[Music] Mike Maples is a founding partner at Floodgate Mike is one of the world's top seed investors and has been on the fores Midas list eight times in the last decade a list which celebrates the top Venture capitalists Mike's Investments include companies like Twitter twitch and Lyft and he's also the author of the
bestselling book patent Breakers where he shares lessons from his most successful startups Mike is known as one of the world's most exceptional discoverers of talent in this episode we talk about his giant idea how the best Founders live in the future why we shouldn't focus on being better we should focus on being completely
different we also talk about generating startup ideas why entrepreneurs are like artists his three categories of Futures and the Art of the pivot so Mike you've been an investor in some absolutely iconic companies um what do you look for when you're looking for great talent yeah I I think that the the main thing I look for is someone who
can change the rules entirely and so uh most people in this world succeed let's say that you want to get in good shape if you work out longer hours you get in better shape if you study harder for an exam you usually get a better grade but that's not the type of success model that I'm looking for I'm looking for someone who can move the
world into a different direction and so that's a different type of success and that's uh that's more of a success based on Breaking the pattern and changing the rules than it is based on uh succeeding brilliantly within the current framework of the rules and so that's part of what I look for so to give you an example
Justin KH when I first met him I met him in a coffee shop and it was pretty chance strange encounter yeah he shows up with a hoodie with a baseball cap and a camera on it and I didn't even know we were having a meeting uh I was meeting another team they said hey do you want to meet this guy Justin KH and we can talk about the idea itself later but
that night I was dilc in Justin con and he' sold his prior company on eBay and I just thought like who does I didn't even know it's possible to sell a company on eBay I think he might be one of one of a the only one to have done that the only one I've ever met who's done it and so you know here's this 23y old kid who's sold his company on eBay for quarter of
a million dollars and those are the types of people I've had good Success With You Know Brian chesy when he sold serial boxes to fund Airbnb which unfortunately I didn't invest in but those are those are the types of people people who can be unconventionally successful is what I'm really looking for so quite iconoclastic in a way a
little bit yeah and you know so they have to have this trait where they're willing to think for themselves but also willing to act in unconventional ways right it's it's not enough just to think different you've got to act different and so I I look for the person who embodies both traits and so Mike when we think about what
great talent looks like often you can look at resumés and you can you know want shiny people who've been to Harvard Business School or they've been at you know Goldman Sachs or whatever or that you know not from those worlds but just a really clear track record of achievement the reality actually with a lot of the very biggest companies is
they're people like Justin khah who you know turn up and Hoodie in the coffee shop and there isn't on paper anything that obvious with him it was that he'd sold this company on eBay that was interesting do you look for some kind of evidence that these people have achieved extraordinary things already or are you looking for something else I I look for
some evidence that they independently decided to work on projects of their own that they were obsessed by and so so that's often a good marker uh for success and it and it's interesting too because a lot of these great Founders they're they're successful by conventional uh methods as well so so like for example just KH went to Yale uh
uh Brian Jesy went to Brown uh a lot of a lot of the really good Founders have a conventionally goodlook educational track record but it's like they're sort of um iconic class within a sort of a more conformist backdrop right and so so they're they iconic class in an environment where they were they were able to be
conventionally successful but they're unconventional people and and it interesting that seems to be true of people in a lot of fields with breakthroughs you know Isaac Newton right had some some new ideas about the world but he was in an academic setting where you know he was surrounded by you know academic rigor uh I think that the
same you know Einstein was a pretty iconic clastic thinker but he was also he was well academically grounded and pretty rigorous so so a lot of these people have what looks like a conventionally successful academic background but I think just because they have such a high IQ that they can succeed without it being the primary
thing they focus on are there any questions you sort of ask when you meet these these folks to try and tease that out yeah there's uh there's a few things one of the questions that I really like to get at is just how did they come up with the idea and so I want to I want to believe that they came up with the idea honestly so uh a lot of startup ideas
