Excellence Is the Capacity to Take Pain
Speaker: Travis Kalanick and David Senra
Duration: 01:48:55
Source: https://www.youtube.com/watch?v=QVnU5lGlKE8
Caption track: QVnU5lGlKE8.en.vtt
Note: Caption text may contain errors from the source publisher or automatic speech recognition.

FULL TRANSCRIPT

[00:00:02] I want to start with Adams. >> Yeah.
[00:00:04] You have this great line on the website
[00:00:06] that I actually love. It's this awesome
[00:00:07] sentence. It says, "Physical world
[00:00:09] autonomy requires AI for the physical
[00:00:10] world. This kind of intelligence
[00:00:12] requires computation we haven't invented
[00:00:14] at an efficiency we can't yet fathom
[00:00:16] with deep learning models to understand
[00:00:18] and act in the physical world that don't
[00:00:21] yet exist." Tell us what you're building.
[00:00:24] Let's start at the mission. It's easier
[00:00:25] that way. Physical automation to
[00:00:27] transform industries.
[00:00:30] So you start there. You can sort of go
[00:00:32] it's almost socratic like what does that
[00:00:34] mean? And sort of in the terms that
[00:00:37] people use today is physical AI and
[00:00:40] robotics to transform industry and you
[00:00:43] go okay well
[00:00:46] uh so what is it a humanoid? And no it's
[00:00:49] not. It's not it's I I wouldn't call
[00:00:52] myself anti-humanoid. It's just what
[00:00:54] we're doing is not that. It's
[00:00:56] specialized robotics that it's not like
[00:00:59] we make robotics and anybody can have
[00:01:01] some. It's more like robotics and AI
[00:01:05] that go after an industry one industry
[00:01:07] at a time. And in the industries we
[00:01:10] think it makes massive moves, big moves.
[00:01:14] And once we get our sea legs,
[00:01:16] we go to the next and the next. If
[00:01:20] you're doing it really well, I I like to
[00:01:22] say that um the only constraint on our
[00:01:24] imagination is management capacity.
[00:01:27] What does that mean?
[00:01:28] We're solving problems every day. If I
[00:01:32] have to solve lots of small problems
[00:01:33] because I don't have a lot of management
[00:01:35] capacity under me, we're not going to do
[00:01:37] very much. I'm going to be constrained
[00:01:40] in what portion of my imagination can
[00:01:42] become possible like real. But if you
[00:01:45] have lots of management capacity, lots
[00:01:47] of problem solving capacity
[00:01:50] then those constraints unwind.
[00:01:53] So how do you broaden and expand the
[00:01:55] management capacity you have?
[00:01:56] Okay. So why don't we step back and talk
[00:01:59] a little bit about like I have a lot of
[00:02:02] uh frameworks for this kind of stuff.
[00:02:05] One of them I I call the meta problem.
[00:02:08] Imagine if you had this equation which
[00:02:12] is uh the derivative of problem solving dt
[00:02:20] uh must always be greater than or equal
[00:02:22] to the derivative of problem creation
[00:02:26] dt. And if that's ever not true, you
[00:02:28] have a real problem. I call that the
[00:02:31] meta problem. So what's happening is is
[00:02:34] that if you are creating problems faster
[00:02:38] than you can solve them then you're kind
[00:02:41] of effed. But when you create problems
[00:02:43] like in an Uber context would be like
[00:02:45] let's go to China. That's creating a
[00:02:48] problem. Right now the way I think about
[00:02:51] problems I don't think about them in a
[00:02:52] negative way. I think about problems the
[00:02:54] way like a math professor would think
[00:02:56] about a problem. is a math professor
[00:02:58] without interesting problems to solve as
[00:03:00] a sad math professor. Yeah. So it's like
[00:03:03] a good thing. So you want to create
[00:03:05] interesting things to solve. You want to
[00:03:07] create problems to solve. You have to
[00:03:10] predict well the nature of the problem
[00:03:12] and your ability and capacity to solve
[00:03:15] it. You create a problem today. You may
[00:03:18] not understand the nature of the problem
[00:03:21] solving you're going to have to do. You
[00:03:23] have to predict it. And those problems
[00:03:26] start coming ashore in like 6 months in
[00:03:28] like a real heavy way and maybe even
[00:03:30] longer. And so you have to be good at
[00:03:33] predicting what it's the nature of that
[00:03:36] problem and saying okay well what is my
[00:03:39] management capacity to solve it. If that
[00:03:42] equation gets out of balance then you
[00:03:44] have to stop problem creation while you
[00:03:47] get the solving going so that you're not
[00:03:50] drowning anymore. >> Right.
[00:03:51] Can you give us an example of what
[00:03:53] happened in China then? I mean, China
[00:03:55] was like amazing, but very difficult and
[00:03:59] in some ways impossible to predict.
[00:04:02] Let's go to China. Sounds like fun. It
[00:04:04] was a It was a a super awesome adventure
[00:04:07] because what happened was is I was like,
[00:04:10] "Sounds cool." And I got it was 201
[00:04:14] probably 2013 or early 13. Uber started
[00:04:17] in 2010, so it was still early crew.
[00:04:22] And I got a crew of folks, like super OG
[00:04:25] guys, and we stayed in an apartment in
[00:04:29] China for a week or two, a week and a
[00:04:31] half, two weeks, something like that,
[00:04:33] and met with everybody we could. It's
[00:04:36] actually when I first met Juan Shing,
[00:04:38] uh, at Muan actually. Um, and he told me
[00:04:42] I was crazy. Don't do it.
[00:04:44] It's the worst idea ever.
[00:04:46] What was your response when people tell
[00:04:47] you you're crazy, it's not going to
[00:04:49] work? Like that's the best thing ever.
[00:04:52] Okay. So I mean we're there's many
[00:04:55] threads here. We're already poking
[00:04:56] through. We're gonna go everywhere.
[00:04:58] Okay. So in engineering we call this
[00:05:00] BFS, breath first search. So I'm not
[00:05:03] able to go deep. We're like we're
[00:05:05] painting the breath of the tree before
[00:05:07] we're going deep. So uh we have a
[00:05:11] cultural value for that at Uber and I've
[00:05:13] pulled it into our new value system at
[00:05:15] into my value system at my current
[00:05:17] company. Uh, but it's called super
[00:05:19] pumped, which is about infectious
[00:05:21] enthusiasm about the hard things.
[00:05:25] The harder it is, the more weird,
[00:05:32] gnarly, whatever words, whatever
[00:05:35] superlative you want to put in front of
[00:05:36] it, the more awesome it would be to
[00:05:39] solve it. >> Mhm.
[00:05:42] The more excited I get.
[00:05:45] And the problems that are more awesome
[00:05:47] to solve are the ones that people think
[00:05:48] are are impossible to solve. Sometimes
[00:05:51] people think something is impossible.
[00:05:53] They perceive it that way, but it's very
[00:05:55] possible, but it's actually easy. And
[00:05:58] there's other ones that people think are
[00:05:59] impossible that are super difficult, but
[00:06:02] possible. That's how you think about
[00:06:04] Adams now, right? When I hear you speak
[00:06:06] about it, and when I read about it,
[00:06:07] you're like, "This is going to be super
[00:06:09] difficult, but it is possible."
[00:06:11] So Adams is the name of my company. We
[00:06:13] just named it this. It came from a a a
[00:06:17] crazy obscure name that was done on
[00:06:19] purpose. We basically went ultra
[00:06:21] stealth. But the real question is is
[00:06:26] coming out of Uber. What was the next
[00:06:28] thing and why? And
[00:06:32] it is Adams. We just started calling it
[00:06:36] that now. I was yearning or had a
[00:06:39] pension for an affinity for something
[00:06:41] that's super hard,
[00:06:46] super complicated.
[00:06:47] Have you always been like that or was
[00:06:49] the exper like was the experience of
[00:06:51] Uber that crystallized how important
[00:06:53] that was? when did this this desire
[00:06:55] it's always it's always been this way
[00:06:57] which is and I think it's funny how you
[00:06:59] got there because it's like that feeling
[00:07:02] when somebody tells you something that
[00:07:04] is impossible and you're like is that right
[00:07:09] and that and I'm like watch this
[00:07:13] I've always had that like when I was a
[00:07:15] kid I'd always have a sparkle in my eye
[00:07:18] to do something somebody was like [inaudible]
[00:07:21] that kind of thing did you know at when
[00:07:24] you started it like how there's no way
[00:07:26] you could have known like how difficult
[00:07:27] it was or did you like this is a hairy
[00:07:29] problem I'm going to there's I'm going
[00:07:30] to be fight
[00:07:31] complexity there's a complexity to it
[00:07:32] that was part of the attraction
[00:07:34] okay and you saw that from the from the
[00:07:36] first spot
[00:07:37] yeah from the very early days I knew it
[00:07:38] was complicated I didn't understand
[00:07:39] exactly how it was complicated
[00:07:41] I'm very curious what you said was very
[00:07:42] interesting you're creating all these
[00:07:43] problems some of the problems you're
[00:07:45] creating are not coming ashore I think
[00:07:47] is the word you use for
[00:07:47] it takes time to to see what the nature
[00:07:50] of the problem is that you created
[00:07:51] so can Can you give an example of like a
[00:07:54] problem you're creating when you start
[00:07:55] in China, how long it takes to come
[00:07:56] ashore and what happens when it does?
[00:07:58] Okay. So, what you learn when you go and
[00:08:00] do what we did in China is you learn
[00:08:03] that when you go and take your business
[00:08:06] and go to China, you have to start over.
[00:08:09] So many people think that you can take
[00:08:11] your business and take it somewhere
[00:08:13] which by the way Uber kind of like
[00:08:16] trademarked that if there's such a thing
[00:08:18] like we made that a thing where like
[00:08:20] cities countries didn't matter we
[00:08:23] created a system that was inevitable but
[00:08:26] China was different because of how that
[00:08:30] country works
[00:08:33] everything's different and that means
[00:08:34] you have to start from scratch right
[00:08:38] it's like as something as simple as like
[00:08:40] uh the phones uh or let's say maps GPS. >> Mhm.
[00:08:44] There's a different GPS system in China
[00:08:47] than there is here.
[00:08:49] What does that mean? Well, it's like
[00:08:50] different. So, if I want to understand
[00:08:53] how cars are moving through space, I
[00:08:56] have to change my GPS system so I can do that.
[00:09:00] So, I understand. And that's like one of
[00:09:03] like a hundred things that are different
[00:09:05] in China, which means you have to start
[00:09:08] over. And so, yeah, you're starting a
[00:09:10] new business when you take it to China.
[00:09:12] And you have to
[00:09:14] you have to be in a very receptive like
[00:09:19] I am going to learn how to do things
[00:09:22] differently in this very different place
[00:09:25] and be excited and interested in how
[00:09:28] different it is. Whereas most
[00:09:31] entrep let's say western entrepreneurs
[00:09:33] that go to China that almost none
[00:09:35] succeed. Have any succeeded
[00:09:38] at the time? Like Apple,
[00:09:40] I'd say the two that you would come up
[00:09:42] with in our area, in our neck of the
[00:09:43] woods, there are others, but like in our
[00:09:45] neck of the woods, you're like, "Okay,
[00:09:47] Elon definitely did." Right. And Apple
[00:09:50] definitely did. Tim Apple and and
[00:09:53] Elon, right? [laughter]
[00:09:55] Right. Those are the two guys.
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[00:12:13] So, you start getting in this war with
[00:12:16] DD. Was there anybody else besides was
[00:12:18] there multiple competitors?
[00:12:19] We um we eventually rolled out. So Uber
[00:12:22] Black was one thing much smaller than
[00:12:23] like a DD thing. There was another
[00:12:25] company called
[00:12:26] Quaid. Mhm.
[00:12:27] And we were just in this corner sort of
[00:12:30] doing a niche thing which is a super
[00:12:32] high-end thing in China which is like
[00:12:35] so niche, right? An S-class in China at
[00:12:38] that time is like very it's thin. I mean
[00:12:41] we're growing. It was fun but it was
[00:12:42] thin. But I think it was 2014 I believe
[00:12:45] it was 14. Yeah I believe it was 14.
[00:12:49] must have been where we we basically
[00:12:52] said, "Okay, we're going to do ride
[00:12:53] sharing in China." [snorts] Nobody had
[00:12:56] done that.
[00:12:58] Di was taxis.
[00:13:02] And if anybody who's used taxi app with
[00:13:04] taxis, the problem is you're a secondass
[00:13:06] citizen. Meaning taxis want people to
[00:13:08] wave them down. They don't want to take
[00:13:10] rides from an app where they have to
[00:13:12] give a percentage of the revenue to some
[00:13:13] middleman. That's not a thing. Right.
[00:13:15] So, it sort of will fill in the gaps,
[00:13:18] but it's not their main jam.
[00:13:21] But we went to full ride share, which is
[00:13:24] like peer-to-peer ride sharing where
[00:13:26] anybody driving a car could offer a ride
[00:13:29] to a citizen in the city,
[00:13:31] which before you did not exist at all in China.
[00:13:33] Certainly not coordinated by an app.
[00:13:35] This is now a ride sharing, what was at
[00:13:38] the time called peer-to-peer ride
[00:13:39] sharing. think of some people would
[00:13:42] think of Lyft or Uber X, this kind of
[00:13:44] thing in the US context. Uh, but what we
[00:13:47] called it was the people's Uber. And so
[00:13:49] in the app, you'd open it up and it was
[00:13:51] red cars. >> Mhm.
[00:13:53] But we became Chinese. We had a a
[00:13:56] massive awesome [snorts] brand there
[00:13:58] because we cared and we were passionate
[00:14:01] about the user
[00:14:03] uh the customer in ways that these other
[00:14:06] companies just weren't.
[00:14:08] But what was interesting about what was
[00:14:10] going on with Dee was that while we were
[00:14:14] in inventing, innovating,
[00:14:17] they were copying.
[00:14:20] And these guys were so good at copying,
[00:14:23] it was kind of it was almost an art form.
[00:14:27] To be able to copy as quickly and
[00:14:29] fiercely as they did was like warrior
[00:14:32] mentality in its own right. >> [snorts]
[00:14:34] But it's like I like to say like the the
[00:14:36] the place to be is it's like a brave
[00:14:38] heart which is like the warrior poet.
[00:14:41] These guys were just pure warriors.
[00:14:43] There was no poetry. They weren't
[00:14:45] creating the new thing. They were
[00:14:47] copying the they were copying
[00:14:49] but almost to a level of poetry in their
[00:14:52] ability to copy and the speed at which
[00:14:54] they were able to do it
[00:14:55] right. But while they were getting ready
[00:14:57] copying it, it was a very wild sort of
[00:15:00] half technology half regulatory arbitrage.
[00:15:06] Very bold. It took them a while to copy.
[00:15:09] And while that happened, it went vertical.
[00:15:13] Uber did.
[00:15:14] Yeah, Uber did. And I'd say like so
[00:15:17] vertical it almost leaned to the left.
