ABOUT THIS EPISODE

In this episode, Startup Notes has a special guest from Silicon Valley: Antonio García Martínez. Antonio has been an advisor to Twitter, one of the first product managers on Facebook’s ad team, and the CEO/founder of AdGrok (a venture-backed AdTech startup that participated in Y Combinator and was later acquired by Twitter). More recently, he became known to a wider audience as the author of the New York Times bestseller “Chaos Monkeys”, in which he shares his experiences in the tech world and gives a behind-the-scenes look of Facebook and the supposedly ‘illustrious’ startup culture in Silicon Valley.
In this interview with Startup Notes, Antonio makes a deep dive and talks about what the culture in Silicon Valley is actually like, what makes Facebook special as a company and why he thinks the increasing automatization that gets accelerated by tech startups is a major threat to society. Lastly, he also gives advice on how startup founders can increase their chances to make it into the famous Y Combinator accelerator.
Are you interested to hear more about his views on startups and why you should not split the equity equally between founders when starting a company?
Check out Startup Notes’ 1-hour video interview with him from 2015 on YouTube: bit.ly/2mULoSK
English
United States

TRANSCRIPT

00:00:01welcome to the start of notes five cast the start of notes podcast is dedicated to help aspiring entrepreneurs successfully start their own company here you'll get unique entrepreneurial insights from Europe's most small entrepreneurs and best if you like what you hear please follow started notes on Facebook visit
00:00:19our website under start up notes dot EDU and subscribe to our newsletter to receive an update whenever a new podcast is live today we have a special guest from Silicon Valley at startup Antonio Garcia Martinez is a former Goldman Sachs trader co founded in at tech start up
00:00:37there was part of why commander and later got so to Twitter answer was an early Facebook employee work directly with my second more lately he has written a book about his experiences in the Silicon Valley called kos monkeys which became a New York times bestseller in this interview
00:00:53with talk about what I'm Tony thinks about silicon valley's culture makes Facebook special and why things automation is a major threat to society Antonio welcome to sort of notes and thanks a lot for taking the time to thank you for having me %HESITATION until noon you've had an
00:01:10impressive and and a very interesting career I would say %HESITATION for the people who are not familiar with this story and and maybe you haven't read your book can you please guide us through the the main stages in your career yes I I actually wouldn't call it impressive
00:01:25although I I I would maybe say that it's interesting in the sense that I think it's very representative of a of a completely typical sort of start up %HESITATION roller coaster sort of career these days and so and the short version so I was a a flailing physics
00:01:42PhD student at Berkeley when I I read the book that effectively ruined my life %HESITATION is called %HESITATION liar's poker by Michael Lewis which if any of your listeners have ever had an interest in Wall Street I'm sure they know about the same guy who wrote the big
00:01:55short and now Moneyball and his first book and it describes his days inside the nineteen eighties bond trading world in New York and it completely convinced me to to abandon my hopes my very sort of weak hopes of being on a science academic and instead I went to
00:02:11Goldman Sachs where I I priced and modeled credit derivatives which might sound weird but if you actually know that Truman as world is actually very typical you know what what's called a quantity in English like a quantitative analyst the guy who cooks up these models is almost always
00:02:25some failed %HESITATION through the system mathematician at as indeed I was and so I I went to the Goldman in two thousand five and had sort of you know as a junior guy on the desk but they give you a lot of responsibility and you know I had
00:02:37a front row seat on basically the financial meltdown of two thousand and eight %HESITATION as one of you know six or so Qantas on Goldman's credit trading desk and do you know what watching it and then the reason I mention this is it it's actually a chapter in
00:02:52the book and you know it it's part of the reason or it's the entire reason why ended up sort of back in Silicon Valley that I had laughed and that sort of known a little bit about a Berkeley Raper Klay for those who don't know is in the
00:03:04eye of the bay area but it's not quite in the middle of it like Stanford is and I'd kind of seen the first %HESITATION tech boom in the late nineties and early odds kind of take off and crash right so I kind of knew about the tech world
00:03:15and when the financial will blow up I eat I probably made one of the few correct predictions of my entire life one out when I said that well you know the the financial apocalypse is coming the only thing that'll really survive or be an oasis is this crazy
00:03:28tech world that isn't really coupled to the bigger economic macro picture and so in two thousand eight I randomly read about some tech start up that raise a bunch of money in the New York times applied to give me a job and I I drove out in a
00:03:41convertible I know it sounds kind of very tacky but it's true out to California and that started as employees seventy something Atta an advertising start up and that's where I sort of picked up the ad tech kind of world that company was a disaster and run by a
00:03:56complete sociopaths as as many companies are I I I I would discover %HESITATION but the upside of it was that I I met my to future co founders %HESITATION these two guys who were in my opinion the best engineers in the company %HESITATION we kind of randomly applied
00:04:10into an incubator called why combinators which I suspect most of your listeners probably know about and if they down it's sort of the more sort of prestigious incubator accelerator whatever in Silicon Valley expertise companies like Airbnb Dropbox stripe on on right arm and we went through I commentator
00:04:26and had the completely typical %HESITATION kind of you know what I would call kind of failed startup experience of you know running raising some money wit win a lawsuit we had co founder issues we know we're going to build a central sector despite that all we actually managed
00:04:40to raise a decent amount of money we ran like crazy for a year and then Twitter bought us for what was on paper ten million dollars in two thousand eleven and what was I think at second or third acquisition on which and all this I I describe in
