Indians can get you. The weather can get you. You know, all sorts of things can go wrong. And so, you know, the spirit of the frontier, Harry, is a spirit of entrepreneurship. It's a spirit of innovation. And, but really fundamentally, it's a spirit of accountability. Like, it's actually a place where you don't have time to spend time arguing about status games and virtue signaling. You have to make things work on the frontier.

   2. HSHarry Stebbings7:01

      Well, I agree with you entirely, but I'm playing a, you know, devil's advocate game here. You're also a father with children, uh, and a very caring man. And I'm from Europe where we mostly have welfare states, and most people in Scandinavia still study at the age of 50 and haven't got a job.

   3. JLJoe Lonsdale7:15

      No frontiers left in Europe. (laughs)

   4. HSHarry Stebbings7:17

      There's no frontiers left in Europe. But when you get sick, you are looked after.

   5. JLJoe Lonsdale7:21

      Yes.

   6. HSHarry Stebbings7:21

      When you need medical care, you are looked after. You need education that is a good enough standard, it is there.

   7. JLJoe Lonsdale7:31

      Yes.

   8. HSHarry Stebbings7:31

      It is a better standard of living, is it not, in a core nation for the whole?

   9. JLJoe Lonsdale7:35

      I think that this is why most people are not crazy enough to go leave to the frontier, 'cause it is more dangerous. It is rougher. And what- what you really want is a dialectic, right? Let's be honest. I'm raising four young daughters. You don't want to raise four young daughters purely on the frontier. Uh, you wanna raise your family somewhere where there is some aspects of the core. And, and so ... But for a nation to advance, uh, to have, to ... For a nation to solve problems, for a nation to not become decadent and broken and insular, it needs places that are the frontier. And so what a dialectic is, is it's, it's a reality ... I think it's an important reality for all of us, is that there's truth on both extremes. You clearly need some things to be more like the core, but you also need some things to be more like the frontier. You need to take the properties of the frontier. You need to find ways of injecting them into parts of your society to allow it to be dynamic, to allow it to advance and innovate.

   10. HSHarry Stebbings8:26

       Can I ask, one of the things that's preventing that is lack of accountability. Why is America's core sick and lacking accountability?

   11. JLJoe Lonsdale8:34

       Well, I think this is what happens, frankly, to every civilization over time. One of my favorite authors on this, there's something called Evolution of Civilizations by Carroll Quigley. I think Quigley was one of Bill ... President Bill Clinton's mentors. But re- real, real great thinker, and he maps out the different stages of civilizations. And you kind of map it to institutions as well. But, you know, you know, o- one of the, kind of, ideas is that as, as these things become dominant, the same things that led you to, kind of, grow and win and that you had the support to grow become special interests. And the special interests, uh, start to, like, worry less about what they're doing for civilization or for the company, and more about what they're doing for themselves. And so you, so you start having lots of special interests fighting for themselves, uh, and not for the common good. And that, and that, that, that really breaks things over time. And, you know, what, what you see in the US government, which you see in every other government, is you have hundreds of thousands, millions of rules. And the rules tend to be put in place by the big companies, by the unions, w- by the, you know, by the, by the groups that are running things. For example, with prisons, let's go to ex- specific.

6. 9:35 – 14:03

   Lack of Accountability in America’s Core

   1. JLJoe Lonsdale9:35

      Prisons in America are very badly run. People can blame for-profit prisons, but 90% of them are non-profit. And, and they're, they're run by government unions. And, you know, you have the best paid prison guards in the world in California, and you have 37 prisons there. And whether or not the people come out and can have jobs and succeed, or whether or not they come out and commit more crimes, these people still get paid the same amount. There's no accountability. So, if, if you actually wa- ... If you actually cared and you wanted these people to come back and be, do a better job in their community, you'd test ideas. You'd re- you'd reward the people running the prisons that, where people are coming out doing better. You'd replace the people that were, where they're coming out doing worse, and, and fix the broken cultures, you know, running those prisons. That's just one example of hundreds of organizations in our society where it's just there's no accountability and it's broken. And, and there's ... And the leadership spends more time, A, fighting for raises for prison guards and raises for the unions with no accountability. And B, doing s- whatever virtue signaling is popular. I'm sure there's all sorts of keywords about whatever trans and whatever minority and whatever other stuff. But the, but the actual truth is, you're hurting those exact people you're using the words to virtue signal for by not having accountability and not running it well.

   2. HSHarry Stebbings10:38

      Should we have more for-profit prisons? They're run better. They have the profit incentive. They have accountability.

   3. JLJoe Lonsdale10:43

      Well, the, the, the, the s- the step back ... No, exactly. Profit incentive, you're, you're exactly right, is not a problem. It is a problem the way the current profit incentive works for prisons, 'cause that's not good either. If your only profit incentive is to, is to house more people and get more people to come to jail, that's bad too, right? So, what you should be doing ... And ac- actually on the, as a side note, we have a group we're sponsoring, Social, Social Profit Corrections, SPC. What we're doing is we're taking a non-profit. We're gonna buy a for-profit prison, and we're gonna run it as if the only way to make profit was pay-for-performance, was lower recidivism, higher employment. So, we wanna show people. And I don't care if it's for-profit or non-profit, I wanna show people that, that innovation and metrics and accountability could lead to much better results. And, and we've already done this now in probation and parole with my policy group and just by putting in metrics there. But I really wanna show what's possible as an entrepreneur in, in this non-profit area, something, something very important to do. There's, there's all sorts of ways in which, which is just, just gaps in the world that no one's going after. That ... And sometimes you have to use non-profits to go after them.

   4. HSHarry Stebbings11:41

      If you were to show that, is the core not so sick that they would not still reject you despite the data to prove that you are more effective?

   5. JLJoe Lonsdale11:49

      My theory of change on policy in the US, we have a group called the Cicero Institute. It's one of the top state policy groups in the US, it's non-partisan. We're in 19 states right now, Harry, and it's- it's very hard to get something done in DC. It just takes forever with the arguments. But it turns out, it's not that hard to get things done in certain types of states. It tends to be the purple or the red states where they're able to take more risks on accountability right now, which- which even my friends on the- on the- on the left tend to agree with me, that's where you do it. And- and- and you can go in and you could actually pass laws that tie things to metrics, tie things to goals. I don't think it is that sick, I think it actually is possible. We've shown, we get a- we get dozens of laws passed per year. You know, for things like vocational schools, tie the funding to the results, you get a much better results for huge numbers of people.

   6. HSHarry Stebbings12:30

      Yeah, I totally get you and agree. You- you mentioned the virtue signaling earlier. Uh, yeah, it made me think of, bluntly, woke mind virus. Why do you believe woke mind virus is real? Others suggest or denigrate it as not being actually as prevalent as people think. And why is it such a problem?

   7. JLJoe Lonsdale12:45

      I mean, I think all of us look around and you see, this is something that- that it- it's- it's, uh, it's probably some sort of post-modern religion, right? I think- I think there's- it seems- as best I could tell, human nature is that we all, or at least most of us, have some kind of innate bias or desire, uh, for- for transcendence and for something that's more important than us and for- and for- to understand our pl- our place and what meaning in the world and the higher power. And, you know, I think there's a lot of wisdom in the ancient religions that have evolved over, you know, thousands of years. And- and it- I think a lot of people when- when they're- when they completely reject all of those, they need to find meaning in something else, and I think a lot of them have grasped onto this kind of system, uh, which- which, you know, I think Elon and Richard Dawkins have originally most famously called the woke mind virus. And- and it's a problem, Harry, because it's basically focusing on virtue signaling and focusing on things that- that don't matter as much at the sake of- of competence, at the sake of a functional society. Now, I- I think a lot of the woke mind virus is reflecting progressive values that come from a good place. I think a lot of people, they feel like they're being a good person by going along with it. Of course you want everyone treated fairly, of you know, of- of course you wanna take people who have- who've ha- who've had a rough time and- and you wanna help them. But- but the woke mind virus, the way it expresses itself, it's not

7. 14:03 – 17:07

   Woke Mind Virus is Real?

