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Sam needs no introduction if we read the tech press and listen to other people's podcasts what's oh no what's the single most likely misconception about Venture Capital they're going to have the adventure capitalists are like on the whole like smart Visionaries who know
exactly what's going to happen in the world the trick about that the way you become really great adventure capital is to accept that the only way to figure out the future of the world is to identify and incredibly talented smart creative original thinkers and back
those people and you have to sort of trust that that will work out over time you can't just be the smartest person all the time so if I'm trying to place your view in contrast with others your view on how to spot and identify and mobilize Talent compared to Mark andrees
is there any difference how would I place you two well I I do have my own strong views about where the world is going to go uh and what's important to support and I think it is important to have Vi about the world and it's a shame that most people don't but I have at
least at the stage of enture capital we operate at I have become so convinced that the only thing that my firm has to do is find the smartest most talented people in the world discover those people and enable them and make bets on them as people um and trust that they
will figure out over time they will drift towards the right ideas and the right kind of businesses but if you're trying to spot that Talent you must have methods you use or ways of thinking about Talent that's different from the other Venture capitalists otherwise you
would be interchangeable with them and how would you place yourself relative to them what do you put more stress on I think our greatest differentiator is not how we identify talent alth I will answer that question but the fact that we treat our own business we run why
combinator in the way that we tell our startups to run as a successful startup which almost no Venture Capital firm does almost every Venture Capital firm gives advice they never follow themselves they don't build differentiated products they are not Network affected businesses um they
don't try to build a a brand in a community and they don't try to make something that gets better the bigger it gets and have the scale effects that anyone would tell you they want in a business and you know when we we at y combinator always say we want to get a
lot bigger because this is a network effect this is a network that matters and most Venture Capital firms will say out of one side of their mouth oh no like this you know smaller is better I think because they don't want to work more um and then they'll tell all their
business is like the network effect is the only thing that matters so I think many people are as smart as we are think about the world in similar ways but I think we have internalized that we run our firm the same way we tell our startups to operate and we try to we
view the most important thing that we do is to build a network and a network effect I will answer that what's the most binding constraint on your ability to scale if that's the difference greater interest in scaling your own activity I mean I think we have scaled
to an incredible degree already um and we will over time figure out how to get another 10x and then another 10x after that and someday we will fund all the companies in the world but all the good ones at least uh but I think it's unclear where the scaling limits are um
I I come from a software background and one of the things that I learned is you can always scale systems more than you think and you can never predict ahead of time where the choke points are going to be and so you profile the code you figure out where you need to optimize
and you optimize that and that's the continual evolution of Y combinator now this is from Wikipedia and I quote in functional programming the Y combinator can be used to formally Define recursive functions in a programming language that does not support recursion so why did
you name the company why combinator so I didn't name it that my predecessor Paul Graham named it that but I think it's a very brilliant name because like really what that is is a function that starts other functions and we are a company
that starts other companies the thing that I think is the cool list about YC combinator and that is different about us spiritually than most Venture firms is or at least some Venture firms is we like to start companies that if we didn't fund them uh wouldn't happen most
Venture Capital firms and me and my own personal investing when I'm not doing y combinator are looking for you want to be a really great stock picker you want to find a company that'll be successful whether or not you do anything and get them to take your money uh and the thing
that I think is so much fun about why combinator is we make companies happen that otherwise wouldn't and that's the name let me play Venture Capital skeptic and you can talk me back into optimism I might not so let's say I say Tech has had a stream of big hits personal
computer internet cell phone mobile so you've had a lot of rapidly scalable Innovations become possible in a short period of time we're now in a slight L we're not sure what the next big thing is or when it will come and without that Next Big Thing won't the current
equilibrium require a higher rate of picking the right Talent than Venture capitalists are in fact able to do oh I will talk you out of that one happily it is the most expensive investing mistake in the world to make um is to be a pessimist and it's a common one that's actually I think the
most expensive mistake to make in life it is true that we are in a lull right now but it is absolutely categorically false that unless the world gets destroyed in the very short term that we will not have a bigger technological wave than we've ever had before but why
can't I be an optimist but not an optimist about VC so I think new ideas will come through established companies they'll be funded by private Equity they'll happen in China but the exact formula where you can afford to make so many mistakes because the hits are so
big to what extent does VC rely on that kind of Rapid scalability that may not come back it it does rely on that and that's why the industry came about really truly at a time when when software happened and we had this software is very unlike any other good
because the marginal cost is is zero um and and networks are so powerful and it's always tempting to say that the big companies in any industry are never going to you're never going to compete with them they will be the big ones forever and it is also possible that the
next set of companies are all going to the next set of hundred billion doll startups are all going to be synthetic bio companies or nuclear fusion companies or whatever but the the big companies in any moment always look um like behemoths that you will never be
able to compete with and 10 years later it always looks so obvious about how they got beaten or 20 years later whatever it is so I do think it does even feel to me myself that this current generation of tech hyper caps like I'm almost willing to say this time it's different but I know in my heart that
there will be technological change that will happen at a rate that the companies can't do or require a level of risk they can't take and it has been a Bad Bet to bet against new companies you know for centuries and I think that'll keep happening your conceptual model of
venture capital what do you take to its Origins is it the early Voyages of Discovery finding the new world is it whing ships is it tillan Valley in the last 50 years is it Hollywood movies where does it start for you you know when I studied the Industrial Revolution
as a kid um it was all about technology and that you had this great idea you invent this great thing and now you can like make this new thing and that so the way I would have explained the Industrial Revolution as a kid was there was this handful of inventions and they
were really important and the world changed in the short period of time and when I went back and studied it again as an adult with the benefit of hindsight of my career um it was very clear to me that the most important invention of the entire Industrial
Revolution was the joint stock Corporation and you had governments say um you know what we have this second order kind of mini sovereignity and although the world has historically been limited to family businesses and small groups of trust now we're going to allow
