The Twenty Minute VCMatt Clifford: The Bull & Bear Case for China's Ability to Challenge the US' AI Capabilities | E1172
EVERY SPOKEN WORD
135 min read · 27,316 words- 0:00 – 1:06
Intro
- MCMatt Clifford
I think that we are seeing the flattening off of the value of just adding more compute and more data to language models. I think nuclear war is really underrated. I think AI changes everything in the future of war. China is more paranoid about AI safety than probably any other government. The US export controls on, you know, the semiconductor supply chain have had an impact. It's harder if you are a big Chinese company to build a access-100,000-GPU cluster.
- HSHarry Stebbings
Ready to go? Matt, I am so excited for this. We, we first met, I remember, do you know what? I remember exactly where it was. It was the Hoxton Hotel, and it was like eight years ago if you can believe it.
- MCMatt Clifford
Yeah. I can believe it.
- HSHarry Stebbings
So, dude, thank you so much for joining me today.
- MCMatt Clifford
Thank you for having me. Uh, it's great to be celebrating our anniversary together. (laughs)
- HSHarry Stebbings
It, it is incredibly special. I want to start with a little bit of context. I think we're actually shaped a lot by our early years in our childhood.
- 1:06 – 4:34
Impactful Childhood Hardship
- HSHarry Stebbings
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
Uh, and actually often by harder times. I remember, uh, my mother getting MS was probably one of the most challenging but impactful times on me. What was the most challenging time for you in your childhood that you think impacted you most?
- MCMatt Clifford
So I was... I had a very fortunate childhood. I grew up in, um, a sort of ex-industrial small town in the north of England. Um, my mum was a teaching assistant. My dad was a social worker. Uh, I have three siblings. It was like a big, happy sort of family. But I, I think, like, probably the formative experience for me, at least in retrospect, was, you know, like, where I grew up there were no... If you want, if you were a teenager and you wanted to, like, make money, you basically could work in Gregg's. That was like, that was the option. And I really didn't want to work in Gregg's. And, um, I think, like, a really formative thing was I remembered that there was a lightning storm, uh, in our village. And, uh, one of my parents' friends, it sort of somehow damaged their computer. Um, and I remember, like, them saying to me, "Do you think you could fix this?" And I knew nothing about, uh, fixing computers. But I was like, "Yes."
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
And so I did. I basically just bought a new motherboard and plunked everything back in. And I think what I learned from... And then, sorry, the, the... I never went to work at Gregg's. I ended up sort of like building a little business, sort of age 13, fixing and building computers for, first my parents' friends and then their friends and then sort of like branching out into building them websites and sort of like taking spyware and malware off their computers, which, (laughs) you know, like this was like the early days of the consumer internet where-
- HSHarry Stebbings
Yeah.
- MCMatt Clifford
... everything was horrible. And I think just realizing you can do stuff. You, you can just say yes and figure it out. You don't need anyone's permission. I think that was really life-changing for me. I think, like, so much of everything I've done since comes from believing you can just say yes and you can just do stuff.
- HSHarry Stebbings
I believe that the best founders always actually start their first entrepreneurial thing early.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
It is never when you're 25 and you come out of Oxford and you're like-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... "Oh, this entrepreneurship thing."
- MCMatt Clifford
Yeah. Yeah.
- HSHarry Stebbings
Do you disagree with me having seen so many different entrepreneurial paths that you've seen?
- MCMatt Clifford
We believe... One of, one of our kind of core ways that we evaluate founders at Entrepreneur First is that the best predictor of future behavior is past behavior. Um, so we absolutely think that it's very unlikely that you rock up with a perfect CV but, like, no sign whatsoever of ever having done anything that you weren't told to do by a teacher or a boss, and suddenly you're gonna figure out how to do things that you weren't told to do. So, uh, in that sense, I think I would very strongly agree. I guess what I would say though is that, um, culture and default paths really matter. And so one thing we've learned about evaluating talent is what it looks like to do something that your parents, teachers, bosses didn't tell you to do in the Bay Area is very different from in Singapore. You know, like if you grow up in the Bay Area and you go to Stanford and you graduate and you never thought (laughs) about starting a company, then that's a very negative signal on you as a founder.
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
If you grew up in Palani, in, you know, rural India, um, I don't think I need to have seen that you started a company before. But what I'm doing when I'm interviewing you is figuring out what is the behavior, what is your equivalent of the story I just told you? What is your equivalent of that entrepreneurial activity that is a predictor of you being able to succeed in an unstructured environment? That's what
- 4:34 – 10:28
The Future of AI & LLM Commoditization
- MCMatt Clifford
I care about.
- HSHarry Stebbings
So we're gonna go back to founders 'cause it's such a-
- MCMatt Clifford
Yeah, yeah.
- HSHarry Stebbings
... big topic that I do want to kind of really touch on properly. But I want to start on this tweet of yours, which I just thought was fantastic. And you said, "Two predictions. One, someone will build a new OpenAI anthropic-scale AI company that takes the commoditization of LLMs as one of its core premises." What did you mean by this?
- MCMatt Clifford
I was very lucky to start investing in AI about 10 years ago, a B- bit more than that now, when the first sort of deep learning, uh, wave kicked off. And, you know, E- what's really interesting is that really certainly the last five years, but arguably longer, the story of AI is really a story largely about the deployment of just enormous amounts of, uh, compute and enormous amounts of data and not that many new ideas, candidly.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
You know, I mean, like, there, I'm not saying there are none, but, like, broadly, if you had to, like, do a pie chart (laughs) of where the progress has come from, it's largely come from-... massive investment in compute and application of that. I think what's interesting, if I had to, like, if you held a gun to my head and said, like, "Where are we today?" I think that we are seeing the flattening off of the value of just adding more compute and more data to language models.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
Um, I think we've seen truly extraordinary progress over the last five years. But, you know, I- I think of most technologies as S-curves. You know, you sort of get slow progress, then fast progress, then slow. And it strikes me that we're in this moment where sort of incremental value of- of just continuing on this path of scaling is leveling off.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
And what that means is, the- the value of ideas is about to go up a lot relative to the value of just scale. And what that means to me is that whenever va- ideas become valuable again, you have an opportunity for startups. Frankly, I don't think startups today should be trying to compete on building bigger and bigger LLMs. It doesn't make sense. It's mainly a capital game. Like, maybe you can do a Mr. Allen raise, you know, like hundreds of millions in year one. But even they might be under-capitalized, right? I mean, that's the kind of crazy thing. And so today, I think the real opportunity for founders is, uh, find the next S-curve. And I think we're in a moment where that's actually possible to start.