00:04:53sort of the first half of the book and then after that through weird reasons that I want to spoil for your readers I I actually kind of ended up at Facebook instead of Twitter the rest of the company with the Twitter but I went to Facebook and I
00:05:05became an early member of Facebook's adds team when like all of Facebook monetization was maybe twenty five or thirty people out most and I became the product manager like the head of products for ads targeting basically turning user data into money and %HESITATION right around before the IPO
00:05:23and %HESITATION for a year after which was a kind of very keep in Facebook's history for many reasons and that's the second half of my book basically how how Facebook figured out how to make money how it went from kind of a crazy start up the kind of
00:05:36a big company with all the politics that implies etcetera etcetera and so my CV more losses that is the plot stream for word cast monkeys the book effectively ends and like entails monkeys and you've you've mentioned some of the things and like founders being sociopaths and and and
00:05:54other things %HESITATION in the book you're super super critical about the Silicon Valley startup ecosystem and its and its culture in general like why for people who haven't read it like what would you say what are like the main reasons for that like ways to critical about what
00:06:10well I you know I don't know that I'm sick I I kind of I would somewhat reject the cynical label on just because to me I you know I don't think it's here's here's part of the reason and I might be preempting one of your later questions like
00:06:24why did I write the book right will eat away the reason I I wrote with his race reasons I wrote the book but what one of the big ones was to in some ways %HESITATION counteract the various myths that that you know people have about Silicon Valley and
00:06:37I think by the way particularly Europeans have because of course like many American things they kind of revered as this amazing example but they know they don't see the sort of ugly side of of much of it and so what I you know the book actually isn't that
00:06:48cynical in many ways I actually I praise Facebook me I call mark Zuckerberg genius I'm actually very sort of positive about certain aspects of the culture but I I also kind of temper that with a lot of the negative aspects of %HESITATION neo soaking valley culture more generally
00:07:02and and facebooks culture more specifically %HESITATION and so %HESITATION yeah I know I can I I really when Sam cynical I think I it's just it literally is a like stream of consciousness absolutely unvarnished insider look at what's looking now is really like which happens to include yes
00:07:18a lot of ugliness frankly yeah I mean I meant more like rather than than cynical like critical critical about like a lot of things and and and maybe you can like explain to bits what are the things that you think for example in Europe like people don't really
00:07:35know about Silicon Valley what are like the ugly sides of so come out well I mean god there's there's a lot of myths that we could deflate here %HESITATION %HESITATION man you know one thing is that start ups are like cool and fun to work at they're actually
00:07:49not there actually are stories in general %HESITATION they take a massive toll on your personal life things like depression alcoholism drug abuse are rampant among startup founder's I mean I I experienced %HESITATION I guess two or two out of three of those %HESITATION you know it it like
00:08:07that you should be very wary of people who think startups are so great I want to be stuck on the start up world as the lan mask kind of famously was quoted as saying and I quote in the book doing the start up is like swallowing glass and
00:08:18staring into the abyss of death and that's kind of true that that actually is true and so people who think starter greater cool or so into the start of culture like I really think they actually have never experienced that to be honest because no one no one would
00:08:32love it so much right I know any of the other thing is that like the whole changing the world ethos that Silicon Valley packages it's often and which is partially true I mean a lot of these companies for better or worse do in fact change the world but
00:08:45the reality is a lot of the companies are you know either some tiny little idea or frankly never gonna reach these ambitious goals and people are just fooling themselves and so the constant you know huckster is uncertain died was touting this thing you know gets a little old
00:08:58after awhile American today it's I don't think Silicon Valley is that radically different than you know any other human pursuit which has its own sort of you know foibles and dramas and whatever you do it's like I say in the book it's you know it's no worse than
00:09:15any other industry or or the political sphere but it certainly no better either on even though I think it I think it thinks that it's better but it it really isn't %HESITATION and so you know there's that and then what else that I also sort of puncture I
00:09:28guess I mean you know just the attitude I mean we can get into that later but me out Facebook right looms kind of large in the book because again I was I guess I now would be considered an early employee out I never thought of myself as early
00:09:40but I guess I'm you know I'm relatively early employee you know how people think about Facebook I think is kind of deeply wrong in many ways and so I also want to kind of to undo some of those myths which I mean we can get into later if
00:09:50you want but that's that was also part of it ands and maybe maybe now that we we started talking about it about Facebook like what would you say makes Facebook special of the company like why why their Facebook achieve the success it's at the chiefs well I mean
00:10:09if this you know I think like most things it's half black and half Hey you know Facebook culture is very strong they're very good at many things that they do and and again I'm not cynical about that actually highlight that in the book in a big way engineering
00:10:22culture is is very very good right I mean they just put it this way Facebook is literally about a quarter to a third of the internet in the entire world except for China right and you know this is run with not very many people to be honest and
00:10:39down there they're very good ads creating an engineering culture in which you know a young engineer whose twenty two whatever comes from MIT or Stanford or Carnegie Mellon or whatever right and literally on day one he does you know get pool from from the could rebel and he's
00:10:54got I did this because I went to the engineering on boarding as well they've got you know you've got a local version of your own Facebook running on your own development box and you can do anything you want it's it's this feeling of empowerment right and I think
