Transcription
How much do you think, um, disagreeability, or just the the the ability to sort of, you know, fight and sort of disagree publicly, is a is a necessary trait for Founders, as exemplified by by Steve Jobs?
Yeah, so yeah, so start with Steve, who who I, you know, who I knew. So Steve is one of the most disagreeable people in the history of humankind. Um, you know, Steve would disagree with you over the shape of the glass on the table in front of you; like it just was like it was going to argue about everything. So, um, and you know, that's where that's where a lot of the genius came from, which is he he was just not going to take the status quo for granted under any circumstances. Elon uses the term first principles thinking, and St Steve had had a lot of that as well. So, um, you know, there's a lot of genius in there, but you know, if you read the books on Steve or you hear the stories, you know, there there's basically two stories about Steve you hear. One is that he was a saint and he was perfect in all regards, which was somewhat true, um, but the other story that you hear is, you know, basically he was like a screaming lunatic, and he would just run around and like, you know, yell at people in elevators and fire people in meetings, and just he was like, you know, you know, some people have all these, you know, kind of awful horrible things, um, you know, it's like angel devil, you know, kind of thing. And I I think and again I think on this I think the reality was was was somewhere in the middle, um, and I at least what I saw and what I heard from people who worked with him for a very long time, um, was basically he was just like he was absolutely intolerant of anything less than first-class work. If you brought him first-class work, um, and if you were top in your field and super diligent and on top of everything and had all the details figured out and you know, had it all you like knew what you were doing and were really good, you know, he was like the best manager you were ever going to work with and the best CEO you were ever going to work with, and and and the thing that comes up with people talk about who worked with him closely is I did the best work of my life working for him. Right, um, and and part of that is because he really appreciated, understood the quality of great work, and he didn't tolerate anything less than that, which meant that everybody around you also hit that bar, you know, sort of his approach to Performance Performance Management is everybody's going to be doing top-end work; if they're not, they're not going to be here. As a consequence, the best people in the world are going to love being here because they're surrounded by the best people in the world, um, and by the way, that that's also something of course that that Elon shares, um, and so so the the stories that you hear about, you know, the screaming or firing people in meetings or whatever, it's it's a it's a it was always a side effect of it's it's not it's not first-class work, um, and you know, it's either somebody who really should have been able to do it who who didn't who didn't, you know, work hard enough, or it's somebody who was just not capable of doing it right, who who needed to go find something something else, um, but the but the result, the core thing always, and this is why there was so much love for him, right, is the core thing was I I do the best work of my life uh uh working for him.
Having said that, also Steve himself matured, right, and and you know, his his career kind of got, you know, time dilation kind of happens, and so you kind of think, well, Steve built, you know, Apple, you know, the company that we all know and love today, um, it's like, well, yes, but like it took a very long time, and there were twists and turns along the way, and the big twist and turn of course is he got fired, um, right. So he he, you know, he started the company in '76 with Steve Wozniak; he built, you know, they built Apple I, Apple II, um, they built the Lisa actually, which which failed; that was the other thing, by the way, is he didn't not every Steve Jobs project succeeded, right, and and he he learned a lot from the failures, and you know, now everybody's forgotten the failures, but you can read about them on Wikipedia, and he he had the, you know, the Lisa was before the Macintosh, uh, and it was a complete failure, um, and but then the Macintosh, you know, started to work, but before the Macintosh really took off, you know, he just like he, you know, he he brought in the wrong CEO, and then there was a revolt inside the company, and he got fired, and then he spent 10 years out of the company, right, which is actually when I got to know him, um, is when he was off doing Next, um, and um, you know, Next was like a complete wipeout; like it was it was, you know, years of of of real pain and agony, and then you know, and he had this little side project nobody understood, which is this little graphics company, Pixar. It turned out, anyway, the point is, by the time he came back into Apple in like '97, you know, he I think maybe he'd been out for like 12 years, and what people, again what people who knew him better than I did said, he actually learned to be he learned how to actually be a great CEO, not at Apple but at Next, because he spent 12 years actually doing it the hard way, um, where he wasn't being showered with praise; everything wasn't he didn't have the magic touch; the product fundament didn't take; he had to like, as we say now, pivot; good we have this great new term pivot; we us should just say up, um, you know, pivoted Next, you know, he built he, by the way, I used the when I was in college in '92, '89 when I got '89 I got illo '89; we were one of the early adopters of the Next computer, which NEXT was the name of the company; it's called the Next Cube was the the the computer, and it was sort of the it was the post-Macintosh, and so it was like literally it was like a $15,000 Macintosh, but but and it was like fully modern, you know, not only graphical but it was like full Unix at a time when that was really unusual for a desktop computer, um, and it was like it had it had this incredible state-of-the-art; it had the first um it had the first CD-ROM drive, and then right one of the great stories is it was a perfect cube; it was a perfect 12-inch cube, 12 x 12 x 12, and there's a famous story of his designers at Next when they were designing it; they came in with a the sort of optimal, you know, parade optimal hardware design built for manufacturing cost optimization, which was 12 inches x 12 inches by 13 inches, and he said you go back and make it a perfect cube, and they're like, Steve, that's going to like double the cost, and he's like, I don't care, like make it a cube, and so it's like a perfect cube; it was slow as like it like it took forever; like the thing was just like it was like walking through molasses to use the thing; completely flopped; nobody wanted it; pivoted the company to software; nobody wanted the software, um, you know, it just like this; anyway, the point is like he like that was really hard, and he had to like make every part of the company work; he had to op, you know, try to figure out how to optimize it the hard way; he had to retain a team, you know, through 12 years of basically failure; he what basically people say is he had this incredible growth in innovation skill set from Apple phase one, and then he had an incredible management skill set from the sort of wilderness years, and then so by the time he came back to Apple in '97, he was both, and he was also at that point a great CEO, but he maybe not would have ever become the Steve Jobs that we know had he not gone through the hard period.
