YouSaid · the spoken record

Alex Danco

lines on the record: 110
first: 2019-02-12
most recent: 2019-02-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Another sort of perpetual kindness in my life that I want to highlight is sort of my grandmother, my grandma from Montreal, who I think just sort of is always one of those people that goes out of their way to make sure that people are just having the best day they can and knows that they're thinking of them. And it's really, it's a cross-generational value, this idea that whatever it is that you're going through your life, whether it's happy times like expecting our first kid and moving into a new city, or whether it's more difficult times, it's just sort of understanding that people have been there before you. people have worked through it like you always have help you always have family who's there you always have support who's there i think that's she's just somebody that i'm also unbelievably lucky to have in my life still you know she is also just very healthy always with us and just a perpetual source of love in my life”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“She threw us just a phenomenally good welcome to the neighbor party with getting everybody together just making it so clear that we were welcomed here and loved here right off the bat and I just remember thinking it's like this is something that I really want our generation to learn how to do better is this idea of it's not people that you know it's not people that you are trying to get socially with it's not anything where you're pursuing some sort of goal aside from welcome you're one of us now you're here. I'm going to go out of my way to make sure we do something really special. That's really great”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Two things that come to mind, and I think something that's important from both of them is they're both from people who are much older than I am. The first example that comes to mind, this isn't the kindest thing that anyone has ever done for me, but is the first example that popped immediately to mind, is just something that was incredibly touching and fun and joyful, and I think that we need more of in the world is recently we bought a house. My wife and I moved into a new place several months ago, and it's sort of a classic Toronto semi-detached house out in the East End. attached neighbor is an older woman named Sally. She is ninety-two. She is a force of nature. She is still actively teaching as a professor at the University of Toronto. Wow. She is incredible. And she immediately just made us feel so at home and so welcome. And one of the first things that she did, I got a phone call from her that said, hello, welcome to the neighborhood. Look forward to meeting you soon. I'm going to need some dates for you to find out when we are throwing you a party. This is non-negotiable. I just need some dates. Please let me know. I was thinking this is pretty great. And then we went.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Investable. If you look at this as this is a toy sailboat that goes around doing science experiments and rallying climate-focused people, then you might look at this as a philanthropic investment. So they've raised money from the Schmidt Foundation and other instances where people have said, oh, I could see myself supporting this as a charity cause. That's fine. We want to support this as a business. We think they're an incredible business. So we love opportunities like that.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are going to be worse than we think, or is it going to be less bad than we think? I care about this on a minute to minute basis, right? You better believe that I want the best possible information. Well, if I'm Saildrone, I have the best information, right? What am I going to do? And say, hey, I am at a point of friction here. I'm at a point of scarcity where I have the best information and I have it now. So first of all, I can say, listen, on one hand, I have this mandate to go help make sure that everybody is safe, make sure nobody is ever caught unprepared, make sure that instances where people are caught unaware of what a storm surge could do can never happen again, not just in New York and places where we can afford it, but anywhere in the world. Let's make this trivially cheap so that disasters will happen to fewer people than before. Second, I have some pretty valuable information that I would like to sell to you. Would you like this information now or would you like to pay me X thousand dollars to get this information five minutes before the other guy? Pretty quickly, you can get into a position where they have something that's just say.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Urgent concerns about climate change is the sea level rise transiently in places, things like storm surge. Think about how much investable property in lower Manhattan is under threat from the next hurricane sandy, under threat from storm surge of any kind. It's like, well, if you look at just the insurable assets here and just the sheer amount of stakes that are involved for places like New York and Hong Kong or whatever, you'd better be sure that you have the best information at all times about what the ocean is doing, especially if there's trouble going on, if there's any sort of hurricane going on or any sort of problem. And I like to think about this. Like, hurricanes are actually sort of unique as natural disasters in that you have warning before they happen. You have 72 hours before 96 hours or something. You're like, all right, we need to figure out we'll recover and not if we've got to cover our butts. And if you look at insurers and reinsurers are very interested in knowing, is the disaster?”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Use what you've got. Or you could go hire Sail Drone and say, I just want to have these boats go around and autonomously go figure out, go sail around, go capture things. You can fix whatever sensors you want at the bottom of these boats. Go say like whatever task I need to problem, whether it's oil and gas related or fishery related, go figure it out. So the market for this already is quite big. But then if you start to think about sort of an order beyond this, which is to say, We need to stop thinking about this in terms of what is an individual boat and how much value can an individual boat go create for me, which is already large. It's very good return on investment. But if you just had drones everywhere, the whole ocean is just sort of covered in these things.