Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Maryanna Saenko on Venture Capital, Philanthropy, and Ethical Technology
139 Plays1 year ago
Maryanna Saenko joins the podcast to discuss how venture capital works, how to fund innovation, and what the fields of investing and philanthropy could learn from each other. You can read more about Maryanna's work at https://future.ventures
Timestamps:
00:00 How does venture capital work?
09:01 Failure and success for startups
13:22 Is overconfidence necessary?
19:20 Repeat entrepreneurs
24:38 Long-term investing
30:36 Feedback loops from investments
35:05 Timing investments
38:35 The hardware-software dichotomy
42:19 Innovation prizes
45:43 VC lessons for philanthropy
51:03 Creating new markets
54:01 Investing versus philanthropy
56:14 Technology preying on human frailty
1:00:55 Are good ideas getting harder to find?
1:06:17 Artificial intelligence
1:12:41 Funding ethics research
1:14:25 Is philosophy useful?
Social Media Links:
➡️ WEBSITE: https://futureoflife.org
➡️ TWITTER: https://twitter.com/FLIxrisk
➡️ INSTAGRAM: https://www.instagram.com/futureoflifeinstitute/
➡️ META: https://www.facebook.com/futureoflifeinstitute
➡️ LINKEDIN: https://www.linkedin.com/company/future-of-life-institute/
Recommended
Transcript
Introduction to Mariana Sainko and Venture Capital
00:00:00
Speaker
Welcome to the Future of Life Institute podcast. I'm Gus Dogger. I'm here with Mariana Sainko, who is the co-founder of Future Ventures, which is a venture capital firm. So, Mariana, welcome to the podcast. Oh, Gus, thank you so much for having me. It's such a pleasure to talk to you today. Okay, perhaps we could start by talking about how venture capital works. Where does it fit on, say, the spectrum of risk from a pension fund to a private investment?
00:00:30
Speaker
Yeah, it's an interesting construction in the market.
Venture Capital: Risks and Rewards
00:00:36
Speaker
And I think it's probably not the right framing to say where does it sit on the risk, because frankly, lots of pension funds invest in lots of venture capital funds. And so there's a little bit of a stacked hierarchy here. I think when people think about an investment portfolio, they think about low risk,
00:01:00
Speaker
and probably, frankly, low yield opportunities and very high risk, but hopefully high yield opportunities. And venture capital is about as far on the right side of that high risk, high yield as you could probably reasonably get. It's like maybe one tick below gambling with, frankly, about the same statistical odds. And so in a diversified portfolio, one might hope for
00:01:28
Speaker
some small portion of the portfolio to be distributed across any one of these particular access points across this risk yield profile. And so venture capital ends up being within the portfolio management scheme of many different types of investing bundles and firms. But the best way to think about venture capitalists and venture capital is that we
00:01:58
Speaker
take very high risk, hopefully high yield for our investors chances. And that from an entrepreneurial standpoint, we're capable of funding things that possibly nobody else would touch with a 10 foot pole. And the flip side of that is that our cost of capital is a fair bit higher than what you might eventually come to as you come down that risk curve, right?
Innovation and the Role of Venture Capital
00:02:28
Speaker
venture capital tends to make the most sense at the earliest stages of an idea to kind of test it against reality. Because there you would expect the returns to be high if it succeeds, and you would expect a lot of things to fail at the early stage. That's right. In fact, the vast majority of things fail.
00:02:45
Speaker
And so why is this an interesting place to invest? Why do we need the venture capital industry? Why couldn't we just say, for example, have existing firms, existing large corporations like Apple and Microsoft do the things that venture capitalists try to do? It's a fascinating question, right? There's been a number of books written on this construction, this construct of the innovator's dilemma.
00:03:13
Speaker
as it's well referred to. And I think essentially there's a set point and it's not clear to me that it's always true. It just seems to be almost always true that at a certain size, stage, cultural profile of a corporation, innovation and creativity effectively falls off a cliff.
00:03:38
Speaker
And part of it is that it's hard and expensive to really throw new ideas at the wall and see what sticks. And for very brief periods of time, large corporations can actually occasionally pull this off. And wonderful examples of this are like the Bell Labs situation. They tend to not last very long. And frankly, not that many things come out of them.
00:04:05
Speaker
that actually pushed forward into reality, but Bell Labs again being a historical counter example. But even if we look at our friends at Alphabet, Google has endeavored so many times over the years and poured so much capital into trying to build novel, beautiful hardware products. And yet we're not all walking around with Google Glass on our heads and with
00:04:35
Speaker
some type of functional robot helping us out at home. And I've wondered this myself deeply. Why do you actually need constraints to push through that through line of innovation and creativity? If you look at the Dow Jones Industrial Average, two thirds of companies on the Dow Jones Industrial Average were started in recessions.
00:05:02
Speaker
So perhaps that's a marker for us to think about. Perhaps what you actually need to really be pushing the bleeding edge of a particular type of innovation is to be so wildly constrained that you actually have to come up with such a novel way of doing something. I'm not saying all creativity comes from startups. That's obviously not true. Apple is doing incredible work on antenna design and
00:05:31
Speaker
TSMC is so good at manufacturing really incredible chips that our entire world is based off of. And as far as I can tell, no startup is going to really figure out how to rip semiconductor manufacturing out from the big players. So there are certain things that are absolutely relegated to the world of large corporations. But there's a style and aesthetic of early stage creation, idea, product development.
00:05:58
Speaker
that seems to just move much faster inside smaller, leaner companies. And why can't this structure of the venture capital fund or the startup be replicated inside of existing companies? I know a lot of existing companies have tried this, but to me, it doesn't seem to have succeeded wildly at least. So why can't they replicate the startup environment inside of existing companies? I love this question.
00:06:29
Speaker
was at some point in my prior existence at Airbus. And before that was a consultant to a number of large corporations thinking about autonomous systems and robotics and autonomous vehicles. And I don't have a tight answer on this because theoretically it should be possible. But I think at the end of the day, it's really hard to maintain that
00:06:59
Speaker
style of ambition and frankly delusion inside a large comfortable corporation, right? So when your lunch is beautifully served to you in a stunning cafeteria with thousands of your other colleagues and everyone's kind of plugging away in a small piece of a large puzzle, it's hard to maintain a small team that actually
00:07:29
Speaker
feels existential pressure. And it's a fair question, which is like, do we actually need to feel like an existential threat, like our capacity to not exist tomorrow to actually get through these early days inside startups?
