0:00
[Applause] [Music] [Applause] [Music] hey everyone before we get to the show today a quick favor to ask please do us the kindness of visiting marcus.org survey and tell us a bit about yourself by doing this you'll help us find more
Search this video
0:15
people who like you will love the show they just don't know about it yet plus you can enter yourself to win a special gift from Tyler it only takes 5 to 10 minutes so fill out the form at marcus.org survey help us the show to more people
0:31
and maybe win yourself something special from Tyler thanks conversations with Tyler is produced by the mercada center at George Mason University Bridging the Gap between academic ideas and real world problems learn more at radis.org and for
0:55
more conversations including videos transcripts and upcoming dates visit conversations withth tyler.com [Music] I'm here today with Balaji sason Mark andrees has described Balaji as the man who has more ideas good ideas per minute than anyone else in the Bay Area he is
1:21
the CEO of earn.com where we're sitting right now a board partner at andreson harwitz formerly a general partner and he has co- founded the company Council in addition to many other achievements on top of all that being thought of as
1:35
simply one of the most generative thinkers talkers and speakers in Silicon Valley BAGI thank you for doing this Tyler ice see you uh my first question I suppose is about management so there are amazing achievements from the tech sector but a lot of them seem to cover
1:51
software or other services that are very rapidly scalable to what extent do you think the Bay Area has actually come up with a kind of new and innovative management technique for managing smart people better or is it just that you do scalability great that's a really good
2:06
question I think the most fundamental concept uh really boils down to equity which is to say that in Game Theory you know the the the simplest game the 2 by two Matrix right you know whether you're talking prisoners element or something
2:18
else like that you want to actually have the upper diagonal where it's a win-win be obviously better for both parties than any other Square on on the on the board certainly the Win Lose or the lose win case and what Equity does it takes
2:29
set from the 2x two to the 2x two x 2 x two case right the two to the K case where even if you have K parties all of them realize that they're highest payoff is from the upper right quadrant that is to say when the company exits that's what makes them the most money then
2:44
anything that would be kind of an off diagonal political thing to do which benefits them at the expense of somebody else so the most fundamental management technique I think that the barrier has has pioneered is Introduction of equity
2:56
and Company stock options as given so say we took silicon Val or San Francisco managers and brought them into the healthcare sector is there a lwh hanging fruit that could be reaped from what you've all done here the healthcare sector is a very large area I'd say that
3:10
if you separate it out into let's say health it and electronic medical records and then Diagnostics and then let's say Prosthetics and then you get to Therapeutics and you know gene therapy and vaccines and things like that that's kind of a gradation of risk and also
3:27
gradation of let's say suscep ability to a software based attack so for example Health it and EMR that's directly within our wheelhouse that's there's a lot of companies that are working on that already a Diagnostics is something I'm
3:39
also pretty familiar with it's about half physical and then the rest of it digital Prosthetics again is like Robotics and you know even though there's there's invasive aspects of it you can get pretty far thinking of it as a software and Hardware kind of thing
3:50
and less messy biology it's when you get to Therapeutics and when you get to gene therapy when you get to vaccines and and stuff that's under cedar or CRA that's where it gets difficult so if you break Healthcare up into those segments I
4:01
think some of them are amendable to startups and Silicon Valley techniques today and some of them not for some time as you know we live in a country where really large numbers of parents are afraid or unwilling to vaccinate their children or maybe they do so with
4:13
hesitation how is it that we explain to them they're going to get something on the blockchain it's Sinister it's inhabited by Satan it will eat out the interior of their minds H how does this work what's the role of the new Silicon
4:25
Valley CEO well that's mixing a bunch of different things together I'd say vaccines are real Edge case for you know folks who are generally Live and Let Live because you know while you wouldn't want to inter with someone's choice of clothes or their choice of food
4:39
necessarily if they don't believe in vaccines and their child or or themselves has a contagious disease then it can screw up other people's livelihoods and lives I'm not sure that's something that a software CEO could attack it's kind of an education
4:53
problem I do think that folks who are against vaccination if they wanted to self- quarantine that would be good since they're not going to do so then it's a challenging problem it's one that I don't think software necessarily has a solution to at this point if you were
5:06
designing journalism from scratch what would it look like H that's interesting question I think it would have much much more involvement of people on the ground and many many many more part-time journalists and people who wouldn't even
5:21
call themselves journalists so for example the person who's actually on the scene with a smartphone everybody now has a 24/7 Internet connected video camera um with all kinds of software on it and I think you know Korea pioneered
5:33
something like this called oh my news a while back I think it's still possibly going I haven't followed it very closely but I think a model like that on the global scale where you're effectively paying you know folks in lots of different countries to collect news I
5:45
think is interesting but the news problem of course is is a much much bigger thing there's still verification right so there's still verification yeah especially with phony video being easier and easier that's right I mean one thing
5:56
that's you know kind of like let's say a secondary Point somewhat related is typically what people do is they will take let's say War reporting and you know Kim Kardashian type reporting and put them at opposite ends of the spectrum like this is your eat your
6:08
vegetable stuff and this is your infotainment I would actually group them at the same kind of region and put let's say tutorials on the other side and here's why whether it's you know about Afghanistan or Iraq or the Kardashians that's a story whose facts you can't
6:23
independently verify versus a tutorial on you know a new piece of software or you know how to fly a drone or or something like that is something you can independently verify and so you can fact check every single line by going through
6:34
it yourself so what I think is likely to happen is you're going to see more news that falls into that news you can use category where if people are concerned about the veracity it's got kind of an inbuilt factchecking mechanism because
6:44
you're actually executing every single line as as you read it and this will involve micro payments and the blockchain H uh I think there is one aspect that might so you know while I certainly think about the blockchain a lot the part that's relevant here is
6:55
prediction markets and so you know what people have often talked about there lots of people write oped columns there's no you know record of whether they were correct or not in their predictions right people who op Pine for a living don't traditionally have a way
7:08
of collecting you know hey I was right about this wrong about that Venture capitalists do and it's called our returns right and so I think you could potentially bring something like that to a wider audience if you nail the whole
