In this episode, I’m joined by entrepreneur in residence William Eden to discuss biotech venture capital, parenting, longevity, American decadence and a whole lot more.
William Jarvis 0:05
Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it’s a better, more definite vision of the future. I’m your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.
Will Eden 0:39
Today, I’m joined by will Eaton, Will is currently an entrepreneur in residence and an investor in the biotech space. He studied economics at Dartmouth College and worked as an economist at the Federal Reserve Bank of New York during the financial crisis, after the Fed will move out to the Bay Area and work for a digital health startup in a personalized medicine startup. He then worked with Peter Thiel for six years, leading his personal early stage biotech venture capital investments team. I hope you enjoyed this conversation with will. I want to get started with something that’s been top of my mind recently, I recently invested in and had a podcast with someone who is building a new cryonics company, and it’s focused on pets, the idea is to build out, there’s some real infrastructure. So you know, if we build it out with veterinary hospitals, and make it a kind of a norm with pets, we can eventually you know, migrate that to hospitals, and then it can be an option just like, you know, cremation or getting put in the ground, you know, crash could be a third option, instead of like, flying out the you know, Arizona, and your brains liquefied in between, right. It’s a interesting approach. Yeah. So I’m going to talk about longevity, you know, where do you think we are right now, in terms of longevity research? You know, do you think we’ll hit escape velocity in your lifetime in my lifetime? Or are we should we be betting more on products and brain preservation?
Unknown Speaker 2:00
Right. So I will say, I think that it is possible that it’s within our lifetime. But I do think that the field would have to look a little bit different to probably get there. Gotcha. I am a little pessimistic on what things look like right now. That said, fields can change very quickly. And I do think that we’ve hit a tipping point where certain aspects of the aging question are coming into mainstream focus.
Will Eden 2:28
So you know, I would highlight things like San lytic drugs, and stem cells have really kind of entered the mainstream. And, you know, I do think those are pieces of the whole puzzle. And as soon as you get pieces of it, I think the potential for that to sort of cascade and to hit all of the other areas of aging that we’d have to solve is certainly possible. And I think the main thing that we’ve needed as a field is something really convincing. Right? We do have some interesting studies in rodents, some interesting studies in you know, much simpler life forms, which don’t really resemble humans.
Unknown Speaker 3:08
And those were stunning enough to get like the research community interested in this question, but we need a clear condenser on it living older human right now, right? Like, if you could take someone with like, completely white hair, and then turn it brown, I think folks would be like, Oh, wow. Right? Or if you could somehow give them like a drug that just eliminated all of like, the wrinkles on their face or something, right. And, you know, obviously, I’m suggesting something more cosmetic, but that’s the thing that we see all over, right, like, like, right, we see the signs of aging everywhere we see it on our own face when we look in the mirror. And I don’t think I’m convinced there has to be cosmetic. But I think that that’s one that would just be like, really shocking,
Will Eden 3:55
right? Great, great sales pitch, right? Not really, very logical sales pitch.
Right? So that said, I do think that cryo is probably more likely to work in the short term. And by work, I mean, we get to a point where the cryopreservation is good enough that we think the brain structure still contains all of the info that was inside someone’s head. Gotcha. In terms of reviving someone from cryo? That’s probably a harder problem than the life extension problem. Not necessarily, but possibly, but I think trying to get the preservation really, really good is probably the easiest problem in that whole space.
Will Jarvis 4:33
Gotcha. So it’s just a lot but it to me at least, it seems a lot more straightforward. Like I think we kind of we have a pretty logical roadmap and we may have one for you know, longevity as well. I just don’t know less about it. I’m curious do you see it as a as a talent problem? Is it a money problem? Is it an approach problem? Oh, boy, right now, is it all three? I mean, we’ve seen a lot of capital go into the space right? And then last, like five years, but But yeah, what’s your sense of that?
Unknown Speaker 4:59
Yeah, you’re grasping the trillion dollar question. Yeah, I think different fields are bottlenecked on different things. And with aging, if you take the SENS approach, right, there’s like, you know, seven or eight things you kind of have to do. And if you miss any one of them, you’ll still age and die. And if you basically buy that model, which I don’t think is totally crazy, then then yeah, the problem is effectively, that there hasn’t been enough buy in very broadly, which means you don’t get the money, and you don’t get talent, and you don’t get the leadership involved, right. And I would say, in terms of the biotech space as a whole, before I started investing in the space, I sincerely believed that the bottleneck was something like good ideas intersect, and sometimes funding when there was a good idea. But now that I am actually investing in the space, it’s a lot more often that I see a great idea. And I look at the team and the company and the structure and how they’re trying to execute that idea. And I think to myself, Man, this really isn’t going to work. I love the idea. But I don’t think that this is going to succeed in its current form. And that’s a very hard thing to see. And that’s a very hard message to give founders because they really hate to hear that, right. But like, I do sincerely believe in biotech as a whole, you know, it comes down mostly to talent and leadership holding us back, I would say, currently, in longevity, I don’t necessarily think that’s true, I do still think there are some like paradigm level breakthroughs that probably still have to be done. And most of even the basic research going on isn’t really directed at aging, quite aging, right. It’s mostly not directed at the fundamental levers that we could possibly pull here. So that one, I think, is actually a more complicated problem and isn’t just a talent problem.
Will Eden 7:09
Gotcha. Gotcha. And on the talent problem, is the leadership problem. Is that just a on the leadership problem? Is that a pure management challenge where people just aren’t competent managers? And on the talent side, is it that they’re just, you know, all the smart people go to work at open AI, or go into physics or something like that. And there’s some weird sorting mechanism going on. That is
Unknown Speaker 7:29
one hypothesis, right? I don’t fully understand what’s going on. Some folks are theorizing that there’s just fewer talented and competent folks overall in the world. And there’s something about the maybe the like, education systems, something about the system of incentives, something about how things are too, like, rigid, and it’s possible that there are just less people like this overall period. The other hypothesis is basically the one you’re saying, which is there are tons of folks who are very talented, but they’re all going into other fields. Right. And I do think that there’s probably some of both here going on. But you know, the simple fact of the matter remains if you’re a really talented, CEO and founder, right, where can you make the most money the most quickly? I totally doing a tech startup. Yeah, it’s not doing biotech. Right. And it’s certainly not doing things like building nuclear reactors, right. So I think it has to be at least some of both. I definitely think given the increase of the world’s population, it’s shocking that we don’t have more like extremely talented people. Right. That’s very, very weird. Yeah. So something systemically is going on that makes them less common, at least as a fraction of like total population?
Will Eden 8:52
Well, and it’s really weird, right? Because I’ve got a right beside me, I’ve got one of Jim Collins books, I’ve been going through and you know, IQs, in the West have been going up over the last, you know, 50 years, maybe, you know, maybe the leveling off in the last 10. It’s kind of unclear, but it seems like people are getting somewhat smarter, you know, like their pure like, horsepower side of things. It seems like people are getting smarter yet, we do seem to have less Shakespeares or like true, like outside talents. Now, do you think things are just kind of getting harder or something like that? You know, I
Unknown Speaker 9:22
really don’t like that hypothesis.
Will Eden 9:26
It’s not really a helpful hypothesis, at the very least even if it’s true.
Unknown Speaker 9:28
Right. Exactly. It may be true. And I think certain aspects of it have to be true, right? Because like there There obviously are only a fixed number of ways to like put atoms together. Right. So like, clearly, as you like, find more of those combinations. There are fewer of them left, right. But like that isn’t to say that, that we haven’t been overlooking something super fundamental either, right. And I do try to think about like, what would a true kind of paradigm shift actually look Like something like the advent of computing, that sort of came out of nowhere. And it’s sort of also like tied into like math and other things, which were kind of well understood, but like as a paradigm for how to think about the world that really kind of just overhauled things, right? Like it, it really was just this very different way of seeing the world. And computation has allowed us to do all kinds of crazy stuff. And, you know, I think that it has been less impactful than a lot of the things that we discovered a century back. But it was still kind of like a ground shattering, just absolute paradigm shift. And it’s hard for me to imagine where the next one of those comes from. But I would also be absolutely shocked if we’ve discovered everything there is to discover either. And if you think about just hypothetically, the most efficient use of every atom, we are so far from that point, that the idea that we have somehow picked all the low hanging fruit seems absolutely crazy to me, right? If there were a super smart AI, like here with us right now, would they really be like, Yeah, you guys picked all the low hanging fruit? I cannot improve the world anymore. You’ve done it all. No, absolutely not. Right? That’s absolutely crazy. So from that perspective, I think thinking of it as like, oh, well, everything is just hard now isn’t, as you say, very helpful. And I also think that it’s not super likely to be true. You can find historical parallels here. So in the like, early 20th century, you know, we had invented the steam engines many, many decades back. Yeah. And we discovered electricity, and we were starting to get like, you know, lights powered by, you know, power, right. And there was this feeling of like, Yeah, well, we sort of invented the, you know, obvious low hanging fruit. And that clearly was false. That clearly was false. You know, we ended up having this kind of mid century, you know, and you could argue why that period happens, you know, maybe it was the second world war, maybe it was like the movement of peoples because of the Second World War that sort of brought, like, ideas somewhere, it could be just that, like, we were all forced to sort of step up, right. And there was just this incredible explosion of tack that, I would say that was kind of the last time the world really kind of got fundamentally reshaped. Like, if you look at sort of the 1950s onwards, you start to see what looks like the modern world, right? If you look at you know, pre World War Two, like you can see the the sort of very beginnings of that, right. But it was still very, very early, like, we didn’t have spaceflight. So for all of those folks back in, like the 1920s, who thought they just discovered all of the low hanging fruit that turned out to be completely wrong. Right? And can we tell whether we’re in you know, the post world war two era or the PRI, right, and I think that’s actually very hard to tell. And I think we can all look back 10 or 20 or 50 years from now, and and just be like, Wow, we were so dumb, there was all of this low hanging fruit everywhere. And like, I wouldn’t be surprised to see that world. Right.
Will Eden 13:18
Interesting. It’s to do you think like, perhaps and like, this is really difficult to even even think about? So like, I don’t know how useful the question is, but, you know, do you think it’s something where people just like, aren’t trying as hard or maybe just aren’t as inspired or something like that?
Unknown Speaker 13:34
Um, I think there’s something going on there. I do think that adversity can cause humans to really step up in a big way, and humanity as a whole. And yet, you know, we also try to seek to minimize adversity in our lives. And I don’t even necessarily think that the right thing to do is to increase adversity either. I do know, some folks who think like that, oh, well, modern humans are, you know, weak and soft. And we just need some, you know, giant global war to whip us into shape. It’s like, okay, but the human consequences of that are just insanely horrible also. Yeah. But that said, you know, what could then sort of shake us out of the stupor, either, right. And I think some of what we’re seeing, I mean, certainly now. There’s a major war going on in Europe. And it was a word that a lot of people said probably wouldn’t happen. And I think the sort of outside view that like, nothing ever happens now because we’re in the modern era, I think that’s been very well falsified. We’ve we’ve had a global pandemic, we have a massive war with one of the world’s largest, most populous economies, it’s now sanctioned is cut off from the world. I mean, this is absolutely crazy stuff. And I feel like if you could, you know, go back to us, you know, 10 or 20 years ago and share some of the stuff that’s happened we would be be shocked. I do think it was much easier in, say the 90s to be like, yeah, history is over guys. And now I think today, it’s very hard to actually make that case. So I think there’s some chance that like, we could be snapped out of our stupor, through just events in the world unfolding. That doesn’t mean we need to start them. That certainly doesn’t mean that we have to make the world worse in order to, you know, change this thing.
Will Eden 15:28
Since it, maybe it’s something like, you know, we look at Ukraine and what’s going on there. And we, you know, maybe people start to think, wow, like, things really can’t get worse, maybe we need to work harder and make things better, or something like that.