happen because the founder tries to think of a start up and I think that's a path to not terrible terrible I think that's a path to not so good and there's a set of reasons for that but so if if I find out that the startup idea came from you know ideating where you put Post-it notes on a whiteboard or you know that
kind of stuff that that concerns me and so most of the most of the founders that I've worked with who've had the most success they got obsessed with something going on in the future and they had a front row seat in the future before the rest of us and they were just down this Rabbit Hole where they were you know opening new fractals of knowledge and
they were discovering undiscovered things because they were interested in it just for its own sake and then it it you know they just by doing that they discovered the Undiscovered amazing you've got this idea of living in the future tell us about that yeah so the um there's a cyberpunk Sci-Fi author named William
Gibson uh and one of his quotes that I really like is the future is already here it's just not even distributed so one one thing I've noticed so the great startup ideas tend to be non-consensus and right um and how do you have a non-consensus and right idea right like let's say your founder in the early days you don't know that you're right if you
knew that you were right then it's too obvious and it's probably not non-consensus and so you can only know for sure that you're non-consensus at first and so some entrepreneurs would say to me well that that may sound good from where you're sitting but like I'm the entrepreneur this is my only startup this is my only thing and so what I
started to realize is that the best insights usually come from living in the future most of the great startup ideas I find happen that way it's not trying to think of startup ideas it's not trying to solve unmet needs in markets it's more living in the future and and when you're living in the future you encounter the barriers to actualizing
everything about it and when you encounter those barriers you notice what's missing and you build the missing thing the interesting thing is one of the one of the metaphors that didn't make the the book but but some people liked was uh this idea of an oasis so like let's say all three of us are living on a sand dune with a bunch of
other people and that that's all we've ever seen our whole lives and then one of us sees something on the horizon and wanders across the desert and finds an oasis well once you're in the Oasis what is different about the Oasis is obvious it's got water it's got coconut trees like you're not saying to yourself hm I wonder how life's
different here it's like it's a different everywhere you look that's what living in the future is like like everything around you is just different the assumptions the the the laws the rules the patterns are all different and so like the way startups happen is that founder is living in the future they're like this is awesome I like eating
coconuts I like swimming in the water I like having water I like plants all this other cool stuff I'm going to go back to that sand dune and tell people about this Oasis so what happens is they go back to the Sand Dune and most people in the Sand Dune are like nah I don't believe you um I've never seen an oasis before I I think you're wrong I think
you're delusional that doesn't make sense to me uh you know last time somebody said there was an oasis they wandered off we never saw them again and so uh then usually what happens is the founder convinces a couple people couple people say I'll bite I'll walk across with you and then they go see the Oasis and now there's several people in the
Oasis they're like this is awesome they come back pretty soon you're an idiot not to go so that's kind of the whereas most people think that startup ideas come from just I'm sitting in a sand dune and I have an opinion that there's an oasis somewhere you know there ought to be one so I'm G to like my vision is there's an
oasis so most most people think vision is like having better binoculars and you're like looking out over the horizon but that but where good startup ideas happen is you're embedded in that future and you're tinkering with it directly and the entrepreneur in doing that discovers firsthand the opportunity to break the pattern they see firsthand why
life is different there and they see firsthand what's missing there and when you build what's missing in that future your intuition about what to build is far more likely to be right and so then the question just becomes am I living in the valid future am I living in the future that most people will Someday live in that's what you really
interested in and so you know it kind of gets back to your initial question like what I'm looking for I want to when I asked the founder how did you come up with the idea I'm interested in the idea but I'm really more interested in the story around the idea and do I believe that they so you know there's a saying
in customer development get out of the building I like to say when you develop an Insight you want to get out of the present and you want to you want to transport yourself to a valid different future that one day a whole bunch of people will live in Le let's talk more about this idea of living in the future so for me I've seen two types that have