7:18
prediction markets thing but that's something people have talked about for some time I think it's newly feasible again with blockchain maybe someone will take a crack at that why aren't private companies more interested in prediction
7:27
markets this has long been a puzzle to me I think several reasons well first is there private companies have the market itself namely the stock market right the Commodities Market the bond market where people are paying but that's conditional
7:38
on many different decisions correct you could have a conditional Market if we do x what do you all think yes except the problem is that those real markets have real money and all the folks playing in those markets are really playing to win
7:52
whereas a a toy Market at least that's what we perceived as at the beginning will not have the dollar totals required to be interesting it might only have you know like academic nerds as part of it as opposed to folks trying to gain the system I think it wouldn't be
8:06
necessarily as reflective of reality and wouldn't have the predicted value as the real markets do that may be one reason that private companies have not adopted it but if people value something so take Bitcoin when satto she started it if
8:16
that's even the right word it was the weirdest possible thing and that is well underway and then some after basically 10 years the iPhone comes out there's plenty of markets in iPhones and things that go with iPhones prediction markets it shouldn't seem the jump starting
8:30
should be that hard you get liquidity people want to trade companies want to do them just like changing accounting practices or many other things that happen all the time yeah do we not want to know the truth within companies as I
8:40
said I think people will take another crack of this with the blockchain because you know the blockchain has not just made it much easier to start your own currency in your drawing room it's also made it much more easy to start your own Marketplace and so the
8:50
threshold for starting a new market has Dro dramatically and so maybe we're going to see some innovation in that in the years to come if you were designing Academia from scratch what would that look like Ah that's interesting I think a lot about the culture of Open Source
9:04
versus peerreview right and the distinction is in open source bugs are expected reproducibility is a function of your ability to execute the source code everything is fundamentally transparent because it's all published and you you publish first and then
9:18
people kind of review it and give feedback second as opposed to you know the academic model like in the clay shy model right exactly right and if you think about Academia all of those are inverted uh for example a retraction or a correction
9:29
in Academia is a real blemish on your career can can be a very big deal whereas you know in open source it's expected you've got you know very popular repositories set of thousands of bugs you know you go and get peer-reviewed first and published second
9:42
and many many papers are not at all transparent in their methods or their data so I'd like to see a more open source like culture that can really only happen when the incentives of Academia are aligned towards open source and right now the grants model is not
9:55
conducive to that and would you bundle research and teaching the way we do it now or you have another their proposal I think that what's starting to happen is a lot of the folks in a previous generation who would have gone on to be
10:05
let's say professors at Stanford are increasingly saying hey look why should I go and you know spend all this effort for a few hundred, for a grant when I can spend a comparable amount of effort start a company exit it and get a few
10:18
million dollars and then fund the equivalent of graduate students via Angel Investments right so I think what you're going to start to see is the research teaching division comes from like you know basically the 20th century and I think what you instead get is
10:32
something where I I go and I'm a practitioner then I do a bunch of Angel Investments and I spend some time researching and then I go and put up a Muk lecture and I teach what I've got and I think it's more organic where some people will focus just on one thing some
10:42
on another thing some will do a mix but it's going to be more commercially align the entirety of it as opposed to just being an Academia why is the Venture Capital model so geographically clustered so so much of it is out here
10:52
in the Bay Area it's spreading to other parts of the country but around the world you see Israel in some ways as being number two per capita number one but that's a very small country why is it so hard to get Venture Capital off
11:04
the ground in so many areas so I think that's actually now changed with the Advent of icos in ethereum and crypto the I think historically the reason for it was you know companies would go they'd come to San Hill Road and one maybe slightly less appreciated aspect
11:20
is if you come to San Hill Road and you get VC financing the VC who invests in your company typically takes a board seat and a VC does not want to fly bu 6,000 mil for every board seat if they've got 10 board seats and four board boings a year per company so what
11:35
the VC would like in general all this being equal is for you to be within driving distance right and not not only does that VC like it so does the next VC in the B round the next VC in the C round and so that that factor is actually one of the big things that
11:47
constrains people to the Bay Area is VC driving distance right because VC's don't want to do Investments that are you know entire world away I think that with the Advent of ethereum and IC we have finally begun to decentralize
12:01
the last piece which was funding and that regulatory you know environment needs to be worked out it's going to be worked out in different ways in different countries but the old era where you had to come to San Hill to get your company funded and then go to Wall
12:13
Street to exit it is over I think that's something where it's going to increasingly decentralize already has decentralized worldwide and that's going to continue with or without a board seat doesn't funding require a face to-face relationship it's common for VC
12:25
companies to even want the people they're funding to move their Endeavor to the Bay Area in some way not not only for the board meeting but they want to spend time with those people we're doing this podcast face to face we could have
12:37
done it over Skype there's something significant about actually having an emotionally Vivid connection with someone right there in the room how much can we get around that as a basic constraint I think that obviously in person is always going to be valuable so
12:52
long as we're physical beings but I do think that there's a number of things that have a made remote work better better and be made the Bay Area more disadvantages I I'll list a few of the factors first soaring rents right in the
13:04
Bay Area but that's precisely because face to face is efficient true but but at a certain point what happens is you know price is a signal right and you know the rest of the world is like I mean that's everywhere outside the Bay
13:14
Area there's a lot of places that are cheaper that are you know safer if you've got a family that have better weather you know the Bay Area has got decent weather but there's places that are nicer that have a lower cost of living very expensive over here and that
13:25
you don't have the same issue with Engineers getting poached you know that's big issue at other companies and so on and so forth there's there's a list of reasons that are starting to pile up that make the barrier less and less attractive from a comparative
13:36
standpoint and then on the on the pull side remote work is getting better every year it gets better you know whether it's slack or whether it's mobile phones getting better or face to face gets better too because slack is a complement
13:47