- HSHarry Stebbings
Is that next S-curve in the application layer then? If you're like, hey, it's not gonna be in that layer, and compute alone is at a stage where it's reaching diminishing returns, is that in the application layer where you feed off of the compute and investments?
- MCMatt Clifford
I- it could be. I mean, I think the things that I'm excited about and I'm looking at pretty hard right now are, um, search, you know, like, how we can apply... You know, and there's been a lot of buzz about this recently in the sort of AI research community, like, how do you use search? Um, the techniques that actually made things like AlphaGo work, um, how do you kind of mix those with LLMs to get better results? I think clearly, there's this big moment around multimodality that is just getting started-
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
... where I think if you can figure out very smart ways to think about different data types than text, that might be another S-curve.
- HSHarry Stebbings
Do you not think you're right in the pathway of OpenAI if you're going for that use case? If you think about multimodality and you look at, you know-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... um, some of the OpenAI's latest release, especially when you look at their language kind of learning-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... the math algorithms, it was like, oof.
- MCMatt Clifford
Yeah, I mean, look, I- I think my- my point's not that, like, the big guys won't be able to do this. My point's that I think the value of ideas right now, the... I- I suppose my point is really that the, uh, value of ideas over the last five years has been relatively small.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
Like, the question was, could you get the scale to compute? I think the value of ideas over the next few years might be high, and it might be enough to unlock... I'm not saying it's suddenly gonna become this low capital game. I think if you want to build an AGI company, you're gonna need a lot of capital. But I think until now, the only way to do that is, was to have trained a large language model at one of the labs, come out and raise a bunch of money and say, "We're gonna carry on doing it." I think there may be a new approach that's possible today, where you actually just have an idea that's, like, really quite different from what people have been doing. And you can use that, a little bit like DeepMind 10 years ago, to do a demo that makes people say, "Ha." And that unlocks the capital that allows you to go up against the big guys.
- HSHarry Stebbings
When you think about, like, progression in the LLM space, you've got kind of compute algorithms and data. When I had Alex Wang on the show, a mutual friend of ours-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... he said that data is the bottleneck.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
Actually, we've seen, uh, you know, incredible amounts of compute, uh, but it's data that is the bottleneck. Do you agree? And if you were to choose one of the three that is the bottleneck to the progression, what would it be?
- MCMatt Clifford
So I think it's certainly true that, um, data is the one of those that it's least obvious how you continue to, to scale. You know, as in, at the moment, you can just translate dollars into compute relatively easy, easily. And so, you know, you can imagine at least a couple of orders of magnitude, of- of growth, of compute, you know, quite straightforwardly. It's not obvious that you can do the same in data. That said, I think people probably underestimate what we haven't done yet. I mean, like, we are not... you know, partly because of compute limits. You know, like, these models are not trained on all video, you know? In fact, most, m- you know, mostly that hasn't happened yet. And it's kind of interesting. I mean, y- some of the things that, um, people like, uh, Andrej Karpathy have been talking about recently is like, you know, the potential of- of thinking about video as being a- a really great way for a, um, for a model to build a world model and, you know, to understand more about, uh, how the world works. So yeah, d- data is a bottleneck, but I wouldn't bet against smart people figuring out ways to either create or, uh, ingest new types of data. I guess what I'm really arguing when I say we're on an S-curve is, I don't think there's a lot further to go in just finding more text. You know, I think, I think we may be at the flattening out of the S-curve on text, but I suspect the next S-curve could just involve finding ways to, um, yeah, to use video, to use, like, interactive experience in- in
- 10:28 – 15:47
Is AI Facing a Hype Cycle Decline?
- MCMatt Clifford
very different ways.
- HSHarry Stebbings
You said about investing in, you know, AI 10 years ago. I remember, God, some of early demo days, and that might be... But I remember, like, Bloomsbury AI.
- MCMatt Clifford
Yeah (laughs) .
- HSHarry Stebbings
And this was so early then.
- MCMatt Clifford
Yeah, yeah, yeah, yeah.
- HSHarry Stebbings
And, you know, I- I love Alex Schultz from Meta.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
And he wrote a brilliant piece the other day about kind of, um, hype cycles-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... in new technologies that I thought was really interesting. And he said, you know, kind of what he's concerned about is actually, we're gonna hit the flattening of the hype cycle, like autonomous cars.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
Do you think we're gonna hit that flattening again?
- MCMatt Clifford
Well, I think it's a race, as in, like, I do think that if- if we can't find anything better than just trying to scale LLMs, then yeah, the flattening out will be brutal. But my, if I had to bet, my bet is that the enormous amount of capital and talent that has been aggregated, you know, around this relatively small number of companies because of the hype will be enough...... to unlock the next S-curve. And so you'll see, you know, kind of further improvement. If we can't f- but this is what I mean about the val- the returns to good ideas, I think will be very high over the next few years. So actually, another way of thinking about it is, one thing you've seen over the last couple of years since GPT-4 was released is actually a convergence of capabilities. You know, when GPT-4 came out, it was very clear that OpenAI were in the lead. And now, like, there's quite a few companies that have a GPT-4-ish level model.
- HSHarry Stebbings
A hundred percent. (laughs)
- MCMatt Clifford
You're seeing convergence, right? My guess is that you may see more divergence over the next few years because the value of ideas goes up, because people aren't just scaling.
- HSHarry Stebbings
But that's just really interesting because everyone is saying, "Oh, we're seeing a complete commoditization." We even have Chinese players like Yi, I think it's called-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... uh, which is like almost equivalent-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... of GPT-4's-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... per- performance. Are we not seeing the conversation yet?
- MCMatt Clifford
I- I- I think the pure LLM approach absolutely is commoditized, will be c- either is or will be very quickly commoditized. I guess what I'm saying is, it- it- I don't think GPT-5 is just gonna be a bigger language model. I think it's gonna involve something different. It's gonna involve kind of, uh, you know, like, a lot of productizations, maybe search, as we already, you know, discussed and things. And so, like, but these are not commodity ideas yet. It's not yet, uh, the case that everyone will then just say, uh, or- or that immediately everyone will be able to copy that. And so I think, you know, broadly, you know, I was talking recently to someone who was on the LLaMA 3 team, and they were like, "You're probably underrating (laughs) the extent to which LLaMA 3 is literally just LLaMA 2 with more compute (laughs) and- and more data." There's not a lot that's different other than, you know, that. I guess what I'm saying is, LLaMA 4 will not just be, you know, a bigger LLaMA 3. It will have to be different. It will incorporate new ideas.
- HSHarry Stebbings
And this will then lead to a tearing away or a pulling away with that player who has the ball.
