YouSaid · the spoken record

Antonio Gracias

lines on the record: 74
first: 2022-04-05
most recent: 2022-04-05
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

“Giving and very focused on that give that yes, you're a smart, talented kid, but man, you should be humble and you're responsible to give back because that's what we do.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Almost an extraordinary woman came to this country to speak English, raised four of us, and was just a great motivator for me. I always held her almost like a virgin Mary in my life. It's perfect and caused me some problems. And I had to come to terms with the fact that she was a rookie might like the rest of us. But she was a deeply, very loving woman who was super supportive of, I think my father and her children and gave as much as she could do and really imbued in all of us a sense of responsibility that we were, as Sims and I are talented people, we've all gone on to do interesting things in our lives and that we needed to give back to society that we were responsible, that this is why we're here, that we're to care for each other, and that a sense of compassion and care and hard work might father was very hardworking. It wasn't home a lot and setting standard up, you work really hard, and she was setting standard of you really care about each other and you care about people. I remember watching how she interacted with people and how much she cared about them and how that made them feel. That's what I remember about her being very loving and very caring, very”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I get into a situation where I'm not sure what to do, or I ask myself what the right thing to do is, I think of her, I think of that moment in particular. And it becomes very clear what I'm supposed to do. That's one of the reasons I want to make sure to try to make the world better.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Never actually told the story outside of a very, very close set of friends and colleagues. So I'll tell it to you and it's going to get a little emotional, I'll tell it to you. When my mother died, she died of a heart attack in the hospital, and I was there. She was in an angio room that got this year before. They did the angiogram when she actually passed away. And I went in that room and she held my hand. And she said to me in Spanish the kido. And she said, which means I love you and be courageous. And I think that's the kind of thing I've always ever done for me. that at the end of her life what she thought of was telling her son to be courageous i think knowing that she was going to die”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I started asking some of the COs I have with respect who are, I'd say, at a demographic that they really understand the millennial and the post-COVID world. So Josh is probably in his early 30s or something. And I estimate, what are you doing and how you think about this with the fully distributed workforce and go off and close and how e-culture companies do great? He said, we use this book called Legacy. And it's interesting because legacy is one of the books that we use. This book is by James Kerr. I recommend editing in the podcast. It's about the news No and All Blacks, which is the most winning sports team of all time. And when you get into it, you'll see it as an ethos of serving leadership, which is what we've lived in here. And we've actually been working with James. We've hired him to help us think about our cultural program here and how we design it and inculcate it with energy sure to use and how we're going to build it. And we're mid flight on this right now, Patrick. It's super important to us to get it right as we speak.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are you thinking about a lot because I'm at a stage where I continue to do what I'm doing because I believe we're in the battle of the world and I'm surviving me. And we have some great partners here. It all begins with people. My partners want to join our amazing. Some of our younger folks coming up are great. And I think carefully about how we are inculcating our culture. We're doing a lot of work around that now because we're views here called Fellowship, which is this moment where you as individual think you're growing, your purpose is fulfilled because your mission is great and you have respect for people you're working with. When all those three things lined up, you feel great about going to work. When I'm in a meeting, we're talking about a company we all believe in and we all want to get behind. That feels great when the teams are together and we're in those moments of fellowship. We're trying to inculcate that in a way that's more recognized. Those of us who've been together for a long time and be partnership group. We're turning our operations tools on ourselves. So we're often asked this question by some of our companies. And one of our great prone token CEOs, Josh Moto, who is the CEO of Bata Coalition. And I was thinking about, man, how do I coke culture?”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of our companies, and we're trying to figure out how to take some of our operations work and package it in a way that it is kind of self-deployable. Something where we could say, here's our sales average toolkit. It's a two million dollar investments. We can't send you a team. We can't justify it. But we can give you some information about how you could do better, be better. And maybe you have a call with somebody to help you. And if we did that, we would then also go back a little further back and do more C, just make the world better by trying to help more people do the right thing is why we do it. And I think it's the right thing to do. We're thinking about it carefully.