Understanding Startup Dynamics and Failure Rates
00:07:44
Speaker
And I don't love this because as like ostensibly a person who practices like Buddhist styles of thought, I'm like, oh man, do we really have to create suffering to have output? Like such an unfortunate
00:07:57
Speaker
construct to believe in, right? Like, do you actually have to generate like fear and concern and suffering to get, to tightly iterate on products quickly, sufficiently. But I think what ends up happening is that large companies have so many things that they have to worry about that setting up a cadence internally, or maybe even with some reference
00:08:27
Speaker
reference points externally that say, okay, here's a bit of capital, get to these milestones, and then only then will we give you more capital for you to continue. I think that's just hard to do within an employee pool. It's frankly probably hard from an HR standpoint because the simple reality is basically startups are on the chopping block every 12 to 18 months.
00:08:56
Speaker
deterministically trying to figure out whether or not anyone wants to continue supporting them. Yeah, we should we should dive a little deeper into this, these statistics that you've been alluding to. So when we talk about most startups failing, what does this mean? For example, if we take a typical VC fund, how many of their investments will succeed? And to what extent will they will succeed? So how many will succeed wildly? How many will totally fail? How many will become?
00:09:25
Speaker
mediocre. Yeah, how's the landscape looking? Bad. In the sense that it's one of these, you're really betting on asymmetric outcomes. So there's this construct called the power law, which suggests that basically your top performing investment will overshadow
00:09:53
Speaker
all other investments that you've made cumulatively, right? And then if you're good, then your second best investment overshadows everything underneath that cumulatively, right? To the point where it's not that you have one winner and everything else dies, but effectively when you think about that kind of curve, the area under the curve, right, goes down exponentially. And so you end up
00:10:20
Speaker
Effectively, from a perspective that the gain you have from a small investment doing marginally okay, like maybe a 2x, is so overshadowed by a top investment doing orders of magnitude better than that, that effectively everything else could be a zero and it basically wouldn't matter. How many venture funds are actually 10x venture funds? Frankly, not that many.
00:10:50
Speaker
How many venture funds across the pool of all venture capital firms actually have spectacular returns? Again, not that many, right? Like the top 10% of venture funds return, have 90% of the gains in the market. So there's also like the small pool of players within venture capital who are doing very well.
00:11:08
Speaker
So there's almost like a power law of venture capital firms also. There are. And what's interesting about that is it's actually there's a group called Correlation Ventures that has some interesting statistics on this that that actually suggests that even more so than the venture funds is the actual individuals doing the investments.
00:11:27
Speaker
And so that even within venture funds, it's actually like which partner you have at which firm is probably the best correlative of overall success rather than even just the top line name brand of the firm. So when I say something like 90% of companies that one, any given venture capitalist might invest in are effectively
00:11:52
Speaker
but not good investments in the same way. It's not that they all go to zero, it's not that those companies die. In fact, mostly they return maybe the original capital, so you generally try not to lose money, but how many of your potential investments actually return a 5 or a 10 or a 20X?
The Entrepreneurial Mindset
00:12:12
Speaker
certainly less than 10%, and frankly about 1%. In a portfolio, in any given fund, we would invest in 20 companies out of each novel fund that we raise, of which we would hope that one ideally would be an absolute moonshot outstanding winner. Then hopefully there's another one underneath that, and hopefully another one underneath that, but it follows that parallel line.
00:12:43
Speaker
Um, but our hope also at the same time is to ensure that every single one of our investments gets to fruition in the sense that we really, we try to invest in things that we think the world fundamentally needs. And so I also care deeply about not seeing anything die just for the sake of it. Um, but to actually say, can we find a soft landing spot, maybe in a large company, uh, maybe adjacent to some other organization.
00:13:10
Speaker
where we ensure that this idea and this team, this thing actually comes to fruition, even if it's not. If I was just economically motivated, frankly, I should have become an investment banker.
00:13:23
Speaker
Yeah, I can see the attraction of venture capital investing from the investor side. But say that a bright-eyed young person comes to you and has an idea. And of course, as you said, maybe they are delusionally confident in their idea. And I'm assuming that you would want them to say, this is the idea that's going to change the world. If they said,
00:13:45
Speaker
Looking at the statistical nature of the statistical landscape in VC investing, I predict that I will probably not succeed. I mean, then you would then you would probably pass on that investment. You want everyone to believe that they are they are the ones who will succeed wildly. And is there some
00:14:03
Speaker
from the people who are starting the startups, is there something perhaps against their own interest here that they are expected to be extremely perhaps overconfident in their own vision for them to be taken seriously? Well, let me try to better understand that question. So is the concern that they need to be overconfident to start and that's a net negation or that
00:14:33
Speaker
that form of personality is like a baseline requirement. Perhaps that that's that it's a baseline requirement. And could it could it be so so could it be good for the investor, but perhaps bad for for the people trying? Oh, I love this question. Oh, yeah. I think a lot of the companies that we try to invest in, right, we invest in early stage, deep technology companies that we hope will make the world that
00:15:02
Speaker
better and more verdant place and ideally more peaceful and more equitable and not prey on human frailty. What we find is we invest in the kinds of entrepreneurs who say, this just has to exist and it's killing me that it doesn't. And I'm looking around and nobody else is picking up this ball. So it's not that you want the reluctant entrepreneur because you actually want someone deeply motivated to go
00:15:31
Speaker
build this thing, but you want the person who is just, it's a vocation, it's a calling, it's a deep intrinsic need in their being to see this become reality. And I think when that happens, there's actually a humility that shows up because it's not just about them wearing a badge of like, look, what a successful entrepreneur I am. And, you know, the number of people who equate success to the number of dollars they've raised,
00:16:00
Speaker
That's not success. That's just your capacity to tell a very good story that's necessary, but certainly not sufficient. But there's a humility that comes with saying, I am in service to this idea, and I've willingly stepped into the ring to figure out
00:16:19
Speaker
how to make it real. And I am in service to the idea, to the other people I bring along to commit to bringing this into fruition. And so we actually find that the most incredible entrepreneurs are the ones who have a particular form of humility. They have maybe extreme technical
00:16:38
Speaker
courage, the capacity to say, this is really hard. Nobody has ever done this. But we have deep faith in ourselves, our team, our technical capacities, our ability to build a nuclear fusion reactor. So on that aspect, they do have to have that perspective of a willingness to say, no, we're going to go figure out how to build reusable rockets, even though nobody's ever done it before. And at the same time, a capacity to
00:17:07
Speaker
pause and iterate and actually take real feedback because I think anyone who's driven to any personality poll ends up, you end up off balance and then all sorts of probably frightening things happen personally and professionally.