to face Toof face interaction so it's making both the remote and the direct better yeah changing the ratio yeah I think I mean at least anecdotally what I found is a lot of the companies that have been working with have like a Bay Area HQ where your hubs are in person
14:03
and your spokes are international right and so what what I mean by that is it is true that executive functions management things like that where you're managing people then you know face Toof face is good you know whiteboard sessions are
14:15
good Etc if you're really just primarily working with electrons you don't need face Toof face as much and you can be kind of on your own schedule so it's say if you're a manager if you're an executive yes face to face is still probably necessary but as an engineer
14:27
it's less and less necessary I think if you try to think through what's the main faing at the margin of telepresence so if I said well I think the main faing is you cannot send smells over T presence that doesn't sound plausible right it
14:41
seems you could get on with people and work with them face to face even if you didn't have a sense of smell so what exactly is the thing that's missing if we get into a very good teleconferencing room we all sit around the table speak
14:53
to people on the screen if not smell what is absent that makes that less valuable really good question I thought thought about this a lot actually I think there's two technologies that are going that are kind of obviously going to converge the first are these any Bots
15:06
type things which are basically like an iPad on Wheels which you can you know remotely control like a video game roll it around Etc and the second are the Boston Dynamic style humanoid robots which you can do grasping and other
15:18
kinds of things they've got a humanoid form factor eventually those things plus like a VR bodysuit are going to be combined such that you can maybe in 10 years you know script A robot from around the world right and you'll be able to basically see through a screen
15:32
and you can actually actuate it and move the arms and whatnot I've done this giving a talk by the way okay I don't know how it was for the audience but it does in some literal sense work right so the thing is that the robotics have to
15:43
be better you know the the bandwidth has to be better all that stuff has to be better but when it does get better an interesting thing happens your immigration policy becomes your firewall right that is to say someone can quote immigrate to your country over an
15:54
internet connection connect to a robot animate it and start walking it around and now your ability to inite those internet connections is your your immigration policy right that has massive implications for all kinds of things among other things you know you
16:06
wouldn't have to travel thousands of miles to get a job as a day laborer you could literally comparison shop even like migrant work type labor could eventually become software which is really kind of amazing because then they
16:16
could get a higher wage potentially they could go to the to the best Market I think going to be some really interesting things that happen with tele presence in the medium term we're not there yet but about 5 to 10 years know there's some evidence say from soccer
16:27
that peripheral vision is an important determinant of whether you're a good soccer player or a great soccer player how much you take in around you that is not obviously the thing you're tasked with doing MH and maybe one problem with
16:39
telepresence it's simply hard to test or try out other people's peripheral vision because exactly they're focused on looking at you and you don't see how they take in the surprises because they're insulated from those because they're pointed at you in some way right
16:52
I I think that is solvable though like you know a lot of the VR work nowadays is focus on field of view and peripheral vision and making it feel more immersive and you just need the right kind of cameras on the robot and and the right
17:03
latency and what not that that's that's potentially solvable but you're right it does need to become more immersive eventually though it may cross over and become something where people prefer that than travel because you know they can go to Egypt and they can go to Japan
17:16
and they can go to the UK all within the same day without any jet lag and they'll literally move at the speed of light now here's a very general question right now children especially in the Bay Area but they grow up with so much Tech suround
17:28
them all the time iPad smartphone apps whatever it may be and they they learn how to use it very young now there are costs and benefits to this overall I would say I'm optimistic about it but just in general what is the implicit ideological commitment or value judgment
17:44
we're making by just allowing this to proceed how do you think about that decision well you know one thing I say that's interesting is basically that the fact that kids are on their phones and on their iPads and and whatnot means you
17:58
know the the state has six hours of compulsory education per day right but what's interesting is the network is getting a lot of those hours uh and kind of taking them away from the state because the kids are you know plugged into their laptops and iPads and iPhones
18:12
and self-educating during the period they're supposed to be having compulsory State education so I think there's an interesting kind of thing that's happening there where you're having kids plugged into a different network not the
18:24
state approved Network during their nent years but the internet and their own sub communities and subcultures so the state has a lot less control over kids as they're coming up and if you go all the way back to like you know how bismar Institute of public education and
18:36
whatnot it was to really raise children who were you know quote unquote obedient to the state right who were Patriots or however you want to call it and because that acculturation is happening less and less because kids are getting plugged
18:47
into folks who have maybe different ideologies at a much younger age I think that's got a lot of interesting medium-term consequences but you know some parents would say there's a potential maybe addiction risk if that's the right word or May maybe an attention
18:59
risk and then on the plus side there's a lot more information more freedom of thought if you're an unusual child you can connect with others like you more readily how much do you think we know now those are positive tradeoffs on
19:13
balance I think it's more upside more downside like everything technology is doing that's that's just my oneliner for the future more upside more downside in in this context of course Downs sets are obvious you know you have kids who are
19:24
less able to make eye contact because they're staring at a screen all day and they just you know literally maybe their eye physically can't focus at medium distance as much anymore you've got kids who you know it's harder for them to to focus on books and you know to do deep
19:37
reading because they're constantly distracted by these notifications the downsides are obvious the upsides of course are that you have access to the Library of Alexandria for free anytime if you're really good at math or computer science or have any interest
19:48
like that you can actually find other people and you're not you know forced into this one-size fits-all 12 years of Quasi jail that the modern American public schools are in said you can self-educate and self- advance and level
19:59
up and so on balance I think it's probably better it's probably positive on net we want to figure out some way to amarate those downsides now you've given a very famous talk or several talks actually on the ideas of exit in voice in the global Community the idea that
20:13
your ability to leave a government can induce Liberty and wealth creating policies if we look around the world we see that many previously poor countries are now growing at rapid rates emerging economies are indeed emerging but if you
20:26