So a big undercurrent that what you've been discussing, just the concept of like market timing, right, like what's the right time, the sort of ENT market, um, and it's the technology truly ready for sort of the consumer or the enterprise version of that of that technology, um, and so thinking back to like the the 90s, um, like you know, you wanted to be not Pets.com but like Chewy, eventually get on, right, like some of these companies that came 10, 15 years later, um, so so how would you think if if you're a builder right now and you're selecting like markets right now, the building, um, how how would you think about what the right time is? Like is it too early for certain markets and so on so forth?
Yeah, so one of my observations that I sounds crazy, but I think might be true, is I think actually all the ideas might be good. Like I think qualified Founders who know what they're doing, I think generally are right about the opportunity that they're that they're that they're going after, and that like it's just like, okay, if you're like a qualified founder doing what you're doing, you should be so deep in the domain that when you think about like, okay, this technology now makes this use case possible, and we can build a product that does that, people are going to want that; like I I think the accuracy rate on that is almost 100%, um, the problem is the timing, um, and and early is the same as being wrong, right, in practice, right, um, and and and and and you see this the pattern you see this in the pattern which is basically what you see basically, um, is anytime there's like an overnight success like a technology company that just like lights the world on fire, um, is doing great; what you find is basically there were a set of companies that try to do that same thing five years earlier and failed, five years before that and failed, five years before that and failed, five years before that and failed; often goes back, by the way, I mentioned the e-commerce and the phone thing; the first actual smartphone came out in 1987, right, and so there there were literally 20 years of failed attempts to do smartphones, um, until the iPhone, you know, 20 years, right, um, and so, um, and you know, those Founders, I knew many of the founders trying to do smartphones before before the iPhone, and they were very very smart, capable people; many of them very successful in you in other domains are very successful later on, um, and uh it just it was just too ear like it just the technology wasn't ready yet. And so so there's this and then why is this hard? It's hard for basically two reasons: one is because found to be to be a successful founder by definition you have to like you have to live in the future, right, so you you have to envision a world that doesn't exist yet in which the thing that you're building is something that everybody's going to use, and and like people around you like can't see that yet because it doesn't exist yet, and so like you you see a vision of the world that doesn't yet exist, and you know that may be right, and you know may not be right, um, or it may happen now, and it may not happen now, and then and then the other, you know, thing about it is it's just like the world gets a vote, um, and you know, I think one of the really interesting kind of conceptual questions is, you know, there's like the the push side of like you trying to make something happen in the world and trying to get the world to understand something and want to want to do something and buy something, but then there's like there's like some sociological thing on the other side, which is like, okay, when is the world actually ready for the new idea? I mean, here's another just another just like really amazing thing; uh, somebody got a uh llama; somebody got one of the small versions of Llama to run on Windows 98, um, on on a Pi; they got they booted up a literally a Dell Compu desktop computer from I think 1998 with a with a with a fresh copy of Windows 98, and they got Llama running on it, and so like all of those old PCs literally could have been smart this whole time, like you know, they really could have been, and like we had neural networks; right, there were lots of people working on AI, but like we could have been talking to our computers in English for like the last, you know, basically almost 30 years, uh, you know, we now know; and crazy alternate history, crazy alternate history, and like we and we didn't like it; it just, you know, whatever; read that; yeah, there was an AI there was an AI startup boom in the 80s; like there were people there were a lot of really smart people in the 80s who thought this was all going to happen then; there there were