Transcript
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So I think that's a very interesting and quite
terrifying biodefense problem that I've been
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thinking a little bit about with some of our
companies, recently, which is if cyber was,
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like, the recent iteration of, like, the the
kind of, quote, unquote, fashionable way of
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attacking adversaries, and maybe more
traditionally, that was actual physical
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weapons.
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I think the next iteration of that is is
probably using bioweapons, and I think that
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the, way that plays out is using AI.
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I think AI's ability to create new protein
structures that can evade traditional vaccine
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really powerful and a little bit scary.
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There's a very, very linear correlation between
reporting cadence and performance of the
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company.
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As companies, tend to go down hill, reporting
tends to get soppier.
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It isn't as extensive.
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It isn't as frequent.
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We can generally tell.
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We've seen enough companies now to tell from
those signals.
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You mentioned founder breakups.
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It's arguably the number one issue for seed
stage startups that fail.
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How does a company go about navigating a
founder break?
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You decided to drop out at the age of 20 from
Oxford after getting accepted into Peter
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Thiel's fellowship.
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Tell me about that decision.
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Yeah.
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My family didn't have, like, a history of going
to Oxford every, every generation.
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And so it was a pretty kinda meaningful
decision for me.
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But but at the same time, it was a supernatural
decision, not least because the Thiel
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Fellowship has obviously got an incredible
reputation.
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But I think kinda more importantly, you know, I
was at the right time for that decision, and I
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it's definitely been among the most impactful
decisions, if not, top 2 or 3 most impactful
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decisions of of my life to do.
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There's only been a couple 100 Thiel Fellows
and already some incredible breakouts like
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Ethereum, OyoRoom, Scale AI, Polkadot, to to
name a few.
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What do you attribute to the success of the
Thiel Fellowship?
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Why why is there such a high hit rate?
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It's a maybe a mindset or mentality of the kind
of person who has not only taken the initiative
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to build a company during college, but also and
to to do so, you know, with some traction or or
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some kind of early success.
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But 2, to kind of have the, I guess, the
internal drive to drop out and, pursue this
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full time against all of the social pressures
and all of the social norms.
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I I think that takes a certain kind of
attribute in in terms of personality.
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And I think that combined with, frankly, the
the Teal Foundation and Teal Fellowship's
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ability to find those people and bring them
together, I think that combination is is is is
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pretty unique.
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And I think the fact that it hasn't scaled in
some ways is is the is the feature.
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It's by design, and I think it very much
contributes to such a high hit rate of success.
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I think that the, you know, the the the kind of
more formulaic programs that are more scaled,
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ultimately, will have a higher number of
unicorns on a number basis or a higher number
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of successful outcomes on a number basis.
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But the the percentage hit rate, likely won't
be as high even though you have more shots on
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goal.
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I think there's a couple of factors there.
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One is the teal fellows are figuratively
burning the boats.
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They're dropping out of college in order to
pursue something, so they're all in in that
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kind of focus.
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I think the second one is obviously, you know,
it's it's picked from tens of thousands of
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applicants, and, you know, these are, like, the
the elite the most most elite, the highest IQ
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people.
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And then, of course, I think the Thiel
Fellowship itself has become a sort of signal
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or a self fulfilling prophecy.
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Once you're in the Thiel Fellowship, you're
able to raise a lot of capital, and then that
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obviously significantly increases the chances
of success.
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Yeah.
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I definitely think there is some self
fulfilling, kinda attributes to it.
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The same as you have with any kind of, like,
elite community or or or some sort of, you
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know, high profile, kind of, you know,
community or or or in in many other cases,
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awards and things like that.
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I definitely think that contributes to it.
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And I think as the fellowship evolves, the
concept of dropping out of university to start
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a company is still rare, but not as rare.
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But I think that that you'll see a complete,
kind of, refocus on on big ideas, which I think
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is is critically important.
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You mentioned portfolio construction.
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You have strong, strong views on portfolio
construction for seed stage.
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What are your views on how portfolio should be
constructed?
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I guess why we've chosen to think about things
the way we have at TBC.
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You know, our our view is that, with a slightly
larger team than your average seed fund at 8
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people, we have an ability to, you know, work
with founders in a a more proactive way than
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maybe you could do if you were 2 people.
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And so that enables us to build, you know,
strong relationships with our founders in an in
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an operating capacity that, you know, really
gives us a few different advantages, but
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hopefully adds commensurate value back to the
founders in in what they're able to extract
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from that in in terms of the kind of two way
trade or the two way dialogue.
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And so for us, our advantage in doing that is,
is something that needs to our ability to have
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a more concentrated portfolio construction,
which is our kind of information asymmetry.
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It's how, how how can you make a a kind of
comprehensive decision in the rosiest picture
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of what a founder's story is going to be, which
is your first investment decision.
