Balaji on How to Fix the Media, Cloud Communities & Crypto | MFM #178

Shaan Puri

Are you aware of what it's like to talk to you

Balaji Srinivasan

no

Shaan Puri

Yeah, I feel like I can rule the world. I know I could be what I want to be.

Shaan Puri

We got a good pod and we have a good guest here. Before I introduce our guest, I'm going to butter them up a little bit because I'm genuinely excited for this. There are probably like 3 or 4 podcasts so far that I'm like, "Oh yeah, this is one that I wake up in the morning excited to do." I know that if we do a good job, this is going to be one of people's favorite podcasts. Why is that? Well, this is the podcast...

Sam Parr

not morning for us sean it's it's 10

Shaan Puri

it's late night sir 10:30:30:40 it's

Sam Parr

It's almost... it's almost midnight soon, where Abreu is. Yeah, we got up late or we stayed up late.

Shaan Puri

yeah but that's alright it's my birthday by the way today so this is how I'm spending my birthday evening

Sam Parr

tell you happy birthday my wife was like what do you wanna do

Shaan Puri

For your birthday, I was like, "Don't worry, it's already planned. I'm doing a podcast. I love it!" So anyway, the reason I think this project, this podcast, is going to be good, this episode is going to be good, is because our podcast is all about ideas. People listen to this pod; they wake up and they listen to this pod because we get the wheels turning. We present new and interesting ideas, or we talk about spaces in ways that you haven't heard too much before. Now, one...

Sam Parr

of those one of the ways that I

Shaan Puri

Get a bunch of my ideas from our guest, Balaji, who is here. He has been... I don't know what the exact quote was, but I think Marc Andreessen at one point called you "the highest ideas per minute of anybody he's met." Do you know that quote that I'm talking about? He sort...

Shaan Puri

of yeah

Shaan Puri

did your style

Balaji Srinivasan

kind remark he said they were useful ideas too which was good so

Shaan Puri

Any business sense? Credit for our ideas? People don't usually call them useful, but that's okay. Entertaining is okay.

Sam Parr

Yes, we teach people how to launch a porn app. You teach people how to warn the world of a pandemic, so like...

Balaji Srinivasan

Your podcast is actually very popular, and I've heard a lot of people say good things about it. So, don't be too hard on yourself; it's good.

Shaan Puri

Thank you, thank you! I think that, you know, one of the... like, if a lot of people ask us, "Oh, you know, who do you guys follow? Who do you guys read?" You're one of my answers. If I started a new Twitter account and had to follow five people to get that information flowing in, you would definitely be in there for me. And Sam, I know you've been following as well, so we'll give kind of like a very quick rundown. But then we have a bunch of topics that I think are exciting. We're going to talk about a bunch of crypto things because I think you're very forward-thinking in the crypto world. We're going to talk about some non-crypto things as well, and then we'll all try to steer clear of too much controversy. You know, let's play ball—nobody get canceled! Here we go. So, Balaji is here at one. You were a founder of, I believe, a genetics company or a biogenetic company. How would you describe your first company? What would you call that category?

Balaji Srinivasan

**Clinical genomics** is essentially one of the first companies to use genomics in medicine. We took, if you've heard of **Tay-Sachs** or **sickle cell**, these sorts of genetic diseases—Mendelian diseases—that you probably learned about in high school. These are simple genetic diseases where they can be predicted by usually just variation in one gene. What we did was take all of those at the same time and test them at once with a universal genetic test. This was one of the first applications of genomics in the clinic. The scalability of it, the fact that you could assess many different markers and many different variants at the same time, allowed us to cut costs relative to traditional one-gene or one-variant-at-a-time blood tests.

Sam Parr

Which I actually just used it. Oh really? I used it for freezing embryos with my wife. It's called Myriad.

Balaji Srinivasan

Yeah, it's under Myriad Women's Health, you know, division. But basically, it was called "Counsyl" as an independent company.

Sam Parr

So, like, I saw the packaging in the trash can and I was like, "Oh wait, I know this name." And so, yeah, Sean, that's what we used it for.

Shaan Puri

glad glad

Balaji Srinivasan

I'm glad that could be of assistance. I think it's interesting because that's a space which has sort of just evolved in its own way. You know, genomics and biomedicine haven't really linked up with the main body of tech, like internet technology and consumer technology. It might do so this decade; we'll see. It’s sort of like how high-frequency trading and all that type of stuff is its own kind of sub-area. Crypto has now linked it up with the main body of tech, where it's programming on top of blockchains. Right now, we have over 30 million sequenced genomes and lots of people with genotypes. I forget the latest number, but with 23andMe and Ancestry.com, there are millions of people who have personal genomes, albeit genotypes rather than full sequences. I think we're going to start to see more computation because a lot of genomes have been installed in the same sense as a personal computer's software. It's a piece of data, rather, locally on your computer that you can do things with. That's a whole separate topic, and I'm happy to dive into that if you're interested.

Sam Parr

and what and what did you do after that

Balaji Srinivasan

so I was when

Sam Parr

And that was like a... sorry, actually that was like a $300,000,000 exit or something. Like, pretty wildly successful.

Balaji Srinivasan

It was good. Yeah, it was a good company. So after that, there are a bunch of things. I was an early investor in cryptocurrencies like Bitcoin, Ethereum, Zcash, and a bunch of others you've heard of. I shouldn't say every major coin, but every major coin that I think has some technological innovation, I've probably got something in it. Not every single one, but a lot of them. I was also an early investor in Superhuman, Soylent, Cameo, Lambda School, Replit, Mighty, and a bunch of others that have all done fairly well. You know, Deal just became a unicorn last week. All these investments fit my philosophy because I invest in things that help to improve the quality of life in the future that I envision. For example, with crypto, it's built for the apocalypse but with the internet, right? Soylent, that type of stuff. I think of it as an apocalypse followed by a rebirth. I view it as a stack of technologies through the lens of the unbundling and fracturing of all trans-century, all pre-internet institutions, and then the rebundling of them back together into new internet-native forms. I think very few institutions that predate the internet will survive the internet in the fullness of time.

Sam Parr

so I wanna ask you

Shaan Puri

I think oh sorry

Balaji Srinivasan

go ahead

Sam Parr

I think, Sean, that before we really get into it, I did want to call out his latest project. I want to promote that right away, as opposed to at the end. So, Sean, do you want to take it from there?

Shaan Puri

Yeah, well, I'll let you introduce it, but it's a super interesting project. I believe the URL is **1729.com**—just the numbers **1729.com**. It's really simple, and I love simple ideas. The concept is that it's a newsletter that pays you. So, it's a newsletter you receive that has these little micro tasks. I got one, I don't know if it was yesterday or the day before, but it was basically like, "You can get $3,000 in Bitcoin if you create memes that will promote crypto in India," or help package that idea in a way that's shareable and spreadable. That's what memes are about—crypto in India. There are these little tasks that come out, and so it's a newsletter that you read not just for information. For example, Sam has a newsletter with 2 million subscribers called **The Hustle**. They provide information, but it's sort of like a path. You just consume it and move on with your day. Your newsletter is actually kind of interesting because it gives you an opportunity—a small, bite-sized opportunity—to do something. You can earn from it and also build up credentials by accomplishing these little micro tasks. So, can you give us the... like, that's right? I don't know, that's my read from the outside.

Sam Parr

did you hear that slight he goes yours is actually interesting

Balaji Srinivasan

We should do a collaboration. I'm sure there's a lot with the Hustle's kind of ethos that overlaps. As I was mentioning to Sean beforehand, you know, it takes all different kinds to build a company. You guys have sort of the sales, you know, business DNA natively, right? For me, that's very much an acquired skill. I can emulate business, and I can run that in an emulation layer, but my core operating system is math. Then there are folks who are the reverse—fundamentally businessmen who can get into tech and computer science as a way to do business. You need both kinds, right? But I think one area of overlap potentially with the Hustle's audience is that a lot of time online, as we know, is just being wasted. It's being thrown into a meat grinder. I mean, think about the sheer number of hours—millions or billions of hours—that are used on social networks. Look, I think there's a necessary step to get people online. On balance, it was necessary. But one issue is that social networks were invented and scaled about 7 to 10 years before cryptocurrency. Because of that, you could only transfer status online and not value. What that means is that everything basically boiled down to status games—leaderboards, what's the most popular, how many followers, how many likes, etc. These appear locally non-zero-sum but are globally zero-sum. That is to say, locally it appears to cost me nothing to give this person a like, but globally it's a zero-sum leaderboard. Only one can be at the top, right? And that leads to the status games that you see on Twitter and all these other places, which are somewhat familiar with places like Reddit where they use pseudonyms. But it's an issue. Anyway, what's my...?

Balaji Srinivasan

So, 7229, you know, my friend Dan Romero actually tweeted a while back, "What's the new Hacker News?" I think you guys were talking about that. I believe the new Hacker News for crypto is not just a place where you come to discuss and do things aimlessly, but something that uses crypto so you can actually earn and learn. And actually, the third aspect is burn. We have another concept called "proof of workout." Basically, you're pursuing truth, health, and wealth in that order. I think that's actually the right priority order. First, learn the truth; determine what is true. Then, pursue health, because without that, you have really nothing else. Wealth is important, but it's third. You never want to do something that's untrue to make money or sacrifice your long-term health for wealth. I mean, losing sleep one day may not end the world, but over a year, it's going to affect your long-term health. And that's actually going to impact, from a pure dollars and cents perspective, your wealth-sharing capacity and your ability to provide value for your employees and shareholders. So, even if it's the selfless thing to do on a daily basis, in the long term, you want to take care of your health for the sake of those around you. Essentially, this was sort of...

Sam Parr

So, the "go ahead, this true health and wealth" thing, is this like a personal saying or is this the slogan for 17/29?

Shaan Puri

it's a

Balaji Srinivasan

**Slogan for 17/29:** It's basically, I think of it as the new "Liberté, Égalité, Fraternité."

Sam Parr

yeah that's great

Balaji Srinivasan

I know it sounds ambitious, but basically, it's a tripartite motto for a new kind of state in the fullness of time. The reason is that technology actually allows us to do all three. You know, with crypto in particular, the decentralized ledgers... we can’t.

Shaan Puri

Can I ask the question in a slightly different way? Whenever I'm looking at an investment, I think I ask the founders this... My favorite question to ask a founder is: "Awesome. Let's fast forward 3 years. What does the world look like if this has been adopted? What does my day look like that's different? Maybe me as a user?" But I would love to hear your version of that because I think there is a really different and cool new lane that gets opened up as something like this gets more adopted. So, what does the world look like if this... what does my day [look like]?

Sam Parr

look like if I if this

Shaan Puri

is not

Balaji Srinivasan

done well first is rather than just accumulating karma you're actually accumulating something of value right so something a tradable asset you're earning cryptocurrency you're you're you're actually leveling up yourself imagine if you didn't just gain I don't know a 100,000 followers but a $100,000 in all your posting online right that would actually give material benefit to people right now you know for technical reasons facebook and twitter basically capture all the revenue and in the early 2000 mid 2000 that was actually a great deal because they were giving these free platforms that you could broadcast to anybody in the world and they would maintain everything for you they give all the hosting you know the free model was actually a very good deal relative to the alternative at that time and so they just take the cut for doing it but now today people realize actually hey all this content that I'm producing for them all this work that I'm putting into it the hours into your tweets or whatever you aren't get seeing a single dime out of it there's 0 creator monetization for the most part in these major social networks I'm not saying okay not totally 0 you could put link in bio at instagram and there's some stuff but it has lagged right and so now we need a kind of a new social contract a social smart contract and what that means is basically to make money online and not just make money but to learn things online and not just to make money and learn but also to become healthy and so if this becomes popular you don't waste time online or not just waste time you learn things you actually gain crypto credentials not just cryptocurrencies so like badges in your wallet which are emblematic or or reflective of your ability to do certain things for example you complete 5 python problems and you get a badge that says I've completed 5 python problems and you complete you know 10 questions on I don't know russian history and you get that kind of badge right or the russian language now why that kind of thing is important is it totally destroys the concept of a college diploma the reason being college diploma is a very very coarse grained you know kind of illustration of somebody's skills if somebody says oh I've got a harvard degree or stanford degree right what does that really mean you know you have some estimate okay I kinda know that they you know stanford degree in computer science I I kinda know what the curriculum is but this particular person you don't know what their skills are actually all their coursework they did during undergrad has been basically wasted right and if instead what you did was that portfolio that they had every single problem that they solved was in a folder on github so you know they have 25 courses and 10 10 weeks per course and 10 problems per course all 25 100 problems were organized in folders on on github you could see their portfolio you could drill down and see their particular skills okay this guy knows operating systems she knows compilers this person knows machine learning and I can see that as evidenced by the 15 problems they've solved with source code online and especially for a broad discipline like computer science or electrical engineering or chemical engineering you can't simply presume that because somebody has a degree that they have that particular skill set people have strengths in different areas?

Balaji Srinivasan

Is once you unbundle that or you granularize that, once you give individual measurable skills, you can see just how much talent or background somebody has in there. "Oh, this person has solved 100 different problems on compilers. They're actually really an expert in this area, and I've got the badges to prove it." Okay, once those badges are in your crypto wallet, just like you log into a website today and you can load in your cryptocurrency or unload it, right? I think one of the things we want to do at Sempity Trine is have this sort of portable crypto diploma or these crypto credentials. So, you could log into a job board and just start working because you're automatically qualified on the basis of your credentials. Right now, the only thing we can declare is our interest. "I'm interested in Game of Thrones." You can't provably declare, "I know how to calculate eigenvalues." Right? I know Arnoldi-Lanczos methods for large matrices. I know how to do graph layout, that type of stuff. You can't credibly declare that. You can certainly put the words in your CV, but if you guys have hired, you know that that's an unreliable narrator problem often, right? You know, people will say...

Sam Parr

so how does that

Balaji Srinivasan

jump in and

Sam Parr

cut me off by the way if if you know

Shaan Puri

if you got

Sam Parr

I think Sean and I might ask a similar question, but basically what I'm understanding with this is that right now, as it is, it's much simpler. It's not doing everything you just said. It's basically, "Here's something that is just silly, funny, or actually useful." Yes, I'm going to pay you money if you could pull it off.

Balaji Srinivasan

that's right

Sam Parr

And that's in itself just interesting, fun, and neat. But the long-term plan here is that basically, if you're building a company, anyone who meets the requirements will be able to log in based on their task history, contribute work, and get paid for it.

Balaji Srinivasan

exactly

Sam Parr

Now, that sounds like my thing with you is that everything you say sounds crazy, but you're right a fair bit. So, it's like... I have to like... I'm like, life would be easier.

Shaan Puri

if we

Balaji Srinivasan

could just ridiculous

Shaan Puri

If we could just write you off as crazy, we could just move on with our day. Yeah, sure. Damn it, the guy's right. So now we have to take each one of these ideas and actually say shit.