people in the 50s who thought it was going to happen then, um, and so this timing thing is just like incredibly difficult, and then just practically speaking as a startup, you only have so long to either prove it right or not, and so and basically it's like, you know, give or take five years total, right? You can if you don't get traction to the startup in the first five years, you're your as of success are very low just because it's very hard to hold the team together, um, and you're going R against time, right? You're going to race against time; yeah, you're in a race; you're in a race against time, and then you end up in this frustrating; you can a lot; you know, I have a lot of friends who've ended up in this frustrating circumstance where, you know, you started a company in 2010; you thought now was the time; your company failed in 2014, and then a company started in 2015 that just like hit went, and you're just right, um, and so the the timing part of it is very hard; I don't think there's an answer; I don't think there's an actual answer to the timing thing other than I think that's a really key part of they call entrepreneurial judgment; like I I think that's a big thing that the founder has to really work hard about and think hard about, and and it's again it's this thing of like reconciling I live in the future, and I can see it happening, but like can I can I actually deliver it in the form of a product that actually works the way people expect, and then it it is there enough precondition in the world such that they're going to want to actually do this thing, um, and I just like I mean these these guys John tell you like I don't I don't even I don't even try to forecast these things myself anymore; like in meetings I I just I just figure like let's just assume the founder is more likely to be right than we are just because like this is the the best the founder's best guess is probably the best guess that exists because the founders have the most information kind of synthesize a view on this, but having said that, you know, we're going to back in, you know, I don't know like I don't know like a third of the companies or whatever we're going to back in a given year; it's just going to turn out that we're too early. By the way, the the other corollary to this is, um, if if if if it's going to work, it almost always feels like you're too late, um, so as a Founder, it almost always feels like I wish I I I I should have started this if I if only I started this company two years earlier because because it's like you're end up in this situation where you're like, oh my God, like it's going to happen, and the market's coming, and it's going to happen, but like my product's not quite ready yet, and like oh like I'm running out of time, right, and and like my experience at least is that that's a it feels terrible in the moment because it feels like you're not rising to the occasion, but that's that's the that's actually the positive sign.
What excites you the most when you think about uh AI and sort of what it can be, the creative storytelling, and just the entertainment industry at large?
So aspirationally, um, the um, you know, there's opportunity for like a complete reinvention of the entire process of storytelling and games and immersive worlds, uh, right, and you know, this is this sort of thing instead of instead of us making them, maybe they're going to get hallucinated, you know, they're going to get dreamed; you know, you're playing a game, and it's going to it's going to basically it's going to be an AI sort of in symbiosis with you as the player, and it's going to, you know, adapt; it's going to learn from you; adapt to you and make you the best possible experience, um, you know, with the best possible, you know, the trade-off between, you know, the ease and difficulty learning curve and and the most possible entertaining scenario for you, and you know, the best games people will play for, you know, many thousands of hours, um, and U and then by the way, the businesses can be really amazing underneath this because they don't you you don't bear all the cost of of uh of manual content creation, and so you know, you you build an engine like this, and it it runs, you know, maybe it runs forever, um, and so like that that's super exciting, um, and then you know, being able to have virtual worlds with like, you know, super smart, you know, lots of, you know, populated by, you know, these incredible personalities, um, uh, you know, just like whole new amazing kind of storytelling. So like I know and we're big believers in all this, and like I I think that's all going to happen; it's going to be it's going to be it's going to be fantastic.