look at the wealthy countries Western Europe United States Japan if anything they seem somewhat less free even though there's much more International competition if we have a theory where exit is important as a source of Liberty how do we explain that Liberty seems to
20:42
be declining in in all of the world's leaders or most of them you know sort of one mental model is over the course of the 20th century China India Eastern Europe Vietnam Russia for sure all sort of were under you know communism or
20:56
socialism and Western Europe was Market you know socialism and the US was capitalist let's just say is a very rough sketch and now I kind of think the whole axis is tilting back the other way where because they were sort of
21:09
civilization vaccinated Against The Lure of Communism in in the 20th century the Chinese the Russians the Eastern Europeans have a civilizational memory of why that was a bad idea and so they've reacted against it with these states which are not necessarily all
21:24
totally free market capitalists in like the best ways but certainly are not you know what you'd call you know hardcore coms they're not they're not you know Mass rering people and and seizing their land and so that that affects Society in
21:34
many different ways but basically people have this near-term 30 years ago memory of hey that was actually a bad idea to try to to move in that direction politically right now are you more bullish on large political units or small political units small in general
21:49
with one major exception which is China I think in general like I think the the countries that are going to win the future will be like Estonia Singapore Israel very software Savvy small countries where their leaders are basically almost like software CEOs and
22:04
what I mean by that is for example estonia's president tumas silves literally you know computer scientist Lee Shan Lun who you know is leuan son was like the Wrangler at Cambridge like very smart guy and you know n yahu is an
22:16
MIT graduate right those are like three examples of folks who are pretty softer Savvy As Leaders of their country now China is also actually you know as a large country extremely software Savvy you know the great firewall is an
22:27
instrument of policy that's something that they actually think about as a first class thing and even Putin actually has made recent comments about the blockchain showing that it's on his radar and you know you know he's maybe u-turning Russia to make that National
22:38
priority for them so I'd say in general I'm more bullish on small countries there may be a few large ones that that are software Savvy enough to compete and when it comes to cyber security quite arguably the form of warfare of the future or even the present is that the
22:53
small or large countries that have the comparative advantage in either attack or defense so that's interesting I mean certainly China well so Israel has some great cyber security people so does Estonia so does Singapore so does China
23:06
gigantic and has a lot right I'm not sure you can necessarily correlate that to Country size I would say however there's a bunch of these small countries that punch above their weight from a software standpoint Peter TL has suggested that with the onset of
23:19
artificial intelligence this will encourage at least authoritarianism of of the negative sort or possibly even totalitarianism do you agree I thought Peter had a insightful kind of you know Jos or contrast between blockchain's decentralizing aspects and AI
23:36
centralizing aspects I do think that it's a little bit complicated by the fact that there's recent breakthroughs or developments in AI which allow for calculations of the coefficients locally on your phones without getting super
23:48
technical up to this point typically the way you've done machine learning is you've centralized all the data have huge data tables data sets at your central servers and then run the analysis but there's ways to do it where you basically do a map reduce out to all
24:00
of your phones and you calculate it locally and the data and everything stays locally and this is just a coordinator but not storing it Google's published some research on that we'll see how you know big that becomes in in the years to come but say I'm in
24:12
Shenzhen right now as I understand it there are several intersections where if I jwalk they will do facial surveillance on me very likely identify me find me automatically and there's a a very strong element of control beer yep in
24:27
China if you have a bad social credit score maybe you can't ride on the train or take a bus why isn't the future simply easier control of people in this way which would produce some more local public goods but nonetheless be a kind
24:38
of horrible dystopia that most of us wouldn't want to live in yeah I I mean I think China May well be vectoring in that direction the thing about it is you know what they're almost moving AI towards is almost like the allseeing all- knowing god right like in the sense
24:53
of some of the stuff they're doing with face recognition is taking you know all the surveillance footage they have and then turning it into something which can take somebody's face pull it out of that pull into a database and then track like
25:03
a human being across you know the entire entirety of their life essentially and that that takes it from you know hey I need to look at the surveillance camera and recognize this person into something where the computer's recognizing it for me it just completely levels up like the
25:15
the threat level of what a surveillance camera is what do I think that results in I think it may result in a very low crime Society you know it may be something that uh certainly does have lots of obvious negative aspects and I
25:25
probably wouldn't want to live in a country like that but it might be something that a lot of people NE nevertheless choose to live there like there's folks who choose to live in places that you or I or folks in the west would not choose to live in and you
25:37
know maybe they think hey the trade-offs are worth it I I wouldn't probably most westerners wouldn't but I'm not necessarily saying that that's going to cause their civilization to fail a lot of people thought for example that the great firewall in the in the early 2000s
25:50
because the Restriction of freedom of speech would cause the Chinese internet to collapse and it' be a disaster and they wouldn't be able to get Innovation and so on and they managed to get very far with the controlled internet so I
26:00
have a little bit of a you know for lack better term modesty on this where as bad as I think that future is a I I'm not sure it's within our power to prevent it and B I'm not sure the Chinese people would want us to prevent it or at least
26:11
not all of them you know so that's where I am on that if I call up say Apple customer service and I need to prove I'm Tyler Cowen one thing they might do is ask me for the last four digits of my social security number this seems absurd for one thing that kind of information
26:26
can be quite readily available the future of personal identity proving you are who you claim to be say 10 15 years from now what will that look like how will we do it sorry is it a retina scan is it fingerprint is it facial recognition how how will you prove to
26:43
the world you're you right good question I think it's going to vary depending on the context because you know for example redness scans and Biometrics are good in that they're unique to you they're bad in that there's no password reset for
26:55
example right if password reset is a core feature of your security system you may not be able to use that so I think we're just going to have a bunch of different options from you know email and phone number off username off Biometrics Etc where it's just going to
27:07
fit the particular use case the exit option this is debated quite a bit now with Facebook with Google some people say well Facebook you don't like it you don't have to use it you can just exit how persuasive do you find this argument
27:20