00:17:25
Speaker
Yeah, so we should also perhaps say that we are talking about companies succeeding or failing here. We could have repeat tries. So from the from the person trying to start these companies, they could start to try a second time or third time. How common is that that that you see a first time startup entrepreneur fail and then come back and succeed? I am certain it happens with a fair bit of frequency. I think what I see more commonly
00:17:54
Speaker
is a startup with a moderate bit of success. Perhaps the entrepreneur personally had a life-changing financial event as a result of that. What we would consider a moderate outcome, like, good job, you 5x this investment. Thank you for not losing your money. Thank you for making us a fair bit of capital. More importantly, thank you for bringing this idea into fruition. And then maybe the company sells to
00:18:23
Speaker
some other company, that large corporation, that hopefully continues to see the idea forward. Most often we see those entrepreneurs coming back around and saying, I've really learned my lessons. I didn't build a multi-generational, multi-billion dollar massive organization. In fact, I got swallowed up by one of those, but now I know what I'm going to do different.
00:18:50
Speaker
I think a lot of people who struggle in their first go around absolutely do come around. I wish more of them took more time off, right? So I see a lot of people jumping from one idea to another or trying to pivot within the same company. And I think that can work. And obviously, it has worked in quite a number of cases. But I think it's also important to pause and figure out how to reset and refresh.
00:19:18
Speaker
When I do meet entrepreneurs, I was actually just having dinner with a brilliant former CEO who sold her company and she hired an executive coach after selling her company.
00:19:34
Speaker
to help her ensure that she wouldn't just immediately start the next company. Good luck. That is a massively motivated individual. I don't think that's a problem that a lot of people have, that they can't hold themselves back. And perhaps that's exactly the type of person you're looking for. I think entrepreneurs do have this problem. I think entrepreneurship is this communicable disease, right?
00:19:56
Speaker
You can. Like once they get in it. And I think it's also like it's like childbirth. Like you don't actually remember the pain of it. You just remember the euphoria. And so maybe that's also some something that happens here, which is that people go through it. And depending on their experience, they don't really tap out. Instead, they're like, I need more of that.
00:20:20
Speaker
I would imagine that if people won moderately, so as you mentioned, maybe 5x the original investment and now they're comfortable, I would imagine perhaps that they would become a little lazier or not be motivated to do anything. But that's not what you see. You see that they immediately jump to the next thing and try again to start something truly revolutionary. I think what happens, ideally, they take some time off and they
00:20:49
Speaker
deep time with their family and they figure out what is going to be a sustainable pace for their life. But I think when you get outside of the scope of being fiscally tethered to your reality, where particular baseline outcome is an absolute necessity for your continued happy, healthy existence, there's a different thing that happens on the other side of that. When you're talking to a person who's
00:21:17
Speaker
who's maybe not entirely, but perhaps largely post economic, do you end up in conversations with people who are really asking like, what needs to come into being? And how can I best position myself to be of service to that? And I find that those are some of the most fascinating people because it's no longer a job, it's a calling.
00:21:42
Speaker
And I think what startups force you to recognize is that if you don't at any, at any question, right? Like any bright person working at any startup, frankly, at any level, like forget this, that's the founders, um, you know, early teams included. You have to ask yourself this question of it's difficult and largely thinkless and the payout may never come.
00:22:08
Speaker
So you really need to be motivated by the mission of the original, of the thesis of the work. And if you're not, you probably shouldn't be there. And so I think that that ideology becomes even more true as people move through their careers and varying stages of life.
00:22:31
Speaker
Do you think that if you had a VC fund that didn't have a high failure rate, call it failure if the startups do not succeed wildly. So if you had a VC fund that didn't have this power law distributions, would this imply to you that you weren't being ambitious enough? So would it mean that you weren't taking on very weird bets that turn out to be great companies 10 years later? Yeah, we were actually just
00:23:00
Speaker
closing the fundraise on our third fund where actually have now closed it. Certainly we'll have closed it by the time this podcast goes live. And we had a couple folks who were talking to us who essentially said, why aren't more companies in your portfolio dead? I thought you guys were on the leading and bleeding edge.
00:23:26
Speaker
And our response was, don't worry, they're still going to die. And a lot of it was just that we've lived, particularly 2021 was a very strange year of a lot of capital floating around in the markets. And now that globally interest rates are on the rise, things like early stage, high risk tech investing probably look a little less compelling. There's probably a little less capital in the market.
00:23:58
Speaker
More things will suffer going forward than probably have in the last couple of years, even modulo COVID. I fundamentally think that if you are purporting to position yourself as an early stage investor and you're not seeing some significant level of attrition, then perhaps you haven't crawled out to the furthest edge of the branch that maybe you should be.
00:24:25
Speaker
This is, in a sense, a very hardcore environment to be in, where this is the measure of whether you're succeeding is that a lot of your portfolio companies are failing. That's right. Is that true? I'm fascinated by VC. I'm fascinated by this kind of hit-based investing. Another thing that's fascinating about the industry is the long time horizons. So perhaps you could talk a little bit about this, because it seems unique to me.
Long-term Horizons in Venture Capital
00:24:55
Speaker
long time horizons like this show up in academic research but you don't see long time horizons in publicly traded companies, at least not to the same extent I think. Perhaps tell us a bit about time horizons in VC.
00:25:12
Speaker
And with things like some folks working on the long-term stock exchange, perhaps we can overall eventually shift people to a mindset of thinking over the longer arc.
00:25:25
Speaker
But that's frankly quite difficult for people to do. It's not structurally set up appropriately in most of our corporations. Most people take a job, particularly if you look across societal structures today. There are very few countries left on earth like Japan where there's an expectation of you've taken this job and you're going to work here for the next 30 years.
00:25:52
Speaker
beautiful that that continues to exist there. That is very much not the way of the broader rest of the world or the direction that the world is taken. And so there's this question of saying, well, what does it look like to actually build the future world? And frankly, I think that the vast majority of people in venture capital
00:26:20
Speaker
who invest in enterprise software and consumer social media plays or whatever actually aren't operating on a particularly long horizon, right? There's a strong push of saying you have to get to profitability in two years and then hyperscale growth in a handful of years after that. And the internet really under
00:26:44
Speaker
rode that trend for a long time. And then even post the dot com crash, it's been kind of this enterprise software investing where there is a strong push to say, OK, you don't actually have that many years to get to a sustainable business. The kinds of companies we invest in, we recognize that we have to be a little bit more patient, right? You can't actually build a rocket ship that eventually becomes a Mars transporter that
00:27:13
Speaker
has a successful launch business in a short order number of years. SpaceX has been around for quite a while. And as a venture fund, we're a 15-year fund, which means that we hope to return capital to our investors before 15 years, but that we won't wrap up the fund
00:27:34
Speaker
short of 15 years. So that's kind of the starting point. And the construct here is that to invest in these kind of deep tech, often physical, most of our investments actually have a software underlay that allows for a computational advancement. But we recognize that these fundamental technology plays just take a bit longer to mature and that we want to be honest about what that actually looks like. That said, we actually don't think that
00:28:02
Speaker
businesses should be funded purely on venture dollars for decades on end. It's about recognizing that you have to figure out how to get to a place of iterating early with customers or the market in some way. And then over the long arc, recognizing that it can take a decade to really build that business into its full fruition. And that's when you as an early investor, you know, you kind of want to keep supporting and piling in.