worked well one is the kind of Grand Vision living in the future so someone like Tim burners Lee who we had on the giant ideas Summit a while ago and for him developing the worldwide web that really was a pretty Grand Vision he was deeply in the future he was living at CERN and and working there but it was a very specific big vision for the future
yeah but on the other end of the spectrum some of the companies you worked with Twitter uh and others maybe maybe Justin KH with uh twitch to me those seem more like tinkering in the future and you know from my experience with the Twitter guys I was lucky to start a company called swing which biz Stone one of the Twitter
Founders was the chairman of yeah and we hired a bunch of the original Instagram designers and creators and for both of those companies Instagram and Twitter it seemed to me that these were teams who were not coming with some huge vision for Humanity it was more that they were just so deeply engaged in the current
Advanced Niche technology whether it was you know the iPhone photography set up with the Instagram guys or with Twitter they were tinkering with with podcasting right AO which was the original Twitter uh idea was going to be a podcasting tool probably 10 years too early they were into blogging it didn't seem to me that these were people who were going
right I've got this idea in 10 years Twitter's going to be the public sphere it's going to be used in this way they were just hacking and tinkering yeah is that more your experience is the tinkerers yeah well it depends so so um I like to say broadly speaking I've noticed three different types of Futures that people pursue so the first I call uh plausible
Futures so a good example of this would be Todd McKinnon and Freddy Caris OCTA so Todd comes to us and says I'm I've been VP of engineering at Salesforce Salesforce is the early Cloud company that matters all the early adopters of Salesforce are early adopter of cloud computing and they're telling me that they're struggling with identity
management across Cloud apps and Cloud apps are proliferating and so I believe someday somebody's going to have identity management and you know I'm well situated to do this because I I know what to build and I know the customers and they trust me and when when he says that to me I'm like sounds good to me right that sounds pretty
plausible right so I'm like if anybody can he can and so um but it wasn't like I was like okay well I'm I'm not buying it it was more like okay I I think that you are the most ideally matchable person in team to that future uh and so that sounds very plausible to me but most people when they saw Todd McKinnon and OCTA you kind of couldn't unsee it
you're like okay yeah he showed me the future he's right but this is true like of Steve wnac I think it was true of Zuck it was true of a lot of these I call them uh um possible Futures and a possible future is one where most people when they see it they're just kind of like huh you know whatever like most people when they saw the browser most
normal people at first didn't think it was important they kind of so like these PL these possible Futures tend to get U dismissed as toys you know the early days of crypto um the early Homebrew personal computers early uh social network types of things uh at the college campuses so you know they usually have these Dynamics where they
have a ground swell of really excited Alpha geek types of people or early adopters but most normal people don't think it's going to be important at first until it is um and then you have the third type which I like to call Preposterous Futures so so like a so you know a plausible future when when you hear it you're like I can't unsee it I I
agree a possible future most people are like okay you explained it to me but I'm like whatever there's a few people who like it but I don't get it um a Preposterous future it's like okay you're Elon Musk you're going to start a rocket company good luck and so you know the Preposterous company it's like you
could tell the whole world you don't have to be in stealth because nobody believes you can do it and it seems crazy and it seems impossible and so um you know another example of a company like that was madna right they they raised $5 billion and took 10 years before they shipped a first product and so in order to pull one of those off off
you have to be a miraculously good fundraiser you have to be incredibly persuasive and I think you do have to have a very determined idea of the future right like you have to you can't just be hacking your way see what happens next right you can't stumble into something uh so I think that that there are you know Peter teal would
probably call it um determined optimism you know it's it's like you're saying I I have a very strong belief about a future that I'm going to design and it's going to take a lot of time but like I'm going to overcome all the resistance of the present and make it happen of those three Futures which which stories do you like most being a part of uh I like them
all you know they're they're they're all fun in different ways the the the the plausible ones are the most straightforward right like you know snowflake would have been one of those you know they're usually they're businesses to business you know new technology Trend somebody has a front row seat on that Trend um the possible