- MCMatt Clifford
Yeah. Well, particularly because norms around secrecy around ideas, well, have increased over time. I mean, you- it's easy to forget that-
- HSHarry Stebbings
Well, have they, or do we see the, um, incredible incest (laughs) between different companies, you know, the super AGI team that leaves OpenAI goes to Anthropic?
- MCMatt Clifford
Yeah. That's- that- that- that's certainly true. But I guess what I mean is that, um, the, y- you know, like, the- the- the knowledge around how to build, uh, how to train, do pre-training on, you know, a very large model is now extremely well-known. But I think it is now quite appreciated in the labs that if you can find an idea that has this, like, disproportionate impact on capabilities, guarding that is gonna be very important. Now, again, I'm not saying that that will remain secret forever. But I think in the short term, I think we're likely to see more divergence, you know, over the next couple of years than convergence.
- HSHarry Stebbings
Yeah. No, listen, I, I agree with you there. Would you be a buyer of OpenAI at 90 billion?
- MCMatt Clifford
Oh, you know, I think, I think it, I think I would not be. I mean, I'm a huge fan of OpenAI. I think it's extraordinary what they've done. Um, but, I mean, on the other hand, if they're really doing whatever it is, three and a half billion a year (laughs) and, you know, they can continue to productize, you know, maybe it's not crazy. But I- I do think that, um, we're- we're gonna get a lot more data in the next, a lot more evidence in the next year, whether anyone has another good idea. Um, and I think that's what it's gonna take.
- HSHarry Stebbings
Do you think China-
- 15:47 – 24:46
Is China Two Years behind in AI Race?
- MCMatt Clifford
any money.
- HSHarry Stebbings
Do you think China is two years behind?
- MCMatt Clifford
This is what Alex said. Uh, this is what Alex disputed, right?
- HSHarry Stebbings
Yeah.
- MCMatt Clifford
Um, so Alex has become a- a- a good friend. Um, I would, I would put this again in the category of like, it's very hard to say. I think there is a, I think it's... You know, as, as you know, I, I spent quite a lot of time last year working on the, the geopolitics of AI in, in government and including, like, spending time in Beijing and, you know, negotiating with the Chinese government on, you know, AI. And you, what I would say-
- HSHarry Stebbings
What is their level of sophistication?
- MCMatt Clifford
Um-
- HSHarry Stebbings
Because in the UK, I think w- there's-
- MCMatt Clifford
Uh-
- HSHarry Stebbings
... the idea that we know very little other than people
- NANarrator
(techno music)
- MCMatt Clifford
I think it was... I think, uh, the Chinese government is very sophisticated on AI. Um, you know, for example, the- the guy I was meeting to negotiate with was the- the Minister of Science and Technology, you know, a senior minister on the, you know, standing committee of the CCP. You know, he's a computer scientist. Like, he- he knew his stuff.
- HSHarry Stebbings
Is that a higher level of sophistication than the UK government?
- MCMatt Clifford
I guess I would say, like, one thing I learned during, during that job, um, a- albeit briefly, was that, actually, the UK's, um, the UK's capacity in this space is high relative to most countries. I remember being on the initial kickoff call, so for the 28 com- you know, I was running this, um, you know, this- this summit for the Prime Minister, and there were 28 countries coming. We did this kickoff call on Zoom or Teams. Uh, you know, the best way to improve productivity of government is just, like, allow them to not use Teams.
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
Um, and, you know, like, honestly, without naming names, there were countries where they were like, "Oh, we don't even ha- we, you know, how could we possibly do this? We don't have an AI policy division. We don't have an AI minister." You know, like, so I- I think, like, the UK actually has been, um, ahead of the curve on this. But I do think China is very sophisticated, and I think-
- HSHarry Stebbings
And it doesn't actually matter if you're ahead of shit. What matters if you win-
- MCMatt Clifford
Yeah, absolutely.
- HSHarry Stebbings
... I think in this. And my, my concern is that China will have unparalleled access to data and just say, "I don't give a shit-"
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
"... about privacy concerns, about data... Just go."
- MCMatt Clifford
W- one of the things that's interesting and I think underrated is that, um...Actually, China is more paranoid about AI safety than probably any other government in the world. So if you look at Chinese AI regulation, it makes Brussels look like a soft touch. Um, it's incredibly onerous.
- HSHarry Stebbings
Why is that? I thought they would be all out dominant, "We need to win this race and we will do anything to win it."
- MCMatt Clifford
I think you've just got to see the CCP as being, like, fundamentally extre- have an extreme priority on stability. You know, like, the- the whole story of the CCP and its- and its dominance is eliminate threats to stability. And, you know, whatever you think about AI, whether you're bullish or bearish, whether you care about safety, whether you don't care about safety, I think everyone agrees that it's, like, a destabilizing force. And so I think the last thing they want is either companies gaining a lot of power, uh, through AI or AI itself being destabilizing. So, you know, like, if you read the- the- the regulation that's already coming through, for example, if you train a large model, you have to, like, supply random samples of the training data to the, um, to the CCP or to the government. You have to, uh, you have to, like, show its, like, political, that it (laughs) , that it is, um, not gonna undermine any of the, you know, stated positions of the CCP on various issues. So, like, it's actually a very, very regulated environment. Now, that doesn't mean that ultimately the Chinese state won't try and harness powerful AI for its own ends as- as you're sort of talking about. But I think it's easy to understate the level of paranoia they have about it. So, y- y- you know, like, my- my view would be there- there are two factors that make me think that maybe, you know, maybe I'm not quite in Alex's camp. O- one is that, that actually they... th- that it's a very highly regulated space there.
- HSHarry Stebbings
And that means that they are not gonna be at the same...
- MCMatt Clifford
Well, I think if you look at, like, why i- why it's been so fascinating, um, in the West, you know, basically because, you know, certainly OpenAI and Anthropic and, to an extent, you know, kind of especially now, you know, under the sort of unified leadership, um, here in London of- of- of DeepMind, you basically just have this extraordinary permissionless, to go back to that idea, explosion of, like, ambition. You know, like, what, you know, Sam and Demis and Dario are doing, y- y- you know, it's like, it's this almost untrammeled, um, uh, very visionary, uh, uh, ambition. And I think in China, as we've seen in other parts of the tech industry in China, the CCP is very nervous about entrepreneurs being given that much, (laughs) uh, that much room. And so I think that it's not trivial to create the conditions in which a Chinese Sam Altman or a Chinese Demis Hassabis can just go to the races in the same way, because there's just much more... I mean, we all saw what happened to Jack Ma, um, when he became... when it looked like he was too powerful. But I think that's an important ingredient in building, you know, these sort of AGI companies is you need someone at the top that actually is all out to build, you know, like, the final invention as (laughs) , as some of them call it.