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“This be an interesting investable business. It sort of looks like a hobby. A lot of investors they talk to are like, I just don't see where any value is coming out of this. So we looked at this and we thought, okay, first of all, there already is a large budget for understanding what is in the ocean. Government through NOAA has to pay a lot of money for research vessels and buoys to go around collecting all this data. We need to know it for the weather. We need to know it for our Coast Guard safety. We need to know it for all these reasons. We have to have things out in the ocean understanding what's up. Things like commercial fisheries need to be constantly monitoring things. Oil and gas need to be constantly monitoring things. Anybody who uses the ocean right now faces this incredible dearth of information because the ocean is big and we have almost nothing in there. So what we do right now is you either hire a research vessel which will cost unknown tens of thousands of dollars per day to staff and crew and you're very restricted in what you can do. Or you can use buoys that are fixed in place that send weak radio signals out and you have to try to”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd love to talk about Sailrone. So Saildrone is a company that social capital invested into in early 2016, I believe. Cell drone is just one of those companies where you think, I'm so cool, I get to work in any proximity to these people. So what Sailrone does, quite literally, they make giant robotic drone sailboats that sail autonomously around the ocean, collecting data that is useful and going out and serving as these kind of monitors for all types of things you might want to look at in the water. So carbon dioxide, chemical levels, acidity, whatever it is you want. That's really neat, right? There are these technological marvels, right? We had one in our office once for an annual meeting, and it's huge, right? These things are like maybe, I don't know, 20 feet high or something like that. They're these big boats, right, that can catch a lot of wind, they can move around very fast. You should just go Google sail drones, right? Just go scroll through all the images. They're magnificent looking. But ultimately, you know, who cares? Who is interested in robotic floating sailboat drones? Like, why would”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Making it. Yeah. Cool. We're making one. And then fourth thing I would say fueling. So life is very good at transforming one kind of energy into another. And I bet you the market for energy will always exist. I bet you that's not going away. Plants through photosynthesis are very good at converting sunlight into chemical bonds is one thing. They can convert other things too. We will always need to move energy around. We will always need to harvest energy. We will always need to do things. And we're doing great work with solar panels. We're doing great work with the way we're dealing with energy. I am highly confident we will always have needs for fuels, for very energy-dense things. And that's something that life excels at. So the total investable market cap into this, just in my opinion, over the long run is Titanic.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Things out in the world. If we have a company or project that we're working on that's working on sensing lead and drinking water, it's like have a plant where you water it every day and one day if your plant's leaves turn red, go check your water. That's important, right? It's really interesting. You should give that to every school district. We should give this to every home and every place where there's a tap in North America that is at any risk. They should just have one of these plants. They cost nothing once you make them. This life. Life is incredibly tenacious at doing this stuff.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Value materials. It could even be more conventional building materials like making synthetic wood is actually a phenomenally interesting application of synthetic biology if you're going to do building materials that can sort of soak carbon up and have desirable properties that can be like incredibly strong. You think about spider silk, right? Incredibly strong and tough and light spider silk is. Imagine if we could get that kind of material value and everything we want. So that's really cool. Second thing is break things down. If you look at things like pollution, things like the environment, air quality, water quality, all of this horrible negative externalities we've shoved off into the world. It's like we got to go deal with this at some point. We have many, many billions of dollars worth of work to do just to clean up in terms of people are willing to pay for now if we can give them a way to do it. Life is a great way of cleaning things up, of sort of breaking down things that are bad into things that are smaller and inert. Third thing I would say is what I call sensing. So it's like life can be very good at sensing.