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Jim O'Shaughnessy: Well hello everyone it’s Jim O'Shaughnessy with another edition of Infinite Loops.
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Wait a minute…this is the special edition that is meant to coincide with the launch of O’Shaughnessy Ventures, and the true podcast king, my son Patrick O’Shaughnessy, has graciously agreed to be the host.
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So, listen in about all things O’Shaughnessy Ventures. Thanks.
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Patrick O'Shaughnessy: All right, let's do this.
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Jim O'Shaughnessy: All right, you're the host.
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Patrick O'Shaughnessy: We have a tremendous amount of overlapping interests, but are approaching those interests in very different ways.
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We talk all the time, obviously for obvious reasons, mostly that we're father and son but when it comes to work, this was true at OSAM, it's true again now.
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We kind of do our own thing.
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While we kind of know everything going on with each other, people would also be surprised by the degree to which we operate in separate worlds and don't necessarily collaborate or even share notes on a whole lot of stuff, which actually makes a conversation like this more fun for me because I'll actually be learning answers that I don't know yet as opposed to just going back through the same stuff.
1:18
Maybe start at the highest possible level, which is just how would you describe what you want O'Shaughnessy Ventures to be? Why is it called that? What was its origin?
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Just give us the basics and then we can dive into the particulars. Jim O'Shaughnessy: Sure.
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Thank you for guest hosting for me. I really appreciate it.
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Patrick O'Shaughnessy: I'll send you my bill.
1:39
Jim O'Shaughnessy: O'Shaughnessy Ventures has been something that has been in my mind for probably the last 10 years.
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As you know, I love the new, I love technology, I love movies.
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We have a vertical, which we'll get into later that's going to make movies.
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This was kind of my opportunity to set up a company that reflected everything that I thought would be presenting because of everything that's happening, asymmetric opportunities for people who are tuned into what's going on, but also things that I love and want to accomplish.
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For example, O'Shaughnessy Ventures, the name basically, your mother had a lot to do with that.
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She named the first company and she looked at me simply and said, "What did JP Morgan call his bank?" And I went, "JP Morgan."
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And [inaudible] is very tied to, "Listen, if you're going to go all in, go all in on your name."
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That worked out really well.
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And thus O'Shaughnessy what?
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I chose ventures, because we're taking adventures.
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As a matter of fact, the name of the vertical for our venture capital is Infinite Adventures.
2:55
I'm going back to the original name.
3:01
Because when I read that in a book about hedge funds, I'm like, "I love that name."
3:08
The guiding principle here, at least as I see it, is we are at an inflection point in society and the inflection point is being caused by the collapse of geography, time, space.
3:17
I think that the pandemic lock in advanced trends that were already there by in some circumstances as much as 7-10 years.
3:36
It totally got rid of the idea that no one can work remote.
3:36
It totally got rid of a lot of the ideas about the way people interact.
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My thesis is that for most of human history, a genius was born, lived and died and no one knew anything about him or her.
3:54
Probably because they were in a little town somewhere and they were bound very tightly by their kit and kin, by the culture in which they grew up.
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I think all of that has disappeared.
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We can take huge advantage of that because I think for the most part, talent, innovation, creativity are mostly probably normally distributed.
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For the first time in human history, we can go find that person in Nairobi, we can go find the person in Bangladesh.
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What we bring to the table, obviously is the ability to give them support, to fund them, to do a whole variety of things, plug them into our network, will get to networks and why I think they're going to be even more important in this new age than they were in the past.
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But essentially, these are all things that have always animated me and I've always been interested in.
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After we sold OSAM, I thought, "Well, you know what? I want to do this.
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This is something that is very meaningful to me."
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The opportunity to demonstrate that the world we live in is kind of magical in a way.
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The drum beat from traditional media is like, "Here's a fire, here's a killing. Here's a..."
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That misses a huge portion of the news.
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Like a million people came out of poverty over the last decade.
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Places are being developed that simply were immune to development years and years ago and I want to be part of that.
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And so each vertical is going to address a different aspect.
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I've also had the thesis that all of the old business models are collapsing and in their place are going to be new ones that are very, very different.
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I had Lulu Meservey, I think you're going to have her on as well.
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She's a communications expert and I read her stuff on Substack, fell in love immediately because when she was at Substack New York Times did a heat piece because they were taking their writers and her response, I just read it and my jaw hit the floor.
6:20
I was like, "Now this is the person I want to get to know."
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Because it wasn't the no comment, it was no jargon, it was none of that.
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I think that that's just an example of the rules are changing everywhere.
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The way you set positive sum up is very different than the way traditional VCs have been set up.
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And so I think as part of this, we're doing this series on infinite loops called The Great Reshuffle.
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I think the new models are on their way and certain circumstances are here already and we want to take what we view as the new playbook and run it.
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Patrick O'Shaughnessy: But you and I have spent our whole careers as fiduciaries managing other people's money.
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That's still all of my time.
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I'm really curious to hear your decision around whether or not to incorporate other people's money into this venture versus just doing it with your own capital.
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The sort of pros and cons of the fiduciary mindset.
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Of course, you're still a fiduciary in other ways just to a smaller base.
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But I find this fascinating because I think some of the things we'll talk about will sound a little out there, will sound very risky, will sound highly uncertain.
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I think in many ways maybe you can still be a good fiduciary and do those sorts of things because that's where returns can be.
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But talk me through this dimension of it, which I find really interesting.
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Jim O'Shaughnessy: As do I.
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As a matter of fact, I was just living listening to David Senra's podcast on Peter Thiel.
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I'd read the book when it came out.
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But of course David is magical in the way he transforms them with his insight.
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I'm like, "Yes, this is what I want to do with O'Shaughnessy Ventures."
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On the upside of being a fiduciary is it teaches you how to take as many perspectives as you can from parties that have very different interests.
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On the downside of being bound by fiduciary rule, for example, the investment in Stability AI, I couldn't have done that.
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I wouldn't have done that.