Balaji Srinivasan

right so this is the cutthroat

Sam Parr

so so let me let me speak to

Balaji Srinivasan

a few points here right so basically like the very short version is semtech is a place where you make money learn things level up with technological progress as an initiative in building a positive future right so it's you know on the east coast for example media media businesses have sort of software engineers as second classes right they're just guys who build the app and the writers are kind of the first class right traditionally in tech it's been the opposite you know the software engineers are the you have private place they're building dropbox or Google or whatever and then the writers are content marketing I think here another aspect of citroen is they're kinda unified where we have a product roadmap but we also have content calendar and those are really you know side by side and basically equal pairs we have a story that we're telling as we're kind of building this functionality and I think one of the things about this and there's several different angles I can talk about but one big thing is this is sort of a reaction against what I think of as the entropic internet right so if you know entropy or the concept of entropy it's like particles flying in every direction okay if you go and look at hacker news for example or twitter there's something that you can't unsee once it's been pointed out which is those 30 links are like a jackson pollock blah on on on on the on the page right it's just it's like guaranteed to just fragment your brain into a 1,000 pieces right and the opposite of that is something like you know what michael nielsen's been doing with the science of reminding you know where you learn something and you don't just learn it you get you know reminders at you know 1 minute and 1 hour and one day you know space repetition right of the same concept with a little bit of space repetition it gets stored in like your permanent memory banks you remember quantum computing for example right so right now what we're doing with the entropic internet is we're just eating all this junk food which feels good because it's novelty seeking oh cool that's cool oh that's cool oh that's cool right and you know if you have a really good memory then you don't need the spaced repetition but most people don't have such a good memory and even people who have a great memory I mean do you remember the thousands of links that you've seen online no it's actually more like watching a movie it's just it's just sugar it's just candy right if instead you can be much more deliberate about a less entropic internet and set essentially a goal for yourself and you make one high level decision come to 70 29 and then what we do is we basically serve you content that strengthens you right

Sam Parr

Sean, I think that we can take this in so many ways. I want to talk about media eventually, sure. But where do we start? Because this is so interesting. What he's like... you want to?

Shaan Puri

yeah like he

Sam Parr

He just threw out this like meaty thing, and we could chop this up in like a hundred different ways. There's so much to discuss. I want to talk about this anonymous work thing, which is somewhat related. I also want to talk about what you just said about East Coast media. I would love to talk about that. Sure, where do you want to take the shot?

Shaan Puri

Jump around because I think that's... if you're... if this was just hanging out, having a conversation, and then the listeners are flies on the wall, that's what people like best. So let's do that. So, yeah, what would you say right now? If this is a normal conversation, you'd be like, "Tell me what the... you know, let's talk about media." I want to go...

Sam Parr

To this media thing, because you said something that I see you're doing, and I think it's smart. But it's so obvious, I don't know why you and others haven't done it. I do the same thing; I criticize East Coast media where the writers are the stars. A lot of them are, it's like the "circle jerk" community that I am somewhat part of. I owned a media company and I've hired a lot of those people. In Silicon Valley, the engineers are like the gods. Both are "circle jerk" communities; they both can stink and they both can rock, whatever. So, you're saying that you're paying attention to content now in media. I was talking with you... I don't know, did we do a call? We did something where I was teaching you about email because you're like, "This email thing is cool," and I was like, "Duh, dude, what the hell?"

Balaji Srinivasan

What's the matter? I remember we had a call, and I remember you had some insight. I don't think it was quite like... oh, go ahead.

Sam Parr

No, I'm teasing you. I criticize your website. I go, "Dude, if you want email to be part of your website, just make your website your personal domain. Just make that an email for..."

Shaan Puri

work and that's it

Balaji Srinivasan

Got it. Yeah, yeah, yeah, I understand. So the thing is that I was actually building 1729 at the time. But your suggestion of having the subscriber thing on the front page, like Substack, is actually what we did do. So we did take that suggestion, and I think it's good.

Sam Parr

but what I'm

Balaji Srinivasan

but what what I'm

Sam Parr

Getting at though is like, why are you all of a sudden caring about media? The reason why I'm asking this is I love media. I love content. So does Sean. It's a pretty **shitty business model**. Like, subscriptions are a good business model, but advertising is a **shitty business model**.

Shaan Puri

But another way of putting the question is: you built a bio-genetics company, you were the CTO of Coinbase early in crypto, and the current product, in its product form, is a newsletter. Right? Low tech, but you know, high reach... potentially. So, why did you decide to do that? Why did you decide to kind of go into a space where, you know, we debate this all the time: is media a good space to go into? So, I think, Sam, is that what you're getting at? Like, why did you decide to launch?

Balaji Srinivasan

a product which is a newsletter

Sam Parr

And I want to know what your version of media is going to be. I don't ever want to leave this industry, but I think the business model is flawed. So, if you can save me, I would love that.

Balaji Srinivasan

well okay so lots of lots of things there so one is that

Sam Parr

I think let me give a let me give

Balaji Srinivasan

A story, a history, and yeah, then maybe we can go from there. So, you know, you can date the modern era of tech from different starting points. Let's start at around 1995 with the Netscape IPO. From 1995 to roughly 2008, tech and media basically ignored each other. Or rather, media coverage of tech was positive up until the dot-com boom. After the dot-com crash and 9/11, for many years in the early 2000s, tech was happening, but it certainly was not a front-page story. It's actually hard to remember, but if you go back to even 2008 and look at lists of power centers in the U.S., Silicon Valley doesn't actually come up there. Google was just a search engine, and Facebook was just a college social network. It was growing, but it was still just a college social network. The iPhone hadn't yet come out; it was announced in 2007. So, media kind of ignored tech during this time. It was occupied with the Iraq War and terrorism, which were big storylines of the 2000s. Obviously, there were blogs and stuff like that, and people were using them, but it was kind of a side show. It was like that thing you kind of... you know, a supporting character basically. Tech also ignored media, and the reason for that is different. That's because Terry Semel was at Yahoo, and he tried to turn Yahoo into a media company. For an entire generation of tech founders, that seemed like a very bad model because Yahoo failed. Or I shouldn't say failed; it didn't go to zero, of course, but relative to Google, it failed. This entire generation of tech founders took the lesson that you just build a pipe, right? You build Facebook.

Sam Parr

yeah aol did it too yeah

Balaji Srinivasan

Exactly, that's right. So, Facebook, Dropbox, YouTube, Twitter... that entire generation of companies basically said, "We're a neutral pipe. We're just going to build a technology." By the way, that was hard enough. That was pretty freaking hard. You know, at that time, it was a bandwidth-constrained environment. Before all the modern web development tools, that was actually not trivial. So, they just focused on that completely and they said, "Look, the users bring their own content." User-generated content, right? And that kind of happened for a while. Then the financial crisis happened, and the iPhone happened. After the financial crisis in 2008, from 2008 to 2012, Facebook, Google, and Apple all started going totally vertical. There's a graph called "Print Media Disruption," which you can see. After the financial crisis, print media dropped their revenue from something like $65 billion down to like $17 billion, while Google and Facebook were just going vertical like this, right? Craigslist, of course, was also a factor here. It wasn't just advertising; it was also classified ads. That was a major factor. Craig Newmark effectively bought them off with the Newmark Foundation stuff, with a lot of grants for journalism, like datajournalism.com. By the way, there's a surveillance handbook at datajournalism.com that explains exactly how to surveil a subject of an article, which you can look at to see exactly how these folks kind of think.

Sam Parr

we when we started the hustle by the way we started it out of craigslist office

Balaji Srinivasan

there are a bunch of stories in the 2000 there were negative pieces on craigslist it wasn't obvious to me whether or not they craigslist classifieds were actually that much worse than newspaper classifieds I never saw any stats on it but it seemed motivated in part by you know craigslist's economic you know attacks on on media implicit not not intentional but implicit I think in part some degree of peace was bought with craig then funding a bunch of journalism I have nothing against craig you know I don't know him I'm just saying that I that's that's an observation craigslist by the way is a wildly profitable business it's just private so nobody knows how much money he makes but it's it's a very big deal okay what's my. Coming back at the stack so from 2008 to 2012 tech suddenly came out of its box which was you know oh cute gadget manufacturers over there in palo alto just take over all of these segments that were previously the east coast segments like madison avenue was taking a hit everybody was looking to cut costs after the 2008 crisis entertainment okay let's do that online rather than going to the movies all of that type of stuff just shifted online it's a huge digital shock right corona's a second one by the way and so what happened is that you know tech and media were basically allied through 2012 to get obama reelected and if you look at the late 2012 coverage for example like the nerds go marching in december 2012 was sort of the high watermark of sort of the tech media alliance and then in 2013 basically post election the knives came out right and essentially what happened was me was like okay you guys are getting way too big for your britches we kind of thought of you as like just a part of the coalition but you're coming for the entire enchilada you know to mix metaphors right and this was something where all the negative articles on tech and tech bros you can date it exactly to like 2013 2012 there's even articles at you know valuewag or whatever denying that such a thing as a programmer exists okay the same guy the next year is starting to write you know nasty articles on like tech bros and and and whatnot right so it's a very crisp shift okay and so so then what happened basically for the next several years tech got its head caved in by by media with the techlash something I've warned against because I could see it as like a almost like a seed investor I could see this thing brewing and going viral in in 2013 and I could see even you know there's 1 journal in slate who's like sort of sort of denounced this thing and said oh you know would you look at all these rich people this is such a silly view of the world you know we can do so much more and then 5 years later he's calling for abolish billionaires right you can actually see the radicalization pipeline of these folks in real time and you know you you can you can watch this happening because their world is collapsing and they blame it on tech and it is certainly true that economically a lot of that revenue has gone to tech tech didn't try to do it but Google and facebook and twitter took away ads but not just ads they also took away a lot of influence and so you had this sort of battle of the bulge style reaction you know in from roughly 2013 to 2019 with this tech lash and these media corporations they couldn't build search engines or create social networks what they could do is write stories and shape narratives and do you know the difference between like a story and you know a product announcement

Sam Parr

well I mean one's objective one isn't

Balaji Srinivasan

yeah but a story has a bad guy okay a hero so so

Shaan Puri

go ahead I said and a hero

Balaji Srinivasan

Yeah, yeah, yeah, yeah, yeah. But, like, you know, as people have said, "You can build a religion without God, but not without Satan." You know, that's not original to me; that's a saying. So what happened, basically, was, you know, while tech is busy doing these pastel-colored product announcements—oh, you know, like Dropbox offers 10 more gigs, yay!—and it's just a utility, media corporations were busy lining up to paint tech as bad, as evil. You've heard like 500 different lines of argument on this, right? Every, you know, journal and academic was jostling to try to find that meme that would, like, kill these tech companies once and for all, right? And, you know, they've been somewhat successful in that, but they also haven't been. What's happened is a lot of the older line tech companies that didn't have any ideological defenses but were good at making money got sort of mentally colonized, right? And, you know, went woke. That has resulted in, you know, yeah, they can make a lot of money, but they didn't have the meta-level story. They didn't have the meta-level narrative. So it's like that saying about economists, right? "Practical men who believe themselves fully devoid of external influence are often the slaves of some dead economist." Have you ever heard that? You know, best by John Maynard Keynes, I think so.

Balaji Srinivasan

Being that these ideas float around in the air, people are running on scripts that they don't even realize they're following. Media scripts humans just as code scripts machines, right? This is something I had in the Farish podcast. Tech has already abandoned unpack.

Shaan Puri

That for a second, for somebody who doesn't get it right off the top, you know? Sure, you know, just the way that... you know, what is a script in the way that the media scripts humans?

Balaji Srinivasan

Masks work. Masks don't work. Okay, boomer. Every meme, right? For example, you see a bunch of kids when they come...

Sam Parr

or the the karen thing yeah

Balaji Srinivasan

the karen thing you know you you see a bunch of kids when they come out of a movie theater what is the first thing they do

Sam Parr

I haven't seen kids come out of a movie theater I

Shaan Puri

don't know okay

Balaji Srinivasan

A bunch of kids come out of a movie theater, and the first thing they do is start quoting lines from the movie. They just reenact what they just saw on screen. This is something where the way to get people to do something sometimes is to tell them to do it, but often it is just to show it being done. That is kind of Peter Thiel's citation of René Girard on mimesis. I think it's important. Humans are mimetic; that's how we acquire language and align on objectives. Whether you want to call it contagious mental illness, I think that's an understudied concept. By the way, we know that there are contagious physical illnesses; we know there are viruses. Contagious mental illness? Well, we've sort of all stuck our brains into Twitter, right? Imagine putting your brain into a vat with 300 million other people, and they're all just sending electromagnetic signals of their brain states to you. It feels a little unhygienic if you think about it that way. In an interesting sense, we sort of social distance away from each other offline, but we pack close online. Social networking means we are packed close, and what that meant was that bad memes, you know, crazy memes, could spread faster than ever—wildfire, whoosh! Because everybody's brain was connected to everybody else's brain. There's a famous cartoon of this with the stock market, where it shows the mental contagion with respect to prices. A guy says, "Okay, I can't have any more of this, goodbye." Someone overhears him and says, "Goodbye, bye, bye, bye, bye." Then there's somebody else who overhears it and thinks, "I think this stock could really excel." Then someone else chimes in, "Excel, sell, sell, sell, sell, sell!" It's actually really funny.

Sam Parr

you

Balaji Srinivasan

know it it just sort of conveys these sort of like traveling waves of of memes right right now we don't have great visuals on this we can't we can't do the molecular neurology of the meme like we can do the molecular biology of the gene let me explain what I mean by that the concept of genetics predated molecular genetics you know like mendel went into these phenomenological experiments where you could see you know like the the pea plants and so on big a little a if you remember that from high school or what have you before people understood the biochemistry of you know deoxyribonucleic acid and how a gene is actually represented in the double helix and all that type of stuff that awaited kind of the next century right in the same way I think dawkins and kind of our phenomenological understanding of means right is something that is ahead of our molecular neurology how are ideas represented in the brain right how are they stored how are they retrieved how are they accessed how are they communicated people have done things on this with like you know the so called jennifer aniston neuron right where you know it appears there's actually sites in the brain that would actually store jennifer aniston like you see something and it it just has you know where where you see the words jennifer aniston you see the image jennifer aniston you see a video of her you see brad pitt and it would light up next to her and so on and so forth for somebody who follows all this celeb stuff it's not my thing but this is from that it's from a paper a while ago when jennifer aniston was still I think very much in the news not as much today right that concept seems to also exist to some extent within neural networks you know like the new you know like the the the ai stuff that's being done where you can actually seem to express like a like an abstract concept where a neuron replies I think openai I forget who I think it's openai who had a paper on this recently okay so we're starting to actually get at how concepts abstract concepts could be represented in a quantifiable scientific way and you know we're not yet there but eventually we'll be able to see things like okay here's this traveling wave of ideas we've met a contagion here are ideas that serve as vaccines against those other ideas right they they block them out because these ideas are themselves trying to spread

Sam Parr

Yeah, so how does this work? I'm going to say, like, here's the dumb Sam version of what you said: I can convince people to believe certain things by making them feel certain emotions. I could do that by using sticky, viral content, which boils down to funny memes. The internet is still on tap, and we're all racing to put our stake in the ground. Email is one great empire to build. Is that kind of what you're getting at?

Balaji Srinivasan

Well, email is one piece of it, right? But basically, you know, there are push notifications. That's just a mechanism of how nodes are connected. On a side note, I do think that within 5 to 10 years, in addition to email and text messages, your ENS name—or let's say your crypto name—will probably become the third most popular communications channel.

Sam Parr

I want to talk about that in a second because that's amazing. But to wrap up the media thing, what did Sean say earlier? He was saying that he had a good question, which was: "In three years, what's the world going to look like?" Let's say that you are running, which you kind of are, this small media business. Maybe one day it will be a media empire. What do you think that's going to look like? How's that going to function? How's that business model going to work?