00:11:06to the to the extent that sucker Brigus a genius and I and I do call on that in the book and and I don't mean that in the cognitive sense of him being the smartest guy in the world I mean that the old school sense of him being
00:11:14like a force of nature who's managed to like warp reality around himself into this vision right which I think he very much is very very willfully don you know this this quality this engineering culture this this this hacker culture as they call it right the fact that you're
00:11:28empowered to literally change everything inside Facebook I think is a very is something that that system does very very well %HESITATION you know what I can also imagine things in this poorly but I mean you ask the good things on you know its ability to ship code constantly
00:11:41right I mean here's here's the re I get a might be planting a later question but %HESITATION eight you know here's how soaking Dolly really works and again this is one of the mess there's one of the realities that I think deflate lot of miss right and I
00:11:53say this in the book near his house would really really works right you launch ten products right out of the blue kind of half fast and half baked seven of them like utterly fail miserably fail and you just forget about as if they didn't happen right even though
00:12:07you held at their arrival as if it was the savior of humanity right seven fail to have them kind of do okay for kind of the reasons you thought they would and then one absolutely does amazing and just has incredible adoption are incredible and causation for reasons that
00:12:21really only makes sense after the fact and and of course we'll take that after the fact explanation and your rewrite the creation myth of that product to make it seem as if you knew this was gonna happen along even though of course you didn't and so you know
00:12:34and and this is how this is also the mother works right and is a feat in itself Facebook works by the way and describing very specifically the whole set of monetization products that we launched around the time of the IPO I'm very desperately because Facebook was having kind
00:12:47of revenue growth problems around the IPO in fact and they know I created some of these some of these tests products some of them of what you know I created in my example I created the two that did sort of okay right but the one that actually saves
00:12:59Facebook on you know came out of the blue just one more idea among the dozen and no anyone being honest with themselves you know would would also agree that nobody thought this was going to be the one thing in this one thing was mobile news feed ads right
00:13:11mobile face became a mobile monetization platform in like the span of a year ago again somewhat serendipitously on about a year after the the I PO right and %HESITATION and and this is just how Silicon Valley works and so it to the extent that Facebook ships you know
00:13:27has the courage right to shake things up and ship new product and try to find that winning saying even if serendipitously but I think it does it works very well in that environment and and and so in that sense it's not a criticism like this because doing is
00:13:40doing it exactly how it works in the consumer internet world right I just think we shouldn't maybe he's a little bit too much praise on Facebook and think that you know here's the myth of Silicon Valley right this is the version of Silicon Valley that you believe here
00:13:53if you look at the cover of fortune magazine with you know Zucker Berg all our house in a drop box or whatever staring out from it right some steely eyed product visionary dreams up some future version of the world right they have this flawless technical you know implementation
00:14:09of it and they have instant product market business success and this and this is the reigning method soak in ballet and it is utter bullshit all of it right that it's just not how it works at all let me give you a very specific example that I I
00:14:23actually site in the book and that by the way is it wireless when I was there was told is you know part of their Facebook folklore that faced with a lot of folklore right which is how you can just tell you you know transmit culture across generations are
00:14:35like fairy tales basically and so you know how you here's the story of how Facebook video happen and I heard this from various people and and I you know I have every reason to believe this is in fact true %HESITATION so Facebook used to have what are called
00:14:46hackathons which I think now is pretty a common thing in which engineers were work overnight on some random product that wasn't related to their actual job right on so one hackathon way before I was there odd you know right soon after they had launched a Facebook photo and
00:15:00again it seems ridiculous now that this was somehow pioneering but remember Facebook used to just be kind of this profile thing right there was no feed there was no streaming videos none of that stuff right but they make they created a bit early to actually upload videos right
00:15:14and is called face with video and a couple guys built overnight they showed it to Zack Zack completely **** on it and said no we're not doing this this is ridiculous like you know we're we're not even sure we should be doing photos and you've got a video
00:15:27like shut this down don't watch it it's the people behind it %HESITATION ignored Zach basically and locked themselves in a conference room for two days and then just shifted right which I think you probably couldn't get away with this now but at the time you you absolutely cut
00:15:41and then now Facebook is the second largest video site after you too right and so and Facebook videos obviously a huge source of engagement for Facebook users right this is one example in which you know not only did not predict success in fact is up with things like
00:15:54stop doing it but it was the sort of the reverent spirit of a face but that made it happen kind of any house again that's another very concrete example where a lot of these companies succeed by accident or by accident of course you know if if the Facebook
00:16:08engineering culture had been quite so hacking irreverent those engineers wouldn't have shipped anyhow right in a conventional copy they probably would've been fired and you know they wouldn't have come to a debate with it so that's what I mean that the company succeed by accident but in some
00:16:20sense their culture is what produces those happy accidents and so that's that's the reality of Facebook okay cool that's not very interesting I think like another part of culture that got a lot of like publicity lately especially with what happened and Wilbur was like the whole talk around