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If I had LPs that I had to answer to, my calculations, my incentives would be all different.
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One of the things that I love right now about being still a fiduciary mindset, but not having the agent principle problem.
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I think that that provides a huge advantage in my ability to do things that I think are going to work out.
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Now, I know going in the majority probably won't work out.
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But we'll learn from those and we'll take risks that if I was investing on behalf of a big group of other people, as was my career for most of my life, I wouldn't take.
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This is kind of me unbound, if you will.
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That's one of the aspects of this that excites me the most, because we're going to run a fellowship.
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It's going to be a $100,000 for a year.
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And the person who gets that fellowship, what we're going to tell them is pursue your passion with everything you got.
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You've got this money now.
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You've got our network now.
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We want it to be very disparate.
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We want it aimed at creatives.
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But my definition of a creative is somewhat different than other people's.
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You're a creative, an entrepreneurs are creative, artists obviously are creatives, scientists are creative.
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One of the things that we want to do with the fellowship is really find and fund these people who we think have incredible ideas.
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Now, some of them will feed up and maybe start a company that OSV will seed, others we'll just plug them into our network and see what that combination can produce.
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I think it's going to produce great things.
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We'll get to networks in a minute.
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But back to the fiduciary, I feel liberated honestly.
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I have been a fiduciary for 35 years. I think like that.
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I'm always building that into my calculations.
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It's going to be there even with me just using my own capital.
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But in many respects, it also lets me have a much broader range of things that I think are interesting, that are innovative, that might probably work that I probably wouldn't fund if I was like a Sequoia or a benchmark because I don't have any agent principal problems.
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For the time being, it's going to be that way. Now never say never.
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Of course on the investment arm, I'll do deals with other investors like I did with Stability AI, but not people that I'm responsible for.
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Patrick O'Shaughnessy: Maybe talk about the Stability AI investment. It's a great case study. It's already happened.
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So it's not a hypothetical and it's probably pretty emblematic of the kind of thing that you'll do on the investing side.
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We'll come back to the fellowships and some of the other ideas in a minute.
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But since that one has already happened, it's in motion, it's in progress, it's been an interesting story, obviously a huge explosion of interest from not just investors, but just users of the system.
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Tell the story of how you found it and what you saw in it and the risk profile as you perceived it because you already mentioned maybe you wouldn't have done that if you had been managing other people's money. Why say that?
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Just give us kind of the play by play of that investment. Jim O'Shaughnessy: Sure.
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So as you know, one of the things that has animated me in quant research ever since going all the way back, I wanted to see the first time that I became really fascinated by other ways of doing quant research, and that was all the way back in my 1985 journal. I'm like, "Yeah.
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We're going to do the empirical stuff.
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Yeah, we're going to do all of that."
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But I wonder if there are other things that'll come online that will make for better data sets, et cetera.
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One of the things that I was going to do after we sold OSAM was this idea of Gray Swan, which was going to be a long short company using our own funds that used machine learning and artificial intelligence to confirm that a black swan had happened.
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Like black swans, you can't predict.
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But I had the thesis that you might be able to confirm them and obviously as you know, if you can confirm oil when it went negative, if you confirmed a black swan in that market even a week before everyone started to figure out what was going on, that would be an amazing edge for you to have in markets.
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I talked to my friend Dan Jeffries, who's like one of these 100X system designers and he's a nomad and can work wherever he wants because everybody wants him to work for them.
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He works for Stability now as our chief information officer.
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Anyway, so I call him because I want to reality test my idea.
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I explained the gray swan to him and he goes, "That's really, really cool.
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Question, do you have 500 million lying around for the compute power that you're going to need to do this?" And I'm like, "No."
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And he said, listen, Manny.
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And then he started explaining the world of AI, which he's been very active in for the last five years to me.
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And I'm like, "Okay, we're going to put gray swan on the back burner."
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Then Dan called me about two weeks later and he goes, "I think I found your gray swan."
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And it was Emad and Stability AI.
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We arranged a call with him and then started due diligence way back in April.
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The thing that animated me there was, first off, I believe that AI is the third technology revolution.
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I think that 5-10 years from now, AI will be in everything.
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And since it is an omni-use technology, it's going to change hopefully for the better, for some for the worse, but mostly for the better every industry in my opinion.
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As I started to think about it and saw this debate between open and closed, I felt very passionately that I have three grandchildren, two more on the way.
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I don't want my grandchildren living in a world where a panopticon controlled by a few that's closed AI, where they tell you, "No, no, no, no. You can't use the... It's just too powerful."
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So I felt very, very passionate about wanting to be able to do something about that.
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The investment in Stability, which is an open AI company, made itself available in August right after he dropped the little nuclear bomb in Lake Michigan and released a full model, which had never been done with the weights.
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And then the thesis was this is going to cause a Cambrian-like explosion of creativity and it was double what I was anticipating.
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One of my deep beliefs is that I don't know...
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It's like I know 1% and nothing.
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I think I'm pretty switched on.
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I think that for things like AI to work, we need as much cognitive diversity as possible.
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We also have no idea what skill sets somebody sitting out in Dubuque has.
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Yet, two weeks after the launch of the open model, there were 200 applications, not just in generative art, but across the spectrum using the tools of the stable diffusion model.
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I passionately believe that for AI to serve us humans, we need as many humans having input into it and their creativity.
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I think it's the height of presumption to think that I know or some group of people know everything that's going to be good or not be good.
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I'm a huge fan of David Deutsch and The Beginning of Infinity.
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But I think he, I'm a huge fan because he's right.
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Basically this idea that we have the ability to prophesize future knowledge is a bug in human OS. We have no idea.
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He's got a great quote in there.
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He is like, "What were physicists talking...
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What were their opinions on the internet and AI back in 1900?
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Well, they didn't have any because they didn't exist."
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And yet we always fall into this default zone that we know everything that's going to be or be in the future, which for much of human history, that was pretty true given the very static nature of many societies.
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This is a classic example of A, I want open AI to win.