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Slowly we start to say, okay, I want to try to build my own computer out of harvested parts of computers. And now we say, like, I want to try making my own thing. We're almost at the point where we can make our own computer now. So we've gotten to this point now where we can make synthetic cells out of like naturally occurring proteins and genes and enzymes and have them work, have them self-replicate, have them do things. This is not the same as forward engineering our own life. We're still a long way from that. But we've gotten to the point where we understand it well enough that we can start to get them to do useful things for us. So why does this matter? Like, who cares? Who cares if we can mess around with bacteria in the lab? It's like, well, I think there are four things that life could do really powerfully at scale. The first is make things. So can assemble any stuff, any carbon-based stuff into more complicated and valuable carbon-based stuff. So this could mean drugs, right? Drugs are a really obvious candidate, but it could also mean things like ways of getting nutrients and food. It could be”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think right now we're going through this period of time where we're starting to lay the groundwork of starting to almost forward engineer biology in some interesting ways. What I mean by forward engineer is this. We're life and where cells and where living systems differ from computers is we invented computers. Like we made them from scratch. We did not invent life. We are observing it and we are trying to figure out how it works from the outside in. They're like black boxes that were slowly starting to dig into. So you can imagine a world where there's no computer science, there's no software engineering, there's no software development, but there are MacBook Pros and Intel chips and iPhones and Raspberry Pis like wandering around the real world. And slowly over time, we sort of figure out how to get them to do what we want. We don't understand why they're doing it, but we get that they're doing useful things for us. We get how to make them play memes. Then slowly we try to dig in. We figure out that there's a thing called an operating system. We figure out that there's things called files. We figure out the logic of this a little bit.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“There is just a huge amount of payback that I can get from that. If you think about a cell or about a living thing, life is self-replication. That's what life is. That is self-replication that we have figured out how to do as a species and as not just our species, but as all species as life on Earth, this is a thing that emerged out of a bunch of inert chemicals. This is really cool. Life as a mechanism of self-replication should set off a bunch of early ideas. That means that if you can figure out how to do something, you can figure out how to do it at scale. Biology scales in a way that almost nothing else does. So what this means is that although figuring out ways to engineer life to”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“I should put a caveat here. It may be that this time is opening up for early stage investing to be ripe to capture a whole bunch of interesting investable opportunity in biology. It may be some time before that translates into a new golden age for bio public market companies. But who knows? I don't know. But here, I'll tell you why I'm excited about biology as sort of the next, if you want your sound bites like the next trillion dollars of value to get created. It's like the next equivalent to like, look at how much wealth software made. Could this be the next one? Why do we care about biology? If you think about software and the internet and what makes software business models work, it's like everywhere you slice it, it comes down to this idea of zero marginal cost and zero cost of replication. So it may cost me a lot of money to make a software program, but I can then distribute that a number of times and I can run it n number of times. There's no incremental cost of doing this. So because of that, I can spend a lot of time building something very interesting knowing that”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Dictate surge in this thing, then yes, they are. They're absolutely going to maintain this ability to make money. I think if you look at this and then you look at across sort of all of business and the ability, all of investing into these new kinds of business, like look at Amazon. Amazon has this mighty back end infrastructure where they have assets called warehouses and called robots and server farms and whatever that ultimately have to go fulfilling function. One consumer wants one book. I want to consume one Amazon web service EC2 function. I want this one specific thing as the user. Their job is to sort of coordinate and match. And again, it's like they don't actually own their warehouses probably. It's like some bank does. That bank is getting their whatever percent on their warehouse. That's fine. Amazon doesn't need to own that. What they own is this big network in the middle connecting everything together. And that is what allows them to have a phenomenally differentiated moat. That's what gives them pricing power. That's what gives them what you want to invest in. Everything that leads up to that, everything into building these platforms.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Access these functions and the desire of the owner to have their assets go to work optimally. In the middle, you have this thing that is going to be fought over, which is sort of the idea of this, you can think of it as sort of the state of these networks that have to manage the cars going around and finding their functions. So like with Inuber's case, it's like what gives Uber pricing power is surge pricing, right? It's the ability to dynamically capture what is being fought over. And so long as they are in this position, it's like that is the scarcity. The scarcity is kind of this ability to take in a frictionless world, figure out how to match the, this is exactly what I want, is this ride right now to this place and figure out, okay, this is my moment to capture a huge amount of gross margin on individual rides. This is when people look at Uber and they're like, is there ability to sustain gross margin overall these rides and all these cities going to maintain itself? It's like, well, so long as they own the ability to...