00:16:37broke culture and sexism it's at were and still come out in general like from your experiences as a founder and its Facebook like how do you see how do you see the topic how god this is this is one mine field that I simply refuse to sprint into
00:16:52because there is just no good outcome from there's nothing that I as a male inside this world can say that will shed any unique light on it and it literally this pure downside and so in general I usually the platitude I usually give to make me sound good
00:17:05and you know soulful and you know politically correct to say you know right here I would privilege the female perspective on this point of view and I'll just shut up because I have nothing new to add although of course I have my own opinions but anyhow that don't
00:17:17really matter unknown to listen to them anyhow so yeah it's just one thing that I I tend to avoid I will say however that as Facebook at least when I was there I never saw anything like actual overt sexism or asking or anything and in fact the company
00:17:29was very was very cognizant of preventing that behavior and so I again I never saw anything like that anything even remotely close that I face but when I was there on okay okay no that's a great it's a great answer exit around you you mentioned briefly but I
00:17:46think the story is very interesting the another we're talking about Facebook like when you sold at rock your your company that you've cofounded through Twitter but then you started working at Facebook just just a few weeks later I'd which scenes were very weird %HESITATION how did you pull
00:18:02that off yeah well you know it's part of it's part of the drama in the books I don't wanna like give spoilers but the the it's actually it's funny because it's actually not that uncommon I know it sounds kind of weird but in fact it's it's actually not
00:18:17I mean here's here's the truth of the matter %HESITATION in early stage acquisitions what are called aqua hires an English right on it within a combination acquisition hiring they're usually much more higher than they are actually in the sense that it really is a recruitment tool on your
00:18:34getting paid a premium right it's weird unlike say eggs when you by engineers you actually pay a premium when you buy them in volume you don't get a discount and so that means that %HESITATION you know you buy a company with engineers and you actually pay more per
00:18:47engineer than you would if you hired them individually but the idea is you know these engineers are better in that they've created this company in this company really is a job interview effectively it's not really a company right to just to set the scene a one act wire
00:18:58really as right so within that context rate if your company and your and you're buying a company just a higher what you consider to be the high quality people can I'm just I'm saying this descriptively not normatively this is just how they think about it the high quality
00:19:12people are the engineers and any product people and our founders right because the founders are effectively all product people at the beginning right and so they're willing to pay a lot of money for that right at least the ones they like and they're not willing to pay money
00:19:26for ones that they don't like in other words people they would not normally a tired anyhow or people who are sales operation community managers you know types of labor there are rightly or wrongly considered lower value than engineers right and so what happens on you know you you
00:19:40get acquired but the reality is the entire team comes in they all do a day's worth of job interviews which I described by the way in the book on just as you would if you applied for a job and then out of that say set of and people
00:19:54%HESITATION you know they they they sort of figure out what set of than they actually want and you know occasionally that's the entire team like yeah we want the entire team but often and and a lot more than anyone ever I sort of confesses by the way it's
00:20:07like well actually no we don't want your ops people we don't want your contractor and by the way this one engineer at like we think he's terrible and we just are unwilling like we would never even higher in much less pay a premium for and so look we're
00:20:21gonna pay you X. amount for the you know these three out of five people and you can take it or leave it we don't care but that's the offer on the table okay and so what happened was for whatever reason I'm not saying faced was right to do
00:20:34this or whatever but Facebook interviewed you know everyone in the start up and they basically were only willing to pay for me and while twelve Twitter looked at the entire team and said okay great entire team great %HESITATION and so Facebook effectively made an offer for me and
00:20:50me alone which you know was just a job offer that was very rich and reproduce the economics my fraction of the deal on the other side what Twitter produced a term sheet you know for the entire company paying off the investors and giving us all again pretty juicy
00:21:06job offers which again is by the way how these act we know when when someone says this company got bought for ten million dollars what they really mean is the company got bought for like half a million or million to pay back the investors and then each founder
00:21:20say %HESITATION god what would it effectively is a three million dollar job offer vesting over four years or whatever which is effectively what the deal for Agricola's and so they they actually pack what's called the consideration right whenever you have these nice accounting terms it means somebody's getting
00:21:35screwed right and so what if consideration mean consideration means the real money in the deal where does that go right and so investors are sorry you know into the founders can actually get very differential consideration and investors right and in fact if you want to screw your investors
00:21:52which many founders do that's exactly what they do because if you think about it they're effectively paying the investors out of their own pocket %HESITATION you know the acquiring company doesn't really care what the poor engineer cost as they care the total amount and the number of people
00:22:06there getting beyond that they're you know they're indifferent to whether the investors get paid off for not right so you have to decide look I'm gonna accepts twenty percent less for me so that we all collectively pay off the investor so that you know three years from now
00:22:20when we have to raise money again we won't have reputations that we screwed the investors which is the only reason why founders don't screw investors by the way and so %HESITATION so any of this is this is just maybe more detail you wanted but this is how these