Unknown Speaker 15:39
Something like that. I mean, I think that alone isn’t enough to shake people out of complacency. But it’s a sign that much bigger things like that could actually happen. Right. Gotcha. And I do think that having a tighter feedback loop with the physical reality of the world is one of those things that pretty reliably produces progress. Now, maybe that’s not the kind of progress we want, right? Maybe the progress we’ll make as a result is like, killer. You know, drones, and, like, completely autonomous weapons powered by AI are saying, right, like, there’s horrible things that can happen, right? So I don’t necessarily even think war is like the answer. But historically, it’s been one of those things that has sort of like lit a fire under us as a species to step up. And a lot of those things can then get repurposed after the war, also. So I don’t think war is always bad. But I do think it’s basically always net bad. And so I don’t I don’t I don’t think that is the answer. I guess there’s there’s a question of can can we produce a sort of cultural psychological shift ourselves, right? Can we do that without any kind of outside force prompting it? I’m relatively optimistic that this is possible. I guess I would have to really think back to what, what kind of precedents there have been for that. But I do basically believe that if we change our mindset, it is in fact possible to think about the world in a way that makes us much more likely to discover great ideas. And I do think that, you know, unfortunately, we live in this very tightly regulated environment. So I do think that that there are headwinds, and I do think that those headwinds will sort of make it less likely for us to sort of purely endogenously make that sort of shift in mindset. And I think it can also make it hard for, you know, funding to actually get to those, you know, truly earth shattering type projects, also. So, can we fully do it individually without some outside stressor? I do think it’s possible. But I do think that that’s also going to be a major challenge. And I do think people like Elon Musk, for instance, right? Yeah, he’s a complex figure like all humans are, but I think that he’s doing something important, which is inspiring people with engineering. Right. And we haven’t had those kinds of heroes in our society for a long time. And having examples like Elon Musk that we can all look at, I think, is actually one of the things that can start to kind of shape us up as a species.
Will Eden 18:18
That’s great. And, you know, part of the reason I started this podcast was to talk to people that are, were have found, you know, $20 bills in the sidewalk. And just just to kind of put in the ether, that it is possible, there are areas you know, where you can innovate, like, there are things you can do, and just encourage people, you know, like, a lot of times the market is efficient. And you know, there’s not alpha to be had, but you know, every once a while you can find things. And I think it’s really important to look, especially if you’re, you’re a smart person. So So I’m curious, we talked a lot about longevity, and I want to talk a little bit more about biotech and how it differs from kind of investing in traditional tech. Sure, it seems like it’s quite difficult, right? There’s a lot more players, and it’s a lot more expensive to get through. There’s all kinds of complications, which we could go through what has been the biggest challenge for you in investing in biotech? It seems like to me, one of the big challenges is understanding that there’s people up the chain, you need to sell to as well. So you know, there’s shorter feedback loops in Tech where you can go straight to a customer, right, but maybe in biotech, you know, you have to invest in scientist, and then you just gotta go to this like contract research organization, and it’s got to get to the FDA, and on and on and on and on. Have you found that to be the case? And what have been the kind of the toughest challenges to solve for successful biotech companies?
Unknown Speaker 19:41
Yeah, it is absolutely true. So I think I’ll just start off by saying there’s more to biotech than just drugs. And I think for drugs and to a certain degree devices, the dynamic that you’re talking about is absolutely true. Right. You have a phase one trial, you have a phase two trial, you have a phase three trial. These are real important company events that you have to, you know, actually gear towards both on the financing side and the team side and where you focus your science, right, like so. From that perspective, I basically concur with you that there are these other factors which make it intrinsically more difficult than something like tech where you can push a button on your computer, and everything that was in test gets pushed into deployment. And suddenly, you know, your billion customers are using the code that you’ve just wrote, right? That is absolutely crazy, right? There’s no parallel to that in bio whatsoever. And you can envision a future world where you can like, update some drugs or like personalized some thing and like, your desktop printer will produce the exact vaccine, like, Sure, great. That’s a possible future world. But that’s not what biotech looks like, right. Now. The other thing I will say, though, is, if you’re doing a biotech business, that is catering to other biotechs, that’s much more like a normal company, right? And that you do have customers that you’re selling to right away. And some of my absolute best investments have been in companies like that, right? Where you aren’t having to cater to the FDA, you can actually sort of like push out new technology to all of the biotechs that you’re working with. Right. So I don’t think it’s quite as binary outside of the drug space, specifically. Gotcha. But in terms of drugs, which is one of the things that we care about, yes, it’s a very different world. Right? Very, very different. And I think there are a few things that make it relevantly different from tech, one of which is that sort of staging. But I think almost more importantly, it’s more about the sort of capital requirements of it. It costs a lot of money to even design one antibody, and then put that into patients for the very first time. Right, just to get there. You’re talking eight figure checks? Yeah. Yeah. So in tech, there’s nothing comparable to that. Nothing like and, you know, this is basically an artifact of the way that we’ve chosen to setup our system. And I do think that there could be a very different version of the world, which sort of doesn’t involve the FDA looking quite like it does now. Right. But I also think that that’s a very different world, that is going to be very difficult to get to from where we are now. But at the end of the day, if I could wave a magic wand, I would love the FDA to basically certify things as safe, but it just
Will Eden 22:42
leaves the efficacy. It’s like, we’re not worried about that. Yeah, just slightly, like regular consumer protections kind of handle that.
Unknown Speaker 22:48
Yeah, totally. And look like that would obviously also result in a world where a bunch of stuff that’s not very good medicine is also being sold. Right, right. We already have that in like the supplement space, right? Oh, yeah. Some people are angry at the supplement space. It’s like, oh, well, you know, it’s like hard to know what’s even in the supplements, and most of them don’t do anything. But like, most of us don’t really care, right? It’s like, Yeah, I’ll take supplements, if I feel like it. And I’m not really going to stop someone else from like, wanting their supplements, right. And we could get into a world where, basically, pharma looks more like that model. Now, I think there would be, you know, slightly more serious layers between you and just sort of like buying heroin off the counter. But I do think a world where drugs were developed and looked more like supplements is probably a world where we get more drugs. And in the end, if we get more drugs, and can try more things, I think we have an ecosystem that is more likely to innovate and actually get new good stuff. Whereas right now, that sort of feedback loop is very, very loose. And what this means is we end up doing a lot of testing drugs in animal models, which partially reflect humans, but also partially dumped, right. And so you get this weird situation where a ton of the kind of fundamental r&d is being done in vitro or in animals, or even in like computer modeling now, and the odds of that stuff, translating into a clinically useful drug in humans is just exceptionally low. It’s very, very, very low. Again, some models are better than others if you’re testing a light antibiotic in other mammal, okay, you probably know pretty much exactly how that will work. If you’re trying to test a cancer drug in an animal and then apply that to a human. I mean, good luck, right? The odds of that working are so small, so small,
Will Eden 24:40
that shot in the dark is the answer more challenge trials or something like that. I think
Unknown Speaker 24:45
challenge trials would be awesome. Obviously, you can’t do a challenge trial with like, you know, cancer. It would be hard to radiate your whole body and then give you a cancer drug and see if you survive But I mean, I guess consenting adults in that world would look horrible. Now, I think I think very few people would, would actually volunteer for that. But yeah, I mean, look, I do think that the FDA doesn’t want to stand in the way of good drugs. And I think that they do very much go out of their way, when it comes to orphan diseases. Interesting. And that is the one area where you see the most sort of progress in terms of short timelines. All right, gotcha. So if you’re treating an orphan disease, you might be from your first human trial to a fully approved drug and as little as like four years. Oh, wow. Now, mind you, in some other world, maybe that could be you know, like, one or two years, right. But that’s pretty different than the common story, which is, yeah, from like coming up with a drug to actually having it inpatients worldwide being like 20 years. Unfortunately, that is actually all too common. And that’s the kind of thing where I just start to think I mean, man, could we do this better? It’s tough. Yeah. And I do think in this particular case, the fact that we have actually found all of these other drugs up already, because of the way that we’ve set up the system. I think that is a larger barrier in biotech than it is in other spaces, right? So if someone wants to make a clone of Facebook, it really just comes down to do people want to leave Facebook, does this, you know, new thing, have, you know, maybe some slightly better features? Or maybe it’s just targeted at like, a younger demographic or something, right? Yeah, it doesn’t really have to be intrinsically superior to Facebook to like, beat Facebook, right. But the way that the FDA actually sets up these trials is the new drug has actually beat the old drug. Right? It’s not just that you can just put out a drug of similar efficacy, you need to actually do better than what’s already out there. And I’m kind of like, well, but maybe just put that out and allow us to explore the sort of new space, right? And we might end up finding that there’s these weird quirks. I mean, so many drugs, were originally approved for something totally different, and then got repurposed. Right? And so if you’re, then like, well, for this one indication that you’re going for, you know, say some heart drug, well, it’s just as good as this existing heart drugs. So I think we’re not gonna say yes. Okay, but you don’t know what other purpose that drug might be put to 20 years from now. Right? We are repurposing so many things. That I mean, it’s actually way better to just throw all this stuff out there. Absolutely.
Will Eden 27:35
Well, and you can use it, you know, a lot of physicians use it off label, they can discover all these new things, if it’s actually in the ether, and people can use it, which makes
Unknown Speaker 27:43
a lot of sense. And I think the other thing I would point to in in terms of how things are getting better is there is an increasing push to allow, basically patients with no other option to use experimental therapies. So Congress did pass a right to try bill a few years back. And it does still require there to be a completed phase one study. So it’s not literally like anyone can go to, you know, a scientist and be like, pump me up doc, go, you know, but the phase one at least, I mean, again, that is already a very high bar, we’re talking eight fingers, right. But at least that gives this opening for folks to try stuff that at least has some, you know, a bit of kind of human record on it. Right. And that’s a very far cry from having to wait until somebody’s completed a phase three trial and is being marketed and sold, oh, that we’re talking a speed up of, you know, many, many years for some of the sort of worst off patients. So I would also definitely highlight that as being, you know, really, really good step. I don’t think it’s, you know, as far as it could go, but it’s a very good step.
Will Eden 28:57
Makes sense? Makes sense. And, you know, if you had to pick between the two, you know, would you rather there just be a lot more money in the biotech space, you know, capital flowing in or is just spending money on lobbying to try and get the FDA to, you know, drop efficacy requirements, and just just make the process more simple.
Unknown Speaker 29:15
I don’t know if there’s any amount of lobbying that would do that. Oh, yeah. To interrupt so well, look, I think that the way that you need to look at federal regulators is they get heavily punished when things don’t go well. And they get no upside when things go right. And this is as true of the FDA as it is a V like nuclear commission, right, which hasn’t approved anything or one or two projects like 40 years, right. So basically, every every layer of sort of government oversight that you add, is just another entire system of people, all of whom are only trying to stop you know, one of the Do kinds of errors, right? And you can just do that over and over and over. And you can create arbitrarily many of these groups, all of which can veto these projects. And so that’s kind of the world that we find ourselves in. That’s sad. A lot of the reason that the FDA has sort of gotten better on the compassionate use thing, and a lot of the reason that they’re quicker to approve orphan drugs now isn’t because of lobbying in the traditional sense is because of patient advocacy groups. And a lot of the really smart pharma companies are working very closely with these groups. Because these are actual patients and, and the families of patients that are basically like appealing to the FDA in a public and very emotional manner. Right, right. And I think generally, when folks think of lobbying, it’s like, I’m gonna pay off some congressmen to, you know, vote for this bill. And it’s really my moustache. But that’s not what these groups are. Right, right there, for the most part, as far as I know, they’re not paying anyone, right. But they’re showing up at these meetings every single day. And they’re like, Hey, you have done nothing. For my family member, you have approved zero drugs that treat, you know, my son, my daughter, right? And you can only sort of look those people in the eyes so many times before, you’re like, yeah, maybe I should approve this one. Now, mind you, we do get things like that Alzheimer’s drug, we’re very skeptical, you know that it works at all. But that is the price. That’s the price we pay, we have to let through a couple of drugs that don’t work in order to let through drugs at all.
Will Eden 31:35
Yeah, you know, I talked to biotech m&a, laying on the podcast a couple weeks ago, and she talked about how the failure of that drug for Alzheimer’s just as ruined, like a whole class of drugs that were targeting the space because no one will invest to them anymore. Because you know, that one drug didn’t work. And he’s this big Atlantic story and everything.