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The first time you ever meet a founder,
regardless of the context of the situation, it
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will ultimately be the most packaged, and best,
picture of the business, which is ultimately
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the job of a good founder.
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And so your first investment decision probably
will it may be your best, but it statistically
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is likely to be your worst from, like, a data
to, kind of information perspective.
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And so, you know, the the, ability to leverage
a larger team to have an extended diligence
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process post investment and then double down on
winners is something we feel very, very
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strongly about.
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And so our construction is relatively
concentrated to seed stage.
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We do about 30 companies every fund cycle.
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The ownership at entry, which we can also talk
about in a second for us is is 8 to 10% at
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entry, which is slightly lower than your
conventional 20% of your leading rounds that
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you'd see in most funds.
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You mentioned that you have an informational
advantage as an
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existing investor.
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Tell me about that informational advantage.
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Yeah.
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I think, this really comes down to your
approach post, investment for portfolio
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success.
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So I think you kind of really have 3 scores of
thought there again or or 3 strategies there.
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Some are highly diversified seed firms, who
have limited resources, but they wanna get a
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large base of companies.
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They probably aren't spending huge amounts of
time working with their companies day in, day
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out.
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There's just a resource constraint in being
able to do so.
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And so I think that limits your ability to, to
have information and thereby likely means that
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you should be spending the bulk of your dollars
in your initial investment and try and optimize
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for the lowest possible price.
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I think that's kind of gotta be the strategy
there.
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I think, the other end of that is a kind of a
multistage firm who is using seed stage as a
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kind of an option on supporting companies.
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Whether they take a board seat or not is is
kind of bifurcating there, but let's say they
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do take a board seat.
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The relationship tends to be relatively
governance heavy.
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Right?
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It's like I I come to my board meeting.
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I'd like to understand what's going on, and I'd
like to help you make a couple of key
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decisions, and that's, like, that's quite high
level and quite specific to some very, very key
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decisions.
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If they choose not to take a board seat, they
probably have that same lack of informational
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advantage because, they're really ultimately
waiting for a large round and using their
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initial investment to kinda get them in the
door.
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And then I think you have kind of a strategy in
the middle, which is if you can come up with a
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mechanism to have more resources, you can, have
a slightly more concentrated portfolio, but you
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can spend significantly more time with those
companies outside of board meetings.
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And I really emphasize outside of board
meetings, So I think board meetings are kind of
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the default place where VCs interact with
companies and founders.
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But I think they are probably the worst place
to get, the under into the real kind of bones
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of what's going on at the company.
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So, essentially, it's really a two way street.
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Your informational advantage comes from being
involved with a company and helping, and the
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company gets that as a value from you as an
investor.
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Correct.
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That's exactly how I view it.
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It has to be a two way street.
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It has to be organic.
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You know, the information requests aren't
something that I found at once.
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I've been on that side of the table.
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Every time I get asked for information, it
distracts from me doing my core job.
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But if I'm being asked for information as a
mechanism for me to be able to, let's say,
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receive an introduction or something that is
relevant and something that furthers my goals,
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that kind of two way street means that I'm
very, very willing to, play ball and and and
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give that information because it's value added
to me to have that engaged relationship.
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To play devil's advocate, how do you scale this
value added strategy?
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And that's a super valid question.
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I think it it ultimately doesn't scale
infinitely, e g, if you continue to to put the
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same amount of effort into every company on a
kind of, evenly distributed basis, that becomes
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very challenging.
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We as a firm, twice a year get together, and we
actually have all of our team, blindly stack
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rank, our portfolio companies on a series of
different metrics that give us a sense of the
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time input, to progress of the company and how
they continuously are performing.
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If a company, is stopping reporting, is being
less communicative, is ultimately growing
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slower, and we don't think we're gonna allocate
significant follow on dollars to that company,
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we do make a conscious decision to reduce the
cadence and, volume of people on our team that
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are working with that company.
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That's not to say that we abandon them or don't
pick up the phone, but, ultimately, we are in
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the business of trying to work out which
companies are going to succeed and allocating
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our resources accordingly.
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And thereby, we have to be conscious despite
having an 8 person team as to how we do that.
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Now the dirty secret of VC is that every VC has
their favorites and and their less favorites
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and and don't always spend an equal amount with
with every startup.
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That's ultimately the business model that
venture capital, firms have to be upfront
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about.
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It it is a game where some companies, will
ultimately return the vast majority of the
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capital and others will not.
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And I think as long as that's kind of front and
center, I think the expectation needs to be, if
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your if your company is struggling and you need
our help, we will be there.
