[Music] we want to bring together people from technology business science policy all into a room together and there's this gaming tool that allows people to inhabit characters they don't normally get to do in real life and and put it all together an opinion is really a perception right and your perception is different than my perception we really
put a value on humility but to be successful you you can't really have that the most confident people tend to rise to the top false sincerity you non-confrontation passive gressive behavior is the single worst ingredient in Innovation always keep your mind open to where things are going as opposed to where they bet it's really important not
to get locked into long-term plans you can only plan so far ahead and then you go into the fog of War cuz what you really want to have confidence on is that no matter what happens you're going to learn quickly you're going to adapt to ambiguous circumstances and you can mobilize and be effective well hello everyone jimo shami
with yet another infinite Loops I'm super excited about today's guest Danny Kon is the editorinchief of RIS gaming newsletter and head of editorial for our friends at Lux Capital you man you are like there's there's just so much on your resume it could take us a 10 minutes to read through that you're a full bright scholar a former managing
editor at Tech Crunch and you've worked as an early stage V capitalist at General Catalyst and Charles Rivers Ventures Danny welcome thank you Jim thanks for having me so let's start out with the background on uh what were the what was the uh environment that led everyone at Lux to decide you know what we should launch a risk gaming
initiative it was launched just April of 2024 right so it's relatively new so give me and and our listeners and viewers a background on what led to that yeah I mean let's rewind the context right I was November 2021 I joined Lux and we were still in this kind of malays postco right so in our Meno Park office the health department still didn't allow
more than one person per room uh and so we had to meet entrepreneurs either through glass or through Zoom that you you sort of looked at each other but you couldn't actually be in the same physical space and so you know no one was going out to dinners it was still hard to go out to to drinks or never events and as we started to kind of
reactivate this you people were saying like look it's great to be back you know at a meetup group or an event a conference a session or whatever the case may be but it seems like kind of the same old thing over and over and over again and a lot of my backgrounds in foreign affairs foreign policy um and and risk gaming or what's normally
dubbed wargaming um is a pretty common tool to connect people together to help them understand a complex subject and so it sort of hit me that we have this problem which is we want to bring together people from technology business science policy all into a room together and there's this tool we have this gaming tool that allows people to
inhabit characters they don't normally get to do in real life and and put it all together and so um in early 2023 I started writing the first scenario one about climate change in National Security um we we tried it with with more than 200 uh early stage technology Founders thank God they're so sympathetic uh to some of our early foras here and then you know it's
expanded since then so we've hosted uh generals congressmen uh CEOs Think Tank presidents all across multiple games now over the last two years and uh what are some of the outcomes that you've had in all the various risk gaming sessions that really surprised you and really conflict it with your your thoughts about where it
would come out vers where it actually came out one of the things uh which has been interesting I don't know if it was surprising but um when we play with a group of technologists uh we often find that people start very very cooperative and then as the game goes on they start to get more and more competitive as they sort of optimize for their own
advantages their own goals and objectives um but when we play in Washington DC with politicians with policy makers we actually see the opposite we we we start with extreme competition no one cooperates at all everyone's focused on their own goals and then they quickly realize that there's no way to succeed in that context and so they actually have to
start to cooperate and so what's interesting is at least among the technologist they sort of end up in a very antisocial very competitive Place whereas in DC and policy we see kind of the opposite they start very aggressive and eventually get used to each other and sort of work its way all the way through and so um it's interesting
because when we combine these groups together it creates kind of an oil and and and you know water feel where you know no one knows who to cooperate people are sort of anti-competitive and often times it never comes together because the whole group is starting from different points of view you know those technologist who wanted cooperate early
on feel feel sort of uh there was treason at the table so to speak uh meanwhile the politicians who had been building kind of alliances are now saying well look catch up with me I'm willing to work with you now I know I I I sort of mess with you in the first few rounds but trust me at this time and you sort of realize how important that that
first round is that trust that you either build or don't build whether someone backstabs someone else that openness that you have in the first couple minutes of the game totally sets the tone for the rest of the of the evening yeah I I had often advocated uh giving a trial to taking all of the think tanks in Washington right left
right and Center putting them in a room together and seeing if they could come up with 10 things that they agreed that they agreed on and that they would all sign the policy every one of them would sign it at the end and didn't get many I I talked to friends that they think they're like H that's never going to happen do do you
think that and it did happen to a lesser extent I think with Brookings and um either AE I think it was AI um and and they have different political views and I think they did I think they did something on Healthcare what do you what do you think about that process in terms of requiring uh a un IED statement at the end of the gaming that everyone is
willing to affix their signature too I think what you're getting at is um the importance of going from oneoff games so if you look at the theory you have one-off game theories and then iterative Game Theory right where you actually play the same people over and over and over again and and and the entire outcome changes dramatically because
when we know that we're going to interact with the same people over and over again we tend to want to build trust we tend not to want to defect we even if we have an advantage or an advantage we could take uh you know have an opportunity for we'll avoid doing so knowing that there may be consequences in the next 5 10 100 500 interactions
and that's one of the reasons why you know entrepreneurial reason regions like Silicon Valley are so successful um thousands of investors tens of thousands of Founders we could all sort of backstab each other all the time but we end up realizing we're going to run into the same people over and over over again and so it creates this level of trust
and so when you're talking about bringing different types of let's say partisan groups together in DC I I see much the same thing most people in the same partisan tribe interact with each other and so there's Trust on the right there's Trust on the left but there's no connective tissue that brings the two together and so whether the prime is
saying look you have to work together to reach an end point yes I think that starts to actually create that sort of relationship what's even more powerful is just to avoid the policy statement to say why don't you just do an obstacle course together realize that you're both humans you can work together you can improv uh you can go hunting you can go
uh to you know a Spartan Race over the weekend or whatever the case may be um but as soon as you actually start to build that of teamwork coherence realizing that actually you each have something to offer you might find that the policy sort of automatically runs itself once you've built the trust and glue that holds those relationships
together yeah I'm a big fan of Douglas Hoffer and in his book Gold leer Bach he talks about the prisoners dilemma and that the the and they used to have I they might still have computer code competitions to play iteratively the game and the one that I was intrigued by was the one that had the shortest lines of cod and it was cooperate when the uh
first and then if you're if the other guy cooperates you can continue to cooperate if the other guy rats you out retaliate retaliate and rat him out but then go back to cooperation right yes and so so much of what you're doing is due to our friends Mr Von noyman Mr Morgan Stern and Professor Nash and and are you building in kind of Classic Game Theory uh
situations in into the process yeah I I take from the three you just mentioned shelling would be another uh you know there a whole family of scientists and researchers who've done this at Rand at Harvard and other Institution I I think there's a couple of so I'm always inspired by some of the canonical examples prisoners dilemma would be a
great one where each of us has an opportunity to defect so how can you build trust what institutions do that um but to me what's interesting about risk gaming and the opportunity that comes from being here at locks is the world's just really complicated the world is very complex incentives cross not just two or three parties but hundreds of
parties simultaneously and so when I want to build these games I try to really Encompass as much of that complexity into the simulation as possible now that doesn't mean it's not fun it doesn't mean it's not simplified uh it doesn't mean it's an overwhelming rule set of hundreds and hundreds of pages um it's amazing how much you can
do around two or three decisions but uh for instance we ran a game earlier this year around AI deep fake election security and that included 54 players working simultaneously trying to find different types of threats with the goal of highlighting just how challenging it is when you're coming from business intelligence um Foreign Affairs think
tanks to to work together in an environment where none of one actually sees each other on on a day-to-day basis and so um you can't do that with Game Theory I mean you you can do it with computation but we can't do it in the in the sense of like a human can comprehend what's really going on there and so I I find that when you put people into a