Unknown Speaker 31:53
Yeah, the Alzheimer’s space in particular is tough. I definitely think just like every other field. Everything is about trends and fashion. Like other some target, and everyone wants to go after that one target. And that can make sense when it’s a really good target. Right, right. But when it’s a very uncertain target, right, and every drug company goes for it. Yeah, that can destroy entire fields. There are very few companies that are excited to invest in a new Alzheimer’s drug, right. Which is incredibly, incredibly sad. And yet, that’s how the world works. When things fail over and over and over again. We’re just conditioned to then not try.
Will Eden 32:41
Definitely, definitely. Do you see any of this changing changing on the capital side? You know, I was talking to Paul smelting at Yale couple weeks ago, we’re talking about the long term trend of interest rates for the past 800 years. They’ve been trending trending down, you know, down to like,
Unknown Speaker 32:57
I saw that paper. Yeah, yeah, absolutely. Absolutely.
Will Eden 33:00
So we were talking, you know about why this was. But you know, long story short, it does seem like interest rates are trending down hitting zero right about now. And this seems like this will probably continue to be the case. And so that pushes people up to riskier assets. You know, venture capital is one of them, you know, do you think eventually, like more capital in the space will just help fix and alleviate some of these problems in the long run?
Unknown Speaker 33:22
So I’m gonna say no, at least from the evidence that we have, when more money goes into venture, it tends to underperform. Just just reducing the returns. It doesn’t. Yeah, which suggests that the the fundamental bottleneck isn’t actually funding. And I suspect that that money could be better spent elsewhere. I think the way to think about VC is that it’s a high prestige field, which means it’s always going to be over supplied relative to the actual size of the market. Gotcha. And if you look at overall VC returns, it generally is somewhat underperforming, just owning the s&p 500. There are brief periods where it over performs, right, there are some, you know, 90s tech companies that have ended up becoming the largest companies in the world. So yeah, you have a couple cohorts that outperform by a lot. But the vast majority of cohorts underperform. Interesting, interesting. And if you pour more money into that space, it’s basically going to push up valuations, and it’s not really going to do a whole lot, I think, to increase returns in the space.
Will Eden 34:34
Got it? Got it. How do you, you know, working in venture capital that, you know, how do you think about finding alpha? You know, like, if, you know, there’s a lot of capital, it’s really hard. Yeah. Is it just like, just like, like, man, it’s just very difficult. We just did the best we can kind of anger like, what’s your answer there?
Unknown Speaker 34:50
I think every investor comes up with a set of heuristics that they think allows them to outperform. Yeah, and I think some of what makes VC extremely hard. Is that the feedback loops are very loose, right? So if you invest in a company in the public market, you have a daily p&l. And you have to stare at that number, if it’s red, if it’s green, you know, every single day, which I think is also another failure mode. By the way, it’s very hard to invest Well, when you can see the price every single day. The flip side, though, is what kind of feedback do you get as a VC, right? Well, the company is going to raise another round, maybe in a year, maybe in two years, maybe longer, they’re going to do that a few times before they go public. It’s a very long road before you either a get your money back, or b Get something like a kind of daily thermometer about how things are actually going. So in that sense, I do basically think most VC investors are using the price of the following round as their criteria for success. Yeah. Which does create some obviously bad and weird incentives. And that’s sort of only a proxy metric for the thing that you actually are trying to do. Right? So in that sense, it’s very hard. And did you generate alpha, I’ll tell you in 10 years, whether your strategy generated any alpha, maybe 15.
Will Eden 36:22
At that point, it’s just too late. It’s too late.
Unknown Speaker 36:24
I mean, it’s not too late if you’re gonna spend your entire life doing VC. Alright, so you know, maybe you have a 50 year long career, if you’re very lucky, and you hang on away longer than you actually should. Maybe 10 to 15 years into a, I mean, Fine, let’s call it a 40 year career, right? Maybe after 10 to 15 years out of your total 40 year career, you’ll know if you’re actually making money. I do think that it’s not impossible, either, right? Like I invested for Peter Thiel. He’s one of the great investors in the space, if there’s anyone who has proven that they can actually generate alpha, it’s him. So can I generate alpha by just copying what he’s doing? Maybe? I don’t think that’s totally crazy. And I do think that I obviously learned a ton from him. I also don’t think I’m as good of an investor as he is. But if I can get, you know, half of that alpha, I’ll still be happy to leave make money. Right.
Will Eden 37:29
Right. Right. Right. Right. Interesting. Interesting. Is it just, you know, just at the metal level, is it just looking for things that other people just overlook? For some reason, you know, like taboos or things like that? Or just, you know, is are there any, like frameworks you can talk about that help you conceptualize,
Unknown Speaker 37:47
you know, picking good investments. So to be fair, I think biotech is a little different than tech. And I don’t spend most of my days doing tech stuff. So it’s possible that this is maybe a little bit of an unfair characterization. But I sort of feel like you could just take a company’s weekly growth rate intact, and just like solely price it based off of that one metric, and just get rid of all other VCs. And look, I don’t think that’s actually fair. But I think that that’s closer to the mark, then I wish we were dreaming. Yeah, I think I think the one big conceit that all VCs have is that the ideas matter. Interesting. And so often, I hate to say it, but but the ideas don’t actually matter. It’s more about the team. It’s about the execution. And it’s a little bit sort of trite to say that now, but I think even most VCs still haven’t internalized how much that’s actually true. Really, it’s just can this team pull it off? Now, again, I think that’s slightly more complicated in biotech, but only by a little. And the reason I say that is most companies in biotech, if they’re developing a drug are bought before the phase three. Got it? Not every time, but most of the time. So yeah, there are some proof points in a phase one, they’re pretty weak. By the phase two, you probably really should have some sort of, you know, indication that the drug will work, but even then, not always. Right. But yeah, I think I think that that has helped to kind of weaken the amount of that the sort of ideas and the underlying tech matters, because if it’s bought before you’ve had to prove it out. Then the idea didn’t matter did it?
Will Eden 39:36
So it’s important just you know, like I guess, operational like managerial excellence and good salesmanship that matters a lot more like can you just sales and sales matters a lot sales
Unknown Speaker 39:45
skill? Seriously, I I honest to God thinks sales is the most important skill a CEO can have. It is the most important skill. And yeah, again, you get a Theranos type situation to it. which I will note, by the way, there were no like hardcore biotech investors in that company. Right? It was all folks from outside the space who invested in this company. So clearly, there’s something that we could pick up on that something wasn’t quite right here. Right, you know, but that said, there have been plenty of drug companies, which, again, were bought after a, you know, possibly successful phase two, if you sort of squint your eyes and like, turn your head and look at it in just the right way. Maybe that was a positive phase two, and that company still got bought. And that comes down to sales, it comes down to sales, it comes down to who, you know, networking. And if that’s the primary thing that generates early stage returns, that’s the primary investment criteria. Yeah. Can the CEO do sales? And I’ll tell you right now, that’s not different between tech and biotech. It’s really not.
Will Eden 40:55
You bring up a great point, I’ve always thought that elands evil is real skill was that he’s just an incredible salesperson. Like, you know, like, I think like, you know, he may be a competent engineer, I have no idea. Pretty probably it’s very smart person. But I thought his real skill is just his ability to sell. I think he’s a really great salesperson,
Unknown Speaker 41:11
100%. And quite a few people have pointed that out in the past. But it does seem though, like, yes, he’s good at sales. And he seems to have actually created working products, too, right? It’s important. And those two things are somewhat orthogonal. Arguably, they’re even diametrically opposed. In some cases. However, he’s actually proven himself in a way that a lot of people who are good at sales never have to actually prove themselves. It’s true. So I think he has earned more respect than He’s normally given at this point. I think you’re right. I do think those are totally fair criticisms, even five years ago, but certainly 10 years ago. I think I think that there are other universes where Elon, you know, did blow up the first three rockets or four rockets or five rockets. And he’s nobody now quite, quite clear. Yeah. And that’s not the world that we live in. And I’m very glad that it’s not. But I do think that there were many cases where he was a sort of hair’s breadth from failure. And he pulled through. Well,
Will Eden 42:20
that brings a great question, you know, up, that I’ve been thinking about, sorry, it’s not on the outline. But yeah, how much do you think, chance of luck play in these things?
Unknown Speaker 42:30
They obviously play some role. And it’s one of those things where for the people who don’t have the non luck factors, they like to play up the luck. And for the people who have the non luck factors, they like to play down the luck. Excellent. Yeah. So clearly, there is some work. And also very clearly, there are a lot of things you can do to stack the deck in your favor. I like to think of it as how much can you load your dice, it’s still going to be a roll of the dice. Okay, fine. Right. But maybe your dice have three sides that have a six on it. And you know, maybe the others are a four, a three and a two. Like, that gives you a much higher average roll. But yeah, is there luck? Yes. But have you changed the expected value? Yes, by a lot.
Will Eden 43:22
It sounds like you probably want to act like you know, it’s all under your control. But at the end of the day, at the macro level, that luck is involved, you just want to maximize your expected return as best you can.
Unknown Speaker 43:32
Oh, yeah. And I think most entrepreneurs are basically like psychotically deluded about how little luck matters. And I think they have to be, right. And this is also one reason why I’m not super excited to start my own company, like, I will do it, if no one else is doing it. And it’s a really good idea. And I have a pretty high level of certainty, I could be convinced to start a company. But for me, that’s a huge hurdle. Whereas for other people, they are just like compelled. They can’t not to start companies. And those people often are not necessarily the best thinkers in terms of like figuring out what’s true and what’s not true. But they’re much better doers than the people who are trying to figure out what’s true and not true. I’m very glad that those people exist, I think they put themselves through enormous hell. I basically think being an entrepreneur is absolutely hellish. And only crazy people do it. And that’s fine, because those crazy people do exist. And if they didn’t, the world would be much worse. But I’m also not so self deluded to think that I could be one of those people and stick it through even when things obviously weren’t going well.
Will Eden 44:53
You know, well, I want to I want to tell you this, this quick anecdote, you know, coming out of college, helped create this company with you know, My friends. We sold it five years later, right, you know, week before the pandemic, and we were doing a retrospective. This is a couple months ago with one of my friends. And we realized there was probably 12 separate occasions where we thought it was greater than 75% chance that we were going to fail week to week, you know, like, they were like, wow, Jesus, like, odds on that are like, not good. Like, we were so stupid. Like, stopped, like, each of these occasions, like, you know, I was like, clearly, you know, I don’t know, like, you just kind of somehow figured out some way. If you’re just kind of somewhat diluted, I suppose probably the best way to look at it.
Unknown Speaker 45:40
And then how successful were you know,
Will Eden 45:42
we did? Okay, you know, we did okay, it wasn’t a huge success. You know, it wasn’t a failure, but it was like, just very median kind of outcome. Little bit about median, I would say, not life changing. But you know, a really good experience and a great lesson, I would say, Oh, totally, which was very interesting, very interesting. Which brings up a question I wanted to ask, which is, you know, how do you think people can kind of get better at thinking, you know, it’s clear, like people can get better, like, you know, they get more fit, we can kind of self approve and all these different areas. But do you think people can kind of like self improve in the area of thinking about things and being rational?
Unknown Speaker 46:18
Absolutely, yes. Yes, of course. It’s like any other skill, you can obviously train it. That’s awesome. Now, my caveat, however, is that returns to thinking are probably wildly different across people and what they’re trying to do. So if you meet a high level poker player, they’re incredibly rational in terms of doing things like calculating expected value, right? They have gotten very good at that. And they’ve trained themselves to do that. Because if you don’t do that, you systematically get money drained out of your pockets, important. So in that sense, they face this very steep curve, where you either get really good at a certain kind of thinking, or you lose all of your money. And in any environment like that, there are so many, like strong incentives to learn that you’re going to improve your thinking, or you’re not going to stay in that field. And I would argue this is true of like, finance, too. If you’re this like crazy, over emotional swing trader, like I was going up, I’m gonna buy, oh, it’s going down, and suddenly, and very, very quickly, you’ll certainly soon learn that you lose all of your money. And almost everyone who actively trades has some period where they all admit they were totally stupid. But you can learn to manage your emotions, you can learn to be systematic, right? You can learn to have heuristics that work, you know, 52% of the time, right? And that that sort of thing. You can obviously, obviously improve on and make games. But what fraction of people are in that kind of situation where you have to improve your thinking skills in order to to do better at life? Not many? Seems like that. I would argue that it’s actually not that many. Yeah. So do you want to improve your thinking skills? I think the answer is sort of like entrepreneurs, are you compelled to do so is there are no world in which you wouldn’t improve your thinking skills? In which case, go ahead and do it? And you can absolutely do it. If you’re a normal, sane human being how much is that really going to help your life? You know, maybe some here and there? Right. But I think not. It isn’t, it isn’t going to be profoundly life changing either. Gotcha. It
Will Eden 48:41
was just like not that much, instead of for most people to get better. Really? Yeah, it’s probably what’s going on? And what is getting better look like? Is it just like recognizing like biases, cognitive biases, that kind of thing? Or? Yeah, what do you think that looks like?