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But, ultimately, our productivity is obviously
going to go towards the companies that are
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progressing the best and the fastest and who
are ultimately on that kind of two way journey
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with us, who are playing, you know, the the,
the game that we are playing in terms of we
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need the communication.
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We need the consistency of reporting, etcetera,
to be able to do that.
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And I think there's a very, very linear
correlation between reporting cadence and
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performance of a company.
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As companies, tend to go downhill, reporting
tends to get sloppier.
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It isn't as extensive.
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It isn't as frequent.
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We can generally tell.
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We've seen enough companies now to tell from
those signals.
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When we were last chatting, you mentioned that
you tell every founder, text me with good news,
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text me with bad news.
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How do you get founders to open up and text you
with bad news?
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It's really nuanced.
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Right?
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And you can't expect to see everything in real
time.
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But I do really believe that, the quality of
your relationship with the founder and
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explicitly that not being in a board setting, I
think is really important.
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Like, we really do invest the time to try and
build that relationship.
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We do work with founders to set those micro
goals that aren't the macro goal of the
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company, but what are the specific things
you're trying to achieve in working back from
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your next financing round or for your next
milestone.
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And I think by being integrated into that flow,
I think it's easier to see those things.
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Of course, we get blindsided the same way as
other people get blindsided.
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It's not to say that we see everything.
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But I think even if we see 50% more, that's a
significant difference for us in our ability to
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plan how to, 1, allocate resources and to
support those companies in advance.
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And I think making it clear early on that we
can only help you if we find out before it's
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too late.
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For example, if you're having a really big
problem with your cofounder and you would like
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to ways with your cofounder, knowing that
before you're getting into a legal dispute or
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before you're trying to figure, you know,
figure out how to transition them out is
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critically important.
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We can only help you if we know that in
advance.
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I think it's just things like that, encouraging
that behavior early on and being hugely
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transparent as well.
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One thing I think VCs do quite badly in general
with managing expectations and things like
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follow on, things like decision to do pro rata,
all of those types of decisions by being super,
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super candid and transparent early on as to how
we make decisions, why we generally don't do
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bridges, even if they seem like a great deal
unless our information tells us that it is a
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great deal, things like that.
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We don't do things just for signaling, which I
think a lot of people do.
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And I think being really transparent around
that whole process and how we think about those
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things and our philosophy is really important.
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You mentioned founder breakups.
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It's arguably the number one issue for seed
stage startups that fail.
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How does a company go about navigating a
founder breakup?
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Thank you for listening.
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To join our community and to make sure you do
not miss any future episodes, please click the
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00:12:57,454 --> 00:12:59,074
follow button above to subscribe.
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It's a really, challenging and nuanced
situation in in every case by case.
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So I think it's it's hard to generalize.
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But what I would say is getting to the kind of
core of the motivations on on both sides and
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and cutting through those emotions to, what is
the most productive thing for the vision of the
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company?
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Is it a vision disburgence?
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Right?
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So is it, I I think the company should go in
this direction.
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You you believe the company should go in this
direction.
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That's a very different situation to we just
can't get on and communicate anymore.
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That's a communication breakdown or, you know,
a secondary, you know, should we be taking a
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secondary?
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00:13:34,070 --> 00:13:35,990
Should we there's all kinds of nuances to that.
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I think it's getting to the knob of what is the
problem.
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Is it we're in the wrong role?
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That often happens.
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00:13:40,870 --> 00:13:45,269
The the CEO and the CTO, there's a friction or
in chief scientific officer and the CEO.
243
00:13:45,269 --> 00:13:48,235
There's some friction around, who's in that
role.
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00:13:48,535 --> 00:13:50,934
And there's obviously always some egos at play.
245
00:13:50,934 --> 00:13:53,514
You have to have a certain amount of ego to be
a founder.
246
00:13:53,735 --> 00:13:57,735
And so I I think, it's really getting to the
core of that and then working backwards from
247
00:13:57,735 --> 00:13:58,054
that.
248
00:13:58,054 --> 00:13:59,014
How do we solve that?
249
00:13:59,014 --> 00:14:00,535
Is it a complete breakup?
250
00:14:00,535 --> 00:14:01,889
Is it a move in role?
251
00:14:01,970 --> 00:14:06,610
Is it a change in equity or compensation that
there's always some way to solve it?
252
00:14:06,610 --> 00:14:11,009
And I think, not moving to lawyers immediately
and not moving to kind of a toxic situation
253
00:14:11,009 --> 00:14:12,470
immediately is really important.
254
00:14:12,690 --> 00:14:17,225
And I think having a mediator who is, somewhat
unbiased is really important for that.
255
00:14:17,225 --> 00:14:18,904
There's a lot of funds in the market.
256
00:14:18,904 --> 00:14:24,024
How would you explain to the LP or allocator
community TVC source of alpha?