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“And answer this question in a little more open algorithmic way, which is I think about the problems our investment process as a false positive in making a mistake, okay with that because our aperture is pretty narrow and loss is good, a false negative. We say notice that we shouldn't have amiss. It's in our pipeline today. We just don't do anything with it. We miss it. And then we just didn't see it at all. Our biggest problem today is in our pipeline today and we miss it because we have hundreds of companies in our pipeline we're following because of the strategy of write a small check and then scale up. And we don't have enough people actually to really follow them all carefully. And that's one that bothers me the most. We are building technology here to solve that problem, working on some software and turning data science to solve that problem. The fourth problem, which is we didn't see it at all, is a problem. But look, if we just got everything that went in our pipeline that was good, we could fill up our funds and then someone would be very happy. I am going to work on the fourth problem, more because I think it's the right thing to do than because I think we have a lack of opportunity here. And that is by continuing to scale up our strategy in investing, I'd say, earlier stage to”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Politically think about how we want to bring things back from Asia, back from Europe, which is very important for America. The only company in this country at this point making sales make chips in this country, you don't make farm in this country. There's not things we don't make. Think about making those things just for strategic reasons, for security reasons. We need more people that can actually make stuff and want to work in factories making stuff. Very important that the education system will have that. And the third thing I think you're totally right, we use ferret embrace. America is a country of immigrants. My appearance of immigrants. You look at business formation, a very large percentage of business formation of America comes from immigrants or children immigrants. And I'm saddened by the idea that somehow immigration is pathologized on both sides of the aisle in Washington. I think that's just crazy. We are a country of immigrants. People want to work. They're smart, hardworking, great. Let them in. Let them work. I don't think that's taking jobs away people that are here today. We don't have enough people today and don't want to work.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“In the US, all these things. I think the easiest solution is immigration. We definitely have a demographic problem. We look at the employment population ratio quite carefully. And it was bottomed out around 60% right after COVID and COVID. That's the same level that it was at in the early 70s when women entered the workforce. So if you think about 40% of eligible people aren't working, roughly, now it's about 62%, which approximately we're pre-COVID, but have been coming down from the mid 60s to 62-63 pre-COVID. This is really bad. You cannot create productivity without people working. So why aren't people working? About 30% of it is resulting from the aging population, but 70% of it is not described by this. It's just other people leaving the workforce for many reasons. And we need people to be productive for short. So I think it's a combination of getting people that should be working today that aren't working back in the workforce as we're bringing more young people through the system, actually educating them well. And not everyone has to go to college. It would be great to have a very good vocational training system in this country where people are respected for being a toolmaker or aching stuff. And I think as we”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say that talent is a good straight period. I think that it's those very, very specialty brains. Crave there are more of those. But frankly, if there were more people that were just really, really great, they could scale those brains, we would do more stuff. So if you said to me, if I could wave a magic wand today, would I put 10 more elons on Earth or 10 more bases on Earth? Or would I put a million more super talented executives, engineers, et cetera, to scale what those people are doing today? I think the constraint is actually having great people that are going to go on mission and help scale the things we already have in motion today.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I often give executives a book in this thin air. It is a great description of the compounding effect of bad decisions. It's not the first decision that kills them. It's the last decision they make. And they make a series of very bad decisions along the way because they're emotionally engaged. They're not thinking clearly. That is 100% what we're talking about here. The vectors of their students are ending up in a negative way. And at some point, they can't recover and they die. This is actually extremely important for life. It's my basic philosophy in life, which is my decisions matter. Your decisions matter. And Elon's contract would be they're all adding up in a team or a company and they're driving a certain direction. If they drive in that direction effectively, we'll get forward movement and we'll build something great.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“And one of the reasons these, I think, mission driven companies just do better than other companies is that you're more likely to supplement whatever you want to the overall mission of the company if you really believe it and you believe it's going to make a big difference and your life's energy that you're putting into that company, you're taking your decisions and the energy of your actions, which is really all you have in this life is your time, the energy, but you put the energy in that time. You're putting it toward a goal, toward objective. And if you believe that objective, it really matters to humanity. You're more likely to want to do it and do it in a way that's really great for the company and not worry too much about what's good just for you as an individual. I think it's a very important lesson. It's one that I'm incorporated here and that we think about as we meet executives. And it's how I think about decision making now. Your life is the sum total of all the decisions you make and how those vectors add up. And if the vector is going in a positive direction, they could force momentum. Your life will get better, your consent will get better. If they're going negative, they compound over time negatively and things get worse.