ones are sort of whimsical you know they're sort of fun because they surprise you you know Twitter was a little bit this way it didn't it didn't seem that important until it was uh Justin TV certainly and then then the Preposterous ones they're just very few of them ever happen you know most of them this is one of the problems with
some of these hard tech Investments is a lot of the hardtech Investments you look at the founder and you say I think they could build the widget maybe but they're going to have to do a lot more than that for something like you know let's say somebody comes in with a quantum computer I'm like okay you got to last long enough to S not only
survive but succeed and that's going to be more you're not going to just engineer your way out of that right that there's a bunch of other things you got to be good at what did you see in the twist of Founders uh well I was pretty lucky on that one so when I met uh Evan Williams he had just he had just come out of Google so he' sold blogger to
Google and I was really excited about podcasting and so I I created uh my own uh podcatcher you know podcat podcasting at the time there was this open source software called ipotter so I was uh uh catching and I was also broad catching you know catching video right also using bit to so I thought it was a really
exciting Trend and when EV presented what they were doing with Odio I thought he was the natural guy to do it right he he'd done the blogging software he he had a really good taste for products and EV just has a way of naming things and describing things just really good and so uh so I thought okay that's that's
the one and then a week after I invested Apple decides to give podcasting away for free on iTunes and and that's a problem because like at the time there were no iPhones there there are no devices really to play tunes on other than iPods and so if if Apple owns the device you play the tunes on and they give away the podcasting for free it's
it's hard to imagine you have a business yeah I I had a my one of my first startups was a a Online Marketplace for college musicians to sell their music online uh this is a long time ago now we had M and Sons Ellie gin some big names but then iTunes came along and basically allowed everyone to um Independent Artists to sell and stream their music
through that and that pretty much killed us overnight yeah so yeah and and that happens sometimes it's actually rare than than uh I think most realize like I haven't had very many startups fail because a big incumbent just came out of nowhere and just obsoleted their business in one day uh I think that that that people are afraid of that happening
a lot more than the reality of it happen it's happening a lot now though with the AI platforms I would say yeah yeah there's probably some truth to that yeah I think but but but far in way the biggest reason I've seen startup fail is you know what Paul Graham would say which is they just didn't make something
people wanted yeah you know they they had they had an opinion about what people wanted but their mental model of what the future was and what people wanted was in their head it wasn't it wasn't the reality of what people really wanted so being early is great but sometimes you can be too early and we've seen a lot of star starts fail because
they have these Grand visions of the future or they're tinkering in the future but they're just actually a bit too early for example crypto so if you were early to crypto you made a lot of money that's great but consistently we've seen people who are trying to build applications on the blockchain you know that was too early 10 years ago it
was too too early 5 years ago it's probably maybe too early today even uh people consistently get that wrong tell us about when it's too early and it should be obvious that it's too early yeah so so first of all I major caveat to this answer I think that timing might be the hardest variable to get right in these things by maybe even a wide margin
a and a lot of smart people I know would probably agree with that statement I I know like Mark Andre and Reed Hoffman some of these guys we talk about it and and we're all like oh yeah timing really hard so the the the idea that we had with this notion of inflections is that an inflection is a turning point so um
if if you go to say Lyft or Uber the iPhone 4S had a GPS chip in it uh you could have had the idea for ride sharing before the iPhone 4S but it wouldn't have mattered because you could have implemented a system right that embodied that Insight so what what we wanted to do with the inflection theory was to say why is it that something new has
just been introduced that for the first time ever provides a new specific form of empowerment for specific people and the reason that we wanted to do that that way is one is we just wanted to know is this startup idea powerful is it powerful enough to change the subject but we also wanted to answer that why now question and we thought okay if if
we're able to say like in the case of of Lyft you know now for the first time it's possible to locate Riders and drivers algorithmically the day before the iPhone 4S that was not true the day after the iPhone 4S it is true for the first time ever now you could start to reason your way through hm maybe that's not a crazy bet like we still don't know