[00:15:20] Like it almost started bending. The
[00:15:22] curve almost bent to the left. Okay.
[00:15:26] And um
[00:15:30] that was what it was. The opportunity
[00:15:31] was massive where we would basically at
[00:15:34] some point probably our top
[00:15:37] 10 cities were all Chinese cities.
[00:15:40] That's wild. in rides. Yeah.
[00:15:42] Not in revenue because the rides instead
[00:15:44] of like
[00:15:45] at the in my day 13 bucks, 15 bucks, whatever,
[00:15:50] they were these were like three bucks,
[00:15:53] two bucks type stuff, right? I remember
[00:15:55] we were doing this fund raise in China.
[00:15:57] We had to raise money in China because we
[00:16:02] I mean it was a huge I mean it was just
[00:16:05] pulling a huge amount of money.
[00:16:06] You mean you were burning a ton of
[00:16:08] money? were burning a lot of money, but
[00:16:09] also we needed a partner. When we first
[00:16:12] went to China, everybody told us that we
[00:16:14] needed a partner.
[00:16:15] And they'll just tell you that. We're
[00:16:16] like, "What is a partner?" They're like,
[00:16:17] "Well, that person or that entity has
[00:16:20] like 50% of your company in China." I
[00:16:23] go, "Why is this a law?" They're like,
[00:16:25] "No, but if you don't do it, you're
[00:16:27] totally screwed." And I just never got
[00:16:30] it. Nobody could tell me why. And why I
[00:16:33] had to. I just said, "I'm going to try.
[00:16:34] Screw it." which is like again
[00:16:38] Apple, Tesla, these guys said screw it
[00:16:41] and they just did it right now and we
[00:16:43] eventually did get a partner but instead
[00:16:45] of giving up 50% we gave up I think it
[00:16:48] was 7%.
[00:16:49] And it was to buy do but it was because
[00:16:52] we were getting massive regulatory heat
[00:16:55] and as long as we had a partner by our
[00:16:57] side we could be Chinese. >> Yeah.
[00:17:00] Right. And like this is like when you
[00:17:02] start meeting with ministers in China,
[00:17:06] you know, like at the top at the highest
[00:17:07] level, you have to be vouched for by
[00:17:10] somebody in China or things get start to
[00:17:13] get weird.
[00:17:13] And that's what the 7% is for.
[00:17:15] That's what the 7% was for.
[00:17:17] BU needed we needed a partner inside
[00:17:19] China that was trusted essentially. But
[00:17:22] like I remember, you know, right about
[00:17:24] the time that we got that partner, you
[00:17:26] know, we of course were doing this and
[00:17:28] there was a a strike, a a panuropean strike
[00:17:35] for all taxis in all European cities.
[00:17:40] And at some point, I think there were
[00:17:42] like I think this is 15, I believe,
[00:17:45] 2015, uh, July, I think. Um,
[00:17:51] you know, there were
[00:17:54] vehicles being lit on fire in Paris, you
[00:17:57] know, but it was like every major city
[00:18:00] in they just tried to shut the [inaudible]
[00:18:02] down. And
[00:18:04] what are they protesting? >> Progress.
[00:18:09] So I'm going and meeting with the
[00:18:11] transportation minister in China
[00:18:14] and he throws down three newspapers,
[00:18:17] western newspapers that
[00:18:22] top of the fold old school newspapers,
[00:18:24] right? remember those [laughter] because
[00:18:27] pictures of this chaos across all these
[00:18:29] cities and he's like
[00:18:33] this is a problem
[00:18:36] and this is not going to you know this
[00:18:38] is not something we're okay with and I said
[00:18:44] said why
[00:18:46] and you know there's obvious I knew what
[00:18:48] I you know I knew what he was going to
[00:18:49] say and I said but this is all western
[00:18:52] democracies And I'm like in western democracy
[00:18:58] is we know is it's a popularity contest.
[00:19:01] Um and what that means is that the the
[00:19:06] politician succeeds by being popular. He
[00:19:09] doesn't succeed when progress comes. And
[00:19:12] the only way to get progress
[00:19:15] in a democracy
[00:19:17] is for that
[00:19:20] for that politician who seeks to be
[00:19:23] popular when he's under threat.
[00:19:29] When there is a threat of
[00:19:33] disruption or instability
[00:19:36] is the only time you'll get progress in
[00:19:38] Western democracy.
[00:19:40] And I'm like, "But
[00:19:42] so what? We're here in China and it's
[00:19:45] totally different." He goes, "What do
[00:19:47] you mean?" And I'm like, "Well,
[00:19:50] the only time I get I'm able to get
[00:19:53] progress in China
[00:19:56] is when
[00:19:58] uh stability
[00:20:00] is in harmony with progress." So
[00:20:05] or or let's say progress those two must
[00:20:08] be harmonized. You will only get
[00:20:10] progress when it is in harmony with
[00:20:13] stability. And I said it in that way,
[00:20:16] those three words. And
[00:20:20] that was very Chinese,
[00:20:22] you know, and totally different. It's
[00:20:25] like I'm like, if there was ever any
[00:20:29] hint of instability that we were to
[00:20:31] bring to China, we would be shut down immediately.
[00:20:37] But as long as we
[00:20:39] create a foundation of stability,
[00:20:42] progress is super welcome.
[00:20:47] Progress must be in harmony with stability
[00:20:50] and totally different.
[00:20:53] So when did they take the viewpoint if
[00:20:54] they took the viewpoint that Uber is
[00:20:56] injecting instability into their city or
[00:20:59] area? They never did. >> Yeah.
[00:21:02] But they at some point
[00:21:06] felt like we were we may win.
[00:21:11] And instead of really seeing super
[00:21:13] problems at the we didn't for the most
[00:21:16] part we were treated fairly at the
[00:21:18] cities for the most part. Not completely
[00:21:20] but for the most part. But what happened
[00:21:22] was the
[00:21:25] what I would what I'd say at the time is
[00:21:27] that the China war went global.
[00:21:30] So, we were spending, let's say, tens of
[00:21:32] millions of dollars a month fighting DD
[00:21:36] in all these cities. And the fight was
[00:21:39] like, uh, I needed to subsidize rides
[00:21:44] to gain market share. When I gain market
[00:21:47] share, there's network effect because if
[00:21:49] I'm bigger, then my system is more
[00:21:53] efficient. And if I'm more efficient
[00:21:55] than them, they have to subsidize more
[00:21:57] than I do to compete with me.
[00:22:02] So how do I subsidize where, when, how
[00:22:07] to get that efficiency edge, that
[00:22:10] network effect efficiency edge so that I
[00:22:13] subsidize less than them? This is why,
[00:22:16] you know, like Lyft is smaller than Uber
[00:22:19] because we were better at this part of
[00:22:22] this the thing and people don't really
[00:22:24] know that's what it takes. It's but like
[00:22:26] how do you get efficiency edge?
[00:22:28] Efficiency edge starts when somebody
[00:22:29] even downloads the app and signs up. If
[00:22:33] it's easier to sign up on one versus the
[00:22:35] other, you have an efficiency edge. If
[00:22:38] it's easier to call a vehicle and like
[00:22:41] get it to you without problems, you have
[00:22:43] an efficiency edge because you'll have
[00:22:45] less support. You'll have less like
[00:22:48] people are getting their higher
[00:22:49] completion rates. Like if the cars are
[00:22:53] moving to where the demand is because
[00:22:56] they the driver app has good sort of
[00:22:59] ways to point drivers to the right
[00:23:01] place, that means you have shorter
[00:23:02] pickup time. Efficiency edge.
[00:23:05] Efficiency edge means you get bigger
[00:23:07] faster. You get bigger faster means you
[00:23:10] have a bigger network of drivers which
[00:23:11] means wherever you are in the city you
[00:23:14] are going to get a faster pickup.
[00:23:17] Um and it will be cheaper because well
[00:23:19] if there's less dead time for the driver
[00:23:21] to pick you up then if he's generally
[00:23:23] trying to optimize for dollars per hour then
[00:23:28] then the whole thing just starts working
[00:23:30] better. That's the network effect. So
[00:23:32] you're like okay how do I get bigger?
[00:23:34] Well, I'll make the rides really cheap.
[00:23:35] That's one way of doing it. And if your
[00:23:38] rides are cheaper than them, then all of
[00:23:40] a sudden your network gets bigger. Your
[00:23:42] network gives you efficiency, which then
[00:23:44] means you can get to a lower price point
[00:23:47] without subsidies that the competitor
[00:23:50] still has to subsidize.
[00:23:51] You'd make money profit at a a place
[00:23:54] where they would make a loss. And the
[00:23:56] Robert Barons all understood this like
[00:24:00] Carnegie all
[00:24:02] Yeah. when you're talking I'm like [inaudible]
[00:24:03] this is Rockefeller
[00:24:04] it totally so I I read u I think it was
[00:24:06] a churnout biography >> Titan
[00:24:09] Titan >> yes
[00:24:09] okay there's actually a better one I'm
[00:24:10] going to send you
[00:24:11] and what it is is this book from 1970 by
[00:24:14] David Freeman Hawk it's called
[00:24:16] Rockefeller the founding father John D
[00:24:18] the founding father of Rockefellers
[00:24:20] Titan is 800 pages and you got a lot
[00:24:22] about his like family history this is
[00:24:24] like 250 pages of how he built Standard
[00:24:26] Oil and it's this [inaudible]
[00:24:28] it is exactly what you're describing I
[00:24:30] want to interrupt you one second before
[00:24:31] you go back to My question to you now is
[00:24:33] like I spend
[00:24:35] thousands of dollars a month on Uber and
[00:24:36] I only use Uber at Black SUV. It's
[00:24:38] insane. What in a mature market in the
[00:24:42] United States in these big cities that
[00:24:44] I'm using Uber? What would how would
[00:24:46] the network effects of Uber be reversed?
[00:24:49] Okay, so there's a couple things. First
[00:24:51] is a small player competing against Uber
[00:24:53] has certain advantages.
[00:24:55] Let's say a small player said, "I'm
[00:24:58] going to have cheaper rides than the big
[00:25:01] player." Okay, the small player, let's
[00:25:04] say, is onetenth the size. Let's just
[00:25:06] say their subsidies on an absolute basis
[00:25:10] are somewhere around onetenth as much.
[00:25:13] So, if I am the small guy and I go and
[00:25:15] subsidize rides, I'm going to gain
[00:25:17] market share unless the big guy is
[00:25:20] spending 10 times as much as me.
[00:25:25] Now the efficiency edge can make it
[00:25:27] instead of 10x can make it 7x. >> Mhm.
[00:25:30] Okay. But you you ultimately a
[00:25:34] wellfunded competitor you have to let
[00:25:36] them grow
[00:25:38] to some degree so that they they have to
[00:25:41] feel the weight of the size of what they
[00:25:43] are. So when they're subsidizing it
[00:25:45] becomes a problem
[00:25:45] and it hurts some more. I like to talk
[00:25:48] about situations where if we had a
[00:25:50] competitor we weren't exactly sure what
[00:25:52] was going on because what happens is you
[00:25:54] have to guess when you're subsidizing
[00:25:57] you have to guess do I have an
[00:25:58] efficiency edge on them or not. You try
[00:26:00] to make yourself as efficient as
[00:26:02] possible but you don't know if you are
[00:26:05] more efficient than them or not. So you
[00:26:07] need signal
[00:26:08] to determine whether you're better.
[00:26:10] One of the ways you could totally do it
[00:26:13] is let the competitor get to 50%. So
[00:26:15] it's 50/50. you have the same network size,
[00:26:19] then you would start to see, okay, is my
[00:26:24] price lower than theirs while
[00:26:26] maintaining a 50% market share or is my
[00:26:29] price higher than theirs while
[00:26:30] maintaining a a 50% market share? If I
[00:26:33] can maintain 50% market share while
[00:26:35] having a higher price, then my system is
[00:26:38] more efficient than them.
[00:26:39] Mhm. then I could start dialing because
[00:26:44] I know they'll lose because why? Because
[00:26:46] at some point efficiency outstrips
[00:26:49] subsidy. What I mean by that is when
[00:26:52] you're subsidizing you go through huge
[00:26:53] growth and at some point you get so big
[00:26:57] that you can't really subsidize a lot.
[00:27:00] Like if you're doing 10 billion rides a year,
[00:27:04] you can't subsidize two bucks a ride
[00:27:06] because you run out of money.
[00:27:07] Just $20 billion a year. Nobody's going
[00:27:08] to fund that. >> Okay?
[00:27:09] Right? And so as you get bigger and
[00:27:12] bigger, the amount of subsidy you can
[00:27:14] actually put to it is smaller and
[00:27:16] smaller. And at some point, the amount
[00:27:17] of subsidy you can put to it
[00:27:19] realistically is smaller than your
[00:27:20] efficiency gain by just being better.
[00:27:24] And so then you efficiency outstrips
[00:27:26] subsidy. Anybody who's a small player in
[00:27:28] a market has a natural advantage if
[00:27:32] they're wellunded. is that you can gain
[00:27:34] market share very quickly and you can
[00:27:36] force the big guy to burn money.
[00:27:38] But why wouldn't the big guy be able to
[00:27:40] drown the smaller competitor faster?
[00:27:42] Well, there are there are ways to
[00:27:44] reverse it. So, for instance,
[00:27:46] uh the other way where there's
[00:27:48] asymmetric going the other way is uh
[00:27:50] recruiting drivers.
[00:27:53] So, for instance, I could give subsidies
[00:27:56] to drivers if I'm the big guy. I can
[00:27:58] give subsidies to drivers that are like uh
[00:28:03] they're like uh
[00:28:06] $1,000 if you join Uber and you're you
[00:28:10] know you do a 100 trips in that first week.
[00:28:13] week. >> Mhm.
[00:28:15] I could suck up that supply. The only
[00:28:18] way they're going to be able to keep
[00:28:19] those drivers is they're going to have
[00:28:22] to subsidize across pole of their drivers
[00:28:26] even though I just took a small number
[00:28:27] of them. >> Mhm.
[00:28:29] So, I'm going to suck up all of their
[00:28:30] drivers unless they defend their driver base.
[00:28:33] There's like a lot of little things like
[00:28:34] this and and I'm almost like remembering
[00:28:37] it's been 10 years since I did any of
[00:28:38] this, but like I'm trying to remember
[00:28:40] all the ways where it's asymmetric one
[00:28:41] way versus the other way. And I'm Yeah,
[00:28:43] I think you hit on it's it's this paying
[00:28:45] attention to every single little detail.
[00:28:47] So like when you were speaking about
[00:28:49] even the sign up flow and like how fast
[00:28:51] the ride comes and how easy to put in
[00:28:53] your credit card information, everything
[00:28:54] else. My what I'm sitting here thinking
[00:28:56] is not necessarily about you and Uber
[00:28:58] and China. I'm thinking about
[00:28:59] Rockefeller walking by and saying, "Hey,
[00:29:01] you guys are putting 50 drops of sold
[00:29:04] solder on these barrels
[00:29:06] and you're doing that because you think
[00:29:07] it's 50 so it doesn't leak.