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things that I feel really allowed us to work so closely ever so long was this idea of their constraints is really about the force vectors going through a system and are they aligned or not? This is true of human decision making and teams make decisions that decision has force and directions in the world and it goes out and interacts. We talked about a little earlier. These are all force vectors. He has a very similar theory which is everyone's efforts add up in a team and they drive forward together. This is really important in any business, which is you're only the sum total of all of your activity together and any countervectors in the system just drive counteractivity. And if you don't have a common direction, a common mission and people aren't driving their efforts.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Car just sitting there doing nothing for a fair amount of time. That's a constraint, quite obviously, in that part of the system.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing we did the cars would come out of the end of line. It'd already been painted coming into line and assembled, and then they were being charged directly in that area and then sent to an end of line rectification area to make sure all the fit finish is good. And the issue was, I can't remember the exact numbers, but let's say it took three or four hours trench car. They'd just sit there. They move. Now, when you're trying to read the factory, that's a long time in allowing you to sitting there. And remember, velocity and quality related. So one of the things we did was we actually moved some of these teams that were checking the final quality of the car and rectifying all this all the stuff you do at the end of the line. We actually developed, built a bunch of supercharge stations at the end of line, and then moved those teams instead of being in a separate location on to the cars while they were being charged. Because you weren't sitting doing nothing and then moving, you were actually working on the car while it was actually charging because they had to be in a partial charge state to be shipped to make sure the battery charged in the car had to be tested, etc. It's this kind of stuff. Where is the constraint in my system?”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Were issues ramping the factory. I was working on called the paint shop forward at the back end of line, Elon Van executive's working on the body shop and other stuff and we work on the whole thing, but just supporting the guys as they were trying to ramp the facility and helping to do some of the theory constraints you were talking about and managed to improve throughput. And my partner, Tim, was there, who was a real engineer, was of an engineering side. I think back on that moment as one of the products on my career personally because I feel like I've really made a difference and I like doing it. I really do like being on a factory floor, working with folks making a product, can't do it every day. But that was a great personal moment for me.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“From COVID, I would tell you is we have a company here called Bis Vitages basically selling produce that doesn't quite fit the grocery channel direct to a middle class consumer. And in COVID, this is super important because people get food. And if you remember the very food shortages. So this company's in Philadelphia. We deployed a team in the Villacoa that I was so proud of our teams. The COVID was in full rage. They actually drove through barriers because Philadelphia, where they were going had riots and went to their facility and helped them actually scale the facility up to serve more customers. And then we helped them build another one out west. It's those moments that make it real for us. There's been lots of well-documented operating where Tesla, our person spent the summer of 2018 in the factory there long apart to Markins helping scale up monotonous reproduction. At that time, I tell you it's one of the most rewarding was my career.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Now you can read about them in books, and you can fit reference check us with dozens of people to see if we're good at it. So it really comes down to a self-selected mechanism. If you want a partner that wants to be valuable to you, wants to be more than just capital and wants to help you, I think we are actually the best people around for that. If all you want is capital and people won't show up or make report meetings, probably not the right people for you. And that's okay. There's a lot of people in the world, a lot of great companies in the world, a lot of great CEOs, and we're just looking for the ones that like what we do.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the vast majority of people that we deal with don't need our help. We're like insurance. We can make things go faster, easier. We have a lot of reps. The kind of problems that we're dealing with, the repeated problems for us that are the first time through a first-time founder, we will lower the risk, we will lower the pain, we'll increase the speed. And if something really goes wrong, we can help you fix it. That's why you want us. We don't want investment people to actually need us. But when you're dealing with figuring out which capital partner you want, well, some people actually want help and some people don't. I don't value judge that, but our kind of people were very clear about who we are and what we want to do. And it's a good sorting mechanism for us. That's the question of some money, what are wer top three problems? And they say something like, I have no problems, then I think we probably have a ground tree problem in the sense that everyone has problems. I got problems in my business. You got problems in your business in our business. If we don't, we're not thinking. If they say, look, we have five issues, but we don't really want anyone to help us. And that's the way it is. Okay, great, probably not for us. I think there was a period of time when our resources were unknown and everywhere were well qualified.