Balaji Srinivasan

Totally, yeah. So basically, I think... you know, I'm giving long answers because I didn't have the time to write short ones. I don't know if that makes any sense. You know, if you've heard that one? Yes, yeah.

Sam Parr

That's a... yeah, it's a... I didn't have time to write a short thing. I was too busy doing the long ones or something like that.

Balaji Srinivasan

so so excuse my digression and you know maybe I can edit this down into sound bites or or or shorter thesis statements the short version is basically tech ignored media for all the reasons I just described in that story and over the last 6 years we've seen the cost of ignoring media the story is told and you're the bad guy okay now there's another story to be told which is for example there's a website called tech journalism is less diverse than tech.com okay so a nigerian guy basically tried to submit this as an op ed to a bunch of tech journalism outlets and couldn't get it there and I put up a prize and he actually went and did this analysis and shows that actually tech is like 30 points more diverse than the media outlets that constantly give tech shit about this right and so the you know another story is that actually a lot of the owners of these media corporations are like literally inherited wealth like nepotists that you know just got the family business from their father's father's father's father and you know you another aspect is they're mostly american as opposed to the mostly immigrant nature of tech which is very global and has an international purview and so on and so forth there's actually a number of ways where the narrative of these media corporations where they they run billboards that literally they market themselves as truth on a billboard or democracy like democracy dies in darkness like that's how they market themselves on a billboard or or fairness and balance right that's just corporate propaganda literally by these legacy media corporations to define themselves as the literal truth you know and they believe this you know their brains have been melted by corporate propaganda to such an extent now I don't think any tech company would be you know people talk about tech arrogance or I think any tech company would be so crazy as to market itself as a little truth but now actually we have an answer as to what that literal truth is which is cryptography cryptography and especially how the blockchain actually puts it online is decentralized truth right it's mathematical truth it's truth that anybody has access to you know as I mentioned in a previous podcast basically everybody knows exactly how much bitcoin somebody has you know whether you're palestinian or israeli democrat or republican that's not something there's actually contention over which is amazing because it's this $1,000,000,000,000 piece of international property that's the kind of thing people usually fight over we can use those so

Sam Parr

What are you implying, Pete? We're going to be covering that. We're going to be covering these transactions, and we're going to know.

Shaan Puri

well

Sam Parr

is that I mean

Balaji Srinivasan

here's what I'm thinking about that but yeah here's what I'm here's what

Sam Parr

that's only one that's only one niche niche that's an interesting one though but is that yeah

Balaji Srinivasan

Okay, so step 2 is defining where it's not just about who owns what Bitcoin, but who owns what digital property and digital goods. That's an enormous swath of the economy, right? Maybe most of the economy over time. **All property eventually becomes digital.** Should I clarify why I think that? Because that's a provocative statement. Why does all property become digital? Because much of the physical world becomes printable. Okay, so obviously, you can print out a piece of paper. If you look at, for example, the supply chain or what's going on in robotics in terms of getting food to your door, there are folks who are obviously making the restaurant pop up. Right? The delivery bit—there are folks who are doing autonomous cars or sidewalk delivery robots, which are better in some ways. There are also folks who are doing autonomous food prep. You could imagine the whole thing being fully automated. It's all robotics, and it's all this electromechanical process that has no human intervention, in which case it's analogous to just a print. I think robotics is something that has sort of been happening in our peripheral vision. We kind of know what's going on with Boston Dynamics and whatnot. But what I think is going to happen is that most of the value will be created online, and you'll print it out by essentially invoking robotics. I think that's the next—this decade—we're going to see more and more of that. You're starting to see actually robots in the field, like these robot dogs. I think we're going to see way more of that, and it's going to come pretty quickly. Because once a robot can do something, you've turned labor into capital, because it's all electricity and the value creation.

Shaan Puri

well sam sorry

Sam Parr

so I know

Balaji Srinivasan

I know, I know, that's the premise. I'm installing that premise. Okay, all property becomes digital, so that's the second phase, right? You know, who owns what? Bitcoin, and then, you know, who owns what loans, bonds, stocks, assets, all that type of stuff. But the third phase is the most interesting to me, and with that, it's related to something called crypto oracles. So many of these contracts over here in the second phase are doing bets on, you know, will this price go up or down? Or, more interestingly, will the temperature go up in, you know, this farmland? So I need to pay out this insurance because there's a drought. Okay, that's like an example of a smart contract, which combines a financial aspect and a fact about the world. For something like that to happen, that was kind of similar to the business model of like the Climate Corporation, like climate.com, if you remember that. For something like that to work, the smart contract needs access to data about the outside world, which is not purely financial. Okay, and that's the crypto oracle problem, where basically oracles broadcast data on-chain and they sign it. They say, "I'm reporting that this is true. I, the Weather Channel, am saying that it's 82 degrees in Poughkeepsie today at this time," right? And I give a timestamp, like a temperature feed. And this is happening not just for temperature, but it's happening for, you know, crime statistics, or not just individual crimes from which statistics are calculated. It's happening for medical records, right? So a hospital wouldn't just say, "We have 1,000 coronavirus patients." It actually has a feed of this patient at this time, this patient at that time. Redfin or Zillow doesn't just publish aggregate stats; it actually has a feed of which real estate transactions are happening at what time. Okay, and from this, aggregate stats can be computed, but you can also drill down to individual rows and diligence them. What's the...

Balaji Srinivasan

Right now, all of these feeds of data that I'm describing are siloed. You know, the real estate data happens here, the medical data happens here, the price data happens here, and the temperature data happens here. But what I call the **ledger of record** is essentially the integration of all these crypto oracles. The reason they go on-chain is that it's profitable. You can trade off of that information or make money off of it. So, each individual oracle goes on-chain and it's subsidized. You've got a micro incentive to put it online. That's not some macro, highfalutin concept, but the macro concept is that as all of those individual oracles go into this thing I call the **ledger of record**, you now have cryptographically verifiable facts about the world. You have a digital history—an unalterable history. You can tell what happened when. In a sense, this is kind of just the next step. We've got all these tweets, which actually give us a reasonable, I shouldn't say perfect, but some degree of the intellectual history of the last decade. If the Twitter database was downloadable, eventually, either something like it will be, or someone will scrape it, or something like that. You know, storage just keeps improving. So, you could store all of Twitter on a micro drive of 2035 or something like that. That database could be analyzed in all kinds of ways to determine people's moods, what people talked about, and all the memetic contagion stuff that we just talked about. You could actually look at all of that and visualize it. We can't easily see that right now because the dataset isn't open. In the future, with this **ledger of record**, it would be, and you'd be able to establish what happened at what time. So, that is the sense, Sam, in which you go simply from just who owns what Bitcoin to who owns what smart contracts to who said what thing at what time—like what facts were asserted. That is actually a very powerful thing where we start to displace a corporate media corporation as the font of truth with cryptography instead. Alright, let me pause there. I know it's a whole download, but maybe I can express it better.

Shaan Puri

I'm going to summarize some of the interesting ideas that you brought up. I think, and you could take a drink of water—you deserve it! One of the interesting observations was the media's initial ignorance of technology. Then, as technology became more powerful, it was the media that started to ignore tech. What you're identifying is that technology companies are going to realize the power of media, meaning the ability to shape the narrative rather than just being the villain in the narrative. This continues...

Balaji Srinivasan

the 3rd swing of the pendulum now in the middle of the 3rd

Shaan Puri

That's one interesting trend. If you're building a company right now, that's very much worth considering. In order to do that, you're going to have to flex different muscles: storytelling, memes, packaging, you know, different things that...

Balaji Srinivasan

you don't have to do they give you my meme my memes own a media corporation or be owned by 1

Shaan Puri

There you go. So, that's one interesting kind of... You brought up the second one, which is this idea of **empirical truths enforced by economics**. Today, media companies claim to be the truth; they market themselves as the truth. It’s just, you know, sort of corporate propaganda, and there’s all kinds of hypocrisy underneath that. You identified many of them, like criticizing others for not being diverse while not being diverse yourself. There’s also the hypocrisy of hating billionaires, yet the media companies are owned by billionaire families that are passing it down from one child to the next. So, there are all these hypocrisies underneath that. How do you get away from that? While there is this general movement of all things becoming digital, it’s not just that software eats the world; the whole world becomes software. As the whole world becomes digital, assets become digital, contracts become digital, data becomes digital, and news reporting becomes digital. You have this idea of **crypto oracles**, which are the journalists or media companies of the future. If we need to know what happened, what is the truth, who won the game, or who got elected, in order to enforce these betting markets, prediction markets, or stock markets, then they will be rewarded through these microeconomic incentives for being accurate, or they will be punished.

Shaan Puri

if they

Balaji Srinivasan

Were very able summary, but let me offer a few asterisks here. I think the vision of the future is **oracles** and **advocates**. So, redefine a reporter as like a **sensor**. A sensor that essentially writes data on-chain. Okay, which can literally be like a machine that just takes a temperature sense and writes it on-chain. The thing is, you might think that's trivial, but hey, that would actually, in aggregate, if you had lots of them, give you a cryptographically provable record that you could use in, for example, discussions about climate change.

Shaan Puri

so the the weather man becomes a sensor

Shaan Puri

who tells

Balaji Srinivasan

the weather man becomes a sensor

Shaan Puri

that's right

Balaji Srinivasan

that's right or but this

Sam Parr

But this is kind of a little... Okay, so I understand what your vision is here, but it's missing a whole lot.

Balaji Srinivasan

Wait, wait, wait! Let me get the second part of it. Hold on before you... because you might be right. Okay, the first layer, that base layer, is the raw facts—cryptographical attestations. You're right, from sensors. And the sensor could be lying to you, of course. It could be saying the temperature is 80 when it's actually 30. But it's got a digital signature, so you can see its track record. You can involve other kinds of things there, right? You can match it up, you can audit it. Other people can audit it. So you can have a second thing that's auditing, you know, one out of a hundred of the measurements of the first guy. There's a hypergeometric distribution, which is like, you know, auditing things off an assembly line—like pick a ball and see if it's corrupted or not. But then the second layer is advocates on top of those oracles. Okay, so these are humans, and you just assume that a human has an editorial judgment. You know why? Because it's not just what they write; it's what they write about. Now, the selection function of what specific facts they choose to include is itself visible. Right? Editorial judgment is now quantifiable because you have this layer of the raw facts that are on-chain. Then narrative becomes tangible because it's which facts you actually cite in your story. Okay, and so the selection function is basically just like a ranking algorithm for a social media site. That selection function actually is now quantifiable, but you can see not just what was included, but crucially, what was omitted.

Sam Parr

The... so this seems like... but this seems like an entire... so, okay, so what you're gonna do is 17/29, you're gonna hire.

Shaan Puri

I I don't think he's talking about 17/29 for this whole thing right

Balaji Srinivasan

you're yeah

Sam Parr

I know I'm just making that... I'm just using your media empire. You're going to hire 200 engineers to build this—what did you call it? The **ledger of record**. And then you're going to hire 200 journalists to editorialize... sorry, you're not calling them journalists, you're calling them **advocates** to editorialize some of the facts, correct?

Balaji Srinivasan

No, so I've got a different approach. I would call what you just said, and I don't mean this in a bad way, but sort of like the railroad-looking model. Here's at least what I'm planning to do, which may well fail, but you know, at least this is what I'm thinking about. First, it's decentralized media. What I want to do is invest in lots of individual, diverse influencers and pseudonymous voices around the world. Basically, everything that's not "Brooklyn woke." All these other voices that are underrepresented in our conversation—ideologically, demographically, internationally, and technologically. You know, like scientific depth being brought to bear. Those are the kind of folks I want to fund.

Shaan Puri

Number one, right? Chosen by you, and so is central choosing decentral. You know what I mean?

Balaji Srinivasan

yes that's right but but the the like all the tools and stuff that we use for selection funding like the yc style safe equivalent and and so on all those will be public so I want people to pick it up and copy it and so on and so forth right so I'm not at all proprietary about that I'm just trying to set an example for what it's worth sort of similar like you know last night you know I tweeted out like for the covid relief thing in india and you know the notion ceo and the the actually the hubspot founder dharmesh actually yep rt ed that so it kinda gave a template that they could then just use and that's that's what I seek to do right and you know the goal being to basically bootstrap a bunch of these voices okay call that one component the second component is to bootstrap the technology which is to say figure out like what the right version of using crypto oracles in content is okay maybe that's gonna require a few years of compounding maybe I just write the articles on what that vision of the future is and I'm not smart enough to build it but one of my you know you know portfolio companies or readers or something like that is because you know we all it's all it's all a relay race right you know you you hand the baton and maybe someone else can figure out something you did and so on right so kind of open sourcing my thinking on how we can get to a better model of you know truth right out there and then 3rd is writing a story so so first is you know like the the writers and the the people who are writing these tasks 2nd is the technology technology for kind of creating the task creating the content and 3rd is the story which is I have a book the network state which I've been I'm I'm a perfectionist so I edit the chapters and I edit them and edit them so I put the first one up at 7229 dotcom you know how to start a new country I think it's done pretty well you know like it's it's it's got a lot of good feedback and I think it stimulated some thinking and essentially the idea is you know how do you start a new country well when there's no land the short answer is rather than try to like take over a peninsula or a you know piece of territory or you know or or declare or conversely take over like a oil platform near england and call yourself sealand right instead you have a community that you build in the cloud and they go and take piece of land all around the world which are like you know cul de sacs or apartment complexes and so on you network them together such that it's something which may eventually have a scale of 100 of 1000 or millions of people and the footprint of a contiguous state but it's just contiguous since it's networked on the internet right so that's the third part which is a story so it is not simply content or technology who's who's doing that

Shaan Puri

Is anybody... do you think that there is a project out there? Or do you feel like there's anybody out there who's taking that approach? How do you start a new country, create a community in the cloud, and then have these decentralized pods or hubs all around the world?

Balaji Srinivasan

Where do those people actually congregate? I think it's a 20-year project. Basically, my one-liner on this is: the 2000s were the tech companies, the 2010s were crypto protocols, the 2020s are startup cities, and the 2030s will be network states. So, company, protocol, city, state. I think that's where we're going. We sent you the things; it's just beginning.

Shaan Puri

We are in the startup cities phase right now, so let's transition to that real quick. So, what is a startup city? Is this like Sam leaving San Francisco and moving to Austin? You know, the mayor of Miami actively recruiting candidates like a startup CEO would and hiring away great talent into Miami. Is that what a startup city is to you, or is it something else?

Shaan Puri

yeah

Balaji Srinivasan

So, what's great about the term is that it encompasses kind of three definitions, right? The first is just a city where startups happen, which is what San Francisco used to be. You know, nowadays, it's just... you know, like, when somebody chooses San Francisco for a startup, I crinkle my eyebrows. I mentioned it before; before the pandemic, I said it was like choosing Java. You know, proven but kind of sucks. It's like, okay, you don't know new languages, and I'm not sure about your productivity in this or whatever. But now, it's like choosing Oracle for a new company, you know, which is like...

Sam Parr

right

Balaji Srinivasan

Basically, you're just getting locked into this horrible cost structure with a declining product when far better options are available. I question their judgment. So, the first definition is a city where startups just happen. The second is a city that acts like a startup, which is Miami now under Suarez, and that is amazing. The third definition is a city that's a startup itself, like prospera.hnorculdesac.com or the various startup cities that pronomos.vc is investing in. The thing is, I think, you know, obviously when I said 2000 tech companies, 20 companies in 2010, scripted protocols in 2020, and startup cities in the 2030s, that's sort of when that exponential starts, right? What is the analog of Bitcoin in 2010? It's startup cities in 2021, right? Okay, where... go ahead.