00:22:32act hires kind of really work in practice tonight if if your listeners have gotten like lost along the way I go into it in much more detail actually in in the book itself okay no perfect so I think for people who were interested in the token can can
00:22:47read it in a book %HESITATION I've if you questions related through two white community and like actually a talk you gave at southwest of west recently where you talked about automation and and its implications on society and you said for pretty much every drop out there there's a
00:23:05White Sea combinators why coming in a company trying to get rid of it are trying to make it up to the tried and as a bit of a multi faceted question but what are like some of the main developments you're seeing %HESITATION like how would you relate it's
00:23:21for example with the rise of somebody like trump in the US and and what are things that we can do about it rights or like or as a kind of %HESITATION the natural flow of things and and we just have to accept he also I mean in terms
00:23:37of what you know what's being automated I think the example that almost everyone sites that because I think it's very easy to think about particularly for people who maybe don't have their heads inside tack is you know self driving cars an autonomous vehicles right %HESITATION and the biggest
00:23:51one I as you know I think it's it's huge in the U. S. not quite sure how big the trucking industry is in in Europe but in the U. S. track you know the US is mostly a a trucking supplied company right in there there is railroad for
00:24:03a large box stuff the most things that we consume I cite the number my talk is something like sixty or seventy percent by volume actually comes in a truck and %HESITATION close to about three and a half million Americans are actually employed in tracking as drivers and about
00:24:17twice that number as in other professions which doesn't seem like a huge number but just to put it in context at least in the US which again I think is different in Europe trucking is like the last job that all high school educated male or anybody can do
00:24:32and still feed a family right salaries it trucking is actually a very hard job particle in the U. S. because it's so big that the pay is pretty good for you know the skills required you can actually make anywhere from forty to seventy or maybe even more money
00:24:46seventy K. year in a country where the average family income is about fifty K. so it's it's a decent paying job and you know in states like Wyoming or North Dakota or whatever you can actually live pretty well on that you can't live in San Francisco on that
00:24:59but you can live in other parts of the country on that and so the the problem is that you know this is the famous sort of white working class that voted for trump because of their economic difficulties and automation is literally taking away one of the last jobs
00:25:13they can do that is that is the reality of it we you know three and a half million heads of households which is again kind of a big number are not gonna be able to feed their families probably in about a you know two to five years right
00:25:27that full stop that's what it is and dumb and and that's just trucking rate which is a you know what we call a blue collar job like a you know working class job you know it the funny thing is we think about it you know white collar jobs
00:25:41or you know non manual labor type jobs are not exempt from this automation trend if anything some of their jobs are even easier to automate in fact %HESITATION there's a YC company just randomly naming companies now and I have nothing to do with this company whatsoever %HESITATION there's
00:25:57one Cup there's one called we force which is basically an online divorce company so in the US you know you still employ a lawyer to basically go through some pro forma document and you pay the guy like three to five hundred Bucks for probably with like fifteen minutes
00:26:10of work on his part or her part right they just completely automate this like you literally go online and you just buy a divorce and they do all the paperwork and just over and you know from from like I'm sure eighty to ninety percent of most divorces that
00:26:23are very simple and not complicated you can just do that and so that just means that many lawyers many of whom say at least in the US are in debt having gone too expensive law school in the whole thing just won't have jobs they don't have to go
00:26:35drive uber but oops sorry we automated driving for uber as well so there's no chop there I think you're right I mean this is this is the progress I mean the reality is that you know many and you can look at very studies upwards of about fifty percent
00:26:48of US jobs fifty percent of US jobs will be substantially automated in the next twenty to thirty years that that means that literally half of working Americans won't have jobs and I mean I think and I think that you know you look within you know you look at
00:27:02things like trump and you no one can say many things about trump but I see him not I mean he's just some guy right he is a symptom of something way bigger which is this economic disenfranchisement and and this you know economic decline that that much of the
00:27:17U. S. is saying I'm in my in my talk I can remember my talk or not but you know one of the stats that you can look at is for example that the decline of you know manufacturing jobs in the U. S. have declined by about fifty percent
00:27:30in the past thirty years what by the way productivity has actually gone up by three acts absolute productivity so productivity per head actually is gone about six X. again thanks to automation you got a lot more productivity out of one hour human labor thanks to automation but that
00:27:46still means that fewer and fewer Americans are actually employed in in in manufacturing and those that are are probably height more educated you know are the the the the reason they're there is because they actually help guide the automation help guide the machine do its job as again
00:28:00in all these things are converging and I and I think we as I listen to you as a society as as a political and economic and social and cultural entity are not grappling with the reality of what this automation gonna bring and and as I cite in my
00:28:13in my talk I think it's like the final slide you know right now I think we're in a race run a race between the technologists and the YC company's ability to basically automate every damn job in the world right any job that's repetitively that Scott that's a repetitive
00:28:29cognitive a manual task will be automated away right and there's a race between that drive and the ability of our you know politics in our political system in our culture to adapt to that reality and and currently the technologists are absolutely winning at least in the U. S.