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, going back to business, let's look at the supply side versus the demand side and what all of tech has done to. This is sort of like the wrap-up theme for this. If the internet and software has created an enormous amount of efficiency and lowered the friction and lowered all of the scarcity out there in the world and created a sort of more perfect form of competition, what does it ultimately look like? It's like who's the batter and who's the pitcher? It's like, well, it's like on the one hand, you have capital who wants return. They have assets. And my asset might be a fleet of cars. And I want that car to provide optimal return on my bunch of assets. Then you have consumers. What they want is for their job to be done as cheaply as possible. And ideally, they want as much consumer surplus as possible. I want to get to the airport and I want to get to the airport for as little money as possible and I want this to be ideally either subsidized for me by a bunch of rich venture capitalists or otherwise driven down to lowest possible cost. Now if you look at this sort of dual between the desire for the consumer to”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's being negotiated between the batter and the pitcher, right? It makes sense that they're not going up or down. They vary from season to season, but walks have kind of become the scarce thing, right? It's like strikeouts will happen at some mathematical probability density function. Home runs will happen at some density function. And then walks are what is the real scarce thing, which is how you steal your runs.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“The three true outcomes was this fascinating paper that was written in 2000 that turned out to be utterly predictive of what would happen to baseball. This guy said, listen, baseball fundamentally is a conflict between the batter and the pitcher. Everything else is ancillary to this. And the batter and the pitcher have goals that are opposing but not opposite. The pitcher wants outs and the batter wants runs. And they are in conflict with one another, but sometimes this is why you see things like sacrifice flies, right? You get something where they both get what they want. The whole game of baseball is kind of like what follows from the emergent conflict between the desire for outs versus the desire for runs. And so this paper basically predicted, it says, in time as baseball gets more and more efficient and gets played more and more perfectly, we should see more home runs, more strikeouts, and more walks and less of everything else. Two out of those three things came true. There were indeed way more home runs, and there are way more strikeouts, but walks have stayed about the same. And I think it's instructive why, which is walks are actually...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“If driverless cards actually happen on schedule and actually roll out in the way we want, where it's like, I can just kind of call any car. It's like, who's to stop Toyota and GM and Tesla for that matter of just having these big fleets of cars, these fleets of objects, right? These car objects that are financed incredibly efficiently going out and performing functions for us. This is a little vague, but I like this as a comparison. You watch baseball at all? Yeah. Do you know, okay, have you ever heard of the three true outcomes?”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Since the friction of being able to get to any car has gone way down right now, I have a smartphone, a driver, and an Uber also has a smartphone and we can connect and he can just give me a ride for a couple more dollars than it would cost me to drive the car myself, but I can just get it now, right? And get this very fast. Now, look at the relationship between me and the car has changed. I'm not hiring an object to do all these functions for me. I'm hiring one function to do an object for me. And then that function uses whatever object is available. So I'm going to call a function on my phone, which is go to airport, and then Uber is going to go find me a car and driver, wherever one is available. I'll just use whichever one. So you start to shift from this mindset of a world that is populated by objects that people own and they use them to do their functions for them to now this big inversion of now a world where I have all these functions available to me and they will call on whatever object is available. I think this is pretty profound.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“In the old days, right, if there is friction, or you know, it's like cars made the friction of moving around much lower, but there is still friction in the sense that you had to have one. A car costs a lot of money. And if you were going to buy a car, then it made sense to use it for everything. The car was a fantastic bundle. Once you become a car owner, once I own this car object, I'm going to use the car object to get to work and to get to the grocery store and to get to the airport and to get anywhere else I need to go. However, now what's happening is that”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Towards this world where consumers are increasingly hiring what I would call functions to do their jobs for them, as opposed to buying objects or assets that do them. And I think this is an important trend for anybody who wants to go build these businesses or invest into these trends, right? Because it's a very different idea of how value gets done for consumers and how they pay for it. So an example here would be look at Uber and look at cars.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Mean, you shouldn't take my advice on business building, but I think where we do have an interesting perspective from our point of view in Palo Alto and getting to see a lot of the new stuff that is being built is this idea of non-invented Hear syndrome and this realization that like every year the amount of resources available to you are getting stronger and stronger and cheaper and cheaper Don't think about this too much because if you do you'll be like why would I start a business this year if I could start it next year and have ability the same back end firepower for less money it's like you know don't think about too much but you want to be in a position where you can take advantage of all of the support underneath you in a way that is as maximal as possible so again this sort of goes back into this idea of if what you are doing is doing something very pointy very specific you're providing a service to a customer right you're addressing their job to be done right to use clay christensen's framework i do think we are moving”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Previously, like big utilities. It was like if you look at the electricity wars, like, this is exactly what was happening. It was like Con Edison versus whoever are dueling with like the AC versus DC standards. And it's like, what is going to happen with the future of electricity? It's like, you know, look at Cloud Wars. It's like, what's going to happen with this investment? It's like, well, the long thing that happened with electricity is like everything kind of collectively calmed down. And then this new reality emerged, which is it benefited small businesses enormously. Because previously, like if you wanted to have a lot of power, right? If you wanted to have energy in wherever your place of business was, you needed to be at the scale where you could afford like a coal plant or a water power wheel or something like that. Now, any small business can go connect to the grid and then turn the light. That's kind of what's happened now.