big groups of people to coordinate we're going to figure out how to align their incentives for Capital providers and Risk Takers and labor and everything else and we're going to let these big groups of people work towards a common goal and a common Vision with all the
elements you need to make that work and we the government are going to enforce that and protect that and let that happen and that I think was the fundamental route you once said growth masks all problems are there exceptions to that cancer um I mean clearly yes I
don't mean that so flippantly there is an article in the Jerusalem post today someone credible claiming that cancer has been cured I don't know if you saw that I didn't see that but I do having talked to many biologists working in the field I will say there is a surprising
amount of optimism that we are within a decade or two of that being true MH I it's not an area where I feel anywhere near expert enough to comment on the validity of that statement um and I think it's always dangerous to just trust what other smart people say who
especially when they're have an incentive talk their own book but it does seem like a lot of people believe that growth is bad in plenty of times um but it does mask a lot of problems so a statement that I wouldn't make is that growth is always an inherent good
although I do think I think you've said something like this too that sustainable economic growth is almost always a moral good and something that I think a lot of the current problems in the country can be traced to is the decline in that and part of of what motivates me to work on
why combinated and open AI is that I think getting back to that getting back to sustainable economic growth getting back to a world where most people's lives get better every year and that we feel the sort of shared Spirit of success is is really important but there are
definitely and and and growth feels good so it does mask a lot of problems but there are definitely individual instances where you'd be better off with slower growth for whatever reason why is being quick and decisive such an important personality and a Founder oo
that is a great question um I have thought a lot about this cuz the correlation is clear that one of the most fun things about YC is that I think we have more data points on what successful Founders and bad Founders look like than any other organization
has had in the history of the world we have that all in our heads and that's great and so I can say with a high degree of confidence that this correlation is true uh being a fast mover and being decisive it is very hard to be successful and not have those traits as a Founder why that
is uh I'm not perfectly clear on but I think it is something about the only advantage that startups have or the biggest Advantage startups have over large companies is agility speed willing to make non-consensus concentrated bets incredible focus and that's that's
really how you get to beat a big company how quickly should someone answer your email to count as quick and decisive you know years ago I wrote a little program to look at this yes um like how quickly our best Founders like our Founders that run sort of billion plus dollar
companies answer my emails versus our bad Founders and I don't remember the exact data but it was mind-blowingly different I mean it was like a it was a difference of like minutes versus days on average response time oh now I come from Northern Virginia the Washington DC
area and we have very few Geniuses and the few that we have tend to be crazy and sometimes destructive we have what I would call they're very stable though a lot of upper middle class intellectual Talent people who are pretty smart and good at something when
it comes to spotting good upper middle class intellectual Talent do you think you have the same Competitive Edge as with spotting Geniuses who will make rapidly scalable tech companies I mean I think that's how I'd characterize myself like upper middle class pretty smart not
a super genius by any means and it turns out that like I've met many people smarter than me but I would say I've only ever met a handful of people that are obviously more Curious than me um I don't think raw IQ is my biggest strength pretty good to be clear um but
I think the chances of me winning a Nobel Prize in physics are low and I think physics is a bad field at this point unfortunately I think what we spot you do have to be pretty smart to be a successful founder that's not where I look for people to be true outliers so
given that self- description assuming I accept it and I'm not sure I do do you think you're as good at spotting upper middle class intellectual Talent as Superstar Founders let's say we put you in charge of I I think and this there's a statement here that's just bad about
the world but I think if you look at most successful Founders they are pretty smart upper middle class people they are very rarely the children of super successful people they are very rarely born in real they are very rarely the absolute smartest you know people who otherwise
would win a Fields medal they are never dumb but upper middle class pretty smart people that have grit and drive and creativity and vision and Edge uh and a different way of thinking about the world that is what I think I'm good at spotting and that is what I think are
good Founders and there's a whole bunch of reasons that that's a sad statement about the world but there it is so someone else has to find the Geniuses again I don't want to go for false modesty here I think I'm like a smart person I think our Founders we found are
smart people and I think I would have maybe said 10 years ago that raw IQ is the thing that matters most for Founders and I've I've updated my view on that how useful is personality psychology in the classic five Factor sense for judging potential Founders I mean I know
I've heard the five factors I I could pick them out of a list but I can't sit here and name them uh the thing that I Paul Graham who started y commentator used to talk about people being relentlessly resourceful and it became this Mantra of ours and I
think it's one of the most important traits in a Founder um I think like a vision that someone feels compelled to make happen in the world um is probably the most important of a super successful founder and then this idea of Relentless resourcefulness
like that thing is so important to me that I'm going to figure out how to get it done whatever it takes whatever I need to learn whoever I need to convince that's really important you need to be a Great Communicator which I think is a very under appreciated skill because you
have to convince so many people to sort of join you on this quest uh you become your job as a Founder ends up being like sort of Chief evangelist for the company and most people aren't good at that um it's not something that we teach in school we don't teach Vision either
actually none of these skills we teach but those are the kind of things we look for and do you think of yourself in terms of personality is more of a CEO type or more of a Founder type I mean I've done both I think of myself more as a Founder type the way that I would say
it is I think most people who run organizations at a certain skill are either good managers or good leaders um and I would put myself squarely in the good leader weaker manager category and that I think correlates more often with Founders people who perform extreme
physical events climbing or F of strength or running or marathons as personality types how do they differ from Founders if at all not so much that's something that I've learned to look for and what do you think is the difference because they're not Founders
right and the founders are not out a surprising number of YC's best Founders are also into some sort of extreme physical something and why why do you see that correlation what do you think um something about focus and determination and drive to win and perform at your highest level
um I think one thing that is is is a really important thing to strive for is being internally driven so being driven to compete with yourself um not with other people if you compete with other people you end up in this mtic trap and you sort of play this tournament if you
win you lose um but if you're competing with yourself and and and all you're trying to do is like for the own self-satisfaction uh and for also sort of the impact you have on the world and the duty you feel to do that be the best possible version you can that there is