- HSHarry Stebbings
That's so interesting. Yeah, we released a show, say, with Eisenberg, Michael Eisenberg at LF-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... and he said, "US number one-"
- MCMatt Clifford
Yeah.
- 24:46 – 26:59
Vertical Integration in AI & Chip Industries
- MCMatt Clifford
in an extraordinary position.
- HSHarry Stebbings
I actually had David at Adept on the show.
- MCMatt Clifford
Okay.
- HSHarry Stebbings
Uh, it comes out on Monday. He was fantastic, but he actually spoke about kind of the verticalization of all of s-... the different players.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
And he said actually that you're gonna see NVIDIA move into the model layer, 'cause they wanna own more of the margin, and you're gonna move... see the model players, OpenAI and the biggest, move into the chip layer-
- MCMatt Clifford
Mm-hmm.
- HSHarry Stebbings
... uh, because they need to own more of the margin. Do you think you're gonna see that? We already saw Apple actually talk a lot about their own chips.
- MCMatt Clifford
You know, one of my favorite tech essays that I find myself referring to all the time is that, um, you know, Joel Spolsky thing on commoditize your compliments. And, you know, that... that's what's happening in... in AI right now. Um, everyone is saying like, "What are the compliments to what I'm doing and how do I commoditize them?" I mean, I... it's interesting, like, I... the reviews of NVIDIA's model are pretty mixed, to put it mildly. I don't know. Like, I think... I think you'll certainly see people trying to figure out, like, which layers of the stack do you... do you need to own and, you know, like, how... you know, what do you have to commoditize in order to, like... like, really protect your, um, your core business? But I do think... you know, like, the... the... maybe we'll always say this, but it really feels to me like we're gonna learn so much in the next 12 months. You know, like, the... to me, the key question that until we... until we resolve, we're all just guessing, is sort of, how good are the GPT-5 era of models? If they're, like, wildly better, if it's as big a gap between four and five as it was between three and four, that is a very different world from if it really feels like we're eking out these tiny improvements despite having invested truly colossal amounts of money.
- HSHarry Stebbings
What do you think would be a needle-moving shift?
- MCMatt Clifford
I think the one that people are talking most about, which makes sense to me, is just agency. I mean, like, you can't... you can't... the... GPT-3 wasn't good enough really to do anything remotely agentic. People have obviously built agents on GPT-4, but, you know, people doing that have said, like, "You can build great demos." You know, you run it 100 times, you pick the best one, it looks amazing. But robustness is very, very... well, a huge problem and, and, and they're not reliable. But I think if GPT-5 were good enough that you could get much, much more reliabil-... reliable agents, I think that would feel like a qualitative change that was really impressive.
- 26:59 – 29:42
Is the World Ready for Autonomous AI Models?
- MCMatt Clifford
- HSHarry Stebbings
Do you think the world is ready for an agentic capable model to be unleashed?
- MCMatt Clifford
Not one that... where, like, many millions of instances can be run and, um, they can operate at, like, nearly human level. No, I don't think that's what GPT-5 will be. But like, I... you know, one of the... one of the theses I'm really interested in right now is I think we'll get really good agents in the next five years. And I think if you look at parts of the economy where we already have a lot of automation, it's pretty clear that that requires a lot of infrastructure, requires protocols for agents to interact. I think we're gonna need that for AI agents. We're gonna need, uh, to build great infrastructure to maximize the economic value of these agents and to-
- HSHarry Stebbings
I'm sorry, what does great infrastructure mean to maximize...
- MCMatt Clifford
Well, let me give you an example. Uh, there... there... there are... uh, an area of the economy where there's already a lot of autonomous agents is, um, high-frequency trading.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
You know, so in... in... in, um, in trading, a lot of the work is now done by what I think you can only describe as autonomous agents. But we don't let them just go wild and, you know-
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
... like, call their broker and, uh... I'm being facetious, but, like, if you look at the complexity of the infrastructure we've built to handle, you know, like, edge-
- HSHarry Stebbings
And it's a rules-based system, though.
- MCMatt Clifford
Mm-hmm.
- HSHarry Stebbings
And the rules are quite... well, the rules are very objective.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
When X means Y, then do Z.
- MCMatt Clifford
Yeah, so I'm certainly not saying that we can just copy what we have, but I think it gives you... to me, it's like an intuition builder that, like, let's say we're gonna send out lots of agents to do economically valuable work. We need to goverthing-... govern things like, um, how do they interact with each other? Um, what are the rules for that? How do you handle the edge cases? How do you observe what they're doing? Um, how do you govern what they're doing? How do you make them keep to the rules? And so it strikes me that whoever builds the protocol that for key slices of the economy actually allows agents to come together and do business together, that's gonna be an extraordinarily valuable company.
- HSHarry Stebbings
Should government be the ones to do that?
- MCMatt Clifford
I think government should, like, set the standards, but I just don't think government has a great track record of building important scalable software.
- HSHarry Stebbings
And that's an independent company that would be-
- MCMatt Clifford
I think so.
- HSHarry Stebbings
... the one setting that protocol?
- MCMatt Clifford
I think so. I think it's like... it's the equivalent to building an operating system or a... or a protocol. It's basically saying, "If you want agents to transact with each other, we provide the tooling that allows you to observe that, govern that, turn them off when they're not working, handle the edge cases." But imagine that a large chunk of the economy over the next decade ends up being transacted by autonomous agents. I don't think they're gonna interact in the way that humans interact. There's gonna have to be, um... there's gonna have to be infrastructure that allows them to interact. And whoever owns that infrastructure, I think that's gonna be a huge asset.
- 29:42 – 31:19
Content Automation & Socioeconomic Inequality
- MCMatt Clifford
- HSHarry Stebbings
We're sitting in London.
- MCMatt Clifford
We are.
- HSHarry Stebbings
And you... you mentioned about the kind of, uh, town in the north that you're from.
- MCMatt Clifford
Bradford?
- HSHarry Stebbings
Uh, Bradford, and-
- MCMatt Clifford
Lost my accent.
- HSHarry Stebbings
There you go. I'm really worried about, like-... knowledge and equality actually. And I think we sit here, and we know all these things. Dude, like, a million people in the UK, of 65 million, have any idea what we're talking about, maybe less. Do you not think this is gonna create an ever-increasing chasm in wealth im- inequality?