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you could say that we trust that you are going to deliver on what you're telling us you're going to deliver, and we trust that you have a common view of first principles thinking and ground truth that we do. We learned that over time. Because it's not just that we trust that they're going to do what they say they're going to do, it's that we also know that they're arriving at those conclusions in a way that's a logic pattern that makes sense to us, which is, hey, what are the facts? What's ground truth here? And then from first principles, let's build up the right answer. And if there's an error, they do good root cause analysis, highly qualified cognitive thinkers. And then I guess on the emotional side, emotions will be in check enough to make rational decisions. So all that leads to a sense of trust, yes.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“The reality is where these businesses for a long period of time want to be valuable partners, want to be invested for many, many years, and sometimes now coming about two decades and some of these companies. And we want that. That's nirvana for us. Where was someone for 20 years? That's amazing. We value partners who want to be there in good times and bad. And I think the questions you might ask about a long-term relationship that's going to be with a friend or with a colleague you want to respect and be with the same questions we would ask.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's engineering. Measure a little bit. He's just amazing at that. He is a first principles, ground truth decision maker. He wants the facts. And if you have the facts, it's super easy. And so when we see that, it's a great pattern match for us that this is a really great executive where values aligned with. We think about what does integrity and excellence mean for us? Epistemic humility means you are intellectually humble. You want to find ground truth. We don't care what you think today. You want his right answer. Integrity means you actually want to get that answer. It's all about that. It's all about what's real ground truth. Let's have some agreement on that first and then make decisions.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“We are often in situations where we're dealing with visionary leaders. And as you said, they're holding these giant visions and that they're executing as well. And they've got these, I say, big probability option sets. And then they're also executing on individual matters. And I think that's what makes them so special is that there is a real acceptance of reality. The truth is the truth, ground truth. And the very best executive we have, I've never really had arguments. It's like, what is the truth? Get the data, go figure it out, come back. Let's make some decisions. And, you know, when you're having a problem with reality matching, you can either get objective truth figured out. There was a judgment to make and obviously we're not charged. We don't want to be in charge. The judge is to be by the CEO. But our job is to get the facts on the table and come to some conclusion. But in 90 plus percent of the time, it's pretty obvious when you have the right facts. And when you don't have the right facts, then you have disagreements. But we live in a time when I think truth is somewhat becoming relative. Your perspective, my perspective, and solidville, this is not true in business. There are actually objective facts. There are numbers. There's a product.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Where you can see that in advanced compassion meditators, the ambiguous thickens and grows. So it's one of the things that's influenced me now. And we're actually not that different at all. What makes this different anyway is the language we learned as children probably and the cultural programming that comes along with it. That's all that really makes us different. It was a profound thought for me. It connected me to people in a very different way.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“By studying Japanese very intensely when I was at Georgetown. And one of the things that occurred to me when I was living in Japan was that the language itself has a different diplomatical pattern than Western languages. You have markers like subject, object. You can move them around the sentence. And those days, it was always, people thought about Japan and Japanese. Yes is in a yes. It's like this circular logic pattern going on. And it occurred to me that it was actually different. The logic was different because the grammar was different and the language was different. And so these miscommunications were occurring were occurring because language itself is programming the brain. If you said all of us in the room, me, you, a Japanese person, someone from Spain or Eastern Europe, whatever, Brand Nevat, virtually all the same. Small variances and parts of the brain or whatever were all the same. The language and culture we live in is what programs our brain. And as we talked about, it became the programming. And as Taiwan and I started figuring out that, look, I could use this language in the brain in the form of a mantra to help change my brain. If you go research this compassion meditation,”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Documents as bias. It's got cognitive behavior and emotional bias in it. And we literally don't talk about it. And there's a culture here where I want people to check me and I check them. Why are we doing this? Does it really make sense? What are you feeling about it? And having a conversation about feelings around investment table, I know it sounds a little crazy. You're so data driven, but it's important because you want your people to be passionate. We want to be passionate about what we're doing. That's the whole point. We like doing it. We want to make the world better. But at the same time, we want to make sure it doesn't override our cognitive systems. And so we have external checks as well, which is where the check is manifesto thing, where we're actually just checking off and saying, yeah, we thought about it, we talked about it. They don't even say they don't exist, actually. We just identify them. And when we go back in time and look at our errors, because we still make errors, we will look at the underwriting, look at the numbers, all the qualitative quantitative stuff we do. We'll look at the biased dates. We'll look and see if we made a mistake. Did we miss a bias? Did something happen there?”