for sure you never know 100% for sure but like the the inflection notion the stress test was a way of saying okay if the why now questions the hardest one to get right why don't we ask a bunch of really specific trting questions that help us understand if we're in that Goldilocks moment right if if we're if
we're too soon then um what we have is a science project right we don't have something that anybody's desperate for that empowers people enough if we're too late it's just obvious there's already a bunch of them just like it you know why pursue something why why why get into the Trap and Mindless competition I think with a lot of these examples
what's interesting is that yes these Founders are living in the future but their ideas evolved and in some cases what they actually built was so far away from the original idea happened obviously with Twitter we've just talked about originally a podcasting company then becomes Twitter my favorite internet story in stup story is is slack
and Stuart Butterfield who you know set out to build a game the game never ending doesn't work ends up creating flicker instead one of the first uh you know photo sharing sites does that it's a great success and he's like right I'm going to build my game now I'm going to build the game game fails again and slack emerges from it one of the you
know the biggest technology stories yeah King of the pivot and it's fascinating you know in that example it's an extremely different idea every time it's a game that becomes a photo app or it's a a game that becomes a a work messaging platform so for you how do you think about that when is the right time to Pivot when when do you when do you as a
Founder go right we just need to just try something completely different but also as an investor given that you know that you know that a lot of these entrepreneurs are going to end up working on something completely different how do you then assess what they're doing at the beginning yeah so so um and and Stuart Butterfield is a a
really interesting case um that one would have been harder for me to figure out I think so so here's the way I think about it I think that a a a great startup um has to have a fundamental insight about the future and an insight to be powerful has to embody two things uh one is it has to harness inflections so it has to it has to have some type of
specific power that allows it to not just be better but to just totally change the subject so a startup capitalist doesn't win better doesn't matter with startups you got to be radically different to make radical difference right and so the inflections give the startup founder the ability to wage asymmetric Warfare on the present
right because we don't want to have a fair fight with the present the insight though is it's more than just a new type of empowerment it's a non-obvious new type of empowerment why does that matter well what I started to think about and you know you point you kind of alluded to it if 80% of my exit profits have come from
pivots should I even care what the product is is that true because because yeah that's true that's well I I care what the product is but like 80% of my profits come from pivots so you you sit there and you say wait a second here in the success case it's 80% likely to change so what am I investing in maybe not the product um and so what what I
came to believe was that I was investing in the insight and the founders capabilities to make the Insight real and that the initial product was really a reference implementation of the Insight so the the initial product is the Founder's initial attempt to find people desperate for the product that embodies their Insight but what a pivot
really is is it's it's kind of a h so far we're not getting product Market fit so either we're talking to the wrong people or our implementation of the Insight is not on target OCTA started out doing problem management for cloud apps and so in that case they had the Right audience but the audience said hey look you know
this problem management that's kind of cool but that's fifth on our list of problems and Todd and Freddy had the presence of mind to say well what's number one on your list oh identity management total hassle so where am I going with this the the the Insight pivot comes from basketball right the metaphor the inside is like your pivot
foot and so in basketball when you pivot you hold your pivot foot fixed on the ground and you move your body and so in startups it's the same the Insight is your pivot foot you maintain your Insight because if you don't have your Insight you have nothing you have no reason to exist as a startup and the act of moving your body metaphorically is
the choice to either vary the implementation or the audience that you focus on that's why you want to invest in the Insight because if the insight's true even if the first implementation is off that founder is still learning that founder has a first mover Advantage into the future that founder is learning things that other people aren't learning
they're discovering the Undiscovered and so just because what they discover at first isn't the right thing doesn't mean that they're not one step closer to the right thing and so that's kind of what I've come to realiz this is kind of what I'm investing in and do you play an active role kind of acting as a mirror