- MCMatt Clifford
I think one of the good things is people benefit from technology even when they don't understand it. I think that's, like, one of the big lessons in, you know, the history of the last 200 years of capitalism is that, um, uh, you know, you, t- technology is, is the engine of prosperity. And, you know, like, people whose jobs involve very little technology today make a whole lot more than their ancestors 200 years ago and have a much better quality of life because of the benefits that technology brings. Um, I do think it's true that so far, you know, I, uh, in the broad trend is that, uh, technology is what, I guess, economists call a skills biased. It benefits people with more skills more than it benefits people with, with fewer skills. Um, and that's a big challenge. That is a big challenge for governments. Also probably a big opportunity for, for entrepreneurs. But I think, in general, the story of technology is, is an extraordinarily positive one. And I think although I, I'm not saying that people shouldn't, including policymakers, look at this and say, "Right, how do we plan for this world where relatively few people understand this, but it's a huge factor in everyone's lives?" But I worry about that because I worry that you start to get the instinct of, like, maybe we should try and slow it down, maybe we should try and stop it.
- 31:19 – 39:23
European Regulation: Overreach or Appropriate Response?
- MCMatt Clifford
And-
- HSHarry Stebbings
Do you think the fears of, oh, we're gonna be regulated to oblivion and Europe will regulate ourselves as we generally have done, is overreaching?
- MCMatt Clifford
My view would be, and I think you see this already, is that, you know, I, I didn't vote for Brexit. I, um, uh, was not a fan. Uh, broadly, I'm not a fan. But, you know (laughs) , probably the first issue where I'm like, "Huh, may- there are some benefits to this," is just looking at the difference in approaches to AI regulation. I mean, I do think the EU AI Act is a, is a mistake. I think the way it thinks about AI as a technology, it sort of assumes... It tr- it, uh, my basic model of how that legislation gets written is, like, a bunch of old dudes sit in Brussels and say, "Let's imagine everything that could go wrong. Okay, you're not allowed to do that."
- HSHarry Stebbings
What's the biggest problem with the EU AI Act?
- MCMatt Clifford
Basically this, that it try, it, it basically tries to anticipate, uh, the future, labels a bunch of things high risk, and creates an enormous burden for companies trying to innovate in those areas. I think actually this is an area where the UK has done a lot better job than Europe, where we're not regulating to oblivion. In fact, on AI, uh, the UK has less regulation than any other country that has a significant AI industry. So, you know, right now, there is no specific AI regulation in the UK. Um, in fact, in the UK-
- HSHarry Stebbings
So if you're building AI in Europe, the UK is the best place to build?
- MCMatt Clifford
I strongly believe that.
- HSHarry Stebbings
Huh. And that's because of the regulatory benefits?
- MCMatt Clifford
I think it's, I think, I think that's one of the factors. I think the other is just the extraordinary talent base. If you go back to the thing we started this conversation talking about, let's say I'm right that there's gonna be, like, a strong return to ideas, to new ideas, over the next few years. I think it's very likely that of people in Europe who might have those ideas, they're disproportionally in the UK.
- HSHarry Stebbings
Do you think so? And you think they will stay in the UK?
- MCMatt Clifford
Let's say you really believed that you could build... Let's say you c- believed you could build, as I framed it and you quoted, like, a, an Anthropic or OpenAI scale company in terms of ambition. I actually think one of your biggest challenges building that in the Bay Area today would be building and retaining the AI research talent that makes that-
- HSHarry Stebbings
100%.
- MCMatt Clifford
Like, rete- and, you know, people always talk about hiring. People much less often talk about retention. But, like, the packages that Sam Altman will offer to your best people the minute you get your first, like, uh, you know, demo, uh, y- you know, i- is really hard. I think in, in London, it's much more plausible that you build a truly world-class research team and keep them together for long enough to really see the impact. And yet, like, here in London, we have DeepMind, we have the London office of Anthro- we have the European office of Anthropic, the European office of OpenAI. We have Wave, we have, you know, Oxford, Cambridge, Imperial, UCL. Like, we, I, like, the, the bench is very deep when it comes to AI talent.
- HSHarry Stebbings
Why are we so fucking negative then?
- MCMatt Clifford
I don't know. Like, um, I'm gonna, I'm gonna-
- HSHarry Stebbings
Why do we, why are we-
- MCMatt Clifford
... do a spoiler. I know one of the questions you're gonna ask later is, "What do you believe that people around you don't?" And I thought a lot about this and I was like, "Oh, maybe I can say something about AI." And I realized the thing I really believe that almost no one believes is I think the UK can go back to being pretty much the richest country in the world per capita. I really truly believe that.
- HSHarry Stebbings
The richest country?
- MCMatt Clifford
Per c- per capita, yeah. I think we can be at least as rich as the United States on a per head basis. I think we've chosen not to be, um, and we just need to choose to be.
- HSHarry Stebbings
And the biggest way that we could choose to be is...
- MCMatt Clifford
We, we, we should be the obvious place in the world to build and scale technology companies, and we can be.
- HSHarry Stebbings
So, so what is that rate-limiting factor?
- MCMatt Clifford
I think the big things are actually levers that we can choose to pull. Like, you know, one of the things that I found just, like, really dispiriting when I was working in government last year was the, um... I mean, it was an enormous privilege, but I, you know, I got to go and meet Satya Nadella And Andy Jassy and, you know, these people, and negotiate with them on, you know, on, on this summit. And, you know, I was mainly talking about AI policy. You know, obviously, they wanted to talk about the full tech agenda with the UK. And the number one issue that these companies had, and I'm, I'm really not exaggerating, was, "We want to invest billions and billions of dollars to build compute infrastructure in the UK, and your local county councils, in the middle of nowhere, keep vetoing our data centers because they obscure a view from a railway bridge."
- HSHarry Stebbings
It's inspiring to hear you, because I literally, I just sit with other entrepreneurs and other VCs, and everyone just fucking goes, "This sucks in London."
- MCMatt Clifford
But it's so funny, right? Because, you know, as you said, we're sitting here in London, and I would say-... you know, within three miles of where we are, you have a top three global AI lab, arguably the one with the broadest research agenda, DeepMind. So if I'm right that ideas will matter, then DeepMind's, you know, right up there. You have probably the top embodied AI company, private company in the world in Wayve. You have, like, probably the best life sciences cluster, you know, (laughs) in, certainly in Europe. Um, you've got, I'm super biased because I'm the chair, but you've got probably the most radical government R&D, um, funding agency in the world in Arria. Um, we, we, we know how to do this stuff already. We've just got to believe in it.
- HSHarry Stebbings
What about people who say, "Ah, but the liquidity markets are shit. Like LSE is useless. There's not enough of a buy book. Big institutions aren't understanding enough." How do you think about that?