[00:29:09] Try 48." They try 48. This is in [inaudible]
[00:29:12] Titan. They try 48 it leaves. What about 49?
[00:29:15] 49 doesn't leave. And he says the first
[00:29:17] year that only saved us $2,500 a year
[00:29:19] cuz that one drop,
[00:29:21] but we were tiny. Now it's hundreds of
[00:29:23] thousands of dollars. And he did that
[00:29:24] with a thousand different things. So by
[00:29:26] the time he got to his scale, you're not
[00:29:28] competing at all. It's impossible.
[00:29:30] And so that's super important. Now
[00:29:33] I read Titan after Uber. [laughter]
[00:29:38] Okay. And I'm reading him going, "Holy
[00:29:42] [inaudible] this dude was
[00:29:45] way more hardcore." But the reason why
[00:29:48] is because I got an anti like there we
[00:29:51] had antitrust attorneys at Uber and
[00:29:52] they're like very making it very clear.
[00:29:57] Like there's certain things you can do,
[00:29:58] certain things you can't. They're like
[00:30:00] training me and educating me on
[00:30:02] antitrust law.
[00:30:03] Yeah. Now, at first when you hear that
[00:30:05] and you're just a startup kid, like
[00:30:07] literally just get you're like antitrust
[00:30:10] law. That's like what are you
[00:30:13] can't wait to have that problem, [laughter]
[00:30:14] you know? Uh but it it ends up being
[00:30:17] obviously very important. Um but
[00:30:19] Rockefeller didn't have that. >> No,
[00:30:22] he the laws passed because of him,
[00:30:24] of course, but it's like he's the super
[00:30:27] like people use OG, they use it the
[00:30:29] wrong way. It means original gangster.
[00:30:33] He's the OG. OG.
[00:30:37] I found one of my all-time favorite
[00:30:38] quotes when I was reading the book 0ero
[00:30:40] to1. The quote says, "The single most
[00:30:41] powerful pattern I have noticed is that
[00:30:44] successful people find value in
[00:30:45] unexpected places. [music] And they do
[00:30:47] this by thinking about business from
[00:30:49] first principles instead of formulas."
[00:30:52] That is exactly what Apploven has done
[00:30:54] with their advertising platform.
[00:30:55] Apploven connects you with over a
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[00:31:41] Apploven. And you can do that by going
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[00:31:48] I think the other thing about monopolies
[00:31:50] too is there's there are different ways
[00:31:52] there different things because sometimes
[00:31:57] the monopoly emerges because the company
[00:32:00] is so competitive.
[00:32:02] Sometimes the monopoly emerges because
[00:32:05] the company is anti-competitive and
[00:32:07] they're different.
[00:32:08] That's interesting. Say more about this.
[00:32:09] Yeah. Well, where I ended up at Uber was
[00:32:13] it basically sort of the motto was more
[00:32:16] like the one who serves the customer
[00:32:20] best gets all the customers.
[00:32:22] Very Bezos.
[00:32:24] That's where we ended up. So, you can be
[00:32:27] highly competitive. And look, we had
[00:32:30] never at Uber, we never
[00:32:33] got a regulation passed that would hurt
[00:32:35] a competitor. We never would do that.
[00:32:38] That's just not how we rolled. We never
[00:32:41] donated to a campaign
[00:32:44] ever to try to get something passed.
[00:32:48] You wanted to win because you built the
[00:32:49] best service.
[00:32:50] That's right.
[00:32:50] I'm reading this biography right now. It
[00:32:52] was published in 1975. It's on the
[00:32:55] founder of Honda who's competing in
[00:32:56] Japan. He founds Honda 1948. Japan's in ruins.
[00:33:01] ruins. >> Yeah.
[00:33:01] And they're the technology in Japan is
[00:33:04] really low at the time. And so all these
[00:33:06] all of his the people that are building
[00:33:07] motorcycles and cars, they're like,
[00:33:08] "Let's b uh let's get together and
[00:33:11] petition the government to not allow
[00:33:14] imports." And he's like, and he was the
[00:33:16] only one that voted against it. He goes,
[00:33:17] "No, no, no." He goes, "The way to win
[00:33:18] is to build the superior technology." >> Yeah.
[00:33:20] Cuz if we have the best product, that
[00:33:22] product will go, it won't just be
[00:33:24] profitable in Japan, it'll spread
[00:33:26] throughout the entire world.
[00:33:27] Very much like what you're saying here.
[00:33:28] It's like, "No, I don't want
[00:33:29] protectionism. I want to win because I
[00:33:31] built the best product and customers are
[00:33:33] choosing me." And also remember what we
[00:33:35] were overcoming to do what we do was a
[00:33:38] system that was perfectly anti-competitive.
[00:33:42] Can you explain a government a
[00:33:44] government condoned monopoly or a
[00:33:48] government condoned cartel called taxi?
[00:33:51] People don't understand this. Can you
[00:33:52] explain the environment in which you
[00:33:54] started Uber?
[00:33:55] Let's start with what is a taxi.
[00:33:59] Okay. What is a taxi? Um,
[00:34:02] we'll do New York cuz it's the best it's
[00:34:05] the best way to tell it. In the early
[00:34:07] 1900s, there were people that were
[00:34:10] picking up other citizens
[00:34:13] uh that needed a ride across town and
[00:34:15] charging them for it. And um
[00:34:21] eventually the city decided, hey, look,
[00:34:23] we want to have this to be licensed and
[00:34:25] controlled in some way or like certainly
[00:34:26] rules of the road, just rules of the
[00:34:28] road. So, you'd get a license, but
[00:34:30] anybody could get a license. You'd get
[00:34:31] that license for free and they would
[00:34:33] make sure like you weren't like a felon
[00:34:35] and like different things like this,
[00:34:37] which you'd go, "That sounds great. Good
[00:34:38] idea." But anybody could get a license
[00:34:40] and get it for free, a taxi license in
[00:34:43] New York.
[00:34:45] And eventually that number got to, I
[00:34:47] don't know, somewhere around 13,000. And
[00:34:53] then those 13,000 people who had
[00:34:55] licenses, this is now like, let's call
[00:34:57] it the 1920s, the 1930s,
[00:35:00] decided that they would lobby the city
[00:35:05] to give no more licenses out. And the
[00:35:08] city, they they did some deals. Who
[00:35:11] knows, you know, that era in New York,
[00:35:13] you know, how that went down, but no
[00:35:16] more licenses. And of course that was
[00:35:18] great for the people who had them
[00:35:20] because as the city was growing there's
[00:35:23] more and more demand to get across town
[00:35:26] but there are a fixed number of licenses
[00:35:29] people who could do it who are allowed
[00:35:31] to do it.
[00:35:33] Then the taxi guys go to city council
[00:35:35] and they they lobby again. And the next
[00:35:39] version of the lobbying is we want to be
[00:35:41] able to sell the license
[00:35:45] to somebody else.
[00:35:47] So now I have this thing now. It's known
[00:35:49] as a medallion. Now I can I can it's
[00:35:52] it's sort of artificial scarcity. Um and
[00:35:55] I can sell it to somebody else who wants
[00:35:57] to get a cash flow that's an
[00:35:59] artificially high cash flow because
[00:36:01] nobody's allowed to compete essentially.
[00:36:05] And then they went to city council one
[00:36:07] more time and they said, "We want to be
[00:36:08] able to lease out this license to an individual
[00:36:13] on a daily or weekly basis."
[00:36:16] [snorts] And that is the modern taxi
[00:36:18] system today. When Uber rolled into New York,
[00:36:23] York, uh
[00:36:26] the driver
[00:36:28] was getting a 12-hour shift 7 days a
[00:36:30] week, but there are two 12-hour shifts.
[00:36:34] Each of those drivers was paying $40,000
[00:36:38] a year to rent a car for half time. >> Insane.
[00:36:43] Which means the guy who had the license,
[00:36:46] whose grandpa got it for free. Okay. All
[00:36:50] right. The guy who has a license, whose
[00:36:52] grandpa got it for free, is getting
[00:36:55] $80,000 a year renting a car to a taxi
[00:36:59] driver. And that taxi driver who's
[00:37:01] paying $40,000 a year for 12 hours a day.
[00:37:06] He's renting a car for $40,000 a year.
[00:37:09] For that privilege, he gets to be impoverished.
[00:37:12] That is the taxi system. And they are
[00:37:15] over a hundred years. So
[00:37:20] it's like uh Stockholm syndrome or
[00:37:24] regulatory capture is so freaking tight
[00:37:27] that the
[00:37:29] the regulators the difference between
[00:37:31] the regulator and the taxi company is
[00:37:33] almost indistinguishable
[00:37:36] and it had to be jarring for you to walk
[00:37:38] into a system where you just described
[00:37:40] you're just describing corruption.
[00:37:42] It is not
[00:37:43] legalized corruption legalized
[00:37:44] corruption. So remember it is so what is
[00:37:46] a taxi system? It is a government
[00:37:49] condoned cartel that outlaws competition
[00:37:53] but it be jarring for you because then
[00:37:55] you come in with with a better product
[00:37:57] at a better at a cheaper price that
[00:37:59] customers love a thous
[00:38:02] you've had you caught me in 2010 or
[00:38:04] whenever you open up in New York you've
[00:38:05] kept me since then. I've never opened up
[00:38:07] another app like 16 17 years however
[00:38:10] long long it's been. It's like I'm
[00:38:13] choosing to do that and then the
[00:38:14] governments are like no no this
[00:38:16] legalized corruption is good. You Travis
[00:38:18] and Uber get the hell out of here.
[00:38:19] So what happens is
[00:38:22] uh being anti-competitive
[00:38:25] is illegal in the United States unless
[00:38:29] you get a government official or
[00:38:32] regulator to do it for you
[00:38:34] then it's legal.
[00:38:38] Pretty interesting.
[00:38:40] We were talking before we started
[00:38:42] recording about capitalism and he has
[00:38:44] some interesting thoughts and ways to
[00:38:45] describe it. I would also say like
[00:38:48] you know this this show is a love letter
[00:38:49] to capitalism. It's very pro
[00:38:50] entrepreneurship. I'm the son of a Cuban
[00:38:52] immigrant. I grew up meeting people that
[00:38:54] came over here in rafts. From the time I
[00:38:56] was 9 years old, I knew I I'm obviously
[00:38:58] born into a very special place. if these
[00:39:00] people risk their lives to get here and
[00:39:02] the wealth that this this country has
[00:39:03] created. What I think also has to be
[00:39:05] called out is this crony capitalism
[00:39:06] where it's like you don't I like the
[00:39:08] Hondas of the world where it's like no
[00:39:09] no I want to win because I'm the best
[00:39:12] not because I gave you a bunch of money
[00:39:14] and you shut down my competitors. That
[00:39:16] [inaudible] should be called out. So it's super
[00:39:18] interesting because you go okay well in
[00:39:20] this case Uber was
[00:39:24] was the symbol of
[00:39:27] hyper capitalism if in many ways like it
[00:39:30] was like embracing all of the
[00:39:35] values and um
[00:39:38] principles of capitalism but it started
[00:39:41] with the most important which is an
[00:39:44] individual has a right to choose between different
[00:39:48] uh suppliers of a good or service.
[00:39:51] It's like a pro competition thing. The
[00:39:54] consumer has a right to choose between
[00:39:57] different offerings. The other side of
[00:39:59] that is an individual can start a
[00:40:02] business to provide that service or offering.
[00:40:07] So you go okay. So capitalism at its foundation
[00:40:11] is somebody can start
[00:40:14] a legal business like a you know any
[00:40:17] make a product or a service and offer it
[00:40:19] to people and the people have the right
[00:40:22] to choose which one they use. That's capitalism.
[00:40:26] So the question is what's anti- capitalism?
[00:40:30] Anti- capitalism is the constraint on
[00:40:33] people being able to start a business or
[00:40:36] a uh have a vocation that they choose
[00:40:42] andor individuals
[00:40:45] not having the right to choose which
[00:40:47] service or off or product that they buy.
[00:40:50] At the core, that's what it is. Now,
[00:40:52] people get confused. Sometimes they
[00:40:54] think something is capitalism that is
[00:40:57] not. [snorts] Uh it's pretty obvious,
[00:41:00] you know, anybody watching any part of
[00:41:02] this conversation on taxis, it's super
[00:41:04] clear that taxis are definitely not capitalism.
[00:41:07] capitalism. >> Mhm.
[00:41:07] But it's why they are not very good and
[00:41:10] it's why they are more expensive than
[00:41:12] they need to be. And if people are
[00:41:14] taking Ubers today in New York and
[00:41:16] wondering why it's so expensive
[00:41:20] and why it's getting more unreliable,
[00:41:22] it's because after I left Uber, they
[00:41:26] started passing a bunch of laws that are
[00:41:29] turning Uber into the taxi system.
[00:41:32] I didn't know this.
[00:41:33] Yeah. They've they have a limit on the
[00:41:35] number of drivers that can be on Uber.
[00:41:39] They've turned it into a medallion
[00:41:41] system that cannot be traded. And as
[00:41:44] people retire out of driving, the number
[00:41:46] of Ubers, I believe, I may have this
[00:41:49] wrong, but it's something it's either
[00:41:50] fixed or shrinking right now. And that
[00:41:53] is why the prices are going up and the
[00:41:55] service is going down. But Uber's
[00:41:57] thought of as a capitalist thing, but
[00:41:59] actually the government is constraining
[00:42:03] it. This is a And why? Because of the
[00:42:06] taxi owners who want their medallion
[00:42:08] prices to go back up.
[00:42:10] This is madness. Have you ever read
[00:42:11] Atlas Shrugged?
[00:42:12] Of course. Yeah,
[00:42:14] I mean a lot of people are like what's
[00:42:15] happening now feels like the scenario,
[00:42:17] you know, the scenes in from that book.
[00:42:19] I haven't it was like recommended to me
[00:42:21] a million times. There's a bunch of
[00:42:22] people guests that have been on the show
[00:42:23] that have talked to me about it in
[00:42:24] private and finally I was like all right
[00:42:26] the 12th [inaudible] person that recommended
[00:42:28] I finally read it and I'm like and then
[00:42:29] I went looked up I was like wait this
[00:42:31] was written from like 1946 to 1956 I
[00:42:33] think the 10-year period she was writing
[00:42:34] I was like this sounds the the the
[00:42:37] people in this book is exactly it's the
[00:42:40] same kind of person today.
[00:42:41] Yeah. Yeah. For sure. I agree with that.
[00:42:43] The whole book is like we have these
[00:42:45] prime movers and then we have these
[00:42:46] people that are just trying to restrain
[00:42:48] their competitive and they're I love
[00:42:49] what you said like what are they protesting?
[00:42:51] protesting? >> Progress.
[00:42:52] Progress. >> Yeah.
[00:42:52] But what happens when the people
[00:42:53] building the progress then go on strike?
[00:42:55] That's very fascinating like theme
[00:42:57] throughout the book.
[00:42:58] Yeah. I mean we get to some pretty
[00:42:59] interesting places with this kind of thing.