I will say I am also seeing this through the eyes of my nine-year-old, um, so I'm re-going through the uh, you know, the process of learning about gaming and coming up to speed as a gamer through my my nine-year-old, and so, um, couple couple key lessons: one is, well, Warcraft apparently is or not war, um, Minecraft is immortal, um, so like like he loves Minecraft more than like life itself, and so that like that whatever whatever those guys did is just has worked, um, and by the way, really interesting thing like the nine-year-olds, at least the nine-year-olds, they don't care at all about visual fidelity, visual quality; like he could not give a damn, um, and so Minecraft, Minecraft and Roblox and games that look like that are are fantastic, and he just discovered his first, um, I just learned about IO games, um, if people have heard of those, and so he just discovered he just discovered his first first-person shooter, um, which just thrills thrills me to no end; that's that's that's called Shell Shockers, um, and it's basically it's Counter-Strike but with uh anthropomorphic eggs; oh wow, that; so it's like full military hardware, and then when you shoot another player, he explodes in a shower of yolk, um, and it's it's a it's a completely browser-based game, right? It's multiplayer, but it's all browser-based, and so it punches through all the school firewalls, um, and so the the it runs it runs great on Chromebooks, um, he's he's very frustrated; he can't get it; when we take away his laptop, he's currently on a laptop break, uh, when we take away his laptop, he tries very hard to get it working on the K on the web browser on his Kindle; that's his main form of frustration is life right now is that is that uh, and we tell him it's good that it's good that Shell Shockers doesn't run on the web browser on the Kindle because if it did, we'd have to take away the Kindle, um, so, um, but anyway, um, I I watch him doing this, and then and then you know, and then I had this moment when ChatGPT came out, uh, where I was like, wow, this is amazing, and you know, I can't wait to show this to my kid, and I'm going to I felt like that felt like Prometheus bringing fire down from the Heavens to my to my kid; it's like I'm bringing him, you know, AI, and it's going to be this tutor and coach, and it's going to be with him forever, and it's going to talk to him, and he can ask you questions, and he'll teach him about all these things he's interested in, and I I I install it on his laptop and show him; you type in a question; it'll it'll answer the question, you know, and and I'm I'm like this is like the best thing I could ever possibly do for my kid is give him this capability, and you know, he looks at me and he's like, so I was like, no, it's like it took 80 years with the neural networks and this and the training data in the whole thing, and it like does the thing, and it makes and he's like that it's a computer; like if it doesn't answer your questions, like what would it do?
Well, against this this backdrop, right, like we've got new administration, new policies, new technology, sort of new sort of cultural movement potentially, um, it feels like we're very much at a moment in time; I've heard you describe it before as like we could be in the precipice of literally a golden age, right, for for America and for the and for the world, um, what what are some ways that startups today, like in 2025, could be thinking about capitalizing just on on this moment, right?
Yeah, so look, I think for at least the next four years, I think it's, you know, basically blue skies, and so I think that you know, now now's definitely the time to build, um, you know, you know, we as I said earlier like our whole theory of all this is that the the prime time for startups is when there's a platform change, um, and I'm not by the way, this is not saying that every startup should be an AI startup or whatever, but like there is this incredible new tool, um, you know, that can be used, um, and it's just again it's just sort of general fact that big big companies, big incumbents have a very hard time reacting uh to these platform changes; sometimes they they they pull it off, but a lot of times they really struggle, and so it's sort of the best possible opportunity uh for a startup is going up against an incumbent is when there's this this kind of shift happening, um, so I think that's happening; yeah, there's going to be four years of of um of uh of clear clear sailing I think in the US, um, you know, the rest of the world's in a funny state, um, uh, you know, the EU has you know, all but made AI illegal at this point, um, uh, they they literally this is the amazing, um, they literally say publicly their senior officials literally said publicly a year ago; they're like, well, we've realized that the EU cannot be the world's leader in AI innovation, and so therefore we will be the world's leader in AI regulation, um, which is one of those things that I think you only say if you're an unelected bureaucrat completely lost in your own thoughts, um, but you know, they they pass this very draconian AI law, um, that as a consequence even the big AI labs now are not launching new AI products in in the EU uh because they can't figure out how to do it legally, um, the UK actually backslid on this; they they they should; the UK should be a haven for for openness, and instead they they basically have matched the EU, um, on on bad bad regulations and seem like they're going sideways on that. So so and this is important because like the the main US trading partners are actually our main our main trading partners now; China; our main trading partners is Europe; like the the the the globalization is sort of based fundamentally, you know, in the west is based on the economic relationship between the US and Europe, um, and then yeah, I mean, look, you know, the entire world is is is opening up; I mean, you know, kids everywhere are now online; they have access to all this; they they want to use all this technology; they want to build it; you know, they
Want to be part of these companies? Um, some of that obviously happens through, you know, migration, but a lot of that happens through just like everybody's online now. Um, and so there's, you know, talent all over the world. Um, and you know, hopefully the the the internet itself, you know, and general economic arrangement stay free enough where people all over the world can come together and build things.
Sure, that's very exciting. Definitely feels like we're at a unique moment in time to be building. Um, I think it's a great note there to wrap it on, so thank you. M and Jon, let's give him a hand.
Good, good, good. Thanks everybody. It just drives you ing nuts, right? Um, and by the way, is it okay if this is an adult audience? Is it? Can I can I swear? Is this everybody? Is everybody over the age of 18? It's hard to tell if you're below the age of 15. It's just whatever the new thing is. It's just the way the world has always worked. It's totally normal. Um, if you're between the ages of 15 to 35, you know the new thing is very exciting, and you might be able to make a career out of it. Uh, if you're above the age of 35, the new is unholy, um, and against the social order, and it's going to destroy civilization.