no limit to how long far that can drive someone to perform and I think that is something you see even though EXT it looks looks like athletes are competing with each other when you talk to a really great absolute top- of the field athlete um it's their own time they're
going against I'd like to try a little exercise I'll throw out a few names from popular culture and you imagine that I am unlikely to know these but we can try it imagine they show up at Y combinator and how would you assess them a Spider-Man Peter Parker like I I watch
one Spider-Man movie but I don't like all I can think of is him going like that through the buildings I so you wouldn't be that impressed I might be I have to I'd have to like let's keep going with someone else I might know more about Luke Skywalker
oh Luke Skywalker I'd be impressed by why isn't he indecisive what he focuses on the short term he doesn't have a big picture Vision no he like turns away like without you know like that that that when he like leaves Yoda and says you know I'm going to go do this thing which
his like Guru is telling him you you need more training and he goes off and he does the right thing on Instinct and then comes back and Yoda says no further training you know you've got it like that's a sign of a great founder like you kind of you you go off
before the world thinks you're ready and you do it anyway let's say Heyman rickover shows up at Y combinator what do you think I think building the Nuclear Navy is among the most [Music] impressive operational engineering accomplishments of human history uh so
we would definitely fund him good James Bond um Paul Graham used to say that the prototype for a good founder was James Bond um there's lots of reasons the analogy doesn't work but this idea that you are sort of a lot of things go wrong you all you you are unflappable you
never lose your cool you know how to react bad things are happening to you left and right and you are a Survivor and you always figure it out with whatever resources in front of you like that part is the spirit of a great founder what about Q with the guy in the
lab who shows James Bond the gadgets his explanations are so to the point would that impress you yes with a good co-founder Austin Powers I don't think so Harry Potter hm that was not one I was expecting um yes let's try Harry Potter a single teen mother artha
Franklin look on the yes on the spirit of this idea that grit and determination is the most important quality in a Founder um and I think being a single teen mother and coming through to the other side of that successfully is probably one of the hardest things
anyone can do in the world but say filters we have set up to identify her as a single teen mother before she's successful what is it we should be looking for in artha Franklin oh so this gets to the question of like the most common question I get about why combinator is how can you make a
decision in a 10-minute interview about who to fund and where we do miss where we might miss her is at the upper filters of our application process we have far more qualified people that want to do YC each year than we we can fund but by the time we get someone in the
room by the time we can sit across the table and spend 10 minutes with somebody as far as I know we have never met made a big mistake at that stage of the process and we've looked at tens of thousands well in person we've maybe looked at 10,000 companies these
personality traits of determination and communication and the ability to articulate a vision for the world and explain how you're going to get that done I used to think that that was so hard to assess in 10 minutes it was maybe uh impossible to try and YC interviews actually used to be like an
hour I now think that most of the time we could get it right in in 5 minutes when you have enough data points when you meet enough people and get to watch what they they go on to do cu the one thing that's hard in a 10-minute interview and the most important thing
about evaluating someone is their rate of improvement so that's a little bit hard when you only get a single sample but when you do this enough times and you get to learn what to look for it is incredible how good you can get at that and we will make some mistakes but on
the whole uh I think one way that I'd like to see why combinator scale is right now you know we we have maybe let's say 25,000 companies per year apply we only get to meet say 2,000 in person I'm sure we were making a lot of mistakes there one thing I'd love to do
is to figure out how to meet all 25,000 in person for 10 minutes and I believe our error rate would go down incredibly low young Napoleon shows up what do you think after five minutes uh how young which like like 18-year-old Napoleon he's famous 21y old Napoleon um I mean
from everything I've read that would be a definite yes in fact the best book I read last year is called the mind of Napoleon which is a book of quotes about his views on everything it's like that thick just of Napoleon quotes obviously deeply flawed
human but man impressive what kinds of insights did he have the thing that stuck with me the most and this is a trait we see among many of our good Founders was not his operational excellence it was not his vision it was not any of the things that he I think is
is well known for that are all necessary if you want to do what he did uh in such a short period of time but it was his incredible understanding of human psychology and that is something we see among many of our best Founders and there was one quote there he was and it
sort of felt quite applicable to the US in 2019 the French motto is something like Freedom Brotherhood and Liberty and he said he had thought about that for a while Liberty equality and Brotherhood and he realized that the French people actually didn't care at all although
they said it and that that was what it was they didn't care at all about Liberty and they cared even less of a Brotherhood and it was really just about equality um but it was tied up with this weird French ideal of Love of of status and differentiation as well and so he
talked about how you build a system given that people say this one thing but feel this other how you sort of build a system where you can kind of control the people and I was like wow like I'm glad he does not run the United States cuz that is a dude who understands something
deep that I did not and clearly was able to use it for power what's the most interesting or surprising thing you've learned or changed your mind about in the last three months I mean a lot of things but one that I have been thinking a lot about in the last 3 weeks is how
watching the US political system react from this sort of cultural war on the left uh sort of this anti I otherness from a cultural perspective to this economic sorry on the right to this economic war on the left and like there's I've studied this so many times
in history um and I didn't think it was actually going to happen and I think when you get those two forces together fighting each other it's so bad and I've updated myself to thinking now that like things can actually get much worse in the US much more quickly than I thought
and what does that process look like if it continues for 5 10 years I mean pi your example of I we could talk about like some of the pre-World War II stuff but I don't think it ends well before we move on to open AI you know I think you should fund Peter Parker I tell me about
him maybe we should I just I don't know enough to say of course he's Spider-Man but the impressive thing is he has these little devices on his wrists that shoot out web and those are not Spider-Man Powers at all that's a technological device that he implemented and the first
time he actually tried he couldn't have really known for sure that it worked so I would give a big thumbs up to Peter Parker yeah look that's a good that's a good sign um and he has superpowers on top of that in some sense like the superhero I would most want to fund
would be Batman because he doesn't have superpowers and he's just a resourceful driven dude to do the right thing um and I like that better than people who just sort of got lucky with superpowers but if Peter Parker fits in that category okay we'll fund him and