[00:43:02] In your career, did you only run into
[00:43:04] this government corruption in Uber? Have
[00:43:05] you run into any I know you started uh
[00:43:08] city storage systems? cloud kitchens was
[00:43:10] in city storage systems. Now you renamed
[00:43:13] it at Adams. Have you run into because
[00:43:14] you're your whole thing what I love
[00:43:16] about you is just like
[00:43:18] all physical world. I think you said
[00:43:19] it's a you consider it a calling. >> Yeah.
[00:43:21] To digitize
[00:43:22] the physical world.
[00:43:23] I love that you use the word calling
[00:43:25] though. I think that's really important.
[00:43:26] Have you run into other forms of
[00:43:28] It's everywhere, but taxes is by far the
[00:43:31] most intense. Literally competi we talk
[00:43:34] about anti-competitive things and
[00:43:36] antitrust law and Rockefeller and things
[00:43:39] like this. No, no, no. Taxis,
[00:43:42] competition is illegal.
[00:43:45] But why do they still have power?
[00:43:47] They've captured the regulators
[00:43:49] through lobbying, through donations,
[00:43:53] through legalized corruption.
[00:43:56] And it's not like the only industry
[00:43:57] where this exists. You know, there are
[00:43:59] obviously many other industries, but in
[00:44:01] terms of what I've seen,
[00:44:04] competition is outlawed.
[00:44:06] How does the China Diddy Uber story end?
[00:44:09] Did they the government put the hand on
[00:44:10] the scale and favored Diddy over Uber?
[00:44:13] So, they ultimately did. What happened
[00:44:15] was is the China war went global
[00:44:19] and what happened is the sovereign
[00:44:22] wealth uh their sovereign wealth funds
[00:44:24] in China started pouring billions of
[00:44:27] dollars into my competitors Uber's
[00:44:30] competitors in different regions so that
[00:44:32] they would subsidize in those regions
[00:44:35] and drain my resources. Wait, before you
[00:44:39] go there, take me your mindset when you
[00:44:42] realize the game that they're playing.
[00:44:44] Yeah. I mean, you're like, damn,
[00:44:47] that's real. You're like,
[00:44:49] what are you like not sleeping or are
[00:44:51] you like
[00:44:51] Well, I mean, the entire Uber thing was
[00:44:53] like a lack of sleep, you know? So, it
[00:44:55] wasn't like this was a new lack of sleep
[00:44:56] thing. It was just I mean it was a new
[00:44:58] thing but lack of sleep generally was a
[00:45:01] thing just because I had a global
[00:45:03] business that was really intense and and
[00:45:05] very game theory oriented in the ways
[00:45:07] that I'm describing which means it was
[00:45:09] always on and crazy weird things happen
[00:45:12] in cars at night. So like uh the first
[00:45:16] time I got woken up in the middle of the
[00:45:19] night because there was a a driveby
[00:45:21] shooting from an Uber.
[00:45:25] You know what I mean? Like that's not
[00:45:27] good. The the thing is is that
[00:45:32] what happens in a city
[00:45:35] happens in an Uber.
[00:45:37] So you're exposed to all the vagaries of
[00:45:39] human behavior.
[00:45:39] Yeah. The roads
[00:45:41] the roads are the cardiovascular system
[00:45:43] for the city. There's nothing that
[00:45:45] happens in a city that road doesn't
[00:45:47] touch. You know, people are people. They
[00:45:49] do things they shouldn't do.
[00:45:52] What we our goal was to make Uber the
[00:45:54] safest place in a city. And I think we
[00:45:57] accomplished that. We got pretty close
[00:45:58] to that. Um, and I know they take it
[00:46:00] pretty seriously today.
[00:46:02] But go back to the stress. Like you
[00:46:03] wanted the stress, right?
[00:46:05] It was fun.
[00:46:06] Okay. So, Herb Keller, do you know that is
[00:46:09] founder of Southwest Dwith Airlines,
[00:46:11] most successful airline in history 40
[00:46:13] straight years was was profitable. Yeah.
[00:46:15] And you know, he he has what he was a
[00:46:18] gangster, right? uh drink a fifth of
[00:46:20] bourbon every day, smoke cigarettes on
[00:46:22] the planes,
[00:46:24] and he was he unfiltered guy. I would
[00:46:27] love if he was still alive. He'd be like
[00:46:28] one of my top uh you know guests I want
[00:46:31] to talk to. And I love he was giving he
[00:46:33] was doing interview one time. They're
[00:46:34] like, "You undergo a lot of stress. How
[00:46:35] do you handle it?" And he goes, "I don't
[00:46:37] handle it. I like it." >> Yeah.
[00:46:39] I get that same vibe from you.
[00:46:41] The lifestyle of an entrepreneur I I
[00:46:44] believe at its core. There's a couple
[00:46:45] other things, but this is one one one
[00:46:47] prism, one one one part of it, one
[00:46:50] pillar of it is I can take more pain
[00:46:54] than the other guy
[00:46:56] and I'll prove it.
[00:46:59] Once you take on that lifestyle,
[00:47:02] I mean it's a real thing. It's not just
[00:47:04] that I choose to take it on. It is the
[00:47:06] nature of the thing that I am doing.
[00:47:08] Then you are taking on a a life of
[00:47:12] adversity and overcoming all the time.
[00:47:16] And once you are seeing adversity all
[00:47:18] the time and overcoming it, it just
[00:47:20] becomes normal.
[00:47:23] The downside of it is you can get used
[00:47:25] to adversity.
[00:47:26] It just becomes very normal.
[00:47:28] Why is that a downside?
[00:47:30] Because you almost start accepting it.
[00:47:35] You don't like something bad happens,
[00:47:37] you don't even get mad.
[00:47:39] You're like, "That's interesting."
[00:47:41] But wouldn't it be beneficial to be like
[00:47:43] unruffled like that where
[00:47:44] there are benefits, but you need to make
[00:47:47] sure you don't get so used to it that it
[00:47:49] doesn't even bother you.
[00:47:51] You can get so zen you're unbothered.
[00:47:53] Now, you still act, but there's
[00:47:55] something special about the extra
[00:47:58] fierceness of being bothered,
[00:48:01] being upset about something that is
[00:48:03] wrong. Yeah. Wrong things. When what is adversity?
[00:48:08] What is adversity?
[00:48:11] Usually adversity is like some bad [inaudible]
[00:48:14] went down that shouldn't have.
[00:48:17] And it was done to you. It's adversity.
[00:48:20] You [laughter] know what I mean? Like
[00:48:22] for a farmer, it's like a drought, you
[00:48:24] know? It's like terrible.
[00:48:27] Um, so or it could be a lot of things.
[00:48:30] Could be somebody stole his crops, could
[00:48:32] be could be pests, could be, you know,
[00:48:34] it could be anything. So, uh,
[00:48:36] are you just getting numb to it? Is that
[00:48:38] what you're saying? Like, was there
[00:48:38] parts? Just saying once you fully embody
[00:48:42] the lifestyle of
[00:48:45] adversity and overcoming it, you have to
[00:48:48] be careful of the
[00:48:52] ease at which you walk through it
[00:48:54] because there is an extra power in being
[00:48:58] bothered by something that is wrong.
[00:49:01] You can get too used to wrong things happening.
[00:49:05] Have you reached that point in your
[00:49:06] career before?
[00:49:07] Well, no. I I I would say today there
[00:49:10] are very few things that actually stress
[00:49:12] me out.
[00:49:14] Are you worried about that?
[00:49:15] Of course. So I remember the things that
[00:49:19] are important
[00:49:22] and that's where I channel fierceness
[00:49:25] through what is right and what is wrong.
[00:49:29] You're almost telling me you've been inoculated
[00:49:32] from pain.
[00:49:33] Yeah. something like uh there's a zen
[00:49:35] that can happen when a warrior has fought
[00:49:39] for a long time. You can get used to it.
[00:49:44] Yeah. But you still for at least from
[00:49:45] the outside you still have this like
[00:49:46] crazy I told you you're the most intense person
[00:49:49] I've ever met and I've met almost all
[00:49:50] the top founders in the world.
[00:49:52] But imagine fierceness with calm on the inside.
[00:49:55] That's what you want or that's what you're
[00:49:57] That's what I got. Yeah.
[00:49:58] That's where I'm at. >> Yeah.
[00:49:59] You weren't calm on the inside when you
[00:50:00] were building Uber. That's what you're
[00:50:02] saying. I'm just saying as one
[00:50:04] entrepreneurs longer and longer and does
[00:50:07] [laughter] it properly
[00:50:09] I've never heard it used as a verb
[00:50:10] you get you get to that place [laughter]
[00:50:14] you just get to that place entrepreneurs
[00:50:16] for longer and longer I'm using that
[00:50:17] line man [laughter]
[00:50:20] you just get to that place
[00:50:21] well I love what you said though about
[00:50:22] like the pain because you know there's a
[00:50:24] bunch of maxims from the history of
[00:50:25] entrepreneurship that I love like um I
[00:50:27] think something that we we both uh like
[00:50:30] support is like trying to to win based
[00:50:32] on you know providing the best service.
[00:50:33] So like one of my favorite maxims comes
[00:50:36] from Henry Ford where he says money
[00:50:37] comes naturally as a result of service.
[00:50:39] If you go read his autobiography you see
[00:50:40] how he organized Ford Motor Company like
[00:50:42] we're going to provide the maximum
[00:50:42] amount of service and I'm not the money
[00:50:44] will take care of itself if I'm just the
[00:50:46] delighting the customer. The bank
[00:50:47] account will be fine but my favorite
[00:50:49] maxim from all of history
[00:50:51] entrepreneurship is excellence is the
[00:50:53] capacity to take pain
[00:50:55] which is exactly what you said.
[00:50:56] Oh this is Oh I love that one. That is
[00:50:58] 100% true. So once you say
[00:51:01] entrepreneurship is the lifestyle of entrepreneuring,
[00:51:06] entrepreneuring, [laughter]
[00:51:07] the lifestyle of entrepreneuring is the
[00:51:14] uh this sort of pride and I can take
[00:51:17] more pain than the other guy. You go
[00:51:19] why? Well, the best example is like
[00:51:23] world class marathoner
[00:51:25] on mile 21.
[00:51:28] You ever seen You ever seen a marathon?
[00:51:29] You ever seen a marathon or a mile 21?
[00:51:31] Probably on TV. Is that dude smiling?
[00:51:35] [inaudible] no.
[00:51:36] Of course not.
[00:51:39] Why? Because if he were smiling, if he
[00:51:43] were just
[00:51:45] not feeling pain, there's somebody else
[00:51:47] who will.
[00:51:49] What is the difference between feeling
[00:51:51] pain and not feeling pain? is that extra push.
[00:51:57] That extra push means he loses if he's
[00:52:00] not getting into that pain.
[00:52:03] And that's what excellence is.
[00:52:05] Excellence is about pushing into
[00:52:09] the extent the the the what is a human
[00:52:13] capable of that the the full potential
[00:52:16] because if you don't somebody else does.
[00:52:19] Yeah. And then that becomes the standard
[00:52:21] of excellence.
[00:52:24] And all of human progress is through
[00:52:28] that push [snorts] towards excellence.
[00:52:30] That is a push through pain. If it is
[00:52:34] not painful, you're clearly not pushing
[00:52:37] hard enough. And I love that you've tied
[00:52:39] this to if you're doing something that's
[00:52:42] easy, you're doing something that's not
[00:52:44] valuable. If you're doing something
[00:52:46] that's easy, it may be valuable, but
[00:52:49] you're about to get your ass whooped. [laughter]
[00:52:52] [laughter] Or
[00:52:55] Or it
[00:52:56] may not be valuable. It just depends.
[00:52:59] So, you know, easy could be sitting on
[00:53:02] the beach for 6 months.
[00:53:05] Now, it could be valuable to you,
[00:53:07] respect, and that's all good. Everybody
[00:53:10] has that choice. That's all good. But
[00:53:13] you're not you're you're you're not
[00:53:15] bringing human progress. And then you
[00:53:17] go, well that's interesting. So if
[00:53:19] somebody sits on the beach for 6 months,
[00:53:20] they're not bringing there's no part
[00:53:22] they're not participating in human
[00:53:23] progress. I'm like, well, how could
[00:53:26] they? You're like, well, what if they
[00:53:27] start thinking deeply about
[00:53:31] life and about philosophy and about
[00:53:35] society and they had really amazing
[00:53:37] thoughts. I'm like, well, did they write
[00:53:39] them down?
[00:53:41] I'm like, "Okay, he wrote him down." So
[00:53:42] now he's on the beach writing it down.
[00:53:44] And I'm like, "Okay, but there's lots of
[00:53:46] people doing that.
[00:53:48] He's got to be better than those other
[00:53:49] guys if he wants to be about progress."
[00:53:51] So now he's really [inaudible] writing them
[00:53:53] down. And he's honing those words to
[00:53:56] such a degree that it's beautiful and
[00:53:58] perfect before somebody else has that
[00:54:01] thought and does it themselves. And now
[00:54:02] he's in pain.
[00:54:04] How long did you take from when you left
[00:54:06] Uber, which obviously had to be [inaudible]
[00:54:08] devastating, heartbreaking, to jumping
[00:54:10] into the next thing? Did you sit on the
[00:54:12] beach for a little bit? Like, what did
[00:54:13] you actually do?
[00:54:14] No. So, it was like 7 months, six, seven
[00:54:17] months, something like this. And most of
[00:54:20] it was
[00:54:22] uh fending off lawfare.
[00:54:24] So, wait, the lawfare was it criminal?
[00:54:25] Were they trying to like
[00:54:26] It was civil and criminal for sure. Yeah.
[00:54:29] Yeah. >> Yeah.
[00:54:29] So, you're fighting off that for
[00:54:31] Yeah. It's like a corporate cancel
[00:54:32] culture, lawfare, like all the things on
[00:54:35] the corporate side of all of those
[00:54:37] things. Remember I said, remember
[00:54:38] earlier we we talked about
[00:54:41] uh business became politics.
[00:54:43] We were talking about this off camera.
[00:54:45] Can you talk about this now?
[00:54:46] Yeah. So there was a you know in the 2010s
[00:54:52] there was something that happened in the
[00:54:54] media and it was that business became
[00:54:57] politics. If you just think about your
[00:55:00] favorite politician and just go on the
[00:55:02] internet today,
[00:55:04] do you think you're gonna see a lot of
[00:55:06] happy golucky stuff about your favorite
[00:55:08] politician? Like, of course not. We know
[00:55:10] that because politicians basically just
[00:55:14] the nature of what it is they do.
[00:55:15] There's a lot of mudslinging and a lot
[00:55:18] of stuff and a vast majority of it is
[00:55:21] just untrue.