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one of the most undertalked about trends. First of all, everybody talks about what's happening on the VC side with funds getting bigger and rounds getting bigger and SoftBank has ruined the industry dynamics with their $100 million minimum check size and whatever. It's like, oh, there's too much money, too much money pursuing larger and larger deals. But meanwhile, remember, as we're getting this bifurcation into all of these smaller subventure scale businesses that are now making amazing things and are actually making real things for consumers. And I think that is one of the most underreported and exciting trends for me is sort of this idea of like this carpet of flowers is blooming along the forest floor. And that is what actually creates jobs and actually creates an employment and actually creates probably the most amount of real actual dividend return to shareholders who are in the form of like these small business owners. If you look at in 1920 or whatever, you're like, what is the future of electricity?”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“It gets worse than that, which is now you have some of these adventure backed companies. I think Airbnb was one example where it's like they had all this surplus cash that they didn't know what to do with. So they put it back into their own VC's funds. Turtles all the way down. I'm not sure how you would recursively unpack what the total fees and carrier paying off of that. It's like you get a Zeno's paradox of how many...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“All this does is it does something important, which is it recreates the magic of the bubble, which is this crisis of undifferentiation that unlocks all this creativity and all this competition and all of the frenzied company building, which is the good part of the bubble, while simultaneously kind of keeping it in check by periodically making sure that the deaths of companies are not seen as a sign that the bubble is bursting, but rather interpreted by the community as a restoration of undifferentiation and like an exhalation of a little bit. It's very, very cultural, but it matters a lot because it creates this continuity that takes us away from these like huge inflating bubbles and then big crashes and creates this stability that is necessary for the valley ecosystem to develop.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Then we do two things at once. Privately, we think well, it's probably a good thing that this company has died so that other companies can live and can sort of exit this crucible of undifferentiation and can claim this scarce resource and can be sort of like stand on their own financially sustainably and can go do something useful. It's like one day if Uber dies, then Lyft can go actually be profitable. We think, well, it's a good thing because now this company is sustainable or vice versa. But publicly, we do the opposite, which is we say, is venture capital killing companies? Do VCs kill promising startups? Should we take less money? And there are a couple people, you know, like the Basecamp guys have built this fantastic brand off of saying bad things about VC every time this happens, right? There's a whole little dance we play. And then finally, we close off the ritual at the end of the day, which is we announced to nobody in particular that Silicon Valley is a place where we celebrate failure.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Then what we do is over the course of the day, we slowly strip out all of the details of the company. We strip out what specifically they did, what specific steps they took, any particulars, and we just sort of refer to them, you know, the headlines that get written say, startup, who raised X million dollars, dies. That's it. What we're doing is we're sort of ritualistically taking away their individual identity and replacing them with this idea of competition, which we then...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is Girard, right? It's like human sacrifice. It's like the rituals basically all went The community is sort of in this crisis of undifferentiation. Everyone's the same and it creates conflict. What you do is first everybody acknowledges this undifferentiation in this crisis. Then we channel all of this into some poor surrogate victim who can be chosen kind of at random and then we kill them. And then what we do is we celebrate the fact that peace and differentiation has been restored, even though we did not actually do anything to solve the real conflict. But for a while we all kind of pretend we did. It's like this release valve gets opened a little bit. It's like a salve for the community, right? And then we move on. Now look at what happens in startups, in Silicon Valley culture. When a company dies, not a company that's being scapegoated, so not a Theranos and not something like that, but just a regular company that was well regarded that got eight fistfuls of venture financing and is now dead because this happens. First thing we do is we say, oh, another really promising company bites the dust to venture back crucible of competition. How should”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“That had to deal with these crises of undifferentiation all the time, right? Because back then it meant real violence, right? People actually killed each other. Many of them had this ritual in common that varied in form, but all had the same basic idea, which was human sacrifice.