it's certainly possible to delete your Facebook account it is possible with probably some effort to ban all facebook.com domains I think it's harder to exit Google but also possible it's certainly possible to do it if you went to China because all
27:34
that stuff is banned and you can have a modern life I understand that the counter to that counterargument is the sheer number of trackers the ubiquity of it and it's hard to live a normal life without having some interaction with those companies I'm sort of mixed on
27:46
that in the sense of I personally know how to exit Facebook or you know Google or whatever if I wanted to do so I recognize it's too hard for other people to do so right now but I think that the right approach is to build build exits
27:58
and build Alternatives such that you know folks can exit from those things and they don't they don't feel constrained by them let's turn to cryptocurrencies for a bit an area you know something about which of the arguments against the future viability
28:12
of crypto assets do you find most persuasive granted that you're not agreeing with them sure what's the best criticism if someone says Ah cryptocurrencies and 15 years it won't be a thing what's the best argument for that point of view that the
28:25
decentralization model actually didn't work and that it was actually possible to compromise them so last year I had an article called quantifying decentralization which put forth a metric for how decentralized a given coin is and the idea is that it
28:41
could be decentralized in terms of how many miners you need to compromise to control it or how many developers or how many exchanges or what have you and the minimum number of entities that you needed to compromise was a degree of decentralization of the system right now
28:53
the utility of that I'm not saying it's a perfect metric it's imperfect like all metrics but the utility of that is that you could start to rank order coins by their at least purported level of decentralization right and so I think in
29:04
so far as these things fail it would be because the decentralization models were not robust enough to protect against the attacks they were supposed to protect against will Libertarians eventually turn on bitcoin as some commentators
29:17
have predicted so there's certainly been a civil war within Bitcoin with you know the Bitcoin cash versus Bitcoin folks and I I I don't think either of them would would call themselves less libertarian than the other it's just a interdenominational fight how will we
29:31
limit the energy intensive costs of Bitcoin mining that's a good question there are coins that are being developed that have more energy efficient proof of works or proof of work Alternatives like Bram con Chia Bram con invented
29:44
bitorrent so he's a legit guy and we'll see what he can do proof of stake and delegated proof of stake are variants that are basically like shareholder votes but you're reintroducing third party involvement in some way and if you're asking how centralized is the
29:58
system someone has to verify who has stake or share or whatever right I would say I don't have a good answer to that other than obviously that you know no exponential can go to the moon it's going to you know top out and logistic
30:09
out at some point with that said I will offer one observation which is that people will compare bitcoin's power consumption to let's say paypals and say oh PayPal just has a few servers and you know bitcoin's using this gigantic you know set of server Farms look how
30:24
wasteful it is to send a transaction but I don't think that's an a posit comparison because what Bitcoin is and then more generally ethereum and all the blockchain stuff is is basically a system of property rights and contract law it's more comparable to let's say
30:36
you know Delaware or even you know the US government at least certain functions than it is to just like a server sending payments back and forth It's about you know who has the property and I I think that's something where if you make that
30:48
comparison even all of bitcoin's energy consumption is cheaper than the Brinks trucks and you know the US Military and the police system and so on required to protect property rights in the American context so right now I pay Financial
30:59
fees to my mutual fund to Mara Lynch all over anytime I save money I'm paying a fee to someone which of those fees will go away maybe all of them you know in the sense of you know if you think about like you know a major business model for the US Postal Service prior to the
31:15
introduction of email with stamps and that now you've got most of the mail that you send doesn't have any stamps associated with it instead you had a complete different business model which is you show ads and email but I can do
31:26
those accounts electronic right for some but still I'm paying fees they've gone down a bit but the financial sector seems to take up about 2% of national wealth sure and it has for many decades roughly I mean why should we think that will go away we're
31:39
paying for some kind of service maybe it's not clear what it is but what in Tech is going to do that more cheaply and what will be done more cheaply for us because you can set up a new payment reil and contract execution system in your dorm room and that's new because it
31:54
provides fundamental competition at the lowest level now you know those payment rails are volatile they've got all kinds of issues associated with them but you can actually root and Branch exit the system in a way that you couldn't have
32:06
done before and I think that get is going to give more fundamental competition to fees the close analogy is you know with the internet you have a new mechanism for transing information which lets you route around the postal service and NBC and the televisions and
32:18
the movies and and the the record companies and whatnot in the same way you've got this new rail or new set of rails list you route around everybody and I think that's going to structurally reduce fees over the years to come but I
32:27
can right now buy crypto assets through thirdparty intermediaries and they too will charge me fees it just sort of feels as a customer a lot like the fees I pay to my other intermediaries it's true I have the option of doing it
32:39
myself but for most people that's very very costly to figure out how to secure a wallet and how crypto assets work in the first place and they would rather pay the fee basically of 2% of their wealth so why aren't we just reintroducing intermediaries at some
32:54
other stage of the game and we'll end up paying fees just like we used to well I think there will be a business model of some kind what you call fees I think May shift to another part of the system so as an example right you know Germany
33:06
recently repatriated several tons of gold from you know the United States you know their Central Bank did and that was something that took like three or four years and cost so many millions of dollars in theory the same amount of money could have been moved in Bitcoin
33:19
for a fraction of that cost so there's already certain contexts where we've reduced fees by several orders of magnitude for very large movements of money and then what's happen is I think these new business models that arise are not going to have exactly the same fee
33:30
structure as the old ones there will be a business model they'll still continue to make money but they're going to tax what is scarce and that that may not be necessarily the wire transfer itself but they may charge some money management
33:39
fees or other kinds of things like that I think the most important thing from my standpoint is the level of choice you're going to have is going to be dramatically increased because it'll be much easier to start up competitor and
33:47
raise up your own shingle as as a new kind of you know Financial Outlet question about tokens here's a statement tell me if you think it's true false or uncertain the role of the Ico is to aggregate dispersed information about a company Ico initial coin offering H I
34:03