   1. JLJoe Lonsdale14:03

      about helping them effectively. It's not about what's functional in a society, it's not tied to meritocracy, it's not tied to- to actually doing things that- that are useful. It's- it's- it's tied to kind of a performative strange thing where you shame people, where you're- where you're very hateful towards people, uh, and don't forgive them if they ever sh- violate your shibboleths. I mean, it's- it's- it's- it's- it's basically a very bad religion is what it is, and it's not- it's not- it's not correlated with a functional society.

   2. HSHarry Stebbings14:28

      I don't say 90% of what I think because of the backlash that would come from the 1% woke. I think every CEO that I speak to have on the show is the same. Do you say what you think? And are you nervous of the woke crowd coming after you?

   3. JLJoe Lonsdale14:45

      I say the vast majority of what I think, as you could tell when you go and look at things th- that I've gotten in trouble for. Now, it hasn't stopped me from building many, many billion-dollar companies, it hasn't stopped me from raising, uh, a lot of great funds because I'm very good at what I do at my fund and I'm very good at what I do with my companies. You know, that said, I don't think all of us need to always say everything we think in a- in a polite, modern, civilized society. You may have thoughts that it's good to dwell on yourself or to explore in private with other people first (laughs) . You- you may have thoughts that are very offensive and you turn out to be wrong. You- you- you know? And I think that's- that's like- that's partly how we learn is we have things that we think and we say, "Wow, I think this." And you actually talk about it with people you trust close to you 'cause you realize it's controversial, and you say, "Actually, I see why I was- I was too extreme there. I see why that wasn't right." And it's probably (laughs) - it's probably healthy not to always expose every last thought in public right away is- is, uh, you know, something I've learned over time.

   4. HSHarry Stebbings15:34

      Is wokeness not the product of having just a completely fully developed core? If you look at an emerging economy, they do not have wokeness 'cause they are fighting for survival, for food, for the next dollar, for a better life. When you have the fully developed core, fuck, we can argue about a you, a he, she, her, cat, dog, wall, object, because we- we're fully developed.

   5. JLJoe Lonsdale16:00

      Well, I appreciate you read The Frontier Core essay. I- I- I... First of all, I'd push back a little bit on fully developed. I still think that if you go forward 100 years in time, we'll look at everything around today as kind of an embarrassingly backwards, like, emerging economy relative to what's possible for humanity. So I- I definitely don't think we've reached kind of, like, the apotheosis of, like, where we should be. I think- I think- I think- I think, you know, if you go back in time 100, 150 years from now, we- we know how backwards that was versus what was possible. Now, there's many parts about society 100 years ago that might be more civilized than today in certain ways, but there's also things that were very backwards. Uh, you know, and that's- that- that'll probably be true in the future. But- but- but yes, to- to the point of your question, Harry, a lot of people use the term luxury beliefs. There's things you can afford to waste time on, uh, when you already have a certain level of wealth and comfort. There's also, I think, a sense in a lot of parts of our society that when you take away accountability, things don't really matter as much anymore, so you could spend time on nonsense. Like- like- like, so if- if- if you're- if you're living in a place li- where, you know, if you have to work to eat and feed your family, and- and if your work fails then it's- you're not gonna be able to feed your family, like, people are focused on reality 'cause they're tied to reality 'cause it matters to them. If you're living in a place

8. 17:07 – 21:42

   Concept of Fully Developed Core & Deglobalization

   1. JLJoe Lonsdale17:07

      where you have kind of a nonsense bureaucratic job, where you're basically virtue signaling at work anyway and- and just kind of going through the motions and- and, uh, you're gonna be funded no matter what by the city or by the government or whatever it is and it's- and there's no sense of possible failure, uh, because you're in, you know, in a monopoly or in something tied to the government, yeah, you have more time to basically screw around and- and- and have nonsense beliefs and- and spend all your time, well, virtue signaling. So yeah, there's- there's definitely something about the core, uh, and- and the unaccountable core that leads to kind of nonsense stuff.

   2. HSHarry Stebbings17:35

      Why is wokeness also a sideshow? You said this in your piece, and I thought it was a fascinating element. Why is wokeness a sideshow?

   3. JLJoe Lonsdale17:42

      Because it's coming out of something that's decadent. Like, the fact that that thing is decadent is what we should be fixing. If there- if there is a health system that has a monopoly and it's very wasteful and spending twice as much as it should and making healthcare unaffordable to the poor in our country and un- and unaffordable in general, uh, because we don't have infinite resources...... is something people don't always understand. We don't have infinite resources, you know? So, I mean, if, if we had more resources (laughs) we could, we could all have better results for everyone. So, so if you have something that's broken and decadent, and it's not facing competition, it's not forcing itself to become more fit, to improve, to compete, then that's a problem, right? So, so the things in our society that are, that are not fit, that are lazy, that are broken, that are incompetent, those are things we should be focused on. We should be fixing. We should be exposing them to competition. We should be exposing them to metrics. We should be finding ways to take broken things and make them compete against other things, and replace the leaders that are not succeeding and inspire people to, to take notes. So, I'll give you another example because I think it's important to go down to the details. You know, the counties in California were responsible for probation, and the state's responsible for state prison. And so you had all these counties that would just send people right to prison right away 'cause who cares? They just, "Get 'em out, get 'em out of here. It's wasting our time." And, you know, there was a bipartisan law passed about 15 years ago, and it said that counties are gonna get measured on how well they do reh- rehabilitation. They're gonna get to keep the upside of not sending people back to prison. Suddenly, all these counties, these same offices that were lazy and doing nothing before, now they're being measured. Now they have, they have goals. They... A lot of them started sharing their results. They started sharing best practices to rehabilitate people, to make people commit less crimes, to help them get back on their feet. They started experimenting with things and, you know, it, it basically saved the state a billion dollars over the next decade. It sent tens of thousands of fewer people back to state prison. And it was a huge success 'cause you took something that was broken. And so, so basically... A- a- and yes, by the way, those, those places became less woke. Same with just... When- whenever... When, when you make these things accountable, whatever they are, they become less woke because they're now focused on, on actually getting things done. So, the wokeness was like a, maybe an indicator of brokenness, but the brokenness itself that was hurting people, that's what really matters to society.

   4. HSHarry Stebbings19:42

      One of the other broken institutions is universities, many would suggest. Um, you've-

   5. JLJoe Lonsdale19:47

      Mm-hmm.

   6. HSHarry Stebbings19:47

      ... done a lot obviously in the university field. Uh, former guest and friend Bill Ackman has certainly voiced his views. Why do you think universities are a broken institution, and what should and can be done there to change it?

   7. JLJoe Lonsdale19:59

      Well, you know, we're very famously, with my co-founders Barry Weiss of The Free Press and Neil Ferguson, the great historian, uh, we've been starting the University of Austin. It's going extremely well. We've admitted a big part of our first undergraduate class for this fall. The goal is to have a, a university where people come. And rather than focus on not offending people, they focus on learning about the intellectual foundations of the West and, and, you know, having strong interdisciplinary centers where we, we... You teach, you know, bold, courageous leaders to go out into the world and to build things. And listen, there's still a lot of-

   8. HSHarry Stebbings20:31

      Do, do you not think-

   9. JLJoe Lonsdale20:31

      ... amazing people-

   10. HSHarry Stebbings20:31

       ... we do that in our... Do you not think we do that today in universities?

   11. JLJoe Lonsdale20:35

       I think you're taught to shut up and virtue signal and be very careful what you say and, and you learn, like, that there's something wrong with you. I think it's even worse in the UK, frankly, r- but in the US, it's pretty bad too. You're... There's something wrong with you if you wanna speak out, something wrong with you if you have your own opinions that are different than the status quo. You know, so, so Harry, what's happened is that there's now more administrators at Yale than there are students, and almost as many at Harvard. And, you know, the professoriate's always been a little to the left. That's not a big deal. That's kind of like a normal, natural consequence of the culture of these places. But it's moved a lot, lot more that way to the point where you can't even get to be a PhD, uh, postdoc, or get into these programs at all. There's no chance you're getting tenure if you're not basically a Marxist, in most of these, like, departments at this point on the humanities side. And the, the administ- and then, and then... So, that's a problem. The administrators then, which, which, of which there are thousands and tens of thousands, are to the, like, f- radical left of the professors. The professors themselves are afraid to speak out, even the ones that are moderate left. Uh, the students, you know, two thirds report self-censorship to not, just not say what they think because they're afraid to get in trouble at these places. That's the exact opposite of what a liberal education is supposed to be. A liberal education is supposed to

9. 21:42 – 27:04

   What’s Wrong with Universities?