Unknown Speaker 48:56
Yeah. I mean, the actual answer is probably that it’s a lot of different sub skills. I do think that learning to recognize cognitive biases is actually very, very helpful. I have personally spent a lot of time investing in doing that. And I feel like it has been very helpful for me. But I think that there are other kind of broader sub skills too, like just learning to do really well at introspecting on what’s going on inside your own head. That does help with things like noticing a cognitive bias, but but I’d almost say just things like having good relationships with people can really, really benefit from that. And that’s not exactly what most people mean by improving your thinking. But it is effectively a cognitive sub skill that will affect every other area of your life. You know, if you can figure out what’s going on in your head and you can figure out what’s going on in someone else’s head and you can talk to them about what’s going on. Sometimes you can actually fix problems that otherwise would sort of go unnoticed and just sort of sit there and fester. So is that improving your thinking? Well, that’s not what people usually mean by that. But I’d argue that it’s almost more important in some way.
Will Eden 50:07
Definitely, definitely. It’s super interesting, super interesting. But you know, Tyler Cowen has this this phrase that you should knowledge workers should have something like scales like practice every day. Do you think people are trying to get better at their thinking should have some kind of like a skills they practice on a daily basis to kind of try and get better at
Unknown Speaker 50:24
it? Yeah. I mean, within the rationality community, I’d say, betting on the prediction markets is a sort of good way of, you know, staying at least somewhat calibrated. You know, most most people aren’t weighing in on so many markets so often, but at least it’s a sort of baseline check. And I do like that there’s a little bit of a culture of challenging each other Tibet’s like, Okay, well, you think something strongly, I think something strongly. They’re not anywhere close to each other. Let’s turn it into an actionable bet. Let’s turn it into some observable thing about the world. And I think just having that as a cultural norm keeps people a little bit saner, actually. And it does keep them a little bit more in touch with like, okay, am I modeling the world? Well, is this subjective probability that I have in my head reflective of actual probability of something happening? Some folks explicitly do calibration exercises, and I think that’s useful to do every now and then largely, again, to just translate the subjective feeling of a probability in your head into an actual probability that corresponds to something that you can check. Very good to do that sometimes, or even just once. But is that necessarily going to keep you sharp? I think it’s it’s tough to do it was sort of stylized things like that. Got it. Got it.
Will Eden 51:45
So you So you started work, you know, you worked Federal Reserve, econ major, you became a biotech investor investing longevity? You know, were there any things you anything you like, explicitly practice along the way? You know, getting up the skill, in biology in longevity? Was it just like reading a ton of papers and getting the lay of the land? Like, like, how did you think about that? Just like that was like, academic papers? Like, that’s the best way to
Unknown Speaker 52:09
do it? Yeah. So. So I would say that there’s a skill in how biology works, generally, there’s a lot of specific facts about biology. And then there’s the skill of becoming a good investor. And I think all three of those I’ve learned separately. Interesting. So I would say that my journey basically started towards the end of college. And I was really reflecting on what I wanted to do with my life. And basically, the answer that I got back if I could, would basically to be stopping sickness and death and suffering, right, just like I was looking around me and seeing my parents and my step parents like falling apart at the seams and other people who had just like mysterious health conditions. There’s tons of people that just like, can’t lose weight, right? It’s everywhere. If you look around, like, ill health is everywhere. And it was just like eating me, I was like, I want to do something to try to help this. And so what I ended up doing is I started with myself, I was like, Alright, I’m just gonna try to answer some, like, really basic questions. What should I do for diet and exercise? So I started to read the literature. It’s like, okay, this is a total mess. We have no idea the studies are done super poorly. And I do think having a background in econ really helped here. Because A, I was actually like, literate enough in stats to sometimes just see these things and be like, that doesn’t really mean what you think it means. That that isn’t good evidence for this claim you’re making this doesn’t make sense. And then everyone’s citing this bad paper and like, well, I can’t trust those papers. It just got burned, you know? Yeah. Total total mass. But I think the other thing too, is there’s a way of thinking about complex systems, which I picked up in econ, not from my classes, but from actually learning fundamental economics from you know, folks like Hayek and Smith, right, there is this way of, of seeing the world as a complex system. And I immediately could see the same things going on in the body. And once I could sort of like port over some of that just general way of thinking that like, actual systems level thinking, the whole body started making a lot more sense. That’s cool. And so in a weird way, my background outside of bio, I think actually prepared me really well to teach myself more bio. So that kicked off the phase of me just like reading everything, and just following every rabbit hole. I got down, you know, I was like, Okay, so I’m interested in nutrition. So like, how are different foods digested and like, oh, it just turns into like, you know, fats, proteins, carbs are like in the bloodstream and then they get metabolized. How do they do that? Oh, it’s going into the mitochondria. I’m like, Oh, the mitochondria. So how does that thing work? Like, oh, this thing is really linked to cancer. Now I have to read every paper on cancer And I just did that. And I read 1000s of journal papers. And it’s tough because a lot of people ask me like, oh, I would like to get started in bio, can you suggest something for me to start with? I’m like, no, no, I can’t actually, my knowledge is compiled from just reading so much hours daily. For years. I didn’t have a single source. I didn’t have like one textbook where I’m like, oh, yeah, you should like definitely check that out. That totally makes sense. I have no idea where someone should start. I just sort of jumped into it with both feet. And I’m here now. And I feel bad because I want to give people good advice, but actually don’t have it. Like I just put in the 1000s of hours necessary to become an expert in this space. And it’s very hard to shortcut that part. Right, I do think I was able to shortcut the, like, way of thinking and I was able to shortcut knowing whether a study looks good or not, I was not able to shortcut Learning the facts of biology, there are so many proteins, so many different molecules floating around so many drugs, so many systems, and all that just takes time to learn.
Unknown Speaker 56:12
Then there’s the becoming an actual investor piece, which I did much later, right. So I got interested in bio years before I ever even considered investing in the space. I’m honestly just incredibly grateful for Peter, and that he gave me the opportunity to do this, I wasn’t an investor before, I worked for him. But he knew that I had this knowledge base. And he knew that, that I could focus on it as a specialist. And, you know, I teamed up with some other folks internally, and we just sort of did it. And, you know, it really was a case of, you know, asking for forgiveness, instead of asking for permission. And I look back on those first few companies that I suggested, and they are so bad. And how I was thinking of them was so terrible, I am shocked that he didn’t like to laugh me out of the room or screen me out of the room, because it was so bad. Right. And that was true of many of the first companies. But eventually, we started to actually hit on something. And then we started to see some of these outcomes, you know, they get up rounds, how high like how soon right, we started to see, okay, were they able to execute or not, and not just on companies that we did invest in, something that I think everyone should do is they should keep a shadow portfolio, look at all the things you seriously considered, but didn’t invest in and look at how all of those did and why. And some of those shadow portfolio companies did incredibly well. Which is always very, very big. It’s brutal. But in terms of training yourself to think especially when there isn’t that tight feedback loop, you need as much as you can, in early stage companies. Yeah, get a bigger dataset, don’t just follow the companies you invested in follow the companies you almost invested in, because that’s the closest thing you have to a control group. It’s not perfect, because obviously, you are choosing which ones to invest in, not invest in, if it’s close, it was close for a reason. It was close, because it almost hit all the heuristics but not quite. And that can help you see okay, which things actually turned out to be pretty important and which things really
Will Eden 58:23
very cool. One common theme I see, just you learn in biology, about longevity is you know, you were just like really intellectually curious about it, to the point where yes, this is something you’re gonna do, like, kind of no matter what, right? Like, you know, you’re just gonna go out there, read the papers, absolutely. Have fun doing it. It’s not like you were like sitting there, like forcing yourself every day, I’m assuming till I want to learn biology. No, never. It never felt like that ever. Which probably seems like a really important part of being successful in it, at least. It’s like, if you’re like trying to force it to happen, it probably wouldn’t work as well, or
Unknown Speaker 58:56
something like that. Yeah, I do agree. I basically think for developing something like that in your kind of, like spare time, I basically think you, you have to be deeply intrinsically motivated. If you’re doing it as your job if for some reason, you know, right now you’re plugged into a lab, and you had no choice, you’re like, you have to become a scientist, I’m pretty sure you would find a way to do it, you know, in the 40 hours per week you would spend on it, and then you do something else, right. So I do think that it is possible to develop expertise deliberately. But I don’t think that that’s gonna get you the passion to do it in your spare time. Right? You have to actually be motivated to do it. Which also sort of like ties into how we think about how to parent like, we are, we’re actually unschooling our kids. We just wait to see what they show some intrinsic interest in and then we like pour fuel on that fire. Right. And it can be almost anything. It can be totally random stuff. But some of our our thinking there as like, well, they’re not really going to want to go deep on it, they’re not going to stick with it, they’re not going to really develop excellence in it. If we’re forcing them to do it, we have to wait for them to show the interest, and then help fulfill that interest as much as we humanly possibly can. And I basically think you can do that to yourself, right, you can look at the thing that you actually want to be doing. And I think it’s tough because a lot of people tell you to turn your hobby into your job. And I think that’s hard on multiple angles. And one is not all hobbies can be turned into jobs. Right. And I think that advice is sort of causing a lot of people to just become more unhappy with like, their actual job. Yeah, I am very hesitant to give people advice that I don’t think can be sort of universally applied or sort of always successful if you follow it. So I’m not going to tell you to turn your hobby into a job. But if you want to be intrinsically motivated to get very good at something with those, you know, hours that you have left in the day, it’s basically a necessary condition. It makes sense, right? So you might not always be able to turn your hobby into your job. But if you want your hobby to become your job, you have to be pretty interested in pretty motivated to do it.
Will Eden 1:01:12
That makes a lot of sense. It makes a lot of sense. Yeah, I think I think that’s very good advice. And that you’re not like sending people down a rabbit holes, but it’s like, this is like a good path, if there’s something well aligned with what you’re interested in. And you spent a lot of time working on it.
Unknown Speaker 1:01:29
Yeah, I mean, I would say the thing I personally struggle with is how to know when to go into a highly competitive prestige driven field, right? Like, how should someone tell whether they should try to become a movie star? Right? And I don’t have a good answer for that question. Because ultimately, you kind of have to try it and see if you get some traction. And sticking with it in an almost like psychopathic way is probably necessary. Other than a few, you know, incredibly lucky, random breaks, but like really sticking with it and just trying and like doing those small gigs and stuff. But yeah, it’s tough, because I would personally tell basically, every friend I have, don’t try to do that. That seems crazy, right? And yet, the movie stars come from somewhere. So maybe it is like being an entrepreneur, right? Don’t go into these fields, which are extremely hard to ever make any progress in unless you are just intrinsically motivated to bash your head up against the wall forever, and possibly just ruin your life because you focused on something totally fruitless. That feels like terrible advice to give to someone and yet you need people who sort of come out the other end of this, right? Like, a shockingly huge fraction of kids want to be a YouTube content creator. How many of those are there in the world? And then how many kids want to be them? And then run that math? Like, well, what advice should I give my kid now? Okay, so you want to be a YouTube content creator? What should I even tell you?