wouldn't necessarily agree with that so I think we're in very very early days on just tokens and so on one useful thing that I heard from someone on a panel was you know she believed that tokens were going to become an integral part of
34:18
every company's capital structure over the next 10 years and her argument went as follows she said okay what is debt you know when a company issues debt it's a claim on the future cash flows of the company right okay what is equity when a
34:29
company issues Equity it's a claim on future liquidations of the company all right then what are tokens or what are network tokens well they claim on the company's future digital asset value or digital Network and the same way that like the interplay of equity and debt is
34:43
something that a competent CFO knows how to trade off between them and not every company is suitable for debt financing if you don't have cash flows you're not suitable for it not every company is suitable for Equity financing if you're
34:52
not going to do 10x if you're a mom and pop you know grocery store Equity financing may not be for you you and then finally you know with tokens or network tokens unless you have a network effect token financing may not be for you right on the third hand you know
35:05
some of these companies are suitable for those me means of financing and I think in addition to network tokens you're going to see tokens that are basically debt tokens Equity tokens and other kinds of financialization I think we're
35:14
at very very early days on the whole token thing and and Ico bundles a lot of different concepts together that are going to get unbundled and and separated out in the years to come but let's say I'm an old style company I'm Nord St on
35:27
Mac's and those companies for a long time they've issued gift certificates which in a way raises money right brings in capital maybe a small amount but we're familiar with how this works now if we wanted to we could trade those gift certificates amongst ourselves we
35:42
could even trade them on blockchains but that probably wouldn't be seen as a major Innovation maybe the price of the gift certificate would tell you something about how good is the merchandise at Nordstrom or Macy's now icos are are more than that somehow but
35:57
what's the element they bring to the problem that you don't get just by trading say give certificates of Nordstrom or Macy's or subway tokens right right right I think I would distinguish between just like terminologically between the Ico itself
36:09
and the token because you can have a token without an Ico and potentially vice versa so but let's say tokens right so why is a token different from just a gift certificate for example right so the first thing is you have in theory at least total custody right that say you
36:23
own the private Keys you can move it to somebody else without any third parties intervention whereas probably a Macy's or you know anybody who's issuing these gift certificates has some restrictions in terms of transfer or what have you
36:35
but you give them as gifts right I mean that's why they're gift certificates and they have numbers that's right and and I think I think the other aspect is once you can do something programmatically a lot of things become unlocked with it
36:45
you can have these tokens you can have millions of them you can have programs consume them you can have them bought and traded programmatically you can use them as inputs for API calls there's there's things that you can do with them you know on a computer that you can't
36:59
just do with like a physical gift certificate the the agility of the value just dramatically increases and I think that's a very important aspect that's not just like a physical gift certificate say WE peer 20 years into the future we consider a person who
37:13
doesn't have a college degree and is at the median income level for the United States and 20 years from now they'll be saying oh because of tokens I can do X maybe they don't understand how it all fits together but they do understand can
37:26
do X and this is Meaningful to them what's the most likely candidate for X well so one thing I've thought about and I think this is a 20year thing may be something like a personal token which is to say if you have some future let's say
37:41
you've done well on something that shows you have some promise rather than let's say taking out a student loan which is one way of sort of mortgaging your future uh you might issue a personal token and that would be something where you say hey look I'm G to give you know
37:54
sell about 20% of my future earnings for token based financing and here's my resume and here's all my stats can you finance me and help me achieve my dreams right and that's something where anybody in the world can ship in right a guy
38:06
from India a guy from Japan a guy from Kenya Brazil can help finance that right now maybe they'll lose money maybe they'll make money but it opens up financing in a way that's never been possible before like at a at a very small level a very individual level I
38:19
think that's like a 20-year Vision I don't think that's a 5-year Vision maybe maybe a 10-year Vision but I think just in the same way that we put up a website for any old thing you put out a tweet for any old thing like a communication a
38:30
broadcast to millions of people is such a low threshold activity a financing or the financialization of something is going to become such a low threshold activity it's going become a lot more common now in all of these conversations
38:43
or most of them there's a segment in the middle called overrated versus underrated sure and feel free to pass on any one of these but I'll toss out a few things or names and you respond rajuan the Indian mathematician overrated or underrated I think he's underrated CU
38:57
he's not yet world famous he's famous in India and why is he important to you so I mean he's uh you know from my you know father's Hometown he's India's Einstein and I think also he's very sort of spiritually important in the sense that
39:11
he represents a sort of rags to Rich's story even though he didn't get rich he came from the middle of nowhere he was very poor destitute but he was able to level himself up and and really make him Mark in the world that's if you want to
39:22
say what drives me is you know the power of the internet to do something like that right to all these people who are in the middle of nowhere who have been left behind by the 20th century give them the information and then you know with the blockchain the financial tools
39:33
to lift themselves up and lift their communities up Indian food in Silicon Valley overrated or underrated exactly right rated I guess I mean it's fine I I have no opinion on it drones underrated why what will they do that we haven't
39:46
thought of construction so there'll be there there's different kinds of drones there not just flying drones there's swimming drones and there's walking drones and and so on so you know like the example I mentioned where you can teleport into a robot and then control
40:01
that you know Skype into a robot and control that on other side of the world that's going to be something where you know maybe you're going to have it in drone mode so it walks to the destination you'll be asleep and then
40:10
you wake up and it's at that destination drones are going to be a very big deal there's an interesting movie called surrogates which actually talks about what a really you know big drone telepresence future would look like and people just never leave their homes
40:22
because instead they just Skype into like a really good-looking drone SL telepresent version of themselves and they walk around in that and if they're hit by a car it doesn't matter because they can just rejuvenate and create like
40:34
like a new one right I think drones are very very underrated in terms of what they're going to do the novelist and poet vicam Seth H I'm a fan of his you know I remember reading his book I think it was a suitable boy yeah that's my favorite yeah and actually no it was it
40:48