   1. JLJoe Lonsdale21:42

      be you come at university and you explore ideas and, and you, and you, and you test out ideas. You test out the boundaries of different ideas. You, you, you learn who you are. You learn about the world. Like, the whole... You're pursuing knowledge. You're pursuing truth above all else. Do you think these kids at these top universities are pursuing truth? They are not pursuing truth. They are pursuing basically how to advance themselves by shutting up and going along. I mean, it is the opposite of what it's supposed to be. And it's, it's been conquered by a perverse ideology over the last 50 years that really h- has been a source of a lot of the nonsense in our society that's spread from these universities.

   2. HSHarry Stebbings22:13

      Would you send your daughters to university?

   3. JLJoe Lonsdale22:15

      Well, I'm trying to build one (laughs) that I would send them to. That's, that's part of-

   4. HSHarry Stebbings22:18

      (laughs)

   5. JLJoe Lonsdale22:18

      ... the goal of University of Austin. And you know what? No, listen. I think going to these places eyes wide open... Um, you know, the places, they've gotten a lot worse, by the way, in the last 20 years. Like, when I went to Stanford, it was not like this. I guess I'm older now. It's 22, 23 years ago, which... There was... There were always issues. Of course, I got in some trouble. I think I got my first B ever 'cause I wrote a defense of John Locke, which our introduction to humanities, you know, group did not like at all. They to- they laughed at me for, for trying to defend John Locke, this horrible, old, naive white man who believed in property and life and liberty and these, these silly outdated concepts. But, but listen, I mean, thin- things were a little annoying then. They've gotten much, much worse now. Now, if you go in eyes wide open, it's, you know, you're learning how to deal with it. But, but, but it's tough. It's like your social life now is hurt really badly at Stanford if you're part of the conservative paper. I mean, it's, it's kind of ridiculous. And listen, after October 7th, as a, as, as a Jew, like, like seeing what's happened where, where there's, there's very clear discrimination against Jews in these campuses. There's very clear unwillingness to condemn the, you know, genocide or whatever else. Like, the, the whole thing has gotten very strange.

   6. HSHarry Stebbings23:19

      Can we turn back the clock on the severity and penetration of woke minds though? Is it not too far to turn back now?

   7. JLJoe Lonsdale23:28

      No, I think this is exactly... Listen, I am... My podcast is called American Optimist, and, and I really am an optimist, but I'm also a realist. So, we have to say like, "Here is the mess we're facing, and now here is what we do." It turns out that these crazy radical ideologues are only a small percentage of our society. That small percent has managed to burrow itself in to a lot of departments at our universities, to the administrations at our universities. It's managed to burrow itself in to, to a lot of, you know, parts of, like, marketing and HR at a lot of our big companies.... a, but a lot of cases, it's not really the true believers. It's just that they're kind of scared everyone around them to going along with them 'cause they aren't the majority. And so, partly what we need to do here is we need to convince people to stand up, to be confident, to, to, to, to not let these people cancel us. And i- it's really up to ins- institutions. Like, are institutions going to let these people cancel people? And I think most of them don't want to. But it takes courage. It takes one person saying, "No, this is ridiculous," and being willing to stand up and be that leader, and others who say, "Yeah, I agree with him. That's ridiculous," or, "I agree with her. That's ridiculous." So, I mean, the question is do we have enough courageous people to lead us out of this? And I, and I, I think we can by modeling this behavior, show this. And I, you know, I think Elon Musk has done more than anybody else to model this behavior, to stand up to this nonsense, and to, and to call out things you're not supposed to call out, and to reveal things you're not supposed to reveal, and I'm trying to do that as well. And I think there's dozens of others of us standing up now trying to do this as well. So, I- I don't think they're going to win. But, but for that, for us, for us to win, like, for all it takes, for, for, all it takes for evil to win is for good men to do nothing. Like, we need people to stand up and we need people to model what leadership and courage looks like here.

   8. HSHarry Stebbings25:05

      Can I ask you, then, if you're in charge of restoring the frontiers in American governance, is that what we need, courageous people who stand up? Like, what are the steps to restore America as a frontier nation?

   9. JLJoe Lonsdale25:17

      We need the intellectual sophistication as well, uh, to, to go in and to say, "Okay, here is the unaccountable bureaucracies. Here is the way the regulatory state works now. Here is, here is the, here is the solution. Here is the way we're gonna fix this system." Like, what's, what's really dangerous when things start to break, Harry, is you get populists on the right, you get populists on the left, and they just wanna tear everything down. And that is not a healthy attitude. What you need is you n- you need, you need a scalpel, not a sledgehammer. So, so, so there's a lot of things to fix here. Look, one of the most important things to fix is the administrative state. The administrative state has millions of rules. They've been captured by corporations. They've been captured by special interests. We need an administrative state that has a system that, that, that eliminates rules over time, that makes it really hard for rules to fight for themselves, that forces them to fight for themselves in accountable, data-driven ways, and makes it sh- self-naturally shrink in a healthy, data-driven way. So, so there's all sorts of really smart policy you're drawing up for how you can use technology, how you can use data to make the administrative state have to justify itself, to make every rule have to justify itself, or else go away. And there's a lot of things like this. Maybe that sounds too technocratic, but the solution here is for s- is, uh, unfortunately involves, you know, involves details, it involves smart people standing up and saying, "No, this is the wrong direction. We're gonna put in a direction that, that preserves our, our property rights, that preserves our court systems, that preserves our liberty, uh, preserves the fundamental, you know, constitution of, of our country, but that pushes back on this nonsense and that goes after every last unaccountable bureaucracy. Everywhere you see something unaccountable, we're gonna make it accountable. We're gonna put laws in to make it accountable. We're gonna tie its performance to its pay." And, and, and if you, and if you get rid of these unaccountable things, you get rid of the local monopolies, I think over time we're gonna win this battle. But it's, it's, it's gotta be one thing at a time. It's gotta be actual people who are entrepreneurs, uh, you know, who are thoughtful doing this. It's not just gonna be some sledgehammer

10. 27:04 – 29:07

    Restoring America as a Frontier Nation

    1. JLJoe Lonsdale27:04

       approach.

    2. HSHarry Stebbings27:04

       You said there the scalpel and the sledgehammer. I love that. Um, I think then of the election coming, and Trump. Um, do you think Trump will win? And what do you think the ramifications and impact of his win will be?

    3. JLJoe Lonsdale27:18

       I tend to be more on the side of the focus on the states because I think that's what I can control and what matters. I do agree this is a really important election, and I think we have, uh, very, very imperfect, uh, you know, people on sides who are running. Overall, uh, overall I probably tend to agree with a lot more of Trump's policy, and even though he himself is a bit of a sledgehammer, I think a lot of the people around him, for example, the person who ran the Office of Information Regulatory Affairs, OIRA, uh, Paul Ray, you know, is a friend. He's a very smart guy. That's basically the regulator of regulators who goes in and tries to make the rules to shrink the regulatory state. So, I think, I think the people who are smart with a bias towards going after unaccountable bureaucracy, shrinking the wasteful parts of government, making it accountable, tend to be more on the right. Uh, I, I, I think Trump's extremely imperfect. He has all sorts of issues that bother me. You know, I think it's very problematic. I wish we had other people. But I think his side is more likely to push these things in the right direction, uh, in terms of the stuff that's really, really broken. And, you know, and, and, and hopefully he doesn't break things in the meantime.

    4. HSHarry Stebbings28:19

       One thing he was very vocal about was his concerns around China, and China's obviously never had such penetration into consumer audiences in America, from TikTok to Shein to Temu. Are you concerned by China's influence, and how would you approach it with its increasing strength?