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Red Queen's race, exactly. Now, what's important about this is so this gets to this deep, deep neurosis that we have in Silicon Valley that is closely related to bubbles, which is idea of We celebrate differentiation. We have all this rhetoric around the uniqueness and the specialness and the weirdness of specific people and things and ideas in Silicon Valley. But what really makes the place work is the fact that everything is so similar. The similarity drives this cross-validation that brings down the costs and the hesitation of doing everything. And the similarity creates this competitive drive that drives people and startups to work insane hours and work very, very hard because their peers are fighting with each other and you have too it creates this culture of intense competition and very intense company building and future building in this crucible of undifferentiation. Now, undifferentiated conflict can't go on forever. Eventually, what happens? Some companies die. It happens all the time. And then when it does, we have this very important ritual that we do around failure, which goes something like this. If you look at early civilization,”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“The more similar we are, the more we are going to compete, the more we are never going to be on this cross collision. So you get into this real kind of conflict internally in your mind, which is, so it descends from this concept from Gregory Bateson in psychiatry actually called the double bind, or the memetic double bind, which says, I love you for copying me because it validates me. And I hate you for copying me because it makes us competitors. And crucially, no escape route is possible except working harder. The only way out is through.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, furthermore, if we go back to our pointy and utility theme, it's like we are going to be built on top of the same tech stack. I'm not going to go reinvent everything underneath me, and neither are you, because the returns to being pointy on top of this undifferentiated mass is too great. In all the ways that count, we are alike, except for one, we get to this in a second. The one true source of differentiation that is recognized in Silicon Valley is founders. Founders are rightfully seen as being unique and special. But we'll get to that in a second. But the fact that we are all alike does something really important, which is it cross-validates what we are doing and it makes the friction of jumping on board much less. If I go into an employee and I say, hey, you know, want to work with us, we're taking this go-to-market approach, we use this software stack, we use this, they look around and they see every other startup doing that too, and they say, okay, you don't second guess everything because everybody is cross-validating everyone else. Everybody is cross-reinforcing everyone else. However...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“On the other hand, it's really good. It's like, well, remember earlier in our conversation when we throw out this idea of like, what if startups are actually pretty similar If you start a software company and I start a software company, maybe you target one customer and have one value proposition and I target some very different customer and have a very another value proposition. Maybe you're consumer and I'm enterprise. But in all the internal ways that count, we are absolutely competitors. We compete for the same money in the same term sheets with the same safe notes from the safe investors. We are competing for the same engineers who are going to work on the same backend problems who use the same engineering frameworks and who demand the same employee equity compensation. We're going to be graded on the same rubric, which is what is your monthly growth rate. For all intents and purposes, our internal value proposition, not to customers, but to the people that matter inside of Silicon Valley is I am a lottery ticket. Who wants to buy me? We are all basically essentially alike.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Scarcity again. Scarcity and abundance again. Well, so we'll get there. That is definitely a very compelling thing to say. But then the next chapter he says, What if 1999 was actually good because temporarily we all came together and realized we needed to build the future, we kind of lost our minds, we lost it in a very productive direction. What if that was actually good? Hold on a second. But last chapter you were saying that undifferentiation is bad because it's only destructive. But now you're saying that 1999 was good because it helped us build the future. Hold on. 1999 was a lot of things, but what it was not was differentiated. It was a bubble. We all briefly became the exact same and sort of collectively entered this hallucination of saying we're going to go build the future in this particular way. You're led to leave. There is something that we're not getting here. There is this deep conflict that we're going to need to untie that I think when you do gets you into really this sort of dark heart of how startups work. This idea of like on the one hand undifferentiation and competition is sameness is terrible.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Peter Teal's book, It Opens has this big idea, which is like competition is for suckers, competition is bad. You want to be as differentiated as possible, undifferentiation only causes destruction.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Then had to go find things to do. That's really important. Going back to this idea of differentiation and undifferentiation, if you read 0 to 1, you know, Peter Thiel's book. Okay.