was Golden Gate that's what it was that was a book that was in the form of a poem and at the end you know he had some really moving Melancholy lines about oh we're all going to die someday and I was like ah this is horrible like can we not
41:02
work on that right and so that's you know what's got me you know really deeply looking at taras and life extension and all that type of stuff that was like you know 18 years ago and so I still think that's going to happen uh there's folks here in the valley who
41:15
are working on that um there's a lot of prerequisites but there's been a lot of progress over the last 105 years not counting anyone you're working with now who would be three quite underrated or undiscovered independent thinkers in Tech today hm I would say at least from
41:30
the American context I'd say the Chinese internet entrepreneurs I know that's a broad category but like you know so Jack ma Pony ma the Chinese internet is a lot more Innovative than let's say the the broad mass of of the US is realized one
41:45
way of looking at that like you know the Silicon Valley HBO opener has only one Chinese internet company there like Alibaba it doesn't really have the rest of them they're not as actively featured and so so it's just I'm not critiquing
41:56
them I'm just saying it hasn't impinged on the American Consciousness the degree of innovation that's happening over there whereas in China they're very hyper aware of what's happening in the US so it's kind of asymmetric so I do think the Chinese internet is very
42:08
underrated second group of you know let's say thinkers doers I'd say that the global englishspeaking population again this is like this is not one individual just Trends whatever they think of is underrated I think you know there's many more English speakers
42:25
outside the United States than there are within right if you include India if you include Nigeria if you include all these countries that have like relatively large english- speaking you know minorities and so now that those folks
42:36
all have smartphones it's only a matter of time before they're really heavily involved in US discussions because what the internet is doing is is bringing people together based on interest from different locations cryptocurrency being
42:49
a great example of that where You' got people from around the world who are participating in this thing there's going to be more things that are like that and so now you're going to get you know tens hundreds of millions of people may be participating you know in the US
43:00
Internet it's going to be very different and very new for people with respect to China if you think about the best Chinese tech companies in terms of management do you think they have any advantages over the Bay Area I don't have as much firsthand knowledge of so
43:15
I'm going to give do they have quicker product Cycles as some people have alleged well so you know what what a lot of folks say and I'm not sure the extent to which that's true versus because I haven't experienced it myself what
43:25
people will say is that the average Chinese Tech Worker Works harder than the American Tech worker like there's the 6612 like 12 hours a day you know 6 days a week kind of thing right I think the big difference is the the Chinese
43:38
that I've met at least really feel like they are trying to show that China can make it on the world stage they have a hunger to prove something that isn't as much there you know for for the Americans it's more of an individual thing as opposed to like a
43:52
civilizational thing right you saw this to some extent on display at the Beijing Olympics right like 10 years ago China wanted to show boom we're we're not you know a backwards country anymore we've really arrived right that's an aspect
44:03
which to a greater or lesser extent is is present in a lot of the Chinese entrepreneurs I've worked with and I think that's much less present among the Americans let's say you were asked to design for a highly intelligent and curious friend who had never been to
44:16
India before the ideal India trip how would you think through what that might look like hm it depends on what they're like whether they want the authentic India or the tourist India the authentic India is has got a lot going for it the
44:30
tourist India will be much closer to their Western experience and given those parameters I'd say either stick to kind of the most manicured City aspects and probably the South which is a little bit you know more attuned to Western sensibilities in terms of just HDI and
44:47
whatnot or if they're you're up for it you could give them the authentic experience and just you know take a train to to place in India I think it depends on their preferences and what what's the one place they might not think of going where you would say oh
44:58
you must go here this is more interesting than the guide books will tell you hm that's a good question so I'm not much of a tourist uh so I I'm not sure I could say for something like that maybe Goa I think Goa is kind of a unique place within India that uh is
45:13
kind of a cultural mixture because it got you know the Portuguese influence Indian influence Etc yeah I I couldn't say on that what do we Americans in the tech World least understand about Nigeria it's English speaking it has very large number of people there's now
45:28
starting to be some software stuff coming out there like andela I think there's going to be a lot of those folks who work in what I call the new digital Blue Collar jobs which are Mechanical Turk type jobs you know we're doing some
45:40
of that with ear.com where you have labeling of images as this is a cat this is a dog or two clusters one cluster that's what I think of as like the new digital Blue Collar like worldwide you know machine learning type stuff and I
45:53
think you're going to have a lot of those from Nigeria Brazil Brazil India places like that how do we do a worldwide Talent search for the really smart kids is that a problem that can be solved by Tech or is it more about local mentoring and coaching I definitely
46:06
think that that is a problem that can be solved in non-real part by Tech though you'd want to use some you know local mentors to to help localize it the way I would do it is you know this is actually something I've thought a lot about
46:18
essentially use a Muk and take the highest scores to some extent that's already been done you know for example even five years ago six years ago there's a article in the nyt called the boy Genius of Anan Bor about a kid in Mongolia who was in his you know early
46:33
teens and outscored a lot of kids at MIT on the circuits class and so I think that's kind of already being done what hasn't happened yet though is to take those kids who are scoring well and then plug them into the global economy so
46:44
they can contribute and get their you know just just dividends I think that's the kind of thing that I'm excited about that maybe the blockchain will play a partial role in now for our final section I have some questions about what I call the BAGI seren vason production
46:57
function that is how you got to be you sure if I understand correctly you grew up on Long Island right yeah both of your parents were Physicians yep how would you say your high school experiences formed your worldview in a significant way it sounds something that
47:10
I spent too many cycles on but you know it is something where I was like oh wow I'm envious of kids today who have stack Overflow and GitHub and you know a really functional Google and whatnot I come from the generation that was just
47:25
before the internet really started to get useful right so I graduated high school in 1997 and you know you had altav Vista digital a little bit and and hotbot and and you know whatnot but the search engines weren't that good there
47:37
wasn't Wikipedia there wasn't any of that stuff so high school is kind of stultifying in the sense that you just couldn't learn anywhere near as fast I feel like my education really only commenced in 2001 when Google started to get good enough that I could really