Shaan Puri

I was gonna ask you a different question

Balaji Srinivasan

maybe that's a good one that's a good one to drop on your listeners bitcoin in 2010 was a pretty good buy or whatever you know

Shaan Puri

yeah exactly and I I

Sam Parr

actually wanna

Shaan Puri

I know you got into crypto early on. I want to know, actually, what was the... you know, where were you kind of when you first heard about it? Was it the white paper that you stumbled through, or was it a conversation with a friend? So, how did you hear about it? How did you get hooked? And then, how long did it take you to sort of like... you know, when the mind virus infected you completely and you were like, "Oh wait, this is actually gonna work"? I would love to hear that from you.

Balaji Srinivasan

yeah so you know I have to recollect the exact timeline but basically it was something where I've been thinking about economics and money after the financial crisis because everything broke and so you start thinking more deeply about you know the system that you just always functional just shattered into a 1000000 pieces and or just didn't work and I've been thinking about like how the true definition of money is energy in a sense of j o u l e s jewels like visualize like an iphone you know coming together like like the rare earth elements and the glass and the aluminum and so on and this and the the silicon just like this molecular assembly and how much energy would it actually take you to assemble that from its constituent parts you know like in chemistry you can you can quantify this you know with like various various chemical processes how much how much input energy do you need to catalyze it or to make the reaction run and so that was like something I was thinking about because if you could reduce the energy cost of assembling something like a phone over time you had genuinely reduced the price right that's a genuine reduction because humans were able to do this thing more efficiently today than we were in the past and that'd be the kind of deflation that you want jewel deflation where because of technology we've actually made this thing cheaper to do than we used to be able to do right now I've been thinking about this and then you know one of my friends you know basically like you know I write these essays or whatever one of but just this is before I was a public you know public figure if that sounds like anything just you know one of my academic friends was like okay you should you know look at this bitcoin thing and I forget exactly when that was it was 2010 or 2011 but basically I thought it was really interesting because it was also using energy you know in a sense in different way to kinda support value but it was doing something that was very counterintuitive the most counterintuitive thing about bitcoin at the time to me was that the extra computation was not going into increasing the number of transactions per second but rather increasing the security of the system that was a design decision that was totally foreign to everything we had learned about scaling out systems and going parallel and so on and so forth that was that was something which took me a while to wrap my head around not that I thought it was bad I just thought I was like I just don't understand this or for example the fact that all blockchain addresses were public essentially he had stepped out of the box of what I thought a distributed system should be you know like had made certain design decisions now in retrospect these are genius moves but like having all your transactions out there in public on chain just would have seemed like a like a feature that you wouldn't be able to give up right but with the pseudonymity it's like okay and then now with 0 knowledge we figured out with zcash and other things how to add back that privacy right so I I followed bitcoin but it was actually only after the 2011 crash and recovery that I was like okay this thing really has legs and I wrote in late 2012 I actually had a course at stanford I gave where I talked about bitcoin and I'm like I'm not sure if bitcoin is the one that wins but it is a very powerful tech that is is like something in that class will be a big deal right and I think both were correct statements I could find the exact pdf or whatever if you want and so that was around the time that coinbase also got going and actually brian and fred and I I think we first met january 2013 very very very early on in the history of coinbase and actually like I I used the coinbase api in a class that I taught that year and in a mooc course and you know basically that was kind of my story of getting into bitcoin and crypto then 2013 boom of course happened but it was basically the crash from $32 down to $2 in 2011 and the subsequent recovery up to like $10 in 2012 that convinced me the thing had staying power because it's very rare that you have something endure a 90% + drop and then come back right that's extremely rare

Sam Parr

You were a professor, is that correct? Yeah, you were a lecturer. I think there was some article—I have no idea if it's true—that you were considering joining the FDA. Was that true?

Balaji Srinivasan

Yeah, I mean, well, rather, I was interviewed for a very senior role.

Sam Parr

sure I

Balaji Srinivasan

Probably could have been at least number 2 that was on the table, but I chose not to. I mean, it's now a few years later and I don't usually like...

Shaan Puri

kiss

Balaji Srinivasan

and tell or whatever you know

Shaan Puri

but

Sam Parr

The... The... The... Is that you have this academic side of you, which is fascinating. You have this crypto guy part of you, which is part investor, still part academic. But you also have this third part of you, which is that you've built companies. So, you helped build... This is like traditional; this is the most normal part of you, which isn't even normal. The most normal part of you helped to build a $50 billion company called Coinbase. Yeah, the most normal part of you. I used when I'm freezing my embryos, and we just found out that one of our potential children just had Down syndrome. And like, oh shit, that's the most normal part of you is that you built that shit, right?

Balaji Srinivasan

well it's funny

Shaan Puri

which is

Balaji Srinivasan

it's it's funny because I for your audience yes I think that's probably true

Sam Parr

Which is weird because that's not normal, right? So, I guess what I'm curious about is, on the Tim Ferriss podcast, you used one of the more baller phrases to say that you're rich. You used "post-economic."

Balaji Srinivasan

I didn't use that phrase tim did but it's a it's a good phrase

Sam Parr

It was the most baller phrase I've ever heard, like post-economic... to the point where money doesn't matter. You're beyond that. I care about money, and it's interesting to me beyond just being able to buy nice things. It's about being able to think about stuff that you normally wouldn't be able to think about. Where has most of your financial success come from? This weird part of you that is a crypto investor and got in early, or from the traditional part of building companies? There's a reason why I'm asking, but I'm curious what the answer is.

Balaji Srinivasan

I think I'm, you know, I like to think of myself as a **pragmatic ideologue**. I have a horizon where I have my eyes set on this long-term goal of **transhumanism** and **transcendence**. However, I'm willing to be as pragmatic as possible in the short run. I execute and go down my to-do list for that **North Star**, which I'm always conscious of. I wake up in the morning and I go to sleep at night thinking about that.

Shaan Puri

I think I think that's

Balaji Srinivasan

basically when

Shaan Puri

Sorry, I was just going to say, I think that's evident. You kind of proved that when we asked you about 17/29. When you talked about it, you mentioned essentially disrupting education. Making it so that when people spend their time online, they're not just frivolously scrolling feeds; they're actually learning, earning, and burning calories. But then, if you go to the product, it is the V1 kind of crawl where you say, "Okay, what's the simple building block that we need to do that?" Let's send a newsletter every day with a microtask that people can do to learn something and earn a little bit of money. So, I think you embodied that exact idea of what's the extreme long-term north star and then what is today's building block in order to move forward.

Sam Parr

and and that's why and that's why I was getting like what the hell are you up to man how are we doing

Balaji Srinivasan

well it's funny

Shaan Puri

but

Balaji Srinivasan

It's funny. Well, let me talk about that for a second. That is absolutely an acquired language where I have learned that you need... Moritz talks about this half-jokingly as, "Every app needs one of the seven deadly sins." You know, like lust, greed, sloth, gluttony, wrath, pride... I forgot the other ones, right? But it's things close, right? So, you know, Tinder is lust, right? And Twitter is wrath. Arguably, early Google, which is pretty highbrow like search, you know, but arguably that's sloth. And you know, then Uber Eats or DoorDash is gluttony. I love those companies, don't get me wrong. I'm not trying to diss any of them, right? So, those hooks basically... I think you need to deliver a visceral, instant benefit to somebody, right? Where in a second, you can explain what it is. Okay, a newsletter that pays you, right? Earn Bitcoin for submitting a form in a minute, right? So, instant benefit. If you can't give that to somebody instantly, then it's too complicated. You know, rarely there's exceptions. You know, rarely there's things that have very end-loaded benefits. You know, like things like Ethereum or roamresearch.com, for example. You know, that rewarded an academic mindset at the beginning. It was very long-term, right? But even Ethereum, for example, there was like a speculative upside, you know, which was the visceral short-term thing where you could align the short-term mentality with the long-term mentality.

Sam Parr

but I have to bring you back to the original question

Balaji Srinivasan

bring you back to earth

Sam Parr

Go ahead. Yeah, I gotta bring you back to the original question, which was basically, I was asking him, "Did you get wealthier from this Bitcoin stuff or from building the company?" And I have a reason for asking.

Balaji Srinivasan

I don't usually like to disclose my percentages or something like that, but let's say I've done well from both. I've been fortunate from both. It's interesting because as an investor, you have 1% or less of the work, 10 to 20% of the return, but 0% of the control. You know, I have never been like a tech guy in the sense of actually... you know how there are people who talk about, "Oh, I had a Commodore 64 really early on. I was programming," and so on? That was actually never me. I played video games a lot when I was a kid, but I was a math guy. That's actually the angle that I came into it from. I was into math and physics growing up, you know, Feynman lectures and all that type of stuff. I thought that I was going to be maybe like a stats professor or an applied mathematics professor or something like that. So, computers were always just a tool, and business was always just a tool. Only later, the reason I got into genomics or clinical genomics, the reason I did a startup was... and I'll come back to your question.

Balaji Srinivasan

I know you're going to... you got a thing. The reason I did that was in academia. If you raise $10,000,000 in a grant—"raise" isn't the right term—you get a $10,000,000 grant. Each row of data costs $1,000 to collect, so you can only do 10,000 rows before you run out of money. Whereas, if you're making even $10 on a row, you can collect a much larger sample and make a much bigger difference for the world. You can actually do the data analysis on that large sample. So, the thing is that the 0% control, even though I am an investor and I think I've done fairly well at it, I invest on an ideological basis. I invest in the world that I want to build. There are probably things that are good financial investments, but I'm just not interested in something if it's just making money. I can sort of force myself to be in that headspace, but I have to force myself.

Sam Parr

Yeah, the reason I was just asking was that I think you're the... I mean, you're supposed to be the stereotype of someone who has all these odd and unique frameworks that create these brilliant ideas. Yada, yada, yada, that's cool. I dig that. But what I was curious about is your life philosophy towards certain things, specifically.

Shaan Puri

how do you

Balaji Srinivasan

think about execution for example

Sam Parr

Well, it was just like, "Did you just think, well, I'm just gonna go and make this company, sell it, and get the bag?" Now I could do all this crazy, wild stuff and everything else is upside down. That's why I'm wondering, because if that is your strategy, I actually think that's kind of cool. There was some practicality, and then like genius stuff comes out afterwards.

Balaji Srinivasan

and that's why

Sam Parr

I was curious like

Balaji Srinivasan

In that sense, I'm not capable of... I should say, I'm not capable of it. I didn't just do a job for the sake of doing a job to get the money to then do the next thing. I really believed in both, you know, counsel and crypto, and you know, Earn and Coinbase. That's how I could put in that level of energy. You know, Buffett has this concept. I don't agree with a lot of his stuff nowadays, actually, but this concept is good. It's like, you know, if you're waiting to do what you want, it's like waiting to make love at like 70 or something like that. You're just deferring it. It just doesn't work like that, right? You should start working on it now. TLL also has a concept of how you achieve your 10-year goal in 6 months. So, yeah, I think that what I tried to do is advance short-term goals. You know, maybe a sinuous path, right? Maybe a winding path, but I had that long-term kind of vector that I'm going towards. The short-term stuff was never, "Oh, let me make the money and move on." Maybe that might have been smarter to do, like D.E. Shaw did something like that, right? It's... you know.

Sam Parr

d d shaw d shaw is the guy who created the the hedge fund

Balaji Srinivasan

yeah the hedge fund they put a ton of the money into protein folding

Sam Parr

Yeah, so, like, Shaw is famous because that's where Bezos worked before he left to join Amazon.

Balaji Srinivasan

he built out this and and

Sam Parr

d shaw was like hey are are you sure you wanna do this yeah

Balaji Srinivasan

yeah yeah yeah exactly right so I mean there's a lot of effective altruism people who are like this I would argue that the effective altruism people miss one very important thing which is that it is the production by people of goods that actually makes them feel that they deserve things like if you haven't built you feel guilt I think it's a very powerful concept right if you haven't built you feel guilt so if it's just handed to you then you don't actually feel like you deserve it and that leads to a sense that nobody deserves it and and everybody's things should be taken down right so I think that emergency aid is actually very good but like industrialized aid where it fosters a sense of dependency is is bad you know easterly and levine have written about things like this but recursing back at the stack they do this concept of you know work hard make a lot of money and then spend it on altruism for example right and I think that's a reasonable strategy but I find it like holding your breath you know and I I only worked on those things that had meaning for me along the way but were leading to a greater meaning thing and I've been fortunate enough to do that by the way you know like one thing I was just mentioning to sean is that it's hard for me to necessarily give advice to folks on the very macro sometimes because in many ways the world has just become more biology like okay if you were a person who was a 9 to 5 morning person who liked routine who liked you know structure who wanted to hit the same button every day who wanted work life balance and to come home to the family and you know like have dinner at the same time every night and so on and so forth the mid 20th century was awesome for you because that was kind of the peak of centralization homogeneity routinization structure it was also by the way the peak of like you know mass murder and so on within like china and russia and whatnot both those are related to centralization but in the us at least like a decent quality of life that was like the best centralized model in the world right whereas the rest of the world wasn't wasn't doing so well under that degree of centralization and and now we're kind of in the opposite thing where it's like favoring night people who are asynchronous you know rather than hitting a button the the same button for 20 years at a factory you're hitting a different key every second you know like you're you're just generating like different information your your day can be extremely varied you know one day like covid has kinda locked us inside but your day online can be extremely varied you know do one thing one day podcast another day maybe play a video game or you know basically the entire diversity of the human experience is a click away you know

Sam Parr

and and that's and

Shaan Puri

Also, you know, you're rewarded now for **diversity of thought and opinion**. In a way that, you know, now that everybody's a content producer, the more differentiated your content is, the higher the rewards you get. In the previous era, not everybody was a content producer; everybody was a content consumer. You would just go home, sit down, and watch the box. If you tried to stray out of line, you weren't necessarily going to find other people who had the same convictions as you. So, it sort of paid to just toe the party line in a bigger way than it does today, where actually standing out is more valuable.

Balaji Srinivasan

It's interesting because I think we are in the middle of a, you know, the battle of the bulge. Do you know what that was? It's basically like Germany's counterattack in the waning days of the war, which was actually a pretty ferocious counterattack. But ultimately, in the long sweep of history, it was just a counterattack. What I think we have now is a strong counterattack in favor of conformity by both, you know, kind of like the woke contingent and the CCP. I think it's going to be quite a fight because, in my model of kind of like these memes and things all battling each other in this gigantic cloud continent, one of the most powerful memes is a meme that says, "There should be no other memes before me."

Shaan Puri

So, you said something that I want to go to. You said, "The world is becoming more biology-like." What does that mean?