to you know maybe you should keep moving on that that pivot foot or you very hands off I do some but I'm pretty careful I'm I'm pretty careful to you know I I view these Founders as more like artists and business people in a lot of ways and so I try I you know it's like if you hand van go the paintbrush you let him paint right you say hey you
know the imposto technique pretty well I'm I'm going to count on your sensitivity your talent I've written a a blog post yet to be published called entrepreneurs a commercial artist so I'll send that your way for I like that so yeah so when I think about art when I think about it and I I first heard this idea from Steve blank so um the the the
basic idea is that artists have two capabilities that are really profound one is they have a sensitivity so they notice things that other people don't notice you know uh most of us uh see a blank canvas van go sees star star KN or most of us see a hunk of marble and Michelangelo sees pah yeah right so there there's the sensitivity and the
noticing which is what Founders do they see what other people don't see and they they notice what other people don't notice but then the other thing that artists do um that's subtle is they persuade people to abandon their logic yes and so like when you see the p in St Peter's Basilica it doesn't matter if you took
an art history class you're just transfixed by it or if you see the cysteine chapel you you can just see how people would have just been in awe yes just emotionally in awe of this art and I you know I remember the first time I saw um star night you can just see how Disturbed he was you know you can you just there's a part of you that just
says Hey van go I see you you know um and so um why is that analogous to Founders well no rational person would do business with a startup and no rational person would join a startup right you have to people don't join or buy from startups for practical reasons they do it for aesthetic reasons right they do it because they believe in the
founders aesthetically Superior idea of a different future yes and they co-create early Believers early customers and employees co-create the future with the founders but in those two senses they really are more like artists than business people right they're they're they're more like an artist than they are a salesperson or an
engineer or a you know they they may have uh talents that embody those things just like an artist has talents that embody the ability to paint but just because you took a paint class or an art history class that doesn't make you go I also noticed that um a lot of artists s entrepreneurs not always but they will often have a community that sort of
drives them forward to some PayPal Mafia or you know the re the impressionist painters or there's a dynamic there as well and and it's and it's also true of people living in the future right so the you know in many ways it's like the time is like a bell curve there's um most of us are living sort of in the present in
the middle of that fat bell curve some people want to live in the past and a tiny sliver are living in the future and these inflections they come over an event horizon yes and the people living in the future see it first but the more important thing is that people in the future are hanging out with each other and so they're talking about that new
thing with each other and so they're they're exposed to a different set of assumptions about what's going on they're not talking to conventionally minded present Centric people they're talking to unconventionally minded future Centric people so just like your example of the Impressionists right the Impressionists all believed that they'
been exposed to a greater truth before the rest of us had yes and so and they would Riff on these ideas together and to them it was like obvious for listeners now thinking about what which Futures they should be living in let's talk about that if you are in 2024 2025 uh 25-year-old who you know wants to build a big career in technology or
venture or whatever else it might be startups what are some of the Futures that people need to be living is it is it quantum computers is it is it AI that you were just talking about where where are these futures for people I'd say the the simplest thing that anybody could do would be to spend a minimum of 20 hours a week of deep work in these
gpts and so you know whether it's um chat GPT or Claude for example or perplexity so why do I think that so um you know I I talk sometimes about uh inflections being the thing that lets the founder change the future right so like the ride sharing companies the inflection was the iPhone 4S had a GPS chip in it and their
Insight was that oh that means you could do Airbnb for cars uh so and then and then the ride sharing app was the product right that embodied that Insight but occasionally you get something that's bigger than an inflection and and there's been it's happened twice in my life so far and I think that AI is the third time so the first was personal
Computing and that c change was really the era I call it Mass computation so computers before the microprocessor were expensive you know you had a data center you had an IBM Mainframe with a bunch of guys running around lab coats and software was the thing that you gave away to keep the Mainframe running because like the Mainframe didn't have