257
00:14:24,024 --> 00:14:25,784
It's a combination of a few different things.
258
00:14:25,784 --> 00:14:28,184
I I think it's hard to kinda point to just one
thing.
259
00:14:28,184 --> 00:14:31,839
I would say the first thing I think very
importantly is is where we choose to focus.
260
00:14:31,839 --> 00:14:37,519
I think, there is an underemphasis on a thesis
driven investing in in in venture.
261
00:14:37,519 --> 00:14:42,799
I think over the years, venture has become
relatively concentrated into a few different
262
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categories.
263
00:14:43,199 --> 00:14:47,585
So white collar enterprise and and b to b
software, consumer Internet.
264
00:14:47,585 --> 00:14:52,465
We very proactively decided to be quite
thematic and face oriented in how we choose to
265
00:14:52,465 --> 00:14:52,865
invest.
266
00:14:52,865 --> 00:14:55,184
And I think that is a source of alpha in
itself.
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00:14:55,184 --> 00:15:00,625
I think, staying close to what, the roots of
venture capital actually are, I.
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E.
269
00:15:00,784 --> 00:15:04,230
Investing in ambitious people, building very
innovative things.
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I think that's really important.
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00:15:05,430 --> 00:15:10,309
And I know that sounds quite trivial, but I do
think we've kind of gotten into a cycle of an
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00:15:10,309 --> 00:15:16,745
ability to make money, by, by using existing
technological, you know, progress, and and
273
00:15:16,745 --> 00:15:22,184
applying spend on marketing dollars or things
like that to generate returns.
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00:15:22,184 --> 00:15:26,024
And I don't know if that necessarily is kind of
the core of venture capital or what will
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00:15:26,024 --> 00:15:26,524
sustain.
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00:15:26,825 --> 00:15:32,639
And so for us, that is, spending a lot of time
forming points of view and working out, where
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00:15:32,639 --> 00:15:36,720
the right communities of both investors and
founders are within categories that we think
278
00:15:36,720 --> 00:15:37,279
are interesting.
279
00:15:37,279 --> 00:15:42,080
So for us, we think we're at a a very, very
interesting pivotal moment in health care,
280
00:15:42,399 --> 00:15:47,715
system right now, around personalization, data,
and the applications of AI and computational
281
00:15:47,855 --> 00:15:54,014
biology in reducing the risk of of operating in
the health care industry whilst increasing the
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00:15:54,014 --> 00:15:58,269
return profile because you are driving better
outcomes at lower costs for people.
283
00:15:58,269 --> 00:15:59,649
So I think that's really important.
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And then we secondarily, thematically believe,
you know, on that on that point that the
285
00:16:04,669 --> 00:16:07,970
physical world around us is gonna go through a
bit more of kind of an industrial
286
00:16:08,029 --> 00:16:12,934
transformation or some sort of reindustrialized
process where everything will both become more
287
00:16:12,934 --> 00:16:13,414
sustainable.
288
00:16:13,414 --> 00:16:18,075
And so I think there's a very important moment
in time where things need to be efficient,
289
00:16:18,615 --> 00:16:25,039
cheap, low cost at the same time as being more
sustainable, which we firmly believe that there
290
00:16:25,039 --> 00:16:28,240
is an opportunity in with computational biology
and chemistry and AI.
291
00:16:28,240 --> 00:16:32,559
You mentioned a couple categories that could be
categorized as deep tech, and and, obviously,
292
00:16:32,559 --> 00:16:36,559
there's a lot of opportunity there, but a lot
of it takes a lot of capital.
293
00:16:36,559 --> 00:16:41,705
How do you make sure that your portfolio math
makes makes sense in order to invest in these
294
00:16:41,705 --> 00:16:42,684
deep tech startups?
295
00:16:42,745 --> 00:16:47,225
The capital intensity and also the time
duration are probably the 2 biggest kind of
296
00:16:47,225 --> 00:16:51,465
risk factors or criticisms that people make in
in in in investing in deep tech, and I
297
00:16:51,465 --> 00:16:53,485
certainly think that has been the case
historically.
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I would say, we can simulate a lot of things,
especially things that are not too hardware
299
00:17:00,829 --> 00:17:02,029
heavy in advance.
300
00:17:02,029 --> 00:17:06,289
So I think there is a huge advantage right now
in the kind of intersection of computational
301
00:17:06,429 --> 00:17:11,184
power or applied AI with biology and chemistry
specifically in in those kind of physical
302
00:17:11,184 --> 00:17:16,144
world, aspects of of deep tech, and also to a
certain extent within the health care system on
303
00:17:16,144 --> 00:17:17,505
the bio side as well.
