Ep. 34 Hero S2 Ep34 Joe Lonsdale

Decoding Diverse Networks: Joe Lonsdale on Building an Enduring Team

Building enduring teams in a remote world

46 min

Ep. 34 Hero S2 Ep34 Joe Lonsdale

46 min

How did our guest Joe Lonsdale go from high school chess champion to super successful VC? His diverse network and a wide variety of interests to start. Joe has been a part of founding more than a dozen mission-driven companies, including Palantir, Addepar, OpenGov, Affinity, Epirus, Resilience Bio, and 8VC. In today’s episode, Joe talks about how he’s been able to build such strong teams over the years and why even in a remote world, human connection is key to building a strong foundation.

Read transcript

"As Elon Musk says, ‘Cost of cost is much less than the cost of time.’ Great engineers figure out how to manage the scarcity of time and to get things done very quickly, to attract others, and to know how to measure other talents and inspire other talents." —Joe Lonsdale

Quick takes on...

Developing a Company Culture


“You have to have a really clear vision of where the company's going. You have to have really clear values that people share and they talk about, that they put down together. And a good way to talk about values is to talk about scenarios, things that could come up, and how you deal with them.”


Hiring Great Engineers


“Elon Musk says, ‘Cost of cost is much less than the cost of time.’ So great engineers figure out how to like manage the scarcity of time and to get things done very quickly as well, to attract others and to know how to measure other talents and use other talents and inspire other talents”


Bring in the Adults


“When you're building these companies, you want the highest IQ, brightest, hardest work, working innovators early on to kinda iterate toward prototypes and customers, fresh product market fit and really get there. And then once things are working a certain way, you still wanna have the innovative part of the business and you wanna nurture it, but you also wanna bring in adults who know how to run processes.”

Meet your guest, Joe Lonsdale

Founder and Managing Partner, 8VC

Spotlight Joe Lonsdale

Joe Lonsdale is a technology entrepreneur and investor. He is the managing partner at 8VC, a US-based venture capital firm that manages several billion dollars in committed capital. Before focusing on institutional investing, Joe co-founded Palantir, a global software company known for its work in defense and other industries. After Palantir, Joe founded both Addepar, which has over $4 trillion USD on its wealth management technology platform, and OpenGov, which provides software for over 2,000 municipalities and state agencies. More recently, you co-founded Affinity, Epirus, Resilience Bio, and many other mission-driven technology companies.

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Ep. 35 Home S2 Ep35 Todd Olson 1

Decoding Product-Led Growth: Todd Olson on Nailing the Customer Experience

Putting product at the center of your customer experience

28 min

If you adopt a product-led growth model, will that take jobs away from your salespeople? Today’s guest, Todd Olson, says that a PLG strategy and optimization will allow space for salespeople to become much more focused and effective. Todd is the co-founder and CEO of Pendo, a platform that accelerates and deepens software product adoption. In today’s episode, Todd says that when companies utilize product-led growth, they also become more efficient, communicative, and adaptable to the digital landscape.

Episode transcript

[00:00:00] Joe Lonsdale: As Elon Musk says "Cost of cost is much less than the cost of time." So great engineers figure out how to like manage the scarcity of time and get things done very quickly as well, and to attract others and to know how to measure other talents and use other talents, and inspire other talents.

[00:00:23] Dan Saks: That was Joe Lonsdale modern Renaissance man.

[00:00:27] After interning at PayPal in its early years, he co-founded Palantir with Peter Thiel. Palantir was then used by the CIA and FBI to analyze government intelligence to track down Osama bin Laden. By 2021 Palantir's Market cap reached over $60 billion. He is also the founder of 8VC a leading venture capital firm, as well as co-founder of Addepar, OpenGov, Cicero Institute and the University of Austin.

[00:00:57] Keep listening to hear out. Joe has been able to build such strong teams over the years and why even in a remote world, human connection is key when building a strong foundation for your growing organization. He shares what's worked well for him and the lessons he has learned throughout his very successful career.

[00:01:16] This is Daniel Sax, president of App Direct, and it's time to decode team building through diverse networks.

[00:01:28] Welcome to Decoding Digital, a podcast for innovators looking to thrive in the digital economy. I'm your host Daniel Sachs, and I'll sit down with other founders, CEOs, and change makers to decode the trends that are transforming the way we work. Let's decode.

[00:01:50] I'm super excited to have Joe Lonsdale with us today. Welcome, Joe.

[00:01:54] Joe Lonsdale: Thanks, Daniel. Good to be here.

[00:01:56] Dan Saks: Amazing. So I wanna set the stage because many people we have on the podcast, they do one thing really deep. But I've known you for a while. You're a founder, investor, partner, friend, father, philanthropist, optimist.

[00:02:10] You've done so many amazing things. And among them include co-founder of Palantir, founder of Addepar, founder of 8VC, Investor in Oculus, Blend and company. I know OpenGov, Cicero Institute. So many things, but one of the things that I thought was a unique lens that I really wanted to decode and double click on with you is throughout all your experiences, you've been a really good champion of talent and what I've found is you've cultivated, networks that have enabled you and your networks to both thrive.

[00:02:40] So really wanted to maybe start from the beginning at Stanford and hear how you kind of got into CS and the people you met and how that led you along your journey.

[00:02:51] Joe Lonsdale: Yeah, sure. You know, if we're really gonna start at the beginning, I think probably some of the stuff at a young age with the chess stuff, and the math stuff's probably pretty important too.

[00:02:59] You just, you know, I was a California state chess champion a couple times in a row, and my brothers were two at one point, and my friends and I did all these math contests, and they taught me to program when I was, I guess nine or 10 years old. So growing up in Silicon Valley and being part of this deep and technical group in Silicon Valley was extremely important and it kinda gave me a pretty big edge.

[00:03:19] I guess you could say I was surrounded by all these really bright people and you know, I guess I was a little bit a king of the nerds where I had a lot of these friends who were perhaps for whatever reason willing to tolerate me and work with me on various things and willing to help even teach me in many cases.

[00:03:34] And, you know, having that background, you know, by the time I got to Stanford writing computer science, I was already way ahead. I'd already done the undergraduate computer science work, you know, thanks, the help of all these other people and having that perspective and being surrounded by that very, very competitive talent.

[00:03:48] Obviously it was a pretty big leg up. And so, you know, I've always been very competitive. I've always wanted to compete with the best and to be the best at what I'm doing. And when I was at Stanford, I saw a lot of the very top people were going to PayPal, and so I tried really hard to get into PayPal.

[00:04:01] They actually rejected me my freshman year that I got in there as an intern my sophomore year. You know, being part of that group, which Peter Elon Musk had brought together was obviously really valuable as well.

[00:04:10] Dan Saks: Amazing. So tell me some of the learnings from the early PayPal experience.

[00:04:14] Joe Lonsdale: Well, you know, I think Peter in particular, probably Elon too, brought together a lot of contrarian thinkers.

[00:04:20] So you had a lot of people who were willing to kinda explore broadly intellectual thoughts about the world, about how the world works, about what's worth trying in business about what's worth doing, different areas, and really eager to reinvent the wheel. Cause they're intellectually courageous and bold and that sort of energy is really contagious.

[00:04:39] It's really interesting. Rather than saying, How do people do this 20, 30 years ago, or how is this done? It was much more energy of how can we do this better? Starting from first principles, given the fact that we're surrounded by a bunch of the smartest people in the world. It's a very different way of kind of approaching and building a company, and it was very much everyone bringing in their smartest friends to solve problems.

[00:04:59] So definitely take the energy and apply it to a lot of things.

[00:05:03] Dan Saks: So what was the moment in the origin story of Palantir that the four of you decided to come together and invest and start Palantir?

[00:05:10] Joe Lonsdale: I was working with Peter at a macro fund and I was a top trader there for a while actually doing very well, and I was trying to bring top talents.

[00:05:22] And to help us with the macro fund. And I actually brought in, obviously with this background I had from the chess and math world and my good friends from high school who taught me a lot of things, a couple cases from elementary school actually, that I brought some of these people together out of their PhD programs and we were working on stuff.

[00:05:38] And it turned out that like four or five of my smartest friends I'd known really didn't like finance, really weren't interested in finance, didn't find it as intuitive as I did. Maybe. Maybe they just didn't care about money and a combination of things. I'm not exactly sure. I have to give a, I should go ask.

[00:05:52] You know, so I had this talent around me and there were all these different random projects people were working on at the time around Peter. There was a spam project, was kind of funny that trying to make money off the different things there. There was like a new restaurant, which is obviously turn out, obviously expensive thing that failed very quickly, which was funny.

[00:06:10] And so there's all sorts of really crazy projects and probably even crazier than any of these was that Peter and I had been talking for a while about the anti-fraud stuff at PayPal. And how we could probably, you know, take that and apply it to different problems in the US government and upgrade investigative technology in the US government given 9/11, you know, from everything we were seeing is they did not have, you know, anything close to the level of investigative technology that we had there.

[00:06:34] So if you kind of put all those different ideas in a row, like they're all quite outlandish. The idea of going and redoing the US government investigative technology . Especially wacky to a lot of the people who were around us at the time. I thought it was really fun. I had studied this area a little bit for fun.

[00:06:49] Everyone, every, you know, young teenage boy watches James Bond and I'd gotten into it and read a bunch of books on it. And so my roommate from Stanford, Stefan was one of the fire six people I brought to work on the hedge fund and frankly probably was one of the ones more in the hedge fund as well. But it was willing to work with this with me, with the others.

[00:07:05] And we started kind of flying back and forth to DC trying to meet mentors, trying to sketch up a prot that we thought be the right product based on the lessons learned from PayPal to to more broadly give investigators, the ability to use all the data. You know, at the time we saw the government spent 36 billion a year gathering data in DC at all different agencies and there's just a huge amount of money gathering data, and yet no one was really able to access that collaborate, figure it out.