his superpower comes from a kind of nuclear fusion right even better is that true radioactive spider okay deal yeah deal okay make him a partner okay so open AI you have both a funding and a leadership role and open AI given the odd sort of event it's directed at
preventing how do you measure whether your money and time there are well spent I I think first of all we're not directed at preventing an event we're directed at making a good event happen more so than we are at preventing a negative event um it is where I spend
most of my time now uh I think it is I think building true superhuman artificial intelligence and figuring out how we as a collective Humanity decide what the world is going to look like on the other side of that and making sure that um it is safe we retain autonomy
and a governance system we like and that the benefits of that are equitably distributed in the world is the most important thing to work on um I think that there are parts of it that are scary there are parts of it that are potential downsides but the upside of
this is unbelievable um I believe that you know all we talked about sustainable economic growth is a moral good I believe at this point real economic sustainable growth comes from technology and I think this technology is going to generate more of it than the sum total
that has ever been generated by technology in human history so so I think that's going to be really great well cyborgs out compete AI so if the flesh and blood is the hard part why not tack on devices to people common in movies but also in the real world I'm
wearing eyeglasses there are hearing aids you can imagine much more isn't that an easier way to get the work done you know when when AI started beating humans at chess there was a short period of time where the very best thing of all was a human and an AI playing chess
together the AI would say here's six moves the human would pick the best one of those um and that was better that could beat an that could beat an unassisted that that merged version or that not that's not really emerged that teamed up version could beat an unassisted Ai and
I don't know exactly how long that stayed true for and people loved that fact but it didn't stay true for long um the humans started making the AI worse than the AI was playing alone as it got smarter and I think we will learn that we're just not that smart like like that
you know the size of a human brain has all of these biological limitations but you can make a really big computer with very fast interconnects between the chips and I suspect we will find that many versions of that merge you talk about are still not better now there may
be other things that some people may choose to do like maybe you upload your entire brain and then you can add a bunch of stuff to it in the computer but I think going in the other direction biology will be more of a limitation and we have to like that's where we have to
make a decision about the kind of future we want let's say we Institute a universal basic income since it seems from the data that citizens often hate the idea of immigrants just getting money for free and forever isn't there a risk that a Ubi would lead to a choking
off of immigration in this and other countries and that we would not onnet end up helping Humanity I think the argument against a universal basic income that I most sympathetic to is that it is a good reason to lower immigration and I think increasing
immigration and particularly High skill immigration into the US is one of the most important policy things we can do so I agree um that is a negative but I think the positives of Ubi are so high that I would take the trade although I'd work as hard as I can at a minimum to
increase the level of high skill immigration like I think if you believe Talent is equally distributed around the world which I certainly do you know 5% of the founders we want are in the US speaking in our own self interest as the US here not is what's best for the globe
for a minute like I'd like all the other 95% here potential Founders on other countries I agree that Talent is equally distributed around the world but cultural background is not for sure and if people from other places including within this country don't from early
ages get the conceptual Frameworks and positive reaffirmations from their parents what is it the less developed parts of the world need to actually be contributing the propor iate share of Founders given that they do have the talent nothing at all they already are
um if you look at the successful tech companies in the United States the percentage of them founded by a first or second generation uh immigrant but they have very common backgrounds even though they're from different places they're from parents who treated them a certain
way when they were young Oh I thought the question was specifically about immigrants um so someone like you know vitalik who was not born in this country he nonetheless has the perfect background for being a founder and most people in the world do not the most
important thing you can get to be a Founder uh is to pick your parents well that's a really sad statement about the world if I weren't working in open AI that is a problem I would like to work on I suspect the answer is education but that's only part of it I do think the
two great gifts I got in my life were the love of my parents and a great education and I'd like to figure out how a lot more people get that I think that's actually one benefit of a Ubi um but I think that'd be transformative to the amount of human potential unlocked
in the world and just from a social justice perspective is so obviously the right thing to do now you grew up in St Louis right I asked Larry Summers this exact same question if you had say $200 million to distribute you could do with it whatever you wanted to help St Louis
just St Louis not the world what would you do to help St Louis this is like very specific to St Louis but I think it may be true of other cities in the midwest that were once growing and prosperous and now are less so I'm such a believer that momentum is at all
levels of organization an individual's life a company a city a country is so important even though cities seem Eternal and indestructible in a way that not many things maybe religions also are St Louis has lost momentum and there's been the talent drain that you would
expect from that and so I would spend all of the money trying to get a few really interesting high growth startups that I was confident in to go move to the city of St Louis and build enough of an ecosystem around them to make them successful and let that sort of
regenerate the talent P momentum of the city and what exactly is the check written for there's a bonus for companies who so the thing that people normally do which is predictably awful is cities will open these co-working spaces uh and say hey startups we've got
this like really cool co-working space and there's like like free espresso and like you know colorful couches and come and you get the people you deserve when you do that so I'm very anti-working spaces but I'll save that rant for another time um no literally I would
what I would do is like make a venture capital fund get like really good GPS to do the advice and fund the companies to come be in St Louis and you would give them special treatment or you would make them jump through all the same Hoops as in any other context I'd give them like
a higher value valuation or something um but no I would like make them be really great companies but I would just invest in them on the condition they move to St Louis and I would do it like you we talked earlier about the importance of a network effect rather than do this for
one or two companies at a time I would do it for enough at once and get them all on one part of the city to form something like what YC combinator has done here why is nuclear energy so unpopular in many parts of the world I think it is because most people are very
bad at intuiting risk they will happily breathe in Cal smoke all day and then someday die of cancer and not connect that together but if there's a nuclear meltdown and three people die they will March against nuclear energy forever nuclear energy is by far the safest form
of energy Humanity has ever created much safer than solar panels because people don't die when they fall off the roofs when they're installing them for example but the disaster like the way the world was introduced to nuclear power is an image that no one will ever forget of a