    5. JLJoe Lonsdale28:34

       Yeah, I, I would force them to divest of TikTok. I think that, I think that's fine for Americans to own TikTok. I think right now China controls the TikTok algorithms. I don't care if the guy is based in Singapore, some of the data is here. It's very clear China controls the algorithms that are able to brainwash tens of millions of our people. That's totally unacceptable. Listen, S- uh, Xi Jinping is a very problematic guy. Is, uh, you, we talk about Trump and Biden and all their issues, this Xi Jinping was, like, basically, like, turned in by his mother in his youth to, to, you know, to, to a, to this terrible government.

11. 29:07 – 30:28

    Concerns & Impact of Trump’s Win

    1. JLJoe Lonsdale29:07

       I think he's sang poems with other Maoists, you know, as they were killing tens of millions of people he was saying poems about hardening your heart to the destruction of America. Like, this guy is a problem. He's, he's, he's a, he's, he's a wacky guy. He's very scary. Uh, China is by far our biggest threat to have that kind of dictatorship. A lot of people like to pretend that it's just like, oh, Americans are just being, like, nativist or hawkish or whatever. No, this, this guy was hiring a lot of his best and brightest to build military technology and is obsessed with, obsessed with us. And so, so I think China's a huge threat. Now, that said, Harry, the Chinese people are amazing, right? And then this, this is a really, again, this is a dialectic. On one hand you have a crazy government, a crazy dictator. It's very scary. On the other hand, gosh, I wish we could work with the Chinese people more because they're s- they're innovative, they're smart. There's real innovation happening. They're not just copying there like they were 20 years ago a lot more. Uh, you know, I'm, I'm very bullish on, on what could be done and will be done in Chinese tech. And I'm not as bullish right now because Xi Jinping just killed a bunch of our friends there, and scared off a bunch from who were running things. (laughs) So, it's a bad time for them. But gosh, I wish we could have a free China that we could work with. The whole world would benefit from that so much. And so I really hope that in our lifetimes we get past this kind of, like, you know, fight that's going on right now between these two sides and find ways to work again with the Chinese people because, 'cause that would really help all of us.

    2. HSHarry Stebbings30:24

       Do you not just think we're entering this kind of very long-term segment of de-globalization,

12. 30:28 – 34:00

    China’s Influence & Approach to Dealing with it

    1. HSHarry Stebbings30:29

       where we will be incredibly insular, where your- your- your friends are very few and you have many enemies, and each nation is really fighting for itself?

    2. JLJoe Lonsdale30:38

       I think that's, like, a very, very terrible way for the world to go the next 20 years. I do think that thanks to the people running China and the things we're facing with them, that we are currently in a de-globalizing period. I think that- that as much as possible, we need to have blocs where we all work together and where we, you know, I think comparative advantage and trade is a great thing for the world. We maybe shouldn't have traded quite how we did with China, given that it's run by crazy people who we made more powerful. Uh, so there's some- there's some legit arguments not to do that. I think there's some legit arguments that AI with manufacturing could bring some things back on shore in the US, and the US more than any other nation. But even though we're able to be self-sufficient, we're actually much stronger as a nation when we're working well, you know, with our partners. And so even if we have to decouple some from China for now, I really hope we still work with the rest of the world. I think it'd be a disaster to completely cut ourselves off. It would be bad for everyone.

    3. HSHarry Stebbings31:27

       Should we trade with Russia?

    4. JLJoe Lonsdale31:29

       Well, we probably should not be trading as much with Russia while they are being an aggressor nation. Uh, I think, I think there's rumors recently of- of space nukes and all sorts of things they're doing. I mean, I think we showed them how far ahead we are using space, and so now they might try to, like, go after us there. Uh, listen, Russia has some really strong, smart people doing some- some very scary things. And I'm- I'm not a fan of Putin, I'm not a fan of what they're doing in Ukraine. We probably need to cut off people when they're bad actors. Uh, but- but we should be trying to trade with as many people as possible who are not run by crazy dictators (laughs) .

    5. HSHarry Stebbings32:00

       Would you continue funding Zelenskyy in Ukraine?

    6. JLJoe Lonsdale32:04

       That's a really complicated one. I- I think this is another one of those where there's a dialectic, where there's really smart people who have really good arguments on- on both sides, frankly. I- I think, I think if you don't appreciate the arguments on both sides, you need to pay a little closer attention. Overall, my bias is, it's done the right way. It is correct to push back on Putin and it is correct to basically both push back on him, but also push back so hard that you come to the table and end the conflict. I think the idea that we want to keep the conflict going is a ter- terrible mistake, and I think that this conflict was unnecessary if we'd had a president who was savvier about how to handle it. But at the same time, I wouldn't just leave them out to dry. So this is- is- is- this is a very nuanced, nuanced topic. I am very frustrated with a lot of the money we've- we've- we've wasted with bad elements there. I'm very frustrated with a lot of our policy that leads to war, more- more war than necessary. Uh, but- but I wouldn't leave them out to dry either.

    7. HSHarry Stebbings32:53

       You mentioned, obviously, some of the horrific events we saw in Israel. But, I'm sorry for the naive question, what do you think happens there? 'Cause it- it's not obvious.

    8. JLJoe Lonsdale33:02

       It's a very, very difficult topic. You know, I was just reading Ben-Gurion last night, um, talking about how everyone told him, uh, even his friends like Marshall at the time, uh, General Marshall, uh, you know, told him not to declare independence in 1948 because they'd be attacked and destroyed, and these people had worked their whole lives basically. Like, he, you know, the context is these people had grown up, uh, this is my grandmother's, you know, parents and grandparents constantly under pogroms, constantly being raped, killed, slaughtered with no home of their own. People have no idea that how tough that history was for so long. It wasn't just the Holocaust. And- and just- just dreams to have a home of their own again. And so even though it was tough odds, they decided to declare independence and the Arab armies attacked and tried to destroy them completely. And- and, you know, fighting for their survival, they were barely able to survive and- and make it. And, you know, Israel is a home to the Jewish people and- and it's, uh, it's- it's- it's definitely something that's extremely important to our people as a needed home.

13. 34:00 – 34:52

    Continue Funding Zelensky?

    1. JLJoe Lonsdale34:00

       We're not gonna give it up. And- and, you know, what we faced until we had that, what we still face now in other places is- is really bad. So it's something that's very, very important to me. Um, the way Israel was attacked by Hamas, Hamas now has to be destroyed. I'm very, very frustrated with people who kind of misunderstand what's going on here and are trying to, as usual, kind of go against the Jews. Basically, like Hamas uses, you know, civilians as human shields and they have our hostages, and it's very sad that they're using these civilians as human shields. Uh, but after they attacked us and went to war against us, we're not gonna stop going after them. So I- we'd like, I'd like them to stop using these people as human shields, I'd like them to give up the hostages. But, you know, the way it stands now is- is we're gonna keep fighting. We're gonna wipe out Hamas. And hopefully we can work with others to have a government there that's- that's not, you know, does not allow terrorism.

    2. HSHarry Stebbings34:49

       I'm so naive, and so forgive me for this.

14. 34:52 – 38:07

    Israeli-Palestinian Conflict

    1. HSHarry Stebbings34:52

       Does that not just create another generation of- of civilians who continue to hate Israel?

    2. JLJoe Lonsdale34:57

       Uh, I think basically what creates a generation of civilians that hate Israel is you have the schools in that area have been run by people who teach people that Jews are pigs and Jews are wrong and our religion hates Jews and these are terrible people. And you have kindergartens where people are going in and practicing showing how they're fighting and killing Jews. You have kids literally after they cross on October 7th calling their mom and dad saying, "I've killed 10 Jews, mom and dad," and celebrating it. So you have basically, effectively a death cult. And there's been a lot of death cults in history. There's been the Nazis, uh, there's been some of what the Comanches did here. There's just been all sorts of these horrible death cults throughout history. We can go back and name a bunch more of 'em. And- and when you have these things, uh, it's very, very terrible. And you can let them attack you and destroy you, or you can attack them and- and make sure to take out the bad guys amongst them. Now, are there gonna be people there who are angry at Israel? Yes, the whole generation has been brainwashed. Like, the whole generation has been brainwashed. There are some good ones, by the way. Despite being brainwashed, people are people and they're smart. And, you know, despite being brainwashed, they still deserve human dignity as much as possible. We do every, we should do everything we can, uh, you know, to help them and get that. But when someone attacks you and kills you and- and is- and is- and is a bad guy and guilty, you have to go after the bad guys who did it and wipe them out. That's- that's what you do when someone does that. And- and there's no other option.