00:28:44the automation conversation is not really part of the national discourse we're all talking about trump's tweets or some idiocy rather than what I think is the real big issue behind it frankly and and just like a few follow up questions because I think it's a super interesting super
00:29:00interesting topic like what do you like what are the alternatives writes like I mean probably don't wanna you don't want to put a brake on on all these companies trying to make the world's or make jobs more efficient and more more productive but like on the other side
00:29:20of his knee like having half of the population unemployed is also not an option because it brings all sorts of other negative consequences with it like where do you see like the avenues to to solve the problem so to say right I mean the answer that most technologists
00:29:38who discussed this and and many are I think within Silicon Valley a lot of people see this coming because they're they're they're literally building the self driving truck excuse the pun that's about to hit you know the US economy right %HESITATION and so %HESITATION they they you know
00:29:52the answer they would give you is well basic income which I'm guessing most your readers know about its effect and it's it could be called many things that can be called the basic income it can be called the negative income tax it's been proposed by people from all
00:30:06parts all parts of the political spectrum actually but basically you get free money for being alive that's basically what it boils down to right if if you make less than a certain amount the government basically just pays you and rather than which sounds crazy but in fact if
00:30:19you run the numbers and you actually did this instead of the sort of typical social welfare system that administers housing and food and all the rest of it which by the way I know I know Europeans think the US is not a socialist country but in fact he
00:30:33actually does have a social safety net although it you know the the barrier to getting benefits tends to be pretty low in the center of the very poor to get it but do you know the US budget a lot of it actually goes to the social entitlement programs
00:30:47if you replace that with like a flat payment that again would be very much will be enough to live in some cheaper parts of the U. S. that's the sort of agreed upon solution right arm and you know I I think the ideas well this prevent the revolution
00:30:59or like mass social unrest that this automation and cars and as I also go into my talk right I I think that's not true %HESITATION and they're the reason for that is that at the end the day we don't actually work to put food on her plate and
00:31:12a roof over our heads right we really work to have some sense of meaning and purpose and satisfaction in our lives right that's that's really what what we work for and that's harder to just give out right that the government can just write you a check but they
00:31:25can't just give you a little box with meaning inside it and suddenly you have meaning and purpose in X. that's impossible to just instantly provide and I set the example and this is a little bit more long when that and maybe it's not worth going into a park
00:31:38as but I'm you know I I would I would propose and I I'm not the only one who thinks so that we're basically already living in a partially basic income world wide how do I mean that well believe it or not and I have a lot of the
00:31:49details and in my talk %HESITATION you know in in many parts of the United States particularly areas that for example but for trump just to mention again right you have what's called disability insurance and what that means is if you claim you can't work rate and you can
00:32:04get a doctor to agree with you %HESITATION the government and depends how much how much they pay you to bend on the state because again the US is a very federal system on the government basically gives you free money right and %HESITATION how this is supposed to work
00:32:18is you know you work in some may be dangerous manual profession you get injured you fall out of the work force the government keeps from staying on the street how does it really work and I I cite some of the some of the data to back up my
00:32:31my arguments in the talk I would really works is unemployment goes up because the economy is weak or because of automation people can't find a job and after a year they kind of give up they go to the doctor they complain about some very common ailment that we
00:32:44all have back pain or depression which I entirely surprising to be depressed after you're not working the doctor says yes and then the government just pays you and you know this isn't some conspiracy theory I mean the the rates of disability insurance and many US counties are as
00:32:59high as literally one fifth of of potentially working adults submit only one in five or even one in four adults in in large parts of the U. S. this isn't like a niche thing are don't appear on the unemployment numbers like officially the US unemployment numbers something like
00:33:16five or six percent and that's a complete lie and every economist understands that are you know the US unemployment rates actually in the double digits safely %HESITATION and so it and it's and it's due to the fact that many Americans of simply opted out of the employment pool
00:33:30in exchange for what is effectively a basic income Pam and so but you you might have be asking okay Antonia but like so white why is that a problem well look at things like the fact that the life expectancy in the US believe it or not has actually
00:33:45gone down another words unlike the rest of the developing world or anywhere else U. S. life expectancy for you know forty five year old white males has gone down significantly in the past ten years for example or look at the rate of opiate addiction there's I I don't
00:34:02know how much Europeans kind of our way out of this there's a massive like pandemic drug problem in the US that's unusual this is not just the regular %HESITATION you know urban decay ghetto whatever you know this is people in what used to be formally like working class
00:34:18or middle class white parts of the country were completely addicted to heroin or other opiates to the point that in two thousand fifteen was the first year that deaths due to opioids surpassed the combined combined a number of deaths due to auto accidents and fire on murders actually