Shaan Puri

what does

Balaji Srinivasan

that mean that means that from 9 to 5 it is you know either like tweets or surges of work right from day people it's like night people are async you know from status quo bias to disruption bias you know from you know sort of the physical world to the informational world the theoretical world like ideas matter more ideas can shape the world more you know all those kinds of things in many ways you know for example something like soylent okay soylent itself like I I I like the company and you know rob reinhart the founder and his friend and so on I prefer like a keto version of soylent of which one of them exists okay but as my - the keto thing the concept of just not having to think about it so I can just do more math or more programming or you know just more content like that's like I love that right that's a very biology kind of thing right and now of course I recognize that you know there's better forms of food like salads and so on but of course there's worse forms of food like candy bars right and so if you compare it against you know what's better then you you'll miss the fact that many people who are busy don't eat well and they eat a candy bar rather than a salad you know and so this is actually like basically it improves baseline health you know in theory if it was more keto or whatever right and so that kind of thing is something where it fit my preferences and because of that I invested it and the world just sort of adopted that or like crypto you know fit my preferences for okay it should be programmable it should be decentralized there should be you know like you shouldn't have somebody be able to do bailouts and so on and the world became more decentralized and so so in some sense that prediction of the future is just something where the world is sort of fitting those preferences you know and that's something that's hard to kinda clone I don't know if that makes any sense yeah that makes a ton of sense

Shaan Puri

If you were, I don't know, 21 today and I actually...

Balaji Srinivasan

You know what? Let me give one asterisk. I want to give one asterisk, which is that in many ways, though a lot of these businesses do not fit my preferences, like Instagram. Instagram is a great company, but going and taking lots of selfies outside... or, you know, like a...

Sam Parr

that seems like something you would do bro

Balaji Srinivasan

yeah yeah I'm a very private person in in that

Sam Parr

come on

Shaan Puri

yeah yeah

Balaji Srinivasan

Yeah, no, no. Like, you know, I actually tweeted on this before the pandemic. Instagram is for people who go outside; Twitter is for depressed intellectuals, you know? Like, I...

Sam Parr

can I

Balaji Srinivasan

go ahead

Sam Parr

the reason why can can I explain what you look like right now

Balaji Srinivasan

like I'm in a I'm in a dungeon here

Sam Parr

You're supposed to be this big shot crypto entrepreneur guy. You have what looks like a super, super old camera and zero lighting. Just looking down at your video setup is so horrible. I thought it was going to be the best. I need to actually get that set up.

Balaji Srinivasan

So actually, I am solving that. I've got a studio and I'm working on it. But basically, you know, we caught him.

Shaan Puri

Caught him in transition. He hasn't set up the full remote workstation yet.

Balaji Srinivasan

Yeah, yeah, yeah. I haven't done all that yet, partly because I do have the Blue Yeti or whatever. I did get that, so people nagged me into doing it. It's sort of something where I go from 0 to 100 on something, you know? So I just use the defaults unless I actually engage. I'm just learning acoustics and I'm learning things.

Sam Parr

you know I'm just

Shaan Puri

we're we're talking shit

Balaji Srinivasan

a month a month ago no you're absolutely right new setup go ahead

Shaan Puri

And then, oh, okay, these guys flew out to our houses and they built us these studios because they were fans of the podcast. So we literally didn't know anything. We still don't know anything. We didn't know how to put this together ourselves either. And now Sam's like, "I feel like we did this."

Sam Parr

no I'm making fun of him because he's like well you know instagram's great but it's not really for me

Balaji Srinivasan

Yeah, bro. Yeah, you can figure that out. It's funny... a shocker. Well, it's interesting because I will value something once it has a dot product with my north star. So, like the dot product, you know, the inner product in linear algebra, it's like, you know, here's a vector, here's another vector, and how much do they align? Are they just at right angles, or is there some alignment? The reason that I'm going to be improving, I think dramatically, hopefully, audio and video production is that I need the content to tell the story to build the future. So, I'm going to get good at that, hopefully, because we need to. But before then, I just felt of it as sort of being an exhibitionist, and it was like, not my thing.

Shaan Puri

Right, so I was going to ask you: if you were 21 today, what would you be like? What would 21-year-old you be focused on? Let's say you don't have the tracker, you don't have the name, or you don't have the funds to be investing and, you know, having a big platform to speak on just yet. How would you be spending your time?

Balaji Srinivasan

so what would I do first skills wise I get really good at computer science and statistics first and the reason is that every domain has algorithms and data structures which means that computer science and stats are valuable anywhere you can walk into walmart and you start writing down code for shopping carts and you know baskets and pricing and so on you can walk into american airlines and do that for you know flight scheduling you could walk into pfizer and start writing about vats you know for drug preparation and and you know like a pharmaceutical manufacturing right reaction connects all that type of stuff and of course each of these areas will have domain knowledge you know but computer science and statistics are universal language and I mean cs and stats I don't mean just like learning programming and you know how to invoke library calls I mean actually understanding the concepts and really wrestling with them okay and the reason is it's sort of like what physics was to the early 20th century cs and stats is to this century because physics was awesome for you know understanding the natural world all these physicists could you know in the heyday of physics go and kick in the doors of any discipline and be like I'm I'm gonna write down some equations and just change your life you know because you're doing this in a phenomenological way and and we can do it way better and now today because so much of the world is a constructed virtual world you know because we're interacting with it on screens you know something like cryptocurrency is a constructed virtual world right social networks are constructed virtual worlds so are video games cs and stats becomes I mean it was valuable before but it's even more valuable today so that's a foundational kind of thing and then you know in terms of demeans to get good at I would find something you know it sounds funny to put it this way but like an area that you really care about for some reason you know and there's but but it's also aligned you know the ikigai concept because mhmm right so like the 4 things I may not remember them fully but it's like what you're good at what the world needs what you can make money at and

Sam Parr

what and what you have fun doing

Balaji Srinivasan

what you have fun doing that's right exactly that's right so the ikigai concept finding what that is so after you build that base of skills right with cs and stats by the way you can understand finance because it's crypto or it'll all become crypto you can understand genomics because the a c's g's and t's on screen you essentially have a theoretical like foundation in any area you walk into and then from that other concepts can be layered on top if that makes any sense right so I mean it's like a general purpose computer it's a general purpose set of of of principles then domains today genomics big robotics big crypto of course big I think an underappreciated area is gonna be relocation permanent international migration and this is why I did teleport a while back digital nomadism is gonna be huge being like there's a 1,000 piece of the tool chain for allowing people to go more mobile you know uber and airbnb uber is go down you know to the coffee shop but the next step is uber around the world right how do I just boom pick up stakes and just move internationally right now as quickly as I can for as low a cost as I can I think that's that's a big area that people haven't really thought as much about as they will and I think post vaccination the post vaccination world a lot more people value their freedom to exit that's why folks are going to miami and so on like when you're cooped up in a room you wanna burst free and so the counter reaction of that is gonna be this great migration in fact I wrote about this in 2013 there's a article I wrote called software is reorganizing the world where essentially I said because the internet is breaking geography because you're closer to people who are 3,000 miles away than your next door neighbors the underlying premises of the city and the nation state are being invalidated that's a geographical proximity no longer leads to cultural proximity and therefore you know the the assumption that people in the shared geography will share the same law and customs is no longer applicable and what it's gonna result in is these cloud communities eventually migrating and materializing into the physical world and forming cloud cities and eventually cloud countries as that's now I think with covid starting to happen crypto is a big component of it because those cloud communities can actually have their own currencies okay remind me why I got it mister ash go ahead

Shaan Puri

Sorry, one second. You said "geographic proximity is no longer linked to cultural proximity." Is that how you said it? Was that the phrase? Yes, that's a powerful one. Could you explain that for someone who's never heard you say that before?

Balaji Srinivasan

Sure, okay. So, if somebody lives in a city in an apartment building, they often don't know their next-door neighbors. They may not even recognize the person who's living 50 feet away from them. Literally, this person is living, eating, and sleeping there, but you walk down this hallway, and it's all closed doors. It's basically as if you lived in a data center, you know, like with virtual machines. You cut up a server into a bunch of virtual machines, and they're all siloed, compartmentalized, and isolated from each other. So, you go and you live in this box. You don't know who's next door, you don't know who's above you, you don't know who's below you, and you don't know who's left or right of you. You don't recognize the people in the hallway. But who do you recognize? You recognize a person from 3,000 miles away who you're laughing with on Snapchat or video chat. You recognize that guy on the other side of the world who you're arguing with. Your social network—your friends and your enemies, or whatever—you know, your friends and your frenemies—they're just scattered around the world. Some of them might be geographically close by, but even that is pointillistic. It's like, okay, this person in this building, this person in this building, this person in this building, and I don't know anybody in between.

Sam Parr

I mean, I buy into that. I've got so many friends who I consider actually dear close friends that they're just internet friends. I call them my internet friends, and I have only met them once or twice.

Shaan Puri

Soon, we'll just drop the whole "internet friends" part and it'll just be like, "Yeah, now at this?" The majority of my friends are internet friends, so that's just called "my friends" now. Right?

Balaji Srinivasan

By the way, "pointillistic"—I know that sounds like maybe it's not a word I made up—it's actually a reference to art. It's like lots of little points, you know, discrete parts here.

Sam Parr

But what the nitpick here is... or I actually agree with you, but I challenge my belief. Because like all three of us, I think you in particular are in your own bubble. But really, we're all in this little bubble of like...

Balaji Srinivasan

the future it's not the filter bubble it's the future bubble because it's the way that

Sam Parr

Well, that's a very optimistic, wonderful way to put it, and I like that term. But, like, I have... I'm from Missouri, okay? My family lives in Missouri. One's a teacher and the husband works at a bar. Their kids go to school, and the exciting things that they do are play softball on Saturdays. Do you ever ask yourself the ideas that I'm coming up with, or that I'm predicting the future? They're really only impacting this small, small, small tip of the iceberg of people. How are they going to impact the random person in Nebraska or Missouri, let alone, you know, someone in Kenya? You know what I mean? Do you ask yourself this when you're thinking about what the world's going to look like?

Balaji Srinivasan

I absolutely do so here I'm gonna put on my pragmatic executive whatever hat right which is you know you have to focus at the beginning right and the way I look at it is the v one goal is to build a at least with 1729 then I'll talk about the b 2 is to build a community of technological progressives who are like I mean sort of like yc's founders but not just tech founders you know people who are media media founders they're influencers they're writers they're activists for technological progress like isabella behmke she's like a pro nuclear activist or folks who are you know for faster approvals of drugs and devices right and I wanna build consensus among that group that technology is good and that we can work together across borders to help people achieve a better future not a pollyanna you know kind of oh everything's gonna be great but certainly what I think of as the bright sun to where the west is today which is black mirror you know and I think that you know that it's sort of like at you know in terms of your efforts how can they scale right so my initial focus is definitely let's call them founders but not just company founders a broader class of founders including media founders protocol founders community founders influencers etcetera and getting you know some agreement among this group among this set of ideas and then recognizing that I personally cannot solve all the problems of the world and figuring out how we can build for lack of a better term positive sum user interfaces for those folks who may not be as interested in the world of ideas and the stuff above right how do we build not just positive sum but aligning user interfaces okay and the user interface I use in the broadest sense you know where like you know the how your house works how your car works how your street works how your community works how can we actually build things where folks are actually aligned you know where the the founder or the ceo gains or loses just as the average citizen does right where there it's sort of like I don't know if you do you see the the guy from chad who who just died on the battlefield no no so basically I think it's like the prime minister of chad died on the battlefield right and there are all these memes you know why because like of course he's a chad he died in conflict with his soldiers right imagine like some western leader doing that they don't have skin in the game right and it was it was it was like a joke and it was sarcastic but it also had like a really penetrating aspect of truth right which is a degree of disalignment of western leaders and you know their their their citizens right because it used to be that a huge you know like a aspect of being a king or being a leader was you were willing to go into battle right even in like world war 1 there was this concept of like you know the the nobility the aristocracy was supposed to actually go into battle right of course battle look we don't wanna have wars right wars are not good but the concept of alignment I think is a very fundamental one and in the communities and in the in the structures that I wanna build in the future I think that alignment has to be quantifiable now we're actually seeing this in crypto because I do think that you know one thing people don't get is that crypto is not just you know the next wall street it's also the next silicon valley because decentralized social networks and so on are built there but even less obviously it's the next yale law and columbia school of journalism and kennedy school of government you know why because yale law gets replaced with smart contracts columbia school of journalism with crypto oracles and decentralized truth and kennedy school of government because the next heads of state are heads of networks okay so let's talk about it

Shaan Puri

what I

Balaji Srinivasan

Mean by that is, you know, there's that saying—it's apocryphal—but like, "Give me control over a nation's monetary policy and I care not who makes its laws." Right? It's apocryphal. I'm not sure exactly who said it, but you've heard it around. So, the people who have founded and run these gigantic crypto networks, that are sometimes in the multiple billions of dollars, are essentially like, you know, the Fed Chair, right? At least of a state, if not the country. They've gotten there by founding something, not by winning this whole popularity process where, as a gerontocrat at 70, they paid all their dues and now they finally can actually put their theories into practice when they're in their 70s. But instead, they are actually founders who are aligned with all of their people, and have all opted in to be part of the same kind of thing. Right? So, the short answer to your question is quantifiable alignment is, I think, the ethical way for those leaders to help, you know, essentially the population that's not as interested in ideas. Let me pause there.

Sam Parr

I think sean had something to say

Shaan Puri

I actually wanted to transition to a topic that I think is a little bit controversial but also exciting. The controversial part is that, you know, I'm going to talk about crypto social networks. We've talked about Bitcloud on here, and we got a lot of flack for discussing it because I said, "Wow."

Sam Parr

I think I think sean and I gave us flack

Shaan Puri

yeah we gave each other flack I was really excited and you were like dude you're pumping this thing I'm like no I'm not trying to pump this thing I'm trying to explain that I'm seeing some very interesting novel things here and and that's exciting to me like I'm a product person you see tons of products you see tons of apps you see tons of announcements and you don't always see anything you know sometimes years go by between seeing something really really interesting and the really interesting thing about big cloud that we talked about was number 1 the growth hack how do you get valuable people onto a new network well they loaded up a bunch of people's accounts with a bunch of money and they gave you know they used economic incentive to bring high status individuals to a new network so that was interesting the second interesting thing was that you could you know sort of this robinhood meets twitter you can buy somebody's coin and in doing so if I identify balaji as an interesting person in 2014 as some people did I get to benefit from the rise so a curator would get rewards alongside a creator so somebody who's in early you can invest in somebody whose popularity and reputation is gonna rise I thought that was interesting the third part and so you know there's some interesting parts but there's also a bunch of controversy and I think that the place I wanna start is I think that these decentralized social networks of which big cloud is 1 are very interesting because they are like they took facebook's most valuable thing right like the facebook database the social graph that facebook would you know defend with its life and they basically put it out there you know as the that is the product here's the social graph with economics built in and now any social network can be built on top of this and I wanted to hear what you see in these crypto social networks because I think you probably when you look at your north star you also don't see like 30 years from now it's you know mark zuckerberg owning the 4 most powerful social platforms and we are all users and consumers and have no economic participation I don't think you would be excited about that version of the future so tell us what version of the future you see with crypto social networks and then try to maybe I guess talk about what you're seeing out there today

Balaji Srinivasan

great so I've been writing about this stuff for a long time and in just disclosure by the way I am an investor in big cloud like a small early investor I wasn't in involved with the project or anything but I I understand why you know there's some agitation around it and but I also think it's actually a good idea overall and I think it's and let me give a few different thoughts okay so first is that a very important concept is that crypto is in a sense the sql to open source because it's not just open source it's open state and open execution okay so let's say it's not just that you have the source code you also have the database and you can track every single opcode when it's executing okay and one of the consequences is you know with twitter or facebook they have the twitter or facebook api and they can shut it off one way right and they have you know meerkat or gosh teespring zynga so many companies that built on top of these apis have had their access throttled or limited or their business model destroyed overnight because there's some change in that one-sided you know relationship right and the the thing about that is that's because if those companies had let the api be completely open twitter's was for a while then somebody could clone the entire twitter functionality and sell ads against it and then twitter would be reduced to essentially an api provider and they couldn't monetize that successfully enough to prevent that from happening right so I was I think you know tweetdeck and soda were essentially cloning the entire interface I don't remember exactly the details but I think that was it so fundamentally the issue was that the the business model for creating an api and a protocol that was totally open that had state was not feasible then okay what I mean by state by the way just for your audience which is maybe less technical that's like database state that's stored state that is information that's not transient okay like you know I I do a phone call with you that's transient I mean maybe it's stored on some nsa server somewhere but we don't have a copy of it typically right whereas facebook has state there's a huge amount of data that they've got your photo and your messages and all that type of stuff right the crucial thing that crypto enables the reason it's not just disrupting wall street it's disrupting silicon valley is that as I said it's open state and open execution so we're moving into the 3rd model of internet technologies in a web 3

Sam Parr

How much of your day is spent doing some of this crazy thinking and building? Are you grinding really hard on all this stuff, or what do you spend your day doing?