room give them an individual role particularly a role that they don't normally play on a day-to-day basis you know they come at it with a fresh perspective and a fresh lens and so sometimes they do pull in from Game Theory we actually have had players who are like this I read this in the textbook and I'm like it's so good
because there's a secret here and and that is wrong and you're going to mess it up and so to me it's people who are able to kind of walk into radical uncertainty not know any of their bearings but start to figure out okay here's the resources I have here are the decisions I can make here the friends maybe allies that I can build and who
might be some adversaries down the line that I don't want to cause them to create themselves I don't want to trigger them to become adversaries but if they were to become adversaries how would I protect myself going forward yeah and I was fascinated by one of the outcomes uh one of your games where it was about rebuilding a shipyard
in a area that was uh increasingly uh subject to flooding due to climate change increased hurricanes Etc and and one of the things that kind of fascinated Me by it was this idea that it seems at least from what I read that participants tended to move towards a more short-term out outome that was favorable to their character the character that they were playing right
and and kind of ignored the longer term um outcomes of those kind of suboptimal decision making and you know in addition to being dismayed by that because it it also seems to be a problem not only of American Business and business everywhere uh but specifically American Business you know this quarterly numbers we got to get this
quarterly Target here we've got a the short-term thinking in my opinion at least and this is just my perception the people who focus on a much longer term time Horizon end to and I underline end to come up with better more Optimal Solutions talk a bit about that and your experience with that particular game yeah I mean that game was focused on
norfol Virginia so it is norfol is the fastest sinking city in America um and it is also the home to three of the most important installations for the Navy and and that includes the the home bases for half of our aircraft carriers basically the Atlantic Fleet and so um the question is and the trigger for the game was why why would these installations be
in the single worst city you could possibly imagine which is one that's sinking as these shipyards on the coast are are basically going below the water and so the game really looks at why do we stay in status quo why can't we get out of this why can't we change why can't it be adapted U and so it models a mayor a congressman um a mayor uh an
admiral at the Navy the CEO actually owns the shipyard in real life the shipyard is privately owned uh it's publicly traded on on the NYC and so we start to look at those short-term U considerations that you're getting at so the mayor and the congressman are running for reelection Congress is every two years mayor every four our CEO is
looking at their stock price and quarterly earnings they need to keep hitting these check points otherwise are going to be fired by the board um and and the Admirals looking to get promoted so they need support uh in Congress in order to be able to go do this and so all these characters can have an amazing pro-social prot trust outcome but they
each have to give up a little in order to get there they're going to have to give up some earnings in order for the company to rebuild the shipyard and make it more durable the mayor and the congressman are going to have to make politically tough decisions decisions that are likely to hit their poll numbers as workers say look you're going
to raise my taxes yes you're trying to protect the shipyard but I have to pay those taxes today and by the way I don't even work at the shipyard so why should I pay these other people who are working there or for the US government why shouldn't the feds pay for that isn't the Navy something that we all take advantage of and share and so we get into this
Challenge and you could call it Game Theory but I I feel like it's more about the time pressure and when you can make those decisions because when I think of our cosos and our portfolio when I think about Venture capitalists that the challenge isn't necessarily making the right decision it's being able to make the decisions in the order and the
timing that you want right so you know that AI is coming but if your fund size is not at the right uh proportion to the size of the market um it's really hard to build a return because you don't have the right denominator in order to compete um if you're building a company and you're underfunded you can't hire the right Talent at the right price
points or vice versa you have too much money in which case it's almost impossible to sort of generate the return that you need uh given how much you've already taken from investors and so you you realize that you have very tight windows in which you have multiple decisions to make but you can't sort of ever get fired right there's a minimum
you you always have to have enough credibility enough share price and very very few people can sort of do what's necessary over a long period of time and not have a consequence from it and so I look at companies you know like Intel which has been on a sort of downward slide for many many years one that I covered at Tech runch and elsewhere um
where look I I believe that Intel has the capability IP and talent to do amazing things but the leadership Can't Take 5 years off from the public markets and do what's necessary to get the company to where it needs to go because investors won't allow it yeah my old life was uh investing in public markets using
quantitative models and one one of the one of the things that continued to surprise me was the number of people really really smart people who were just hyperbolic discounting and everything was like yeah no I can't I can't make that decision for five years from now I got to make the decision for right now and what's what's interesting to me is
that bleeds over into the way clients look at things right so you know we did a study that basically showed that looking at a money manager three-year returns was potentially the worst and Mis most misleading yes and the other studies that duplicated where they looked at the managers who were fired because their three years of under performance vers
the managers who were hired presumably because they had great three-year performance well guess what uh many years later the managers that were fired were outperforming the managers that were hired and it it demonstrated the the the true economic netive impact of shorter term thinking and let me me add here you know 10 years ago I was part of
a utility company an energy Company CEO form so we had about 18 energy CEOs from all across America um some of the largest that are out there right now and and the utility industry is obviously not a very Innovative one right it's grids it's transmission it's distribution you're getting power from point A to point B um there's not there
is innovation uh but it's a very constrained field by Equity analysts because what ends up happening for every utility CEO um and the vast majority of them have dividends to go into retirement accounts it go to pensions and so it it's very tight on on return on Equity everyone really cares about every penny and we asked the CEOs like
why didn't you move to the smart grid why aren't you upgrading your grid we've seen you know this was 10 years ago but now we've seen fires in California we've seen Hawaii and electric having massive issues on Maui um we know that companies have been underinvestigated Mo to move and I started investing in a smart Grid or start upgrading you know the
infrastructure that runs and owers the wealth of this company um my return on Equity will go down maybe even just a little bit maybe 0.1% but I am now at the bottom of all of my peer competitors in the industry and the first thing that any Equity analyst worth their sold is going to do is be like well what's going wrong you know with a company CEO what
is you know in 3 months uh this person has managed to take an amazing performing company and and turn it into the dirt he's got to be fired immediately and the board is going to read that report and fire the person and so they said look if we could collectively in this room we represent you know more than half the distribution
power in the United States if we could collectively say look we're all going to lower our returns 05% 1% and reinvest that into the smart grid it would happen but no one one of us can be the first mover uh without serious consequences or own professional careers into the company itself that's fascinating to me because um it just just touches on so
many things like so for example it in my mind uh points out a structural deficiency in some of our laws for example like for example you can't have all of those utility chairman and CEOs in a room together agreeing to collude right because uh of the of the legal structure that they have to operate under but also a question for you do you
think that that structural problem is what makes most of the Innovation come from newer companies startups Etc and you know creative destruction Mr shumer uh you think you think that's one of the things at play here I I I think how you get evaluated for performance changes your behavior a lot right so for these big company CEOs you have a collective action problem Equity
analysts don't care if you want to invest in the smart grid they want to return on Equity but when you're a new company you have Venture capitalists on your board you have uh angel investors who are looking for you to go bold and build big companies now that has downsides as well right we don't build as many sustainable companies because we
want to be very ambitious we want to shoot for the scars we want a100 billion do company rather than a $300 million sustainable business um but at the same time you're not constrained by look there's 20 other competitors just like you and any change your business is going to change you know your stock price dramatically and and I find that
very fascinating because you know when I was a tech crge we were owned by Verizon large Telecom comp be get AT&T and T-Mobile and when you read the equity analyst reports for the Telecom industry I mean we just get every number is absolutely itemized across the three of us every change to the business is exactly compared and and they're
different businesses quite frankly um but they get you know sort of summarized down into these reports whereas I think when you're in the startup world we have Market Maps but when there's only five people it's very hard to say well this to that company which is that company vendor just gives you a lot more flexibility to make operational