mushroom cloud over Japan it feels to some people like you know I've thought a lot about why the world turned against science and one answer of many that I am willing to believe is that image and that we learned that like maybe some technology is too powerful for people to
have and that was like people are more convinced by imagery than facts and that was that's the other side of nuclear energy if nuclear fusion has had a number of false starts as you know if it really starts to work and I believe you're optimistic about that what will
it look like how will we know and how will we distinguish it from the previous false starts well we'll just get out more electrons than we put in I believe we will get net gain nuclear fusion working in the next decade this is hot or cold hot it may not turn out to be
economical you know we're still at the point where there's errors in the exponents and that's always hard it may turn out to just debug the engineering takes so long that it doesn't matter you know if it like it could be the kind of thing where we get
Fusion working in 2022 and the first commercial system isn't deployed until 2032 or longer these are going to be complicated not complicated like a fishing reactor but still complicated systems but I believe we will get net gain to work and I believe there's a
good chance that the engineering won't be as hard as we think and that the regulatory framework will be much easier than we think and the economics will be great and you know at any given moment in history there is one cheapest source of energy and whatever that is in a
small number of decades usually takes over a significant part of the generating capacity of the world will China do it first whoever does it first I'll be happy with I don't they don't tell me as much about the Chinese projects so I don't know but I'd be delighted if they did if we in some
basic fundamental way hack biology through Tech how am I as a customer or patient most likely to notice this first what what's the New York Times headline going to say what will my doctor give me I think we've hacked biology already to an incredible degree you life expectancy
is just rising at a constant rate right it's even gone down for a few years in the US that's not totally encouraging it's not the fault of tech but Tech has not Healthcare has been a catastrophic mess I I meant our ability to do other like to make GMOs and you know we can do
a lot with synthetic biology today you know one thing I was meeting with a company today that is looking at and N YC had put out a request for more of this about how you genetically modify bacteria in the ocean to pull carbon out of the atmosphere and stop climate
change um that wouldn't have been something that anyone would have seriously talked about 10 years ago and the fact that we can even have that conversation now I think is awesome we may decide not to do it for good reasons you know we talked about growing up in
St Louis um one thing that my dad was really into when I was a kid was the Human Genome Project wasu uh which we live near was one of the centers and they sequenced a human for a billion dollars and it was this huge deal and I was I was a kid it wasn't that long ago
you can sequence a human now for 100 bucks you can take a sample of your blood and you can sequence every piece of DNA and RNA in there and any bacteria or virus in your body we have a perfect diagnostics for so if you have an infectious disease I guess unless it's a
prion we can just sequence everything and we have a perfect diagnostic that's amazing why is the tech world found education so hard to crack why can the tech world not convince parents to love and prioritize their children say a little more there's
a lot of things technology can't do there are a lot of things that require human connection there are a lot of things that require people um and I think technology can do some things but I don't think the biggest problem with our educational system is a technology
one it's a human one for sure what is the biggest and by the way one thing that I'm excited about is if AI really does unemploy 80% of the world M maybe we get a great teacher yeah for every child in the world not just a teacher but like uh someone to just like care about and love
and make that kid the best they can be what is the biggest problem in the US Financial system that you think can be fixed or ameliorated by a tech company or Tech Revolution well we all come at this with our own bias but in terms of where I'm choosing to spend my own time
yeah a lot more economic growth by funding a lot more great startups building AGI and figuring out how to distribute that fairly among citizens of the world and nuclear fusion I would take any of those the the the financial system banking payments oh that
literally that I thought you meant like the economic system like one it's amazing to me uh just studying history how much the the cost of energy correlates with quality of life yes and so if like for the economic system that'd be huge wi for the banking system
I I don't know um it's not Bitcoin I'll say that I don't feel uniquely or particularly well qualified to answer this but I suspect it is doing something along the lines of providing Fair Financial infrastructure for poor people so cheaper loans more responsible
lending practices any something like that is what I would guess but I don't I haven't studied this what's the best case scenario for crypto I'm not suggesting you're predicting it but how might It Go best so I'm excited about Universal basic income I don't think
countries are going to Implement that anytime soon um I can imagine a crypto system where you see something that is more powerful than any government on Earth where you actually figure out a way to give every person on earth a coin and then you make this gigantic Network
that everyone believes in and you can do redistribution outside the control of any government and you know we talked a bunch of times tonight about Network effects that would be the most powerful Network effect the world has ever seen economically and I think that would be
cool if much of economic and social activity ever moves into virtual reality will we use crypto in virtual reality or just trade dollars I'm only laughing because whenever people put two buzzwords together I've learned from YC interviews to really get skeptical good ideas
should have like one big thing that really works one big thing one big thing I I don't know I don't think that would I think we could still use dollars what are we going to do with all the empty big box stores I've been thinking about that yeah so it's an interesting
question have an answer community centers all these tutors who are put out of work by AI they meet up with children there I I would take really cheap housing like if we could fill them all up with really cheap housing I'd be pretty happy look I think one of the
things that's gone badly wrong in the United States is we have now pursued for a long time a policy where we want housing to be an investment um not a consumption asset and thus grow faster than the rate of inflation and after you let those curves compound out for many
decades you get the predictable disaster we're in now where you basically steal the future from young people and if you could pick one National policy that would help I think with redistributing Economic Opportunity the cost of housing near high quality jobs that would be a
great thing to do how optimistic are you about the prospects in the Bay area of having greater freedom to build in a way that would say lower prices by 20% compared to Baseline well I will caveat this by saying I think if you believe what I believe about
the timeline to AGI and the effect that'll have on the world it is hard to spend a lot of mental Cycles think about anything else and so I have not thought deeply about what it would take to solve really any other problem in the last few years but I don't feel optimistic given
prior performance that the Bay Area is really going to do the right thing on and the country as a whole do you think the Bay Area is especially unlikely well land to become a new land of nimi and in turn Houston Dallas someday Chattanooga or how do you see this evolving yeah at
some point and actually I think it may be close the network effects that have made the Bay Area so powerful for technology startups the costs will overcome that and I think that'll be a real opportunity for other cities other than Bay Area of course Israel which is