Balaji Srinivasan

that's a good question I mean day varies

Sam Parr

Because this is all heavy, heavy stuff. I mean, everything we've discussed is pretty heavy, no? And you're just rallying this off as if you've already thought through it. You're like, "Well, why am I wrong?" and then you've thought through it again. Anyway, what's your... how much time or energy are you devoting to this throughout your day? Or do you just go for walks and shoot the shit? What do you do?

Balaji Srinivasan

You know what I have to spend energy on? I have to spend energy on small things, like remembering calendar appointments and stuff like that. That is actually very mentally taxing for me. It's sort of like, you know how a sports car is not meant to drive on normal highways? You can do it, but you just have to watch out or whatever. What I find hard is stuff that other people find easy at times, like just remembering that a meeting is in 15 minutes or something like that. I get engrossed in what I'm doing, you know? So, what I've done is build technological workarounds to help with that. I guess the answer to your question is this is just how I recreate or whatever. I just can't stop it. I walk around and think, "Oh, that'd be cool, this would be cool," and just tap it into my tweets or my notes. I'm not trying to humble brag or something; you're asking what my process is. I think part of it is I do...

Sam Parr

yeah just say the truth I don't care if you brag I wanna brag yeah

Balaji Srinivasan

Yeah, yeah, I'm just saying, like, in terms of how to replicate... I guess one thing I do is something, you know, maybe similar. Like, Feynman had this concept that I think about a lot, which is I have a bunch of active problems at any one time. For example, how to build decentralized social networks, how to create alternatives to media corporations, and how to establish decentralized truth. You know, these are sort of like active...

Sam Parr

how to not miss my dentist appointment

Balaji Srinivasan

Exactly, that's right. Very right. So, those are like active problems, and then against them, I match solutions. You know, I've done this before. For example, you read something and you're like, "Okay, this maps to that." You know, this maps to that because this was a problem that you had two years ago. Now you see some concept, and it lights up that this hammer could fit this nail. So, that's kind of what I try to do.

Shaan Puri

I don't know if

Balaji Srinivasan

that makes any sense

Shaan Puri

You also kind of helped popularize the idea of the "idea maze" concept, right? Was that you who kind of coined the "idea maze" concept?

Balaji Srinivasan

I coined the term, and it was funny because you never know what's going to resonate with people. You know, Dixon actually might go ahead.

Shaan Puri

I was going to say that not only did that resonate with me, but it also made me feel much less stupid as a founder while I was wandering around. So, okay, the idea maze... I'll paraphrase kind of just my understanding of it. There’s this movie, you know, the Steven Spielberg version of startups. The founder wakes up, has a eureka moment, and thinks, "I know! This is the future. I'm a visionary." They go and build the thing. It’s a straight line, and yes, there’s adversity along the way. But the reality, or at least my reality, was more like this: I'm interested in solving this problem for people, or I'm interested in this kind of new space, and it’s all kind of foggy. I always think I'm in the eureka moment, and I'm like, "Yes!" Then I sprint, and I hit a dead end. I'm like, "Oh, fuck! This is not how things actually work." This product, this distribution strategy is not quite right. Okay, let me backtrack three steps and then let me go down this other fork in the road that we didn’t take last time. I get a bit further, and I hit another dead end. It’s like wandering around a maze. Eventually, you sort of come out the other side. That is actually quite a normal process for thinking through it as an entrepreneur trying to bring something to life and make something successful. That was my interpretation, and it made me feel a lot better about hitting those dead ends because it didn’t mean I was stupid or not cut from the same cloth. This is the process, or at least one version of the process, that is a common set of problems. So, you know, carry on. Go back a few steps and then figure out a new way. Did I butcher it, or is that... no?

Balaji Srinivasan

That's really quite good. In fact, you know, now, like 8 years later or what have you, I'll give a few other thoughts. One is it's actually similar to mining for gold. You know, like how... I don't know if you've seen that quote that circulated about San Francisco during the Gold Rush era and how similar it was to the startup era. Right? Like, yeah, you know, everybody had crazy plans and there was unlimited amounts of financing for any kind of gold mining operation. That culture, interestingly, has seemingly a through line for a hundred something years. It really sounded like it was describing startup culture where they're mining for gold and they have theories about this river or this mountain or whatever as the best way to get it. And, you know, of course, tech culture is not just about the gold aspects; it's the technology aspect. But that aspect is similar. So the idea maze is like, "Okay, which thing is gonna lead to the pot of gold?" It's sort of like that, you know? It's sort of like a physical gold mine. So that's one interesting bit. The second bit is that the maze is time-varying. So what's a bad idea today could be a good idea in the future, or vice versa. For example, Pandora, you know, pre-iPhone was only an okay idea, and post-iPhone, it finally became like a $1,000,000,000 company. I'm not sure how it's doing now, but the iPhone was a lift that it needed for ubiquitous audio everywhere. Another is that often very small seeming permutations can radically change the outcomes of companies. Like, I remember... you guys remember this? In the early days of Twitter and Facebook, I remember people saying, "Why would anybody use Twitter? It's just the status update function of Facebook."

Sam Parr

yeah yeah yeah

Balaji Srinivasan

Okay, that was a common knock on it. But the fact that Twitter was default public, number one, and asymmetric, number two, meant that it just became a completely different experience than the sort of private set of interactions that Facebook has. Fundamentally, the fact that for the most part, anybody can link to any other tweet means it's a connected graph. It's just one graph, right? Whereas Facebook is something where I probably can't view that Facebook post, so I don't share it with people. It's a fundamentally private experience, so it's actually, in a sense, less viral. Now, of course, I think Facebook is a more successful company, and I think it gets way more criticism than Twitter. Even though Facebook is probably worse for the world in some ways, it's better for the world in other ways. It's just this gigantic amplifier, both positive and negative. All the good stuff comes out of Twitter, and all the bad stuff... Actually, Paul Graham had a good comment on this where it's like the terms are so large that you can't even initially see whether it's positive or negative overall. Where was I? I lost my train of thought. Give me a moment.

Shaan Puri

talking about the idea maze in your yeah

Balaji Srinivasan

the idea maze that's right okay so come back to the bit so now one thing I will say that I've grown to appreciate more is the the specific idea maze you decide to run really does matter and can be like a 1,000 x multiplier on the result right so you know look genomics was if I could show you all the good arguments as to why genomics would be a huge deal in the 2000s or at 20 tens and I could show you the curve of declining sequencing costs and so on but basically that generation of companies was I shouldn't say capped but it was somewhere between like a few 100 mil to a bill or something there wasn't a $100,000,000,000 company that to my knowledge came out of that and it was sort of like that was like the zipcar era and then there's gonna be an uber era coming up right and it's really hard to know whether you're in the zipcar or the uber era of something you know right and often there's iterations on a theme and it just breaks through like and sometimes things seem tired and old like substack 2 or 3 years ago may have seemed like alright whatever just another blog who cares but adding those two features of a monetizability and b newsletter so that you've got you know because because a blog by default I mean it's not I think maybe you can with blogspot do emailing and so on but it wasn't like set up for that it wasn't smack in the face for both user and writer those two aspects really changed things and you know have have made subsec a breakout where it was not obvious 2 years ago or 3 years ago right ben ben thompson's stratecory which subsec was inspired by had been kind of just rattling off in his own thing for a long time doing his own thing when nobody cared and and then it actually worked right part of this is also the decline of the existing media environment that's what I mean by like you know the iphone came and pandora went from a bad idea to a great idea the decline of the existing east coast media corporations has led to this exodus where this thing that was an okay idea became an amazing idea because there's only a need for it right that all these nails came up right I think insofar as I'd give advice for people who are thinking about picking the idea you you really wanna ask yourself if this is a chance of being an apoccal shift like search or social or you know mobile or or crypto now right or or something like that and it doesn't have to be by the way and that apocalypse shift by the way might be 5 or 10 years out from when you even start the thing you know some companies just go like vertical relatively late in life but you ideally wanna be part of you want to have a thesis on why some huge trend will occur let me give you another example of this by the way teleport which we set up in 2014

Sam Parr

I was just going to ask you all about Teleport. I'm trying to find the old website. Was it just .com or .org? That's why... So, the way that I understand it is Teleport was going to crawl and aggregate tons and tons of data to tell you the best place to live.

Balaji Srinivasan

Yeah, because here's a thought: basically, an extremely valuable search engine—maybe the most valuable search engine—is the one that tells you the economically best place to live.

Sam Parr

because there's all well it wasn't just economically was it wasn't it just like

Balaji Srinivasan

It wasn't just economically, but the concept was that every other quality of life metric could, to a first approximation, have a dollar value placed on it. For example, how much more is it worth? When I say implicitly, it would be like, "Okay, this place is $3,000 a month in expenses, but this place is $3,100. However, it is warmer." So, out of 1,000,000 choices like that, you can sort of back up the function of how much more people value that extra degree of warmth. Do you see what I'm saying? Right? Yep.

Sam Parr

yeah it still gets a fair bit of traffic it looks like still people are still going to

Balaji Srinivasan

the site using

Sam Parr

it did you yeah you sold it to what's this atopia atopia yeah

Balaji Srinivasan

It was like a relocation company, right? Teleport, I think, is... I think we're completely right about everything that people wanted. I mean, it was fine. It was a fine result. Like, Sten and, you know, Silver did fine. You know, and I'm...

Sam Parr

why did you say stan and why did you say they did fine

Balaji Srinivasan

I say they did fine because they they basically just did fine in their careers as a function of that like

Sam Parr

the oh got it okay

Balaji Srinivasan

Like, those were the two co-founders with me: Stan and Silver, early Skype employees. They've done great, and it was a fine outcome. But it was also a little too early, you know? Basically, it's something where Teleport and Nomad List is the other one, by the way, which is also quite good. But he's...

Sam Parr

got which I love I think that guy's awesome

Shaan Puri

man yeah

Balaji Srinivasan

Yeah, he's actually Levels IO on Twitter, and he's good. The only thing that I think he's probably a little too aggressive on is that he's anti-investor. There are bad investors, but there are also good investors. So that's something... whatever. It might just be a Twitter thing where if I got the second or third bit of information, he might agree that there are some value-add people or whatever. But the thing is that Nomad List and Teleport essentially worked out the theory of this almost a decade ago. You know, that digital nomadism would be valuable and that people would want to relocate. The reason I say it's economic is that you can put a number on it, right? That's something you can plug into an algorithm. Do you know what constrained optimization is?

Sam Parr

yes

Balaji Srinivasan

okay alright so basically

Sam Parr

I mean is that basically where you put you very purposely constrain something

Shaan Puri

oh

Sam Parr

to be happy

Balaji Srinivasan

yeah yeah so in in in math you know there's something constraint optimization is like I want to optimize my you know like the amount of time that I spend delivering packages subject to the following constraints a you know the car can only hold so many pounds it can only take so many packages at a time b you know it it has to have this many stops you know between refueling and so on and so forth you have these constraints on the optimization okay and what you try to do is you take all those constraints you try to express the entire thing often in terms of minimizing or maximizing a single number that's called the objective okay and so no matter how complicated all the things you are that are putting in the first order second order third order things you're just minimizing one objective so you think about the best place in the world to live you actually wanna think okay how do I like imagine like green hills and red valleys like green is good and red is bad like a heat map you know of good places and bad places to live right and so it's a scaler and so you can basically to first sort of think of that as the net economic benefit or loss I would have in relocating from here to here okay and so you take all of these layers on the world so first is cost of living 2nd is how much you'd make in that geography right 3rd is like you know is there bars or nightlife if you're interested in that 4th if you're older you know do do they have schools do they have airports is there is it green what is the you know what's the rule set like you know like is x band or is y legal you know and so and so forth all of those you layer on top of each other and you have actually a very complicated mathematical optimization problem right which actually varies for somebody at different times of their life you know the best place to live when you're you know a 20 something college student you want the bars in nightlife but if you've got children you're probably thinking about schools and just a different set of considerations so the greens and reds change you know we could quantify all of that right so here is that it'd be the search engine that would give you the maximum value right it would basically be something where by changing your x y location you might gain you know like $50,000 hedonically of which maybe 20 or $30,000 is economic and the other remainder is in quality of life let me pause here

Sam Parr

could this company could could this had worked I mean I

Balaji Srinivasan

I... it was okay. It wasn't a failure, but it was something like Zipcar to Uber. If it had been an operation, or if it had been like the main thing in 2019 and 2020, it would have been during the pandemic, right? Or, you know, arguably it's still early. I think it's still early because post-vaccine is when travel truly opens up, you know? When everybody's fully vaccinated, it'll be like mobile phone installs. It'll take a while, and hopefully there won't be, you know, variants that present immune escape that can actually get out of the vaccine. We'll see what happens with the vaccines. But modulo that, I think you will have a ton more. You already are seeing folks who went to Miami and so on. The map is becoming mobile even as states are doing lockdowns. You have the other thing, which is the centralized lockdowns and the decentralized, you know, global migrants. So I think tools for international relocation are still early. If anybody wants to build like Teleport 2.0 or Nomad List 2.0, DM me with a demo, and I'll definitely take a look because I think we're still very early in that space.

Sam Parr

When, by the way, right now I have no idea where you are. But if you were making your own personal teleport list, which cities most interest you for living in long term?