00:28:30
Speaker
I think there's a difference here, which is we don't expect liquidity in two to three years. We expect progress and growth. And that's the difference of the mindset versus a shareholder in the public market. That's the whole thing about public markets. They're liquid. You can actually move those positions. Private markets, you can't move those. The valuations are much more stable. In fact, the companies are more stable, but they're stable because you can't get out of them.
00:29:00
Speaker
you're fixed. And so we need both, right? We need short term liquidity and we need long term belief systems. Is it perhaps tempting to go to these software as a service investments that can scale over the internet and return investment dollars quickly? Do you think that it's tempting to do that for a lot of funds, as opposed to thinking more long term and thinking perhaps creating hardware?
00:29:28
Speaker
Of course. I mean, that's what 90, probably 9%, I don't know. I don't actually know how many funds are out there right now, what they're focusing on, but the vast majority of funds focus on that. And I don't blame them for a second. I just wouldn't be able to sleep at night if that's the thing that I focused on. And it's not from a place of moral outrage of what others are doing, it's from a perspective of
00:29:50
Speaker
What is the leverage point that I would like to have on reality? And what would I like to see to come into fruition? Like we're trying to fund the kinds of companies that history books will be written about. And frankly, I just don't think that many history books are going to be written about some of these very frankly, really important, you know, underlying software systems, but helping some marketing team manage their client portal.
00:30:20
Speaker
is just, I mean, I'm asleep before I even manage to watch the rest of the sentence. But then, but to someone else that's deeply exciting, right? And so it's just about asking like, are you at your best and highest use supporting the things that you're trying to support?
00:30:36
Speaker
How do you think about getting feedback on how companies are doing if you're investing over very long time horizons? Because you want, I think you mentioned earlier, you want to iterate quickly. You want to perhaps change course if what you're doing is not working. I don't imagine that you wait 15 years and then see how things are doing, but how do you think about feedback over long time horizons?
00:31:01
Speaker
Oh God, I love this question. This question keeps me up at night. In our portfolio, we try to take on more engineering risk and less underlying fundamental science risk because where do you draw the arbitrary line in the sand to say that a particular piece of scientific research is now concrete and sufficient to build an entire product suite
Risk Assessment in Venture Capital
00:31:29
Speaker
around it?
00:31:29
Speaker
We should distinguish these two. So what's the difference between fundamental science risk and engineering risk? Are we talking about whether something is physically possible? Here's an example. I think we would be very reticent to invest in a novel battery chemistry without seeing an actual cylindrical cell likely on a desktop in a lab stage.
00:31:56
Speaker
with a question of what is the charge? What is the discharge rate? What is the hysteresis loop? What is a full lifecycle analysis of this battery, right? So basically not going to bet on someone's battery chemistry until they show me that they can print manufacture at least one cell. And that probably precludes me from frankly investing in any novel battery chemistry, like as a whole, because I just have this arbitrary line in the sand of saying, I think this is the choke point and I don't know how you get past that
00:32:25
Speaker
choke point with the positive, without frankly investing an awful lot of money. Quantum computers are another perfect example. We didn't invest in any gate model computers because we basically said, oh, it's going to cost a couple hundred million dollars to build. The first full gate system and any transient piece on the way to that doesn't actually say a lot about whether or not the whole gate model works.
00:32:56
Speaker
versus we invest in a nuclear fusion company, which should probably cause you to scratch your head and say, wait a second, you really did do battery chemistry, but you did nuclear fusion. Like what is wrong with you? Um, but the difference there is we really came to confidence that we invest in Commonwealth fusion systems, that a token Mac system will work. And it's a question of at what scale and how powerful the plasma and the, the,
00:33:23
Speaker
the cost of the entire system and the energy output is directly related to the size of the plasma and your capacity to basically have a high density plasma is driven entirely by the strength of your electromagnet.
00:33:38
Speaker
Not entirely, there's a number of other things involved, but one could make the simple correlation that if you could build a magnet that's significantly more powerful than any other electromagnet on Earth, then you can have a denser plasma, higher output, smaller building, the math closes suddenly. And so when we met a company that said,
00:33:56
Speaker
We're going to eventually do this thing of building Tokamaks. That's largely proven. The thing that we need to figure out is whether or not we can first make and then second manufacture these magnets. That was an inflection point for us where we said that we can underwrite because there's a clear inflection point around which we believe that scientifically sound set of reasoning can be built. That's where we think is like, is there a known testable
00:34:26
Speaker
empirically referenceable decision point that you can come to to say this is working or not working. And this is where like a lot of biotech and biomedical decisions are really hard because you have like these soft clinical endpoints or you have a situation where you say, okay, it didn't work inside a sample size of 10. But is that enough of an experiment to say with statistical accuracy that it's not working?
00:34:54
Speaker
Well, I don't know. Do you need to run it 100 times, 200 times? And what is the cost of doing that? So it's like always this sliding scale of saying, at which point do I gain confidence? So you're looking for a prototype or a proof of concept, something that's actually been built. But does that exclude you from the very wildest and perhaps most interesting investments you could make that are
00:35:19
Speaker
that are at the stage before the prototype is even created. Does it make sense to think even further out, so perhaps at a 30-year timeline? Or is that simply beyond the capacity of the investment systems we have now? I don't think that there's a direct correlation between stage of technological maturity or technology readiness level or either TRL level and a linear time construction.
00:35:45
Speaker
Again, I think it's all about pricing risk to some extent. For example, we invested in an ammonia catalysis company on the basis of belief system that the Haber-Bosch process was effectively last significantly iterated on when it was developed in the early 1900s. Effectively, the entirety of our global food system is based on it, the vast majority of ammonia that
00:36:13
Speaker
is generated, goes into fertilizer. Turns out we need an awful lot of fertilizer. We can have a whole different conversation about whether or not that's the right way and whether or not we should be using different agents to reaffirm soil structures.
00:36:28
Speaker
It's one of these scientific technologies that underlie our civilization where no one has even really heard about it, but it brings the food on the table every day. Correct. And to any one of your listeners, I highly recommend Alchemy of the Air as a book on this construct. It's a surprisingly engaging beach read. I didn't ever think I would say that about a book about ammonia.