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“It doesn't, I should just do nothing and be calm. Over time, what happened to me? I got more deeply into it. I had done some Sen Buddhist meditation when I was in Japan when I was very young. I was able to return to a breathing practice and a meditative practice that is without a mantra where I could reduce the voice. And this happened to me just a few years ago. I've had a Japan, my family, and I went back to my very favorite place on earth, a temple called Ruhanji. I was at a Kyoto. It's a beautiful sun temple. And I was meditating there on New Year's Day. It was the first time in my life that I could take the voice down to zero, be in a state of awareness without hearing the voice and just be. This is allowed me to, I think, mediate between my sense of ego and what is really happening in the environment because there's a space there for me now. It's been really very useful to me. It just made my life more pleasant, frankly. The other thing done here is has some wonderful, wonderful partners I work with, very smart people and really great humans. And it's part of our process. If you go look”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll tell with internal things and the external things. So internally, I've meditated practice. I started several years ago as a young man and then dropped it for a while and picked it back up again now, a little over a decade ago. I started doing TM translation, which is a useful mantra. And I found that that gave me space between my limbic vein and my prefrontal cortex to make it even a millisecond decision about combinator spot I'm going to feel. And that was very, very useful to me. After practicing that for a long time, I was able to actually get myself to a place where I could use a mantra to replace the dialogue in that's always going. And one thing that's important about the dialogue is to tell you we tell people a lot is it's not you thinking. It might be you, but it's often the source of emotional bias or cognitive bias. It's important to know this unless it's directed. It's not really always thinking. Thinking is occurring in the background of your sleep. And meditation and TM in particular opened a space between my lungic system and my prefrontal cortex so I could make a milliseconds decision around. That is a response that is correct if it's mediated to the environment and makes sense.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“When we talk about control, that's what I mean. Your internal uncertainty relative to the external entropy, how well you deal with that, how it happens, how it works for you, and how you can keep an even state. I think that is quite important as a decision maker.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are feeling unsafe, your physiologic state will be triggered. That is the most classic trend out of the brain where you have the prefrontal cortex, the white matter, and then the limbic system that you see in textbooks and all. That is what gets triggered when you feel lack of security. And this could be physical security. In our context, the problem is that a brain is designed to be on the savannah and see a line and run. But now we work in offices and talk to each other on Zoom. And so we're not threatened the same way. But if you say something that really annoys me, that thing might go off as if my security were threat. And I think that's actually one of the problems we're having today is we don't have the right tools to mediate that emotional state of having our security threat. And control, I think, is control of the environment. So I think about it as a hierarchy. We have basic physical security and emotional security. And then control of our environment is that we all feel uncertainty in our minds. And how well we deal with uncertainty and the chaos in the outside, so external entropy often determines how well we make decisions in an emotional state. That's hard.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Bunch of systems in place to help check that and internally to me I think that the tools to manage that emotional bias state all exist in philosophy today and if we had accepted the reality of the situation we were in and did a proper Bayesian update frankly we wouldn't have made that decision”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Inside of my emotional state. And in a most simple context, we think about emotional states and biases like Olympic hijack. Something happens to you, you get dysregulated, and it takes over your frontal lobe, but you can't make a decision. In a positive context is you get overly attached to something because you want to believe it and you really want to be on that mission. And we very carefully check that out here because we are mission driven in our investments. We have to be careful that we are actually successful in the things we're dealing with, that our emotions and our desire to make something real don't override our due diligence process and everything else we're doing. So emotional bias is very important and we're doing a lot of work on that. There is a hierarchy to emotional bias, which is security control and affirmation. And what really was going on here is my sense of affirmation about who I am and who I want the firm to be was being triggered by something that felt really good to do. Ego is an important driver. Want to be affirmed by the things we're doing. And if you're in our state, which is we're affirmed by making the world better, that can actually become dangerous. And so we put”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly a lot of bias because of its making these errors. I was trying to figure out why I'm making these errors. And you read the fast and slow economy stuff about cognitive bias throughout his most qualified decision makers we deal with don't make a lot of cognitive errors. They know how to manage cognitive bias pretty well. And in my case, the errors I was making were not