[00:55:24] Um though I I'd say with some of our
[00:55:26] politicians today maybe a lot of it is
[00:55:28] true but but you know it's just a doggy
[00:55:31] dog mudslinging thing and the headlines
[00:55:34] are often not true which I think we know
[00:55:37] that in politics. What we didn't know in
[00:55:39] the 2010s is that or that was just
[00:55:42] starting to happen was that business was
[00:55:44] becoming politics. That the headlines
[00:55:46] you were starting to read about business
[00:55:49] were just narratives and often
[00:55:52] fabrications with substantial material
[00:55:57] perversion of truth.
[00:55:59] And you were exhibit A for this
[00:56:01] for sure. I I would I would say so.
[00:56:04] Yeah, I would say so too.
[00:56:05] Yeah. So, you know, like talk to anybody
[00:56:08] who knows me, they would basically say
[00:56:11] the difference between, especially if
[00:56:14] you talk about 10 years ago, the
[00:56:16] difference between
[00:56:18] the public persona and the actual person
[00:56:22] couldn't be more different.
[00:56:24] Well, I can I can speak to this and I
[00:56:26] know when I we before started recording
[00:56:28] and I've been chasing you for a while.
[00:56:30] and I saw you at Michael's house and
[00:56:32] everything else which was funny by the
[00:56:34] way when you walked up to us and I was
[00:56:35] like do you remember me go like yeah I
[00:56:38] go it's time to do the [inaudible] show and
[00:56:39] you go it's time to do the [inaudible] show [laughter]
[00:56:42] I love that but what I would say is just
[00:56:44] like in terms of founders that actually
[00:56:48] know their [inaudible]
[00:56:49] your reputation is >> perfect
[00:56:52] sterling like if you're a killer entrepreneur
[00:56:55] you say great things about Travis
[00:56:58] it's the only [inaudible] I've ever heard comes
[00:57:00] from like investors. This is why
[00:57:02] I don't necessarily believe it comes
[00:57:03] from investors, but
[00:57:05] I'm saying what I hear.
[00:57:06] No, it's interesting because where I,
[00:57:08] you know,
[00:57:10] Yeah. a lot of times it's from the the gallery.
[00:57:16] Now, sometimes investors are in that
[00:57:18] category, but [snorts]
[00:57:20] when I go and do pitches and
[00:57:22] fundraising, I don't feel like
[00:57:24] you're Travis C. Come on, bro. I'm just
[00:57:25] [laughter] saying [inaudible] Tra. Of
[00:57:28] course. Like you you basically
[00:57:30] unlimited. So this is one I was texting
[00:57:32] Daniel E about uh that I was going to
[00:57:34] see you and he wanted he's like you got
[00:57:36] to get him talk about fundraising which
[00:57:37] we'll get to in a minute. I think we
[00:57:38] have to hit on something really
[00:57:39] important because what I loved about our
[00:57:41] dinner is you just straight interrupted
[00:57:42] me which I loved because you should have
[00:57:44] and but I was trying to tell you I was
[00:57:45] like man listen there's just something
[00:57:47] weird that all the content and the
[00:57:49] podcasts that entrepreneurs and founders
[00:57:52] are consuming are created by VCs and you
[00:57:56] like and then I went to say another
[00:57:57] thing and you cut me off. You put like
[00:57:58] your hand in my face which is hilarious.
[00:58:00] You're like real founders don't listen
[00:58:02] to VCs.
[00:58:04] We need to talk about this because >> sure
[00:58:06] if you're friends with founders,
[00:58:08] you hear atrocious horror stories and
[00:58:12] bad behavior by investors all the time
[00:58:15] that they will not sit talk about publicly,
[00:58:18] right? You went through one of the worst
[00:58:21] of the worst. Like going back, it's like
[00:58:23] is it just when you're doing Uber, is it
[00:58:25] just you raised money from the wrong
[00:58:26] people? What did you how do you look at
[00:58:27] it now? And how could you what would you
[00:58:29] tell like a young founder now that has
[00:58:31] to raise a ton of money? I always I got
[00:58:34] to do the I got to first shoot the
[00:58:36] arrow, which is you definitely shouldn't
[00:58:37] raise from benchmark capital. Got to get
[00:58:39] that out there. Um and then okay, let's
[00:58:42] get into the real stuff. Um
[00:58:46] look, I think it's really interesting to
[00:58:48] start with what where where did it get
[00:58:51] weird? I mean, basically at the peak, so
[00:58:56] 2017 was a was my problem year, right? I
[00:59:00] mean, it was always hard, but this is
[00:59:01] when it got dialed up. And Benchmark was
[00:59:04] running a war room.
[00:59:07] They were an an unspoken activist
[00:59:09] investor that was creating
[00:59:12] a once a week crisis,
[00:59:17] but without
[00:59:19] against you.
[00:59:20] Yeah. Against me, uh, without speaking
[00:59:23] of it. Again, there's some things I
[00:59:25] don't know, but the best I can see is
[00:59:27] that they wanted liquidity and they felt
[00:59:29] like I wouldn't give it. [snorts]
[00:59:34] We were already preparing for an IPO,
[00:59:36] but I didn't tell them that.
[00:59:37] Why didn't you tell them that? >> Because
[00:59:42] we wanted to sort of make sure we'd done
[00:59:45] the right thinking, got prepared, so we
[00:59:47] could just say, "We're going to do it,
[00:59:49] and here's how we're going to do it."
[00:59:51] And Bill Gurley is a bit of a
[00:59:52] catastrophist. it's always the end of
[00:59:55] the world.
[00:59:56] Um, and so that forces you to do really
[01:00:00] weird things if you think the world is
[01:00:01] always going to end, including try to
[01:00:03] take me out.
[01:00:05] So instead of dealing with that catastrophism,
[01:00:10] let's just go do the damn thing. be I
[01:00:14] give you lots of examples like uh I
[01:00:17] think on the we had a we had a fund
[01:00:19] raise in 2014 mid 2014
[01:00:24] um where the last round we did was in
[01:00:29] August 13 was $3.5 billion that's when
[01:00:32] we brought Google and um
[01:00:36] Google and TPG in and then mid 2014 so 9
[01:00:40] months later that was three and a half
[01:00:42] billion 9 months later we did around.
[01:00:45] Girly was like convinced it was the end
[01:00:48] of the world and we got a raise and just
[01:00:50] take your first term sheet. Just [inaudible]
[01:00:52] take it. And you have a whole philosophy
[01:00:55] on this which is like if you want a
[01:00:56] round to go well and to go fast.
[01:01:01] You have to have a process. If you just
[01:01:04] go take the first term sheet, getting
[01:01:06] the round done will actually take longer
[01:01:09] because there's no alternatives. You
[01:01:11] don't have alternatives. And then it
[01:01:12] gets weird and then the VC will just
[01:01:14] keep pushing pushing pushing push
[01:01:16] getting more and more more more and it
[01:01:17] gets weird to a point where it actually
[01:01:19] becomes highly likely that the the deal
[01:01:21] just blows up. So I like to say I never
[01:01:23] get attached to a price. I get attached
[01:01:26] to a process. That process is about
[01:01:27] excellence in fundraising. Anyways, can
[01:01:30] you explain that process though?
[01:01:31] We'll get there. >> Okay.
[01:01:32] Okay. >> Okay.
[01:01:32] Don't let me forget.
[01:01:33] I won't. [laughter] >> BFS.
[01:01:37] Okay. We're going have to sit here for
[01:01:39] 10 hours to cover everything. But he was
[01:01:41] convinced like, "Hey, just take the
[01:01:43] first deal. Like, just do a $6 billion."
[01:01:46] It was like, "I think you could get a $6
[01:01:48] billion round valuation done right now.
[01:01:51] It's 9 months after the three and a
[01:01:52] half. Just go take the first term sheet,
[01:01:55] make it happen."
[01:01:57] Now, if you're a founder hearing that
[01:01:58] and you're just like, [snorts] [sighs and gasps]
[01:02:01] you're like, "Dude, I hear you. But even
[01:02:05] if the world is about to end,
[01:02:08] the best thing you can do is have
[01:02:09] alternatives. and the deal will actually
[01:02:12] get done faster.
[01:02:15] So, we got to a place where like I just
[01:02:18] wouldn't talk to him and not if he
[01:02:22] reached out to me, I would re I would
[01:02:24] talk to him, but like I just wouldn't
[01:02:25] try to engage
[01:02:28] because it was always that. So, Emil
[01:02:31] Michael would handle this part. He would
[01:02:34] handle a lot of the the investor
[01:02:36] relations, especially as a relationship.
[01:02:37] Shout out Emil Michael. That dude is
[01:02:39] loyal as hell to you. Well, he's just an
[01:02:41] awesome guy. Not because of loyalty, but
[01:02:43] because he's just an awesome guy. But of
[01:02:45] course, that too. And he would do it in
[01:02:49] a genuine authentic way, like try to
[01:02:51] handle the the objections or whatever.
[01:02:55] [snorts] Anyways,
[01:02:57] two months later, we got a round done at
[01:02:59] a 17.5 billion pre.
[01:03:02] Whoa. So, that's my point. So, when you
[01:03:06] want to do things right, you got to do
[01:03:07] things right. And VCs don't,
[01:03:12] not all, but many, most,
[01:03:17] they're just, they're worried about
[01:03:18] other things.
[01:03:20] So, we were already planning IPO stuff.
[01:03:24] They didn't know it, but they also never expressed
[01:03:29] the desire to like, "Hey, dude, you got
[01:03:32] to IPO." It's never brought up.
[01:03:35] So, it was like this weird cat catastrophism
[01:03:40] mixed with if you think the world's
[01:03:43] about to end and you've got this thing
[01:03:44] that's worth a ton of money,
[01:03:46] you could get to a weird place.
[01:03:48] Especially when you're in a VC, you
[01:03:49] don't have any control. You're not like
[01:03:52] running anything. So now you're like
[01:03:54] your entire holy [inaudible] big your outcomes
[01:03:58] in life are due to this guy and you
[01:04:01] think the world's about to end and he doesn't.
[01:04:04] You're like you could get into a place
[01:04:07] where you're running a war room to
[01:04:08] destroy him
[01:04:10] and that's that's kind of what happened.
[01:04:13] What's the alternative scenario if you
[01:04:14] raised just from somebody that wouldn't
[01:04:16] have done that? Like I'm just going to
[01:04:17] make this up but like how Founders Fund
[01:04:19] says they no matter what they'll never
[01:04:20] remove a founder. will not do like a
[01:04:22] warfare war room against them.
[01:04:24] Well, I think there's two parts. So,
[01:04:25] first I'd say the most the the the
[01:04:28] actually a super high bar for a VC is do
[01:04:31] no harm. There's a lot of reasons why
[01:04:33] that's hard for a VC.
[01:04:35] Elaborate, please. This is important,
[01:04:37] man. No one talks about this [inaudible]
[01:04:39] Everybody wants to make a mark on the world.
[01:04:44] Everybody wants to make a mark on the world.
[01:04:47] And you might believe one thing or another.
[01:04:53] You want to make a mark in the world.
[01:04:56] And the the way I think about it is an
[01:04:59] operator who's running a company is a if
[01:05:03] they're good is a grandmaster of chess. >> Mhm.
[01:05:08] the VC and by the way that grandmaster
[01:05:11] of chess, this operator entrepreneur
[01:05:15] is playing this
[01:05:18] chess match somewhere between 60 and 80
[01:05:21] hours a week
[01:05:24] and is like really knows this thing and
[01:05:28] it's like
[01:05:30] knows many moves ahead and just sees
[01:05:33] things other people don't see and
[01:05:34] they're in it as well. [snorts]
[01:05:37] And the VC is a chess enthusiast
[01:05:43] and they check in on the chess match
[01:05:45] once every three months
[01:05:49] and they're like trying to make a mark
[01:05:51] on the opinion. They're trying to make a
[01:05:54] mark. Hey, why don't you do this or
[01:05:56] that? and you're like,
[01:06:00] you know, uh,
[01:06:05] don't go to Jordan and tell him how to
[01:06:06] dunk and definitely don't go to him and
[01:06:09] tell him how to dribble.
[01:06:12] But it's hard because everybody has an
[01:06:15] opinion and
[01:06:18] you believe whatever you believe, you
[01:06:19] really believe it. But like if you're
[01:06:21] not in a thing all in all the way every
[01:06:24] day 12 to 16 hours a day
[01:06:28] on this game, it ain't a thing. But
[01:06:31] that's a hard thing for most people to take
[01:06:36] who aren't running [inaudible]
[01:06:38] Why do you think it's hard for them to
[01:06:39] take? because VCs are uh glamorized and
[01:06:45] they have a seat at the table in some
[01:06:47] fashion and there are certain powers you
[01:06:50] can make a mark
[01:06:53] and so it's sort of like the way to
[01:06:55] think about it is you're on the Serengeti
[01:07:00] and uh
[01:07:04] like if an analopee limps in the
[01:07:07] Serengeti the lion will take it down
[01:07:10] even if it's not hungry. Can't even
[01:07:11] [inaudible] help it.
[01:07:14] Uh it's just what is what he does.
[01:07:17] And that's kind of the nature of most VCs.
[01:07:22] This the nature of it is they will if
[01:07:26] the if you are on the Serengeti and
[01:07:28] limping, you will you will be eaten.
[01:07:32] It's just the nature of it.
[01:07:35] And the lion doesn't even know why.
[01:07:37] Sometimes you're just like this is what
[01:07:38] I do. Yeah.
[01:07:40] So when you're talking to other
[01:07:42] founders, younger founders, you're
[01:07:43] saying priority number one is just find
[01:07:44] an investor that does no harm. That
[01:07:47] would be a high bar. So achievable what
[01:07:50] percentage of the time then you would
[01:07:51] guess 10%.
[01:07:55] And then the 1% is helpful,
[01:08:02] but it's hard. How the [inaudible] are they
[01:08:04] supposed to be helpful? There's
[01:08:06] different times to be helpful, though.
[01:08:07] helpful is hard times
[01:08:10] is when you actually need real help, right?
[01:08:16] Uh helpful is
[01:08:22] there, you know, maybe it's personnel
[01:08:24] like you need epic people, but it's
[01:08:27] still like hard hard for them to
[01:08:31] participate because they're just not in
[01:08:33] it that deep. So, can you explain
[01:08:36] explain excellence in the fundraising
[01:08:38] process and how you think about it, the
[01:08:39] system you develop for this?
[01:08:41] Yeah, and it it could be changing over
[01:08:43] time, but I like I certainly have my
[01:08:46] approach. It's interesting because I've
[01:08:48] just I'm just finishing a fund raise
[01:08:50] right now and it's it's interesting to
[01:08:53] see the world change. But I think part
[01:08:55] of what we're seeing right now is we're
[01:08:57] in a we're in a super cycle or like a
[01:08:59] super high
[01:09:02] we're in a hype I don't want to call
[01:09:04] hypo, but like in a a very bullish cycle
[01:09:06] right now, which means different things
[01:09:09] happen than if it's sort of average.