00:36:52
Speaker
But the question of how early are we willing to go and at what point? This entrepreneur came to us and said, I don't have a better catalyst, but I have a strategy around using a particular form of computational modeling that I think will help us derive
00:37:14
Speaker
a pathway to creating a better catalysis process, not just for Haber-Bosch, but potentially across the entire catalysis landscape. And I want to go explore that. And we wrote the first check into the company saying, yeah, absolutely. That is reasonable because, frankly, the iteration is pretty cheap, right? It's compute cycles and fast. And then we can downselect to things that we actually go and bring into the wet lab chemistry setup.
00:37:45
Speaker
I am very comfortable investing at a stage that's outrageously early if there's a commentary that suggests that the speed of experimentation is for some reason accelerated. Because the last thing that you want to do is invest on some necessary novel future innovation, but no inflection point about why you might arrive at
00:38:12
Speaker
that next inflection point faster than anyone has done it in the past or cheaper or more efficiently. Ideally, all of those things, faster, cheaper, more efficiently, they all stack. If you're going to be presenting something at the earliest stages of investigation, I think there also needs to be a story about why that investigation is going to be more efficient.
00:38:36
Speaker
When we talk about deep tech, I'm thinking of nuclear fusion, for example, I'm thinking of rockets, something that changes something physical in the world and not just pixels on a screen. But do you think that a lot of deep tech involves software also? So is there a sense in which deep tech is not
00:38:58
Speaker
It's a sense in which hardware and software is merging together because as you just mentioned, some of these innovations that affect the physical world come out of machine learning. For example, DeepMind had a breakthrough where they used, again, machine learning to
00:39:15
Speaker
Yeah, help with an advance in nuclear fusion. And so you see these two, you see software and hardware coming together in interesting ways. Does it make sense to split the world into the physical and software anymore? No. And frankly, I don't think it ever did. And to our friends at A16Z, who at some point said software is eating the world and now are investing in an awful lot of hardware, deep tech companies, I think
00:39:44
Speaker
Even the most stringent supporters of everything exists in a software layer are recognizing that at the end of the day, we're pretty three-dimensional beings. That doesn't matter how compelling the metaverse becomes. We're still going to move bits around. But I also think it's an unfair delineation in the other direction, which is to say that things that exist in free space and that atoms
00:40:13
Speaker
bits, hardware, world, and that they're not entirely dependent and enmeshed in the software space, right? So this construction of how can we use software simulation, predictive systems, transformers, large language models, whatever,
00:40:32
Speaker
the topic du jour is in novel software architecture and development to help our capacity to iterate faster and more efficiently in physical space. Because what we need to get away from is how slow and clunky and exceptionally costly it is to actually do things in the physical world.
00:41:03
Speaker
this case, which is what if you could have a full biological digital twin of yourself, like you Gus as a human, right? With all of your ancestral familial genetic data and all of your relevant like blood levels and markers and, you know, food allergens like set up as, but
00:41:33
Speaker
not by the creation of creating a child and seeing what immune system they have in the world, but actually saying, what if we could actually recreate that digitally and then basically run models forward and backward and say, well, how likely are you to develop a particular type of cancer and what inputs might you want to change to shift that? I think the addition of
00:42:00
Speaker
deep computational models will fundamentally shift how we move forward in the world, our capacity to have truly personalized medicine. And we're just at the most nascent stage of that today. But I'm so excited, basically, about figuring out how these how these two spaces intermesh.
Venture Capital vs. Innovation Prizes
00:42:19
Speaker
Do you think that you could potentially replace the venture capital industry by huge innovation prices? So for example, say, instead of having venture capitalists pick out startup founders that are trying to solve nuclear fusion, we put up a billion dollar price to any team that solves nuclear fusion or that gets out net energy from a nuclear fusion process. Sure. But who funds?
00:42:46
Speaker
I mean, those exist, right? The X prizes exist and they're not billion dollar prizes. Who funds that fusion company getting to a prize? They're going to need a billion dollars to build their first reactor. We can change the numbers around and we could say perhaps it's actually $100 million for it to make economic sense. But there is some
00:43:11
Speaker
interesting idea in which you you incentivize people, of course, to try to innovate here. But perhaps you have a lot of different teams spending more than the total price in trying to win the price. And so perhaps you it's an efficient way to get what you want. But is it really? I mean, I'm going to push you on that because one, again, who funds the work because it's you
00:43:33
Speaker
Like, let's use literally any industry. Let's say electric vehicles, right? So someone could have funded the electric vehicle prize.
00:43:45
Speaker
It costs an awful lot of money to go build an electric vehicle and then test vehicles and then eventually build a consumer vehicle that might get to a point of wanting to win one of those prizes. Who funds that? I don't have a great answer for that, I admit. So perhaps you would need venture capitalists to fund a lot of firms. And there's one too, right? Because the prize is winning the public market. The prize is winning consumer sentiment.
00:44:12
Speaker
and use case and industry and becoming the de facto standard of the future. So you don't actually need the carrot is not the question. Like the carrot already exists. The carrot is we have to figure out how to live functionally on this planet in concert with our ecosystems, with other humans, and then maybe eventually on other planets as well. That carrot is huge.
00:44:39
Speaker
And there's no need for a prize. The question is, and the other way that you can say this, like if I took your construct of a question to a lot, it's logical reality, I think you hit up against a pretty strong social fallacy, which is then there is no equitable pathway to a bright kid sitting somewhere in the world to go and start an idea. Because you're basically saying,
00:45:07
Speaker
There's future prize, but no access to current capital. And so the only people who could actually work on those things are top universities, a handful of wealthy billionaires, people who are entirely post-economic. So we'd really be shrinking the pool set of who has the capacity to go do these things because no one's going to do work for anyone else on the promise of like, maybe one day we future wins some big thing.
00:45:32
Speaker
I take your point. I totally take your point. So I'm interested in venture capital, and I'm interested in which lessons so other areas of life could take from venture capital. For example, what could the philanthropy industry, if we can call it that, learn from venture capital? Specifically, is there other interesting lessons relating to this hits-based investing and long-time horizons?
00:45:59
Speaker
Perhaps, are people not being ambitious enough in philanthropy? That's an interesting question. I struggle to put venture capital on a pedestal of saying that it is the best or most efficient way to bring ideas into being. It has a particular use case and for things, for
00:46:24
Speaker
Keys, right? Companies that fit the keyhole of venture capital, like when those two things mate, it's incredible. And everyone passed themselves on the back and the world is better, faster, hopefully, occasionally worse, faster, and then we have to deal with the fallout of that. And to your earlier question, I think there will be a lot of things that will probably bear out a significant shakeout in the venture market. So it's not that I think that we're so intrinsically necessary that there isn't a world moving forward without us.