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And so I kind of take a stoic mindset about things and it's like I don't worry about things that I can't change even however tiny my contribution is.
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But when I see something where I can become active and contribute and that would lead to a change that I'm in favor of, then I'm going to do it.
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Literally, I met Emad the founder and spent the entire day with him in New York and said, "Okay, I'm in."
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That's a great example back to the fiduciary.
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Now, we had done a lot of due diligence on him, and so we had a lot of those docs done and we had had a lot of due diligence through my network of people that I know who are tech geniuses to say, "Yeah.
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This is a real thing and this is an amazing model."
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But at the end of the day, I essentially had the ability to say I don't have to sell this to anyone.
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I don't have to get anyone else to buy into what I see as the important developments in AI.
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And that was very liberating.
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Now, like anything, there's a 1,000 things that could go wrong, it has very well funded competitors who really do not like us at all.
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One of the jokes when we were over at London on the first offsite was somebody was saying, "This is just going to be so much fun."
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And Dan was there and he's a huge Game of Thrones fan.
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He stopped everyone from...
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He goes, "For those of you who don't understand, you are now playing in the Game of Thrones.
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And so get ready for a lot of people wanting to take major swings at us and take us out." Risky? Sure, absolutely.
20:27
But I think just what I...
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Even if this thing entirely fails and it zeros out, what I will have learned from being involved deeply in this process, I'm the executive chair of the board of directors, so I am deeply involved with the principles and the amount I'm learning is just massive.
20:49
And then finally, you're like this too.
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I look for things to root for as opposed to things to root against.
21:04
I believe that AI is going to be incredible for many people.
21:04
I had my friend Liberty on the podcast and he put it perfectly.
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He goes, "I think of myself as an artistic person, but I can't draw a stick figure."
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And he goes, "The ability to use generative AI to come up with my creations," he said, "has been one of that...
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It made me happier than anything over the last 10 years other than my kids." I love that notion.
21:32
I think instead of stifling human creativity, it's going to explode because people like me, I can't draw, I can't film, I can't do any of these things.
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But when I get the tools that I can use, imagine me, you know about a story treatment that I have that I've had forever and your sister wants to help on. It's called the trust.
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Well, three years from now, I might be able to just dictate that into the AI and make the movie.
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That kind of stuff is incredibly exciting.
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But then the final thing that really excites me is what this can do to scientific research.
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What this can do to the advancement of treatments for human beings.
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It all comes back to humans.
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It's not the tech that's going to create the human colossus.
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It's going to be a tool that we use.
22:31
Three use cases in just science alone.
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Number one, there's so many studies and it turns out that many of them were faked like Ancel Keyes at the University of Minnesota with the no fat and he starved people, not a good guy.
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But then it develops that he faked all of his data. What happened?
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The food pyramid happened and obesity exploded.
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And so one of the first things that we think would be very valuable is to do a forensic analysis of prior studies.
23:05
The AI, because it can think at levels and think is a different term, investigate at a 100,000 parameters, a million parameters, it's going to find connections in the liminal spaces that the human mind really can't go to.
23:28
Let's interrogate all of the previous research, find out what's right, what's bullshit.
23:35
But then secondly, human OS.
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What if I said to you, "Hey Patrick, I want you to devote two years of your life to a hypothesis that we know is going to be a null set."
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You're going to go, "Yeah, no thanks."
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If you're a scientist trying to get a grant, you want to prove something, you want to get published, you want to do all these things.
23:56
That entirely excludes null sets, our idea of the research graveyard.
24:02
There's a ton of information in the null set.
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So one of the things that we're going to do at Stability AI is have the AI generate a ton of null sets and then machine publish it to a dataset database that is available to all scientific researchers.
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The information that escapes us because we're not doing via negativa, is enormous.
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And if you think about Claude Shannon and Information Theory, there's going to be a ton of good stuff there.
24:41
Finally, experiments that would've not gotten approved if you wanted to use humans can now be done in what they call in silico.
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We can recreate me and you right down to our DNA structure and recreate us in silicone and run a lot of the experiments that way.
24:58
Which I think will lead to a burst of new discoveries that help people live healthier, live longer, avoid things that have plagued still parts of the emerging world.
25:15
But also, you'll see that the age of unique Patrick O'Shaughnessy, Jim O'Shaughnessy drugs will be at hand.
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That to me, that is what I find just so incredibly exciting.
25:33
Final thing there, we also believe that right now, AI has a very western bias.
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Essentially the weirdest people in the world.
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It's us and the Brits and a few others.
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One of the things that we believe passionately in is AI should be programmed in every known language and every known story because another thing that I'm really excited about is we're both big fans of Joseph Campbell, the Hero's Journey.
26:03
We're going to be able to have AI review and study and give us findings from all of the world's stories.
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What are the common threads?
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What are the things that every society, despite where they are, have a story for?
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To me, it's just endlessly exciting.
26:23
Patrick O'Shaughnessy: What have been the most surprising things from being a prospective investor doing diligence where there's sort of this, there's this wall that's always up between companies and investors where they're not trying to misrepresent anything, but it's in everyone's interest on that side of the wall to present the rosiest version of the story.
26:38
It's the job of the good investor to approximate what reality might be on the other side of that wall.
26:50
Now that you're on the other side of that wall as a major part of the board, in Stability the company, but really I'm more interested in general in this space that is young and moving ridiculously quickly, iterating ridiculously quickly.
27:02
What has surprised you the most?
27:02
Good, bad, indifferent, however you want to take it?
27:07
Jim O'Shaughnessy: I'll tell you what surprised me the most and it actually is a really good thing.
27:17
I had a pretty cynical view of big tech because using AI lingo, they talk about maximizing the objective function.
27:28
Simply means you tell the AI what we want you to maximize for.
27:28
Facebook, to a lesser extent, Twitter, the social sites, they looked at it and said, "Maximize for revenue.
27:45
That's what we want maximized."
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So essentially they used our data to sell us shit.
27:54
You can also change the objective function to maximize for human creativity, maximize for human happiness.