    3. HSHarry Stebbings36:08

       You mentioned that kind of the bringing up of children there in obviously a horrible and very negative way. I spoke to many of your mutual friends and our mutual friends and your team before the show, and they mentioned what a central role your family plays in your life. You've mentioned your daughters. Can I ask you, how has your style of ... I know it's a very strange outlet one, but I just sort of when ... How has your style of parenting changed over the years? This is one of the most interesting topics. Like, how has, what being a good father changes to you?

    4. JLJoe Lonsdale36:36

       You know, uh, here is one where I'm still learning. Um, my kids are...... one, three, five, and six. And we have four little girls, and we're hoping to welcome a son this, this, this summer it looks like. So, we'll, we'll see what happens with this. Uh, so I, I am definitely not an expert. I'll tell you what. I was one of three boys, and we were, like I said, like I told you, we're a very competitive family. Uh, you know, my daughters have some competition, which is fun. But I think, I, I remember coming in after teaching them, uh, some of the chess moves with my two eldest ones, and I came back after going to the washroom, and they said, "Look, Daddy, they're having a wedding. The pieces are getting married." (laughs) And like, and, and, and l- they said, "Look, Daddy, they're all friends now between, (laughs) between the black and the white pieces, and there's a wedding." I'm like, "That's great there's a wedding," you know? (laughs) It's like, "What, what do you do with this?" It's not, you know ... so maybe, maybe they're not quite as naturally competitive as I was and there's, there's different interests. And I think the eldest is really into art. And they're, they're very bright. They're v- really wonderful. We had a Valentine's Day celebration where I got them all flowers and cards, you know, relatively re- you know, earlier. And it's, uh, I, I am s- I am still learning. My father was so good at figuring out what I was interested in, and then getting me to just go after it and be really competitive. And I, I haven't figured out how to do that quite as well with them. But I'm doing my best to support them. And I think, I think it's most important to, to sp- spend lots of time with them and show them I really care about them, give them individual attention, uh, you know, en- encourage them. But listen, I'm, I'm not an expert yet, right? I'm, I'm definitely learning as I go.

    5. HSHarry Stebbings37:58

       Dude, you do so many different things. And you also have four girls and, like, a fifth soon, in terms of a child near

    6. NANarrator38:05

       Yeah.

    7. HSHarry Stebbings38:05

       ... then little boy. How do you

15. 38:07 – 39:57

    Role of Parenting

    1. HSHarry Stebbings38:07

       not see spending time with children as an opportunity cost away from work and doing what your mission is? And I know that sounds awful and horrible, and forgive me for it. I love kids. But me and you are both pretty auto-focused. (laughs) How do you do-

    2. JLJoe Lonsdale38:21

       Yeah, you know, you know, it, it definitely helps you with your priorities. It definitely helps you say no to things that you wanted to do but you just don't have time for. I'm, I'm, I'm pretty, I'm pretty rigorous about my scheduling. There's a lot of hours in the day. I, I find I work a lot better if I get at least seven hours of sleep. I find I have to work out. And so you, you schedule. You schedule with your kids, you schedule a workout. That time with the kids, that time with, for your health, both of those, the time for your sleep, like, all of those are, are sacred. You only cut into them if it is an absolute emergency, and, and you really, really push back and you, and you make sure you hold those times. I try to be here for Shabbat dinner on Friday nights. We start it early at 5:00. Like, I have lots of things that are just kinda sacred time with the kids. Then, then the rest of the day, you, you do what you can. It, it turns out here, you just gotta go really fast in, in the, in the kinda 60, 70 hours you have, you know?

    3. HSHarry Stebbings39:08

       How do you bring children up with hunger, ambition, hustle, in a world where there is financial abundance? It's one of the hardest things as a bluntly wealthy parent.

    4. JLJoe Lonsdale39:19

       Yeah. You know, you gotta expose to them the challenges and the problems in the world, and, "Listen, I wish we could do this, and here's..." Like, I, I guess I'm kind of lucky in a sense that I have so many areas where I see gaps. Like, I think what makes a strong entrepreneur and a strong venture investor is y- is you see the gaps in the world and, and you, and you wanna fix them. You see, like, "This is broken here. This is broken here." So, uh, there's just so many gaps in the world that, that we should be fixing and we're not. And if I had more resources, if I had more wealth, if I had more time, if I had more competent people, we could be fixing this and we'd be helping so many people. So, I think for me, trying to expose them to these gaps, trying to expose them to the fact that if we do

16. 39:57 – 41:08

    Balancing Work & Family

    1. JLJoe Lonsdale39:57

       have resources, if we are gifted, where we're gifted with, with a great mind or a great ability, it's our job to g- like, go run towards these gaps and try to fix them, and, and hopefully share some of that passion. And, and, and I'm, I'm ... I hope that'll ru- it'll rub off and, and they'll wanna do the same.

    2. HSHarry Stebbings40:11

       I'm so interested. Dude, you said there about kind of exposing the gaps, the cracks of opportunity. How does that mean you view the importance of people versus markets when starting something, when investing in your new business? Where do you weigh those two?

    3. JLJoe Lonsdale40:24

       They're both necessary, right? It's, it's, you know ... you have to have the smartest, hardest-working, most passionate people in the world to build these giant companies, or even to build these nonprofits successfully. You have to have the best people in anything I do. If it's not the best people, I don't know how to make it work.

    4. HSHarry Stebbings40:42

       Do, do, do you-

    5. JLJoe Lonsdale40:42

       Uh, but in-

    6. HSHarry Stebbings40:42

       Do you, though ... I mean, I, I mean it nicely. Like, I've seen quite a few businesses where, like, they've reached, like, very, very big outcomes, billion-dollar plus, and the people are, eh, like, seven? Great markets.

    7. JLJoe Lonsdale40:55

       I ... There are always exceptions. Now, listen, there's alway- listen, if you pick, like, the best market ever that for some reason no one's going after, and the people, even if they're not the most talented, have some special ability maybe to do that area, sure, it's

17. 41:08 – 42:10

    Instilling Ambition in Kids

    1. JLJoe Lonsdale41:08

       possible. But ... And we always used to give the example of Twitter back in the day was, like, you know, these, they ... I think, I, I think Mark Zuckerberg very, put it very well. He said it was a clown car that fell into a gold mine, right? So I mean, there, there are, there are gold mines (laughs) you can fall into if you're, if you're not the most talented people necessarily. But I think that's very rare. I think that's the exception that proves the rule. And, and, and, you know, a lot of times, I'll start with the best people, and we'll go towards a gap, and we'll realize the way we were approaching it was wrong and it's not working. But because you have the people, you figure it out, you iterate, you make it work. So, so I mean, you get a lot more shots on goal, uh, when you have the right teams and the right culture.

    2. HSHarry Stebbings41:45

       How many shots on goal do you think you need? You're, you're a dude with a lot of conviction in what you do. Do you believe in diversification? Are you, "I know this. I can go concentrated"?