00:34:38believe it or not so the U. S. actually now loses more people to you know opioids right than it does to either firearms or cars right which is a lot and so this is the reality and in much of the you know the United States where again they're
00:34:51living off basically basic incoming they're lacking any sense of meaning and smite my general argument here I guess is that this is only gonna get worse as the automation process continues okay %HESITATION coming back a little bit to the to the start of World or especially to why
00:35:06see I think %HESITATION well a lot of our listeners of the Europeans and %HESITATION Europeans especially like aspiring entrepreneurs and people interested in starting their own company for and you are part of of the YC YC family in the sense that you I think you review some of
00:35:23the applications every year like would you say that for a European company %HESITATION especially who wants to get into why come in it are like what are some what is some advice what's like the secret sauce yeah I don't know that there is one secret sauce I mean
00:35:38I have I you know I don't do it quite so much I haven't done it quite so much this year because the book at me busy but historically in the past %HESITATION and I think that I mean this is a public thing are the alarms are actually the
00:35:48the first people who review the original applications and in the past I've actually been yeah one of the more one of the more prolific reviewers and so I've I've read it or what at this point is probably thousands of YC applications I'm and I have recommended dozens of
00:36:04people some of whom have actually gotten and and so I you know I have a fairly decent grasp of like what the standards aren't any no one sees is an organic institution right it's not a static thing Sam Altman runs it now instead of Paul Graham who used
00:36:17to be the grew so I think the profile of the average YC companies change a little bit twenty up long way of saying everything I'm saying is like subject to change and if you talk to somebody else who reviewed apps you might even get a slightly different answer
00:36:28right %HESITATION but you know what what do you look for I mean you know you used to be the case that I think they looked at a little bit more the team than the actual traction say the idea because YC used to be kind of an earlier stage
00:36:41thing like when we got into icy we had basically no product and no company I mean they were basically betting on us and the fact that we seem to know the art world I think in these days why sees a little bit later state or maybe just there's
00:36:54many more people doing start ups and so on well you probably thought it can get in is just the team I think it probably examine %HESITATION not just the idea because again no one ideas are worthless right now is gonna and if you disagree try selling one right
00:37:07normal by an idea least of all YC but they they might actually look at what you've done thus far and the traction you generated and if you raise any money whatever and kind of take that into account I think a little bit more than they have in the
00:37:18past %HESITATION but but more than that in there looking for a certain psychological profile right I mean did you used to call Weiss the founder than he meant this as a positive thing okay by the way it's not a negative thing you know he called them like cockroaches
00:37:30right because the unique thing about cockroaches is that they're impossible to kill right their lives they live it I mean there were more successful than humans are as a species obviously and the live in almost any conditions you know any radiation any heat any rain it doesn't matter
00:37:43the things are just unkillable basically and the key thing that you know it about the best start about two meters and we're talking about even you know crazy successful ones like Airbnb or Dropbox anything else is that many of them spent years rate treading water not doing well
00:37:59not having figured out their market and somehow they still managed to push through until they finally got to the point where they're enough sorry to use the buzz word that they found the product market sit in a big way right and so I think that the biggest quality
00:38:12that why he looks for is that level of perseverance right to actually get through all these problems and then you know and then there's a a I get to me at least and again this is my personal opinion it's not like why the gospel necessarily but you know
00:38:25how the founders know each other you know are they very close friends have they barely just mad are they married a you know I can be go through the struggles of life together I mean I as PJ said and I'm quoting a quarter in the book doing a
00:38:38study together and it's a little bit longer but you don't have that CC regulation I imagine you know doing a start up together is like being married but without the **** right like that's that's the reality of it like that's what it's like to be a start of
00:38:49thunder and I mentioned this in the book and it's true like I got to know my founders better than like their wives and girlfriends knew them probably at least during that during that start up time right and so do you have that relationship with your startup founder or
00:39:02do you not if you don't I think it's very hard to imagine you surviving the startup process and I think what I see is very good at teasing out that reality %HESITATION so yeah that's that's what I'd say as a top level advice and okay cool thanks a
00:39:16lot for that like a question related especially to founders because in the beginning you mentioned that a lot of the successful founders in Silicon Valley are sociopaths and and it's something out for quite a lot what like why do you think that's the case and like like houses
00:39:34how does it was a correlational causation with them being successful funders yeah I know I mean it's it sounds like a glib almost ridiculous statement but I I actually absolutely believe it's true and I I don't think it's necessarily a good thing and then I think arguably the