[00:07:29] So we said this is a really cool problem. So we sketched out a bunch of interfaces, flew back and forth, and Stefan was a really good prototyper where it looked really cool, these graphics guy as well. We were able to get people excited enough that, you know, Peter got really excited by the project and he brought on Nathan.

[00:07:44] We're not supposed to mention anymore cause he's now an international man of mystery. He doesn't like to be on the internet, but Nathan was the key guy from PayPal who worked on these problems and he came on and helped build it out. Nathan and Stefan, I was kind of more a product guy at the time while doing this trading and they were the engineers.

[00:07:59] And we really kind got going that way and, and then, you know, a little bit later on, Carp was giving me a lot of advice and there was a whole thing where Stefan and I recruited Carp because we didn't want any of the other CEOs that Peter was suggesting from the Defense Department. And so it was about kinda a year incubation and Carp got involved and the whole thing kind of took off.

[00:08:15] Dan Saks: So the success is unreal and definitely the reputation for hiring, you know, talented engineers and the secret element of the brand has been legend in the valley, but you obviously left and did many other things. What was the decision like at that point? And you always had the philosophy that you want found a company and be there forever, or did you have this kind of idea of I wanna do a lot back then?

[00:08:37] Joe Lonsdale: You know, I started it with Stefan when I was 21, and we built the government side. We actually had to build this like all about structured data that we realized we needed a whole new part of the product for all the unstructured data. And there are these pillars about like productizing data integration, all the search discovery analysis, platform stuff, all the stuff with collaboration.

[00:08:57] We had this idea where, You wanna have pounds here installed in different parts of the world, then you need to have really clear rules about how they work together. So if MI6 and this part of the CIA this part of the FBI, all wanna share data to try to catch these bad guys, here's the rules to make sure that they're doing it in way that they're allowed.

[00:09:11] So we designed all these really cool frameworks for it to be able to work in a distributed way. And you know, about three and a half years in, we realized government is very unpredictable and can be very slow. And what we got ourselves into here, so, you know, we should actually probably take some of these data breakthroughs we're doing and apply them to commercial world as well.

[00:09:27] Because it turns out that a lot of things we're doing are very applicable to parts of finance and energy and healthcare and kinda data problems in the Fortune 500. So I helped get that going with the focus on a very specific interface in finance. I was really passionate about. Ended up having the biggest hedge fund in the world.

[00:09:41] Use that for quite a while and pay us very well and really iterating on that. And you know, we'd hired, there were six directors underneath the founders. Five of them were my personal friends, actually. People I knew and we brought them in. You know, we're hiring all these really great, talented people.

[00:09:56] Spent a lot of time, was very involved hiring the first 200 people or so at Palantir and we started this commercial division. There's gonna more stuff to start there. It was gonna start another part of the commercial division and you know, at that point, five years in the company was just starting to be pretty successful.

[00:10:08] You know, it had space, had some of the very top talent in Silicon Valley and. It was six years, and I guess if you say it, you include the beginning part. And I owned, I don't know, I think I owned that point, like four or 5% of the company. They said, You know what? This is pretty exciting, but I've already put in so many great people.

[00:10:24] I've already replaced myself. You know, it seems like it's time to create something new.

[00:10:28] Dan Saks: So in my view, you're like a talent magnet, and the Palantir story is a good example of that. But you did go and start another company before getting into VC. Tell me about the rationale for founding one more company and then you've obviously kind of continued to be a founder.

[00:10:42] So how do you look at your time? Are you saying like, I'm gonna start one thing, go all in? Or how do you balance across different things?

[00:10:49] Joe Lonsdale: When you're first doing this, when you're first getting involved, you really gotta build one company and go all in. Cause there's so many lessons you're not gonna know.

[00:10:57] You're not gonna know. And there's so many advantages to like just going all in on these things. You need everyone early on, just all in on these companies. I think it's very important. When I started at Addepar it was really based on this theme I've been thinking a lot about. So just say, you know, I'm venture capital now, so speak like a venture capitalist.

[00:11:13] There's really two things that matter when you're creating a company early on. There's the talent. Which is getting the very best people in the world who are motivated, inspired, and aligned, and working on and bringing their smartest friends. And then there's the what are you doing? And you know, to create a successful, big, successful tech company.

[00:11:28] I'm not talking about a small business here, to create a multibillion dollar tech company, it needs to be something that's possible now that wasn't possible five or 10 years ago. So having opinions about the world and what's possible is I think is really important. And obviously your opinions have to be right, otherwise , otherwise you're not gonna make it.

[00:11:44] And so the thing that was happening, kind of the end of the 2000s. 2009 / 2010.

[00:11:49] Was you had this new wave of companies that we call the smart enterprise wave, and they were possible because you had the cloud and you had the big data stuff going on for the first time and you had the data coming into the cloud for the mobile ecosystem and from all these other places. And so you had all these companies built in the 1960s, 70s, 80s that were kind of the original enterprise software wave that are all very linear.

[00:12:12] They don't use to get the edge of the cloud or big data. They don't collect knowledge orders, manipulate and figure things out. The processes to provide industries are not nearly as good as they could be. So there's this wave we were mapping out and then there were like 300, 400 of these companies that we created.

[00:12:25] I think that was about right, ultimately. So unlike the consumer wave, which had about 15 or 20 big companies, you know, they were really big. This was more spread out in terms of really big companies. They weren't as big as Google, Facebook, and Twitter and et cetera. But there were a lot of 'em are multi billion dollar companies, most of them that size.

[00:12:41] And so I said, you know, which ones are you most interesting? Which ones do I have the biggest advantage and biggest interest in creating? And the platform that would have a very large amount of the world's wealth on it and be able to make more intelligent decisions was very interesting to me as somebody who's interested both in finance and technology.

[00:12:55] So Addepar as a new cloud platform that was very badly needed by RAs very badly needed by family offices was something we started, I started working on then really hard. I went all in on that, but I also help friends start a fewer things at that time. I helped my friends start OpenGov a year later. I helped my friends start zba, which is a very successful, profitable share platform where everyone wants sell secondary shares.

[00:13:16] I think's one of the best ways to do it, and I guess a few other things at that time. But yeah, Addepar part ended up being like 90% of my time, which I think is the right way to do these things. And if anything you should it hundred percent. But it's been very, very successful. It has 4 trillion in the platform now and you know, built a lot of great talent there.

[00:13:30] I think I made some mistakes, you know, having gone through a successful company like Palantir, you assume that you know what you're doing and sometimes you don't realize you had certain things that you didn't have. So I think there were some cases at Addepar where there's a total pieces of talent missing that if I had thought about it better, I would've even got out to go faster.

[00:13:47] But as it is Addepar's been very successful.

[00:13:50] Dan Saks: And when you talk about like bringing talent in and having a full leadership team, are you often sourcing from your own network or do you use recruiters or what's your secret sauce to attracting talent?

[00:14:00] Joe Lonsdale: Yeah, the most important thing, especially your first double companies, has to be your own core network, has to be, in my case, people like chess or math with or people I knew from computer science or people who I was involved in intellectual endeavors with a lot of intellectual interests where I'll meet smart people. I think having a lot of intellectual interest is probably pretty big advantage of mine, just because I'll get to know people with different backgrounds based on the fact that, you know, I just spent this morning doing a bunch of healthcare policy, which not everyone else likes, and I was pretty tired.

[00:14:29] I was up last night with friends having a cigar and drinking, so it was pretty exhausting to do healthcare policy this morning, even though I love those people. But I set up a lot of different goals for myself and a lot of things I wanna get right, and you meet really amazing people in these different fields and bring them together.

[00:14:44] Obviously, the technology networks, the ones that are most important for technology companies early on. And there's a whole another set of networks, which I call the adults in the technology world. So I wrote this essay maybe a decade ago now called "Bring In the Adults". But the way I see it when you're building these companies is you want kind of like the highest IQ right?

[00:15:00] Hardest working innovators early on to kinda iterate towards prototypes and customers towards product market fit and really get there. And then once things are working a certain way, you still wanna have the innovative part of the business and you wanna nurture it, but you also wanna bring in adults who know how to run processes.

[00:15:14] You wanna bring in people who know how to run the sales machine, who know how to run the customer support machine, who know how to run whatever machines you need to build that have been built as you know, as an entrepreneur yourself a hundred times before. So it's different source of talent you kinda combine to make these things work.

[00:15:27] Dan Saks: And did you start Angel investing even before Palantir or was that something that came later?

[00:15:32] Joe Lonsdale: So I grew up in Fremont, California, middle class. I did not unfortunately, have money to Angel invest the faults. My parents had amazing parents, but we were not wealthy enough to Angel Invest early on. I think at first made enough money to write a few small checks, maybe from the hedge fund with Peter in my early twenties.

[00:15:51] Then I really went all in on Palantir. You actually surprisingly make very little money from these startups that are successful as you know, especially back then it was seen as really gauche to think about like selling out in different rounds. So we didn't really sell out early on. Palantir went public I think a couple years ago now.

[00:16:07] That's where I made most of the money from Palantir. So a in Texas. But in general, I think I started angel investing. 2000 for me, some from the hedge fund, and then I raised the little mini 5 million angel fund. That was a lot of my money as well. Maybe 2009 or so. So basically when I was late twenties, when I was starting Addepar, I guess I was also starting angel investing.

[00:16:29] Dan Saks: Got it. And now you assume for angel investing too, you're tapping your networks of people you knew?

[00:16:33] Joe Lonsdale: Yeah, You know, it was more like I was already kind of mentoring and advising all this talent I'd worked with in many cases were going build things. I thought, Wow, this is really cool. I'm really on this.