connected to VC networks here but what's the like undervalued geographic center for VC in the Next Generation that people should be talking about more my current belief about that is that it's not now that the world has kind of woken up to this it's not going to be one
center it's just going to sort of be more diffused everywhere but here there's so much clustering and the land prices reflected you want to be near other people you're on Boards of companies you want the company to be with you venture capitalists often
induce the company to move next to them for sure what will change that what I meant more is I think instead of one new center or two new centers there will be 30 and there will just be clusters in different places that don't quite get to the density of the Bay Area but get Beyond critical
mass and I think we'll just see that diffused throughout the world so let's say you visit a city abroad you've either never been or haven't been much and you have two three days to look around is this a promising Center for Venture Capital what what is it you look
for I have a funny metric on that and it doesn't probably work for most people but it is the number of times I get stopped on the street for a selfie it's a good metric and it correlates positive at least with like startup energy in that City yeah
yeah Charter cities is that a potential Venture Capital idea or is that just that's that's that's cool I think the world like there is just this desperate need for a better more affordable way to live and better functioning cities like cities are so important in the current
world to Economic Opportunity and they deny it to so many people now that I think people are really willing to try something new and I think there will be there's enough customer demand there that there will be econ iic support for it as our final segment let me ask you a
few questions about what I call the Sam Alman production function are you game sure what did you learn from looped uh you cannot create a market that does not want organically to exist what did you do wrong as a 19-year-old we only have a few more minutes um I didn't spend enough time
thinking about what to work on I just let myself get pulled along and I was probably like pretty like I was probably pretty obnoxious and a little bit of a jerk I think I corrected for that quickly but I wish I had done it faster in the world of tech startups Venture
Capital what is weightlifting correlated with weightlifting weightlifting so Talib tells us in New York City weightlifting is correlated with supporting Trump but I doubt if that's true in many it's not true here um I mean I think it's like correlated with
successful Founders uh it's like fun to have numbers that go up and to the right and like the most fun thing for me about weightlifting is like I have I am I'm basically financially illiterate I can't build an Excel model for anything I can't read a balance sheet um but my
Excel model for weightlifting um is beautiful because they're numbers that go up and to the right and it's really fun to like you know play around with that what makes you a good poker player so learning I played a lot of Poker in college and I think I learned more about
life and business from that than I learned in college I would not say I'm a great poker player but I'm I'm pretty good and the thing that makes me I think good about that is getting good at quickly evaluating risk now I'm from the Northeast when I watch racing cars I see
a bunch of little things on TV go around around the track and I'm totally bored what am I missing it's not that fun to watch but it's very fun to drive fun to drive um there are very few activities I think that are high enough adrenaline to
totally stop thinking about work and racing cars is certainly one of them but watching it is not that fun is Regret rational yes and I think it is rational both to live your life aiming to never regret anything like I try if I ever am making a decision and I feel like I'm
going to regret not doing something or I have regretted not doing something I try to go do that thing right then but on the other hand I think like if you can't change it if it's done then it is maybe not that productive to regret um but it is a deeply human thing and I think
sometimes helpful what is a source of beauty or potential Beauty in your life that you would like to have more of or plan on having more of soon for the first time I think since I was a kid I have really been able in the last few years to take more time to a just like
do nothing with people that I love and B like Marvel at everything in life and figure out how to like look at things for the first time again and that has been a source of great Beauty and what's the binding constraint for those of us who want to do more of that is that we
need to devote more time or somehow open our minds what what's the path to get there is it a free lunch for me it was finding someone to really explain that to me and kind of getting to a point in my life where I was ready to do it so like Beauty mentors sort of yeah now one
of your greatest achievements you said was Reinventing y comp inator after you took it over when the point comes how will you do this again once it's needed how does the next person reinvent y combinated or how do I re- reinvent it whoever it will be I think the key to
doing that for any organization I think it is actually harder to reinvent an organization and than it is to do it the first time I think the hardest thing in business is an organization of that produces repeated Innovation and success because loss of version is so high
resistance to change is so high and when you have something that's working putting it risk to make it work better is not a bet that ever feels comfortable and uh I think internalizing Truly Deeply internalizing that most things in life are not as risky as they seem most
things in life are two-way doors you can come back and that even if people that you work with or in the press or whatever like call you idiots and say oh like that doesn't mean you have to listen to them can you ever appease your critics when people call you idiots I
try not to think of about them try not to think of now last question well that's actually not true I try to listen to every piece of criticism assuming that it is true and assuming that I'm in the wrong but once I have reflected on it and decided that I'm right and this
person is just engaging in bad faith then I try to put it out of my mind entirely I put no effort into try and appease them last question let's say a very smart and credible 19-year-old comes up to you and says I would like to be the Sam Alman of the Next Generation
not an exact copy of of what you've done but the next the 2.0 version what advice would you give to that 19-year-old I mean I don't know what the Sam Alman of my generation is going to look like yet like I hope that I'm not done here other than move to St Louis no I like well I
think the mimetic stuff is always super dangerous but I don't think you should ever try to be somebody else or like I don't think you should ever even try to take too much inspiration from someone else's life path like I still hope that the most important work I have to do
by far is in front of me um and I hope that's the case until the day I stop working and I think that's what I would encourage people to do is like don't like don't shoot for something that somebody else has already done shoot for something that no one has done yet Sam
Alman thank you very much thank you we now have some time for questions at the two mics please keep in mind these are not speeches from you we are here to hear Sam a speech or long-winded statement I will simply uh cut off so we will start start with the microphone
over here please first question in terms of narratives in the country I think we're seeing a lot of fear and a lot of going people going to simpler narratives because it makes them feel more safe and I think you talked maybe last year the the year before at
disrupt and you talked about a startup uh that was looking to take over the role of a church in the community and I was look going to ask you if you have thought more about that kind of interaction between simpler narratives and maybe what they were trying to do
and maybe where that might go in the future I think the thing that has gone wrong in the tech industry and maybe the country as a whole is we have we this area of the world have failed to present a vision of the future where everyone gets to win and that everyone's excited about