28:01
One of the things that really surprised me was the number of huge names in the industry.
28:12
For example, David Ha, who was the head of Google's brain project in Tokyo, one of the most admired guys in AI.
28:19
He left his job to come and work for us for free.
28:29
He got some stock options, but he doesn't have a salary.
28:29
David is an excellent example of this movement of the researchers, the actual people who are doing the research.
28:38
They are flocking to Stability AI, under terms that if you're just thinking at it from a business point of view, don't make a lot of sense.
28:52
And then I realized they really did have good intentions, the early tech guys, the sovereign individual, we're going to set humans free.
28:59
And then of course Facebook monetized everything we did. Not so great.
29:07
But having that cynicism on my part disproved, really got me excited.
29:20
The number of income, you call it the flood.
29:25
We had a tsunami of interest of people leaving really great spots that are highly compensated with existing incredibly rich corporations coming over to work on this. That surprised me.
29:45
I did not expect that to happen at all.
29:45
And the speed with which it happened.
29:45
And then the other thing that surprised me was how incredibly effective the open architecture system is.
30:00
It shouldn't surprise me because I believe that cognitive diversity leads to better outcomes.
30:06
Linux, of course, it's the classic case that Ballmer at Microsoft called it communism.
30:11
Now of course it drives the entire infrastructure of the web.
30:18
But the interesting thing is I'm also a nerd about complex adaptive systems.
30:18
If you study complex adaptive systems, which certainly society as we are, our immune system is a great example.
30:28
But if you study them, most of the emergence comes from below, not from the top.
30:36
We have this mismatch, especially in tech companies, but in most companies where the top people say, "This is what we're going to do."
30:52
Most of that stuff's really boring or bad.
30:58
Whereas what we saw with the explosion of innovation around a variety of models, fashion, generative art, people using it in concert with photos and things like Adobe's Photoshop, et cetera.
31:14
You get better results when there's a variety of people working on the problem.
31:22
Because again, this guy or woman is really good at identifying.
31:22
I'll give you an example.
31:22
When I went to London, I won't name him, but I met this charming young Irish guy about your age, even maybe a little younger. He's a billionaire.
31:37
He's a billionaire because he had this idea that no one else had.
31:41
He's like, "How does the AI know what that photograph is?
31:47
How do we know what that photograph is?"
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And so he thought, "What if I got 50,000 photos and then hired a bunch of people who had really good visual acuity and had them write very neatly what the item was?"
32:01
Well, from that humble beginning, a whole data infrastructure grew that allowed the AI to move from here to hear because the data was clean.
32:10
It was identifiable, et cetera.
32:21
And then of course he made the whole thing code, got taken over by a big company.
32:29
I don't know how many people would be thinking about that.
32:33
Within the open system, the first version of the model that got released had about 16,000 open AI coders working on it.
32:41
We now have over 40,000.
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It seems to me that this is something that is very inclusive, that allows anyone with a deep interest in this and skills to take part.
33:00
That's one of my core beliefs as you know.
33:00
I just think trying to say, "No, you can't do that because you know don't have the right degree or you're not from the right university," or whatever.
33:10
Creativity doesn't need any of those things for the most part unless you're going to be a doctor or a lawyer or those types of things.
33:16
Those two were my biggest surprises.
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The third one was, I expected artists uniformly to hate it. Not true at all.
33:33
We have started an opt-in, opt-out for graphic artists, oil painters, sculptors.
33:33
Right now the majority are opting in, not out because they're learning that it's just a tool that makes their art better.
33:49
The way of looking at this is this is a human machine collaboration where you get to get better ideas because you're iterating with yourself, your own work.
34:06
I just find that incredibly exciting.
34:06
Patrick O'Shaughnessy: I think this will come out January 1st of 2023.
34:08
Maybe orient people by giving them a snapshot of what OSV will look like on 1/1/23 approximately.
34:15
At a high level, talk about what will happen in the next year or two.
34:24
And then I'll pick a few of those to dive deeper on.
34:24
But start high level, what will this thing be? Who will it be? What will it be? What is its missions?
34:34
What will it do on 1/1/23.
34:34
Jim O'Shaughnessy: Got it.
34:35
So on 1/1/23, we will debut the website and that will have information on the verticals that we're starting with. We're starting with...
34:45
And we're branding everything Infinite because of the podcast.
34:51
And you can't mark infinite, which I love, so nobody can trademark infinite and so I'm going to use it.
34:57
So we're starting with Infinite Films is the first vertical.
35:02
That was because as you know, I love movies.
35:08
I've been disgusted with the fact that Hollywood doesn't make Rudy anymore.
35:08
It really bothers me that they don't make inspirational movies that also inspire people.
35:16
The first movie that we're going to make is a documentary about a guy that got raised to me by somebody who bought an NFT that we experimented with.
35:32
The guy who bought it was a tech guy, he was very successful and he's got this whole thing about he wants to move people that are under the radar above the radar.
35:44
And so he nominated David Rooney to be the guest.
35:44
At the end of the podcast, I stop the recording and I go, "Would you let me make a movie of you?"
35:50
His first response was, "Nobody would be... No way."
35:56
His story is incredible.
35:56
He was born quite poor, Black in Oakland.
36:05
His mother had serious problems.
36:05
He hide in cars with his brother so that social services couldn't find them and separate them.
36:13
So not a great opening hand to get dealt at birth.
36:22
Yet he persevered to go on to just accomplish amazing things.
36:22
He got a nomination to the Naval Academy because he was good at basketball and track.
36:29
Even though he an injury, precluded him from doing that for his second two years at the academy, they kept him on the scholarship.
36:43
He graduated an officer in the Navy.
36:43
Immediately they discovered that he was kind of a savant for cryptology.
36:49
And so they assigned him to the NSA.
36:49
He broke one of the first big cyber cases.
36:55
He was the only guy on the team who didn't have a PhD and all the PhDs were like, "What are you doing here?"