decisions that I think Inc comments just can't make yeah and then of course the uh solution to the the problem with the with the uh you know wanting unicorns wanting 100 billion you know whatever on the startup side are companies like tiny for example back in the day uh they were like no we'll we'll buy that 300 million
in Revenue that isn't going to grow very much but boy we love it and one of the one of the things that they were able to do was the Venture capitalists were like I don't want this in my portfolio anymore and so there were a lot of incentives in place that would allow the companies to come in and create quite an amazing portfolio of companies with 100
billion in revenues but that were solid and growing but growing very slowly so not fitting the traditional Venture uh uh bucket um I I think that um one of my prejudices would be hey let let a thousand flowers bloom and when when many of them don't those some will just outright fail uh others however will reach that space in which the tinies of the world are
interested in them Etc uh um and the idea though gets back to incentives which I think are also really fascinating here because you know good old Charlie Munger if you tell me the incentives I'll tell you the outcomes right how do incentives of your various players in the game uh how how do they affect your outcomes in these gaming
scenarios well the incentives are everything and I I would say what makes my what makes risk gaming and the designs that I focus on a little bit different from uh DC and sort of the typical wargaming model is um there are no judges and I also don't direct players to take any particular actions what what I do is I do just create the
incentives um I try to get those to be as accurate to real life as possible and then I just let people play because what I found is rather than trying to control or say look you got to go down path a um I just put the right incentives in place and you're going to probably choose a you could choose b b might actually be better for society uh it's sitting right
there no one is telling you you can't do it except that your incentive whatever it might be your stock price your poll numbers um your support in the small medium business Community the number of subscribers on your substack uh is going to be affected by the decisions that you make and and I think you know to combine a lot of these different threads
together when I think of capitalism I mean capitalism is the study of incentives and I don't think enough people focus enough on asset allocators and their incentives right so we think about why is there so much money in AI versus other assets well there are asset allocators who look I I see this massive expansion I I'm over indexed on maybe
crypto or bio or a couple different areas and I want more exposure to this particular area and I don't really care how I get it and so suddenly you see a hundred billion dollar sort of flood into a market that otherwise didn't have it you know a year or two ago um what we were just talking about utility company CEOs um I am a 65y old pensioner I need
reliable returns electricity is not going anywhere we're not going to slow down if anything thanks to AI it's actually going to grow utility compan see over the last two years have been some of the fastest growing stocks on the market um but I want that dividend I need cash I am paying for my own medical bills um and it's really important that
I have that so those companies are constrained by those incentives and so when you were talking about tiny versus sort of the the go big or go home Venture model um to me the the big challenge is can you underwrite different types of incentives can you create asset classes that are comparable that offer those trade-offs that allow
me to model them um you know from the history if you look some books in the history of accounting or the history of insurance um all of our markets stem over the last 400 years from the ability of Alloys to underwrite a ship going overseas to U in modern day uh the collapse of a lot of Home Insurance markets where you know cap bonds aren't
enough to cover hurricanes and wildfires and other types of disasters like the only way we can build is to understand those incentives to be able to model them to be able to understand them and so I'm with Charlie Munger I just wish that more people sort of grasped that and did the analytical work to to appreciate it more yeah that was one of
my go-to uh metrics to look at uh when trying to gather additional information outside of what are models uh watch the insurance industry watch what's happening over there because that happens well before the downstream effects well you talk about truth and I always joke uh insurance companies are the most obsessed with truth in the
market they have to underwrite and when they're wrong cost them a lot of money uh and it's a competitive industry and because it's competitive you want to get as close to the truth as possible because otherwise you're leaving money on the table and so it's it's a unique part it's not always true in all parts of Finance but it is a unique part of
Finance where there is this sort of ASM toote to the truth and and that's probably most notable in climate change where regardless of your political views regardless of what you believe uh disasters the cost of disaster cost of replacing a house uh has gone up and so insurance companies have to be responsible for that they just don't
have the budgets or the reinsurance coverage to be able to cover those increased costs and so regardless of any of our views they just look at the data and they get closer to truth and they are the sort of canary in in the coal mine so to speak that sort of indicates what the rest of us are going to experience over the next couple of years
yeah uh speaking of AI have you ever entered an AI as one of the participants we have not I have explored so I definitely explored there's a researcher at MIT who's done this around diplomatic negotiations there's some really fun working papers I I find I I'll be curious how to do it over the next two years I mean to me as as we started at
the beginning of the show this was out of postco there's no devices allowed of the games everything's on paper there are no iPads uh I really wanted to make it a manual in-person cohesive experience and I I will say um you know people always say this but then they start to use their phones I've never seen anyone use their phone during one
of my games um they just never think to even look at it it's amazing distractions go away when you're so intensely focused and you don't want to lose um but I I am curious to build more virtual experiences and that would sort of open up the floor to more AI agents being able to negotiate understand their own incentives Etc yeah I think you could probably with
the advances that are being made now you could let uh the human participants not have a device but then you could have one device that can listen yes yes and that can speak uh uh in a pretty good accent I would be really interested in that because I build AI every every one of our workflows that are Shany benur has an AI component built into it and
and essentially one of the best use cases that we found internally is just for steel Manning our own arguments and then uh and importantly the arguments that argue against what we're doing we want to look at Steelman versions of both of them and those have worked out pretty well uh as has the whenever I'm writing about something or thinking
about oh maybe we should go and do this over here or write up kind of a paper on it and then I'll feed it into the AI and I'll say so where are my weakest arguments how could I improve them and I have found that it's very efficacious in that particular and very limited uh use case but the um the the process has been
incredibly helpful not only does it speed up um the back and forth Etc uh but the it's it's really great because sometimes and again now we get down to almost an existential question here but like like if I'm showing it to people who are on my team there's all sorts of reasons why they might not want to disagree with me right and and and what
and when I have a it's like uh um the idea that once you the Peter principal when you get you succeed to the height of your own incompetency right and it's like M neera thought literally from what I've read M neera who was the Secretary of Defense during the Vietnam war he really thought we were winning the war yes and he and he thought it because he
had a horrible information PL they were basically just saying oh yes of course yes Mr mamero that that works the way it does and then when you bring it into the AI he's like you're a dumb well I I could see a world where you know I don't have any criticism but my AI bot Bert does Bert what do you have to say well actually John this is a terrible idea uh and uh
you know only saying this you know for a friend but uh you really need to reconsider everything you're just doing right here um I I do think it's interesting because you know you're getting at uh if you think about the development of AI over the last couple of years particular particularly Alpha go um a lot of these were built around
kind of competitive evolutionary models so you used Alpha go against Alpha go U it competed with each other and you could you know scale that up millions and millions and millions of times train these algorithms faster and at some point it overcame sort of human you know the the best Professionals in in the sport their capabilities to compete um I
I think the same thing is true in organizations but you don't have that Loop right in every organization we have social etiquette um if I'm the one who's arguing argumentative in every meeting no you're wrong there's five things you it's very frustrating no one wants to either be well some people want to be that person I don't want to be that
person um even if it's in the pursuit of Truth in the pursuit of profit whatever the case may be whatever the organization's goal is it's a very awkward place to be to be The Annoying Gat constantly pointing out flaws uh but AI can be that right it doesn't understand context it doesn't understand edicate as of today um and so it is much
more direct um and so maybe that's something that we'll see a norm change over the next 10 years as AI I mean as we're recording this you have an AI bot that's taking notes um you can imagine in future meetings look you made an argument um how do we go and do this um we already see that in the context of sales calls where there's better
training with AI listening and saying look here's how you would improve here's how you can increase your performance but it's been mostly individual right I'm doing a repetitive motion there's a lot of training data there are better and worse ways to do sales and so I can be trained kind of to optimally conduct that business um I've never seen in the