[00:16:43] This is gonna work really well. I wish I had, you know, $100,000 to throw into this round because I think it's going to be great. So I started that and you learn a lot other way as an angel investors think you do as an entrepreneur. I did learn that my instincts overall were correct. So what I did, I had three size of investment. They had the really big checks, which back then were 300,000.

[00:17:01] They had the midsize checks, which were 100,000 and I had the mini checks, which were like 10 to 50,000. I did a lot more of those, and overall I did have more winners with the really big checks versus medium checks, more winners than small checks. But you learn a hell of a lot about how I think about these things.

[00:17:15] What types of things fail? I mean, there's all sorts of stuff that sounds like a really good scheme. It just never ends up being a good idea. It's always about just top talent, working really hard and all the important stuff, takes a long time.

[00:17:28] Dan Saks: What are some of the lessons that you learned then that you think are just as applicable today?

[00:17:32] Joe Lonsdale: Well, like don't invest in schemes. Don't invest in things where, The government's gonna bail it out, or there's gonna be one really giant deal with like a big company or there's gonna be some trick that makes you a bunch of money because of some new thing. It's, it's very unlikely those things work. I mean, I guess there's sort of one time in my whole career what I'd call a scheme.

[00:17:51] I wanna name the company to be offensive to them, but there was some sort of scheme where like all these trucks were being required to put this thing on the truck and this angel investment that didn't work for a while and then suddenly shot up. Cause they were required to do. And they're valued at least in the billions

[00:18:05] now. We'll see if they actually exit in the billions. But I think in general, like these schemes like that is just not a good idea. You just have to solve a really hard problem over a long period of time and you have to build a great tech culture. Like basically all these companies that had like some really good idea with the product, it sounded really good, but that weren't being founded by technologists.

[00:18:22] They all fail. You know? You have to have technologist involved in the founding team. That's right. It's just my lesson.

[00:18:28] Dan Saks: And how would you define a great technologist and what would someone look for?

[00:18:33] Joe Lonsdale: I think first and foremost, they have to be just the one who can attract other great technologists, which means really strong computer scientists and people who think creatively think like engineers, which means manage, which means building and building, managing scarcity.

[00:18:48] One of the great lessons about what a great engineer is for me when I was younger is it turns out it's actually very easy to build any bridge you want if you have infinite resources, right? Because you just design it in such a way they just very, very wasteful, but super secure and it's done. But a big part of engineering is managing scarcity.

[00:19:03] And as Elon Musk says "Cost of cost is much less than the cost of time." So great engineers figure out how to like manage the scarcity of time and get things done very quickly as well, and to attract others and to know how to measure other talents and use other talents and inspire other talents. And so there's all sorts of rules for good tech cultures, right?

[00:19:21] But that's kinda a very, very simple start right there. I think Peter Thiel always really emphasized. Just like the 99.9 percentile minds are just worth so much more than the 95 percentile minds. So it's like, who is the person that was like multiple years ahead at the top engineering school and who won all those contests and stuff?

[00:19:41] And you know, I always had friends that were step ahead of me in some of those things for the international contests or whatever. And those guys, they, it was just such an advantage happen on the team. It's also true, you do want some experience around, so I think an ideal startup team will be. You know, four or five smart dynamic people.

[00:19:58] Maybe they've won contests and like national robotic contests, great computer programmers, but they also are good communicators that they could have been something not in tech. They could been a historian, they could been a great writer, just a high IQ in general, it's important engineers and then you combine with people who have built related things over the last 20 or 30 years is you do want a couple more experienced people sometimes to guide them.

[00:20:21] I think early on in in Addepar, I underestimated how important that was, and there were things we did that we just would've benefited from having more adults around. So I think that combination is really important for the culture.

[00:20:31] Dan Saks: So you tracked a solid team, but then are you intentional about building the culture, the vision, the values? Or do you like to grow organically?

[00:20:38] Joe Lonsdale: Yeah, you have to have really clear vision of where the company's going. You have to have really clear values people share to talk about they put down together. And a good way to talk about values is talk about scenarios, things that could come. And how you deal with them.

[00:20:50] What's most important to the company, What's most important to people in the company, why you're here. One of the values, very wealthy people, piece of the company, they wanna make a lot of money. That's totally fine, but you need to have other values that supersede that at all possible. Cause otherwise you don't end up getting something that's healthy, that's loyalty.

[00:21:05] The best companies I built, you have a lot of talented people stay out for a very long time, and I think that's a sign of a healthy company. If you have your superstars willing to many years to stay there, you know, for a long period of time. When you create a company early on, you wanna give it a heartbeat, which there's just certain things you do regularly.

[00:21:20] There's like maybe there's certain weekly things you report on there, certain monthly things you report on. In some cases be faster on the scrum daily things or whatever, but you start having a heartbeat where people are stewards of the schedule, stewards of the goals, and you have a culture you have to nurture.

[00:21:35] Where I think flat cultures work better for technology organizations. I think cultures people are eager to challenge. I think it's really important for people to get along outside of work as well. It's something that maybe is controversial, but I don't like having a company early stage where they're all very different places in their life and they all just only know each other at work.

[00:21:52] I think in order to get an environment where you build the trust, the people will push back hard. When it's the time to push back hard, they need to have some bonds they've created, and those bonds are much stronger if they have some social bonds as. It's like a well to draw on for people in the company early on.

[00:22:06] And so that tends to mean that you want like socially a more homogenous company, at least the very beginning in order to get that kinda healthy energy, which people like Max Legend have talked about this as well, align with the way he said it got in trouble. Cause it sound like he was saying not to bring in diverse people.

[00:22:22] Of course you are bring in diverse people and of course you wanna have different skill sets, but you need to be socially interested in hanging out with each other. I think for a startup company, I think that's actually key.

[00:22:32] Dan Saks: It seems to me like you want people to be all in, and what I've found is that a lot of founders I interact with, they talk about how people show up, they'll work, but then they all do different things. It's really hard to have that singular focus and that trust and that energy, and that's made even harder by remote team. So definitely resonates.

[00:22:48] Joe Lonsdale: That's why remote teams so hard for me that just like, it's so hard. How do you build that deep well of trust and the bonds and shared values and shared social time?

[00:22:57] Maybe if you have really good offsite all the time or something, it can work, but just, yeah, nothing seems so hard for me.

[00:23:03] Dan Saks: The hard thing though is that if you're tapping your talent networks and like you and I both were in the Valley we moved, You're in Texas, I'm in California, L.A. But you have people everywhere and to just say I'm gonna only be in Austin is limiting too, based on your talent pool.

[00:23:17] Joe Lonsdale: I tried doing something only in Austin that was very important to me and we ended up basing it mostly in New York and San Francisco for fin-tech company. I started recently, but we have offices in San Francisco, we have offices in New York. People work really closely together there. We fly back and forth.

[00:23:34] We do offsite together, some of those in Austin, and I think that's worked really well. The idea of just people being everywhere to me is still just so much worse than having bases where, where the teams are together.

[00:23:43] Dan Saks: Yeah, I agree. And I'm like fueled by just being in person with people, so it's. Definitely something that's exciting.

[00:23:48] So I think one of the cool things that I've known personally about you that a lot of people don't know is when you started 8VC you had an advisory board, and on that list is everyone from Steven Harper to Ashton Kutcher to Nema from Blend to Aaron Levy from Box. I was grateful to be on that list and what I found is it created like an instant connection for me where whenever I met great talent,

[00:24:09] or whenever I met people, I thought of you and I thought of 8VC and sent them to Alex or others. And I think if that formal kind of setup wasn't there, I probably wouldn't have thought of you. So I think it was cool in many ways. One is it establishes connection and obviously you've been incredible at staying in touch with people both professionally and personally, and kind of cultivating a group and a network.

[00:24:29] But what I also admire is that this was a tech vc, but you had actors, you had politicians, you had leaders across different industries, geographies, everything. So tell me what the genesis was from that and the value you got from that and how that's benefited 8VC and yourself over the years?

[00:24:46] Joe Lonsdale: Sure. This probably comes a little bit down to the fact that I have so many different interests and then I have friends who do a lot of different things.

[00:24:53] And so, you know, Prime Minister Stephen Harper, to me was one of the great leaders we've had the stage in the last few decades and is a very courageous person. For me, courage is extremely important. I'd actually rather deal with someone who is courageous and I disagree with, than someone who I think is essentially a coward, who is on my team.

[00:25:09] In his case, I happen to agree with him on a lot of things and he was the only one to stand out for Israel in certain cases where it was being wrongly condemned and the only one like to stop certain things. He got punched in the face by an old French president once because of it in private which I thought was a very funny story.

[00:25:24] But he and others are exemplify leadership and they exemplify traits that are very helpful to our portfolio. They also have networks, of course, that are very useful to us when we're trying to get things done around the world. You know, Ashton is a great example of someone who, as you know, probably is a great investor as well. He's very interested in products and technology.

[00:25:41] So just obviously he's a very dynamic person to have around and it's been great to run things by him over the years. And I partner with him early on, in his nonprofit savings. Thousands of kids exploitation. Online. Online. And we'd find him. So he's working together pretty well. And just having people who can open doors for you is really critical.

[00:26:01] As you said, having people who are tied to top talent is really critical and frankly, it makes the whole thing a lot more fun. You just have interesting smart people around you who get to people. All of us at the fund who are partners now have probably made enough money that most of don't actually really need to work anymore at this point.

[00:26:15] And so, you know, we do have a very gruling very intense work schedule and I think in order to keep that up, it has to be something that we enjoy and people we wanna be hanging out with. And so the advisors will give us a bunch of advantages. It also lets us work with people we like.

[00:26:28] Dan Saks: Amazing and a couple call outs for the listeners.