[01:09:12] When it's average,
[01:09:14] it's super important
[01:09:16] to tell a beautiful story
[01:09:21] that's woven like that that that's
[01:09:24] that's like a story that numbers are
[01:09:27] woven through. It's a it's a it's a
[01:09:30] beautiful, entertaining, interesting story
[01:09:35] story with
[01:09:36] analytical numbers woven through it. and
[01:09:40] you basically get to what I would call QED,
[01:09:44] which is
[01:09:46] you've dissected the chess match to such
[01:09:49] a degree that it's very clear
[01:09:52] what it takes to win and that you have
[01:09:56] the winning formula.
[01:09:59] And you get to the end of the thing and
[01:10:01] you're like, it's just proven. It's not
[01:10:03] even like a question anymore. It's QED.
[01:10:07] That's in normal times. And I think in
[01:10:11] super cycles or whatever we want to
[01:10:12] call, you know, kind of what's going on
[01:10:14] right now, that rigor is not as important.
[01:10:19] And if you go too far on that rigor, it
[01:10:21] could be too much.
[01:10:22] Explain that.
[01:10:23] You hear stories of entrepreneurs that
[01:10:25] just sit down around a table and then
[01:10:29] they have an idea and they get money.
[01:10:31] That's the opposite of QED. But
[01:10:37] if you have a 2-hour long presentation
[01:10:41] that goes QED
[01:10:44] in a super cycle, you probably should
[01:10:46] shorten that to 45 minutes. >> Why?
[01:10:49] I don't know how to put it. It just
[01:10:51] looks like too much. Like, why are you
[01:10:53] going so far, dude? What? What's
[01:10:55] yourself out of the wrong?
[01:10:56] Yeah, you'll talk yourself out of the way.
[01:10:57] Why are you so detailed?
[01:11:01] It's this weird dynamic. It's very
[01:11:03] funny. like
[01:11:05] it's cool, bro. [laughter] You know,
[01:11:09] maybe it's also because you're you're
[01:11:12] projecting many years out. So, so the
[01:11:16] more super cycle you're in, the more
[01:11:18] forward you are, the more into the
[01:11:21] future you are. And that future can't
[01:11:23] really be presented as tightly with numbers.
[01:11:26] Yeah. So, when you're talking 2 hours
[01:11:27] forward, you don't know.
[01:11:28] So, then it's about the theory of the
[01:11:30] case. That's probably the way to think
[01:11:32] about it is that a mix of super cycle
[01:11:35] plus the speed at which technology is
[01:11:38] moving and the sort of true exponential
[01:11:41] inflection that can occur.
[01:11:44] You're talking 3 to 5 years out.
[01:11:47] There's almost no set of numbers today
[01:11:50] that can QED the 5year thing at this
[01:11:53] crazy 100x situation that's probably
[01:11:56] going to occur. Mhm.
[01:11:57] So then you have to talk about the
[01:11:58] theory of it
[01:12:00] in many ways and so maybe that's why
[01:12:02] it's a little bit different today.
[01:12:03] What's the common uh in your approach in
[01:12:05] a normal cycle and the super cycle you
[01:12:08] just got?
[01:12:08] Normal cycle is 2 hours QED.
[01:12:10] What is something that you'll use in
[01:12:12] both whether it's normal or super?
[01:12:13] Well, I still do some version of I my
[01:12:16] style is QED
[01:12:17] and then the multiple bids thing is is
[01:12:19] mandatory. Correct. So well I would call
[01:12:20] it so it's QED is the storytelling and
[01:12:24] then there's sort of like a
[01:12:26] an auction process
[01:12:30] that you hone
[01:12:32] if when you're doing right now. This is
[01:12:34] has to be measured against how many
[01:12:36] resources you have to do QED and how
[01:12:39] much deal resources you have to manage a
[01:12:41] full auction.
[01:12:42] Explain that part to me.
[01:12:42] Like if I have five rooms going at the
[01:12:44] same time, I have to have that. That's a
[01:12:48] thing that you five rooms simultaneous
[01:12:51] for an entire week.
[01:12:53] Where did you even get that idea?
[01:12:55] It was just the expression
[01:12:58] of the right thing. It it's it's sort of
[01:13:02] like if you keep incrementing on
[01:13:04] something and keep making it better and
[01:13:06] better, you will end up there.
[01:13:07] What was the quality of the business
[01:13:08] when you were running this like five
[01:13:10] room process?
[01:13:11] That's peak Uber
[01:13:12] peak. So it's like there it's like you
[01:13:14] can put money to this or nothing.
[01:13:15] Nothing's even close.
[01:13:18] No, there are other things but it was
[01:13:19] peak Uber. But the point was I did it QED.
[01:13:23] So I showed at the atomic level how the
[01:13:27] whole system works
[01:13:30] with [clears throat] with a very
[01:13:32] analytical view but also sort of a bit
[01:13:35] of performance art cuz you're storytelling.
[01:13:38] Okay. Explain what's happening in these
[01:13:40] five rooms then.
[01:13:41] Five rooms, 12 hours, one week.
[01:13:44] Who's in the rooms? You don't have to
[01:13:46] say the people.
[01:13:47] No, it's okay. So I'm in the $250
[01:13:50] million check or over room. Then there's
[01:13:53] like a $100 million room and a $50
[01:13:55] million room and a $25 million room. And
[01:13:58] there'll be a guy in the $25 million
[01:14:00] room who's like uh
[01:14:06] who works for a guy who works for a guy
[01:14:08] who works for me, right? And what are
[01:14:11] you guys saying in in all these rooms?
[01:14:14] We're telling the story. >> Mhm.
[01:14:15] That story is the core.
[01:14:17] And now you have it being performed in
[01:14:20] four rooms at a time. and there's this a
[01:14:22] deadline price is going up.
[01:14:24] Well, no, it's not prices going up. So,
[01:14:26] that's the mis that's the misunderstanding.
[01:14:28] misunderstanding. >> Okay.
[01:14:29] The right way to do it is to start with
[01:14:31] a low price.
[01:14:33] Explain that.
[01:14:34] So, a lot of entrepreneurs they go and
[01:14:36] they say they really have remember I
[01:14:38] said attached to a process not a price.
[01:14:42] So, a lot of entrepreneurs will get
[01:14:43] attached to the price and not the process.
[01:14:46] And you have to be careful. It's very
[01:14:48] easy to get sucked into that where
[01:14:50] you're like you get some signal that it
[01:14:52] should be a price and you get attached
[01:14:54] to it and then that becomes your price
[01:14:56] but you haven't cleared the market. So
[01:14:58] you have to be very careful about that.
[01:15:00] So you get attached to the price and so
[01:15:01] then when I throw a price out you're on
[01:15:03] the other side of the table and you like
[01:15:06] you come in under it and now we
[01:15:07] negotiate, right? It's a very bad place
[01:15:11] to be from my perspective. uh where you
[01:15:13] really want to be is you want to start
[01:15:15] at a low price and say look I don't know
[01:15:18] where the price is going to go but I
[01:15:19] know it's at least here
[01:15:22] and if it's low
[01:15:27] is like
[01:15:29] okay now once they give you that read
[01:15:32] once they lean forward like that you're
[01:15:34] like okay we're good [snorts] you have a bidder
[01:15:41] and then you go to the next guy.
[01:15:44] It depends on how the nature of the
[01:15:45] round. If you're doing a winner takes
[01:15:47] all round, then you would just go to the
[01:15:49] next guy and you would then say whatever
[01:15:52] that guy said x + 5 whatever x + y here.
[01:15:57] Just say x plus 5. And that [snorts] guy
[01:15:59] does the same thing. And then you go to
[01:16:01] the next guy and then it's x + 5 + 5.
[01:16:06] And the next guy x plus 5 plus 5 plus 5.
[01:16:08] All the while while that's happening,
[01:16:10] it's a winner takes all deal.
[01:16:12] You go back to the original guy and
[01:16:14] you're like, "Dude, it's going up. It's
[01:16:15] going up." And you're telling people
[01:16:16] it's going up. That's a winner takes all
[01:16:19] approach. [snorts]
[01:16:21] And then you sort of do a going once,
[01:16:23] going twice, like when you start to peak
[01:16:26] out where it's like people are getting a
[01:16:28] little it's starting to get a little
[01:16:29] high altitude, sweaty,
[01:16:32] then you're like, "Okay, going once,
[01:16:34] going twice, sold." and then you close
[01:16:36] it down and winner takes all and they
[01:16:38] take the deal.
[01:16:39] But most deals that are big deals today
[01:16:42] are not working that way. When you're
[01:16:45] doing multiple rooms at a time in
[01:16:47] something like this, it's more like
[01:16:51] uh how much would you put in at this price?
[01:16:55] And how much would you put in, let's
[01:16:56] call it, I'm just making this up, 8
[01:16:58] billion. And how much would you put in
[01:17:00] at 9? And how much would you put in at
[01:17:03] 10? How much would you put in at 12? How
[01:17:05] much would you put in 14? Fill the sheet out.
[01:17:09] You decide how much you'd put in any any
[01:17:11] price that we end up at. And you do that
[01:17:13] across everybody. And
[01:17:15] is that what you're doing now?
[01:17:17] Hold on. Slow down. Slow down. [laughter]
[01:17:20] Then you aggregate how much demand I
[01:17:22] have at every price. So as the price
[01:17:24] gets higher, the demand goes down. You
[01:17:26] now have your demand curve and you're
[01:17:29] like, "Okay, I want to raise a billion."
[01:17:31] So, but at the really low price I have
[01:17:34] three billion of demand.
[01:17:36] At the higher price, eventually I have a
[01:17:40] billion dollars worth of demand. And I
[01:17:41] go, "Okay, that's the price that I could
[01:17:42] close at right now." Then you go and
[01:17:45] tell all the people that
[01:17:49] that got cut out because they didn't get
[01:17:50] high enough of a price. There's less
[01:17:52] demand at this price, which means
[01:17:54] there's certain people that didn't bid
[01:17:55] here. You go tell them they're out. And
[01:17:59] you're like, "But you could fill out
[01:18:00] another sheet if you want to make some
[01:18:02] moves." So they fill out the sheet, you
[01:18:04] do the demand curve again, everything
[01:18:06] moves a little bit to the right, and
[01:18:08] there's other guys that now get pushed
[01:18:10] out. And you do it one more time, and
[01:18:12] then you clean it, and you're done.
[01:18:14] So what are you doing now?
[01:18:16] I'm about to close a deal.
[01:18:17] Do you want to say how you did it,
[01:18:18] though? You don't say numbers, but like
[01:18:21] I can't I can't do that. No,
[01:18:22] I can't do that.
[01:18:23] Okay, fair enough. Fair. come back on in
[01:18:25] a few months and
[01:18:26] yeah like yeah a couple years ago here's
[01:18:27] how this one went.
[01:18:29] You got to put time in between cuz it's
[01:18:31] like you just did a deal. You know what
[01:18:32] I mean? [laughter]
[01:18:33] But I I would say I did a a slightly
[01:18:36] different slightly different this time around.
[01:18:38] I'm very curious how you protect
[01:18:40] yourself from
[01:18:42] what happened with Benchmark and Uber
[01:18:45] from ever happening to you again. So how
[01:18:47] are you selecting is just obviously the
[01:18:49] price. Look,
[01:18:50] you're not taking the highest bidder.
[01:18:51] Like how are you picking your partners?
[01:18:52] Yeah. You have to also be careful like um
[01:18:56] there can be
[01:19:00] you got to be really careful not to get
[01:19:02] into victim mentality and what I mean by
[01:19:03] that is what was my part in that in that
[01:19:06] dynamic. I was thinking while you were
[01:19:08] speaking I was like what if we could ask them
[01:19:11] what would they want you to do that you
[01:19:12] weren't doing maybe say hey we're about
[01:19:14] to [inaudible] IPO
[01:19:17] [laughter] that probably would have
[01:19:18] saved me but also like I didn't kiss the
[01:19:20] ring I think girly wanted to feel like
[01:19:26] hometown with me and just never was
[01:19:29] hometown to me is different than kissing
[01:19:30] a ring though but it it's similar okay
[01:19:34] just put it in that category we don't
[01:19:35] have to [inaudible] go there. So,
[01:19:39] so that's
[01:19:41] there's that. That's one thing I could
[01:19:43] have done differently for sure. Would
[01:19:45] have changed everything. Um, there are people
[01:19:50] inside of the company who became his partner
[01:19:55] to do the coup. Those individuals
[01:19:58] shouldn't have been there. Okay.
[01:20:01] Did you suspect them at all before? >> Yes.
[01:20:04] Wow. There was definitely something
[01:20:06] wrong is what I would say. Okay, let's
[01:20:09] put it that way. Every decision I made
[01:20:11] at Uber
[01:20:14] defend to this day.
[01:20:17] Like I wasn't 100% correct, but always
[01:20:21] good intentions and
[01:20:23] always coming from the right place.
[01:20:26] Generally just did the right thing.
[01:20:28] Yeah. One of my lawyers put it this way.
[01:20:30] is like um you know did you if you're
[01:20:33] like he he sort of made a sporting or
[01:20:36] like a like a sports analogy which is
[01:20:38] like do you have chalk on your shoe
[01:20:40] would be like kind of going out of
[01:20:42] bounds or doing something you shouldn't
[01:20:43] have done. I'm like never had chalk on
[01:20:45] my shoe.
[01:20:47] But in order to know, [snorts]
[01:20:50] you would need an electromagnetic
[01:20:51] scanning microscope to see with reverse
[01:20:55] angle of slow-mo replay to verify that
[01:20:58] there's no chalk on the shoe. So the
[01:21:01] problem was I ran too close to the line
[01:21:04] in too many situations
[01:21:06] that it
[01:21:09] it [snorts]
[01:21:11] when you are big and important
[01:21:14] the scrutiny and the expectation is that
[01:21:17] you don't run that close to line even if
[01:21:19] it's correct and that is a thing I
[01:21:21] definitely did not understand
[01:21:24] um and it comes from what I did before
[01:21:27] Uber which was I was doing a really hard
[01:21:31] startup. First four years, no salary,
[01:21:34] ran out of money several times,
[01:21:37] like super grind,
[01:21:41] like lose all friends, like everything's
[01:21:45] it was just the hardest kind of I I like
[01:21:49] to say the non-luckiest entrepreneur
[01:21:51] journey of all time. You can't call it
[01:21:54] unlucky. I eventually sold, but like you
[01:21:56] definitely would never call it lucky.
[01:21:58] That's for damn sure. [snorts] But
[01:22:00] basically, it was so hard that I had to
[01:22:04] be sort of
[01:22:06] epically precise and hardcore just to
[01:22:10] pay the bills and go to the grocery
[01:22:12] store next week.
[01:22:14] And that precision and intensity made
[01:22:18] Uber what it was. But I was running a
[01:22:22] $70 billion company
[01:22:25] the way somebody who thought he was
[01:22:27] going to starve next week would run it.
[01:22:29] That is fascinating.
[01:22:30] Like super intense precision, perfection,
[01:22:36] perfection, obsession
[01:22:37] because he's not sure that he's going to
[01:22:40] be able to pay the grocery bill next week.
[01:22:42] Did you understand you were that was
[01:22:44] your approach at the time you had that approach
[01:22:48] or you had to leave and look back and
[01:22:50] figure it out?