organization group context and to me that is going to be a huge unlock uh particularly in bureaucratic societies like America where the paperwork uh the processing the middle management you add all these layers together and it takes you know at a large company 5 10 years to you know buy a a pop machine whatever the case may be uh and so I I have a lot
of potential there for AI to sort of cut through all of our niceties and try to get ahead yeah and uh we definitely found that it can be very very helpful just internally on our various uh verticals um another thing you did and describe uh and I'd like you to talk to me and for our audience and benefit is this idea of peir programming where you
take a very senior person and put them with a junior person not necessarily you know what I mean um yeah and what did you find there mean look appen ships were the foundation for modern society I if you go back to the Renaissance uh the idea of a journeyman going into becoming a master uh was intrinsic to the guilds and the trades that exist in the 1400s
1500s Florence going up to the Netherlands um you know in the 15 and 1600s um we sort of lost that culture right because we went into the industrial era um there started to become this massive explosion of the number of people I mean it's actually really really important it's one of those um grounding analyses can do but
look at the number of people who existed in the world either by region or just globally over centuries and you see this exponential growth in the 1800s in 1900s due to increase in food and and economic wealth and so um we went from a model of individualized training in education where someone will train me on how to go
do this to the industrial education model of public schools uh institutions infrastructure going all the way up to secondary tertiary at the University level and so suddenly you a a journeyman to a Master you were one of 50 students in a classroom with a black board with someone you know yelling things at the front now if you read the research in
education studies over the last five to 10 years one of the single most powerful interventions that economists have found over and over across you know random controlled experiments um all kinds of different econometrics is the individualized attention of a tutor if you have tutoring at exactly the right moment the level of progress that a
student can make is incredible and that's true across math uh reading it doesn't matter what the skill is when you have an intervention that's individualized even for a limited period of time doesn't have to be for hours could be for 20 minutes um there is an absolute quantitative verifiable Improvement in that student skill and so
to me I think there you know we've seen this in in coding as you're pointing out this idea of pair programming um you you put it as senior and Junior but ironically it's actually uh even pairs in parallel with each other can actually be very effective just having a second pair of eyes the same way that I as a journalist writer work with editors uh
and vice versa as an Editor to other writers having someone read your work and being like look I know what you're trying to do here but you're too involved in your own coding you're too involved in your own writing I got to take you out of this I'm going to do it this way and you're like oh my God that makes total sense why didn't I think of
that it's because you got too into it uh you got too obsessed with over some details um and I I think you can expand out though from those sorts of fields to basically everything from from the medical professions and nursing um into business I mean those of us who make business decisions usually don't get to do it in a collaborative element we
don't get to work with our competitors and say well what are you doing in the exact same context you know this just happened our industry how are you responding because it's antitrust and it's competitive so I can't actually work with my peers who would make that same decision and so I think one of the biggest challenges even when I think
about what we try to help with with our founding CEOs it's how do you connect peers who are not competitive with each other but are making very very similar decisions because if you can learn and pair and and take that Knowledge from each other it's just like having an individualized tutor and that's very very powerful but based on the evidence
as well as my own antic data yeah the uh individualized tutor is another use case from AI that I find very compelling we're investors in synthesis schools which is essentially doing AI tutoring results are pretty extraordinary we are also investors stability AI which just went through a recapitalization and uh but much of the
um uh earlier work there was also uh we did an experiment with the uh African nation of Mala where they asked us for AI tablets with tutors and um they um found that the kids who were getting the AI tutoring on the tablet were way ahead of the kids in the traditional um uh classroom environment and my observation uh was well I think it might not necessarily be
just the AI it might be the fact that they are getting individual attention exactly right right and and so um I'm a huge believer in that as far as your comment about the numbers of people absolutely true I don't remember what decade it was but Robert Anton Wilson wrote once that I think he wrote this in the 80s that there were more scientists
and researchers alive at that point he was writing it and in other any other time in human history in other words yeah take all of the scientists of yore and there were more people doing those act living today than all of the accumulation of human history so so that numbers scale problem was an interest uh idea to me um how have you changed uh
the structure of of the game and uh we for example one of our oasi fellows William Zen attended one of yours at Maxwell social and he and he thought and he thought it was great and his feedback to us was that he'd like more right he said I'd like more I'd like more pre well he got the fellowship from us to to advance open source Quantum Computing so
there you go there you go doing okay yeah he's doing okay in the old uh gry matter the old nogin yes but uh but but what kind of changes have you made or are contemplating to the underlying structure of theame look we we do with scenarios right so risk gaming is sort of a family of scenarios we want to keep building them we're up
to five uh at various forms of draft we have two coming out uh in September I I would say in each case I I actually start to noo so I I start with no assumptions I start with no models I don't even start with the number of people who are playing I actually just start with a problem I start with a thesis a question I'm trying to answer
with the game so with the first one on climate change and National Security the question was why is the shipyard most important to the United States's you know power projection overseas in the single worst city you could host it anywhere in the United States because that to me was a contradiction and and ironically it was one that no one had
covered since I did the game and I don't think it's triggered from the work that I did but there have been covered stories in New York Times Welsh Journal Bloomberg I mean it's getting more attention than it did two years ago and I think that's how you sort of reduce surprise long term um we looked at the Chinese EV Market we had a third one on
the future of AI and National Security Focus around uh defense procurement um a fourth one as I mentioned on AI and deep fakes uh particularly around this year of Elections a majority of humans on Earth are voting this year for something um and then the fifth one is actually focused on chip Fabs in Phoenix and so the water usage uh balance between Farms
the chip Fabs and residential growth and so in each of these I I just start from U from the basics like who are the players who where are the trade-offs coming from who who is sort of competitive with who even if they may not realize it so you know we're starting to build the Phoenix game right now um you have Farms who have had water
rights going back 150 years off the Colorado River uh now these chip Fabs this new industry that's funded with the US chips act billions of dollars uh President Joe Biden has stopped by has has launched this big initiative here with tsmc Intel and other uh chip Fabs but they need the same water that everyone else needs in Arizona is a
desert and so do you knock out these Farmers many of which are families wedded to the state some of which were there at the founding of Arizona um and then all this is in competition with residential growth as as humans we need water as well our houses need water even if you don't have a front yard um and so in Phoenix you need a proof of a
100-year supply water in order to build a new house and so what you actually have is this tension between look I want high growth high industry more jobs but those jobs from people they now need more housing uh and there's only so much water to go around and given climate change it's getting Tighter and Tighter over time and so I I love being
different types of people together figuring out what are those exact trade-offs maybe the farmers and the chip Fabs actually work really well together we can actually do work we can report we can talk to people who are on the ground going to do this maybe there's not as much of a conflict that it appears from from a distance or it
might be the opposite there's another group that we didn't even consider that's part of this this Nexus here and then we can add into the game and so I I always start with kind of the blank sheet of paper I start with a problem and I start reporting and I I I think that's been the the course of my entire life is always you got to get to real
truth and the more that you sort of assume you know through secondary tertiary sources um the more you're going to get wrong you you just you know when we're covering some of these issues you can talk to the people who actually done this in the case of um our our naval game um we talked to the head of procurement for the Navy and we
interviewed them and we got information from them that was very crucial to understanding some of the trade-offs that the Navy had to make in the context of the game and so uh I think that uh ultimately this is in some ways a replacement of the policy memo that long formed journalism article that would have been 20,000 words that you don't
really remember the conclusions from because it's a lot of pictures and words and it's hard to remember when you actually play an experience that you actually understand the Dynamics you you inhabit it uh I can teach you more in two hours than you could get from an 8 Hour book has the outcome of the various games that you've conducted impacted uh investment uh at uh at