Will Eden 1:03:00
Right? Well, this, this reminds me I have a good friend. He talks about this a lot. And he says, you know, one of the things that people miss is, you know, kids will come to him. He’s a school teacher. And, you know, ask them what they want to be. And they’re like, Well, I want to be an NBA star. It’s like, well, like, Yeah, but like, why do you want to be an NBA star? It’s like, well, like actually, like, I like money. I want a lot of money. Like I can care less about basketball, but I know NBA players have money. Like in the surveys, you know, it’s like, yes, you can go.
Unknown Speaker 1:03:29
Yeah, it’s like really just like, prove your thinking and then go effect.
Will Eden 1:03:32
Yeah, exactly. Maybe they got like, because maybe it’s just like people are glomming onto like, some other aspect. And that’s just a popular choice. But who knows, I think it’s
Unknown Speaker 1:03:41
tough if the thing that they’re glomming onto is the fame, right? The same is really pretty zero sum. Money is not a zero sum fame is pretty zero sum.
Will Eden 1:03:53
Game is pretty bad. If you want to when
Unknown Speaker 1:03:55
I would say any, any field that involves drawing people’s attention away from something else they’re doing to your thing, is going to be intrinsically very difficult, including podcast by the way.
Will Eden 1:04:09
I would, if you want to make money or be seen or anything like this, I would not recommend podcasting. It’s not a good, good way, though reason I started the podcast to be able to talk to people like you will, which I would have no access to otherwise, essentially, it’s really an excuse for me to learn from people. And for that, it’s great, but if you want to go out and like try and make money and things like that, I think it’s a very poor choice. Many other ways your time ever better.
Unknown Speaker 1:04:32
So it’s funny, I I first started thinking about doing a podcast, man. I had an old Facebook post about this, I want to say was eight or nine years ago, and I just asked people, Hey, would folks be interested in a podcast that was just two people having a really interesting conversation? And it turns out this is one of like the biggest markets for podcasts ever. Joe Rogan is just two people sitting down having a good conversation purposes. And the amount of pushback I got was actually pretty surprising. There were several people who were like, yeah, that actually does sound kind of cool. I would like that. But the number of folks who came back me like, No, you, you need this, like, you know, type content thing are super boring. And it has to be super edited and scripted. And that’s kind of like, Are you sure, but I didn’t have enough conviction, right, because at the time, I thought the podcast space was too crowded. Visit today, but actually started back then I think there’s a decent chance that just having interesting conversations would have caught on, it could have been some sort of podcaster. And it’s still to this day, I’m like, maybe I should start a podcast. It’s like, well, but it’s an even worse time now.
Will Eden 1:05:45
Very interesting space. I gotta say, yeah. But I do highly recommend it. You know, if you want to have interesting conversation and learn from people, it’s a great, it’s a great method to do that from. But it’s not a great way to like, try and go out and make a lot of money or something like that many, many ways.
Unknown Speaker 1:06:02
Yeah, I mean, I did honestly try to think like, Okay, if I did start a podcast, I wouldn’t expect to become rich or famous, necessarily. It’s like, what actually was my sort of success criterion for that. And I was basically like, yeah, if the right 10,000 People listened to it, and liked it, I’d be very happy with that. And I think the trick there, though, is to get to the right 10,000 People, you actually have to get to like, a million plus people. And then randomly hit those, you know, 10, best in the you actually want to listen to the podcast
Will Eden 1:06:37
on that a little bit, because I have actually a lot of success. Like, I’ve what my audience is like, the exact type of people that I would like to connect with. For some reason. I don’t know why I guess it’s just, but I think it’s because I only follow, like, I only contact people I’m reading, or I find interesting, like it is exactly that, like I have, I do not look at like, who’s popular or anything like that. I think if you tried to do that, it wouldn’t really work. Yeah. But if you do just follow your obscure interests, like I think you can make it, you can attract that kind of audience.
Unknown Speaker 1:07:11
I have a couple of thoughts on that. I mean, one is, if you’re thinking of a niche to dominate, I think you can totally make a podcast that is very popular within a certain sort of subgroup in our culture. Yeah. And I basically think that you have succeeded at that lifespan. And there’s a question of okay, then can a podcast kind of like break out of a particular niche? Yeah, that’s a good question. And one answer is, you don’t actually need to write like you, you, you have hit your goals with this podcast. So it doesn’t actually have to be more popular because the people that you care about or hearing it, and you did that because you’re targeting a particular kind of person. But I do think that in terms of doing like the stag hunting thing, and like trying to get famous people on the podcast, I do think even for a podcast is targeting a niche, it is still actually pretty useful, just from a marketing perspective, saying, Hey, look at the awesome people that I’ve had on this podcast, because those folks have fans who will listen to all of their stuff no matter what. And they’ll discover your podcast one, too. It’s easier to get the intros. If you’re like, Hey, I’ve had X, Y, and Z on my podcast, Would you also like to be on it? Because it gives you this level of social proof. And so I do think we shouldn’t be seeking out famous people to be on our podcasts. But having famous people on a podcast does not hurt. It actually does help.
Will Eden 1:08:31
It definitely does. And that’s, you know, you mentioned social proof. And that’s one of the very weird benefits that it does give you is, you know, like, there’s, there’s some weird linkage people get when you sit, you know, I reach out to people, I say, Hey, I’ve talked to these people, and they’re like, wow, like, I like them. And, you know, people are much more likely to say yes, that way. I don’t know if humans are very, like, status driven or something like that. I don’t know, kind of disturbing at some level.
Unknown Speaker 1:08:56
Um, yes. And no, I think some of it is status driven, though I think a lot of it is. We live in this very busy, complicated, crowded web slowly. And you need some method of sorting, right, you need some method of rapidly separating signal from noise. And anything that is a hard to fake signal is really useful for that. And being able to point to a podcast be like, Hey, I interviewed Important Person X for two hours. That’s really helpful. Because it it is it is very hard to fake signal that Important Person X thought you were important enough to give two hours to that’s a really great point. And I think that among nerdier type people we really hate costly signaling because it feels like you shouldn’t be able to just like tell people the truth, and then we got this horrible cost, and the signaling feels really dirty. And yeah, it’s often this like status based thing like gross, right? Yeah. But if you think about it from a search and a like, information theory perspective, on some level, you have to To get signal from noise you have to and the costliness of the signal is part of what makes it a valuable signal. And those are inseparable. They’re absolutely inseparable. And I think it’s better if folks like us really learn that lesson and internalize it upfront, because then we can get comfortable with the fact that yes, sometimes you have to pay these weird social costs. But you get incredible benefits. Because you are conveying credible information to other people in the world. That’s one of the most important things you can do.
Will Eden 1:10:29
You know, man, well, I really appreciate that. Because, okay, I’ll tell this anecdote, really quick. My friend Lars and I, we wanted ACX grant, this last December, for some of our work on land value taxes. And it just opened up like a whole new cadre of guests. And it was kind of like a black pill. Because I was like, Man, I haven’t done anything like different now until like, like, I just get this one signal. It’s like, Man, if I had a Harvard degree, is this the same thing? And I’m like, Man, this is kind of annoying, but the world works this way. But I think the way you painted that as it’s like, it’s a really good way to look at it, right? It’s like, it just people have very little time to evaluate. And it’s just like, you have to take shortcuts where you can. And it’s an easy way to do that.
Unknown Speaker 1:11:11
Yeah, and frankly, we are all born into this world as helpless newborn infants who cannot do literally anything. Everyone’s entire life is bootstrapping, even from the very first like, get the visual system online, learn how to move my arms, like, even if you’re born rich, you still have to bootstrap basic human functionality. So and I think that we actually just have to be okay with that. And we have to be more patient with ourselves and others and accept that, to a certain degree. You know, we have, like, we all have something to prove. Everyone, no matter what has something to prove. And that’s hard. And that sucks sometimes. But that’s part of life.
Will Eden 1:11:52
Yep. Yep. That’s the way it is. It’s, that’s, that’s really well put what you know, this is a great transition to parenting. I’m sure you’ve got a lot of really interesting thoughts on the subject. Some of the things you mentioned earlier in the podcast reminded me of we talked to Tommy Cole us, and he’s one of the Collison brothers, yeah, a while back, and we were talking about his childhood. And it was very much like, you know, his parents just encouraged him to kind of go after, like, whatever he found interested in and really enabled him to do that, which I really found, like, awesome, because I see around me, everyone trying to get their kids into the competitive preschools. And so they get to the right college. It’s just like, really, like Insanity. Just like seems like a really bad idea to do that. So how have you approached parenting? And how much do you think parenting matters at the end of the day, if you’re not kind of actively screwing up kids?
Unknown Speaker 1:12:40
Oh, man, that is a huge and extremely contentious subject of which many books have been written.
Will Eden 1:12:47
Most more questions here.
Unknown Speaker 1:12:49
I mean, look, maybe I’m as delusional as the entrepreneur who assumes that he’ll succeed no matter what. But I basically believe that my parenting matters. There are studies that will try to show you that’s not true. I think that those studies try to prove a little bit too much. But I think it’s probably one of those things where the people who thinks it’s like all genetics plus randomness is, you know, understating the effect of parenting, and most parents are overstating it. And I do have a couple of essays on my blog on this subject, where I’ve tried to actually get into studies which try to get at this question. Most of these are using heritability estimates. So you take, you know, identical versus non identical twins raised separately versus raised in the same household. And then you can sort of decompose that variance into genetics, shared environment and non shared environment. And I’ve never really loved this approach, because you’re not directly measuring anything. It’s basically like a statistical trick. Gotcha. And it is a statistical trick that to be fair, does have some value. And I think that is particularly helpful for trying to back out how much of stuff is actually genetic? Because I do think almost everyone is underplaying how important your genetics and your partners are in the outcome of your kids. And I know no one wants to think anything is like predestined, and it’s really not. But again, you’re sort of loading those dice. And I really do think folks should, you know, at least give a nonzero amount of thought to like the genetics of the person that they want to settle down with. That’s, you know, not directly how we choose our partners. But I think subtly, right, I think we are sort of thinking about by selecting on that. But I do think yeah, for folks who who, like, especially folks who want kids and want a lot of kids, it’s at least a factor we should be thinking about a little more. And you see it coming up with like preventing genetic diseases, which makes a lot lot of sense, right? Like, if you’re both carriers for something, you know, that’s a huge issue for the child. But I do think just yeah, in general, it matters. And I think the heritability studies are good at pointing out that it does matter. Those studies also do show which things matter more than others. If you’re talking about your height, it’s mostly genetic. Really, frankly. And if it’s health stuff, yeah, it’s actually partly genetic, you know, certainly the, you know, propensity towards certain types of health problems are, once you start getting into the social variables, you actually do start to see the genetic component go down, and you see the shared environment go from, you know, zero to something more significant. Fundamentally, I don’t like how the shared environment and the non shared environment are separated in these
Will Eden 1:15:51
studies seems like tough to do marketing. Yeah,
Unknown Speaker 1:15:54
I have, I have two complaints. One, one is about the shared environment, and one is about the non shared. And my complaint about the non shared environment is basically that I know that all parents like to pretend that they treat their children the same, but they really don’t. And just because two kids were born into the same household, I think doesn’t mean that they got parented, the same at all. There are then like, arguments like okay, but then there still should be something that shows up in the shared environment. Okay, sure, fine. But like, if you actually just look at an object level, how, how parents interact with their kids, it’s very, very different. So it’s, it isn’t a priori obvious to me that the shared environment component should actually be catching the effect of parenting. But then the other problem with the shared environment is, it basically makes no sense for the shared environment to appear to be virtually zero. Because the shared environment isn’t just your parents, right? It’s the house that you grew up in, does the house that you grew up in have led paint? Okay, why doesn’t that show up then as a shared environment effect on IQ? If lead has any effect on IQ and lead differs area at area? Why doesn’t that show up? Why shouldn’t the kids raised together have lower IQ than right? Yeah. So the very fact that the shared environment isn’t showing up known environmental things like toxins, you start to then wonder, okay, well, then, well, then why? What is this thing actually measuring? It sure. Seems like it’s just some weird statistical artifact and not really the actual sort of thing that we care about if it’s not catching known environmental factors that are shared between the people that you’re studying. And then I think the final criticism of these heritability studies is they’re really only well defined within a population. So if you could do some RCT where you take twins, and one of them is raised in, let’s say, the Congo, and one of them is raised in Norway? Well, there are basically zero RCTs that do this, right. However, could you make any case that the shared environment and those two people’s life outcomes should be zero? That makes absolutely no sense to me? Like what if the other person dies? Of a tropical disease? Yeah, they could have been treated for in Norway, right? Can they possibly become a successful multibillion dollar entrepreneur, it seems much more likely that’s going to happen in Norway, even if these kids are genetically the same. So if you actually could take, like a sort of global heritability estimate, the shared environment factor has to be absolutely massive. And the pushback on that is basically like, okay, sure, that’s true. But what you care about is sort of how much you’re affecting your kids outcomes within, like, whether you live in the US, it’s like, we’re not actually going to, you know, go then, like, take one of our kids and like, give them to someone, you know, to raise and you know, I don’t know, Afghanistan, or something like, no one’s actually going to do that. So maybe what the heritability estimate is telling you is how much each of these factors matter within the context in which you are embedded. And I do think that that’s true. And yeah, it comes down to, on average, half genetics, and half everything else. How much of that is parenting? We don’t really know. I think some of it is parenting. I don’t think it’s zero. It also feels weird to me, because a lot of these people who say that, like parents shouldn’t matter or sort of don’t matter. A lot of them also somehow seem to believe that like having a great professor in college matters are things like that. Inconsistencies like okay, so you’re telling me the person you spent the most hours of your life with has less effect than this, like basically incidental contact that you had for like a year of school or something
Will Eden 1:19:48
Unknown Speaker 1:19:49
How does that make any sense whatsoever? So yeah, I think, at least with those people, they sort of acknowledge if you’re going to do a kind of like weird homeschooling thing where you have it large number of kids and your families pretty insular and you’re doing something sort of weirdly different than the general population. Okay, maybe then you have sort of opted into some weird edge case where maybe parenting matters, like, Okay, I mean, in fairness that’s closer to us. I am just personally pretty strongly against sending kids to school, it was pretty bad. Like, I understand that for some people, that is an absolute necessity. But I think for a lot of people, they’re choosing to do it. And yeah, in that case, yes, you’re handing over some of the most critical years of influence to someone else, to some effectively stranger, and to some group of, you know, 30 kids who you didn’t choose or pick or like, and I basically think parents try to do a proxy version of this by sort of choosing which school district they live in. Yeah, that’s a huge game here is a huge, huge game. And I just look at all that. And I think, man, I just, I look at the world today. And I think, do I want my kids to be more like the mainstream or less like the main? And for me, that’s an extremely easy choice. My hesitancy is zero?