37:02
And he's like, "Well, I'm a first principal thinker and I think here's where you're going to find him."
37:07
And they're all like poo-pooing him.
37:07
But they sent the FBI, that's where they got him.
37:11
And then he decided, "You know what?
37:11
It'd be really fun to be a surgeon."
37:18
And so he went through medical school and now he's a robotic surgeon but like us, he just has so many interests and he's so articulate.
37:25
We're doing this documentary because first off, I find him fascinating, but also how many other people who might be in similar situations will see this and think, "Holy shit!
37:42
If he can do that, maybe I can do that too."
37:48
Hollywood, stop making those movies for the most part. I want to make them.
37:48
The way we're going to do the movie is also emblematic of what I think is going on.
37:55
That is I think the days of people staying at the same firm and getting a gold watch are done.
38:03
I think people are going to have multiple careers with multiple groups.
38:08
That's the way I call it the swarm.
38:15
We need the website to find the director, the cinematographer and all those.
38:20
But everyone we choose will probably be very young because I love youth and they have great ideas.
38:27
What they lack is funding, which I can provide.
38:27
But in addition there, they're all going to get a piece of ownership of the movie.
38:34
It'll depend on my ability to sell it to the streamers and/or alternate venues like YouTube and whatever else.
38:48
Because a big part of the dominating theme that's guiding everything at OSV is we want asymmetric opportunities that are win-win.
38:55
When you use that as your filter, so to speak, the win-win one is the one that excludes a lot of potential investments.
39:01
This is win-win because if I managed to sell this movie for a lot, they make a lot of money.
39:10
But because the Hollywood system is still kind of like a medieval guild association, they get something maybe even more valuable to them and that is the credit.
39:22
As you know, you've got to have three appearances in a movie.
39:27
Our friend Ron Howard puts people in his movies just so they can get that.
39:34
Before you can get a screen actor guild card. Well, they'll have them.
39:34
Imagine graduating NYU, you're 24, you graduate NYU Film school and all of a sudden, a year and a half later your first credit is Director of Born to Fit out.
39:47
That's what we're calling the movie.
39:55
Super excited about that.
39:55
We'll do documentaries, we'll do feature type films, but ultimately I see this as probably five years from now, we'll be mostly an AI movie company.
40:10
But again, super exciting because it'll give me the tools for all these ideas that I've had plus all the other brilliant people with great stories out there.
40:15
The next word of call is Infinite Media.
40:22
I think media is growing and is going to be part of every ecosystem.
40:32
The brilliance of you building out Colossus is like would be a case study here of executing almost flawlessly against your objective, of essentially, I think you're going to give that hundreds, thousands of people an alternative to get an MBA education without the cost because the content that you are building in your library.
41:01
So we think at OSV that there's going to be opportunities to roll up some podcasts, not in a venture methodology, but more like a bond.
41:10
I think we can put together a package of podcasts and make offers to the podcaster where, look, you become part of this family, we'll pay you X amount right now.
41:25
You'll get X amount of revenues, we'll have somebody in place like you have a guy running Colossus.
41:31
There'll be somebody running that entity where we'll look for kind of podcasts that are out of the norm.
41:39
For example, I got this idea because I got pitched an app for fishing back in 2019, I think I told you about it. I'm like fishing?
41:47
As you know, I don't do any of that stuff.
41:52
And then he shows me the app and it's got like a 100,000 people have it.
41:59
And then I start looking into the economics of fishing, billions and billions of dollars. People love to fish.
42:06
This app was great because it showed you where they caught it.
42:11
It gave you all the, "Here's my fish."
42:11
So all the status stuff and prestige stuff.
42:11
But like a podcast that's dedicated to fishing, I wouldn't listen to it.
42:18
You probably wouldn't listen to it, but there's a lot of people who do.
42:24
A diversified mix of special purpose podcasts where there's low churn in the audience, that could be something that throws off a kind of nice bond-like return.
42:39
Nothing huge but enough to make it interesting and have kind of a steady state of income.
42:48
I think the same will be true.
42:48
I think there will be new aggregators of Substacks and they'll compete with the old school newspapers and everything.
42:57
Except you'll put them together or in this case will curate them by do a similar type deal and then support them and get an ad model and the rest.
43:14
And then other media opportunities as they present themselves.
43:21
The next vertical is the one that I'm best known now for because Stability, which is the Infinite Adventures.
43:29
I love the fact that that was the original term of venture capital.
43:29
It wasn't Venture Capital, it was Adventure Capital.
43:35
I love that he looked at it that way because that's what it was. It was an adventure. People didn't do that.
43:40
People didn't leave Fairchild to start their own Intel.
43:46
That didn't happen back then.
43:46
And so they found this guy and he's like, "Yeah, I'll take that adventure with you."
43:53
I love that spiritually because funding things that are not currently around, that is really, really exciting for me.
44:10
In that regard, we're going to try to find interesting things like Stability, but also things that others who are responsible to LPs might love themselves but would pass on because they wouldn't want to have to explain it to their LPs.
44:29
That's kind of the business model there.
44:29
And then we're doing these things that are based on...
44:35
I was reading about Atlantis and I think Francis Bacon's book, which was a kind of fantasy novel about Atlantis.
44:43
As I was getting to the end of it, he details the fact that Atlantis, this mythical kingdom sent out in explorers to the rest of the world and they sent 12.
44:57
And so I'm like, let's fund 12 fellowships based on these at Atlantian notions.
44:57
Atman was the guy who had the job of taking the antiquated language for the 12 and compressing them a bit.
45:14
We used Jeremiah's Original Mistakes.
45:14
We're going to get four who were going to fund to make Original Mistakes.
45:22
The next four are going to build Original Mistakes.
45:22
And the final four are going to try to explain and educate what we learned from the Original Mistakes.
45:36
Each of the fellowships will be $100,000 for a year and with an option if we think they're doing massively good work, we're going to pay monthly to extend it another six months.
45:45
We hope that many of those might lead to associations with OSV, things we can funds and seed.