Balaji Srinivasan

have you heard the term entrepot maybe I mispronounced that e n t r e p o t so that's basically like a like a commercial center you know typically a port or or or you know something like that historically but I think those are waxing in importance okay so you know dubai right monaco singapore actually miami which is pretty interesting americans think of miami as a party destination you know with sun and beaches and and so on and so forth but antonio garcia martinez actually he was he he turned me on to this I had not actually been aware of this till his essay I think in 2019 he's from miami what he said is really interesting which is miami is like the singapore of latin america which is to say that if you've got like a you know mexican national and a guy from paraguay and they wanna do a deal they'll do it in miami because everybody knows it they all respect it it's like a decentralized you know demilitarized zone it's got good banking rule of law because based in the us at least relatively to south america latin america more stable currency relative to there we'll see what happens in the future and so it's a it's a spot where people from the latin and south american you know diasporas they all have like communities in miami right so it's actually this international business capital that many americans are just not aware of they just think of it as a beach place right so it's actually a great spot for all this tech vc the fusion there is gonna be fascinating I think we're gonna see way more stuff done not just south of the border but in south america there's a lot of talent down there of course but now you just kinda have eyes on it looking at a new light and you know there's actually another aspect a non obvious aspect in which covid is going to increase investment you know what that is no the world has gone remote and what that means is that longitude rather than latitude is now the organizing principle basically what you care about is not where somebody is if they're not in the office then the next question is what time zone are they in right yeah right and so you know this is something there's a website I think it's called time dot is I posted on this tweeted on this right but what that means is longitudinal arbitrage

Shaan Puri

Okay, that's interesting. The Airbnb founders, or whatever, they did this where they went and worked in Argentina because it was sort of a low cost of living at the time. Also, time zone-wise, you're still lined up with the United States. So it's like Armstrong.

Balaji Srinivasan

did that

Shaan Puri

but but yeah I don't know if it was coin was it coinbase what is that what it was

Balaji Srinivasan

Yeah, Armstrong did that. I'm not sure if the Airbnb founders did too, but yeah, Brian Armstrong of Coinbase was in Argentina at a time before Coinbase.

Shaan Puri

are you oh interesting are you are you aware of what it's like to talk to you

Balaji Srinivasan

no

Shaan Puri

I

Shaan Puri

It is like, you know, some kind of amusement park ride. But it's the one that's like, you know, the bungee. Only two people can go on it at any one time. They basically swing and they're super high up, then they hit the ground and spring forward to the other side. They just keep going back and forth. Yeah, that's what it feels like. It's exhilarating with really interesting topics, but you get so high up. As the sparring partner, you're like, "I'm out of my depth." Then you come back to root and say something that speaks to your life experience, and then it goes back up.

Sam Parr

to like

Shaan Puri

Well, we're too far in the future again. I can't see anymore. And then we're back to Earth, and so I meant that.

Sam Parr

as a I mean

Shaan Puri

That’s a compliment, but I was also just curious. You know, when your brain is completely normal too, you live there all the time. For me and Sam, I can't speak for Sam, but I know for me, I love talking to you. I love listening to you. Any conversation we've had, whether through DMs, phone calls, or whatever, has always been great. But you're the only person I talk to frequently that makes me feel out of my depth. I'm like, you know what? I kinda wish you had a better sparring partner in here who knew what the hell you were talking about and could actually push this even further. Whereas what I'm trying to do is almost bring it back down to like...

Sam Parr

and who do you feel that way yeah

Shaan Puri

that's kind that's what I'm looking to which is

Balaji Srinivasan

I I mean certainly not my intention basically go ahead sorry sam

Sam Parr

who who do you feel that way with

Balaji Srinivasan

Oh, I mean like Feynman, Ramanujan... you know, there are geniuses that have walked the earth, right? Or have walked.

Shaan Puri

the earth

Sam Parr

I talked to a guy who's good friends with, what's his name, the VC, bald Andreessen, Marc Andreessen. And they're like, when I talk to him, I just can't keep up. Do you feel that as well?

Shaan Puri

I think what you're saying is sort of like, "Is that a good sparring partner for you?" Who do you have good thought spars with? Those might be other people that people should go follow or listen to. Because if they like what they're getting from you, maybe that's another person.

Balaji Srinivasan

I think I think you know mark and I have kept up a high bandwidth conversation for almost a decade now mark and ben for sure neville ravi khan you know who's a very good friend of mine and armstrong fred ehrsam these are really smart guys who like basically folks who I get a bounce from every single day you know and I think you know I just play tennis with them but it's also something where they're not exactly playing the same sport you know like racquetball versus tennis so as I learned something you know I don't know I mean like I I I I try to learn I mean actually sergey brin had a good one liner on this a long long time ago which was you know every interview he did he wanted that person to teach them something right which did a few things first is it meant even if the interview even if he didn't hire them he gained something out of it right but second is it's also sort of got their their teaching abilities out on on you know and and it's actually useful because you often have to do something within the company and then teach other people what you did right coming back up you know think of you know when I do these podcasts I'm they're so they're totally off the cuff right so it's totally you know just freestyle and so in the edited version I think I would try to map the points such that it's bullet bullet bullet bullet specific specific specific specific general specific specific general like more disciplined in terms of how I accumulate to a thesis right and I think you know I think maybe 2 a few good examples of that if you look at the balajs.com posts on india you know like why india should buy bitcoin how india legalizes crypto add crypto to india stack I think that's sort of more of the sort of workmanlike you know set up this this and this premise conclusion you know over and over again I think it's reasonably well written okay at least it's it's comprehensible but that's like the install software in the most install intellectual software in the most efficacious way but do do you know what I mean by that install intellectual software

Shaan Puri

yeah exactly I I I that makes sense to me when you say it yes

Sam Parr

yeah you get it right

Balaji Srinivasan

like what go ahead sam you're gonna say

Sam Parr

So, you've been blogging on there for a while. I've been reading it. You did "Teleport" like in 2014, right? Or ish? That was about making predictions. You've been all about predictions. I mean, it seems like that's been part of your personality for a very long time. What predictions did you make 10 years ago about the year 2020 that were wildly wrong? Ones that you would have bet a lot of money on, thinking they were going to be correct? Like, you were really bought in on them, and they've proven to be wrong.

Balaji Srinivasan

It's a good question. I mean, there are lots of things—so many things have gone wrong. One thing that's kind of interesting is that I only really became a public figure in 2013. You know, "public figure"—I don't know if I would call myself that now—but I only actually wrote publicly in 2013. Before that, I was sort of cloistered in academia or in genomics. It's like an enterprise founder who just doesn't ever take the mic, so to speak. I had plenty that I was thinking and writing about, but I wasn't speaking publicly on it. I think one big thing I got wrong was that I was just never the personality for cryptocurrency. I'm not really the personality for early social networks, which were all about exhibitionism. Remember that game, Zombies? You know, people wasting time online—all that type of stuff is totally not me. I actually know there are people who dismiss crypto as, "Oh, it costs too much," or "It's just a scam." They just didn't get it for a long time. Then there was eventually a light bulb moment with social networks. I sort of got the appeal of it being like Facebook online. Do you remember the concept of Facebook? I don't know if you guys are old enough. Actually, Sam, you're relatively younger, but something's almost impossible to Google. It's so funny—Google "the Stanford Facebook." You know, that's like three proper nouns. But back in the late nineties and early 2000s, a Facebook was a noun. It was something that was given out to freshmen when you came in. No...

Sam Parr

I yeah

Balaji Srinivasan

you're aware of that

Sam Parr

Well, yeah. I mean, I had my brother's... you're probably 10 years older than me. Yeah, I have brothers that old.

Balaji Srinivasan

I know what you're talking about. Okay, well, that's something which was a physical Facebook, and I understood the appeal of putting that online. I... I only...

Shaan Puri

actually understood like the power of social networks when there was a friend

Balaji Srinivasan

Of mine who was live tweeting a genomics conference. I was like, "Oh, that saved me a flight!" Nobody would have written up the material as well as this scientist would have because it would have just messed up the terminology or made it confusing. They certainly wouldn't have gone into as much depth. I was just able to slurp in and download like 5 hours of presentations without a plane flight, you know, at my laptop in 10 minutes and get the important bits. I was like, "That I really like a lot." Okay, I actually understand the value of that. I did not understand the value of tweeting your breakfast. That seemed to me the stupidest, most exhibitionist, like waste of time thing in the world.

Sam Parr

so what did you predict that it just like understood it might say spa and

Balaji Srinivasan

you know it's the underestimated I underestimated when social networks were basically voyeurism and exhibitionism and time wasting and zombies and so on I I did not really think through their social impact right it was only after and the thing is that the reason that genomics thing really peaked my interest is because I realized that that was something that would only be feasible when the thing is achieved such massive scale that even this very niche niche niche niche niche application was feasible you know it's like like you have gigantic scale thing Google and then you can Google like I don't know belgian cooking recipes or or something like that or french cooking recipes maybe that's not that niche but you know what I'm saying right so social networks I only after I I understood that that they weren't just time wasters or distractions that you can actually learn things with them so I I I very much underestimated social and I think that I probably overestimated genomics you know what I what I got wrong with that was I saw I think all the technology and the all of that you know there's a curve by the way that your your audience can Google which is like cost of sequencing a human genome like nhgri national human genome research institute and that like was just dropping through a cliff in in the late 2000 and it was clear that this looked like a moore's law like thing and moore's law catalyzed quite a lot of stuff so getting to that what I didn't understand as an academic and I only understood as an entrepreneur is what the fda really was and I didn't understand that like basically the fda is like the primary blocker of like medical innovation not just in the us but in the world people are now by the way catching up to this you know because of the disaster of the fda holding back authorization on covid testing them doing things like holding back the johnson and johnson vaccine because like 1 out of a 1000000 people literally are getting blood clots you know this type of stuff people are understanding that their degree of risk aversion is not actually optimal there's both type 1 and type 2 errors both false positives and false negatives and if you are rejecting good drugs or good vaccines or good tests you are potentially doing as much or even more damage than bad one than than approving bad ones and people are only focused on the pr downside of approving a bad thing and not on the unseen of not approving a good thing right

Sam Parr

You basically wanted to be the Ron Swanson of the FDA. You know, you wanted to get elected to tear down... well, no.

Balaji Srinivasan

No, actually, that's why I didn't take the position. In fact, it was a surprise to me because the paradox of that is obvious, right? Like, Google didn't reform Microsoft by becoming, you know, Bill Gates. Google reformed it by building a parallel system. Then, once it had made $1,000,000,000 and after 10 years of Microsoft throwing everything in the book, they replaced their leader, Ballmer, with Satya, and then they reformed and embraced open source. Right, so I don't believe that one can abolish the FDA any more than one can abolish the Fed. But I do think you can exit the FDA like we exited the Fed. You exit the Fed with Bitcoin. It required, like, basically the development of both technical and cultural and economic breakthroughs to build a parallel financial system, which started off as just a crazy person's vision of the future. Some people got the potential very early on. Like, California was speculating there could be like $1 to $10,000,000 per coin very, very, very early on. I think in one of the first threads, like, if Bitcoin took over. I wonder if he was Satoshi's friend or a colleague or something like that, that was just sort of lending his name to this anonymous project to give people, you know, a second look at it. Right? Hey, actually, this pseudonymous guy is actually maybe better than he seems. It's possible, right?

Balaji Srinivasan

Isn't that parallel system built outside the existing system completely ethical? Everyone who is engaged in it has opted into it. It's not forced on anybody. All the bugs, every hack, every loss of funds, every drop or surge in price, every technical difficulty, and every UX difficulty— all of that was opted into. It's a completely ethical opt-in experiment. This is, by the way, the opposite of monetary policies that are foisted on you from above. You had no ability to take the non-inflated USD after 2008. However, if you disagree enough with the cryptocurrency's monetary policy, you can fork the entire economy and go your own way. That minority report does exist. It may not be successful, but that's in the execution. One thing I think about a great deal is what is to our existing institutions what crypto was to finance. You can already see crypto law with smart contracts for big chunks of law. You can start to see crypto media in the sense of decentralized cryptographic truth. The crypto oracle things I was talking about, where the foundational assertions are not human beings thumping their chest and saying "science" (with a capital S) or with quotations, but rather cryptographic facts. By the way, can I dive into that for a second on "science" versus science? This is a very important issue.

Shaan Puri

let's do it

Balaji Srinivasan

so you've seen all these people who are like masks don't work because of science masks work because of science right and essentially what they actually are saying is some authority figure has told me that this is true and therefore it is true it's not actually science is not about peer review it's about independent replication that's a fundamental difference right peer review is at best a proxy for independent replication there's a premise that that guy who reviewed it as a peer actually went and grabbed the bubbling beakers and did the experiment themselves that's less and less the case today most of the time it is or maybe it's less the case forever most of the time it's like a few emailed comments and like make a new figure okay right so the the actual you know like independent replication is download the code and run it on my machine okay now there's only one thing which has now first let me back over a second science is actually the ostensible basis of our civilization you know it's no longer religion right you don't cite god or the ten commandments as why have this law it is science says that there's a certain amount of emissions so therefore this policy is there right science says there's a certain amount of viral particles so therefore we wear masks versus not and so on and so forth right so upstream of everything is a scientific premise which is then coming in often from peer review as opposed to independent replication which is subject to institutional capture which is what's happened and you start to get scientists saying more and more ludicrous things that are you know like all the public health people just completely own themselves during the pandemic in many different respects like they admitted that saying that masks don't work was a noble lie right which which wasn't it wasn't even that noble it was just stupid it was obvious at the time you know and you can't do that too many times and there's many more examples of that but that's a particularly egregious one you can't do that too many times before people just don't trust it right so what's the alternative what's the because you know the answer isn't in my view to go to astrology or wou or or stuff like that what do we have if not science there's only one thing that's more prestigious than science what is that

Sam Parr

more prestigious than science

Balaji Srinivasan

it's not usually thought of as being an opposition

Sam Parr

what is it math okay

Balaji Srinivasan

what do I mean by that when I say math greater than science okay it's like kind of a one liner it's like a funny headline or whatever but let me expand what I mean by that every scientific paper is based on the collection of data and the generation of like figures and tables and so on right there's a concept called the open access movement which is about putting research online and taking it out from behind these publisher paywalls there's also a concept called reproducible research which says that that scientific paper should be fully reproducible from the underlying data and code like you should be able to hit enter and just like you can template a web page with parameters from a database you can template a scientific paper with calculated parameters from that dataset okay there's there's sites like distill.pub or if you look at what openai does like a lot of their papers are basically like interactive websites which operate in this fashion where the underlying dataset is like templating the page okay what's the? The. Is that it is when I talk about science of being independent replication yes it is impractical for everybody around the world to have their own inclined planes and cloud chambers to try and replicate all these experiments we don't have those but what does everybody around the world have computers yes that's right they have computers they have phones they can't necessarily do science at home but they can do math on the computer so the more of that independent replication process that you can turn into math the more that people who do not trust a central authority can check the the claims okay now we've already seen a huge victory of this right which is you know scientific economics has been defeated by mathematical economics they say all these nobel laureates winners of the nobel prize in economic sciences all went and denounced bitcoin in different ways it can't work it won't work it shouldn't work it should be banned and mathematical economics defeated like these quote scientists and I put them as quote unquote scientists because they're not you know one of the big things by the way is it's like Scott alexander calls it the skin suit you know like science is like newton and maxwell and the crucial thing is like maxwell's equations have trillions of independent replications every single time you pick up a cell phone you're doing an independent replication of you know the equations for the e and the b field for the electromagnetic field right and and a thousand other things here you you there's there's equations for quantum mechanics that you're effectively replicating independently confirming because the engineering wouldn't work if the science doesn't right so those things have trillions of independent replications and it's a total category error to compare them to a study that came out last week that has basically 0 replications right calling them both science means you're taking things the only similarity is like they're coming out of universities but the axis on which to compare is the number of independent replications not the number of citations number of independent replications and what's awesome about this is this is actually where crypto is if you think about what does it mean to have a transaction confirmed on chain I don't know if you've ever seen blockchain.com have you ever sent any cryptocurrency and and refreshed blockchain sean maybe I've sent it a whole

Shaan Puri

I’ve tracked and traced the transaction a bunch of times, but I never really looked at the log of the transaction before. It's sort of like a log. I never looked at it.