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“The problem though is that similarity breeds conflict. You know, the idea is like we don't really fight because we're different, we fight because we're the same. And then we invent differences in order to justify why we're fighting, but it's not the real cause of the fighting. Bubbles are a great example of crises of undifferentiation. And what happens when a bubble bursts is it's bad and it's horrible and lots of things die and lots of people lose all their money and you have this big act of violence but that does a very important function, which is it restores differentiation, brings the peace back and it sort of brings us back into this new era that can now return to stability. Now with this new thing probably that has been built, which is the groundwork of this infrastructure has been laid. I think more importantly lots of new people have been brought into the industry that now has a founding culture and has ideas. If you look at this idea what did the 1999 2000 bubble make in terms of infrastructure, it's like, well, we laid a lot of cable. We made a lot of software back end, but most importantly, it made a lot of software engineering.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so I'm going to go directly to the hard question. This is a question that I've grappled with for a long time, and I think the more you wrestle with it, the less satisfied you are with anything you know, which is, is Silicon Valley today a bubble? This is a difficult question because there are a lot of compelling reasons on both sides of the argument that you could support. It's a real Rorschark test. You could say, like, any prior you have can be amplified by something I can bring to this argument. If you think about bubbles as crises of undifferentiation, if you look at, say, well, what happens in a bubble? Well, a bubble is what happens when everybody briefly becomes the same. We all want the same thing. We all go build the same thing. We all temporarily throw in our lot into the same project, competing against each other as being very, very similar. Again, that is a good thing often because some”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of that. It's the classic Buffett and Munger. Bubbles happen when people see their dumb neighbors getting rich. This is exactly kind of what happened, right? So all the telltale signs are there. And if you look back in some, you asked about some of my favorite bubbles. It's like, I think a lot of people have heard about the South Sea bubble as being one of these big sort of original ones. Look up the Mississippi bubble, which was even bigger, right? Yeah, it's like even bigger, even worse, even more hilarious. I think that has to go down as great as bubble of all time. That's the goat, right? It's got to be John Law. He's the LeBron of Bubbles.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, that's not compounding. This is something else, right? This is the absolute speculation. But sort of looking at this and saying like it's hard to stay neutral here, he kind of forces you to have a point of view about this, which is to say like, well, do I believe or not that something really special has happened in this underlying layer of figuring out something about trusted computing? It's like, have we actually used cryptography to solve this important problem? And if so, is this actually a real infrastructure layer for the way that trusted computing and the way the businesses is going to work? Now, what actually happened in 2017 was we got this sort of idea around ICOs, right? This idea of like, hey, we found product market fit for cryptocurrency. It's called gambling. It's like we absolutely found product market fit there. It's called my neighbor bought Ethereum when it was $10, and now he's not my neighbor anymore because he bought a bigger house. I need to get...”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, no. That's always my lens, my lens and my bias. So I'm 30 years old. I've only really lived my professional career through one genuine bona fide bubble, which was the Bitcoin the other year, right? Which was a whole lot of fun, just to watch and to see this spectacle happen of like, you can sort of see it happening. I remember thinking at one point, you know, looking at the price of Bitcoin steadily going up every day and thinking is like, Is this what compounding looks like? You know the meme of the guy in the cartoon with the dove, the butterfly is like, is this a blank? It's like, is this compounding? It's like.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Creates the seeds of it. So there has to be some compelling story with a real element of truth to it for why something fundamentally has gone from being scarce to being abundant, right? It's like without this, there will not be a reason for a large enough people to temporarily lose their minds.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a lot of the rhetoric is around that, but not always. I mean, look at the dot-com bubble, right? It's like many, many of these dot-com businesses were pest.com, right? Web van. It's like these are not platform businesses. This is, oh my goodness.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“Can finance this with multiple funding rounds if you're building something that is new and unprecedented and has never existed before.”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source
“This does it solve this really important coordination failure problem of figuring out what the discount is by creating a negative discount, right? It just says like, nope, the discount is going to be replaced by hype. That is how we are going to do this. So what we've effectively done is said like so long as you can create this environment where everybody is willing to suspend any rational calculation for whether these investments are sound, we can unlock a lot of money and we can unlock a lot of resources and people's time and people's attention into going and building the future and traditionally it's like we have either needed either major financial bubbles or large scale mission driven government spending, which again, so it's different in the sense that it's not this whack irresponsibility, but it is similar in the sense that it is money that is invested, that is decoupled from real financial return, right? It's like you need those in order to break through this initial barrier of there's no way”
2019-02-12 · Invest Like the Best · Alex Danco – Scarcity, Abundance and Bubbles - [Invest Like the Best, EP.121] · IDENTIFIED FROM THE TRANSCRIPT · source