00:46:54
Speaker
We sit at an interesting inflection point. As a person who participates in philanthropy, there are different kinds, there are different ways to look at philanthropic gains, right? And I would question whether like where learnings from venture capital would carry over. So I think in terms, like an interesting question to ask is basically like, what is the most
00:47:25
Speaker
efficient spend of dollars for largest outcomes. And so turns out in the climate space, client earth is a, I believe it's a nonprofit, is focused on helping adjudicate climate policies in the courts. So basically taking governments and corporations to task around the Paris climate record agreements,
00:47:54
Speaker
through legal battles. And so it turns out like dollars spent to outcomes had, it's like the most efficient means of getting to the desired outcome of people actually adhering to climate standards. And I love that as like a metric because I tend to think that things that have their own natural economic flywheel, right? And so if you as a philanthropist are saying, okay, where's my
00:48:21
Speaker
where are my dollars best spent in the climate space? Like turns out funding legal action to take corporations to task for their dirty processes. It's like one of the most efficient things you can do. And like that would be the way that a venture capitalist might think about it. But the other way that one might think about it is to say, well, where do my dollars go that are severely today, like a space that's basically not economic and nobody in the near term can figure out how to make it economic, right? So something like
00:48:50
Speaker
There's a project here that a dear friend of mine sits at the helm of Ryan Fellian and Stewart Brand at Revive and Restore, and they're trying to figure out how to basically stand up projects in de-extinction. So bringing back animals and plants and coral and the rest of it that are on the edge or just past the edge of extinction.
00:49:16
Speaker
And the vast majority of those things, now, technically a startup came out of that project in an adjacency called Colossal, but by and large, most of these projects are not economic in the near term. And they maybe don't have a global impact in the sense that if we bring back the black-footed ferret, it's a meaningful large swath of corridor in the US, and it helps solve those ecosystems.
00:49:44
Speaker
Does it have its own flywheel? Is it a global inflection point? You can make arguments in all directions. And so I think the questions to ask that a venture capitalist might ask in bringing to philanthropy is like,
00:49:59
Speaker
What can I, like, what is the most efficient use of dollars? Like, is an interesting way to look at philanthropic questions? I think another question is just to say, effectively, the inverse of that is to say, what is a completely non-economic thing that I can do to support? The challenge always becomes in philanthropy that
00:50:24
Speaker
Charities really suffer when the driving force behind them recedes, whether it's because a primary benefactor passes away and their estate doesn't continue to support it or
00:50:40
Speaker
But any number of reasons can happen. And I think that's the thing that gives pause. And maybe that's the learning from venture capital. Because the question that we ask essentially as investors is, what is a little bit of capital that you can put in that starts a flywheel and makes something self-sustaining? And that's a real question in philanthropy.
00:51:03
Speaker
Are there perhaps opportunities for bringing previously non-economic areas of society into making them economic?
Philanthropy and Venture Capital: A Comparative Study
00:51:14
Speaker
Now we were talking about de-extinction. Perhaps starting with philanthropy, this could become an industry. And as soon as you have something that's in the economic arena, we're talking about a problem that
00:51:30
Speaker
in some sense, solves itself when you have the market working on it, you have the right incentives and so on. Is there an opportunity to kickstart areas and bring them into the economic arena?
00:51:42
Speaker
Absolutely. Right. At the end of the day, our markets are based on belief system. Our currencies are based on belief systems. Everything in our world is based on a societal belief system that this is worth that much. And this trades for that. And this supports all we exist in these extremely complex emergent systems. And one of the best things that you can do in
00:52:11
Speaker
in the philanthropy space is to say, okay, what's a belief system that probably needs to come into being this largely unfounded today? And so they're potentially in the climate space, for example, we have the carbon credit markets and they're still absolutely nascent, but they're starting to gain steam. And man, if we could just continue operating, right? And a lot of what's happening there is basically philanthropic dollars going into supporting
00:52:41
Speaker
these climate organizations that are basically standing up these carbon markets and saying, there's an economic flywheel to be had here. I think the next iteration of that has to be around something along the lines of an ecological diversity credit.
00:53:01
Speaker
One could make the argument that the carbon market is the best approximation of that, but I think that there can be perhaps some perverse incentive structures by only optimizing around carbon. It's necessary and it's awesome and we should do it and we should all be figuring out how to better fund and support carbon markets. But my question is to say, what's the next iteration of that? How do we support more
00:53:31
Speaker
soil diversity and broader ecological diversity because we know that those things carried forward actually have meaningful impacts on the world, right? But the better microbial soil diversity leads to higher crop yields.
00:53:44
Speaker
that helps pollinators and insects be better supported. And then they, in turn, again, lead to better crop yields. So all of these systems are flywheels on one another, but we need to figure out how to add economic inflection points that help bolster those markets into being. Does philanthropy and venture capital, in a sense, blend together? If we're talking about solving the climate issue, or at least
00:54:10
Speaker
lessening the impacts of climate change. Whether you approach that problem from a VC perspective of trying to fund startups, creating nuclear fusion, or whether you approach it with philanthropic efforts in carbon credits and so on, you're trying to solve the same problem. So in a sense, does it matter whether you call it philanthropy or whether you call it more traditional investment if you're trying to get at the same problem?
00:54:40
Speaker
I think it does matter. I think motivations are different. Rightly or wrongly, there's an awful lot of people in the world right now who are very anti-capitalist systems. So we should probably just be cogent around how we present ourselves and cognizant of those realities. Ideally presenting both sides that there's actually a middle ground that we're all trying to streamline towards and set up less anger and outrage towards each other.
00:55:09
Speaker
But I actually think that there is a fundamental difference in saying, you know, even a 15 year fund is not nowhere near like an infinite time horizon, right? It's 15 years. It's a minuscule drop in the bucket versus I know family offices that are thinking philanthropically that are thinking on a multi-generational scale.
00:55:38
Speaker
And that's for me a very different question. So even if they're still pretty economically minded, they have the capacity and the means to think on an orders of magnitude larger time scale. And so I think that it would be a shame the same way that
00:55:57
Speaker
It's a shame if the world entirely collapses to same-day trading markets. I think we need every natural evolution of pushing the framework of long-term thinking to its edges, and I think philanthropy absolutely sits a tick further on that timeline. You mentioned previously avoiding investments in technologies that prey on human frailty. What does this mean and why is it important?
Ethics in Venture Capital
00:56:23
Speaker
It's one of those really fascinating questions where, you know, why is it important? You could make the argument that it's not, that every human being should learn to fend for themselves against the ails and evils potentially that technology could bring into their lives. And that's a natural form of evolution and evolutionary pressure and
00:56:47
Speaker
We should stress test our societies and our governance systems and our democracies and the strongest will win. And I think that's just an unfortunate worldview for me personally. I think that there are so many things that come into being that frankly, it's not like I think that the social media companies
00:57:10
Speaker
had any terribly minded predatory mindsets around them. I think a lot of the things that happened came from a lack of consideration of a second order effect, right? What happens when you have an infinite scroll on a screen? Well, then you just capture someone's attention possibly forever, right? And so we know that there are kind of gamified constructs that trap people.