that much capacity and you had to run the most Mission critical jobs on it and you had to you know you had to squeeze everything you could out of it so when I was a kid my dad sold 256 kilobytes of ram to Bank of America America for a quar of a million bucks right crazy right so so then the micr processor comes out and now all of a
sudden Computing goes from being the scarce expensive thing to becoming um approaching free and so now you have a computer in every desk and every home or at least that's the direction you went you have Mo's law you know doubling of transistor counts every 18 months at the same price and what does that mean it means that there's a shift in attractive
business models so now all a sudden it became attractive to create a software business and to license your software to every machine it wouldn't have been attractive in a world where you had a thousand machines in the world but it became really attractive in a world where you had Millions so now all of a sudden Microsoft becomes the center of
gravity Microsoft Oracle sap all these companies um and they were counterposed to IBM right so IBM didn't think about pricing for software by the desktop so then in the early 90s you had the era of mass connectivity and rather than uh Computing becoming commoditized you had nodes uh proliferating and you had
Communications bandwidth becoming commoditized and so what drove value it was who owned the biggest networks who gathered the most data on those networks who had the most connections and and that was counterposition to Microsoft like Microsoft didn't know how to respond to Google or Facebook or any of these guys um I think we're now so you
know what happened in the era of mass connectivity was rather than a computer and every desk and every home now it's let's connect everybody in the world uh and and come up with network effects that exploit those connections you know it's not Moore's Law it's met C's law you know network is valued at the square of the function of the number of nodes
so now I think we're entering the era of uh Mass cognition and I think that um the way I've internalized it is that there are certain things that used to require expensive human cognitive labor that are going to become approaching free yes in the same way that Communications bandwidth became free in the same way that um microprocessors
made process you know computation free and so then you say okay how's that going to change the future and this is why I spend at least 20 hours a week in these gpts so like I'll give you an example like Charlie Munger had a set of 90 mental models M for investing in companies that he developed over five decades so I started to think okay how
would you develop an equivalent lattice of mental models for seed and in the early days I thought I wonder if that's ever going to be useful because let's say I'm looking at a pitch how are you going to apply 90 mental models against a pitch you know it's just too much labor in AI it's trivially easy so in AI I can just I have one mental model it's
the business model canvas I have another mental model it's Kay christensen's jobs to be done I have another one that is uh Hamilton Helmer seven Powers I have another one you know Sequoia just came out with their Arc framework I'm like okay why don't I make that a GPT friendly readable format and so you know people talk about machine readable like
now what I've been playing with is GPT readable but if you want to take it further you collect a time capsule of all the prior successful hundred bagger startups and so what I really want to do is run those models against the Airbnb pitch deck or against the Outreach pitch deck or against the Pinterest pitch deck
because I want to know if they would have revealed the signal at the time and is it deck specifically you're running this model against yeah because I want to know could I know from the deck alone is it worth meeting this company what are the unanswered questions that I got to get to in the meeting what are the things that could go right and so and
and having a database of all these uh successful companies allows you to not just forward test but to back test to sanity check whether your mental models so another thing that I'll do is I'll put a whole bunch of these pitch decks into notebook LM and then I upload my book pattern Breakers into it and I say which of these startups were most in
alignment with the theories of pattern Breakers and which were least in alignment and you know it's like rad what comes back I'm just like holy crap this is amazing I wish I was in my 20s again i' belal you know but but like what the the important thing though in that example is I had to have the presence of Mind Over many years to care
about what's aund bagger startup I had to have been compiling that list I had to have an opinion about why they were succeeding and like what are the things to look for so the the opportunity to use AI is to combine your specific knowledge and earn secrets with the AI and to just amplify the heck out of what
you can do like the things I'm describing there's just no way I could have a team of 100 people I can't do those things but now with AI I can just you know well I I I tend to run past the limits every day of these gpts you know they always knock me out but like but I you know I like I run all these different things so uh the gpts helped