[00:26:30] So American Optimist incredible podcast, and I love the one with Prime Minister Stephen Harper. Super interesting. I encourage everyone to listen to it and then you reference what you're doing with Ashton around Thorn. But again, incredible cause I encourage everyone to check that out. For people kind of listening to this, there's probably a big question to say like, Well, how, based on the Valley did you get to know Ashton Kutcher and Prime Minister Stephen Harper well enough to get them on your advisory board?

[00:26:54] Joe Lonsdale: Well Ashton and Demi came up to the Valley and asked for advice when they, she was first thinking about Thorn over a decade ago, and we had a lot of mutual friends. It turns out, cause he was involved in the Valley. So I spend a lot of time with him. Prime Minister Stephen Harper. You know, I had been advising the Canadian government on his technology strategy to the counsel General John Proto in New York.

[00:27:13] The Late Minister Flaherty, I thought was one of the great minds also in global finance. And just because I had a lot of opinions about policy in that world. I met him and debated things and he listen to pull things in place Canada that I was helpful with. So I think because I'd done that, the Prime Minister knew who I was and also just reached out through friends after he was out of office to meet.

[00:27:33] We got along really well. I was excited to try to involve him in different ways. The things we were doing.

[00:27:39] Dan Saks: Fast Forward few years, right? You've had this advisory board, you've now co-founded many more companies. You've invested in dozens, and now you're starting a university, an institute. How do you balance your time?

[00:27:52] How do you think about methodically managing all this?

[00:27:55] Joe Lonsdale: This is something that I probably need more mentorship on. I'm still figuring that out. Daniel, we had our fourth daughter who is three months old now, so I have four little girls at home and balancing them with my reading, which is really important to me. I've always read a huge amount.

[00:28:09] I've honestly read less the last five years after having the girls, and then 8VC is my main responsibility. I think my rule in general, I try to have, speaking of like how do you use your time? Is, you should only be responsible for the failure of one thing at a time as much as possible. I have not always kept it that, but one of the big mistakes I made earlier in my career was the more success you have, the more a lot of people try do a lot of things, and I saw that with a lot of other people before me, and I ended up making mistakes myself as well.

[00:28:36] I recognized the same mistakes my mentors had made. And I went way too broad in the mid twenties, a lot of stuff, and I ended up having to call back and say, Hey, you know what? It's really important at any given time, if there's one thing that fails, that thing is my fault. But it fails and everything else has founders, has leaders, has people in it.

[00:28:53] That's their fault and it fails and I'm just helping them. So that's how I try to structure things. 8VC is the thing. If 8VC fails, it's my fault. Now, I may have gone a little bit beyond that rubric with UATX with the new university, which by the way, is being extremely successful. I think there was probably a year, starting about a year, little more than a year ago, where a if UATX would've failed.

[00:29:14] It would've been my fault, even though we had Pano and others. But Pano, Barry Weis, Neil Ferguson, the best co-founders contributed to this really well. We've raised over 20 million. As of now and the university succeeding in lots of ways and we've brought on now other great board members that's gonna be announced.

[00:29:27] And so I think fortunately, even though I'm the chairman of the board, I've extricated myself to the point where I'm gonna make sure it wins. But it's not only my fault anymore. I think it's really important. Right. With any, you're doing like is it my fault that this fails? I say, How are people who are extremely confident that other investors are betting on when they're the owner and you really have to Only one thing at once, I know maybe sees this differently, and he's alluded two or three things.

[00:29:50] Even with him, I've seen things that he's my best entrepreneur in the world and because he's doing so much at once, there's certain things around him that aren't doing nearly as well as they could if he was able to give it more time.

[00:30:00] Dan Saks: And you reference like mentors in terms of how they manage their network really effectively. Who are people you look to that you think do this in a really good way?

[00:30:07] Joe Lonsdale: In terms of managing networks? That's an interesting question. I think Alex Carp is smart about people, although I don't think he's nearly as broad as I am about. I think all of the successful venture capitalists in the valley, they do this in different ways.

[00:30:22] This this's kinda what you're doing as a venture capitalist is you're, you're training ecosystem and you're managing a network and you're doing it in a disciplined way. So you look at of the top venture firms and see how they operate, I think it's very impressive what they've done. I may be more aggressive than some of them.

[00:30:35] I think for several years we were doing an average of 180 events per year. We built a system, in fact called Affinity. Drew and I co-found this with two amazing talented young guys outta Stanford who are this now a very big company. Thousand forums are using it. But we basically built a system that used AI driven CRM to help us, and we basically ally with differents and different CEOs.

[00:30:57] And it really helped track the network and prioritize for deal flow, for other things for us. And so if people are interested, I guess how I think about networks like Affinity, which is now used by firms including the majority of EC firms in the world at this point. I kinda grew outta thinking on that.

[00:31:11] And there's books I read early on, like the Never Eat Alone book by Keith. Keith Ferrazzi I think this is quite good. And that was over a decade ago and I just think it's worth thinking about cause making it something that you actually make it as something you think about. Build conceptual structures around.

[00:31:26] Force yourself to have some kind discipline around and it shouldn't take over your life, but it has to be a big thing for what you're doing if you're gonna do venture capital, if you're gonna do certain types of activities.

[00:31:36] Dan Saks: And I definitely think like a lot of people are not methodical about it, but what I see in you is that it benefits so many ways.

[00:31:42] Like you said, diverse networks and then things come of it. But one of the things to call out about you is that while you're very busy, you're also one of the most responsive people. I know you came to my engagement party, you're the first to respond to something. If the answer is yes or no, you know, with this podcast, you're just like, Yep, let's do it.

[00:31:57] You didn't really need to involve your team as a question. You're just like, Are we doing. So how do you balance that? Do you have a philosophy or a value around like responsiveness and transparency, and how do you balance that with all the things you do?

[00:32:08] Joe Lonsdale: Yeah, you know, I, I have so much going on that I, I, I realize just I have to be responsive.

[00:32:13] Otherwise, if I don't get back really quickly, I might never get back to the person because there's gonna be something else tomorrow, you know? So, Actually, it's funny, I got subpoenaed, I mentioned online in this Twitter thing, right? Because I guess I know you a lot. I'm not involved in Twitter, but Twitter subpoenaed me cause they're phishing everything.

[00:32:27] So I have to upload all my emails until the lawyer systems in order to like see which ones are gonna have to go to Twitter, is the way this process works. And I've crashed out. The first two different systems they used. Cause they, they've never had this many volume of emails before that they've had to upload.

[00:32:41] That's prefer, thats . We're still to distract the emails, but I don't, we're gonna, anyway, but, uh, yeah, no, I try to, I, I, I do fire 600 a day I spend three or four hours on it now, which is annoying, but I'm really fast. So I'll be flying home tonight on the plane back to Texas, and I'll just get the rest of it back.

[00:33:00] I try to do it in real time. Sometimes it's very rude in meetings and so I try not to do it too much, as much real time as I have. It's a trade off. Get back to people with these people you admire and people. You like, like you respond, you do think with him. I actually, Daniel would love to spend more time with you.

[00:33:13] I haven't got to see you nearly enough and so I'm obviously honored you asked me and happy to come on. But I think it's just in general it's good to just like do things forward and spend time with good people around you and do as much as you can.

[00:33:23] Dan Saks: Yeah, I appreciate that. And one of the things that I admire about you, if I were to look over the years is you've had very deep first principle thinking I could probably ask you something across any subject and you would always have an opinion.

[00:33:35] But more than just having these ideas in your head, you're executing on them and bring it back to the topic. We're decoding around diverse networks. I truly admire and, and there's like very few people that can see something similar where not only do you have this network, not only do you have these ideas, you're able to execute on them in a way that allows you to do many things at once in an effective way.

[00:33:56] But also what I've found is that those people that you're mentoring or partnering with or co-founding with, they're all better off for that partnership and you're enabling them to lead and thrive. That's something I find super inspiring at the same time

[00:34:07] Joe Lonsdale: I really appreciate that one. I do do a lot of things these days.

[00:34:09] It's very important to me to try to only take upside when I'm gonna be creating to the person. So I actually probably taking a lot, a lot of things I've built in the last decade I'm not saying I always get this right, but I think it's just really, really important to try to like exceed expectations, you know, based on what your share is.

[00:34:30] Even if you couldn't take it more then because I'm doing so many other things, it's a very positive thing to do if you do it right.

[00:34:37] Dan Saks: In terms of your co-founders, whether it's at OpenGov or with the University or Palantir or any of these examples, like, and maybe I bring it back to this kind of concept that you shared around.

[00:34:46] You have one thing to fail on. It seems like you must have this methodology, which is like I'm co-founding with you, but it's your neck for the failure. Like what's your philosophy around like accountability in teams and how do you get people to be a part of the team, but then also like know that this is on them?

[00:34:59] You know,

[00:35:00] Joe Lonsdale: I'm still learning over time how to get accountability, right. I've biased very strongly towards loyalty. And towards being a good partner, someone I'm building with. And there are cases where we've had to replace CEOs or a couple cases shift the CEO's role to really, you should be head of product but you shouldn't be CEO here.

[00:35:19] And most of those cases, maybe all of them, they all exceptions. It was like a year or two too late that we did the shift. Cause you kinda knew it, but you kinda really wanted get the person a chance. And that's a really hard thing for me about business. There probably are some of these things in business like that.

[00:35:35] Or I might benefit from being a little more of a jerk, or at least a little more willing to like break the glass a little faster. And I see people like Bezos who are willing to do that really aggressively and Elon is starting to move in that direction.

[00:35:49] So I'm still learning, turning 40 soon, so I'm getting to be an adult now. So learning how to be properly aggressive. Well, I'm obviously extremely aggressive with trying to succeed and being ambitious. And for me, I will try to hold myself accountable. Like if the company's doing a certain level well, like I will make sure that financing is done right cause I've done that times and we'll get that right together.