304
00:17:17,505 --> 00:17:24,000
So I think that there is a multiyear trial and
error r and d process in some ways that can can
305
00:17:24,000 --> 00:17:28,480
get avoided, through these abilities to
simulate things, at scale.
306
00:17:28,480 --> 00:17:30,960
And I think that that will only get better and
easier.
307
00:17:30,960 --> 00:17:35,055
And I do think that's, like, 3 to 5 years of
the journey and quite a lot of expense and risk
308
00:17:35,295 --> 00:17:36,975
can be automated pretty significantly.
309
00:17:36,975 --> 00:17:41,295
And you see that now also in the ability to
simulate things that are CapEx heavy, which
310
00:17:41,295 --> 00:17:44,015
also take a lot of trial and error, which I
think is really important.
311
00:17:44,015 --> 00:17:45,055
So I think that's the first thing.
312
00:17:45,055 --> 00:17:47,634
I think you can compress those cycles
significantly.
313
00:17:48,200 --> 00:17:51,019
And the second thing is the outcomes can just
be bigger.
314
00:17:51,319 --> 00:17:55,720
I think, people always underwrote to the
unicorn valuation, like the $1,000,000,000 kind
315
00:17:55,720 --> 00:17:56,779
of magic number.
316
00:17:56,920 --> 00:18:03,265
I think you will start to see many deca
unicorns beyond, using, deep tech or or or or
317
00:18:03,265 --> 00:18:08,304
kind of a more kind of transformative IP rich
things where they're they are kind of either
318
00:18:08,304 --> 00:18:13,105
winner takes all markets or oligopolies that
can be close to kind of winner takes all
319
00:18:13,105 --> 00:18:16,200
markets where you will see just
transformatively big outcomes.
320
00:18:16,200 --> 00:18:20,680
You've obviously already seen it in your, you
know, SpaceX's opening eyes, x a i's, etcetera
321
00:18:20,680 --> 00:18:21,000
of the world.
322
00:18:21,000 --> 00:18:24,519
And and there there will be a long tail of a
lot more of those companies over the coming
323
00:18:24,519 --> 00:18:24,920
years.
324
00:18:24,920 --> 00:18:28,539
So I think you can make the math work by just
underwriting to a bigger outcome.
325
00:18:28,994 --> 00:18:33,335
But I also think that the dilution
historically, was heavy because less investors
326
00:18:33,394 --> 00:18:34,615
invested in those categories.
327
00:18:34,835 --> 00:18:39,394
I think as more and more investors start to
invest in American dynamism and a lot of these
328
00:18:39,394 --> 00:18:43,990
things that intertwine with DeepTech generally,
just by nature of what they are.
329
00:18:43,990 --> 00:18:47,690
You will see see that capital come in, and
thereby, you will see less dilution.
330
00:18:47,910 --> 00:18:50,309
Seeing a lot of excitement around defense tech.
331
00:18:50,309 --> 00:18:54,965
Do you think the time has come for defense tech
to really make venture like returns for
332
00:18:54,965 --> 00:18:55,465
investors?
333
00:18:55,525 --> 00:18:59,605
There is an enormous amount of government
funding still that maybe in the last
334
00:18:59,605 --> 00:19:03,605
administration, went pretty heavily to, like,
climate tech and things like that.
335
00:19:03,605 --> 00:19:09,384
I think you'll see a lot of that go into kind
of the American dynamism on shoring of critical
336
00:19:09,525 --> 00:19:11,019
things, to the US.
337
00:19:11,019 --> 00:19:12,240
Some of that is defense.
338
00:19:12,380 --> 00:19:16,720
Some of that is is is more kind of independence
or self sovereignty.
339
00:19:17,259 --> 00:19:21,980
But I think that you will see a huge amount
more investment there subsidized and supported
340
00:19:21,980 --> 00:19:23,200
by government funding.
341
00:19:23,259 --> 00:19:23,759
Absolutely.
342
00:19:24,345 --> 00:19:29,944
But I I see a lot of investors who were very
anti investing in defense a few years ago, to a
343
00:19:29,944 --> 00:19:34,664
certain extent anti investing in deep tech gen
generally now shifting their focus a little bit
344
00:19:34,664 --> 00:19:39,304
because it's become both more acceptable, but
also more subsidized and also more in the kind
345
00:19:39,304 --> 00:19:41,779
of, forefront of people's perspectives and
minds.
346
00:19:41,779 --> 00:19:46,500
And, obviously, this incoming administration is
all about self sovereignty of the US and and
347
00:19:46,500 --> 00:19:48,500
bringing things back to being produced here.
348
00:19:48,500 --> 00:19:52,359
And so I think that, you know, that is gonna
have to come with a level of subsidization.
349
00:19:52,580 --> 00:19:57,704
It labor is just more expensive here, But I
think the applications of AI and robotics will
350
00:19:57,704 --> 00:19:59,164
reduce that cost significantly.