[01:22:50] It's a little probably a little bit of
[01:22:52] both. Yeah. But I take pride in that. At
[01:22:55] the time it was like a pride in going
[01:23:01] all the way
[01:23:03] but like not maybe understanding every
[01:23:07] understanding it the way I understand it
[01:23:08] today. I wonder how much of that is a
[01:23:10] benefit. Like you're you're super you're
[01:23:12] one of those most aggressive founders in
[01:23:14] history. You're wiser, more experienced
[01:23:17] now, more access to resources, better
[01:23:20] network. I wonder if this version of you
[01:23:23] could compete with that version or that
[01:23:24] aggressiveness is just what that you you
[01:23:27] created the entire category.
[01:23:28] Yeah. No, I understand. It would be
[01:23:29] super fun if there was a universe where
[01:23:31] I could compete with my younger self.
[01:23:32] That would be [inaudible] awesome. I would
[01:23:35] love that so much. I would kick his ass.
[01:23:37] You Okay. [laughter]
[01:23:40] Now, there'd be certain things he's
[01:23:41] doing because he's younger, and there's
[01:23:43] a there's a certain thing to that.
[01:23:45] Remember I talked about the um the
[01:23:50] the passion for right and wrong,
[01:23:55] right? As an example, there's something
[01:23:57] to that. But also what I noticed today
[01:24:01] is most of the things that would take me
[01:24:04] x amount of time
[01:24:07] 10 years ago, I can do an x divided by
[01:24:10] three today. And not because I got
[01:24:13] clawed over there, right? Like that's a
[01:24:15] whole separate thing. I'm just saying
[01:24:17] like [snorts]
[01:24:19] like I don't know. You read my Adam's
[01:24:21] vision note. >> Yeah.
[01:24:22] Okay. That would have taken me
[01:24:26] I don't even know if I could have
[01:24:27] written that back in the day. Like not
[01:24:29] that good.
[01:24:32] I can just flow and get it done.
[01:24:36] Like the core of that was written in an
[01:24:39] hour and a half. >> Mhm.
[01:24:40] You know that kind of thing.
[01:24:42] What is it that caused you to
[01:24:44] accelerate? Now though
[01:24:45] there's different things. So like um a
[01:24:49] lot of early founders have a fear of failure.
[01:24:53] But what that does is it creates
[01:24:56] blockage around progress around ma
[01:25:00] making progress because you're you're just
[01:25:03] you're bogged down.
[01:25:06] The psyche around fear of failure [inaudible]
[01:25:09] with your ability to to get there.
[01:25:13] Well, the fear of failure could either
[01:25:15] stand in your way or it could push you
[01:25:17] from behind, right? It can push you from
[01:25:18] behind, but ultimately you will never be
[01:25:21] truly world class if you have a fear of failure.
[01:25:23] But how many entrepreneurs have you met
[01:25:25] where they said like the fear of failure
[01:25:27] is greater than the love of success?
[01:25:28] I understand that. I'm just saying that
[01:25:33] it will get you places but it won't get
[01:25:35] you all the way.
[01:25:36] Okay. In that version of Travis where
[01:25:38] you're running a $70 billion company.
[01:25:40] No, no, I would say I was transitioning
[01:25:42] out of fear of failure
[01:25:43] towards the end in 2017. just just just
[01:25:45] let's just say like we don't have to put
[01:25:48] a specific date. It's just a spectrum.
[01:25:50] It's a and just I'm transitioning out of
[01:25:52] it cuz remember where I came from.
[01:25:54] It's just before. So I'm transitioning
[01:25:57] out of fear of failure.
[01:25:58] How old were you when you started Uber? >> 33.
[01:26:02] 33. And you had a couple million bucks, >> right?
[01:26:05] Yeah. I that I put all into all my
[01:26:07] friends startups. >> Okay.
[01:26:08] I had nothing.
[01:26:09] Yeah. It was kind of funny.
[01:26:11] Yeah. [laughter]
[01:26:11] It was kind of funny.
[01:26:12] Did that work out? So, I was the first
[01:26:14] investor in Expensify. Uh,
[01:26:19] there's like a healthcare IT company
[01:26:20] that still hasn't gone public.
[01:26:23] It's really funny.
[01:26:24] Okay. So, not a lot of resources. Still
[01:26:26] young. 33 is still young. So, you it
[01:26:29] makes sense why you felt the way you felt.
[01:26:31] Yeah. But it it's it's just about the
[01:26:34] background. It's just about what the
[01:26:36] previous experience was, not about my
[01:26:38] age, per se.
[01:26:39] It was just about what experience I had
[01:26:41] just come out of. So, I love where the
[01:26:43] conversation has gone because what I'm
[01:26:44] hearing from you is like there's just
[01:26:46] this theme that runs through you as a
[01:26:48] person and then your approach to company
[01:26:49] building throughout these companies. So,
[01:26:52] we barely touched on what you're doing now.
[01:26:54] Like, let's get into Adams
[01:26:57] and you said you wanted to start uh with
[01:26:59] the mission where it says physical
[01:27:01] automation to transform industry and
[01:27:03] move the world. AI and robotics
[01:27:07] to totally transform
[01:27:10] industries but one industry at a time
[01:27:14] and specialized robotics to do so. So
[01:27:18] for instance,
[01:27:20] if you want to make a,000 pancakes an
[01:27:22] hour, you wouldn't have a humanoid do it.
[01:27:26] If you wanted to
[01:27:29] get a car to move down the street, you
[01:27:32] wouldn't have a humanoid drive it.
[01:27:35] I think humanoids have their place which
[01:27:37] is let's call it low-cale tasks
[01:27:41] in human design environments designed
[01:27:44] for humans. So example you're in a house
[01:27:51] clothes need to be folded
[01:27:53] but it's not like you're folding clothes
[01:27:55] all day long.
[01:27:57] It's one of the things, but there's no
[01:27:59] way you'd buy a robot for tens of
[01:28:02] thousands of dollars to just fold
[01:28:03] clothes because it's just not big enough
[01:28:06] of a problem. So now you need a machine
[01:28:08] that can do many different types of
[01:28:10] things in the home. So it needs to fold
[01:28:12] clothes. It needs to take out the trash.
[01:28:14] Probably needs to wash dishes. There's
[01:28:16] like a bunch of things, but that's a
[01:28:18] very generalized thing. Has to be able
[01:28:21] to do a lot of different things. And
[01:28:23] it's in a very human environment.
[01:28:26] The best form factor is a humanoid for
[01:28:28] this thing.
[01:28:30] But they'll bring up the thousand
[01:28:32] pancakes an hour. Imagine a humanoid
[01:28:34] making pancakes. Well, it would make it
[01:28:35] like a human. It would be like,
[01:28:39] "Okay, by the way, if you were just
[01:28:41] making pancakes at home once a week on a
[01:28:44] Sunday, because you need a machine that
[01:28:46] can do many different things, including
[01:28:48] make pancakes, it's all good. But if you
[01:28:51] needed to do a thousand an hour, you'd
[01:28:54] probably need like,
[01:28:56] I don't know,
[01:28:58] a hundred humanoids in a row doing this,
[01:29:00] right? Versus a very simple iron
[01:29:03] apparatus where the batter gets pushed
[01:29:05] into it, it's hot already, and it's
[01:29:08] pushing out like maybe even like a 100
[01:29:10] pancakes every few minutes.
[01:29:12] You know what I mean?
[01:29:14] So specialized
[01:29:17] robotics uh specialized uh machines that
[01:29:21] are specialized for the task at hand is
[01:29:24] sort of how I look at what we do. And so
[01:29:27] industrial scale where there's real
[01:29:31] change to an industry by automating the
[01:29:33] whole thing. And so you go, okay, well
[01:29:35] I've got a lot going on in food already.
[01:29:38] The idea is,
[01:29:40] can you get a meal that's prepared and
[01:29:42] delivered to you so efficient that it
[01:29:45] starts to approach the cost of going to
[01:29:46] the grocery store?
[01:29:49] Pretty awesome if you could. It's got to
[01:29:51] be a high quality meal, of course. But
[01:29:53] like the the the question mark there,
[01:29:56] can you requires you to have
[01:30:00] what I would call industrial real estate
[01:30:02] for food e-commerce. What do I mean food
[01:30:04] e-commerce? We know what e-commerce is.
[01:30:06] It's got Amazon warehouses everywhere or
[01:30:09] like major hubs like big distribution
[01:30:12] centers DC's but food e-commerce is a
[01:30:16] little different you it is a warehouse
[01:30:18] type you need to do logistics from it
[01:30:20] but you also need to do manufacturing
[01:30:23] like there's no manufacturing that's
[01:30:25] happening at an Amazon warehouse because
[01:30:26] everything's manufactured somewhere it
[01:30:28] gets delivered to this big warehouse and
[01:30:30] then it goes from there but with food it
[01:30:32] has a 30 minute halflife so the
[01:30:34] manufacturing the logistics has to
[01:30:36] happen at the same place and it always
[01:30:38] has to be 15 minutes from where you are.
[01:30:41] So now you have a very different
[01:30:42] situation where you have real estate in
[01:30:44] urban and suburban environments that's
[01:30:46] always 15 minutes from anybody. So you
[01:30:50] have an urban logistics fabric
[01:30:52] production and logistics fabric across a
[01:30:54] city which is I have the real estate
[01:30:58] then I have robots uh robotic food production
[01:31:03] cuz then I'm taking the labor cost out
[01:31:05] and then I have robotic logistics
[01:31:09] because right now your $15 bowl that
[01:31:13] then gets delivered to you somehow
[01:31:14] became 30 bucks. Mhm.
[01:31:18] It's of course expensive to produce, but
[01:31:20] every time there's a drop by a courier,
[01:31:23] that's another 12 bucks. >> Mhm.
[01:31:24] Industrial real estate, robotic
[01:31:27] production, robotic couriers. And then
[01:31:30] was there a specific reason you you
[01:31:32] started with food though?
[01:31:34] It just caught me.
[01:31:37] I mean, like that is like I don't have a
[01:31:38] list. Well, first of all, of course, I
[01:31:40] did Uber Eats, so like very familiar
[01:31:42] with this part of things, but nowhere
[01:31:45] close to the atoms that are necessary to
[01:31:48] do what I just described.
[01:31:50] You know, I like to say like I have lots
[01:31:52] of ideas all the time. I mean, I I'm an
[01:31:55] idea factory,
[01:31:57] but other people have great ideas, too.
[01:31:59] But like an idea comes to you or comes
[01:32:02] to you, if that makes sense. And I'd
[01:32:05] like to say, you know, you go out on a
[01:32:06] date with the idea, right? Was it a good
[01:32:09] date? Did it did it go well? Like how
[01:32:11] did you and the idea get along? And it's
[01:32:14] very much related to like who are you is
[01:32:18] going to be a big part of which idea
[01:32:21] works for you.
[01:32:22] You call this finding your sport.
[01:32:24] Yeah. Finding your sport or your
[01:32:27] business soulmate. >> Mhm.
[01:32:29] Be in touch with who you are and then
[01:32:31] when the right idea comes your way, you
[01:32:33] just know.
[01:32:35] You just know. I thought I I understood
[01:32:38] how you
[01:32:39] thought. Yeah.
[01:32:40] And now, you know, we've been talking
[01:32:41] for several hours. I'm I think I'm
[01:32:43] getting a little closer there. But then
[01:32:45] I read what you wrote where you're just
[01:32:47] like, "Well, look around, dude.
[01:32:49] Everything that you see in a city in a
[01:32:51] civilization has either been grown,
[01:32:53] mined, or manufactured."
[01:32:55] And so I'm like, "Oh, he like is you're
[01:32:57] into details like you were describing
[01:32:58] the Uber signup flow earlier,
[01:33:00] but you zoomed all the way out. Yeah. So
[01:33:02] it's like I'm going to start with the
[01:33:04] material constituents of everything that
[01:33:06] exists in the world.
[01:33:07] So when you look around you everything
[01:33:09] around you is grown or mind
[01:33:13] manufactured and moved and that's how we
[01:33:16] look at the world. And then you go well
[01:33:18] when you think about physical AI the
[01:33:20] automation of movement and action in the
[01:33:22] physical world
[01:33:24] you look at the what I call the physical
[01:33:26] AI tech stack. Real estate's part of
[01:33:29] that for the reasons I I've described as
[01:33:31] it relates to food. If you didn't have
[01:33:33] the industrial scale, what I call high infrastructure,
[01:33:38] heavy duty energy, heavy duty mechanical
[01:33:41] systems cuz you're extracting air and
[01:33:42] then tempering it and pushing it back
[01:33:44] in. Real estate is a big part. What is a
[01:33:47] mining company? It's actually real
[01:33:48] estate. So the ability to take land and
[01:33:52] turn it into pro productive
[01:33:56] pro progress essentially is a
[01:33:59] underappreciated and not understood
[01:34:01] thing and it is most definitely a big
[01:34:04] part of the what I would call the
[01:34:06] physical AI tech stack. You go like look
[01:34:09] at you know you can look at Tesla and
[01:34:11] all the things Elon's doing like it's
[01:34:14] obvious that real estate is his jam or
[01:34:16] certainly his team's jam. He doesn't
[01:34:18] talk about it as much, but it's a big
[01:34:20] part of what happens. He's got a
[01:34:22] freaking city. He's starting a freaking
[01:34:24] city, right? You know, the head of HR is
[01:34:27] is basically the mayor of a city that
[01:34:30] he's building. You know what I mean? So
[01:34:33] it's a really important thing but also
[01:34:34] when you you know you can go further
[01:34:36] than that which is everything we're
[01:34:39] seeing in technology you know a lot of
[01:34:41] times we talk about super intelligence
[01:34:43] is sort of the function of I need to
[01:34:47] have energy and I need to have minerals
[01:34:51] at the very base lots of energy we talk
[01:34:54] about data centers now in gigawatts or
[01:34:55] megawatts you know so
[01:34:59] I need to have energy and I need to have
[01:35:00] the minerals and then I have those two
[01:35:02] things and I can get super intelligence
[01:35:04] eventually working those things hard.
[01:35:07] [snorts] But where does the energy come
[01:35:09] from? You're like, "Oh, it comes from
[01:35:11] the sun." Okay, but how do you capture
[01:35:13] it? Goes back to minerals. Like
[01:35:19] land is the whole damn thing.
[01:35:22] So there's a really interesting
[01:35:24] perspective about how land plays a role
[01:35:27] in the future of physical automation.
[01:35:31] physical AI
[01:35:33] um and just
[01:35:36] um autonomy in the physical world is is
[01:35:39] very dependent upon it. And that's why
[01:35:41] mining is so interesting.
[01:35:43] You're not owning the mines. Correct.
[01:35:44] You're just making them more productive
[01:35:46] with gainfully employed robots. >> Correct.
[01:35:49] Yeah. What we call gainfully employed robots,
[01:35:51] which is hilarious, by the way.