00:39:49very best founders are actually not and and and their their best because they aren't but I think your average started founder is a sociopath and what do I mean by that I mean there's like I'm not using the term loosely like I think literally half of them are
00:40:01probably in fact clinical says about like if they went to a to a shrink the shrink would say you're a sociopath and what does that mean that means you know a lack of human empathy they see other people as as means rather than ends in a in and
00:40:16of themselves %HESITATION they almost all have narcissistic personality disorder in that they think the world revolves around them and are willing to engineer a world around themselves in the form of a company %HESITATION I think that they're eating Cajun often very reckless risk taking behavior I mean I
00:40:31had three illegitimate children surprise children with two different women and so you know I I think I'm as guilty as the next guy %HESITATION and you know I engaged in illegal street racing in the book and all this crazy **** that I and everyone else I know does
00:40:45some version of the same thing %HESITATION you know that and and so that's I you know I think you need the I mean think about the phenomenal ego that requires to say look look look I have nothing but an idea and my own sort of gumption enthusiasm and
00:40:59I'm going to turn that into an actual you know viable economic entity called the company right wet wet how deluded which you have to be to actually believe that right and so I I think the people who delude themselves into thinking that are often sociopath for all the
00:41:13reasons that I cited that said you know I think you know I think that that level of sociopath Figley I think works in the very initial stages I think once the company's off the ground and you see this very often in the story of companies you know when
00:41:27you actually need to like motivate regular normal people who have like wives and kids and regular lives I don't know if they necessarily look up to that sociopath thing right unless he's very good at hiding it and so you know what you often see as a company mature
00:41:40is to replace it with like you know someone who actually does have a conscience for example and the sociopathic CEO gets kind of bomb to the cider becomes an adviser whatever and again it because that's you know there's a certain that personality is very good at a certain
00:41:52point the company's history but maybe not so great later on so there it is it's very interesting %HESITATION as a final question answered you because you are I want to be respectful of your time also %HESITATION just a more personal question I would say %HESITATION so you worked
00:42:08in wallstreet and Silicon Valley now you've become a bestselling author electricity what's what's next for you like what are your career plans you know I don't know it's it's a it's a people ask me what do you do and it's funny like in a in a capitalist consumer
00:42:20society it's like almost illegal to say well you know I don't know what I do I don't really do my so if you can answer that you can't you can't just add to that the question that way it's not totally try I do do things right like I
00:42:32I still plugged the book and maintain the personal brand although I find it revolting to even say that but it's true %HESITATION %HESITATION I have a little blue check mark next to my name so I guess that means I need to somehow justify the check mark %HESITATION %HESITATION
00:42:46but you know what do I do now I mean to those who have read my book and read it to the end of the epilogue I mention that %HESITATION %HESITATION you know I had to I had an encounter with more more of mortality that I won't go into
00:42:58but I had to sort of bucket list items one was no actually publishing the work I'd sort of been thinking about doing that and the other was sailing across an ocean it's it's always been a lot a lifelong dream of mine to sail around the world alone and
00:43:10%HESITATION I'm actually talking to you from a sailboat that I bought three years ago and I've spent a lot of time and money sort of fitting out for this for the storage and so that I think is going to happen this year it well yeah this year hopefully
00:43:24early start this year %HESITATION and that's the other thing that sort of laughed and then of course my agent keeps I want me to write a second book it turns out the best time to sell book two is when one book one is doing well which is now
00:43:36and so but again like an idiot I'm actually not doing what I should be doing and instead of going out and selling of the book I'm like mucking around %HESITATION you know on a sailboat and whatever but yeah well we'll see I you know I I'm trying to
00:43:49avoid having to go back to college as long as I possibly can so %HESITATION yeah that's the status for now now it sounds like a great plan actually like sailing around the world I think there is on this this worse there's worse plans for show so I'm Tony
00:44:06thanks a lot for for all the great and says I think they were like a lot of non obvious insights about Silicon Valley the the future of society be one so %HESITATION that's I think a lot of our listeners students didn't know like that before so thanks a
00:44:22lot for taking the time and for all the incense and and all the best for your %HESITATION sitting round the world trip thank you thanks for the interview and again sorry for I know we took it took weeks for us to set this up but thanks for a
00:44:32for your patience dealing with my total sleepiness and my travel but I'm glad we finally got to to do this if you like what you heard please follow started notes on Facebook visit our website under start up notes dot EDU and subscribe to our newsletter to receive an
00:44:49update whenever a new podcast his life

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ABOUT THIS PODCAST

Startup Notes is the hub for unique entrepreneurial insights. Every two weeks, we publish a podcast interview with an accomplished founder or venture capitalist. We talk about all things startup-related – from identifying an opportunity, finding investors, to growing and scaling a company from three people to an international operation with hundreds of employees.
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74 episodes
since Nov, 2016
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