    3. JLJoe Lonsdale41:55

       If I was gonna criticize myself over the last decade, I probably was too diversified. That I think is a very fair ... Listen, like, Palantir, I think now it's trading as a 50-something billion dollar company. It's, it's doing very, very well as, as, as,

18. 42:10 – 43:44

    Importance of People & Markets

    1. JLJoe Lonsdale42:10

       as, as I'd ex- e- expect with the, with the amazing team and leaders. And my, my friend's still in charge there. You know, Addepar, despite what some of the trolls online were saying, has had a, had a record couple years. It's doing amazingly well. I think it's gonna be one of the biggest fintech companies. I'd be very disappointed if it's not, if it's not like a, you know, 20, $30 billion company at the end of the decade. Uh, and hav- you know, and it's, it's just really making great strides. So, I, you know, and, you know, o- o- open, OpenGov is obviously a unicorn I created that's he- impacting thousands of governments. And, you know, and more recently started Epirus, which is probably the most important EMP defense company in the world that sh- it's valued as a unicorn. Should be a really big company. Resilience Bio I started with Bob Nelson and my team. It's valued at, you know, eight or $9 billion. It's, it's doing really important things in biomanufacturing. So, I, I, I have done a lot of things I've gotten going that are working that were ... you know, it's good. And then obviously as an investor in ABC we have so many others with our big themes right now.... um, I mean, there, there, i- it is possible-

    2. HSHarry Stebbings43:04

       If you were to have done less. If you were, if you were to have done less and concentrated efforts, would the ones you concentrated efforts into have been four times bigger or, or not?

    3. JLJoe Lonsdale43:13

       I think, I, I think Addepar could have been bigger faster if we'd gotten some things right earlier on. Now, I might have still made the same mistakes spending more time on it, but I might have not. I might have figured some things out. And fortunately, we have an amazing CEO there who's really figured things out and made things work in a great way. It probably cost us a couple years with some of the missing things where we had certain types of leadership, certain types of talent early on. Could have helped us sa- you know, save some trouble, that's for sure. Probably same thing with OpenGov. OpenGov's in a really strong spot, also had a record quarter recently. It's

19. 43:44 – 45:04

    Diversification vs. Concentration

    1. JLJoe Lonsdale43:44

       a, it's, it's an amazing company. Uh, but yeah. I think, I, I, I think, I think in all these cases... I mean, Epirus as well, amazing defense company, but there were some leadership choices we made in, in, in DC where we probably could have done things faster and better. And, and really, Anduril really got some of those things right. And, and, and Epirus is some of the most important technology in the space, and now has a great business side as well. But it, but, but I think, I think, again, there's probably like... if, when you're not doing something full time, there's gonna be things you miss. And I, I, I go back and forth on this because I'm able to get a lot of things going really well that are important that might not have happened otherwise. But I think there is a reason why, like, a lot of our most talented entrepreneurs who really focus are the wealthiest people in the world. Uh, I, I think, I think there's some lessons from that. So, so maybe, maybe, maybe that was a mistake. I'm, I'm proud to have been able to do so many things. It's something that's kind of a unique skill of mine. And, and to be able to help so many other entrepreneurs, I enjoy it. It's fun, right? You get to go in, you get to sit down and partner with a great entrepreneur. You get to learn stuff you wouldn't have learned if you didn't get to spend some hours with them. Uh, so, so, so it really is a trade-off you make. And, and, and may- maybe I shouldn't have made it, but you know what? I, I guess I have to s- at the end of the day, I do really enjoy running AVC, working with my partners there, working with all these themes and entrepreneurs, kind of understanding what's going on in the economy. It's a fun thing to do. So, so may- maybe, maybe, maybe I'm a little bit less financially successful, but still, you know, whatever, we're still making billions of dollars here. So I, I think it's kind of silly to focus on money at that point, you know?

    2. HSHarry Stebbings45:01

       Joe, do you think about your net worth when you, when you think across those companies?

20. 45:04 – 46:00

    Reflecting on Concentrated Efforts

    1. HSHarry Stebbings45:04

       I'm sorry for the base question.

    2. JLJoe Lonsdale45:05

       (laughs)

    3. HSHarry Stebbings45:05

       But no, but like, do you? Is it like, "Oh, wow. Like, it's like, there's a lot of billion-dollar companies there, bro." (laughs)

    4. JLJoe Lonsdale45:12

       I, I, I definitely get a report in Addepar every week. It, it tells me my net worth, which I'm not going to share on the podcast. (laughs)

    5. HSHarry Stebbings45:19

       (laughs)

    6. JLJoe Lonsdale45:19

       But no, it's, uh ... (laughs) No, it's, it's, uh-

    7. HSHarry Stebbings45:22

       Spoiler.

    8. JLJoe Lonsdale45:22

       ... I mean, you definitely-

    9. HSHarry Stebbings45:25

       Spoiler alert.

    10. JLJoe Lonsdale45:27

        (laughs) Spoiler alert. Uh, it has a nice statue of a lion on it, and it says, "Lonsdale." It's very cool, you know? (laughs) It's just like ... (laughs) You know, put on, put on my s- my robe, you know, and sit back and sip the coffee and look at it. No, I think you focus on your liquidity to do more things. I mean, I'm kind of one of those crazy guys who's 95% illiquid 'cause I'm constantly putting money into new things and building things and putting money into my university, putting money into Cicero. I spent a huge amount of money and cash flow on these non-profits to try to have this impact. And it's kind of fun 'cause every time you make more money, Harry, you can use it to do things. Like, you can use it to send it to the

21. 46:00 – 48:58

    Role of Net Worth

    1. JLJoe Lonsdale46:00

       Philippines or Africa, and you can, like, help like 1,000 people with a relatively small amount of money and help them a lot if you pick the right non-profits. Uh, and with, with, you know, with Cicero, with these laws we're passing, you know, it's hard to measure exactly 'cause it's not perfect, 'cause you still have to convince people and it has to be good. But for a couple hundred thousand dollars, you could take a law that's a really good law, it's gonna help a lot of people and, and, and hire people and go testify, and there's a good chance you can get it done in, in a state where you're making a big difference and you're teaching them something. So you ... And, and you're impacting tens of thousands of lives. And so, you know, the- wha- wha- when I think of money, I think of it as like an ability to use it to do these things, which is, which is really fun.

    2. HSHarry Stebbings46:36

       You should come to Europe. For a couple of thousand dollars, you can buy a politician much easier. (laughs)

    3. JLJoe Lonsdale46:40

       Well, (laughs) you know, that's, that's funny. I, I'm sure that does happen there. We, we, we, we spend the money on the really smart people that go and they testify, they work with them and that help them and that, and they convince people why it's a good idea. I, I, I, I, uh ... You know, obviously, we donate sometimes too to people, but I, I found it's more useful to spend money on the smart people to convince them is, is, is how we like to do things.

    4. HSHarry Stebbings46:59

       Joe, does money make you happy? And then tied to that, when you think about your wealth journey, what were the biggest needle-moving moments in your mindset?

    5. JLJoe Lonsdale47:07

       Well, what makes me happy is, is using it to, to fix things that are broken, right? And, and with these legislation, with the university, uh, with, with a lot of the other causes we do. And frankly, using it to build things that, that, that should exist and to fix problems too. Sometimes the best way to have an impact on the world is creating for-profit companies, you know? When we, when we started OpenGov, I, I, I, I'd, I'd done pretty well at Palantir, although it was still early-ish. Uh, I, I'd done, I'd done well with Peter at the hedge fund and with some other mother angel investing. And we got OpenGov going-

    6. HSHarry Stebbings47:35

       Do you sell alo- do you sell along the way in Palantir or you just did-

    7. JLJoe Lonsdale47:37

       Oh, yes, you have to. You have to. I mean, I mean, I'm too embarrassed to tell you things I've sold along the way 'cause it was so stupid of me to have got out of them early, 'cause I've been in a lot of the, uh, top companies. And, you know, the, the lesson all of us face who were born about the time I was born was just basically to hold on to everything great forever. Of course, it didn't work anymore in 2021 briefly. We had some things that, that spiked and then went down. But, but the lesson was that I probably should have held everything for an extra 10 or 15 years. And I, and Peter Thiel had the same lesson, and I've learned a lot from Peter, and he obviously sold out of Facebook too soon too. And, and, but, I mean, these things are really, really hard to figure out. I've definitely sold out of a lot of things too soon. Uh, and, and, and, but, you know, you have to to do- to do new things. And, and so, anyway, I was gonna say with OpenGov, we originally had a non-profit that was trying to, like, put all the data online for all these states and cities and show people like, like, the different wastes and different efficiencies. And, uh, and all these cities started contacting us after we did it, 'cause basically we showed that California was actually really efficient in some areas and actually really wasteful, like, 2X the spending in a lot of other areas, 'cause you can do regressions versus other states. And all these cities started contacting us and saying, "Oh, do this for us too. We wanna see." And we said, "Sure, send us the data." And they said, "How do we send the data? Our consultant says it's gonna be $50,000 or $80,000." And we're like, "What is going on here?" And we looked into it, and this market was just so backwards. And there is like all these people ripping off, you know, tens of thousands of, of cities and state agencies.