00:57:40
Speaker
Gambling is a perfect example. Gamification of many things is a perfect example, right? It traps our attention. It feeds just enough dopamine back into us that we stay locked in these loops. And then you basically end up with a lot of people who are really suffering on the fringes of society because they don't have the resources to get out. Is there potentially the reverse of this, so gamification for good? Absolutely.
00:58:05
Speaker
What are some interesting examples here? Have you invested in any companies trying to do gamification for good where perhaps you are trying to get through your to-do list in the best possible way and you get points? I don't know. Is there something like this? We tend to shy away from investments and things that are direct to consumer.
00:58:26
Speaker
more of a reflection of us, myself and Steve as individuals than because we don't believe it's a viable path forward, right? We just think that we're not the best people to think about it. But yeah, I met with an entrepreneur the other day who is doing exactly that, who basically said,
00:58:45
Speaker
Oh, what if we could, the way that Pokemon Go actually got people out through an augmented reality game on their phone, running around in the real world, turns out geotagging lots of things and generating much higher fidelity maps. Like what if you could do that in a fun way, but with the intention of getting people moving, like physically moving in space and getting a little bit more activity, right?
00:59:13
Speaker
those same compelling video games that lock people in their rooms and getting them out into the real world and into happier and healthier bodies. So yeah, absolutely. I think it's only a failure of imagination that we frankly haven't done more of that. And you have this interesting activation barrier around individual humans, right? We're like pretty reticent to get off the couch where we're kind of energy saving devices, right? So given the option of the
00:59:41
Speaker
go forward or the stay lazy path. Most people choose the stay lazy. So how do you change the decision making around that? How do you get people to eat healthier? And I think that we can do an awful lot more around this. The same way that when we invest in
01:00:05
Speaker
For example, anything to do in the climate space, we basically say we don't believe in altruism. No offense. It's nice. We obviously believe in it, but on a global scale, we just think that it's an unfair request, particularly of emerging economies to say,
01:00:23
Speaker
You have a lesser gain, but you have this better long-term outcome. Well, no one can make that. That's an unfair position to put somebody in, particularly when the Western world has gotten into its economic fertility from a place of burning an awful lot of fossil fuels.
Future of Innovation and AI
01:00:41
Speaker
So you have to shift the economics. You have to make the decision point today economically unquestionable. So no one's ever going to pay more for the greener solution at scale. You have to pay less.
01:00:53
Speaker
so that it's not actually a choice. Do you think good ideas are becoming harder to find? Are great startups becoming more rare over time? Have we picked the low-hanging fruit? I think we're barely getting started. That's good to hear. You don't think that perhaps it was easier to invent something that became a great company in the past
01:01:21
Speaker
in perhaps in the computer industry, because there are so many things that were available where you could innovate, but now kind of the potential there has dried up, or do you see it in perhaps exactly the reverse way? I would say I see the reverse. If for no other reason than like if you track Moore's law over time, right, for the last 122 years, the amount of compute you can buy for a dollar
01:01:52
Speaker
has risen exponentially for 122 years. I think just like a hundred billion billion improvement over that time, which really just means that the capacity for access to do interesting things with the resources you have available, like we've barely scratched the surface, right? The two thirds of the world's population is not actually yet
01:02:19
Speaker
connected to the internet in a coherent, consistent manner. So I think when you talk about that, I think anyone who's sitting from the perspective of like, oh, we're done or all of that, like it's a very kind of myopic Western focused mindset, which is to say, we can't even begin to fathom what the rest of the world is going to offer us as opportunities. And I think it's probably coming from a lot of people from a place of
01:02:49
Speaker
fear, but what I'm excited about is you have all of these sub-Saharan African countries who are now coming online and have mobile-first economies and are starting to service their worlds. And so I think that the opportunity space is actually only growing larger, but that's because I really believe in the capacity of humans.
01:03:11
Speaker
Perhaps I should frame this question in another way. Think about a small team, ideas that are available to small teams to iterate on, to get better on. Were those ideas easier in the past? For example, if we look at a long way into the past, we can think about
01:03:32
Speaker
how easy it was to invent the light bulb versus how easy it would be to create a quantum computer or something. Because we are, as a society, as a civilization, picking the low hanging fruit of the technological tree, is it getting more difficult to find interesting startups?
01:03:55
Speaker
resonate with that because the resources are becoming more prolific, more equitable. Thomas Edison and the General Electric Company and Nikolai Tesla concurrently in their own pathways, it took quite a number of thousands of years of civilization to get to a light bulb.
01:04:24
Speaker
Right. So we're actually just on the accelerating aspect of the curve. And I think that it's actually, one could make the argument that it's getting easier because you have a larger swath of the population educated sufficiently well in the precursors such that the general
01:04:50
Speaker
level of technological literacy across society is so thoroughly expanding that you have a much wider pool set of creative individuals and teams who are chipping away at problems. Now, your question I could frame as saying, is there more noise
01:05:11
Speaker
in the system today than there was at some prior point in existence. And my intuition is to say almost certainly yes, because frankly, who had the capacity to sit around and pontificate and be an inventor for the last couple thousand years of society? Such an outrageously small percentage of society that it's kind of laughable. So in that sense,
01:05:34
Speaker
It was probably like maybe my job would have been easier 200 years ago because there's actually frankly only like 10 people I needed to talk to. But today I've talked to thousands of people and understand what they're working on and then make some hopefully reasonably educated decision about which one of those are likely to work out. So I agree with you that from that perspective that there's a lot more noise in the system today, but I certainly don't think that
01:06:02
Speaker
we're at some creative culmination point such that the next set of interesting ideas are going to be harder to come by. I'm actually very happy to hear that from you, from a person who has insight into these aspects.
01:06:18
Speaker
Okay, so there's a lot of excitement about AI, about large language models, generative models, all of this. Who is going to capture the value from these models? Of course, it's difficult to say, but what would be your best guess about whose? Is it the hardware manufacturers? Is it the existing tech companies? Is it startups? I'm uncertain. And I...