351
00:19:59,544 --> 00:20:02,065
And so what I think kind of start to equitize
that a little bit.
352
00:20:02,065 --> 00:20:05,384
I think you've seen a similar shift in
sentiment on the LP side.
353
00:20:05,384 --> 00:20:09,384
If you're an LP side if you're an LP today and
you're trying to invest in venture and the
354
00:20:09,384 --> 00:20:11,950
large funds, you really can't avoid defense
tax.
355
00:20:11,950 --> 00:20:15,009
I think some of those policies have been
changing really in real time.
356
00:20:15,950 --> 00:20:21,869
When when we last spoke, you mentioned that
most VCs are momentum investors, but TVC is not
357
00:20:21,869 --> 00:20:23,009
a momentum investor.
358
00:20:23,150 --> 00:20:24,190
Unpack that for me.
359
00:20:24,190 --> 00:20:32,035
It comes down to your ability to, pick areas
not based on what is hot right now, but what
360
00:20:32,035 --> 00:20:33,154
could be hot in future.
361
00:20:33,154 --> 00:20:38,275
I I think that's, it it's trivial, in in in in
what it sounds like.
362
00:20:38,275 --> 00:20:43,640
But but in reality, it takes a lot of work,
forming points of view and not looking at what
363
00:20:43,640 --> 00:20:48,200
the market is doing, you know, and and
informing those points of views with a
364
00:20:48,200 --> 00:20:52,920
fundamental first principles approach is really
kind of counterintuitive to what we've seen
365
00:20:52,920 --> 00:20:58,505
over the last 10 or 15 years in venture, where
I think the real innovation happened, for the
366
00:20:58,505 --> 00:21:01,065
last kind of decade or so of the Internet era.
367
00:21:01,065 --> 00:21:06,924
A lot of that real innovation happened in the
prior decade with the cloud or the new cloud
368
00:21:07,224 --> 00:21:09,384
and the app store and the move to mobile.
369
00:21:09,384 --> 00:21:15,200
Like, a lot of those things enabled,
significant convenience improvement for your
370
00:21:15,200 --> 00:21:20,160
average person's life, which generated a huge
amount of momentum behind things that could
371
00:21:20,160 --> 00:21:21,940
capture parts of that value stack.
372
00:21:22,000 --> 00:21:25,704
I think the interesting thing about that is if
if we look at the most fundamental industries
373
00:21:25,704 --> 00:21:33,384
in the US and further afield, things like, the
production of what we eat or, the things that
374
00:21:33,384 --> 00:21:37,464
drive the manufacturing of all of the goods
that we consume with a lot of these physical
375
00:21:37,464 --> 00:21:42,849
world things and to a certain extent health
care, but but more specifically, these physical
376
00:21:42,849 --> 00:21:50,289
world areas, a website or mobile app may be
improved people's businesses a few percent or
377
00:21:50,289 --> 00:21:51,170
maybe even 10%.
378
00:21:51,170 --> 00:21:55,054
But they didn't improve them 100 of percent
like you saw in the kind of more of the white
379
00:21:55,054 --> 00:21:56,434
collar service industries.
380
00:21:56,815 --> 00:21:56,974
Right?
381
00:21:56,974 --> 00:22:03,134
So for someone, you know, who was a farmer in a
field, you know, the web era didn't it didn't
382
00:22:03,134 --> 00:22:04,255
really impact them.
383
00:22:04,255 --> 00:22:10,269
Whereas the computational biology era or the
applied AI and robotics era where their jobs
384
00:22:10,269 --> 00:22:16,130
are getting, you know, much more, high margin,
and they are able to kind of elevate themselves
385
00:22:16,190 --> 00:22:22,085
and use robots for the lower margin things or
use new products to ensure that crops are
386
00:22:22,085 --> 00:22:29,044
protected or other things like that, that is a
huge multi 100% improvement on the efficiency
387
00:22:29,044 --> 00:22:29,924
of running that business.
388
00:22:29,924 --> 00:22:32,184
And that I think drives real innovation.
389
00:22:32,599 --> 00:22:35,640
I think we're about to see that in the same way
as in white collar industries.
390
00:22:35,640 --> 00:22:40,059
We saw that with websites and and mobile apps
and software platforms, etcetera.
391
00:22:40,440 --> 00:22:42,220
You mentioned computational biology.
392
00:22:42,920 --> 00:22:46,535
What are the opportunities that you see in
computational biology today?
393
00:22:46,535 --> 00:22:51,575
Both computational biology and chemistry are
very interesting now that AI is getting so good
394
00:22:51,575 --> 00:22:52,775
at simulating things.