Balaji Srinivasan

Look at the log. For example, yesterday when I said I was donating money for Indian COVID relief, I was able to post the link on-chain. This allowed people to see the funds flowing and confirm that I donated exactly as much as I said to the address I mentioned, at the time I said I would do it. The critical thing there is that there's a metric called the number of independent confirmations. This indicates how many different miners have confirmed that A did B at time Z. Independent confirmations are very similar to independent replications. That's cool! They're actually doing calculations; all of them are performing mathematical calculations to confirm that this fact, this assertion, actually happened. That you had the digital signature that owned the cryptocurrency, and so on. That seems like a very limited scope, but as I said, we can expand it to property and to lots of other things, including crypto oracles. The idea is that if you take the concepts of open access, reproducible research, and independent replication, and relate them to the multiple confirmations of on-chain data, you can envision a scenario where all these people have computers. If the code and the dataset for every paper were actually on-chain, not only could I independently replicate at least their post-upload conclusions, but they may have still falsified the data. That's still possible. However, post-upload, every calculation they're making I can check. Moreover, if all of that is on-chain, it's an open state database, going back to our previous discussion.

Balaji Srinivasan

Right, so every paper can be compared against every other paper. We can have common formats rather than every paper using a different format. We can import a library from a previous paper just like you can import a library from GitHub because, again, it's all open state. Now, you actually start to make science far more checkable and cumulative because it is only the uploading process that is now in doubt. Everything that's on chain, at least given this data, I can check their calculations, I can check their figures, and I can check their tables. I can also check their citations because I can go back a few hops. They're importing this paper, importing that paper, and I can actually see that their premises—I can check their premises as well. I can map the trail of citations all the way back, which is actually quite difficult to do today. You know, only Google can build something like Google Scholar because they have access to all these journals. It's all behind paywalls. Some of it has been broken out there with PubMed Central and so on, but a lot of it is still behind paywalls or it's in a thousand different formats. This is similar to how banking, before crypto, was in a thousand different formats. It's like, you know, this wire transfer and this address and so on. Crypto unifies it or, like, unifies it in a uniform address format that's universal and global.

Balaji Srinivasan

Being this is actually a way that you can decentralize science by realizing that math is more powerful than simple assertion. By using math and all the computers that we have, we can achieve independent replications of every post-upload plan. Alright, I know I just threw a ton at you there.

Sam Parr

you threw a ton

Balaji Srinivasan

Yeah, but that's like a recipe for what crypto science or decentralized science might look like.

Sam Parr

and just like a quick question you you were a partner at a 16z is that what

Balaji Srinivasan

You were a general partner for a while and then a board partner with us part-time, as opposed to operating a company.

Shaan Puri

you

Sam Parr

You're just a weirdo, and I love it. You're so interesting; you're just so odd. Like, who else is sitting here talking about math and science? We did crypto, we did starting traditional tech companies... we did it all.

Balaji Srinivasan

where to live

Shaan Puri

the

Sam Parr

battle of the bulls

Shaan Puri

I was thinking about where to live yeah

Sam Parr

yeah like you you you you're eclectic

Balaji Srinivasan

Well, we can go deep on a specific topic if you want. Actually, I'd love for you to teach me something about newsletters because you built a large one. So maybe, you know, I can ask you: what would you like? Given that I've got a newsletter that pays, maybe you can teach me something about that and I can learn.

Sam Parr

I could teach you. Yeah, I mean, I could teach you everything about newsletters. I don't know if I could do it today; it's 1 AM, right? Sure, sure. But, bro, I could. I mean, I can't imagine there's that many people in the whole world that know more about newsletters than I do. You know, like what you are to crypto, I am to newsletters. It's unfortunate that crypto is far more lucrative, but...

Balaji Srinivasan

You're okay. You're quite well. The thing is, as you know, one of the funny things about this whole space, or just this tech thing, is that if you stay in the game long enough and take enough swings, some that you just don't expect will connect much harder. I mean, there are investments that I've made which I spent 5 minutes on that have returned more than 5 months of work. Of course, you're still taking capital risk; it's not like free money or anything like that, right? But no, I mean, you're a very successful entrepreneur and you're in the game. So just put some of that newsletter money into crypto or other things. I'm happy for media founders.

Sam Parr

Yeah, I did. I actually... there's like a famous story that I retell over and over again. But the short of it is, I was friendly with Ross Albright. Oh, and when he was arrested, I didn't know that that's who he was. I was sitting next to my coworker and I go, "Billy, my guy Ross just got arrested. You heard of this thing called Silk Road?" And Billy, his last name is Draper.

Shaan Puri

oh

Sam Parr

And he was like, "Yeah, my dad said that Bitcoin is like gonna be the coolest thing ever." I said, "Sounds good to me, I'll go and buy it." So I bought it. I don't know what it is, but your dad is smart. I'll do what he says. Good. So that's like my story.

Balaji Srinivasan

About the whole... I mean, poor Ross. I didn't actually know his name was Albright; I thought it was Albricht.

Sam Parr

albricht

Balaji Srinivasan

actually I I don't know how it's pronounced but yeah poor ross definitely

Sam Parr

Yeah, we weren't like crazy close friends. We've hung out a couple of times, and I lived in Glen Park where he lived. I was in front of the library the day he got arrested.

Balaji Srinivasan

On that topic, it is surprising to me, given all the malfeasance that came out afterwards, that there hasn't been a retrial. You know, literally, agents falsifying information and so on. And that's just what's come out to the public. Who the heck knows if... you know, it was all like... I haven't gotten into details on this, but I do understand that the supposed hits that he ordered were all faked. It was just all entrapment or something like that. Mhmm.

Sam Parr

Well, they were faked. Whether that was entrapment or he meant to murder someone, that's up for debate. Yeah.

Balaji Srinivasan

I I I as I said I haven't gotten into the guts of it I like

Shaan Puri

That you... I like that you try to, like, everybody knows the right thing to do. Then most of us don't always do the right thing, whether it's food or consuming information. It's like, "Ah, maybe this is bullshit, but it's entertaining, so I'm gonna do it anyway. I'm gonna read it, watch it anyway." And it's sort of like, you know, Warren Buffett. He's brilliant in one thing, and then he drinks like, whatever, 6 Cokes a day and eats McDonald's every day. You know, eats McDonald's for breakfast every day.

Balaji Srinivasan

and he's living till 90 so his constitution manages to keep up with it somehow or whatever yeah

Shaan Puri

Yeah, I think he's pretty stressed. For you, I think it works for him. Do you have something like that where you're like, "Yeah, I'm super smart, but this is the dumb thing I do, and I know it's dumb, but I do it anyway?"

Sam Parr

watches the challenge on mtv

Shaan Puri

Yeah, Sam and I both watch **shitty reality TV**. We know there are better things to do, but we do this anyway.

Sam Parr

big kardashian fan

Balaji Srinivasan

I'm a big Kardashian fan. I know you say you're basically asking about what creature comfort type stuff I mean I used to...

Sam Parr

know like you know like things you know us normal humans do

Balaji Srinivasan

No, I mean, I like... I'm on Twitter or whatever, you know? And that's like certainly a huge waste of my time. It's both good and bad. It's one of those things where, you know, every time you get out, they pull you back in. You know, like "The Godfather," right? Yeah, I...

Sam Parr

I once watched a movie

Balaji Srinivasan

yeah no I've watched tons of movies tons and tons of movies basically like less so recently though it's interesting I you know actually one of the things I found you know just on the like the biology like preferences becoming the future kind of thing right let me give you some this is not the answer to your question but let me riff on this and then come back to your question okay there's for example in 2005 when Google maps was out but before the iphone came out when I wanted directions to something what I'd do is I would use Google maps on my laptop I would screenshot it I would charge up the laptop I would also print out the screenshots in the event that that there was a power outage then I'd keep the laptop and the screenshots on the passenger side of the car as I drove okay and that's like that's what why I knew the iphone with maps would be a success because I had this crude jury rigged version of it in that interim. When Google maps existed but the iphone didn't okay it's like a small example right certain things that I've been noticing actually as I just talked to you I was like you know I really haven't watched that many movies recently and why is that it's like well so many of them are woke that I kind of just roll my eyes and I know exactly what it's gonna be like hollywood has just gone so woke and and that's just like being preached to right even if you might agree or disagree with some of the like you know principles there it's just like alright again blah blah blah right and it's very predictable it means the characters are hackneyed it means the messaging is is is just so on the nose you know there there isn't any of the humor and so on that used to characterize it there's so many areas that are off bounds that like it's just all so edited and I just found the quality of hollywood has been dropping off a lot another thing I've I've realized is I don't hire actually from stanford or harvard or mit or whatever anymore you know where I hire from twitter me too okay because basically it's first it's international 2nd is you can kinda tell that these folks can write

Sam Parr

you can see what they're you can see what they're about

Shaan Puri

you can

Balaji Srinivasan

See what they're about. It's actually like a concept of, you know, my thinking about how you didn't get too much signal on them from their diploma, right? Yeah, you get way more signal from their writing and interests, and so on, on Twitter. Not just their skills, but their values and character. There are super smart guys in Nigeria and smart women in the Middle East who shine through. I'm like, "Okay, that person." Now you've got an index on the world that you didn't have before, rather than just buying this degree. In fact, I don't quite say they're guilty until proven innocent, but unlike 5 or 10 years ago, a lot of these graduates from "woke" schools, I mean, I think of them as having a religious education now because that's what they're prioritizing. I don't know if you see this thing, like they're abolishing accelerated math in Virginia and so on and so forth. So, it's actually something where these folks are coming out of higher education with a religious education that basically means they are not necessarily all that technically good anymore. They have a set of priorities and entitlements that are often adverse to what is needed to build a business. I think there's been a college "flippening" for me, at least in terms of hiring from these places. You want to hire the guy from the Midwest or the Middle East who just has a different set of values and is just more hungry.

Sam Parr

what's up

Balaji Srinivasan

yeah exactly right what's

Shaan Puri

Your Hollywood... what's your Hollywood replacement in that same way? So that's your hiring replacement. You said your Hollywood consumption goes down. What'd you replace it with?

Balaji Srinivasan

old books math textbooks

Shaan Puri

I thought

Balaji Srinivasan

It was something like what normal people do or whatever. You know, that's like a slim fridge. Before I started my first company, I was actually about as jacked as possible with my South Asian physiognomy. I lifted and ran all the time; I worked out constantly. It was very difficult to maintain that while operating a startup because your first priority is always the temptation to make that short-term sacrifice. You might stay up late or skip the workout to take a sales call. Frankly, your employees... you know, at least what I told myself at the time was that their responsibilities were more important. Your small health issue or your hour of sleep isn't as important as their well-being because you have a fiduciary responsibility to them. You brought them on, you gave them jobs, and they moved across the country. I thought, "Oh, I didn't do that deal because I went for a run." But it took me a while to realize that was actually a false economy. Spinning down your physical fitness or your health is something that will also impoverish them in the medium to long run. You won't be able to push as hard. Of course, you can push harder when you're young, but as you get older, you just don't have the energy to do that in quite the same way. You can't tolerate as much.

Sam Parr

are you yo are you are you are you fit now

Balaji Srinivasan

I'm fitter than I was. Basically, one of the things that I did at 7029 is, you know, we do this thing called "proof of workout," right? You can submit proof of a workout, and we give you $10 in VTC if it's one of the top 100 of that day. Okay, and which is kind of cool. It's gotten extremely good response. Basically, what I realized is that for the next thing I did, I actually had to make that part of the job and the business, such that everybody expected me to exercise, just like I expected all our employees to go and exercise. This was actually something that advanced the company as a whole. I just had, you know, whatever—I can only do one thing at a time. So, I need to actually make that a front-page priority, in sort of the same way that people have learned that spaghetti code is a short-term optimization. In fact, you're taking on technical debt; you're taking on physical debt if you are not working out and eating right each day, you know? So, I wanted to kind of put that at the top of my consciousness for the next thing. I actually think that daily fitness, eating properly, etc., is on a straight line with transhumanism and with reversing aging, and so on and so forth. Whether we'll be successful in that, I don't know, but at least I want to set that direction vector.

Sam Parr

I like it

Shaan Puri

I think we lost Sam to a bathroom break because we've broken the record for the longest podcast, "My First Million." So, we should wrap it up. Where can people find you? I know Twitter is where I kind of get the most engagement, so please shout out where people can find you and where you have the biggest volume.

Balaji Srinivasan

Yeah, go to **1729.com**. That's the free newsletter that pays you. In fact, it has these regular Bitcoin bounties for tasks and tutorials. I kind of spoke about what our long-term goal is for what we're doing there. Short-term, it's extremely easy to understand: read a post, do a task, and earn some crypto. For example, yesterday we had a post about learning how to register a domain name. That was very valuable in the early nineties. Well, learning how to register a crypto domain name is probably going to be very valuable too. We basically have a tutorial on that. If you go and do it and tweet about your experience, then we'll give you **$250** if you write a good set of tweets—an educational and informative set of tweets. So, that's a cool way to incentivize you to learn something that you should already know. We're giving out like **$5,000** in Ethereum for that. Right? So... can... can...

Shaan Puri

Could other people sponsor? Like, could we put up $5 for something?

Balaji Srinivasan

Absolutely! So we have **1729.com/create**. One thing that I want to have eventually is something similar to what companies do with Twitter accounts. I envision having **1729 accounts** where every task that they can outsource to the public at large is posted. They could potentially pay people in their corporate cryptocurrency.

Shaan Puri

I love that! I love this sort of mini XPRIZE. We've been talking about this on the pod for a while. It's like, I love that the XPRIZE was this kind of big piñata that got a bunch of people to innovate and step up. Actually, there was more investment than the prize that happened because of it. I wondered... I know I've now experienced a big company; we got acquired. I'm like, "Oh, I understand why it's so hard for bigger companies to innovate." I wish we were just putting more things on our company's roadmap, just out there, and say, "Hey, if anyone could build the best version of X, we will state upfront what we will acquire it for, what we will pay for that bounty to be complete." Absolutely, startup ideas I'm most passionate about.

Balaji Srinivasan

Absolutely! If you're interested in trying out some experiments on this, like startup ideas that you had, one thing I want to do is offer prizes for startup ideas. For example, $25,000 for the best one in 30 days. We have the right to put in a safe or something like that, but we can figure out all those details. If you just want to try something, go to 1729.com/create and submit a task. The instructions are there, and if it's good, we may even fund it. To clarify, the process of creating a task—meaning drafting the copy—and the process of sponsoring a task are actually separable things. You could have a lot of people create unfunded tasks, and just like a VC invests in a startup, a sponsor can invest in a task and then boom, make it go mainstream. That itself is an interesting concept. You don't just have, let's say, HubSpot having a feed of tasks; it also has a queue where people can propose things that would be interesting for HubSpot to try on its audience.

Sam Parr

that's sick man

Shaan Puri

we're alright

Sam Parr

so we're wrapping up for everything

Shaan Puri

Yeah, thanks for coming on. You know, it's great to have a smart guy come and chat with a couple of bullshitters like us. We enjoyed the conversation. Thanks!

Sam Parr

speak for yourself

Balaji Srinivasan

You guys are too self-deprecating. You've done a great job, you know? Your show is great and your feed is often insightful. So... mutual admiration. Great job!