Lux I I don't know if it's it's impacted Investments so much as I think it does it help improve people's broad decision- making under uncertainty when what I mean by that is you know we we invest in new spaces and Lux invests across the heart Sciences um you're looking at areas of science where in some cases there's no
investment that's ever been done before right we're not looking at 50 companies in a a software as a service SAS space and saying well which one is fastest growing and you can get all the metrics and download into an Excel spreadsheet you know run some number crunching and sort of have your answer we're in cases where it's like is this technology two
years away from commercialization 10 years away or like a hundred years away uh and we have to do work we have to figure out how do we make that decision and most importantly because oftentimes these these you know categories change we have to actually know what what would we be wanting to see that would change our mind that we're going from the
academic lab into the commercial world you know is it a specific Discovery is it uh a slow um progression of the technology it gets better and better and better over time you know what is it that would trigger us to change our minds because I think you know we we've had Dan economan um who unfortunately passed away last year but he visited us
on my podcast uh about two years ago and he's like you know people never change their minds you know people are locked in that's sort of one of the the theories that sort of grounds Thinking Fast and Slow uh is it's very very hard to change our minds and I I actually think you can but you need good decision-making apparatuses good
mechanisms to say look I'm wrong here's how I would know I'm wrong and here's what I would do if I saw this sort of information so the idea of a premortem and um I I think that that has been taught through these games into theux team and more broadly where you know we we come in with an assumption we leave and we're like wellow we got a lot of it
wrong early on what went wrong and we're sort of iterating and learning all the time through that and that's harder to do in the context of a partnership meeting it's harder to do in the you know the the EB and flow of a investment team where you know we have a couple presentations every Monday uh there's just always chaos everything's always
going on you're always on to the next thing I I think RIS gaming has offers his ability not just for VCS but also very busy CEOs Senators Etc to step back from the daily fry and say how do I just get better at the basic decision- making of my job and what's been interesting as an observation and and I don't know if this will always apply but what's been
interesting is when I talk to staff members they're always like this doesn't seem very useful this doesn't seem like you know it's going to take five hours the Senator's very busy he buckets things in five minute increments of time and then I talk to the senator and they're like this is incredible I would do this tomorrow and I think as you sort
of move up the stack so to speak you start to realize how important strategic decision- making isn't ambiguous circumstances and how hard it is to actually train yourself to get better at that and so I I've just generally found that very successful people really enjoy improving their own cognitive machinery and are always looking for excuses to do
so yeah I agree I know Danny as well knew Danny as well and uh we actually got into a chat one once where because he was maintaining people don't ever change their minds right and I was like well I mean if you'd indulge me I I I kind of think I try to do that all the time and and I went through how how I do that like what one of the things that
I'm always thinking is I'm probably wrong and and then um basically you know because we get this we get this confusion between uh an opinion truth right an opinion is really a perception right and your perception is different than my perception everybody has different perceptions right but if you're developing a thesis or a mental
model right how do you test the E efficacy of that well you put it in practice how well does it work pragmatically is the use of that way of thinking leading to success or leading to failure and I'm only speaking directionally here and if it is mostly leading to success you can still learn from the times where it isn't leading to success and try to
refine and iterate if it's not leading to success then you've got to be willing to say that theory was wrong and and I think that one of the things that worked very well for me was I don't attach those theories uh to me to the definition of gy right I don't say you know that's a hill I will die on I I I subscribe to
the General George Patton idea that I'm going to let the other poor dumb bastards die on their ills I hadn't heard that one before that that look I I think what you're getting at is this idea of intellectual humility right and unfortunately I mean it sounds great uh it's one of these values that everyone should have intellectual
humility we all want this but in reality all of us have jobs in which we have to make decisions often times under very trying circum ances very quick um with limited information and and the reality is uh it's not just unique to American culture or business culture I think it's a global problem is the most confident people tend to rise to the top so
there's there's sort of a parallel to the Peter Principle that we were talking about earlier but it's like the confidence game matters a lot people like confident people you don't want to go to your doctor get four tests and go I don't really know the answer but you know if I had a guess it' be 30% this 40% it's scary it sounds like you don't
know what you're talking about you prefer to go to a and be like look I know I went to Harvard Medical School and the answer is this and you know as a patient and look I have a stats undergrad training and so I come from a probalistic background aasan background I love the first doctor I love anyone I mean to me the first sign of a first-
rate intellect is someone who's who not just has a humility but sort of has a sense of look there's a couple different paths this is where I'm kind of leaning to but look I I could be wrong and this is what I'd be looking for on the other path I'd go um but the vast majority of people whether it's in medicine in the professions your lawyers whether it's in
Venture Capital CEOs we want someone confident next to us who's saying look I know the right answer I have confidence I don't want to know that there are six other Alternatives and maybe you're wrong and we're all going to lose money I'm going to lose my health I'm going to lose my house in a mortgage dispute I'm going to lose my bankruptcy proceedings
or my divorce um and so I I actually think it's one of these values that's constantly in conflict with the reality of life that we we really put a value on humility um but to be successful you you can't really have that um and to me like venture capital is the the ASM toote of that uh you will get nothing done if you do not have uh audacity in a partnership
meeting you know I've sat across street Partners uh Partnerships over my career very different groups of people but the reality is is if you don't come in Pounding the table believing in a founder and entrepreneur against opposition from your partners you're never going to make it and you can't overcome opposition with humility you
can't be humble and say well kind of think that this person is really good but you all could be right because no investment will ever get made and so it's interesting because what you really need is this extreme level of confidence with the re-calibration occasionally of your thinking and thoughts over time that sort of keep you aligned with truth
that's happening in the marketplace yeah well I I I chose the Captain Kirk solution uh when we launched our our very small uh uh Venture fund we don't have any LPS so that solves a lot of problem yes yes so I solv a lot of problems with that but as you were talking about the doctors I actually used to use that as an example
of why using empirical time tested uh investment models made sense and I use doctors as my example and I and I would say which doctor you going to believe are you going to believe the Doctor Who you go in and say Doc these are my symptoms this is I feeling horrible what can you do are you gonna believe the guy who says you know I just got these
little yellow pills uh by the pharmaceutical rep and I've got a really good feeling that these might help you you're GNA run out the door however my argument was I would trust the doctor no matter what his uh even if he gave me pros and uh a variety of U the type of probability analysis I would trust the Doctor Who said I think that
this is your condition here are the 10 years of double blind tests on this specific medication that I'm recommending for you what do you think right yes so so I but but you are absolutely correct you are 100% correct about we always go with the person who seems to be the most confident it's a Confidence Game make it until you know
fake it until you make it is is a conf game and I love that you bring that up because that's where con artists come from confidence and the funny thing about it is it works everywhere right like you know you're not on anything new there and so I guess maybe I've just been very privileged to have reached kind of a point in my career where uh I really I'm not really
trying to convince anyone of anything other other than like the the things I want to get done with the company that I've started um and you know I'm I I guess I got I guess I have to convince the people who might want to work for me um and well I you know I I would actually you know Center this you know existentially a little bit on you know
if you you connect a few dots from earlier in our conversation around utility CEOs uh Building Company LPS what you're getting at is how many people do I have to be confident to right as a venture capitalist at a traditional fund you have to sell to LPS you have to sell to your partners you have to sell to other firms you have to
sell to Founders I to be confident with all these groups which means you know I even if I don't really believe or I I I but I have to have an answer I have to have a immediate response I have to be uh aggressive uh and audacious because otherwise someone else is going to compete and and beat me you know as a Utility Company CEO I the same thing I'm
the CEO uh if I don't sound confident the board will lose trust in me shareholders will lose trust um in the regulated sector like power the the Public Utility Commission may lose trust in me and I'm out and someone else is going to be taking over for me and so I mean one of the reasons I've always stuck to writing particularly in