395
00:22:52,775 --> 00:22:57,335
Let's take, let's take the the kind of the the
the health care system to begin with.
396
00:22:57,335 --> 00:23:01,559
We give someone a vaccination or we give
someone a therapeutic by putting something that
397
00:23:01,559 --> 00:23:05,259
is foreign into the body and having it work its
magic, quote, unquote.
398
00:23:05,640 --> 00:23:08,279
I think that's that's that's not the future of
medicine.
399
00:23:08,279 --> 00:23:13,000
I think the future of medicine is getting the
the body to produce things it already does
400
00:23:13,000 --> 00:23:19,944
every day, but on demand with the right payload
or the right, you know, dosage, you know, on
401
00:23:19,944 --> 00:23:20,265
demand.
402
00:23:20,265 --> 00:23:20,585
Right?
403
00:23:20,585 --> 00:23:25,464
So I think the our ability to interface with
our core critical intelligence systems, the
404
00:23:25,464 --> 00:23:27,784
brain is not the only intelligent organ in the
body.
405
00:23:27,784 --> 00:23:32,059
Our immune system and our ability to fight
foreign things and read and write what's coming
406
00:23:32,059 --> 00:23:36,160
into the body is is not equally as intelligent,
but is extremely intelligent.
407
00:23:36,299 --> 00:23:42,539
And our ability to interface with that and then
apply AI to personalize that, that is like an
408
00:23:42,539 --> 00:23:46,894
incredible move forwards and and shift in in
our ability to do things, and it's a lot
409
00:23:46,894 --> 00:23:48,174
cheaper for the health care system.
410
00:23:48,174 --> 00:23:49,954
So that will be, I think, very transformative.
411
00:23:50,015 --> 00:23:51,474
That's kinda probably one example.
412
00:23:51,615 --> 00:23:57,134
Then maybe more in the physical world, a lot of
the kind of commoditized products that, you
413
00:23:57,134 --> 00:24:01,170
know, we we we we consume every day right now
that aren't sustainable.
414
00:24:01,390 --> 00:24:03,170
Take surfactants, for example.
415
00:24:03,630 --> 00:24:10,430
Surfactants are in every detergent, cosmetics
products, sun you know, sunscreen, food color,
416
00:24:10,430 --> 00:24:11,890
and everything around us.
417
00:24:12,029 --> 00:24:16,464
It's not sustainable, and it hasn't really been
innovated on for a long time, but effectively,
418
00:24:16,464 --> 00:24:20,625
in the most simplistic terms, kinda like the
binding agent that's there.
419
00:24:20,625 --> 00:24:26,224
Redoing things like that with new,
methodologies computationally and ensuring that
420
00:24:26,224 --> 00:24:31,359
it is both low cost and cheaper, but also
sustainable, that kind of stuff, we're gonna
421
00:24:31,359 --> 00:24:35,519
see kinda day in, day out, not with a green
premium, but at, like, cost parity or or lower
422
00:24:35,519 --> 00:24:36,259
than cost.
423
00:24:36,399 --> 00:24:41,279
And and redoing the physical world around us
with with with that overlay, I think, is
424
00:24:41,279 --> 00:24:45,674
really, really interesting and will, you know,
be hugely important for things like preventing
425
00:24:45,674 --> 00:24:49,755
wildfires and hurricanes and things that happen
right now, which are deadly and devastating for
426
00:24:49,755 --> 00:24:50,234
people.
427
00:24:50,234 --> 00:24:53,755
To borrow Peter Thiel question, what do you
believe about venture capital that very few
428
00:24:53,755 --> 00:24:54,575
others believe?
429
00:24:54,634 --> 00:24:54,954
Gosh.
430
00:24:54,954 --> 00:24:55,914
That's a tough question.
431
00:24:55,914 --> 00:25:02,759
I think whether very few others believe this or
maybe I'm packaging it slightly differently.
432
00:25:03,220 --> 00:25:11,945
I I think very few people believe, that the
current state of venture capital is not really
433
00:25:11,945 --> 00:25:16,445
investing in innovation, but is instead
investing in ideas that have already paid out.
434
00:25:16,585 --> 00:25:22,265
I think the kind of contrarian perspective that
I will hammer home forever is that, the rate of
435
00:25:22,265 --> 00:25:28,339
innovation is so rapid right now, and
everything that we see and do is so
436
00:25:28,339 --> 00:25:31,940
significant, in terms of the rate of change
right now.
437
00:25:31,940 --> 00:25:36,740
But the things that we thought things that
maybe took 10 years to play out last cycle, I
438
00:25:36,740 --> 00:25:39,859
think, are playing out in in months and maybe
years right now.
439
00:25:39,859 --> 00:25:46,015
And so if you don't take a very, very thesis
driven approach to figuring out what is going
440
00:25:46,015 --> 00:25:49,775
on, in the world and where the opportunities
are, I think you get left behind.