cognitive errors. They were emotional errors. And not much is written about this. I'm trying to build something around it now with our team of neuroscience psychologists about emotional bias. And what I learned about myself was I so wanted this particular company that turned out to be a problem to work because it was serving mostly minority children, Hispanic, and African-American children in Texas for dental. I was so badly wanted to work that I just overwrote a bunch of yellow lights. Because I believed in the mission. Was the right thing for the world? I would say things like, got to meet these commitments so great that we send our own kids there. We overrode a bunch of yellow lights in our system that we shouldn't have overridden. And when we asked why, and I coached by Gail and Lauren why, the answer was,”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Around these goals because they believe they're making the world better. And of course, some days there's a financial payoff. But what really drives them is the mission. And then it's also working with other great people on that mission. I think that sense of fellowship, these companies all share that. And these CEOs who are able to create that sense of fellowship, that feeling of mission and respect them on the teams and really going to change the world, they galvanize the best people to work on these ideas.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“On a mission that they believe in. SpaceX has galvanized her on the mission to Mars. This is true. I would bet a lot that SpaceX achieves its mission to go to Mars. And is 100% certainty? Nothing's 100% certainty. But they believe it's true? For sure they believe it's true. And I think it is true. In fact, along the way, it's gotten more true. It's a realizable vision. Today we can absolutely see as a realizable vision, but we started with the first step with a bold vision, bold mission. You never would have gotten there. And I think these are very special people that are able to do it. Our partner in bioscience is Jeff Heron does this really well when they're innovating drugs, people working very hard over many years with no payoff. Equity could be worthless if it doesn't work. We believe it's going to work. You believe it's going to work. Keen believes in the work. It's not in consumer space where you get product market fit and you keep going. This takes years. And these are brilliant people galvanized around the objective of getting a drug approving the last big drug you had to prove is narcolepsy and cataplexy. These are terrible conditions people can't work and great professionals galvanize around.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it depends on kind of where you're setting. We can pick companies like SpaceX with huge ambitious goals. I can tell you, I know that Elon believes what he was telling people because I believed it. I was there. I saw the data. And I know that for some people on the outside, it sounded so incredible. It can't be true. On the audit committee, I'm telling you, it's true. But I think sometimes the brain can't process the idea that this thing that's so strange to them could be true. That's one of the hallmarks great is someone who sees something that no one else sees and can realize that goal and that ambition in reality and galvanize people to do it. I find that at least in our case it's always been people that are really trying to make the world better. It's hard to galvanize people to work super hard to dedicate their lives to a mission that's just about, say, making money. It doesn't sustain. Why are mission-driven companies better? Why do we believe that? I think we've been one of the fewer firms who are doing social responsible investment for it was to think. Why? Because A, we want to. It brings me into our lives, to our work. But B, we think these are better companies because you're attracting people. They're going to work very hard over a long period of time.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Therapy frontal cortex, whatever it is, they are able to really make great decisions despite being an extreme pressure at existential moments and do the right thing. They understand the line. There's always this line. There's truth and there's not truth. There's people lying. There's people telling the truth. And I think that we have been able to figure out the difference there. And there's a real difference there. And the very best people know that line is they don't cross it. They know they're pushing the edges of execution. So they're driving people super hard to execute really, really well. But they're telling the truth. And I think that's a very important distinction. So that bell curve does exist, but on the successful end, I promise you that those folks have good ethics and values, or they wouldn't build great companies that last.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“I definitely think it's true their brands are different, and it is probably small differences, but they're different. The ability to take pressure and still think clearly is very important. Most people, when they're under extreme pressure and the risks are very high, so expensive risk to a company and the pressure is very high, their emotional system go off, their limbic system will go off, and they'll make bad decisions. Theranos, how do you reconcile that? It's because that's a series of bad decisions occurred because they were probably in a high threat environment because they were going to fail and they just started doing bad things. And one after the other, the other gets deeper and deeper. The great executives are those that are under that pressure and they actually make better decisions. They are pro-entreprepreneur thinkers. That's where it comes from. And I'm brain scan these folks. My impression is that many of them are actually very compassionate. So the same place you'd find the anxiety having to make that you find compassion. They're very compassionate people. But just because of their experience in life, childhood, the way their brain operates, the way their emotional systems mediate.