the latter half of my career is there's less people I have to prove myself to you know readers can walk away um many readers actually enjoy articles that are have more intellectual humility precisely because they are not looking for a glib answer but they are looking for more depth um I only have to prove it to an editor I have to prove it to
one publisher um I don't have this network of approvals that's required to get this work done uh and I think that that is what's challenging with so many other professions particularly Client Services ones you know think Consulting Investment Banking lawyers doctors um I conf constantly have to pay a Confidence Game to the people paying me I have to
pretend I know what I'm doing even when I don't I mean imagine being McKenzie asked for $5 million on a client engagement you did six months of work and the correct answer is we don't know like that is truly like all the information can you imagine I imagine that that MD that partner walking into room with the engagement
manager and said look you you you put your trust in us for six months we've held up two quarters of results you put 510 million in this field study we have no idea and um you know you just like it's impossible you can't do it you have to show a bias to action you have to show confidence and I'm reminded only because it's funny um that there was
circulating sort of a a Mackenzie slide from the Department of Sanitation here in New York City where they like well it's garbage pins that's how we're going to solve the Wrath problems and it's like on some hands like you're completely right on the other hand it probably shouldn't take 5 million bucks but you could probably be pretty
confident that at least the garbage bins make sense and then you have our mayor in front of Gracie Mansion uh you know with the the Empire State of Mind song going on in the background putting a trash bag into his in his bin and closing it up and making it sound like we're the most Innovative City on the planet confidence it's a confidence game
I know I had exactly that same reaction when I saw that that video I like oh dear godess Shameless confidence goes so far it's amazing in New York is like Carnival Barker city of of world like we're filled with people like this I'm I'm reminded of the uh earlier in my career um and I always looked at it uh in that I I uh changed from being
a protier right like this is the only way you can do it so I was wrong about that there are lots of ways you can do this um and and I had never brought in the idea of the confidence angle thank you I I think I'm going to reassess that uh little part of my history but I do remember um I was hired uh my first company was a shy Capital Management and
we were hired by Merl Lynch to uh design a stock selection strategy for one of their unit investment trusts which were very popular at the time um old joke Merill was not this way anymore listeners but this is back in the dark ages of the N needs and I heard a lot of jokes I was at Merill which was remember Chernobyl and and that so that was still
much more in the public mind back in the 90s and and one of the jokes that I heard at Merl Lynch that did make me laugh even though it's horrible joke was hey what are we gonna how would you clean up the all of the nuclear waste at Chernobyl and the answer was put four points in it and give it to the guys in retail
incentives incentives that's right but but but to get ired right I had to literally convince just on my own 10 separate committees within Merl Lynch right and I felt like cispus man I had a drive down to they had a big campus down in Princeton and like literally I had to drive from New York or grenwich uh down there and like okay which maill am I
going through today and you're right you are absolutely right um even though I did answer several questions where they got into things like really in theats my answer was I do not know but I will find out and report back to you seemed to work that's like a confident you have confidence in results while humility about having it immediately which is
appreciated see my my version of that was getting interviewed by Bane it was at the final interview with the managing partner whoever uh we had this case study as they do with with all the business Consulting interviews um and I came up with some elaborate um you know how to save the business it's heading towards bankruptcy I was like look
there's all these things you can do I came up with 20 25 ideas and the answer was like let the company go bankrupt and that was like the answer and the mening partner at the end was like just shocked at how many ideas I came up to try to save this business uh and I said well that's just stupid like I could have said that a tweet and walked out the
room that's the answer and I I got thing for lack of client you know facing uh personality uh and so I was like well clearly that's not the right pattern no one wants any you know Solutions going on here I love that though because I have a very soft spot in my heart and I have many people who like this who are my teammates here at
oy Ventures they they score very low on agreeableness on the big thought yes yes and I find it very refreshing when somebody looks at me and says you are what are you dumb I I just think it's great I come from Minnesota I grew up in Minnesota and so me too me too I didn't know know that oh uh we're in Minnesota grew up in St Paul Minnesota there
you oh well there you go cities no wonder no wonder we're getting along so well here there you go but I have that Minnesota nice I love the Minnesota's and the news all of a sudden uh but you know that Minnesota nice kind of mentality of um you can be disagreeable without being in your face and I do think that there is that difference on
the coast to the Midwest where we're a little bit more passive aggressive at least in the traditional sense like you know our way of ing disappointment or disagreement uh can sometimes be like well I don't think that that's the correct answer uh and it's not direct like you're wrong uh and you have to sort of piece together what the real
answer is but you know to our earlier point about AI Bots um being able to interact with other folks disagree is something that I think we've we are losing a little bit as a society right because of social media because we're uh intermediated with our devices we're losing the ability to have a long conversation um where you can have
debate and say look I agree with you know points 2 five and N but I don't agree with the others and here's why um to your point about think tanks uh much earlier um I do think you can get a lot more overlap there's not a lot of incentive to do so but the reality is is you never get put anyone in the same room uh no one ever collaborates and
comes uh together as we sort of pointed out earlier and so um to me like the ability to disagree to create ecosystems of competition you know that old uh idea of the free market of of ideas the marketplace of ideas uh um you know is something that is kind of lost I think in 2024 and one that I always exek I always love a debate I was the person
in the lunchroom I always got kicked out of the dining hall as an undergrad because I would come in right as it opened there'd be a group of people who CH up at the table we would all argue for four or five hours and then eventually they were like please leave because we need to clean up the whole the whole place and we did that every
single day seven days a week um and then after college you're like no one wants to go out for five hours in debate what is the meaning of Justice I would have G with you yeah these P people don't even want to drink uh you supposed to even get started uh but um you know building up th those mechanisms of debate helps people I think you know sharpen their
thinking skills sharpen their thesis and it's just hard to get these days right people are sort of scared to kind of cross that line yeah your remark about being from Minnesota reminded me of my sister used to tease me that I actually was not born and raised in Minnesota my parents actually flew to New York City and adopted me and brought me back to
the Midwest and and and because there was when I and of course that's a joke I was born in St Paul but I really did not it it didn't take with me Minnesota nice didn't take with too much with me when when we were going back after moving East in 1991 I looked at my wife as were landing at Twin Cities International Airport and I said welcome back to the
world of false sincerity and passive aggressive behavior it is true it is true we non-confrontational and I will say I do think confront I say this in startups false sincerity false you non-confrontation passive grass of behavior is the single worst ingredient in Innovation sent scientific if you want have an intellectual conversation
you have to have disagreements um and you have to have professional disagreements you have to create mechanisms for going to do that um and it is if you haven't grown up with it and obviously most of our listeners have not you have no idea what we're talking about but if you grow up in a suburb of Minneapolis I can assure you the false
sincerity is something that you experience every day and only notice when it's missing yeah and if you want a crash course on it watch the Cohen Brothers uh Bargo uh because I think that that captures it quite niely um moving on to uh the work that you did at I was very interested in what you were trying to achieve at um Tech crunch when
you were trying to uh launch Tech crunch plus um and so didn't work out and what' you learn what from that experience and fors what you're doing now Etc yeah yeah I mean it's most essential right the media industry was changing throughout the the 2010s right Facebook uh rose up uh social became dominant for a lot of people in terms of our audience reading
um the advertising markets became more and more concentrated with Google and Facebook and digital advertising and so you know like most media companies we were looking to do a subscription product how do you get people to pay out of pocket you get rid of the ads you can get rid of the networks you can get rid of AD salese all this infrastructure we
need to to kind of get revenue from ads um and it builds a deeper denser relationship with a reader so people want to commit they're buying into it they want to read us every day and that that's really positive I think for any Media Company um you know in our case this is back in 2017 2018 when we were sort of building this out um this is
prior to substack I mean actually ironically Chris best uh Hames and some U and the third co-founder over there uh I met them when they were starting YC and they were starting to think about subscription we were all in the same milu together they wanted to do as a platform play I ended up at Tech crunch trying to do it at a larger established