22. 48:58 – 51:53

    Using Wealth to Make a Difference

    1. JLJoe Lonsdale48:58

       And so we started up OpenGov, and it, it was, you know, it took a lot of time and money to get going. Um, and it's now very successful. But, but I, you know, I think OpenGov actually had more positive impact than the non-profit ever could 'cause with OpenGov you can get a bunch of best engineers, bunch of the best business and salespeople, and you actually can get something self-sustaining to go to thousands of cities and thousands of state agencies.... and fix how they operate, and, and, you know, make them work better. And so, so, so what, what I found also is like, like money lets you... Money and success lets you have, do more things that help have a positive impact, and that's, that's kinda how I look at it.

    2. HSHarry Stebbings49:29

       There's so many success stories. One that maybe didn't quite go to plan as well was Wish. I think one does learn from mistakes or...

    3. JLJoe Lonsdale49:37

       I'm happy to talk about that. I've definitely had other failures, if that's what you're trying to get at. So, um, we definitely started-

    4. HSHarry Stebbings49:43

       What, what have been the other f- what have... Yeah.

    5. JLJoe Lonsdale49:45

       We started... My friend started a company with Lady Gaga called Backplane. I was the chairman. She... It was like her social media, littlemonsters.com. She would come and sit in the engineers' laps. It was very cool. We all thought we were really cool. This was at the height of her fame. And it turned out we were able to triple her merch sales by, like, getting feedback from other people that we tried to apply to other artists, and it just totally failed. And, uh, turned out that she was very different in how she worked. Her fan base was very different. The technology was irrelevant to anyone else. Uh, she's still popular, but she wasn't quite as hot the next year, and this thing just, like, had to shut down. It was, wasn't able to be self-sustaining. And so that was very fun to get to know her and do something, my friend, with her, but, but not successful. Listen, Wish, Wish is a, is a, is a comp-

    6. HSHarry Stebbings50:28

       What, what, what did you, what did, just on that, what did you learn from that, if you were to reflect on that?

    7. JLJoe Lonsdale50:32

       Um, I learned a few things. One is I learned, you know, a lot of people who do really well in different enterprise software areas, their next thing they wanna do is to try consumer, because consumer is just so different and so interesting. And it, and it turns out that, A, I probably didn't have, myself, like, the magic touch when it came to, like, consumer online product stuff. That just wasn't necessarily a thing. I was... I'm very good at product for lots of different enterprise contexts. It's like what I really enjoy doing, lots of different strategy there in defense. I've created some cool defense things. I think I, I think I probably wasn't as good on the consumer side. And then also, like a lot... Like, the framework I use is like a gap in the world, where like I'm solving something that should exist in healthcare, should exist in defense. Like, either there wasn't a gap in the world in that part of consumer, or else I wasn't the one to identify it. So, so, so I, so I, so I learned that, you know, I'm gonna focus on the things I'm good at, and I, and I'm good at a lot of other things. So, so I don't need to do, like, more stuff with celebrities online. Um, although ... And, and also, I think things that are too much fun is probably like a warning flag, you know (laughs) ? It's like, not that you shouldn't be having fun, but the whole celebrity is too much fun thing is a little, you know... Who knows?

    8. HSHarry Stebbings51:35

       My big concern is when you have someone have a massive outcome and they're like, "Now I'm gonna fix health," and you're like, "Whoa, whoa, whoa, whoa, whoa. You sold an enterprise data company. Like, let's stay in that world." You, you said... Sorry, and I interrupted you. You said Wish, and I was intrigued. What were you gonna say on Wish?

    9. JLJoe Lonsdale51:52

       Yeah,

23. 51:53 – 53:55

    Lady Gaga’s Company

    1. JLJoe Lonsdale51:53

       and, and, and I will just say, as an aside, I do think it's important for people to try to fix healthcare. They just need to realize they have a lot to learn before... You know, it's, it's pretty complicated. We're doing a lot there we could talk about, but... You know, Wish, Wish was an exception on the consumer stuff, I thought, because I identified what was a really, really top data culture. So I invested in Wish at $6 million post in 2010 out of my angel fund, and I led a round with Jerry Yang and others at about 40 million post at series A, and the company went on to grow very, very quickly. It's basically like, like, you know, going after Walmart online is basically going after very cheap goods. There's about 600,000 merchants in China that were like very cheap, very hard to work with, constantly trying to defraud you. And, and so the idea was, of course this stuff is, is like not the best quality, but it's also the cheapest, and you can kinda iterate to make it better quality. And listen, the company raised billions of dollars from lots of really smart investors. Goldman Sachs took it public at a $25 billion valuation. Obviously, we got something right. And now, unfortunately, as of, you know, recently, the company's crashed and it's gone. And so obviously I got something wrong too. It's a pretty complicated story. I think that there's, there's, there's a few things that happened. Uh, there's definitely laws and regulations and rules that were changed. There's definitely ways the Chinese government did not like the fact, after we went public, I think, that they realized this was such a big company making money from America off of their, you know, effectively off of their stuff. They wanted the Chinese companies to dominate. They did lots of things to help the Chinese companies. The Chinese companies probably also did things that were smart. Uh, I think our CEO ended up having a very hard time, and I think he ended up going through what I can only assume was a hard time in his life based on how he acted. And this is not something that, you know, you know, you wanna talk about too much in public, but there was just a combination of these features both inside and outside the company that, that, that, that created dysfunction. And I think people didn't realize how dysfunctional it was after he left, uh, and so unfortunately it, it ended up not working out and losing to the competition.

    2. HSHarry Stebbings53:48

       Did you sell on the way up?

    3. JLJoe Lonsdale53:50

       There's different rules for how these things work, unfortunately. Uh, our core fund, you know,

24. 53:55 – 56:39

    Why Wish Failed

    1. JLJoe Lonsdale53:55

       Formation 8, uh, did not get m- it out. Uh, I personally did not get any, any out. My angel fund was able to get a lot out, uh, to, to for everyone else, and, and I, I took the distributions, didn't sell them. So un- un- unfortunately I didn't end up, you know, I probably lost a few hundred million dollars from, from not, for not selling, uh, which is unfortunate. Now, you know, I, I, we, we got, we sold about a qu- we got about a quarter of it out when we were on lock six months in when the price was already down somewhat. Wish we'd taken even more off then. So, so definitely, you know, de- definitely some mistakes made there in ter- in terms of, in terms of making money on it. That fund, I mean, listen, the angel fund was like, you know, still without, without it, like over a 10x. Formation 8 fund one is a big fund. It was still very, very good returns despite not end up, you know, cashing in on the three or 4X multiple from this, but obviously it's a big loss.

    2. HSHarry Stebbings54:39

       Final one, do you think venture's still a good business? Uh, Doug Leonis said before that venture has transitioned from a boutique high margin business to a commoditized low margin business. Do you agree, and is venture still good with the commoditization of capital?

    3. JLJoe Lonsdale54:56

       I think if you are amongst the best in the world at something, it is worth doing almost no matter what. And I think venture done by people who are not great entrepreneurs and don't have unfair advantages is very hard. I think it's possible, if, if you have some unique skills, to, to still do it well. I, I, I tend to be biased that I, I just have so many unfair advantages being a great entrepreneur who's built all these companies, who has all these networks of talent.... listen, Harry, I think this AI services trend we didn't end up talking much about is extremely important. I think A- I think AI is going to raise productivity and there's just a lot of ways that we're gonna make a lot of money o- o- over that. Probably a lot of the returns go to existing big companies, but there's also gonna be a lot of returns to people who are doing full stack companies and replacing and fixing big parts of the economy. So in, in that, that, that's gonna be captured by entrepreneurs, it's gonna be captured by the venture capitalists who partner with the entrepreneurs. So, so, uh, you know, on average, does every venture fund do well? No. But do the top venture funds still continue doing really well, especially if you're raising the right size funds? Yeah, it's definitely a good thing to be doing.