and I think we're unlikely to get good at that fast enough so I'm actually excited for the tech industry to figure out how to collaborate with Hollywood or other industries that are good at narrative and and paint a vision of the future that is optimistic because
pessimism is always easier than optimism demagogues always have an easier time winning elections with pessimism than optimism and I think people can kind of sense that whether they like it or not Tech is going to have a lot of influence over their lives and I think it's up to
us to paint that positive narrative and in fact a lot of what I hope open AI does in the next couple of years is figure out how to tell the positive AI story not the negative one next question so I heard you speak a little bit about physicists tonight I
myself I'm a physics PhD student I'm an aspiring physicist all right that mix two of us um when I get back to Berkeley tomorrow and I tell everybody that you might not think physics is the place to be what should I what should I tell the physicists to do they're smart people
they're hardworking but maybe they're doing the wrong thing I actually think there is plenty of fertile ground in the field of phys phys um I think most people aren't working on it everyone wants to solve the grand unified theory somehow or other like that is every
physicist that I've ever met dream and maybe that's the wrong problem to be going after um maybe more physicists should be working on like better plasma physics models so we can get nuclear fusion sooner or maybe more physicists should come work at open AI because like
physicists are usually the smartest people many people in the field have gotten trapped in various dead ends and like any one problem with being really smart is that really smart people tend to be super mimetic and so most physicists I've met have the same
aspiration work on the same problem maybe it's just too hard and there are all these other problems and so my advice to all the physicist Berkeley would be spend less time thinking about the problem you're working on today that you're not making progress on and more
time thinking about what problem no other physicist is working on that would be really important to the world and that maybe you can solve a question from the iPad had please give us your anti-working spaces rant oh all right I will so I used to say
there are 3,000 YC clones in the world um I have since learned that there's 8,000 in China alone so let's say the whole number in the world is 16,000 every time someone decides they're going to build an X Y combinator the idea is always the following it's going to be
just like y combinator except we're going to provide free co-working space and I always want to say to people like did you ever think that maybe we thought about that and it's a feature not a bug that we don't have it I think the single thing that has differentiated YC more
than any other decision we've made is that we do not have a co-working space we bring the companies together once a week but that's it it's enough for a community but it is enough to build your own identity co-working spaces have two big classes of problems number one they
are a banp pass filter good good ideas actually no great ideas are fragile great ideas are easy to kill um an idea in its larvel stage all the best ideas when I first heard them sound bad and all of us myself included are much more affected by what other people think of
us and our ideas than we like to admit and if you are just four people and your own door and you have an idea that sounds bad but is great you can keep that self-d delusion going and if you're in a co-working space people laugh at you and like no one wants to be the kid
picked lasted recess so you change your idea to something that's like sounds plausible but is never going to matter it's true that co-working spaces do kill off the very worst ideas but a bandpass filter for startups is a terrible thing because they kill off the best ideas too
the other thing is the average level of ambition and willingness to work hard at a co-working space is incredibly low um and so there's just this like reversion to the mean that is not what you want in your life life next question so I know we played uh would would be fun or not
but we didn't play overrated or underrated can we do that f one [Laughter] out Antarctica overrated or underrated underrated I went there for Christmas it was awesome what was great about it um it felt like being on another planet and I think as you get older it gets harder
and harder to like truly have New Perspectives on things and let me tell you like having no internet no other humans around/ plants or animals being extremely cold and having nothing to look at but like white and rock man was that a mental reset that was really cool
another question from this side as AI gets better you were talking about in chess I think you said biology becomes a liability as AI gets better at thinking than we are so then what becomes the most important work of humans love creativity how we treat each
other we're going to find out I don't know I was talking to someone recently about all the different ways this can go there are versions and I think a lot of people a lot of sort of like techno utopist love them uh where we all just merge with AI and there's no opt out
either you merge with the AI or you become irrelevant and that sounds cool probably to a lot of people in this room and terrifying to 99% of people on Earth and you know we talked about the need for positive stories I don't think that's the story that most people want
to hear I don't think that's exciting I don't think that's a a future that most people are excited about but the thing that is I think really interesting about this is like sure we're going to build this thing that's like smarter than humans in
every way but we get to make a lot of decisions about how to build it you only get to make them once you know when the vanoyan probes launch from Earth and eventually they never get to communicate again because of the speed of light you better have gotten it right but we do
get to make them and like I don't know what the answer is I do know I don't should not get to deserve to make it by myself but like maybe we as humans as a whole decide the deal we want with AI with the AI is like humans get Earth and 100 Lightyear radius and the AI gets the
rest of the universe but we get to like live our lives as we want and maybe that's okay so I think like the option space is big but we won't be smarter an iPad question you mentioned some of the qualities of good and bad founders of the qualities of bad Founders which
which do you think are the most curable arrogance you want to be confident but not arrogant and they look superficially to an outside Observer very similar and if a Founder is intellectually honest and wants to be better to my surprise this is something I've changed
my mind on um arrogance can often be cured if someone is otherwise well motivated and what cures arrogance other than you getting beaten up by the market sometimes does it but just teaching people that like you can operate this way if you want and you will be unhappy
and people won't want to help you or you can make this slight tweak to the way you interact with people um the way you treat people and the way you treat your team and the way you listen to feedback and get this very different result my experience is if someone is
genuinely intellectually curious you only need to show them that one time question over here um how will YC do better to support the 90 or 95 or 99% of talent people that it's maybe missing or isn't supporting at the moment well I think the most important thing we can do
is grow but that will take some time you know it's always easy to look back at decisions and be like a I knew that thing was going to work and and be really important uh and it's almost always when people say that but the thing that I did personally that surprised me the most for that was in
2014 I think I taught this class at Stanford but also broadcast which I without their permission they were very against it put online called how to start a startup and I still get like dozens of emails per week from people around the world who like watch those
videos and wrote and said hey like I never knew about this I never knew this was an option and this changed my life that taught me and then I've done a bunch of things since that even if we can't fund every startup we can put the information out there for every startup