441
00:25:49,775 --> 00:25:54,089
I think we're gonna see the biggest shift in
venture capital that we've seen probably at
442
00:25:54,089 --> 00:25:58,569
least, since I've been even thinking about the
concept of venture capital and probably even
443
00:25:58,569 --> 00:26:01,690
since I've been thinking about the concept of a
company and building a company and
444
00:26:01,690 --> 00:26:06,970
entrepreneurship in the next few years, not
because of a reallocation of capital by LPs and
445
00:26:06,970 --> 00:26:11,404
allocators, but based on just the relevance of
the things that people are focusing on and how
446
00:26:11,404 --> 00:26:12,605
rapidly that will shift.
447
00:26:12,605 --> 00:26:15,345
That's my my big kind of bet and thesis.
448
00:26:15,404 --> 00:26:20,044
What's an example of something that some people
might think is gonna be 5, 10 years away that
449
00:26:20,044 --> 00:26:21,825
you think may develop in 2025?
450
00:26:22,299 --> 00:26:30,059
So I think that's a very interesting and quite,
terrifying, biodefense, problem that I've been
451
00:26:30,059 --> 00:26:35,705
thinking a little bit about with some of our
companies, recently, which is, I think if if
452
00:26:35,705 --> 00:26:40,424
cyber was like the recent iteration of, like,
the the kind of quote unquote fashionable way
453
00:26:40,424 --> 00:26:46,105
of of of of of attacking adversaries and maybe
more traditionally that was actual physical
454
00:26:46,105 --> 00:26:50,180
weapons, I think the next situation of that is
is probably using bioweapons.
455
00:26:50,720 --> 00:26:54,400
And I think that the, way that plays out is
using AI.
456
00:26:54,400 --> 00:27:00,340
I think AI's ability to create, new protein
structures that can evade traditional vaccines,
457
00:27:01,035 --> 00:27:04,734
is is really powerful and a little bit scary.
458
00:27:05,195 --> 00:27:10,095
And I think that it will it will take a
reframing of how we both build, biodefense
459
00:27:10,315 --> 00:27:16,180
capabilities, but just generally how we build
vaccines and therapeutics to this arming the
460
00:27:16,180 --> 00:27:21,640
body in a personalized way with what the body
already does right now extremely effectively.
461
00:27:22,019 --> 00:27:25,640
That that play out, I think, will happen very
fast.
462
00:27:26,019 --> 00:27:30,404
It's scary for the world, but I think enough
smart people are starting to think about that.
463
00:27:30,484 --> 00:27:34,404
That I think that some of the smartest minds in
the world who maybe are currently working on
464
00:27:34,404 --> 00:27:37,125
medicine, maybe working on biodefense pretty
soon.
465
00:27:37,125 --> 00:27:43,380
And I think that's a pretty, exciting thing if
you're ahead of the curve and a terrifying
466
00:27:43,380 --> 00:27:46,900
thing if you ignore it, that that is coming
down the pipe right now.
467
00:27:46,900 --> 00:27:50,580
What would you like our audience to know about
you, about TVC, or anything else you'd like to
468
00:27:50,580 --> 00:27:50,900
share?
469
00:27:50,900 --> 00:27:55,674
Anyone who's trying to solve a very, very big
problem that's challenging to solve, the ones
470
00:27:55,674 --> 00:27:58,714
that thought partner in doing so absolutely
should come and talk to us.
471
00:27:58,714 --> 00:28:00,154
We're not scared of big ideas.
472
00:28:00,154 --> 00:28:01,355
We're willing to take risks there.
473
00:28:01,355 --> 00:28:03,134
The whole point of venture is taking risk.
474
00:28:03,755 --> 00:28:11,630
And for me, you know, I I personally am very,
very excited by, things that, you know, are are
475
00:28:11,630 --> 00:28:17,650
are obvious big things that are around us that
people think are so established and incumbent
476
00:28:17,869 --> 00:28:19,789
that no one should dare tackle them.
477
00:28:20,029 --> 00:28:24,904
Tackling those problems with a new perspective
as to why that, you know, why that should be
478
00:28:24,904 --> 00:28:28,184
changed, with an approach that is is very first
principle.
479
00:28:28,184 --> 00:28:32,424
That's that's always exciting to me, and I'm
always down to have that conversation, to think
480
00:28:32,424 --> 00:28:34,105
about how that can be best to be financed.
481
00:28:34,105 --> 00:28:35,464
Nick, appreciate you jumping on.
482
00:28:35,464 --> 00:28:36,744
Look forward to seeing you down soon.
483
00:28:36,744 --> 00:28:37,244
Absolutely.