Will Eden 1:21:20
That makes a it makes a lot of sense. And you’re, what is your approach been? Like? Is it been just kind of unschooling it’s been like encouraging, you know, your children’s interests as they come up? Like, like, what does that look like?
Unknown Speaker 1:21:31
Yeah, because like, I do think it’s tough, because as children, we start with zero knowledge of the world, right. And so there are probably hypothetical interests they would have that they’ve never been exposed to, and they don’t know what to ask for. So I think one of my jobs as a parent is to expose them to a wide range of stuff, very, very wide range, even things they don’t necessarily think they would like, at first, if they’re up for trying something. And usually, like, Yeah, we should try it at least once, maybe twice. And I do think just giving them that, that broad base is really helpful. If nothing else, to just identify what things are going to want to do later, I always wish that I were doing more of this, on the margin, you know, every day is busy, there’s always things going on, I always inside myself wish I were given them a more varied experience. And I actually wanted to, like take them on a trip to Europe, in the spring of 2020, this turned out to not be possible, or travel restrictions of COVID happened, which was not the thing when I was planning it in 2019. So certainly, there there, there are lots of kind of missed opportunities there. But I really try to see that as my job, you know, to to just expose them to a wider range of things. And I’ll say they’re fairly savvy kids, and they’re pretty good at finding out that stuff does exist without my help, too. But, um, but yeah, I think I think that is one of the major pillars. And then once you actually find out what they’re interested in, then I think my sort of second obligation is to try to sort of give them as much of that as they want to sort of soak up. Got it. So even though I went to schools, as a kid myself, when I think about what I was, like, really interested in and, and spent my time trying to learn, like I was really into math. And I was always way beyond the math that was being taught in the grade level that I nominally was in, I was just sort of doing math on my own for fun. And similarly, I never took a course on like programming. But I started looking at textbooks and I started looking at other people’s code online, I started to tweak things. And so a lot of the sort of actual enduring knowledge in my life has just come from this independent exploration. And when I look at that, and then I think about how much time I spent in school, it feels like this enormous travesty that I wasted so much of my time. Yeah, sure. There were valuable snippets here and there, and I liked having, you know, friends and stuff, which you’ve totally get outside of school. But like, I do think overall, that time was mostly wasted. And I want as as little as possible to waste my kids time. So see what they’re interested in, and then immerse them in it as much as they can handle and they want, right? And that can take any number of different forms. And it can be incredibly weird stuff. It sort of doesn’t matter. The idea is to preserve that intrinsic curiosity that drives them to excel in a particular subfield
Will Eden 1:24:35
makes a lot of sense. It makes lots of it seems like, yeah, perhaps it’s something that’s missing. Perhaps it’s part of the equation that’s missing with our lack of Shakespeares today. And
Unknown Speaker 1:24:45
true experts is like people just aren’t getting the time young enough to explore these things. Too regimented? Yeah, totally. And there’s a great essay by Eric Weinstein, on the edge where he talks about the pursuit of excellence. And we have excellence crowding out. true genius. And I think there’s basically something like that going on, where everyone is so driven to sort of do well on the test, that that becomes their entire world. And that really worries me, I actually think that that push is responsible for stifling so much interesting stuff that could be happening. At the same time. I do think that for a lot of people, if they don’t have some kind of overarching interests like that, and they don’t have the sort of drive and interest and ability to do that, I do think taking a standardized test and trying to get into as good of a school as you can is a useful signal, whether we like it or not, that’s still a good costly signal. Someone who went to Harvard, frankly, probably has demonstrated more attributes of likelihood, future success than someone who goes to, you know, random Community College. And I think we don’t want to admit that because it feels yucky to say that, but these schools really are trying to sort on various qualities, you know, some of them are more like, are they likely to give money to our school in the future? But quite a few are actually things like, Are you smart? Are you hardworking. And so I think that college can be considered an acceptable default plan, if you don’t have something specifically better to do. But I think that decision has to be more intentional. I think you have to actually look at your life and be like, No, college makes the most sense for me. And I don’t think one should necessarily be structuring their childhood around getting into the best college, that seems like a level of back chaining that is very likely to destroy in childhood, the thing that we need to actually sort of move the world forward,
Will Eden 1:26:46
it makes a lot of sense, it makes a lot of sense. Give you a sense of why it has gotten so intense at the college level. I mean, this was, you know, that’s not the case. You know, they pretty much let everybody into Harvard in 1920, that can pass an admissions test, you know, it’s pretty hard, but you know, like, pretty much I could go it’s, but this has completely changed in the last 100 years. Yeah,
Unknown Speaker 1:27:10
I mean, so I do think the costly signaling cascades can become a runaway selection effect, right? Where it has sort of hit a point where at least among certain strata of our society, you’re considered a failure if you don’t go to college, right. And anytime you have a system like that, it starts to become a really negative signal to not go, even if not going actually makes more sense. And it’s actually better for you, it can hurt your life outcomes enough that you’re sort of compelled to then try to go in and yeah. And so I do think that those are competitive dynamics that can that can happen. Do I think that that’s all of what’s going on, though, I don’t think that could be all of it, there has to be some underlying logic behind it. And I do think some of it is that college has basically been pushed on a financial level, it’s been pushed on a social level, it’s been literally sponsored by the government, you can get subsidized student loans to go. Once you start to see systems like that in place, then I start to be like, okay, someone’s been messing with something here. This is not a sort of purely natural phenomenon. So I think that’s probably part of it. And then I actually think that I basically do by the narrative that a lot of the kind of economic system in like the post war era really started to kind of fall apart starting in the 70s. And if you look at so many different metrics, things either slowed down then or they started looking a lot worse then. And basically, I think what we’re what we’re hitting is a world where there’s a lot more competition, for fewer sort of good outcomes in society. And in that case, I think you get a lot of parents who are seeing this and they feel economically precarious, right, they worry that their children are going to be worse off than them. And the one way to guarantee a good future for their children is you make them go to Harvard. I don’t think that’s true. But I think that’s what’s going on in people’s heads. And so they are feeling like my duty as a parent, right, is to secure the future of my child. And the only way I can do that is by sending them to college. And to send them to college. It’s so competitive, and it’s so hard. We have to be doing practice SATs from the time they’re seven. Right? And some some version of that I think has sort of clicked into place. Now. I am seeing forces that sort of counter this. I do think that the ability for people to you know, go to a coding bootcamp and then get a job, right. And I think the ability of folks who start a business themselves, these things have made it easier, and I think there are alternatives to college that are actually starting to look more viable. But we’re only the very earliest stages of that, and I don’t know whether that’s like a population level solution.
Will Eden 1:30:05
Yeah, maybe it’s like works on like these edges, right for, you know, these specific careers, maybe it’s not enough for for everybody. So do you think it’s something where like, you know, you’ve got this like total factor productivity slowdown, you know, there’s less opportunities. People like rightly said something like this is going on. And so it’s like, well, the best way you can kind of alleviate this as well, the most legible path is here, send your kid to Harvard. And so you do everything you can to get them there. Because that’s kind of your duty. Yeah,
Unknown Speaker 1:30:32
I do think that’s a lot of what’s going on. That’s really dark. But yeah, I think that’s sorry, man. I mean, I think we kind of live in some dark times. So. And it’s weird to right, because like, our our whole social narrative is that we’re living in this era of just unrivaled wealth and prosperity. Yeah. And I think in certain ways, that absolutely is true. And yet, we don’t see that reflected in people’s behavior. We don’t see that reflected in folks attitudes. And I think increasingly, we’re seeing it not reflected in the economic realities on the ground, also. But I do think that, you know, there, there does still have to be this case of like, maybe we’re all just sort of crazy. And life has never been better. Like that. That is a possible hypothesis that I haven’t fully ruled out. And I should just mention that it’s there, because it does have some good arguments behind it. But like, my felt sense, is like we’re entering a more difficult period, and not a like unrivalled. Golden Era period.
Will Eden 1:31:38
Definitely. Well, I think you’re, you’re you’re definitely on the money there. It’s weird. Just just, if you look at the rates of like depression, how many people are on SSRIs? When people are like, very sad and lonely? And like, yeah, we’re living in the best time in history. Like, why is everyone have to be on SSRIs? Like, I don’t I’m divas make sense. Make sense? Right. Very Wait, what do you see any, like, you see bright lights out of like, our kind of general stagnation? Or is it just going to be like this long, slow slide of Deccan? It’s, you know, for the next century or something?
Unknown Speaker 1:32:09
I mean, we’ve talked a little bit about that at the start, right, where there could be something that sort of snaps us out of our complacency. It’s very hard to know what that is before that actually happens. And I do think that if things get bad enough, then that produces forces inside of society to attempt some kind of change, whether that’s going to be a positive change or not. Sort of remains to be seen. I basically think that that forces society into high variance situations. And I know that sounds crazy to some people, maybe but I think the odds of like us devolving into some sort of like fascist state is not like tiny.
Will Eden 1:32:53
It’s kind of a it’s a rational response to like, extreme. Extreme, like, yeah, extreme bad times. That’s generally how things go, right? I mean, no, I usually say like a democracy for long when things are going not so hot.