[00:36:08] Go the work together, it make sure to help with certain things, make sure the right people are giving feedback on certain things, whether you need it in the engineering side or product side of a product. I historically, I spend a lot of time on marketing these days where marketing is to find as kind of like a top level sales strategy that kinda theose between product and between the sales cohorts and how you're gonna go after that, how you're gonna find markets and find things for them.

[00:36:32] So there's parts I try to make sure I'm holding up my own on and then you kind of give them expectations and make sure they're holding up their own. I think the only thing that really drives me crazy is if you have someone you're working with and it's clear they're not getting their all to it, it's they're misaligned somehow, or there's something else that's making them.

[00:36:47] Hold up their part of the bargain and to build these companies, again, it's like winning a gold medal in the Olympics. You have to be that intense. If you're not training hard enough to win a gold medal in the Olympics, you're not gonna have a multimillion dollar tech company most of the time. So I need making sure are their all, like, that's their job as the main founder.

[00:37:02] You know,

[00:37:04] Dan Saks: And I feel like this is great, taking a story arc to where we are today and all the amazing things that you've. And I really want to touch on some of the big problems that exist today because the last time we spoke, you talked about how people aren't doing enough in deep check or solving hard problems.

[00:37:20] So I wanted to give a minute to kind of talk about what you think are some of the biggest problems to solve, and what are some examples?

[00:37:26] Joe Lonsdale: It was funny, I was talking to a reporter doing a story today on the Palantir Path, which I guess is her version of the PayPal Mafia, and it was kinda interesting for me to go back and look at like the 30 or 40 companies that I'm aware of that have come out.

[00:37:39] I've helped with. From that group. And what I'm really proud of from Palantir and Addepar and other companies like OpenGov as well, is the willingness to take on these problems that seem just like really intractable and really, really, really big. So, you know, it's almost comical to say you're gonna go and you're gonna fix the information architecture for the tens of billions of dollars spent in the US in defense intelligence world and for the 40 main allies.

[00:38:04] Right. I just, that's a big problem. And how it go about doing. You almost need to be a little bit crazy to attack these things. So for me, the biggest problems in the world are like, where are there giant gaps and things that are broken that should not be broken. Probably the most important one today is just like a bunch of these areas of government.

[00:38:22] That's what I'm obsessed with right now. Just so many examples and keeping it totally nonpartisan. There's just so many examples of just. Bad incentives and just things that are, lack of accountability and just, just all sorts of messes. I think similar to government, when you kinda go towards that side of the spectrum with these kinda big, giant slow institutions that aren't responsive, you get lots of things in healthcare, the way we run hospitals the way.

[00:38:47] Competition works in general. In healthcare, we have these cartels blocking competition, stopping competition. You have very little incentive to get things right in hospital and get things efficient. We talked about engineering being about efficiency, right? And about doing more with less, and that's just not how hospitals or healthcare systems are set up at all right now.

[00:39:03] There's just waste everywhere. There's no feedback, and I get rid of that. You see this in so many areas, society, they're very important. You see lots of areas of education that are very important right now as well. Just not feedback and to improve the broken universities to improve. We did something again, nonpartisan.

[00:39:20] We did something with vocational education recently. We saw educational schools we're failing their graduates, people going there, coming out with low salaries. We change the incentives for the schools. In this case, I guess the policy solution versus the tech solution. And we made it. The schools, vocational schools only get their funding with a portion to the salaries of the students coming out since they're supposed to be people, jobs, the whole of the school and the salaries to these schools all throughout the state of Texas, over six years, as of two years inflation.

[00:39:48] And just dramatically changed based on having incentive. We've taken this to a bunch of other states, and so for me, I'm looking at what are the big gaps in the world and how could technology, entrepreneurship and up policy entrepreneurship fix them? And you, I'm doing all the policy stuff with doing a lot of things in a lot of industries on the tech side.

[00:40:06] I mean, I guess another giant gap in the world for me right now is nuclear energy is just obviously an answer that could be so much better and people just vastly underestimate how much. Better new energy could be if we actually put the resources on it and we're allowed to iterate on it in the right way the next decade for all these problems.

[00:40:21] There's just a lot of kinda really big problems you can solve with these kinda bold projects and just trying to help other people push forward.

[00:40:29] Dan Saks: Yeah, and one of the things we talked about last time was the methodology in which you do it. So back in the day. You didn't have access to funding. Now there is, we see with App Direct just so much transformation within traditional industries and still so much opportunity to transform the enterprise through technology.

[00:40:45] But one of the things that you mentioned, which I think is super interesting, is kind of really the intersection of private equity and technology. Can you speak a little bit more to your thoughts on how you fuse let's say, a venture funded model with private equity to create really interesting outcome?

[00:40:59] Joe Lonsdale: Private equity's interesting. It's, I've written a few pieces on this in the past where I think it plays a really important role in the economy. A lot of what private equity can do, if used correctly, is to help scale an idea really quickly in an economy. So let's just say for example, that there's like 80,000 loading yards around the us, which are these like logistical hubs that are used and there's a lot of people working at them.

[00:41:18] There's a lot of costs that get things in and out. And let's say you figure out how to use like autonomous driving and AI loading, and you make these things. Or way more efficiently for, you know, way less cost with less emissions. Let's say if you have a technology doing that, a private equity firm would probably be a way to take that tech company, which might be doing this in a few places and scale out really quickly.

[00:41:37] Cause a private equity firm could buy 10 or 20,000 of these, or may already own that many, and now take this world out right away, which is much, much more efficient way for the economy to very quickly do that. So I think venture is about like solving the problem, improving it, and then sometimes it's companies to scale themselves, but sometimes you can use private equity to scale better.

[00:41:55] I see a lot of areas of the economy with these, these assets. That could be either using your technology like in that case or the assets themselves, have data that could then be used to make them run better, to solve other problems of the economy. And you know, you really can unlock this by selling software.

[00:42:10] You can also unlock it by being the owner in many cases, being the owner is just much more efficient with a way to unlock these things. And so you see kind this tech driven and private equity becoming a very important part of how you make the common more efficient. And obviously that scales prosperity in the world.

[00:42:24] Dan Saks: Yeah. One of the observations that I've definitely seen with Tech Stacks is that if you're, let's say develop it within one organization, there's gonna be a lot of bad incentive, a lot of tech debt. If you're a company that only services a few people, and you mentioned this as a bad outcome, you're gonna be concentrated, your roadmap's gonna be ripped up.

[00:42:41] But if you are fin tech company that can create microservices architecture with APIs that are really well documented and the ability to build a lot on top of that platform, then you can have a lot of people adopt and your roadmap's not gonna get hijacked. So one of the things I've been definitely thinking a lot about is like, what are the industries in which you kind of see this platform, but then you can use private equity to accelerate it.

[00:43:03] Or even a network of existing corporations or entities. But from your technology hat and seeing a lot of things play out, what do engineers and CTOs need to think of early days to architect for scale versus making some problems that are gonna create a lot of tech and slow you down

[00:43:19] down the road?

[00:43:20] Joe Lonsdale: No, definitely. I think you said some of its things I'm seeing in healthcare now, these things up as well where, and you have to design this thing in such a way. That it is an architecture with all these different microservices and with everything defined, but how it works together and why it's gonna work together a certain way and you, it's really fun with Addepar

[00:43:37] we're doing all these things now where we're creating different sandboxes where someone can create an app that runs on the platform but doesn't actually see the data in order to suggest things to you. Cause you don't wanna give everyone that kinda personal information, but you do wanna be able to be exposed to the right kinds of financial product.

[00:43:53] That might be specifically relevant for your information. If youre a portfolio, you know, it's a very complicated portfolio and just case, in this case, it's like we, the architecture in a way that it's not too hard do it, but you always end up having to go back and to kinda the architecture a little bit to make it scaled.

[00:44:06] So it's this much bigger, much more complicated use cases, and this is like the classic battle I'm sure you're constantly fighting as well, is like there's certain people on the tech team they're like almost always wanting go back and get rid of tech debt. Cause there's infinite theoretical tech debt and then there's a lot of people who are like the prototype hackers that will like create so much tech debt that they're gonna break your company in or three, they're not gonna be able to, It's be so slow.

[00:44:29] You see most of the big banks in the world, most of the big hospitals in the world, most of the government institutions, they have effectively infinite tech. The point where it's just so slow to build there and in fact ends up scaring away your best engineers. Cause they're like, I do not wanna deal with this environment.

[00:44:41] It's a total mess. So it really is an art at the end of the day. There's extremes that are both wrong, but you do need things like really, really, really done. So I tend to skew towards, you know, like the types of people who do wanna get of tech debt responsibly while also pushing ahead. So I a little bit more towards facing a tech debt side, but I've seen that that extremes really bad as well.

[00:45:02] So I think having a healthy tension there. If your engineers are all happy about how much that you're getting rid of, you're definitely doing it wrong. Not all be happy. There's no one pushing back on them hard enough, but at the same time, you don't want a disastrous situation. So it's a hard thing to get right.

[00:45:17] Dan Saks: Joe, this was really exciting. I appreciate you taking the time and I think when we look at the story arc of your career and knowing that you're not even 40 yet, I'm really excited of what's to come and the things you can achieve, and I feel like you've already made such a profound impact on the world and many entrepreneurs such as myself.

[00:45:31] So we thank you and we thank your ideas, policy and mentorship.

[00:45:36] Joe Lonsdale: Awesome. Thanks Daniel. Spend some time with you. Hope to see you soon.

[00:45:39] Dan Saks: Likewise. Take care, Joe.

[00:45:45] Thanks for listening to Decoding Digital. Make sure you never miss an episode by subscribing to the show in your favorite podcast player. To learn more, visit decoding digital.com. Until next time.