46:00
But isn't the only reason.
46:00
I'm sure that there's somebody in Nairobi who wants to study molecular biology.
46:08
I'd love to give her a scholarship or a fellowship because there are so many people that are bursting with great ideas and that passion of being consumed by their curiosity, but they don't have the path that they can take.
46:25
They've got to have a job, they got to pay their rent, if they're married and they have to work with the spouse, if they have kids, you know the drill.
46:36
I want to be able to connect those passionate, innovative thinkers with funding.
46:45
I just think that will be better for the world, having them in the network.
46:54
Half of that might be just putting great people in the network, but half of it will probably lead to some really interesting companies that we can seed that that person wouldn't have had the opportunity to even think they could get to be a founder.
47:06
But they get that year where they can just work forever on what animates them and their passion.
47:14
That's what you're going to see originally.
47:21
There will be new stuff coming in.
47:21
One of the other things we're going to do is we're going to be very transparent about our mistakes.
47:27
If we have an investment that goes to zero, I'm going to be very honest about it and say, "Here's what I learned.
47:33
Here's what I fucked up and I didn't know it then of course, but I know it now."
47:39
And so we're going to error, correct, and we're going to incorporate this into our model for how we look at these things.
47:48
But we're going to share it publicly.
47:48
And because as you know, I think you only learn, grow, et cetera by making mistakes.
47:57
They're learning opportunities in my opinion.
47:57
I wrote a whole piece about all the mistakes I've made in the past and you know about most of them.
48:10
But they were really good learning experiences.
48:10
Like for example, Netfolio.
48:16
The takeaway there was I had the wrong market, it was B2C way before it should have ever been business to consumer.
48:23
I should have done B2B, but I was filled with, "I'm going to liberate the investor and they're going to be able to get good investment advice over the internet." But also, Hubris.
48:35
Everyone, I was getting offers left and right.
48:35
The post money valuations were insane.
48:41
Even as insane as some of we saw before the fall.
48:51
I got a huge offer from a big Wall Street bank and I turned it down because I knew that I could get it from the pure internet guys and I'm going to take it from those guys.
49:04
I don't want to be part of the legacy system.
49:04
Well, I was filled with Hubris and whom the gods want to destroy.
49:13
They first filled with hubris.
49:13
It was a challenging time because I had investors.
49:25
I had to go to each and every one of them and explain why it didn't work. That's painful, hard.
49:33
Yet I learned more from that than many of my successful adventures.
49:37
Patrick O'Shaughnessy: What does a team look like that can accomplish all this?
49:40
I'm hearing three and a half-ish verticals, all of which are...
49:44
Some overlap, but they're fairly distinctive in terms of the output or the product.
49:50
They're very different in terms of their expertise required to do them well.
49:55
We've certainly learned from our experience in media, like anything interesting is a grind and you need really good people to be able to pull anything off.
50:07
What is your philosophy here on how to assemble a team?
50:07
Anything unique that you're doing here, borrowing from past experience?
50:12
Where to find these people?
50:12
Talk us through who OSV will be.
50:17
Jim O'Shaughnessy: Yeah, so great question.
50:22
The linchpin of OSV is our web presence, which we don't currently have.
50:22
We expect that one sign we got that we're probably right is when we launched the landing page for O'Shaughnessy Ventures, we did that because I had to announce Stability.
50:40
So we were going to try to build this in stealth, but that blew it.
50:46
So I thought, "Let's at least launch this."
50:50
I was expecting that we'd get a healthy amount of emails of interest.
50:59
And so we all kind of guessed, "Well, what do you think we're going to get the first day?"
51:02
My guess, I think, was 200. Others guessed lower.
51:02
One crazy person guessed 500.
51:11
Was it a 1,000 Atman or even more?
51:11
Yeah, so we got a thousand emails on the first day.
51:22
OSV really lives on the web because it will be the way we will source most of our people.
51:32
Infinite films, when we have the website, we're going to advertise.
51:32
Are you director, are you a screenwriter?
51:41
Are you all of these things?
51:41
It's our experience in other things where we've looked for people.
51:47
For example, Atman told you how he came involved here and I just did that on Twitter.
51:54
Having the site where they can see the tools, work with the tools, and then see the specs and see what the job's going to be, I expect that ultimately when we make the first movie, it'll kind of be a swarm.
52:07
We'll get the applications, we'll pick the director, we'll pick the producer, we'll pick the cinematographer.
52:12
My guess is they're all going to be young and probably out of film school.
52:18
And then they can dissipate.
52:18
Or maybe there's a director that we really love and this gets us into network effects that he comes back to us or she comes back to us and says, "I've got a great idea for a movie."
52:34
On the film side, we're going to do it that way.
52:41
We're going to make open applications and sort through them and then pick the ones that we think are best.
52:48
That will be the team for that movie.
52:48
Now, ultimately I'm going to pick and get somebody to run each of these verticals because as you know, running several enterprises, you've got to have somebody who in charge of the nuts and bolts.
53:03
But first I got to prove my hypothesis that I'm going to be able to get really high quality people to participate after the hypothesis has been proven and tested or changed because of things we learned.
53:22
If we continue to do it and succeed, then I'll put in place a person to run that vertical.
53:31
Same with Infinite Media, although I kind of perceive two different ones there.
53:31
One for the world of YouTube and podcasting and one for the printed world, but same sort of thing.
53:46
And then ventures, I've already told you this, the number of pitches that I get right now from startups is staggering. Not without a website.
53:55
With the website, with the portal, with the ability to join the community, I think that that will also happen over on that side and of course with the fellows.
54:13
If you're ambitious, you're going to apply for a $100,000 free money fellowship where you get to work on anything you want to work on.
54:26
In fact, we've already been looked at some estimates, like we've got to figure out a way.
54:31
I'm hoping it's AI by the way, to sort through because of the number of applications we expect to get for this.
54:38
But then ultimately, if that's going really well, I will pick somebody to run that as well because nuts and bolts of running a business, that isn't going to change too much, but it'll all emerge.