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Do the same thing. It takes about six to nine months to figure out whether or not you match up on that stuff. And that's why the small check goes in first and we get to know each other. And once we match up, I think we're great partners. We will go to bad for you. We'll go to war for you. We will 100%, but got to believe that the value is matched up. And then it continued and we went deeper in the neuroscience. He brought a woman named Laura Harrison who's been working on some of the stuff we're talking about here that she's got a PhD in the neuroscience of emotion at Caltech. And she's brilliant things I'm telling you about with decision making have come from the work that we've had with this team of Gail and Laura and some of our folks internally thinking about how we are understanding decision making and how we make better decisions and how we analyze other committees and decisions and soon how we can help train other people make better decisions.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Here on investments all the time. What's the probability of a 3x probably with 5x? We weren't based rate forecasting people. Most people I talked to, if I said to them, hey, what percentage of people you think walk in your office is down for a meeting just are not telling you the truth and think it's okay. Not that they're not telling the truth and think it's not okay, but they're not telling the truth and think it is okay. Most people would say none. I would have said zero before I heard this. And so we raised our base rate forecast to 10%. It's actually helped a lot because you said think about it as base rate to 10%. It should take you six or nine months to figure it out. And so one of the reasons the six-month thing happened is as you get to know people that know us, one of the questions we're asking ourselves is are we values aligned? That doesn't mean someone's bad or good. We have our set of values, other people, their values. And if our values are very misaligned, we find over the years that we're just not going to enjoy the experience, which means you won't be great partners, they won't be partners for us, and that's not good for anyone. And our values here are up on the wall in the conference rooms. It's humility, integrity, responsibility, and excellence. These are things you believe in. We believe in it for ourselves. We hold ourselves accountable to it, and we want to work with you.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, when you have someone who might be committed to fraud and they're high performing, there's no way to figure this out ex ante. You really have to have known them and watch them because they're really good at it. And if they're clinical, they're probably already in jail. But if they're high IQ and subclinical, they're probably in your office. And that's the kind of people we try to sort out. And so he took us through trying to learn how to think about this problem of sorting out people that really didn't fit for us in terms of values and sorting in people that were really good. And I think the key learning that I would share with you is this. He told us about 5% of the human population has this brain anomaly and they concentrate in areas like finance, law, entrepreneurship, politics, etc., all the power professions. And we should think about it as probably 10% of the people we deal with are going to do things that we don't like, the people I like them. We don't like them. They don't fit for our values just because of the nature of how they think and the way their brain operates, their actual physical brain operates. And so we changed our base rate forecast. We do base rate forecasting.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Part of this starts the story of how I started thinking about this. In the same fund that we did, Tezon SpaceX, we had actually, we turned out to be a Medicaid fraud. And I was just tortured by this. These were things I did. Okay, so I'm not blowing anybody. I made these decisions. And how could it be that I could make some set decisions that are just great and others they're just terrible? And in very close proximity in time. And so I actually went and found a psychologist and theologian named Galen Buckwalter who thinks about some of these questions and asks him to help me figure it out. We started thinking about who created cultural tests, help us understand people better, et cetera. And one of the things he studies is people that have a brain anomaly that they're big dollars and fire properly and clinically call these people psych bats. The reality is that I want to be careful with that word because it's got a very negative connotation. But if you watch movie free solo, you see Alex Honnell's, he just doesn't feel risky anxiety the same way that people might. And some of these folks go on to great things. Some of them can be criminals. And one of the things he pointed out to me”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Meaning, and we all are getting great information. But the reality is, we'd rather pay a higher price with more information and less risk. What we're trying to do is the entire distribution of the portfolio, the mean distribution over the right, and increase the size of the fat tail and reduce the losses. Whether we pay 1x or 2x the price, and it's a year later or two years later, and it's been de-risked substantially, doesn't really matter. The IR may be lower, the multiple cost may be lower, but the reality is the risk we took was a lot lower. And so the investment itself, the risk reward dynamic was much better. We're trying to balance a really great asymmetric risk reward equation.