[00:00:00] Joe Lonsdale: As Elon Musk says "Cost of cost is much less than the cost of time." So great engineers figure out how to like manage the scarcity of time and get things done very quickly as well, and to attract others and to know how to measure other talents and use other talents, and inspire other talents.

[00:00:23] Dan Saks: That was Joe Lonsdale modern Renaissance man.

[00:00:27] After interning at PayPal in its early years, he co-founded Palantir with Peter Thiel. Palantir was then used by the CIA and FBI to analyze government intelligence to track down Osama bin Laden. By 2021 Palantir's Market cap reached over $60 billion. He is also the founder of 8VC a leading venture capital firm, as well as co-founder of Addepar, OpenGov, Cicero Institute and the University of Austin.

[00:00:57] Keep listening to hear out. Joe has been able to build such strong teams over the years and why even in a remote world, human connection is key when building a strong foundation for your growing organization. He shares what's worked well for him and the lessons he has learned throughout his very successful career.

[00:01:16] This is Daniel Sax, president of App Direct, and it's time to decode team building through diverse networks.

[00:01:28] Welcome to Decoding Digital, a podcast for innovators looking to thrive in the digital economy. I'm your host Daniel Sachs, and I'll sit down with other founders, CEOs, and change makers to decode the trends that are transforming the way we work. Let's decode.

[00:01:50] I'm super excited to have Joe Lonsdale with us today. Welcome, Joe.

[00:01:54] Joe Lonsdale: Thanks, Daniel. Good to be here.

[00:01:56] Dan Saks: Amazing. So I wanna set the stage because many people we have on the podcast, they do one thing really deep. But I've known you for a while. You're a founder, investor, partner, friend, father, philanthropist, optimist.

[00:02:10] You've done so many amazing things. And among them include co-founder of Palantir, founder of Addepar, founder of 8VC, Investor in Oculus, Blend and company. I know OpenGov, Cicero Institute. So many things, but one of the things that I thought was a unique lens that I really wanted to decode and double click on with you is throughout all your experiences, you've been a really good champion of talent and what I've found is you've cultivated, networks that have enabled you and your networks to both thrive.

[00:02:40] So really wanted to maybe start from the beginning at Stanford and hear how you kind of got into CS and the people you met and how that led you along your journey.

[00:02:51] Joe Lonsdale: Yeah, sure. You know, if we're really gonna start at the beginning, I think probably some of the stuff at a young age with the chess stuff, and the math stuff's probably pretty important too.

[00:02:59] You just, you know, I was a California state chess champion a couple times in a row, and my brothers were two at one point, and my friends and I did all these math contests, and they taught me to program when I was, I guess nine or 10 years old. So growing up in Silicon Valley and being part of this deep and technical group in Silicon Valley was extremely important and it kinda gave me a pretty big edge.

[00:03:19] I guess you could say I was surrounded by all these really bright people and you know, I guess I was a little bit a king of the nerds where I had a lot of these friends who were perhaps for whatever reason willing to tolerate me and work with me on various things and willing to help even teach me in many cases.

[00:03:34] And, you know, having that background, you know, by the time I got to Stanford writing computer science, I was already way ahead. I'd already done the undergraduate computer science work, you know, thanks, the help of all these other people and having that perspective and being surrounded by that very, very competitive talent.

[00:03:48] Obviously it was a pretty big leg up. And so, you know, I've always been very competitive. I've always wanted to compete with the best and to be the best at what I'm doing. And when I was at Stanford, I saw a lot of the very top people were going to PayPal, and so I tried really hard to get into PayPal.

[00:04:01] They actually rejected me my freshman year that I got in there as an intern my sophomore year. You know, being part of that group, which Peter Elon Musk had brought together was obviously really valuable as well.

[00:04:10] Dan Saks: Amazing. So tell me some of the learnings from the early PayPal experience.

[00:04:14] Joe Lonsdale: Well, you know, I think Peter in particular, probably Elon too, brought together a lot of contrarian thinkers.

[00:04:20] So you had a lot of people who were willing to kinda explore broadly intellectual thoughts about the world, about how the world works, about what's worth trying in business about what's worth doing, different areas, and really eager to reinvent the wheel. Cause they're intellectually courageous and bold and that sort of energy is really contagious.

[00:04:39] It's really interesting. Rather than saying, How do people do this 20, 30 years ago, or how is this done? It was much more energy of how can we do this better? Starting from first principles, given the fact that we're surrounded by a bunch of the smartest people in the world. It's a very different way of kind of approaching and building a company, and it was very much everyone bringing in their smartest friends to solve problems.

[00:04:59] So definitely take the energy and apply it to a lot of things.

[00:05:03] Dan Saks: So what was the moment in the origin story of Palantir that the four of you decided to come together and invest and start Palantir?

[00:05:10] Joe Lonsdale: I was working with Peter at a macro fund and I was a top trader there for a while actually doing very well, and I was trying to bring top talents.

[00:05:22] And to help us with the macro fund. And I actually brought in, obviously with this background I had from the chess and math world and my good friends from high school who taught me a lot of things, a couple cases from elementary school actually, that I brought some of these people together out of their PhD programs and we were working on stuff.

[00:05:38] And it turned out that like four or five of my smartest friends I'd known really didn't like finance, really weren't interested in finance, didn't find it as intuitive as I did. Maybe. Maybe they just didn't care about money and a combination of things. I'm not exactly sure. I have to give a, I should go ask.

[00:05:52] You know, so I had this talent around me and there were all these different random projects people were working on at the time around Peter. There was a spam project, was kind of funny that trying to make money off the different things there. There was like a new restaurant, which is obviously turn out, obviously expensive thing that failed very quickly, which was funny.

[00:06:10] And so there's all sorts of really crazy projects and probably even crazier than any of these was that Peter and I had been talking for a while about the anti-fraud stuff at PayPal. And how we could probably, you know, take that and apply it to different problems in the US government and upgrade investigative technology in the US government given 9/11, you know, from everything we were seeing is they did not have, you know, anything close to the level of investigative technology that we had there.

[00:06:34] So if you kind of put all those different ideas in a row, like they're all quite outlandish. The idea of going and redoing the US government investigative technology . Especially wacky to a lot of the people who were around us at the time. I thought it was really fun. I had studied this area a little bit for fun.

[00:06:49] Everyone, every, you know, young teenage boy watches James Bond and I'd gotten into it and read a bunch of books on it. And so my roommate from Stanford, Stefan was one of the fire six people I brought to work on the hedge fund and frankly probably was one of the ones more in the hedge fund as well. But it was willing to work with this with me, with the others.

[00:07:05] And we started kind of flying back and forth to DC trying to meet mentors, trying to sketch up a prot that we thought be the right product based on the lessons learned from PayPal to to more broadly give investigators, the ability to use all the data. You know, at the time we saw the government spent 36 billion a year gathering data in DC at all different agencies and there's just a huge amount of money gathering data, and yet no one was really able to access that collaborate, figure it out.

[00:07:29] So we said this is a really cool problem. So we sketched out a bunch of interfaces, flew back and forth, and Stefan was a really good prototyper where it looked really cool, these graphics guy as well. We were able to get people excited enough that, you know, Peter got really excited by the project and he brought on Nathan.

[00:07:44] We're not supposed to mention anymore cause he's now an international man of mystery. He doesn't like to be on the internet, but Nathan was the key guy from PayPal who worked on these problems and he came on and helped build it out. Nathan and Stefan, I was kind of more a product guy at the time while doing this trading and they were the engineers.

[00:07:59] And we really kind got going that way and, and then, you know, a little bit later on, Carp was giving me a lot of advice and there was a whole thing where Stefan and I recruited Carp because we didn't want any of the other CEOs that Peter was suggesting from the Defense Department. And so it was about kinda a year incubation and Carp got involved and the whole thing kind of took off.

[00:08:15] Dan Saks: So the success is unreal and definitely the reputation for hiring, you know, talented engineers and the secret element of the brand has been legend in the valley, but you obviously left and did many other things. What was the decision like at that point? And you always had the philosophy that you want found a company and be there forever, or did you have this kind of idea of I wanna do a lot back then?

[00:08:37] Joe Lonsdale: You know, I started it with Stefan when I was 21, and we built the government side. We actually had to build this like all about structured data that we realized we needed a whole new part of the product for all the unstructured data. And there are these pillars about like productizing data integration, all the search discovery analysis, platform stuff, all the stuff with collaboration.

[00:08:57] We had this idea where, You wanna have pounds here installed in different parts of the world, then you need to have really clear rules about how they work together. So if MI6 and this part of the CIA this part of the FBI, all wanna share data to try to catch these bad guys, here's the rules to make sure that they're doing it in way that they're allowed.

[00:09:11] So we designed all these really cool frameworks for it to be able to work in a distributed way. And you know, about three and a half years in, we realized government is very unpredictable and can be very slow. And what we got ourselves into here, so, you know, we should actually probably take some of these data breakthroughs we're doing and apply them to commercial world as well.

[00:09:27] Because it turns out that a lot of things we're doing are very applicable to parts of finance and energy and healthcare and kinda data problems in the Fortune 500. So I helped get that going with the focus on a very specific interface in finance. I was really passionate about. Ended up having the biggest hedge fund in the world.

[00:09:41] Use that for quite a while and pay us very well and really iterating on that. And you know, we'd hired, there were six directors underneath the founders. Five of them were my personal friends, actually. People I knew and we brought them in. You know, we're hiring all these really great, talented people.

[00:09:56] Spent a lot of time, was very involved hiring the first 200 people or so at Palantir and we started this commercial division. There's gonna more stuff to start there. It was gonna start another part of the commercial division and you know, at that point, five years in the company was just starting to be pretty successful.