54:54
Patrick O'Shaughnessy: Is there a single objective function, to use your term from earlier, that unites all this?
55:01
Usually in a fiduciary setting where you've got LP money and you're investing professionally.
55:07
The objective function is returns.
55:07
At the end of the day, you are trying to...
55:07
Or assets or a combination thereof.
55:13
The things that produce well for the GP are returns at the end of the day.
55:20
What is your North Star or are there multiple? How did you drive them?
55:25
Jim O'Shaughnessy: So they're multiple.
55:25
I'm, as you know, a passionate believer in free markets.
55:30
I think that they have succeeded where every other ideology has failed.
55:36
If you read the Genius of The Beast where he's talking about how we need to redo parts of capitalism to make it work better, he makes the point in the beginning of the book, all these other systems, many of them religions promised people that they would be fed, that they would be housed, that they would not go hungry.
55:56
And then he goes through all the religions and he goes and they had millennia and failed every single time.
56:01
He said there was only one system that actually delivered on its promise and that was the free market.
56:08
I believe because it's most in line with human biology and the world, complex adaptive system.
56:16
On the one hand, obviously we want winners in the infinite adventures.
56:30
One of our goals is to make a lot of money that we can fund these other things as well. But another one is...
56:40
My purpose in life is to be useful.
56:49
If I can through that, through these other things be useful, that makes me happy.
56:55
By the way, I'm not going to say, "I'm doing this for the people." I'm not, man. I'm doing this for me.
57:00
I'm doing this because I am really interested in this.
57:00
I really hate the phony...
57:08
Well, we just saw what happened when the guy was a complete phony and like, "Oh, I'm going to give all this money away.
57:15
The only reason I want to get rich is so I can give it all away." Fuck you, man. You know he is lying.
57:20
And then he does the interview and he does, it was via text, LOL. No, all the woke stuff.
57:26
That was all just a grift. He wrote that. I want to be very clear.
57:37
I am doing this because I want to do it. I love this. I love what I'm doing.
57:45
One of the side benefits that I also love is the idea that I can make hopefully life better for people with these innovations, with the people I end up working.
57:54
With expanding the network and allowing people into the network who were boxed out before, not intentionally, but simply because networks were essentially where you went to school, where you grew up, that kind of thing. That's gone.
58:13
Geography, time, space, all collapsed.
58:13
In the new world, you can change your digital zip code much easier than you can your actual one.
58:18
You can do that with great ease.
58:25
I am just super chuffed about what's happening, the world your children and Kate and Lael's children are going to grow up in.
58:36
If I can make that world one that's like even this much better, I'm going to try to do that.
58:45
Of course on the adventure side, we've got to make money because we want to spend money.
58:52
Ultimately, there's a little thing you asked me about the umbrella.
58:59
There is this little thing called the O'Shaughnessy Institute.
58:59
This has been my goal since I was a kid and got my first mind body syndrome, Sarno and that whole thing.
59:10
I believe that we now have the tools in place where we can solve that problem.
59:18
If you go through my guests on my podcast, you'll see what I think might be some of the ingredients in that.
59:25
I think AI is going to be very important because it's going to find things that we couldn't even conceive of.
59:30
We can incorporate that into it.
59:30
I think that VR, virtual reality, will be very helpful.
59:38
I think psychedelics will be very helpful.
59:43
A few people understand that Tim Leary, they made the poster child the scapegoat for psychedelics.
59:48
But he was a greatly admired tenured professor of psychology at Harvard before he went into psychedelics.
59:56
He went into psychedelics because one of his theories was that we are who we are in many aspects because of things that got imprinted on us when we didn't have a choice.
1:00:14
In other words, when we were very small.
1:00:14
The first two that he leads with is you're either in printed top dog or bottom dog.
1:00:20
You're either given a winner's script or a loser's script. He said there's very...
1:00:27
When he was writing originally about this, he says, "There's very little you can do about this.
1:00:31
Those were imposed upon you by society, by your parents, by whomever, by genetics."
1:00:37
And then he got the idea, you might be able to reprogram that with psychedelics and with the research that's being done now, openly, thank God by Johns Hopkins, by all of major universities, that will be, I think, one of the potential ingredients in this start to finish idea of being able to cure mind body problems. There's an epidemic.
1:01:04
Literally, if you look at the math, how much it costs, just the US alone for lost time at work, for all of these things and the suffering, having had a number of them I know of what I speak, how cool would it be if I could put together the funding and the groups and the experts that could build that system from beginning to end.
1:01:31
So that's kind of like if you said, "What's your end game?" That's the end game.
1:01:37
Patrick O'Shaughnessy: As you think about the start of this whole thing, which is imminent, what has you most excited?
1:01:45
You're obviously excited about each and every aspect, but as this thing becomes real and out there in the open and all the pipes are flowing, so to speak, not just being built, what do you think will end up taking the most of your time and attention of this kind of tasting menu of different pursuits?
1:02:02
Jim O'Shaughnessy: That's a great question.
1:02:04
I think originally the two that are going to take most of my time and attention are the adventure capital side and oddly, the movie.
1:02:20
We're going to shoot the movie next year.
1:02:20
Again, here's something that I can do that I could never do if I had other people.
1:02:29
Because they'd say, "Jim, you're insane. Don't do that."
1:02:34
I'm going to have a ghost writer write his autobiography.
1:02:34
I learned all about that. It's really cool.
1:02:40
I knew nothing about that, as you know, you wrote your own book. I wrote four books.
1:02:45
So we never had any experience with a ghost writer. It's really cool.
1:02:45
I'm doing that because I want to see how much can I amplify David?
1:02:53
What will the results of that be?
1:02:53
Will it allow him to pursue his passions, which is in his case, financial literacy for people of color.
1:03:09
He wants to do it the right way.
1:03:09
He's so upset about the scammers and all of those people preying on these people with their shitcoins and all that kind of stuff and is he's really, really smart.
1:03:22
And so that's one of his passions.