me figure out the nine different canonical business models so I got a mey list of Nine business models and then I'm like okay here's myund bagger list what was the primary business model my that sounds like a very your plausible version of of Venture capital's future I'm going to sending that straight to our head of data yeah but what's
interesting is anybody could think that like any field has a set of mental models that govern decision-making and and if you go back to kind of what we were saying about new knowledge versus pre-existing knowledge if pre-existing knowledge is becoming asymptotically free then what I should be doing is combining that knowledge at scale with
my specific knowledge regardless of what field I am in regardless of whether I'm a corporate executive or I'm a musician or I'm a you know there's there's the the the frontier knowledge that I'm earning by working uh at the frontier trying to understand it being more obsessive about it and then there's all
the rest of the knowledge in the world that's available to me and I that would not have been available to me before AI because a I wouldn't have had a big enough Team B I wouldn't have been able to verify that I got The Right facts and I had the right expertise I just wouldn't have been able to run the knowledge processing operations that I
can now Mike we end every giant ideas Episode by asking the guest what is it about you that makes you so successful when we talk about your career in seed I I can tell there's just a a a gleam a glint in your eye when you talk about investing you clearly love it I'm sure that's part of the success but also you
are very very early to seed you you are one of the ogs of seed investing what do you think it is about yourself that made you early to seed and continues to make you you love it so much yeah I think I just I just really like startup capitalism right I I just like the idea of you know in the way that Benjamin Graham and Buffett and Munger and those
guys liked uh understanding corporations and reading Fortune 500 annual reports stuff I just love the idea of uh these people who just dare to just deny the premise of the rules and come up with something radically different and I I just think that's cool but but I think there's a general thing that maybe the audience would benefit from like when I
was when I was young my dad used to say uh do your best and a lot of people for a lot of people that's kind of a platitude but when you when you really internalize it it's very powerful like uh Japanese have this term called iy guy right which is sort of like you're trying to figure out um what you love to do uh what's valuable to the world right
and kind of what you can get paid for and there's kind of this intersection where you have uh a comparative advantage that nobody else has right so like if I tried to compete and Venture Capital by being like Peter teal I'm not going to win that game because like first of all he's really smart second of all he's really well
read in certain areas that I'm not but if he tries to compete by being the startup capitalist philosopher king I'm going to win I'm going to win that competition right and so like what I've what I've learned is that too many people think about competitive Advantage when they should think about comparative advantage like it it's great that we're
in the UK right country of Adam Smith uh because what what what Adam Smith understood is that it's people's differences that make them valuable not their similarities right and so if if you that your DNA and your DNA and mine and everybody who's listening you're the only person in human history who's had that exact DNA and so if you are your
absolute best self at whatever you're best at what you like the most and what is valuable you're going to be impossible to compete with and so because you can't be better than your best that's the best you can be and so ironically it's about turning inward somewhat rather than comparing yourself to others you're trying to compare
yourself to how you can best show up in the world because if you do that you'll be impossible to compete with and and you know it probably resonates with some that most of the people that we really look up to tend to have that quality of seeming like how would I ever compete with that person how would I ever be
better at being Elon Musk than Elon Musk how would I ever be better at being Sam Alman than Sam Alman right there's there's some kind of a an aspect to them where they've sort of figured out the the the place to put their footing to stand to move the world and that's their unique Place their unique Toe Hold that they can have that's the sing that's the
single best answer to that question we've had on the on podc so far the thing that's so inspiring about it and where I'm grateful to my dad is that like anybody can benefit from that advice anybody in the world all of us are our own independent nodes on a network of people of humanity and each one of us has comparative set of
advantages that we can we can appropriate value for no matter no matter how we showed up in the world no matter what we have no matter what our assets and liabilities are you're quite the Storyteller and communicates M yeah uplifting way to end Mike thank you so much for sharing your giant idea today all right really appreciate it okay thank you