[00:10:08] You know, it had space, had some of the very top talent in Silicon Valley and. It was six years, and I guess if you say it, you include the beginning part. And I owned, I don't know, I think I owned that point, like four or 5% of the company. They said, You know what? This is pretty exciting, but I've already put in so many great people.

[00:10:24] I've already replaced myself. You know, it seems like it's time to create something new.

[00:10:28] Dan Saks: So in my view, you're like a talent magnet, and the Palantir story is a good example of that. But you did go and start another company before getting into VC. Tell me about the rationale for founding one more company and then you've obviously kind of continued to be a founder.

[00:10:42] So how do you look at your time? Are you saying like, I'm gonna start one thing, go all in? Or how do you balance across different things?

[00:10:49] Joe Lonsdale: When you're first doing this, when you're first getting involved, you really gotta build one company and go all in. Cause there's so many lessons you're not gonna know.

[00:10:57] You're not gonna know. And there's so many advantages to like just going all in on these things. You need everyone early on, just all in on these companies. I think it's very important. When I started at Addepar it was really based on this theme I've been thinking a lot about. So just say, you know, I'm venture capital now, so speak like a venture capitalist.

[00:11:13] There's really two things that matter when you're creating a company early on. There's the talent. Which is getting the very best people in the world who are motivated, inspired, and aligned, and working on and bringing their smartest friends. And then there's the what are you doing? And you know, to create a successful, big, successful tech company.

[00:11:28] I'm not talking about a small business here, to create a multibillion dollar tech company, it needs to be something that's possible now that wasn't possible five or 10 years ago. So having opinions about the world and what's possible is I think is really important. And obviously your opinions have to be right, otherwise , otherwise you're not gonna make it.

[00:11:44] And so the thing that was happening, kind of the end of the 2000s. 2009 / 2010.

[00:11:49] Was you had this new wave of companies that we call the smart enterprise wave, and they were possible because you had the cloud and you had the big data stuff going on for the first time and you had the data coming into the cloud for the mobile ecosystem and from all these other places. And so you had all these companies built in the 1960s, 70s, 80s that were kind of the original enterprise software wave that are all very linear.

[00:12:12] They don't use to get the edge of the cloud or big data. They don't collect knowledge orders, manipulate and figure things out. The processes to provide industries are not nearly as good as they could be. So there's this wave we were mapping out and then there were like 300, 400 of these companies that we created.

[00:12:25] I think that was about right, ultimately. So unlike the consumer wave, which had about 15 or 20 big companies, you know, they were really big. This was more spread out in terms of really big companies. They weren't as big as Google, Facebook, and Twitter and et cetera. But there were a lot of 'em are multi billion dollar companies, most of them that size.

[00:12:41] And so I said, you know, which ones are you most interesting? Which ones do I have the biggest advantage and biggest interest in creating? And the platform that would have a very large amount of the world's wealth on it and be able to make more intelligent decisions was very interesting to me as somebody who's interested both in finance and technology.

[00:12:55] So Addepar as a new cloud platform that was very badly needed by RAs very badly needed by family offices was something we started, I started working on then really hard. I went all in on that, but I also help friends start a fewer things at that time. I helped my friends start OpenGov a year later. I helped my friends start zba, which is a very successful, profitable share platform where everyone wants sell secondary shares.

[00:13:16] I think's one of the best ways to do it, and I guess a few other things at that time. But yeah, Addepar part ended up being like 90% of my time, which I think is the right way to do these things. And if anything you should it hundred percent. But it's been very, very successful. It has 4 trillion in the platform now and you know, built a lot of great talent there.

[00:13:30] I think I made some mistakes, you know, having gone through a successful company like Palantir, you assume that you know what you're doing and sometimes you don't realize you had certain things that you didn't have. So I think there were some cases at Addepar where there's a total pieces of talent missing that if I had thought about it better, I would've even got out to go faster.

[00:13:47] But as it is Addepar's been very successful.

[00:13:50] Dan Saks: And when you talk about like bringing talent in and having a full leadership team, are you often sourcing from your own network or do you use recruiters or what's your secret sauce to attracting talent?

[00:14:00] Joe Lonsdale: Yeah, the most important thing, especially your first double companies, has to be your own core network, has to be, in my case, people like chess or math with or people I knew from computer science or people who I was involved in intellectual endeavors with a lot of intellectual interests where I'll meet smart people. I think having a lot of intellectual interest is probably pretty big advantage of mine, just because I'll get to know people with different backgrounds based on the fact that, you know, I just spent this morning doing a bunch of healthcare policy, which not everyone else likes, and I was pretty tired.

[00:14:29] I was up last night with friends having a cigar and drinking, so it was pretty exhausting to do healthcare policy this morning, even though I love those people. But I set up a lot of different goals for myself and a lot of things I wanna get right, and you meet really amazing people in these different fields and bring them together.

[00:14:44] Obviously, the technology networks, the ones that are most important for technology companies early on. And there's a whole another set of networks, which I call the adults in the technology world. So I wrote this essay maybe a decade ago now called "Bring In the Adults". But the way I see it when you're building these companies is you want kind of like the highest IQ right?

[00:15:00] Hardest working innovators early on to kinda iterate towards prototypes and customers towards product market fit and really get there. And then once things are working a certain way, you still wanna have the innovative part of the business and you wanna nurture it, but you also wanna bring in adults who know how to run processes.

[00:15:14] You wanna bring in people who know how to run the sales machine, who know how to run the customer support machine, who know how to run whatever machines you need to build that have been built as you know, as an entrepreneur yourself a hundred times before. So it's different source of talent you kinda combine to make these things work.

[00:15:27] Dan Saks: And did you start Angel investing even before Palantir or was that something that came later?

[00:15:32] Joe Lonsdale: So I grew up in Fremont, California, middle class. I did not unfortunately, have money to Angel invest the faults. My parents had amazing parents, but we were not wealthy enough to Angel Invest early on. I think at first made enough money to write a few small checks, maybe from the hedge fund with Peter in my early twenties.

[00:15:51] Then I really went all in on Palantir. You actually surprisingly make very little money from these startups that are successful as you know, especially back then it was seen as really gauche to think about like selling out in different rounds. So we didn't really sell out early on. Palantir went public I think a couple years ago now.

[00:16:07] That's where I made most of the money from Palantir. So a in Texas. But in general, I think I started angel investing. 2000 for me, some from the hedge fund, and then I raised the little mini 5 million angel fund. That was a lot of my money as well. Maybe 2009 or so. So basically when I was late twenties, when I was starting Addepar, I guess I was also starting angel investing.

[00:16:29] Dan Saks: Got it. And now you assume for angel investing too, you're tapping your networks of people you knew?

[00:16:33] Joe Lonsdale: Yeah, You know, it was more like I was already kind of mentoring and advising all this talent I'd worked with in many cases were going build things. I thought, Wow, this is really cool. I'm really on this.

[00:16:43] This is gonna work really well. I wish I had, you know, $100,000 to throw into this round because I think it's going to be great. So I started that and you learn a lot other way as an angel investors think you do as an entrepreneur. I did learn that my instincts overall were correct. So what I did, I had three size of investment. They had the really big checks, which back then were 300,000.

[00:17:01] They had the midsize checks, which were 100,000 and I had the mini checks, which were like 10 to 50,000. I did a lot more of those, and overall I did have more winners with the really big checks versus medium checks, more winners than small checks. But you learn a hell of a lot about how I think about these things.

[00:17:15] What types of things fail? I mean, there's all sorts of stuff that sounds like a really good scheme. It just never ends up being a good idea. It's always about just top talent, working really hard and all the important stuff, takes a long time.

[00:17:28] Dan Saks: What are some of the lessons that you learned then that you think are just as applicable today?

[00:17:32] Joe Lonsdale: Well, like don't invest in schemes. Don't invest in things where, The government's gonna bail it out, or there's gonna be one really giant deal with like a big company or there's gonna be some trick that makes you a bunch of money because of some new thing. It's, it's very unlikely those things work. I mean, I guess there's sort of one time in my whole career what I'd call a scheme.

[00:17:51] I wanna name the company to be offensive to them, but there was some sort of scheme where like all these trucks were being required to put this thing on the truck and this angel investment that didn't work for a while and then suddenly shot up. Cause they were required to do. And they're valued at least in the billions

[00:18:05] now. We'll see if they actually exit in the billions. But I think in general, like these schemes like that is just not a good idea. You just have to solve a really hard problem over a long period of time and you have to build a great tech culture. Like basically all these companies that had like some really good idea with the product, it sounded really good, but that weren't being founded by technologists.

[00:18:22] They all fail. You know? You have to have technologist involved in the founding team. That's right. It's just my lesson.

[00:18:28] Dan Saks: And how would you define a great technologist and what would someone look for?

[00:18:33] Joe Lonsdale: I think first and foremost, they have to be just the one who can attract other great technologists, which means really strong computer scientists and people who think creatively think like engineers, which means manage, which means building and building, managing scarcity.

[00:18:48] One of the great lessons about what a great engineer is for me when I was younger is it turns out it's actually very easy to build any bridge you want if you have infinite resources, right? Because you just design it in such a way they just very, very wasteful, but super secure and it's done. But a big part of engineering is managing scarcity.

[00:19:03] And as Elon Musk says "Cost of cost is much less than the cost of time." So great engineers figure out how to like manage the scarcity of time and get things done very quickly as well, and to attract others and to know how to measure other talents and use other talents and inspire other talents. And so there's all sorts of rules for good tech cultures, right?

[00:19:21] But that's kinda a very, very simple start right there. I think Peter Thiel always really emphasized. Just like the 99.9 percentile minds are just worth so much more than the 95 percentile minds. So it's like, who is the person that was like multiple years ahead at the top engineering school and who won all those contests and stuff?