Media Company um and so a huge focus of it was on kind of deeper analytical profiles of a lot of unicorns you know one of the centerpieces was really to say hey we were going from a world of 2030 unicorns remember back in 2017 when there was literally you could count them you could actually memorize them and then we went from 30 to 100 to 200 to uh
I think the highest number I ever saw was 965 unicorns and a lot of them were these companies that people just knew nothing about uh a flexport was one that I was very focused on no one understood Logistics but it was a valuable company like why is it valuable where did it come from um and can we do kind of deeper reporting on that the tech crunch
has not been able to do because we have the subscription uh Etc and and we complemented that with um a focus on Founders so how to build companies and so you would read these profiles and say well how did these people build successful companies these are sort of the lighthouses coming out ahead of me and then we complement that with sort of
tactics coverage you know how do I do marketing how do I build an engineering team how do I scale up a product as my users grow those sorts of playbooks and you know why didn't it go right one part of it was definitely corporate we never had the resources to get it done right and and I think this is a good example where you know the best L plans of mice
and men do off go astray uh the simple reality is is to build a brand like that we needed you know five to 10 writers and we had two um and you can do a lot with two people but you can't do as much as we needed to do to make it an effective product um and so it it's one of these classic you know catch 22s where it was a really good idea I
actually think it was right but if it's not real resourc you will not succeed um you you cannot win an army uh War without without the right Army behind you um so that was a b we sort of got annihilated by the fact that there was a lot of decentralized substack newsletters podcast that came out of all kinds of different places that just ate
different parts of this pie right so a choir got started back in 2015 obviously has grown to I mean just recently they were at Chase Center uh in San Francisco with a practically sellout crowd with Mark Zuckerberg um so I mean over a course of almost 10 years growing to these you know very long podcast profiles of notable companies the same
way we were doing um the generalist uh by Mario um pachy uh and a bunch of others with not boring um you know there became this uh whole world of of the deep profile of tech companies that were competitive and often times free and then on the tactic side you know some of the Venture Capital firms started launching their own Publications but
most notably YC did a pretty pretty heavy job on that they really covered the gambut they had a lot of writers and obviously direct access to a lot of the founders to this and so we were never able to compete we never had the resources we didn't have the infrastructure we didn't have the audience and that sort of the the
tragedy of the situation is you know Tech crunches read by tens of millions of people they are already on the site that was the sort of magic of the place we we didn't have to find these people we didn't have to convince them to come they were already here but we had to deliver them a product that they deserve and we never did good and what did you
learn from that experience that you brought with you to your in your new capacity as as running uh the the newsletter the the games themselves the podcast Etc uh of what you're going what you're doing now it's really important not to get locked into long-term plans you know as I mentioned earlier Tech wrench was owned by Verizon through Verizon media
uh Verizon in the frenetic up and down world of media being owned uh and marooned within a large Telco where you know uh prepaid or or postpay subscriber counts uh on 5G up you know sold uh plans as sort of the metric dour uh is really really hard because you would get these budgets they'd be over for two years um what would happen was we would have the
budget we were spending it appropriately we'd hire folks and then Midway through they're like we actually need the budget to be half of that and I was like well we were on Target for the years when you say half you just mean the final two quarters of the year you're just saying we're going to fire everyone like at the
end of July um which we did uh I mean it was a very sad uh context but um you know every person I hired essentially a tech runch was either fired or laid off at some point or or departed because I knew it was coming over the course of that period because we kept having this investment and then the pullback investment and then the pullback and and
you see this model not just in Corporate America which I think is very very common across the Fortune 500 you know the the the year of the belt tightening uh you know which senior vice president has the power and influence for the next three months and then someone else becomes The Golden Child uh and does super well but you also see in areas
like International Development where the World Bank will get into a project uh they invest a lot of money then they pull back then they invest in another project they pull back and and the funny thing is is if you're on the receiving end of this it's almost always the case you'd less prefer less money but more consistent cash than the roller coaster
ride of budgeting that goes into these places right because you can actually plan you can actually effectively choose a strategy uh and so you know when I think about risk gaming and a lot of the stuff that we're building here you know I I'm a maroon in a very small Venture firm at least small in terms of the number of people everyone I I can see
everyone here so it's a very different place from Verizon which was 100,000 people globally uh and it's a major Fortune 100 company uh in New York City um but I I think the key is is you have to be adaptable right so um earlier this year we hosted a game in partnership with Mike Bloomberg um you know that came out of sort of an introduction of
an introduction which became an interesting opportunity which became a full RIS game which included eventually you know five major generals two congressmen a couple of Think Tank CEOs Etc um we never would have been able to do that with if that was like locked into a budget and I have two similar opportunities like that later this year
I have no idea if they're going to happen there's not even a budget here which no one actually knows about uh but assuming they come together uh the place is flexible enough that I said you know if we can get a couple Senators into a room yeah how about a budget um and so having that sort of flexibility um and the ability to Pivot
strategy regularly makes it feel much more like a startup versus that large utility company CEO that have to plan 10 years in advance and I I just think that with change in the world and how fast things accelerate you know what topics we want to cover change what ways we want to cover those topics change so how do we play these games how do we design
these games games the people we want to connect with are going to change and so I don't want to plan two years in advance I have no idea where I'm going to be I don't even know I'm going to be in America I don't even know if the PO will be here in two years we might all be in Caravans driving around and rusted out old Fords
uh so I have a very existentialist present bias of saying look you you can only plan so far ahead and then you go into the fog of war and so uh the more adaptability you have and the faster your duration speed the better off you're going to be just from our earlier conversation I would say Danny not very confident set you know I it's this is a very
interesting you know people love long-term Strate the government puts together a four or fiveyear strategy you know is five year plan from all five year plans um and it's interesting because some governments actually follow through other plans uh but many don't and I always think it's very very interesting because what you really want to have
confidence on is that no matter what happens you're going to R learn quickly you're going to have rapid learning you're going to adapt to ambiguous circumstances and you can mobilize and be effective and so you know I I covered disaster tech for a long time at at Tech crunch uh climate change National Security a lot of these issues where
there's crisis that show up and what you learn is you can never know what's going to happen you think of some of the huge flas points that have taken place over the last year we could of predict when where how why um you know there're sort of obvious in I no one's saying that some of these aren't obvious but we didn't know exactly what would happen or
how Intense or or when they would take place and so the only thing you have is the ability to mobilize you have the ability to immediately assess here's what just took place and here's what needs to happen right now given what we're seeing live you know on the battlefield or in real life the same thing is true With Disaster Response
which I covered for many years um all of a sudden there was a hurricane that hit Maui knocked out a historic city um we were completely unprepared for that it was a a kind of one one ,000 year storm uh it happened that the land had been very dry and so the wildfires that struck through this happened to be able to to spread away that would not be
usual in Hawaii which is very wet uh it's a tropical place and so you had this unique Confluence of factors and we were really unprepared for how to respond to that and so I I just don't think you know what's going to happen next and so your ability to assess adapt I'm going to use the old sore acronym but um your ability to kind of um do the
O Loop so to speak you know Orient observe or observe Orient uh something something devise act um you know it just becomes really crucial and the speed at which you can conduct that to me is your competitive advantage against anyone else yeah agility is something that we prize very highly when looking at startups to invest in uh and also
reminded of an article of a friend of mine Dan Jeff who's a technologist he was writing about the um the I I don't want to call him spiritual guy but the Enlightenment writer Jed mcginn um and in his essay he did this thing that I really moment I read I was like ah you are absolutely right he was talking about the people that he most admires
are generally people who are the closest to what he called Truth and and what I was interested in was who he identified he identified Special Forces because life and death situation all you know you could be looking at the map everything could have changed from the time you did your halo jump to get to the ground and I've had the privilege of meeting many