Unknown Speaker 1:33:02
Yeah, I think that it’s easier to maintain a democracy as long as the pie is growing. And there’s a lot of gains from trade. But if everyone rightly or wrongly sees the world as being zero sum, then all of a sudden, those sorts of deals don’t look as good anymore. Because it’s like, oh, well, this other person is just like, trying to screw me somehow. And once you don’t have scope for cooperation, people start to fall back on force. And I worry that that’s the direction things are heading. And I’m seeing more of a tendency towards No, we actually just have to force this thing through. I am seeing that from, from everybody. I don’t think this is actually just like, oh, you know, the evil acts or the, you know, horrible why? No, I, I see everyone sort of going slowly, but steadily, a lot more crazy and a lot more zero sum and more violent. And I do worry that this is kind of going to be the overall trend, at least for a while until something turns things around, or it goes much worse. But it’s very hard to predict those kinds of things. And something that I think a lot about is if I were living through the 60s and 70s, would I be seriously worried that the entire world is about to collapse? I think the answer is like maybe yeah. And like maybe we almost did. Like how how did we get through the Cold War without somebody nuking somebody? Very close. Really close. Yeah, it was multiple times. Right. So, you know, there could be some sort of weird anthropic argument for why like all of us are still here, and most universes were just some like smoking crater. Sure, as possible. I think we probably weren’t as close as people think we were. But we can definitely see that with the benefit of hindsight. And I can just see a lot of ways that like that period of global upheaval could have gone so much worse than it did. And then that sort of naturally leads me to this question of like, well, okay, if we could pull through the 60s and 70s, which in an objective sense, were much more violent, much, much, much more violent than today. Yeah. And they managed to sort of get out of that. So it clearly seems like there are ways to turn society around, I don’t think once you’ve sort of entered a downward spiral, that it’s always a death spiral. The problem is that it’s sometimes a death spiral. And you don’t really know at the time which one you’re in or not.
Will Eden 1:35:31
It Right, it’s really difficult to tell like, you know, and you know, momentum matters, right. And these things like, that’s what’s kind of scary to me. It’s like, yeah, it’s hard to reverse trend with things like this,
Unknown Speaker 1:35:42
it seems like, totally, I think, I think the sort of analogies to Rome are somewhat overdone. But there were multiple points throughout the history of Rome, where you could argue that the whole system collapsed, or that the system successfully renewed itself and lasted a few more centuries. So the final time that it fell apart, it really did fully collapse, right, but seemed like it really was collapsing multiple times, and then it like revitalized itself into something arguably better, or at least arguably, more functional for a long time. And, you know, as folks like to say, there’s a lot of Ruin in a nation. And it’s really only easy to tell that you’re in the terminal decline after the fact. You know, there are some fascinating letters from the period of the, you know, actual fall of the Roman Empire, where you have, you know, folks saying, like, yeah, the roads aren’t really safe to travel right now. I’m hoping to visit you, you know, next year when things have settled down. Oh, yeah, well, obviously, that didn’t happen, right. But even the people who are living through the fall at the exact moment, weren’t even completely certain that it was over. And I do feel like there are just so many incidences of this, throughout history, so many times where there’s been a massive social upheaval and outright revolution. Every time I look at these case studies, I’m like, damn, there were so many things wrong. And it seemed like there was this, like, tiny percent of the population that was basically parasitizing off of everyone else. And if they could have thrown them a bone, even like a tiny bone, they could have like, stayed at the top of the hierarchy, and, you know, like, ruled forever. And they just like, couldn’t figure out that they were just a hair’s breadth away from literally being beheaded. either. It’s that inherently hard to figure out, or those dynamics that they were so locked into, right, were just so overwhelmingly powerful that they couldn’t steer the ship differently, even though they knew they were headed for certain doom. It’s very hard to tell after the fact, but definitely, at least contemporary writings in each of those cases, it seems like the people that were overthrown, really were pretty disconnected and didn’t realize they were just about to be killed.
Will Eden 1:38:08
I’ll give you this anecdote. You know, I’m from rural eastern North Carolina, I made a good amount of money on the betting on the 2016 election. Because, you know, I live in this very metropolitan area, now, highest concentrations of PhDs in the world are in my county. But I went back home, you know, like I talked to people house party, and the, the swing, like the differences in what people would tell you, and like, just how far apart I think the left and the right are at this point, it is like, it can’t be, it can’t be underestimated. Listen to how far apart it is when you actually go out like, you know, talking about with friends. And it’s just like Holy mackerel, like, it is such a it’s a bridge. It’s just too far. Like I think people just actually just do not understand where we are at this point in time, because they they’ve just so separated between
Unknown Speaker 1:38:55
totally concur, man. And and it’s not to say that people are living in two completely different worlds. The narratives are different, even when they think the facts are the same. The interpretations are so different, that there’s no conversation. That’s that’s even possible. Sometimes. I find that absolutely mind blown. And then how do you come back from that? That’s my question. How do you come back from that? is a true unity campaign actually possible?
Will Eden 1:39:25
I think Oprah is the only answer. That’s the only answer I have. I say it’s only one who I talked to, like I mentioned that everybody’s like, cool with her. So you know. Well, you know, I have one more question for you along those lines. You worked at the Fed during 2008. And I really like Scott Sumner. And I read a lot of his work about, you know, how the Fed like just this was just, you know, didn’t put enough money in the economy in 2008 could have prevented it, they didn’t. What’s your sense of that, like, you know, how competent is the technocracy that runs the Fed? What kind of things or money in the US? Is it pretty bad? Should I be more bearish than I am? Oh, boy, I’m pretty bearish. What’s your thought?
Unknown Speaker 1:40:07
Yeah, man, we, we could do a whole podcast just on this one. So yeah. So here’s what I’ll say my experience having been there during the financial crisis is the people at the Fed genuinely didn’t know what was going on or what to do. Which is fair, because literally none of us did. Right. I don’t think I don’t think there was anyone in the country who was extremely confident that things would play out how exactly they played out. So obviously, they have a very hard job. And what’s expected of them is I think, actually beyond what’s probably possible. Gotcha. Now that said, could they be doing better? Absolutely, yes. How competent? Do I think they are? I will also say, I don’t fully agree with Scott Sumner either. Nice. I think if you are going to take a monetary policy paradigm, that’s basically the same one that we’ve had for a very long time. Something like nominal GDP targeting, I think is probably the best target that the Fed could have. Gotcha. That said, Do I think we should be in this paradigm? Absolutely not? And do I think that the sort of people working at the Fed have have a good handle on both the broader economy, and the way that monetary policy affects the broader economy? I’m gonna say, No, I think for the most part, the Fed was undertaking actions that sort of looked good or theoretically made sense that they didn’t have any really concrete model of how it was going to affect things. Gotcha. I do think some of the channels by which they’re affecting things are real. But I do think that they, I think there’s a lot of good Harding going on, which obviously makes a ton of sense, because this happens to everyone. But they basically are looking at, you know, a few key summary indicators, and then they’re turning a few knobs. And those knobs are basically the Fed funds rate, and then how much quantitative easing they’re doing, and of like, what type. And I don’t think that they really thought through the transmission channel of how quantitative easing actually affected the economy. And I think if they really fully understood it, that probably isn’t the road that they would have gone down. But in short, I think the whole paradigm of the Fed affecting the economy through fixing short term interest rates, to me just seems like a real, non starter in terms of what I think something like the Fed should be doing. Like, I don’t understand why we think of federal bureaucracy should be deciding, like how much we’d rather have money today than tomorrow. Right? This seems like a fundamental aspect of humanity that we need to sort out with the market. Like the reason we have markets is to figure out how much people value one thing versus something else. And interest rates are just how much you value money now versus money later, why that should be the policy target has has always seemed totally crazy. To me.
Will Eden 1:43:04
It’s bizarre, just just the way it is proud it What’s your sense of why that is just the way they’ve been doing it for a while there’s there’s certain amount of momentum behind
Unknown Speaker 1:43:11
that. Yeah, there’s historical stuff there. If you ask Friedman, he basically thinks, you know, well thought because he’s now dead. But his point was, it’s always like the quantity of money. And he always thought that the targeting of the interest rate was always just this proxy for how much money was in the system. And that was the only thing that mattered. And that was the actual lever that mattered. But they’re, but they’re pretending to themselves that, oh, we’re changing the interest rate. And that’s the thing that somehow matters. But it didn’t used to always be that way. And for a while, like, under Paul Volcker, he basically let the rate just start floating and was really tightly controlling the quantity of money and you saw the rates spike like crazy. But now, when you look at Fed Funds rates, it’s just as like step function, right? Basically, have the Fed just pegging what it’s going to be. So clearly, we didn’t always used to do monetary policy this way. And, and yet, that was sort of the tool that was settled on. And then during the financial crisis, like well, the rates of zero, we can’t easily make the rate negative. That’s a whole other separate conversation. Yeah. And they’re like, Well, what do we do? And at the time, we were sort of looking around, we’re like, Well, what other sort of historical precedents are there? What have folks tried, and we looked to the Bank of Japan, which had been buying bonds. And thus, quantitative easing in the US and Europe was born literally just by looking at what Japan had tried two decades ago, which, by the way, can didn’t successfully get out of the crisis, right? They’ve had like zero growth and zero interest rates for multiple decades. But we’re like, Hmm, let’s try what Japan tried. It was shot so that was really it. And, you know, there were some more sort of innovative responses. But for the most part, the main policy lever that we ended up actually using was quantitative easing. And that turned out to really not have the effects on the broad economy and asset prices that were successfully predicted by the Fed in advance. And it just seems very, very clear that what quantitative easing has mostly done, it hasn’t created inflation, it hasn’t stimulated the economy, it’s raised asset prices, right. And that’s basically benefited a lot of people that were holding assets, and not really helped a lot of other people. And I think there’s a lot of justifiable outrage at the Fed right now. And, like, look, I don’t think they were doing it because they’re trying to, you know, benefit the Wall Street cronies who are buddies and like, I don’t think they were doing it, because they’re trying to, you know, screw the common man, that like, they really genuinely wanted to just help people, they really genuinely want to just fix the situation. And it was the combination of lack of knowledge and hubris and not thinking things through and genuinely having no clue what to do. Like we we have to do something. Mindset, we got all those things, you sort of mix them together, and you get a policy response. That was pretty bad. And we’re still living with that today. Like, why is the Fed buying a majority of newly issued mortgage backed securities? Why, like, no one can give a good answer for why they should be doing that right now. Yep. House prices are going absolutely bonkers right now. Right? Why is the Fed buying mortgages? Why is the Fed even in that business?
Will Eden 1:46:42
just bizarre. Just it’s just very bizarre by when we find herself in and yeah, it’s just a it just makes me wonder. Right. Like, I guess. So somewhat bullish on the fact that it seems like people, the pretty smart, pretty competent, you weren’t working there. Right. So it’s like, they’re picking up smart people. But would we have been better off just, you know, letting it ride and not having done anything? 2008?
Unknown Speaker 1:47:05
Yeah, so this is a pretty contentious thing. I’m much more on the side of like, we had to just take our lumps up front and then recover. And if you do look at the history of the US, there were a couple of pretty, really deep recessions with basically no policy response, which bounced back really quickly. Now, you could argue that maybe the shape of the economy is different today. So that you wouldn’t expect that to happen. Like, okay, I can I can maybe engaged in some of those arguments. But it’s really hard not to look at, at the sort of whole history and think like, did we just maybe just kind of drag out this this whole thing somehow? So yeah, my, my, my sort of personal gut leaning is like, no bailouts take the pain, let’s do this. The counter argument that I put somewhat weight on is that the entire system was designed around an implicit guarantee that the Fed would step in if things went wrong. And so do you basically want to like rub pull all of the players of this game who had sort of collectively agreed to play by certain rules? And I think that that’s actually a harder question. And I don’t think it’s obvious. So what do you do in that case? Right. Can you credibly commit to doing a one time bailout for the people who were playing under these rules, but then tell them like, No, really? We’re not? We’ll never do it again. Yeah. Right. That seems hard to actually credibly commit to, but something like that maybe would be the like, theoretically best policy or something. But yeah, that was not a glorious chapter in our history. I’ll say that about the best and it’s just very clear that the Fed has failed to normalize policy ever since then. Which is again, absolutely bonkers.
Will Eden 1:48:47
Yeah, it’s just just really bananas. Well, we’ll run it up all time here. Do you mind if we do a quick round of overrated or underrated? Sure. Sounds good. Awesome. It’s all throughout turnout. Give me a sense of why it’s overrated. Underrated, or maybe correctly, right? cryonics. Overrated? Underrated,
Unknown Speaker 1:49:05
Will Eden 1:49:07
definitely underrated. Yeah. Excellent. Excellent. Are you signed up? Yep. Very cool. Very cool. Trump’s effectiveness as a manager, overrated or underrated?