01:06:42
Speaker
try to keep my ear to the ground and listen to the groundswell of excitement and interest. And the simple reality is that the Microsoft OpenAI partnership is really sufficiently strong at this point that you go, wow, does anybody else really have access to the same capacity on the same scale? And I can look back through all time and say,
01:07:07
Speaker
And the value accrual almost always ended up being highly condensed in a very small independent group that then ballooned. So how does that actually work? What does that look like? Who builds these models? I think at the end of the day, there is different styles of value accrual in the sense that first and foremost, the best chip
01:07:34
Speaker
Like if your audience hasn't read chip wars yet, highly recommend, but you know, turns out we've just further leaned on our needs around semiconductors and semiconductor manufacturing and having these really, really high technological capacity systems to build the highest forms of compute available and have them be freely and cheaply available. Cause like, frankly, one of the, I was sitting with a,
01:08:01
Speaker
the top young engineering students at Stanford last night, and I asked them, this is kind of the honors engineering students, and I asked them, who here is planning to stay in academia? Because when I was in graduate school, everyone would have raised their hand. Or maybe one or two kids said, oh, I'm thinking about, and none of them raised their hands, which I thought was fascinating. And their argument was,
01:08:29
Speaker
Well, really your capacity to innovate and build something interesting is directly related to your capacity to have access to compute. Like who has the most access to compute? It's actually not the universities anymore. It is largely the large corporations, which is interesting and concerning, right? And even for startups, like one of the largest gating factors is basically like
01:08:51
Speaker
how many compute modules can you get a hold of? And people are like actually stockpiling chips. I'm not even kidding. It's just a really wild time right now. So I am worried from an access point of basically who has access to these compute models, particularly in a framework where we're not pushing the bounds of compute efficiency. We're pushing the bounds of like model size.
01:09:18
Speaker
So I'm a little scared to say that I think a lot of the early value accrual will be in the large corporations, but it will eventually come down those efficiency curves. And then I think it will get a bit more distributed.
01:09:29
Speaker
With this, then, if it happens so that OpenAI and Microsoft in partnership captures a lot of value here, would this be an instance of an existing large corporation kind of solving this innovator's dilemma or staying on top by... It's not an acquisition, but it's a partnership of some sort. How does Microsoft
01:09:54
Speaker
enable and engage and pull into its own business lines some of these tools and are they well suited to do so from a governance standpoint? I have no idea. I don't really know anything about the underpinnings of Microsoft corporate structure and style, but kudos to them for really making a big bet on a very, turns out, strong horse in this particular race. My sentiment here is that coming from
01:10:24
Speaker
a robotics background, I think about systems that have graceful degradation and good fail safe mechanisms. And I spent a lot of my life thinking about kind of deterministic control systems and that feels still far away from me.
01:10:52
Speaker
in these systems, in these large language models. And so I suppose if I listened to everyone around me, I could come up with the opinion saying, well, like, oh, Mariana, you're just not paying enough attention. You don't realize how fast this is getting so much better. And maybe I'm a bit of a Luddite here. But I think that the initial value accrual will probably be, in a lot of this,
01:11:20
Speaker
middle layer software management tools and to anyone who's saying, but these systems aren't really thinking. You could also counter with, and how often are people really thinking, right? But I am very curious. I think we have no idea how to use these systems. I think they're currently very interesting, shiny baubles of toys that we're picking up and being very compelled by. But I think we,
01:11:49
Speaker
We haven't even begun to understand how they will actually influence us in the long run. I think there's a role for philanthropy in perhaps subsidizing compute for traditional academic research institutes. So one thing academia does well is doing things that takes a long time, requires careful analysis and so on.
01:12:12
Speaker
Perhaps one thing that will be very interesting from a from a safety perspective of these models is to know how they work. And we don't really know that even the experts really don't know how machine learning systems work right now. So perhaps there's a role for philanthropic funding of compute for for academia. Yeah. And one could push the universities and say, why aren't they putting more of their endowment dollars to things like this and
01:12:42
Speaker
perhaps a philanthropic access could be to say, here are restricted funds that we will give to your universities to ask these questions. I like that as a construct. I think that's where the capital markets possibly fall down is if people have struggled to basically monetize
01:13:08
Speaker
philosophical and moral underpinning questions, right to ask, okay, well, what is the right construct and how much should we trust these systems and what does it look like? And, you know, if it doesn't make any near term economic sense to create something like an explainable AI, then who on earth is going to do it and why? And is it necessary?
01:13:34
Speaker
I think entirely relying on an economic system to say all necessary things eventually get borne out.
01:13:42
Speaker
I'm not sure I love that, so I would like to see more people asking these questions. I mean, if nothing else, I would really love to see someone funding a bunch of political philosophy and moral and ethical reasoning classes in computer science schools, because I talk to a lot of very, very bright young people, and then I just really want to hand them a whole stack of dead philosophers to read.
01:14:12
Speaker
Because it seems that they're like divining some of these principles about like societal and human reasoning, de novo. And I kind of just want to hand them like Viktor Frankl and say, like, please read this. Perhaps the pessimistic perspective there is that philosophers have been trying to solve the same problems for 2000 years and haven't really found any definite progress. So why should we expect additional funding to help?
01:14:39
Speaker
I think they have. Maybe I'm more philosophically optimistic on the value of the great thinkers of our times and how much they've influenced some of the great leaders of our times and vice versa. I don't think the US would exist without Jefferson
01:14:57
Speaker
and the kind of thinker that he was. So I don't concur with the sentiment that the support of thinking about things like symbolic reasoning and theories of mind don't lead to meaningful outcomes.
01:15:17
Speaker
It's a fascinating example you picked because talk about an impactful set of ideas in the heads of the founding fathers of the US that allowed basically a lot of other innovation, including technical innovation. So the point wasn't to say that ideas don't have consequences in the world, but perhaps just that there are some especially philosophical problems that are so intractable that we shouldn't expect to solve them even with billions of dollars and decades.
01:15:47
Speaker
Oh, I completely agree with that. But I don't think that's a reason not to keep turning those stones over. And I don't, I don't like the line of reasoning personally to say, well, that's really hard. And that's not really a noble answer. So I'm just not going to worry about it. Right. I would rather have everybody be worried about it and not from generating a sentiment, an underlying sentiment of anxiety in our world. Like we have plenty of that.
01:16:17
Speaker
but to say that we are all responsible and that there's a lot of ancient reasoning to this effect, to the fact that you are not required to complete the work nor are you free to be entirely absolved from it, right? That's a poor rephrasing of the Talmud. And I think we could probably all stand to remember things like that.
01:16:44
Speaker
do you think about the efficient market hypothesis? Do you think it's true? And in which situations is it true? I think it's largely true. I don't know that it's always true. And I think it's only true in spaces where there's a good representative market. So it's hard. The simple reality is the vast majority of markets aren't actually free markets. They're
01:17:10
Speaker
monopolies or duopolies hiding in plain sight. And I think that in that sense, we rarely actually get to test the efficient market hypothesis because you don't have an even playing field of equal economically minded actors. You actually generally have power highly concentrated to a handful of individuals or organizations. And I think in that sentiment, it generally doesn't bear out to be that true.
01:17:37
Speaker
Fantastic. All right, Mariana, thank you for coming on the Future of Life Institute podcast. It's been a real pleasure to have you on. Oh, such a gift. Thank you.