- MCMatt Clifford
I think they're right. But like, well, you know this, like this is a r- I- the way I see it is this is really a question about who benefits. It's not actually a question about whether we can build. What I mean by that is I would love it that when, you know, a 20 VC company or an EF company goes public, that the pe- you know, the, the pools of capital that own that company are my mum and dad's, you know, West Yorkshire Pension Fund. Um, right now, that's not what's gonna happen because they're gonna IPO in places that, uh, the shareholders are probably American, you know? It's, uh-
- HSHarry Stebbings
Vanguard.
- MCMatt Clifford
... Vanguard and BlackRock, right? And honestly, for you and me and for the entrepreneurs, who cares? You know, like it's, um, it's, it's all cash. But again, if you want to, you know, from a UK, like, long-term growth perspective, I believe that so much of our growth, if we make it happen, will come from, you know, like entrepreneurship, like big advances in, in, in science and technology. And I think frankly, capital markets are very efficient. Like I think good things will raise capital. The question is, whose capital? And I think, I think from a UK PLC perspective, we should want it to be that it's pension funds, you know, with UK pensions, UK savers that are benefiting from that. So there's a big problem.
- HSHarry Stebbings
What would you say to UK pension funds who are listening?
- 39:23 – 49:19
The Impact of AI on Future Warfare
- MCMatt Clifford
about.
- HSHarry Stebbings
Uh, listen, I, I agree completely. I, I do want to touch on o- one final thing before we do, just a bit on founders, because I think it's such an important part. It's just like the future of, like, modern combat and how AI changes that. One of, you know, the most e- exciting companies coming out of Europe, I think, is Helson.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
And Torsten, one of the best entrepreneurs in Europe.
- MCMatt Clifford
Yeah. My, certainly my best angel investment so far.
- HSHarry Stebbings
I, yeah.
- MCMatt Clifford
That was a very lucky break.
- HSHarry Stebbings
Well done.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
Um, he is exceptional.
- MCMatt Clifford
He's truly exceptional.
- HSHarry Stebbings
The business, the business is incredible. How does AI change the future of warfare? And do you agree with Alex Wang that it is more powerful than nuclear weapons?
- MCMatt Clifford
That's a very Alex thing to say. Um, I don't think AI today is more powerful than nuclear weapons. Um, you know, I, I don't think GPT-4 is. Um-
- HSHarry Stebbings
Have you tried perplexity?
- MCMatt Clifford
(laughs) Yeah. Well, yeah.
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
Have you tried a hydrogen bomb? Um... (laughs)
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
I would say as a, as a slight side note, I do think, which is not what this podcast is about, but I think nuclear war is really underrated as a thing to worry about. Um, if you've not read it already, and if your readers haven't read it already, the best book I've read this year by some distance is, um, Nuclear War: A Scenario by this amazing, uh, American journalist Annie Jacobsen. And she describes it as a non-fiction thriller. And what she does is basically just walk through step by step what would happen if a rogue country launched a, uh, an attempted attack on the United States and all the things that could go wrong and lead to disaster. Um, and it's chilling. It's like, I, I don't think I've ever had an experience with a book before where I had to keep taking breaks because I was like, "Whoa." Um, but you know, she, she, she didn't make this up. She went and she, she spent thousands of hours interviewing the top people in nuclear security in the US, in you know, like former Soviet, um, people. And it, it's an extremely compelling book. Um, so like nuclear war, underrated. (laughs) Um, but to answer your question, um, I think AI changes everything in, in the future of war. Um, I think that if you look at what do soldiers do, um, and like, how do we think about their value and how do we think about the harm that comes to them? If-
- HSHarry Stebbings
When you look at a future though, where you can deploy thousands of autonomous AI drones-
- MCMatt Clifford
That's what I'm saying.
- HSHarry Stebbings
... into the mountains of Afghanistan...... and the Taliban have machine guns, I think it seems like a pretty unfair fight.
- MCMatt Clifford
Yeah. I mean, I think, you know, what's really interesting to me, and this i- this is sort of, um, an open question, and I, you know, I kind of hope your listeners might, might send us their views. Um, I think it's a really interesting question, how does AI change the relative power of, uh, uh, offensive and defensive, uh, weapons? In that, um, there's certainly plausible to tell a story how being able to build cheap smart drones, um, benefits rogue actors, you know, non-state actors a lot more than it benefits, um, states. You know, if you have, like, if you have very large important assets that you don't want (laughs) to be attacked, like aircraft carriers, you can make the argument that the ability to deploy very, very inexpensive but pretty smart explosive drones is, you know, like, really asymmetric. (laughs) Like, there's not much an aircraft carrier can do about that. One of the reasons I'm very interested in defensive technologies is, I think, I think we're gonna have to think about problems like that and get ahead of them. Um, yeah. (laughs) It's, it's definitely... I think there are a lot of scenarios where it's not obvious it actually benefits the current, mm, you know, established powers.
- HSHarry Stebbings
Are you more excited or are you more nervous about the times ahead? You know, one thing that I'm just very aware of as an investor is, I think cyber, uh, security as, as a category-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... is gonna be more important than ever. We could completely have a world of deepfakes. There's so many things that I do worry about. And I don't mean to be negative.
- MCMatt Clifford
No, no, I-
- HSHarry Stebbings
But I am, sorry, when you think about the future for your children...
- MCMatt Clifford
So I think probably, like, the worst idea in the world that is acceptable to hold in polite company is, like, de-growth. Like, the idea that, like, "Oh, you know, like, the real problem in the world is, like, um, too many people, too much stuff, too much consumption. We should shrink, you know. We should shrink populations, we should shrink the economy." Like, I could not hate that idea more. Like, I think all human progress has come from growth. And so, like, I'm such a... Like, I want, I want to see technological progress. I want to see people building amazing things and as using more clean energy to do more amazing things. Where I part company with, you know, kind of other peop- some other people that agree with that is, I don't think that it's therefore inevitable that all technological progress automatically leads to great outcomes. Um, I think you just have to look at nuclear weapons to see that, uh, yeah, so far we've done pretty well. But there's some pretty terrifying stories about near misses, you know, kind of Russian relatively junior soldiers ignoring-
- HSHarry Stebbings
(laughs)
- 49:19 – 53:03
Is Entrepreneurship Accessible to Everyone?
- MCMatt Clifford
is not for them.
- HSHarry Stebbings
Do you think everyone has the ability to be an entrepreneur?