[01:35:52] Yes. [laughter]
[01:35:52] But it's like because right now, you
[01:35:54] know, you know, look, I do think of
[01:35:56] course humanoids are going to be
[01:35:58] gainfully employed. They're not there
[01:36:00] yet, but they'll get there. But right
[01:36:02] now, they're
[01:36:04] the demos are dancing and martial arts.
[01:36:07] You know, I talk about the Beijing.
[01:36:09] There's a a a humanoid Olympics in
[01:36:11] Beijing and they're they're doing a
[01:36:15] marathon. You're like, "Okay, they're
[01:36:16] not quite there. They're going to get
[01:36:17] there." But I kept thinking like, man,
[01:36:19] imagine if you put wheels on them,
[01:36:22] right? And this gets back to humanoids
[01:36:24] being good at certain things and not
[01:36:26] others. And sort of having a
[01:36:28] purpose-built machine for the task is important.
[01:36:31] So wait, you said two very interesting
[01:36:33] things. Your life's work is digitizing
[01:36:35] the physical world. And then you're
[01:36:37] saying for Adams, you're going to attack
[01:36:39] one industry at a time. >> Mhm.
[01:36:42] Physical world far outstrips the digital
[01:36:44] world. Therefore, you almost stumbled
[01:36:46] into or picked, you didn't stumble into,
[01:36:48] you picked an infinite game. So there's
[01:36:50] no limit to what you this company can
[01:36:53] expand into.
[01:36:54] Look, I I have a little bit of an issue
[01:36:56] of infinite, but like it's a very
[01:37:00] it goes very far. Like the dream like,
[01:37:04] okay, look, the mission for mining is
[01:37:07] more productive mines to power Earth's industries.
[01:37:13] Because we can go to a gold mine right
[01:37:15] now, go to a gold mine CEO and ask
[01:37:17] whether he wants 20% more gold per year.
[01:37:20] Why? Because when you automate it,
[01:37:23] that's the output. And you make it
[01:37:25] cheaper to go to other places and even
[01:37:28] get more gold out of that mine that you
[01:37:30] wouldn't even get before. So, it's
[01:37:32] getting more per year. It's getting more
[01:37:33] than you otherwise would. And the
[01:37:35] totality of that mine, plus being able
[01:37:37] to go and do more mines than you
[01:37:38] otherwise would because the opex is so
[01:37:40] much lower. But if you're increasing the
[01:37:42] raw materials, then you're also
[01:37:44] increasing overall industry in the
[01:37:46] world. Period. And then you could then
[01:37:47] go and automate and enhance those
[01:37:50] industries as well. Right?
[01:37:52] The point is is that if you get really
[01:37:54] good at minerals
[01:37:57] and materials and land,
[01:38:00] you get good at automating making land productive
[01:38:05] and powering progress with land.
[01:38:08] It's sort of the lever that moves the
[01:38:10] world. Exactly.
[01:38:12] So if you automate the thing that is the
[01:38:14] lever that moves the world, it's like
[01:38:16] the ultra lever.
[01:38:19] This is kind of fun. It's just actually
[01:38:21] cool. If you see a picture of a, you know,
[01:38:26] a machine that loaded is over 2 million
[01:38:29] pounds and it's the size of a building
[01:38:31] and it's autonomously moving around.
[01:38:34] It's pretty cool. The dream and like
[01:38:35] this is like it's really Elon willing
[01:38:38] really. But like one day he's going to
[01:38:41] be sending
[01:38:43] he's going to be sending missions to
[01:38:45] asteroids to mine them. Yeah, maybe we
[01:38:48] can help out in some way. That'd be a
[01:38:50] lot of fun.
[01:38:50] You have mining, you have food, >> transport,
[01:38:56] and the thing we call it the ignition
[01:38:57] there is wheelbase for robots. So if you
[01:39:00] have specialized machines that that act
[01:39:04] and move in the physical world, that's
[01:39:06] what we do for a living.
[01:39:08] You have to have wheelbase. You have to
[01:39:11] automate how they move. You know, some
[01:39:14] people think about ride sharing when
[01:39:15] they think about this, but there's just
[01:39:17] a lot of there's a lot of things you're
[01:39:20] not thinking about. You know, like I was
[01:39:21] talking to one of the large food
[01:39:22] suppliers in the US. They supply all the
[01:39:26] food to the um uh to the restaurants.
[01:39:30] They're spending $3 billion a year
[01:39:35] on the labor that moves the pallets
[01:39:41] on forklifts.
[01:39:44] This like this just like a little drop
[01:39:47] in the bucket of all the things that are
[01:39:48] moving, right? Um but what about
[01:39:53] freight? What about parcel delivery?
[01:39:56] What about um
[01:39:59] food delivery?
[01:40:02] So like we talked about that on the food
[01:40:04] side. Once I knew I had to get into
[01:40:06] autonomy to complete the food story,
[01:40:10] this is when the Adams thing sort of
[01:40:12] came together beyond just food. One of
[01:40:14] the things that I was talking to Daniel
[01:40:16] Ek about you that he finds most
[01:40:17] fascinating about you is your propensity
[01:40:20] to build a ton of separate companies
[01:40:23] inside of one company. You did this
[01:40:25] obviously at Uber. >> Yeah.
[01:40:27] You're doing it again at Adams. Yeah.
[01:40:29] Is that just your natural is that what
[01:40:31] you meant? Like your business soulmate.
[01:40:32] Just like I don't want to work on just
[01:40:33] one product or one business like you
[01:40:36] want a conglomerate. Like how do you
[01:40:38] think about this?
[01:40:38] I mean this goes back to no you don't
[01:40:40] that's not how it works. It's um but it
[01:40:42] is remember the con only constraint to
[01:40:45] our imagination is management capacity.
[01:40:48] So then the question is twofold. Do you
[01:40:51] have an imagination and is it any good?
[01:40:54] But if you do have an imagination, and
[01:40:56] it's good, you're going to have
[01:40:58] interesting ideas
[01:41:00] that should happen. There's many ideas
[01:41:02] that maybe either shouldn't or somebody
[01:41:03] else should do, but there's going to be
[01:41:05] many ideas that you should do.
[01:41:07] So, what does the actual organization
[01:41:08] inside of Adams looks like with all look
[01:41:10] like with all these different
[01:41:11] businesses? Like, does every business
[01:41:12] have a CEO? They report directly to you.
[01:41:14] Like, how how did you
[01:41:15] business unit line leader and then you
[01:41:17] might even have sub business unit
[01:41:20] leaders as well. um you really try to
[01:41:23] empower and that you know empower them
[01:41:25] to do their thing that is you know I
[01:41:29] sort of look at that as alignment
[01:41:30] upfront accountability on the back end
[01:41:33] so what are we trying to accomplish how
[01:41:36] are we going to try to accomplish it
[01:41:38] what do we view as risky and what sort
[01:41:40] of no-brainer and how do we do
[01:41:42] accountability as we go and then sort of
[01:41:46] approach it with like a management style
[01:41:49] which I call problem solver and chief
[01:41:52] which is I spend my time on the most
[01:41:55] impactful problems that are not already
[01:41:57] being solved.
[01:41:58] That's how you dedicate your time. >> Yeah.
[01:42:00] Is that the directive that you give to
[01:42:01] everybody? That's that's okay.
[01:42:03] Yes. So, I've got a certain number of
[01:42:05] hours per day, but that's a tiny
[01:42:07] fraction of the problems that need to be solved.
[01:42:08] Yeah. That's what I'm trying to figure
[01:42:09] out like how
[01:42:10] So, that flows down. Now, everybody's
[01:42:12] got their their their their
[01:42:15] remit, let's say. So, they solve
[01:42:17] problems in this area. So it's flowing
[01:42:20] down, but they are the problem solver
[01:42:21] and chief deputized for their area
[01:42:25] all the way down to the bottom.
[01:42:26] Do you still put an emphasis? I've heard
[01:42:28] you speak about this in the past, an
[01:42:29] emphasis of hiring and empowering young
[01:42:32] people. Is this business different than
[01:42:33] like when you were launching new cities
[01:42:35] in Uber, for example, where you gave a
[01:42:38] lot of responsibility to, you know,
[01:42:39] aggressive young people?
[01:42:40] Well, okay. Again, so it it there's
[01:42:43] really interesting ways to do it. I I I
[01:42:45] sort of have this this concept I call
[01:42:48] the line in sort of the maybe the
[01:42:50] framework is finding the line. So
[01:42:52] there's a line
[01:42:54] on one side is order lots of structure
[01:42:59] sorry structure like as you as you pull
[01:43:01] away further further back into order you
[01:43:04] have lots of rules lots of structure
[01:43:06] lots of process and eventually lots of bureaucracy.
[01:43:11] And if you go too far back from that
[01:43:13] line, you're going slow and people are bummed.
[01:43:18] And if you go to the other side of the
[01:43:19] line, which is chaos,
[01:43:22] lack of rules, lack of process, lack of
[01:43:26] structure, and as you go deeper and
[01:43:27] deeper and deeper into chaos,
[01:43:30] you also get to a place where you're
[01:43:33] going slow and people are bummed.
[01:43:35] So that line between order and chaos is
[01:43:39] innovation at speed and at scale. And
[01:43:42] the job of every leader is to find that
[01:43:45] line. And it's not in two dimensions.
[01:43:47] It's like in 80 dimensions. Okay? And
[01:43:50] the best leaders are able to find that.
[01:43:53] And you know the probably the most
[01:43:54] approachable way to describe this is the
[01:43:58] fewest number of rules while staying out
[01:44:00] of chaos is the is the approachable way
[01:44:03] to describe this. But you go to back to
[01:44:05] like launch at Uber,
[01:44:09] you could think of it as like, okay,
[01:44:10] there's a bunch of 23 year olds
[01:44:11] launching cities.
[01:44:13] What happened was at the beginning, the
[01:44:15] first 20, 30 cities, I was deeply
[01:44:17] involved in whether that city was going
[01:44:20] to get launched. But what happened was
[01:44:24] somebody go out, hey, go launch a city,
[01:44:27] make something out of nothing. and
[01:44:29] there'd be some kind of playbook there, but
[01:44:33] a lot of it was undefined. But nothing
[01:44:36] would actually launch until they got to
[01:44:38] a pricing call because pricing in the
[01:44:40] transportation space is the sum of all strategy.
[01:44:45] And so the pricing call then goes, well,
[01:44:47] what's the regulatory? What's the car
[01:44:49] type that you're going to use because of
[01:44:50] that regulatory? What is the average
[01:44:53] wage in the city? Because that's on the
[01:44:56] driver's side and that's part of the
[01:44:57] cost. Of course, you basically go
[01:44:59] through every aspect of the city that
[01:45:01] relates to transportation. How long does
[01:45:03] it take to get around? Like where are
[01:45:05] people going? You ultimately get to a
[01:45:07] price, but it means you have to
[01:45:09] understand everything. And how you get
[01:45:12] to that price matters. So in the first
[01:45:13] 20 cities, I was on a pricing call in
[01:45:15] some of those cities, man, it would be
[01:45:16] like eight pricing calls. It could be
[01:45:19] like 8 hours, 10 hours of pricing calls
[01:45:20] before we launched London as an example.
[01:45:23] But I never solved the same problem twice.
[01:45:27] Once we solved it, then it became part
[01:45:29] of the playbook and [snorts] eventually
[01:45:31] we get to city 20
[01:45:33] and that pricing call takes five
[01:45:36] minutes. I stopped going to them. Didn't
[01:45:38] matter anymore. But the key that I was
[01:45:41] trying to get to is you have a
[01:45:42] 23-year-old who then can go and launch a
[01:45:45] city. Even at the beginning when I was
[01:45:48] still involved in that pricing call,
[01:45:49] they wouldn't see me till the pricing
[01:45:50] call, but they knew I was going to be at
[01:45:52] that pricing call. The one rule was you
[01:45:54] can't launch until I say yes at that
[01:45:56] pricing call. So they would come ready
[01:45:59] to play at that pricing call and they
[01:46:02] knew that if they didn't I'd be like no
[01:46:05] and then they suck. And so they would
[01:46:07] put everything they in into making that
[01:46:09] successful which means all the other
[01:46:11] things that they're doing before are
[01:46:13] going to be organized towards doing it
[01:46:17] right because they want to win.
[01:46:20] And so now I've got one rule, which is
[01:46:22] that pricing call, the fewest number of
[01:46:25] rules while staying out of chaos. That
[01:46:27] if you didn't have that one rule, you
[01:46:29] now have 23-y olds running around doing
[01:46:32] crazy [inaudible] That's awesome. It made me
[01:46:35] think of another line that I love that
[01:46:36] you put on Adam's website where he said
[01:46:38] that chaos was the law of nature and
[01:46:41] order was the dream of man. H
[01:46:44] my interpretation of that line now
[01:46:46] having spoken to you about this it's
[01:46:47] like I feel that you're imposing order
[01:46:50] on the chaos of the physical world.
[01:46:52] That's what your company is trying to
[01:46:53] do. I almost think of it as negantropic,
[01:46:56] which means it's kind of a you could get
[01:47:00] into a very interesting sort of uh very
[01:47:04] uh I don't want to say you very
[01:47:07] energetic debate with certain people
[01:47:09] about negative entropy, but civilization
[01:47:12] is an attempt to locally slow down entropy
[01:47:18] and maybe even go negative. It's
[01:47:20] building structure against
[01:47:24] the nature towards [snorts] chaos.
[01:47:27] That's what civilization is. And so
[01:47:29] Adams is essentially
[01:47:32] the structure to defend
[01:47:37] civilization and move it forward into
[01:47:41] progress. There's another line when you
[01:47:43] when you speak, there's a lot of things
[01:47:44] that you say that remind me of
[01:47:45] Rockefeller uh in when in the early days
[01:47:48] of the oil refining industry. He used
[01:47:50] that word that he thought it was a
[01:47:52] chaotic industry. It was he's at the
[01:47:54] very beginning. This is when the oil
[01:47:55] industry the entire
[01:47:57] it's solely concentrated in Pennsylvania
[01:47:59] for God's sake. And he goes, I'm going
[01:48:01] to impose order on this chaos. That's
[01:48:04] the line he used. Progress is sort of
[01:48:06] the organization and structuring of the
[01:48:09] world towards
[01:48:12] human happiness and liberty
[01:48:17] and transcendence in some fashion.
[01:48:20] That's how I view what we're doing at
[01:48:23] maybe the very highest level.
[01:48:24] I think that's an awesome place to
[01:48:25] close. Travis mean really means a lot to
[01:48:28] me for taking the time. Really
[01:48:30] appreciate it, man. Thanks. Great.
[01:48:32] I hope you enjoyed this episode. Please
[01:48:33] remember to subscribe wherever you're
[01:48:35] listening and leave a review. And make
[01:48:36] sure you listen to my other podcast,
[01:48:38] Founders. For almost a decade, I've
[01:48:40] obsessively read over 400 biographies of
[01:48:42] history's greatest entrepreneurs,
[01:48:44] searching for ideas that you can use in
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[01:48:48] on this show first found me through founders.