and we have tried to open- Source everything we know about startups and at least make that part widely available um we tried to create more communities outside of just the we fund we're going to try launch another one tomorrow um but we have things like Hacker News we
tried to like make a bunch of like groups online but we will continue to put as much knowledge out there and create as many communities as we can from horita on iPad what are some systematic problems in Silicon Valley that prevent certain particular problems
from even being noticed that's a bit of my paraphrase I think one thing is just people don't get out of Silicon Valley enough um I don't do this as much anymore more as I used to but I used to make it a point to like I would try to travel like 12 16 weeks a year and I
would try to like meet people in very other contexts or just observe the world like way outside the US and I think that gave me a broadness of perspective that was super valuable and it's something most people don't do question over here uh regarding the uh experiment on Ubi in
Finland um could you comment on the results of that didn't they pull that experiment the finish I thought they stopped that experiment oh yeah so I just I don't know how to comment on the results but uh I would I would have loved it if there were results to discuss from the
iPad if pessimism is indeed the biggest handicap what do you do to actively cultivate optimism you know I think one of the most important questions that I would like an answer to Is is that is optimism versus pessimism nature or nurture um and if it is nature
is that can we fix that with crisper um because it is such a bad thing to have I hope it's a personality trait I hope it's something that can be improved with deliberate practice um I believe in my heart that it is but I try so hard to avoid pessimistic people in my life that
I don't feel like I have enough of a data set to answer that with any confidence what's the optimal percentage of pessimistic people in your Social Circle you do want some and I have plenty um but maybe it's like one in 10 one in 50 something like that I
believe you said that the best way to create wealth is to start a startup on the other hand you've uh you've you're the successor to uh to Running by combinator uh you were almost just like Apprentice look seeming figure uh before you took over which seems almost like
the least foundery thing to do so what should we learn from this should we start a startup unless we have the option to run my combinator or what look if you have the option to run y combinator I think you should that's a pretty good thing to do um but the way that y combinator
generates wealth is still by startups getting started and I think like as the fundamental mechanism sure like I don't start them but I do think I build something that helps them do better and what I meant more by that statement and you don't have to like start it yourself
you can join as an early employee you can be an investor a more precise version of that would be the best way to generate wealth is to own a significant piece of a startup and there are many ways to do that like you can choose to be an investor you can choose to be an
early employee you don't have to be a Founder in fact that's one thing that I think Silicon Valley gets wrong is that like either you're a founder or you suck that is like clearly not the case but I do think startups are the best way to generate huge amounts of wealth quickly
next question there's a famous book which came out in the year 2000 called bowling alone Which documents the decline of social capital in America do you think that decline has continued through to the present day and if so uh what what Solutions do you are do you
think there are to solve it uh either technological or otherwise I'm not familiar with the book could you explain social capital in this context yeah so Social Capital refers to a broad set of factors including shared Norms values um cultural understandings that sort of act
as a lubricant in the society or group to enable it to function more effectively got it great question like there's all this data that the things that make people happy are like most of all is this like sense of community and belonging and sort of frequent Community
celebrations and things like that and that has declined for sure badly like and I and I feel like even in my own life I've watched that decline like in the last 30 years and even like moving from like San Francisco is just an awful City for a sense of community and why is
that I mean I could answer that but it will take do you want a full answer on that it's a long one I sure yeah I think in cities that become dominated by a single industry and cities that have a a reward cities that sort of like reward generation of
wealth and financial success over a sense of sort of shared Humanity in community have a very hard time preserving that Fab of Social Capital Community whatever you want to call it like where I grew up no one would ever walk by a person collapsed on the side of the street on
their way to work and not do something about it and I hope I never get used to the fact that that happens in San Francisco I do blame the tech industry for a lot of things that have gone wrong with the city but not all of them but we have just over time had this like
unbelievable wealth generation in this small Geographic space in the small period of time um and I think not been particularly thoughtful about the effects of that on the community as a whole and because those problems are so hard and so hard to think about I think
most people just choose not to and they just accept this um I think we also have fairly incompetent city government and City management we have people that are sort of unwilling to stand up to certainly the greatest housing crisis I hope I ever see uh and Drug one as
well but if we have city government that has been unwilling for the entire time that I've lived here to make hard decisions that are unpopular with vocal minorities of the voting base um and so we have unaffordable housing we have a homelessness epidemic um and we have
streets that are like like again there's many things I love about this city but the fact that like if I take my trash out late at night when it's dark and don't put on shoes I have to like look for hypmic needles outside my house it's like really that's what that's what we
want to do here and so I think you need like strong strong powerful Community leaders in a way that the city hasn't had and you need you need people who are willing to embrace change um you can't keep the city the way it was that's not
going to happen that ship has sailed and so right now you have people who in their unwillingness to make any changes are just letting everything be awful and the only thing that I think will work is say okay like the game has changed the city has to change in big ways and you
need a leader empowered to do that and it's going to make some people unhappy but the current like the complete lack of humanity and Civic connection we have and the fact that like yeah I'll never get used to people not saying hi to each other on the streets um I'll never get
used to sort of just ignoring people like not even stopping to like calling ambulance for people I don't think I'll ever get used to last question is from me the American Midwest underrated or overrated underrated why you know as a kid it was an idealic place to grow up
um as a teenager I did get kind of bored and as an adult I feel such a strong pullback like people are nice to each other there are seasons like one thing that I think is surprisingly awful about San Francisco and the social fabric of the city is it's never warm at night or
it only is like four nights a year and this sounds like this very minor thing but what it means is you have no sense of life on the streets and you have no people like sitting outside for dinner happy and talking to each other as they pass like when you go outside in San
Francisco in the evenings like you're guarded against the world cuz you're cold um all the time and so there's that like there's not this life on the streets of the city and I think it actually has this like huge effect on on the social fabric Sam Alin thank you very much thank
you thanks for listening to conversations with Tyler you can subscribe to the podcast in iTunes Stitcher or your favorite podcast app and if you like this podcast please consider rating it on iTunes and leaving a review this helps other people find the [Music] show