    4. HSHarry Stebbings55:59

       Uh, tell me, AI services. I do just wanna touch on that 'cause I know you are very bullish on it. Where does the bullishness come from and can you explain how you think that through?

    5. JLJoe Lonsdale56:07

       You know, one way to look at this is what have, what have we been doing for the last 15 years? We call it the smart enterprise wave, right? You had the cloud, you had big data. Suddenly you had probably about 500, you know, unicorns that are legit unicorns formed from the cloud and big data going after enterprise. And what were we really doing there? We were, we, we were, we were taking things from where they were to what's possible, uh, you know, by upgrading infrastructure, by allowing nonlinear workflows. Uh, you know, listen, a lot of people throw a lot of shade at these enterprise companies. It, uh, they have created

25. 56:39 – 57:58

    Future of VC

    1. JLJoe Lonsdale56:39

       trillions of dollars in value the last 15 years by upgrading a lot of parts of the economy. I've, I've invested in and created a lot of these companies. Th- a lot of them are still growing very quickly. They're very viable companies. So that, that's something that I was able to do consistently with dozens of companies. Now, there's not as many of those left to do right now, right? There's not, there's not like a whole nother 500 companies that have not been upgraded, a wh- whole nother 500 subsections of the economy that need to be attacked. And so, so question is what do you do now in venture? So I think a lot of people who are focused on this enterprise model, they're stuck and they're confused and they're saying, "Well, what happens?" Now, w- what is AI? AI, first of all, is gonna help, uh, all of those 500 companies that still have good tech cultures do a lot better so it's gonna make the existing SaaS companies worth a lot more. But, but what else could AI do? And this is where it's kind of fun. So if you, if you think about, if you think about starting a, like company in like 2015 going after a sub-sector in SaaS, the economy, a lot of what you were doing is kind of like, this is kinda mean, but it's kinda like being a bully. 'Cause you're basically taking a company in that sub-sector, in that part of logistics, in that part of finance that was basically a, usually a pre-internet company, or if not pre-internet company it was a pre-cloud company, and that was your competition, right? Your competition was stuff built in the 1980s, 1990s most of the time. And so you're kind of being a bully because you're taking a modern tech culture and you're just, you're, you're wiping the floor with these guys. That's why we were able to win again and again and again with a very high percentage chance.

26. 57:58 – 1:01:26

    Rise of AI Services

    1. JLJoe Lonsdale57:58

       What is AI services? Well, in effect, what AI has done is it's opened up a big part of the economy that we couldn't go after with SaaS, a lot of these old services companies that were also started in the 1970s, '80s, and '90s, and it's opened them up to competition from the tech world. So suddenly we have that same, this kinda sounds silly, but you have that same kind of process of being a bully but in effect you're not really being a bully, you're going, you're upgrading this part of this, the, the economy. But you're going in, you're competing again with pre-internet companies, and so you have a chance to go after with top tech cultures these, these kinda old, kinda lazy areas. And that's a very, very good thing to do as an investor, as an entrepreneur. You want easy competition, you want to compete against things that are broken. When Elon's starting SpaceX, he's competing against like a decadent, broken government department that is not the NASA of the '60s, right? It's, he- he's competing against something that's basically not exploring the new possibilities anymore. And that's why SpaceX was possible. The same thing here, you have all these old, you know, there's like 200 billion plus a year made doing healthcare billing by hand with people who are probably, you know, overweight, sitting in big office buildings working nine to three. And that's a very good thing to compete against, you know, and the fact that AI allows you to go after that to make it three times, four times more efficient. There's gonna be some really big companies. We've identified about 12 areas like this, uh, where we think there's gonna be more than $100 billion pulled out of those areas in terms of being able to go after 'em and create more efficient things. That's great for the economy, it's great space for venture- to attack right now.

    2. HSHarry Stebbings59:23

       I always laugh though 'cause I see these people, you know, going up against foundational models and Sam Altman or any of the greats who are doing it, and I'm like, "The secret to success is weak competition and you chose him?" Really? Like that wa- that was where-

    3. JLJoe Lonsdale59:35

       (laughs)

    4. HSHarry Stebbings59:35

       ... you identified the opportunity? Hey, you are fucked. (laughs)

    5. JLJoe Lonsdale59:38

       Yeah, Bob McGrew was, uh, one of my superstars who ran Palantir engineering early on, a key person we hired very early that made Peter more bullish on our company. He's been running research at OpenAI and doing a lot of work there for the last eight years. And, and I'd much rather be on Bob's team than competing against him. So by go- doing what I'm doing, I get to, I get to do something complementary to Bob and Sam. That's probably the best strategy.

    6. HSHarry Stebbings59:59

       Totally. Listen, I wanna do a quick fire round so I say a short statement, you give me your immediate thoughts. Does that sound okay?

    7. JLJoe Lonsdale1:00:05

       Sounds good.

    8. HSHarry Stebbings1:00:06

       Okay. What have you changed your mind on most in the last 12 months?

    9. JLJoe Lonsdale1:00:09

       Probably I've read a lot of parenting books and I thought I knew what I was doing and I'm s- realized I'm still have no idea what I'm doing. (laughs)

    10. HSHarry Stebbings1:00:16

        (laughs)

    11. JLJoe Lonsdale1:00:16

        So (laughs) that's, they're, my kids are great but I'm still learning.

    12. HSHarry Stebbings1:00:19

        The best advice I've got from speaking to many is, uh, watch National Geographic, look at the elephants. Parents, train by leading the way. Just show the way.

    13. JLJoe Lonsdale1:00:30

        That's great advice.

    14. HSHarry Stebbings1:00:31

        Yeah. I thought so too. What are you most concerned about in the world today?

    15. JLJoe Lonsdale1:00:34

        I'm very concerned about the geopolitical situation with China and Russia and the potential of war. Uh, when I was in, you know, a country in Asia, I won't say the name, seeing our ambassador there who's on the other political side but a very smart guy, even he was telling me he thinks China is likely to strike in the next four years because a lo- they realize how much stronger we're getting and, and how much weaker they're getting. And so I'm just very worried about the, the possibility of war, uh, this decade which is just a very terrible thing and, and would derail everything for everyone and hurt a lot of people.

    16. HSHarry Stebbings1:01:07

        If you could choose one person as a co-founder of a new company today, who would you choose first?

    17. JLJoe Lonsdale1:01:14

        Well, you know, it's dependent. If like, for example, Elon wasn't doing six other things, I think he would probably (laughs) be the best one but I think he's obviously very, very busy and still be very talented.

    18. HSHarry Stebbings1:01:23

        What do you think makes Elon so good, Jay?

    19. JLJoe Lonsdale1:01:25

        It's like f- very

27. 1:01:26 – 1:02:28

    Quick-Fire Round

    1. JLJoe Lonsdale1:01:26

       high IQ, very high clock speed, willingness just to go right to what matters and dismiss all the other bullshit, and not worried about offending or anything else, just like going towards, like the truth and the substance and the thing that matters the most and like attracting the best talent and driving towards the outcome. It's, it's just very, very like no nonsense and, and, and kind of raw, raw like substance.

    2. HSHarry Stebbings1:01:50

       What's the biggest, the single biggest lesson from the many years working with Peter Thiel?

    3. JLJoe Lonsdale1:01:54

       Uh, you know, I wrote a document that's been circulated online-

    4. HSHarry Stebbings1:01:56

       I know, the, the, the nine lessons from... I, I read it because of Sh- Shayan actually sent it to me.

    5. JLJoe Lonsdale1:02:03

       You know, there's a lot of them. The one that, one of the one that stands out a lot to me all the time like in all these conversations I have every day is usually there's like one reason that dominates all the other reasons, and if you have three or four reasons for something, that means you have no reason for something. Like if you have four ways you're gonna make money, you have zero ways you're gonna make money. Like what's the one that's gonna dominate? And if you haven't got to that, you're either thinking sloppily or you haven't figured it out yet. So I, I think that that's a, that's one of my favorite of those nine.

Episode duration: 1:02:56