47:51
start leveling up on the internet and just self-educating and drinking it in so in so far as it shaped me I would say it was just something that taught me wow I never want to send my kids to an American public school I'll just have them you know I'll probably crowdfund a
48:05
tutor or do something like that so that they can actually learn something rather than just being in in jail for for six years I I have this oneliner which says you know life in the United States begins with a 12-year mandatory minimum
48:15
the schoog archipelago now you have several Advanced degrees from Stanford one is in chemical engineering which is slightly unusual and one of my readers wrote into me this question why get a degree in chemical engineering oh there's a method to the madness there so
48:29
I had a lot of credits because since high school is really boring I took a lot of AP classes and I independent studied a lot of AP classes so I had a ton of credits coming into Sanford and nothing to spend them on so I wanted to
48:42
get into genomics and the Human Genome Project was going and what I wanted was the major that would expose me the maximum to genomics while also having the maximum amount of math because I didn't want to just memorize a lot of
48:55
stuff so chemical engineering was that where it had a lot of biology but it presented it probably in the most structured form their thing was that at least at Stanford at the time chemical engineering and electrical engineering had the reputation as the hardest
49:08
engineering majors and so I wanted to do it just because it was hard what's the most important thing you learned from your brother Romi my brother Rami is very good at execution he is incredibly disciplined very very smart he just he
49:21
just approaches problems in a different way than I do but Rami contributed is a skill or a kind of mode of thinking that I call list rank iterate it's kind of a meta algorithm which is almost trivial to describe but a very useful way to attack unstructured problems and
49:34
basically what it means is you know let's say you have a problem hey how do we increase sales or how do we raise funds or how do we do X or how do we do y often what you can do is you can start by making a list for example a list of
49:44
prospective doctors to sell to or a list of prospective VCS to go and fundraise from then impose a ranking function on them which is hey like okay which zip code is this doctor in are they likely to prescribe this test Etc or you know has this VC invest in companies like
49:58
ours before then you just iterate brutally through this and the key thing is you put like a limit you say all right I'm going to do 150 of these and if I don't get any hits in them then I'm going to try a new strategy a new list
50:10
right but this concept of list rank iterate is a great way of structuring unstructured problems and and that's something that I owe Rami you're upbringing in Long Island from Long Island how is that shaped who you are how is that shaped who I am well I I
50:24
actually don't think about it that much was it was almost like um I don't know if you've seen those movies where someone's like Frozen in a block of ice and then they're thought out and then like they experience the world that's
50:32
kind of like what my life has been like post coming to Stanford Long Island was the ice or the world the ice yeah exactly it was it was kind of like everything in life moved in very slow motion until kind of like around 2001 or thereabouts and things sped up a lot
50:47
what's the best theoretical framework for thinking about optimal family size how many children you should have interesting well I plan on having as as many as possible the reason for that is I like children and I come from large families and so on I think it's a very
51:01
individual decision I think Brian Caplan has an interesting book arguing for large family sizes in some ways the folks who have large families are going to win the argument simply because they're going to have more kids and those kids will have more kids Etc so
51:13
it's not really even a logical argument it's kind of a it's it's an evolutionary argument Darwin's going to have the last word and it will keep the world somewhat religious on average religious families tend to have more children right so if
51:24
you think about the different obstacles you've encountered to get to where you are and there were a lot of cliches about what matters well be smart be conscientious five Factor personality tests from Mark I'm sure you've heard sure but outside of that framework if
51:39
there's some Source or influence or Insight you would bring to bear on the question of how to be successful that you feel is underemphasized in the Bay Area what would it be underemphasized in the Bay Area correct because everything
51:52
else was this block of ice on Long Island right nothing was emphasized the cold sure sure sure what is underemphasized the degree to which you really can and should set out to set your own path rather than looking at Tech runch and Twitter and whatnot
52:10
there's a certain model of person who is successful because they go and they look at the competition and they align around the competition they're just a fast follower and so on but I think that it's very hard to tweet or you know Tech
52:24
runch your way to Innovation I really do think you kind of have to tune out a lot of what the valley is thinking and then innovate for example I can't believe Satoshi got the idea for Bitcoin by reading Tech crunch right that's just completely out of left field idea that
52:37
had no validation from it so I'd say tuning out the valley is often the best way to make a huge impact and then have the value recognize that you're a real innovator and I think some of the biggest Innovations like you know SpaceX no one was telling Alan there's there's
52:50
no feed about how space was the next big thing right there was no conferences on space or whatever that it was not thought of as a thing that entrepreneurs could considerably do so what I almost look for what I'd say is take everything
53:03
that people are talking about and then like the rest of human civilization and look for the stuff that technology has not moved into yet and that's maybe where the opportunity is because undere exploited so if you want to tune out the
53:13
valley to some extent do you ever think of not living here and if you couldn't live here or chose not to where else would you live oh yeah I've been wanting to get out of here for a long time where uh Singapore Singapore yeah why
53:25
Singapore it's kind of the optimum place for at least my personal preference Vector because it's it's hot one thing that's little known by the way is a lot of South Asians in Silicon Valley have low-level vitamin D deficiency because
53:37
the place isn't really as sunny as you might think and we're spending all this time in front of our computer so it's like kind of you know it's a small reason but it's like a long-term kind of Health thing in addition to that it's you know it's friendly to capitalism
53:48
it's got a lot of uh skilled immigrants there you can start a tech company really easily it's safe you know if you're you know raising kids it's good it's just a good place I like it a lot I think it it balances a bunch of factors there's other places that are that have
54:03
a lot of those attributes but they're cold you know like sisterland can get cold and so Singapore is probably number one on my list Final question when all is said and done what do you hope your legacy will be I definitely want to work
54:16
in the blockchain for a while and then eventually get back into biology I've got an idea for something in the genomic SL Quantified Self space hopefully that makes an impact let's see in a few years BAGI thank you very much thank you
54:29
Tyler thanks for listening to conversations with Tyler you can subscribe to the podcast in iTunes Stitcher or your favorite podcast app and if you like this podcast please consider rating it on iTunes and leaving a review this helps other people find the show