1:03:22
If this can get him in the network and being able to work on that, I just view that as that's a great outcome.
1:03:29
Those two are going to probably take the most of my time, at least for the first couple of years.
1:03:43
Then ultimately, just like what's going to give me the greatest joy, the greatest joy is just trying, experimenting.
1:03:51
I have this great privilege that I'm grateful for every day, which is I have the ability to find these people and materially help them to create, to innovate, to uncover. How cool is that?
1:04:16
And that I don't have to answer to anyone in terms of you shouldn't hire just a [inaudible] ghost writer to write his autobiography. Well, I can.
1:04:26
And so I'm going to do it.
1:04:36
The learning and you know how I am.
1:04:36
I'm just like, I go down every rabbit hole. I love it.
1:04:42
I love learning about new things.
1:04:42
And so this is going to give me a vehicle where I get to...
1:04:42
I'm going to learn about making a documentary because I want to be there and then I'm going to learn about publishing and I'm going to learn about all these things from a different point of view.
1:04:58
But ultimately, what animates me is I think that we are, over the next five to 10 years, like robber baron fortunes are going to be made with new companies that have very little to do with the old company or the old playbook of how you run a company.
1:05:12
I want to be part of that.
1:05:17
I'm just so excited that I get to be alive during this period. How lucky am I?
1:05:17
We joke around and you had sent me a text earlier about people who attribute everything to luck and then I sent you a text back that I always took the view that people who say everything is due to luck are they unluckiest people in the world.
1:05:39
Look, I'm the first to acknowledge my luck.
1:05:46
The luck of birth that I got, I was born on third base.
1:05:46
I was born sliding into home.
1:05:55
But okay, so I got lucky, I got really lucky.
1:05:55
But there were a lot of people born at the same time I was in the same circumstances and haven't done anything.
1:06:06
I believe passionately that I'm incredibly grateful for my family, the history.
1:06:17
I can't even believe I'm that lucky.
1:06:17
I always say I won the cosmic lottery, but you've got to play the hand.
1:06:22
If you don't play the hand, then it doesn't matter.
1:06:22
I know so many rich people who accomplished nothing. Nothing. Because why should they? I got money.
1:06:32
Well, I'm not interested in money. I'm interested...
1:06:40
Money's technology and it can help, but I'm not doing anything so that I can add another zero to my worth.
1:06:54
I just don't care about that.
1:06:54
What I do care about is ideas and having somebody who is consistently going to say, "Okay, with all your pessimism, I'm going to be busy over here being optimistic and making a ton of money while you are pessimistic, you..." Think, boy word cells.
1:07:15
"It could never be done because..." Come on, act. Take some action. I think ideas are great.
1:07:25
I value them highly, but ideas that aren't put into action are daydreams and you've got to take action against the ideas that animate you.
1:07:32
This is the perfect vehicle for me to do that.
1:07:39
Patrick O'Shaughnessy: What would you like people listening to this to go do on the release of this new website?
1:07:41
What would be the best thing they could do to get involved?
1:07:47
Jim O'Shaughnessy: That's a great question.
1:07:49
Come to the site, listen to this conversation and then look at all of the opportunities that we are making available to you.
1:07:56
Apply for the fellowship.
1:07:56
If you've got some burning desire to learn about the Aztec history of use of psychedelics in traditional ceremonies, give us an application.
1:08:18
If you are somebody who wants to use AI to understand molecular biology better, apply.
1:08:22
Because we can hook you up with the fourth most powerful GPU stack in the world that we have at Stability.
1:08:32
These all compliment one another.
1:08:41
Come and look at the types of sites and the things that we are promoting you.
1:08:41
Well, I can almost guarantee you will find at least one thing there that you're interested in.
1:08:55
One of the other things that we're going to do ultimately is just a curated of interests.
1:09:00
Like you already do it with Colossus where you match everything.
1:09:00
But we're very happy to go outside OSV.
1:09:07
Like if you've got a great podcast, David has a great podcast.
1:09:07
I have no financial interest in either one, but if it's great, it'll show up on this aggregated curated place for not only podcasts, but for movies, for books to read, for articles, for all of those types of things. I do it anyway.
1:09:28
Why not share it with the rest of the world?
1:09:28
What I do right now is I read something I find interesting and I tweet it. This is interesting.
1:09:35
What I find interesting about that is like anything, it takes a long period of time for people to figure that stuff out. Right now, what I...
1:09:49
I get DMs from authors like, "Please, please tweet out this particular Substack."
1:09:57
I won't do it if I don't like it.
1:09:57
And so what I tend to do, I know that you...
1:09:57
Well, someone in your organization suffers from all of the PR types trying to get on your podcast. It's endless.
1:10:10
And so we're getting that now.
1:10:10
And so I just made a rule, anyone who comes through a PR agent and says, "We want to be on Infinite Loops."
1:10:15
The answer is no immediately because I want to be...
1:10:21
The only way to be good at this stuff is to be absolutely honest about what moves you.
1:10:29
Curation, you've got to have good taste, in other words and there's a lot of people with good taste who do curation quite well.
1:10:44
I hope they come and work with us ultimately.
1:10:44
But go to the site, you will definitely find something that should interest you and importantly, make you take action that day.
1:10:50
The internet is removing all of your excuses.
1:10:57
You can't have them anymore.
1:10:57
Patrick O'Shaughnessy: Well, I'm probably the most experienced person to be able to say that no one should doubt your ability to execute against these things.
1:11:05
I think the combination of unique out there ideas, which I think will seem sensible in hindsight, but may appear a bit wacky now, combined with your ability to get them done and zeal for it is going to be fun to watch.
1:11:18
I look forward to watching and thanks for doing this with me today.
1:11:22
Jim O'Shaughnessy: Well, I appreciate you guest hosting for me, as you are the podcast king.
1:11:23
So just you alone, will get, what do you think?
1:11:30
Triple our normal download?
1:11:33
Patrick O'Shaughnessy: One can hope. One can hope.