Unknown Speaker 1:49:16
Will Eden 1:49:20
even by the people who love him, or
Unknown Speaker 1:49:22
hate him? Yes, gotcha. In some ways, especially about the people who hate him, they seem to assume that he was far more capable of executing some like crazy, big plan. Yeah. Then then then he actually was, I feel like the update should be either that like the presidency itself, or Trump specifically has way less power than anyone thought prior to that. And this really should be just as true of his fans as his papers. And if you just look at how, at least how the White House was managed, I don’t have as good of a picture on how he managed his like Trump Empire, but I’m gonna guess It probably looks somewhat similar. But he, he had a very hard time bringing on good people. He had a really hard time keeping them there. And he had a lot of people under his management that were actively sabotaging him. So, In what world? Could you consider Trump to have been a good manager? It makes absolutely no sense to me. It’s like one of the worst I’ve ever seen.
Will Eden 1:50:25
Is this perhaps a an exception to your rule about you know, companies needing really good, like effective leadership? It’s like maybe like, if you’re just such a good salesman, like you can dislike somehow make it?
Unknown Speaker 1:50:35
Well, I did say sales and leadership. I think those are different. Yeah. And, and I do think Trump is very good at sales. And he’s not shown a really high degree of ability at leadership. Right? How many people are sort of inspired by Trump himself? I do think right around the time that he got elected, there was like a large Russia folks who are like, wow, this is our chance, we’re gonna take back the White House, and we’re super excited for this project and all this stuff. And that amounted to basically nothing. Yeah. So yeah, Trump is an excellent salesman. Is he a good leader? I just haven’t seen evidence that that’s true. I think that he was really good at figuring out that the broad US population was extremely annoyed at both parties. And that the rank and file member of the GOP felt very differently than the people in Congress did. And he spotted that, and he just like, blew that wide open. And I think in a certain way, that’s actually a service, because I do think we should, in some sense, at least acknowledge the facts on the ground. And he was at least willing to say, like, Hey, we’re in these unpopular wars that were pushed by, you know, a former Beloved, you know, GOP presidents. Yeah, like, the, like he said, the Iraq war was a mistake. And he waved around a rainbow flag, like he did all of these things that that a normal Republican politician sort of would never consider doing, ever. And the fact that that worked, and was popular, at least has showed us the way forward for what a different version of the Republican Party looks like. What’s great, and the fact that there was this discrepancy between what the people wanted and what the party elites wanted, the fact that that at least now, those two are sort of closer together is probably a service to the country, if you like democracy as a form of government, because I think on the right at least people are getting more of what they want to see in their politicians.
Will Eden 1:52:42
Clothes that kind of arbitrage opportunity there. Yep. Cool. over any writer any burning man?
Unknown Speaker 1:52:49
Yeah, um, I still think by broad society at large, it is underrated. And among hardcore burners, probably slightly overrated, but not by very much. It’s really cool. It’s so much fun, and it’s so beautiful. And it’s just like, out of this world. It is an unbelievable, incredibly fun experience. And I do think pretty much everyone should at least try it.
Will Eden 1:53:18
Awesome. Awesome. Dartmouth, overrated or underrated?
Unknown Speaker 1:53:23
Yeah, um, I feel weird ever saying that an Ivy League school is underrated. But if we just restricted to among the Ivy’s, I’m gonna say it’s slightly underrated, it is obviously still considered to be a very, very good school. But I think that at Dartmouth in particular, there’s more of an emphasis on trying to collect a little bit more of like a wilder spirit. Right? It is, yeah, it is more appealing to sort of outdoorsy type people who want to be in the middle of nowhere in an environment that is just objectively more harsh. I think, I think I think that that that is selecting for something real. And I think that the sort of different Ivy League grads actually have a little different feel towards them. And I think Dermot is is probably slightly underrated for that like Wilder personality who’s maybe willing to do something sort of risky sort of crazy. Love that love that.
Will Eden 1:54:19
You had kowski is a wedding officiant overrated or underrated.
Unknown Speaker 1:54:23
Oh, man. That’s tricky, because he’s also said that he doesn’t want to keep doing these. So I feel sort of bad suggesting like, hey, everyone should have him. Marry them when that’s actually not possible. Yeah, unfortunately, only so many hours in a day. I’m really glad he did. And the reason that I’m glad is because he really felt like the sort of, sort of like elder figure of our community, and he’s not even like that old. But he, you know, really felt like a sort of founder of like the modern rationality movement. And so having him there or, for me, it was basically like, that was that was like the way that our tribe could sort of, like, give us the strongest bond or something. Right. So, you know, I would say, yes, it’s underrated. I mean, also, I will say he’s a very good writer. And so I very much liked him doing our speech. And I think he did a really, really cool job there. And I like our vows. So yes, I would say underrated but unfortunately, you’re probably not going to get him to do it again.
Will Eden 1:55:33
So it’s a good backup career if he solves a lot longer than that. Libertarianism overrated or underrated?
Unknown Speaker 1:55:42
Oh, man, overrated by libertarians, underrated by the rest of society? Yeah, I mean, look, I think I think that you should use libertarianism as a good heuristic, and a good first pass. And the default that everyone should should move towards is don’t intervene, and then come up with a really, really, really, really good reason, then maybe, but that should be the starting place. Definitely, definitely.
Will Eden 1:56:15
Weighing value taxes, Henry George, overrated or underrated?
Unknown Speaker 1:56:19
So I’m gonna say something very uncharacteristic of me. Oh, yeah. Which is I have actually honest to God not done enough of a deep dive to come to a firm conclusion on this one. I’ve heard the surface level arguments, and I see the fanaticism of the Chartists and I greatly admire simple solutions. And I am not yet willing to put my full weight behind it until I personally get more comfortable. Good stuff.
Will Eden 1:56:52
Good stuff. Well, we’ll I’ll send you some stuff. I’ll tell you. Good heart, the good heart of good Harding. Yeah, wrote a paper a couple months ago, about how implementing single tax and us could increase GDP by like, 15%. But I’ll send it to you, if you can, you can prove that I
Unknown Speaker 1:57:12
did in theory, and I want to understand it better.
Will Eden 1:57:15
Yes, you should be you should be skeptical. Someone says 15% of GDP. For anything. That’s good. Totally. How to Win Friends and Influence People overrated or underrated?
Unknown Speaker 1:57:27
Yeah, it would be weird for me to say overrated given that I summarized it on my blog. But in terms of like, all of the books or movies that I’ve put out, it’s really the one that I think about the least, and come back to the least and recommend people the least. So maybe it really is overrated? I think. So. So why I guess it, it was probably one of the first books that was ever sort of treating the social world as an explicit thing to sort of optimize. Interesting. And so from that perspective, I think it was ahead of its time. I mean, look, it’s age well, and that the advice is fairly timeless. But do I consider it like a really good, how to manual where I see someone who’s like, sort of shy or something, and I’m like, Hey, you should read How to Win Friends and Influence People. I sort of feel like I’ve come to the point where that’s just never the the sort of suggestion that I go to ever, which suggested is probably overrated,
Will Eden 1:58:22
unfortunately. Makes sense. Well, maybe maybe there’s something like said we’re just treading new ground where people have never really done that before. And it was somewhat revolutionary in that sense, but now that everybody has a note kind of knows the common knowledge, just less effective. Yeah. Cool. Have one more fasting overrated or underrated?
Unknown Speaker 1:58:40
Hmm. So I think that intermittent fasting is fairly rated, however long fasting multiple days or even weeks is severely underrated. Really? Yeah. So me and my wife have both fasted for very long times. She’s done a few weeks. I’ve done one month. Yeah. Yeah. Yeah, I fasted for a month, and it was super intense and awesome. I lost 28 and a half pounds. I believe. It’s 30 days. Which, by the way, is how you can tell if you know someone who claims to be subsisting only on air isn’t losing weight very rapidly. Someone is like sneaking them food or something. But um, yeah, no, I think that it is it is outside of the kind of Overton window of health recommendations today. Yeah, but if you look at it historically, it is a practice that has actually a fair number of historical adherence. There’s a lot of precedent. It is interesting because, and I do have a short, a short post on my blog on this, but most of the world’s religions had some kind of fasting tradition and it’s been weakened over like Han Drinks of yours. And it’s pretty interesting to see both of those. But it’s very clear that fasting has always been considered something important, though it was largely framed in terms of spiritual importance rather than health importance. But I think that a lot of those old doctrines were actually sort of really helpful for the people who, like, actually use them because they were in fact secretly benefiting health. Right. And, and so I do think there is something to be said for the fact that fasting has showed up in so many places so many times, and so strongly. And in terms of the longer ones, there was a period actually in the US where we’re folks were interested medically, in very long, supervised fasts. And there’s a paper out there the longest fast ever was over a year long offseason. Yeah, the guy was grossly obese, he started over 400 pounds, and he ended up like a normal weight. absolutely wild. And basically, the medical community kind of moved on from this research. I don’t I don’t have the full backstory of why. But I will note that with a lot of the super long fasts, so it was common for them to do a 30 day fast, but they tend to define if you took someone obese fasted them for 30 days, they tend to regain weight over time. But if you fast them completely down to a healthy weight, which would sometimes take over a year, in one case, and many of these faster over like 200 days, those people tend to not to regain the weight. It’s pretty interesting. So maybe there’s some weird selection effect, maybe there’s some profound biological effect, we don’t really know. And it’s not really been studied now. But I think some of why they stopped doing this is that unfortunately, in many of these cases, the people that were fasting were getting like weird biomarker readings, which you might expect, because they’re in a profoundly different physiological state than we then were almost ever in. Yeah, they basically started trying to give them various like drugs and supplements and stuff to sort of like shift them back into, like, more normal numbers. A couple of the people that were doing over 200, they fast actually died. But as far as I can tell, they died because of the medicine that the doctors gave them. Oh, wow. So it is a little bit unclear. And I think the medical community basically shied away from this as a method of just pure weight loss. As far as I can tell, it’s actually very effective. So this is one of those things, I think we’re kind of, we see the modern mindset at work. It’s like, well, it’s effective, but it’s maybe not safe. So we’re not going to explore it.
Will Eden 2:02:40
Right? Did it get easier, you know, like into your mind? Or what was it like kind of a slog the whole time? Or do you get to Texas and just kind of roll through it?
Unknown Speaker 2:02:49
I should write up the whole thing on the one month long, fast, because it was very different than when I’d done one week long fasts. And it was interesting, because I definitely felt like there did hit a point around, I’d say about three weeks in Yeah, where I definitely started to feel like okay, this is becoming like actually sort of stressful on my body in a way that that sort of didn’t feel as good. And if you do read some of the practical guides, written by people who have done monthlong fasts in the modern era, a lot of them do often report that there’s this like, very different sort of feeling that comes on after a certain point. And maybe there is something sort of clicking with our bodies where it’s like, okay, this, this made sense, but now I’m starting to dig into something vital, or something. I am not completely convinced I was in any actual health danger, and I did complete it. Right. But like, I definitely noticed the shift around three weeks in we’re starting to feel more aversive than it was before that. Got
Will Eden 2:03:56
it. Very interesting. Very, very interesting. Yeah, yeah. So So outside of our norm, modern dorms today around like eating and stuff like that, which is really cool. Well, radically outside, right? Yeah, man. Wow. Well, well, thank you so much for taking the time today. I really appreciate it. I learned a ton. It’s my pleasure. Where can people find your work? Where should we send them?
Unknown Speaker 2:04:21
Oh, man. Well, I do have a blog, but I so rarely updated. I’m hesitant to even suggest it. But you can also find me on Twitter, William A Eaton. And, yeah, it’s hard to go into this much depth in one or two tweets. But you can find pithy snippets of wisdom and the occasional longer thread there as well. I love it. I
Will Eden 2:04:46
love it. Very cool. Well, thank you. Well, I really appreciate it and we’ll have to have you on again soon.
Unknown Speaker 2:04:52
Sounds good. I look forward to it.
Will Eden 2:04:57
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