- MCMatt Clifford
No. I think entrepreneurship is like... it's, it's best to think of it as like... well, it's nothing like medicine, but in the same way that I don't think everyone should be a doctor or could be a doctor (laughs) , um, I think you should think of entrepreneurship as like a high-skill, extremely high-skill profession. You know, like probably my favorite... In general, I think the... I'm the sort of person that's inclined to wanna read, like, the academic literature on something and on the basis that surely, like, where there's something we know and we can, you know, there's some alpha in learning. I would say in general, the academic literature on entrepreneurship is not helpful for either entrepreneurs or VCs. Might be interesting, but it's not, it's n- there's no, there's no, like, alpha in it. Um, the paper I think about all the time, um, is a great paper called Forced Entrepreneurs. And what it looks at is in certain markets, uh, when there's a recession, the dominant employers of high-skilled people hire fewer people. Obvious example in the UK is financial crisis, the banks hire fewer bankers. And unsurprisingly, in those periods where the level of, uh, hiring of, you know, kind of highly skilled individuals into finance falls, more people start companies. That's kind of like probably quite obvious. Everyone would sort of intuit that. What's non-intuitive, and in fact, I think the, maybe even counterintuitive, is that not only do those people then start companies, but they do on average better than the median, uh, person who was, uh, starting a company in a year without that recession. In other words, the forced entrepreneurs, the ones that go into it because the banks stop hiring, do better than the people that chose the previous year.
- HSHarry Stebbings
That is fascinating.
- MCMatt Clifford
And the reason, in my view, and this is like... so I realize it's like on the verge of being quite rude and controversial, is that in most ecosystems, it is not by default the very most talented and ambitious people that become founders. It probably is in the Bay Area, but you know, like a w- I remember when we started EF-
- HSHarry Stebbings
(laughs)
- MCMatt Clifford
... um (laughs) , um, well, yeah, b- b- but this is the point, right, is that the reason that I think there's a huge opportunity in the UK and in Europe and in India where, where we work is that actually, you can find those truly exceptional people and they... it's not obvious (laughs) , um, that it's much harder in the Bay Area in a way, because there's so many more opportunities for-
- HSHarry Stebbings
For sure.
- MCMatt Clifford
... for, for, you know, investors to, to, to meet those people. But, but the point I wanna make is, you know, even today in the UK, even with all the progress that's been over the last decade in the ecosystem, um, I would say the most aspirational job for a Cambridge computer science grad is to go work at Jane Street and be a, be a trader. I think that's the number one job.
- HSHarry Stebbings
Seriously?
- MCMatt Clifford
I think-
- HSHarry Stebbings
Still?
- MCMatt Clifford
I, I think it is. I think it is.
- HSHarry Stebbings
How much do you earn as a trader at Jane Street?
- MCMatt Clifford
Oh, like just tru- eye-watering amounts, even for you, Harry. Uh-
- HSHarry Stebbings
Try me.
- MCMatt Clifford
... it's, uh, it's pretty extraordinary. I, I-
- HSHarry Stebbings
Like a million bucks?
- MCMatt Clifford
Uh, in year one, yeah. But, like, by the time you're a few years in, if you're good, like many, many multiples of that. So this is the point about, like, this paper is what it shows is that actually talent is somewhat fungible. It's really tempting for those of us that live and breathe the industry to be like, "There are founders and there are non-founders." But actually what there is, is there's talent and there's ambition. And if that talent and ambition is applied to trading, then those people will be great traders. And if that talent and ambition is applied to entrepreneurship, those people will be great founders. And this is the secret of the Bay Area. Like, why did Silicon Valley work? Because the most ambitious and talented people in that area become founders. If the same thing happened in the UK, in Europe, in India, we'd have very similar outcomes.
- 53:03 – 59:14
Contrasting Entrepreneurial Ambitions: US vs. Europe
- MCMatt Clifford
- HSHarry Stebbings
So what is different about those ecosystems? Because there are j- I'm sorry for being naive, there are Jane Streets equivalent in the US who will put, I'm sure, the same packages down.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
But the ambitious people there say, "No, I'm gonna start a company." And the ambitious people here say, "Sign me up."
- MCMatt Clifford
I think it's like just the, the belief capital. You know, like the, the, there is this, uh, sense that like if you, if you're a Cambridge computer science grad, the five years out, probably the richest person you know is the one that went to Jane Street five years ago. That's probably not true in the Bay Area.
- HSHarry Stebbings
That is not true at all.
- MCMatt Clifford
Right.
- HSHarry Stebbings
That's not true.
- MCMatt Clifford
Right. And so like there's just-
- HSHarry Stebbings
There's Reid Hoffman, always.
- MCMatt Clifford
Right, yeah. No, but I mean, even your peer, you know, like, uh, this is what I'm saying is that, like-
- HSHarry Stebbings
Sure, someone who sold to Dropbox for-
- MCMatt Clifford
Yeah, yeah, exactly.
- HSHarry Stebbings
... 200 million and earned 70%.
- MCMatt Clifford
Yeah, yeah. And so just... but, but that's still not true here. That's the bit I think we still need to see change.... um, is just that, like-
- HSHarry Stebbings
But we've waited long enough, Matt. And we've had exits like Magic Pony-
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
... and in between.
- MCMatt Clifford
Yep.
- HSHarry Stebbings
We've had enough.
- MCMatt Clifford
It's, it ... Which is why it's a lot better than it was.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
Um, it's a lot, I mean, it's a lot better than it was. Whe- when I start, you know, I, I, when I started visiting university campuses properly, when, when Alice and I started EF, um, I think it was Imperial where 60% of computer science grads went into finance. That number is not that anymore. I actually don't know what the number is, but it w- I, I wouldn't be surprised if it was, like, a fraction of that number. It's just changing. But, you know, I, I, uh, something I think is-
- HSHarry Stebbings
I thought one thing though that we were seeing was a movement away from a pure focus around money.
- MCMatt Clifford
For sure. And, and, you know, I, I'm sort of, um, I'm sort of deliberately being sort of reductive about it-
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
... to money. Um, a- and clearly part of the reason why actually really exceptional people do start companies in the UK is exactly that. That, like, yeah, I'm sure they could go work at Jane Street or wherever, but they, but they want to do something. I, I do, I mean, like, to me, whenever I, in a conversation where we've offered someone, you know, a, a place at EF and they've gone off to James Street or, or, or similar, I mean, I'm like, I'm like, "Yeah, you could be an extremely highly-paid crossword puzzle solver," (laughs) um, which is sort of how I think about Jane Street, playing a zero-sum game, or you can, like, change people's lives. Like, it's up to you. And, and, you know, like, actually, a lot of people, exactly as you say, are not just, like, maximizing next year's, um, income. And that, that's, that's where it comes from. My point, though, is the, the, uh, is, is less at the individual level. I'm saying at the system level, you know, our, our biggest challenge I think in Europe is still talent allocation.