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“We've been doing this for a long time. We've almost backed it up by accident because we're running our venture strategy off our own balance sheet. We learn a lot about companies by writing small checks and just spending time with them. We learn over the years that our best management teams, pretty much everyone misses forecast because people are overly optimistic and they should be these entrepreneurs. You miss more than 25%. It's probably a problem. More than 30%, it is a problem. You probably never recover. We have data that goes back 25 years looking at some of this stuff. It's a huge pool of data. We send a team of people out to a company. They're very highly qualified professionals. They're obviously feeding back information on our investment process. And we get to know that company really well inside. And by the way, they get to know us because it's a two-way relationship. And once that happens, you solidified a relationship. We built it information advantage. We can make a much better decision about the next check. It may come in at a higher price. We've had people ask us, does it seem fair to you that you're doing all this work and then you're actually creating some of the conditions that make your price higher the next time around? This stuff used to be free. We do it because we're providing valuable service to our companies. We want to make the world better. The companies make the world better. That's how we build.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“And the answer was we are going to be using the Ebola, but early stage companies really need is revenue. And so if our growth fund's doing scale and we're helping fill scale, what early stage companies need is revenue, we're to create a system that helps early stage companies get revenue from these large corporates and build relations with large corporates or BizDeaf in which they have done a great job of and the team there has done a great job of. It's been really great. We brought a partner in Richard Tate to help us do that in the venture fund and it's worked really well. We're just expanding the team out to working more verticals now and apply the same ideas and the same methodology across the verticals. We're investing now in consumer and I'll call it PartTech SpaceX blockchain security technology almost anything you can conceive of, but it fits inside of our rubric of prototropic resilient and then we can add that operationally.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Figure out, oh man, you've got things like Uber. And then another important chapter is my partner, John Schulkin, create an opportunity here for the firm to start a dedicated venture fund in food tech, retail tech sustainability in partnership with Starbucks. And he's got four or five different corporate clients there. And we talked about what we should do.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Guide and looked at our whole portfolio and said, Hey guys, I just got to point out to you that the technology stuff where you're doing non-control investing and you're helping companies scale. Looks like a lot of fun, Jerry's a lot of return, and it's good for the world. And there's other stuff over here. It's not very fun. Generates a bunch of losses. And not so sure we're making a difference. And Rest was like, okay, thanks for pointing that out pretty smart. We were smart enough to know he was right. And so we just by fund three had gotten rid of the old bio business. Had to change some people out and our core group continued John, Tim, myself, Juan, we continued together and started scaling our fun business in and around this idea of really more later stage growth equity technology. I think one of the first firms in the world to do that. Later stage stuff, the early stage investing was still being done off the balance sheet in a vehicle of valor R&D because our clients at the time, it wasn't a thing yet, people did not classify it. So we were community that scene series A early stage venture off the balance sheet. By the time we get to fund four, the clients...”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Business in our early days in the fun business, in the same fund, we had this balance sheet vehicle running called Valor RD that was doing venture. SpaceX was in that back in 2008 2000s. We wanted to put Tesla in that side vehicle, that partner's our capital. And we went to our advisory board for fund one and said, we want to make this investment. We need to improve it. And they were like, no, no, put it in the fund. So it actually ended up in fund one and joined the board a few years later. That's how it all started. But you also did buyouts, traditional buyouts of value-based companies in the same fund. So we have these two things going on at the same time as technology investment strategy that's really like, and then buyout turnaround strategy, which we're used to doing from the old days. And the next chapter would be that going to the fun business and having both things at the same time. My partner's Tim Watkins, who is engineering genius guru, who did a lot of work at Tons and Spaces and other places, John Shilken, who's co-president of the firm now, has been with us for 20 plus years. These guys are both great at operations and investments. And then we had another partner join, who's co-president for me, Juan Sabaterra, in Fund 2, who is awesome. It's a former Goldman Sachs.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sold our first companies in the early 2000s and decided to go into the fun business because you call them fundless deal sponsors, but we were young guys trying to buy companies back then. There was no word for it. And we had a group of team of people together that I had really grown to care for. And it felt like a fellowship to us, most enjoyable times of my career when working on something you really care about. You think matters the world with people you respect. It's the best. It's awesome. And we have that. We have that now. We had it then. So we want to keep the band together, so to speak. And it seemed the best way to do that was with a fund because we had people join different times, versus capital, quarks, et cetera. So it was just to create a future for the team. And it's always been for us 50-50, whether we go be entrepreneurs or continue the fund business. And now we're scaling the fun business, so it makes sense to keep doing that. But when we first started, it was really like you go buy a company or build another company, start a company, or should go into the fun business. We went to the fun business, kept our operations capacity that we had from the early days with us, and then started deploying that into companies.”
2022-04-05 · Invest Like the Best · Antonio Gracias - Pro-Entropic Investing - [Invest Like the Best, EP. 271] · IDENTIFIED FROM THE TRANSCRIPT · source