of these guys and they're so impressive and like they you can just watch the agility of their thought when when they're thinking which I think is amazing so he identified Special Forces uh emergency room doctors again you have no idea you got to be ready for anything that might come in that door and so it it really inculcates that kind of
thinking and then interestingly enough Traders at Big Banks uh or big institutions because it's not a real debt it's a metaphorical debt if you lose a if you if you lose aund if you lose a hundred million for the outs it's your Deb yes bye-bye uh but I I really enjoy that article because it really crystallized for me a lot of things that were kind of nebulous
in my own thinking pattern that's where I got this idea of you no no no no it's all it's how agile are they right yes and I'm a I'm a huge fan of the of dosm and lot say too had had this wonderful thing the metaphors for life and death right he's like that would just Supple uh right and it gives the idea of the of
the new uh plant when the heavy snow lands on it it bends and the snow slides off and then it Springs back up if it's an old tree branch it is brittle and the P snow PWS up and it breaks on and and so L would say thus to be stiff of opinion you'll always be in the wrong and you are a cult of death be Supple be agile be willing to change and you are a
creature of life and so I think that that's a pretty cool idea for just trying to keep all of our our thinking uh at least somewhat um agile and somewhat open to ideas well and you think uh in the postco world I mean life changed right we spent a year locked in our homes I I remember doing phone calls with people on the sidewalk where I
could see them and you could see me but we were on the phone together and so it felt like we were place but like you're over there um and so we got used to remote work we got you know used to distributed teams decentralization and then you've seen this fight as you see some companies some Executives with you know cognitive flexibility hey there
different ways we can work together uh and how companies are organized um you see how cities are bouncing back uh in New York and San Francisco we've really struggled um to bring these cities back the commercial real estate in Midtown remains anemic compared to what it was you know just four five years ago CU we have no idea what to use with this space
anymore we're still hoping that there's some tenant some company that will buy out all these spaces meanwhile the prices in some cases of the land is going down towards zero as uh you know landlords are going bankrupt selling the stuff off um even the flat iron building here classic Flagship mired in legal wrangling because the repairs to it
aren't matching the the sort of rents that it will expect and so you know it's completely covered and and has been for years at this point and so I think the ability to adapt look it starts at the individual and so you see a huge range I mean you're in the Venture industry much like me you know the founders who are unbelievable and they're adaptable and U they're just
a whole higher order level of thinking of they know exactly they don't lack confidence but they do know to be confident when they need to change directions something has changed in the industry and they go another way and you see this and everything from L Uber that's hearded in taxis but added in food delivery um into the AI world where
people are you know starting an Enterprise going to Consumer vice versa or started in infrastructure and now are trying to do applications um but then it starts at the organization it's not enough to just be flexible yourself you're also part of groups you're part of society you're part of companies you're part of workplaces um and groups
can have flexibility I mean it's interesting you would think that very flexible people would work very well in groups and I actually don't know if that's the case at all uh in some cases I actually think that the most effective groups tend to have two or three leaders who are very Supple as you were just describing from from dows
um and a lot of folks who are sort of willing to just go whatever way the wind blows so to speak and so they're just adaptable to to what what the priorities are of the organization at any given time and then you scale up to Nations and you scale up to cities um I was really recently doing an interview with Paul Kier um author and development
Economist at at Oxford who just published a book on on Left Behind places so um think cities I was born in Youngstown Ohio so I think you know steel towns z rustbelt um and he asked like why are some left behind places still left behind but others have actually caught up what makes these places different and he basically
emphasizes it's it's rapid learning under radical uncertainty some places realized that the steel was never going to come back and so Mayors Community leaders Business Leaders came together and said what do we need to do what's the next thing where can we go uh almost like a a band on on the on the horizon say we need to go this direction it's a
whole new way and the ones that were able to try to chart that path um were really really successful and the others who doubled down were not because they didn't recognize that the world had changed and it it changed at a level you know in this case was NAFTA and trade and everything else um it it traded a way that was not solvable at the city
level and so when I think like Co I think about some of the changes that AI is going to do to schools to to corporations to our workplaces there are a lot of people completely unprepared and who will double down on the past rather than recommit towards the future and so I I love the metaphor of course those metaphors are always so much more
poetic when they come from historical works that of lasted the test of time you know don't of our analyses of adaptability to the AI Revolution I mean does anyone going to read them for a thousand years I I I don't think so I love that idea though um that's going to stick with me the common misperception where people
for whatever reason right that's I I've always had uh an aversion to because that's the way we've always done it and you know well because 100 years you can't argue with 200 years of success yes you can and yes the way that you've always done it if it stops working you might want to stop building it that way or doing it that way because you know
even if it had an illustrious glorious history under completely different circumstances and zeit and societal types of behaviors not gonna work now so always keep your mind open to where where things are going as opposed to where they've been I I do think it's very important to know where they've been I do think having context around history
is vital because you know human operating system doesn't change very often and we keep up the same things time and time and time again but if you know that yes you can arborize it right exactly well listen Danny this has been amazingly fun thank you for joining me um at the end of our podcast we uh play a little game and we are going to W the
emperor of the world and as the emperor of the world you cannot kill anyone you cannot put anyone in a reeducation gap but what we are going to do is we're going to hand you a magical microphone and you can speak two ideas into it and these two ideas will incept the entire population of the world and whenever their next morning is they're going to
wake up and think to themselves I have just had who of the greatest ideas and unlike all the other t times in my life I'm actually going to act on these two ideas starting right now what are you going to incept in the world's population okay that's a very bold question one one that I should have been prepared for uh but two two come to mind
first um the power of decentralization uh the power of breaking up the large and making them small so I think of everything from the monopolis in our own tech industry to large governments large polities um massive cities um humans were designed for smaller communities um evolutionary socially uh dumb Bar's number is roughly 150 um and
with some um some Memory aids you know you can you can push that number higher but the reality is that we live in a in a world of 8 billion people going towards 10 or 12 billion depending on who's counting um and so it can feel very an animiz um where we just feel like we're just a number in this Mass sea of of humanity and so I I think always in my
entire career going to smaller organizations has been more successful has been more fun has been more interesting has been frankly uh more productive and so I wish to give that to more and more people that you can leave those big structures um break them up shred them and and Empower in the same way that sh is talking about creative
destruction that that kind of flexible um organizations rise fall well it doesn't happen if they're monopolists and so breaking up all these big things can can really change things that's one two and this it really comes from a lot lot of French existentialism and I'm a huge Albert Kimu Antoine exper and a bunch of others well that was sort of the the
lesson I was going to give is but you have amazing agency every single day to change the world um whether it's in your own Community whether it's in your own family yourself um you know Victor Frankle uh there's just a huge long list of books man search for meaning um you know you can be in the most trying of circumstances but you are always the
Arbiter of your own fate you are always the Arbiter of your own decisions and you're always the Arbiter of your own morality and so the decisions that you make how you you evaluate them how that contextualizes within the the ties That Bind you uh to society are always within your hands and I think we can sometimes go on autopilot and say well that's just
what the company wants or that's what the country is saying I should do or or my boss or whatever the case may be but you always have agency and and the people who use agency tend to build it as a muscle uh they get used to it and they realize the consequences when they go against the grain when they're contrarian tend to be a lot less than
they expect um the fear does so much more than reality uh when we make the right decisions in our own heads so um the power of agency and the power of smaller groups I love them both I especially love the power of agency I'm a huge fan of vict Frankle love that book it's one of my foundational books that I recommend and and give away to a
lot of people how how can our audience find you uh online uh in New York City yeah in New York City online uh Danny cryden on Twitter Danny ken.com uh on lock capitals website at the man Institute um all different institutions would love to meet people or reach out anytime terrific this has been great thanks for joining us J thanks Jim