- HSHarry Stebbings
What did EF get most wrong in your assumptions on talent?
- MCMatt Clifford
You know, one of the challenges of this business, and you may feel the same, is that the feedback loops are so long. And so, you know, you, you do something. You observe a short-term metric, like do they raise a seed round? Do they raise a series A? And then years later, you find out whether the company's any good. And so I think one of the things we got wrong was just overreacted to short-term data early on. So, you know, we, in the first couple of years, we largely funded people who were straight out of university. And, um, a lot of them did very well. And then as the brand grew and the track record grew, we got more and more applicants who were, like, in their sort of, like, 30s. We're like, "Wow, this is great." Like, "We're, we're able to, like, move up the, um, (laughs) the, the experience curve." And of course, the problem was they were more experienced, but they weren't the very best 30-year-olds. Whereas we could actually get the very best 31-year-olds. You know, like ... Sorry, 21-year-olds. (laughs) Um, yeah.
- HSHarry Stebbings
(laughs)
- 59:14 – 1:06:52
Quick-Fire Round
- HSHarry Stebbings
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
Dude, I want to move into a quick fire because I could talk to you all day.
- MCMatt Clifford
Let's do it. (laughs)
- HSHarry Stebbings
Okay, so let's start off with, uh, which venture investor do you most respect and learn from?
- MCMatt Clifford
Um, well, I was gonna say Charlie Songhurst, and you've already name-checked him. I think Ch-
- HSHarry Stebbings
He's also an angel.
- MCMatt Clifford
Yeah, but he's probably deploys more capital than most seed funds, I would say, every year.
- HSHarry Stebbings
I would agree with that.
- MCMatt Clifford
Yeah. I mean, he's just, he, he could easily put a wrap around it and he would be a fund.
- HSHarry Stebbings
But he also does, like, 500,000 checks.
- MCMatt Clifford
Yeah, he, he, he's, he does, uh, a range of check sizes. Uh-
- HSHarry Stebbings
Yeah. Unbelievable checks.
- MCMatt Clifford
Yeah.
- HSHarry Stebbings
In terms of the amount.
- MCMatt Clifford
The reason I would say Charlie is, like, I think Charlie has two things that I think he is very plausibly the best at in the world. Um, one is-I think he's just a great talent spotter. I think he's just really able to see the best version of every founder that he meets and decide how good that is. If you go back to my idea that, that actually what matters is the peak performance from the peak person, like Charlie has an incredible way of, like, very rapidly building a model of, like, how good is this person at their best. Um, and that's, that's an exceptional thing to be- 'Cause he invests so early. That, that's, like, an amazing thing to be able to do. The other thing he does better than anyone else I know is he pitches back to the founder the most ambitious version of the idea they've just pitched him. And I think he, he's just exceptionally good at that. And he learns so much from how the founder responds.
- HSHarry Stebbings
Mm-hmm.
- MCMatt Clifford
Because a lot of people in Europe ... And, you know, Charlie invests all around the world, but he, I think he largely, I think he largely invests in Europe. You know, uh, one of the things that he and I have discussed a lot is part of the reason it's hard to do investing here is that often by the time you meet founders, they've conditioned themselves to, like, reduce the ambition in the pitch 'cause they're just, you know, been so used to people being like, "Well, that's not very realistic." So then what Charlie will do is he'll pitch back to you.
- HSHarry Stebbings
Yes. (laughs)
- MCMatt Clifford
He did th- You know, he was, he was one of the first investors in the He'll pitch back to you, like, what it could actually be. And, like, I think he's basically saying, like, "Does that excite you?" Do you say, like, "Yes, finally, someone who gets it," or do you flinch? And I think it's an incredible skill.
- HSHarry Stebbings
What's the most contrarian or unorthodox advice you would have for founders?
- MCMatt Clifford
I guess given what I do it's that you can start a company with a stranger. You know, I think a lot of the conventional wisdom on who you should start companies with is just survivorship bias. Just that historically it was almost impossible to start a company with a stranger. So, the only people that the venture community saw were people who founded companies with people they'd known for a long time. And therefore, you know, of course it looks like that's the only way to do it. Um ...
- HSHarry Stebbings
What have you changed your mind on in the last 12 months?
- MCMatt Clifford
We've actually talked about it. I ... 12 months ago, if I'd been on here, I would have told you it's too late to build an AGI company. Like, that ship's sailed. There's gonna be, like, three or four of them. They already exist. I now think the most ambitious founders today should seriously consider whether they're, whether that's what they can do.
- HSHarry Stebbings
Children give you a glimpse of a second life, if not an eternal one. What are your biggest lessons on fatherhood, Matt?
- MCMatt Clifford
So, I've got two little boys. Uh, one's six and one is three and three quarters, as he very proudly says. Um-
- HSHarry Stebbings
(laughs) I love that.
- MCMatt Clifford
I do think fatherhood has been for me a real sort of, uh, exercise in, in humility. You know, like, um, one of the advantages of founding something is, um, at least at work people sort of listen to you. Uh, and you sort of ... You know, maybe it's earned in the sense that you started it, but it's sort of, on a day-to-day basis somewhat unearned. Kids do not care. Like, my sons have no, like, "Oh, well ..." (laughs) Maybe it just means I'm a bad dad. But there's no, like, sense in which, like, "Oh, well, Dad's talking, so, like, he must be right." And I think I just ... It's, it's, uh ... I, I don't want to sugarcoat it. I, I think fatherhood is really hard a lot of the time. Um-
- HSHarry Stebbings
What's the hardest part?
- MCMatt Clifford
The hardest part is that there are no shortcuts. Like, these are humans. And if you want to have a great relationship with them, if you want to be a great dad, you have to invest in that in exactly the same way you'd invest in a relationship or a friendship. And, you know, early on, they're less fun than your friends, frankly. A lot of people seem to like ... And maybe I just ... Not very good, but, like, I, I just think, like, it's this thing where you truly love them in this very deep way. But you ... It's hard work to invest very deeply in this sort of relationship where you, you know, I ... Whenever I travel, which is a lot, I, you know, I sort of have this idealized fantasy of when I come home and they're gonna be like, "Daddy," and we're gonna have this, like, really, like, deep conversation about, like, where I've been and what I've seen. And instead it's like ...
Episode duration: 1:06:52
Install uListen for AI-powered chat & search across the full episode — Get Full Transcript
Transcript of episode 3QJR1LOxXz0
Get more out of YouTube videos.
High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.
Add to Chrome