[00:19:41] And you know, I always had friends that were step ahead of me in some of those things for the international contests or whatever. And those guys, they, it was just such an advantage happen on the team. It's also true, you do want some experience around, so I think an ideal startup team will be. You know, four or five smart dynamic people.

[00:19:58] Maybe they've won contests and like national robotic contests, great computer programmers, but they also are good communicators that they could have been something not in tech. They could been a historian, they could been a great writer, just a high IQ in general, it's important engineers and then you combine with people who have built related things over the last 20 or 30 years is you do want a couple more experienced people sometimes to guide them.

[00:20:21] I think early on in in Addepar, I underestimated how important that was, and there were things we did that we just would've benefited from having more adults around. So I think that combination is really important for the culture.

[00:20:31] Dan Saks: So you tracked a solid team, but then are you intentional about building the culture, the vision, the values? Or do you like to grow organically?

[00:20:38] Joe Lonsdale: Yeah, you have to have really clear vision of where the company's going. You have to have really clear values people share to talk about they put down together. And a good way to talk about values is talk about scenarios, things that could come. And how you deal with them.

[00:20:50] What's most important to the company, What's most important to people in the company, why you're here. One of the values, very wealthy people, piece of the company, they wanna make a lot of money. That's totally fine, but you need to have other values that supersede that at all possible. Cause otherwise you don't end up getting something that's healthy, that's loyalty.

[00:21:05] The best companies I built, you have a lot of talented people stay out for a very long time, and I think that's a sign of a healthy company. If you have your superstars willing to many years to stay there, you know, for a long period of time. When you create a company early on, you wanna give it a heartbeat, which there's just certain things you do regularly.

[00:21:20] There's like maybe there's certain weekly things you report on there, certain monthly things you report on. In some cases be faster on the scrum daily things or whatever, but you start having a heartbeat where people are stewards of the schedule, stewards of the goals, and you have a culture you have to nurture.

[00:21:35] Where I think flat cultures work better for technology organizations. I think cultures people are eager to challenge. I think it's really important for people to get along outside of work as well. It's something that maybe is controversial, but I don't like having a company early stage where they're all very different places in their life and they all just only know each other at work.

[00:21:52] I think in order to get an environment where you build the trust, the people will push back hard. When it's the time to push back hard, they need to have some bonds they've created, and those bonds are much stronger if they have some social bonds as. It's like a well to draw on for people in the company early on.

[00:22:06] And so that tends to mean that you want like socially a more homogenous company, at least the very beginning in order to get that kinda healthy energy, which people like Max Legend have talked about this as well, align with the way he said it got in trouble. Cause it sound like he was saying not to bring in diverse people.

[00:22:22] Of course you are bring in diverse people and of course you wanna have different skill sets, but you need to be socially interested in hanging out with each other. I think for a startup company, I think that's actually key.

[00:22:32] Dan Saks: It seems to me like you want people to be all in, and what I've found is that a lot of founders I interact with, they talk about how people show up, they'll work, but then they all do different things. It's really hard to have that singular focus and that trust and that energy, and that's made even harder by remote team. So definitely resonates.

[00:22:48] Joe Lonsdale: That's why remote teams so hard for me that just like, it's so hard. How do you build that deep well of trust and the bonds and shared values and shared social time?

[00:22:57] Maybe if you have really good offsite all the time or something, it can work, but just, yeah, nothing seems so hard for me.

[00:23:03] Dan Saks: The hard thing though is that if you're tapping your talent networks and like you and I both were in the Valley we moved, You're in Texas, I'm in California, L.A. But you have people everywhere and to just say I'm gonna only be in Austin is limiting too, based on your talent pool.

[00:23:17] Joe Lonsdale: I tried doing something only in Austin that was very important to me and we ended up basing it mostly in New York and San Francisco for fin-tech company. I started recently, but we have offices in San Francisco, we have offices in New York. People work really closely together there. We fly back and forth.

[00:23:34] We do offsite together, some of those in Austin, and I think that's worked really well. The idea of just people being everywhere to me is still just so much worse than having bases where, where the teams are together.

[00:23:43] Dan Saks: Yeah, I agree. And I'm like fueled by just being in person with people, so it's. Definitely something that's exciting.

[00:23:48] So I think one of the cool things that I've known personally about you that a lot of people don't know is when you started 8VC you had an advisory board, and on that list is everyone from Steven Harper to Ashton Kutcher to Nema from Blend to Aaron Levy from Box. I was grateful to be on that list and what I found is it created like an instant connection for me where whenever I met great talent,

[00:24:09] or whenever I met people, I thought of you and I thought of 8VC and sent them to Alex or others. And I think if that formal kind of setup wasn't there, I probably wouldn't have thought of you. So I think it was cool in many ways. One is it establishes connection and obviously you've been incredible at staying in touch with people both professionally and personally, and kind of cultivating a group and a network.

[00:24:29] But what I also admire is that this was a tech vc, but you had actors, you had politicians, you had leaders across different industries, geographies, everything. So tell me what the genesis was from that and the value you got from that and how that's benefited 8VC and yourself over the years?

[00:24:46] Joe Lonsdale: Sure. This probably comes a little bit down to the fact that I have so many different interests and then I have friends who do a lot of different things.

[00:24:53] And so, you know, Prime Minister Stephen Harper, to me was one of the great leaders we've had the stage in the last few decades and is a very courageous person. For me, courage is extremely important. I'd actually rather deal with someone who is courageous and I disagree with, than someone who I think is essentially a coward, who is on my team.

[00:25:09] In his case, I happen to agree with him on a lot of things and he was the only one to stand out for Israel in certain cases where it was being wrongly condemned and the only one like to stop certain things. He got punched in the face by an old French president once because of it in private which I thought was a very funny story.

[00:25:24] But he and others are exemplify leadership and they exemplify traits that are very helpful to our portfolio. They also have networks, of course, that are very useful to us when we're trying to get things done around the world. You know, Ashton is a great example of someone who, as you know, probably is a great investor as well. He's very interested in products and technology.

[00:25:41] So just obviously he's a very dynamic person to have around and it's been great to run things by him over the years. And I partner with him early on, in his nonprofit savings. Thousands of kids exploitation. Online. Online. And we'd find him. So he's working together pretty well. And just having people who can open doors for you is really critical.

[00:26:01] As you said, having people who are tied to top talent is really critical and frankly, it makes the whole thing a lot more fun. You just have interesting smart people around you who get to people. All of us at the fund who are partners now have probably made enough money that most of don't actually really need to work anymore at this point.

[00:26:15] And so, you know, we do have a very gruling very intense work schedule and I think in order to keep that up, it has to be something that we enjoy and people we wanna be hanging out with. And so the advisors will give us a bunch of advantages. It also lets us work with people we like.

[00:26:28] Dan Saks: Amazing and a couple call outs for the listeners.

[00:26:30] So American Optimist incredible podcast, and I love the one with Prime Minister Stephen Harper. Super interesting. I encourage everyone to listen to it and then you reference what you're doing with Ashton around Thorn. But again, incredible cause I encourage everyone to check that out. For people kind of listening to this, there's probably a big question to say like, Well, how, based on the Valley did you get to know Ashton Kutcher and Prime Minister Stephen Harper well enough to get them on your advisory board?

[00:26:54] Joe Lonsdale: Well Ashton and Demi came up to the Valley and asked for advice when they, she was first thinking about Thorn over a decade ago, and we had a lot of mutual friends. It turns out, cause he was involved in the Valley. So I spend a lot of time with him. Prime Minister Stephen Harper. You know, I had been advising the Canadian government on his technology strategy to the counsel General John Proto in New York.

[00:27:13] The Late Minister Flaherty, I thought was one of the great minds also in global finance. And just because I had a lot of opinions about policy in that world. I met him and debated things and he listen to pull things in place Canada that I was helpful with. So I think because I'd done that, the Prime Minister knew who I was and also just reached out through friends after he was out of office to meet.

[00:27:33] We got along really well. I was excited to try to involve him in different ways. The things we were doing.

[00:27:39] Dan Saks: Fast Forward few years, right? You've had this advisory board, you've now co-founded many more companies. You've invested in dozens, and now you're starting a university, an institute. How do you balance your time?

[00:27:52] How do you think about methodically managing all this?

[00:27:55] Joe Lonsdale: This is something that I probably need more mentorship on. I'm still figuring that out. Daniel, we had our fourth daughter who is three months old now, so I have four little girls at home and balancing them with my reading, which is really important to me. I've always read a huge amount.

[00:28:09] I've honestly read less the last five years after having the girls, and then 8VC is my main responsibility. I think my rule in general, I try to have, speaking of like how do you use your time? Is, you should only be responsible for the failure of one thing at a time as much as possible. I have not always kept it that, but one of the big mistakes I made earlier in my career was the more success you have, the more a lot of people try do a lot of things, and I saw that with a lot of other people before me, and I ended up making mistakes myself as well.

[00:28:36] I recognized the same mistakes my mentors had made. And I went way too broad in the mid twenties, a lot of stuff, and I ended up having to call back and say, Hey, you know what? It's really important at any given time, if there's one thing that fails, that thing is my fault. But it fails and everything else has founders, has leaders, has people in it.

[00:28:53] That's their fault and it fails and I'm just helping them. So that's how I try to structure things. 8VC is the thing. If 8VC fails, it's my fault. Now, I may have gone a little bit beyond that rubric with UATX with the new university, which by the way, is being extremely successful. I think there was probably a year, starting about a year, little more than a year ago, where a if UATX would've failed.

[00:29:14] It would've been my fault, even though we had Pano and others. But Pano, Barry Weis, Neil Ferguson, the best co-founders contributed to this really well. We've raised over 20 million. As of now and the university succeeding in lots of ways and we've brought on now other great board members that's gonna be announced.

[00:29:27] And so I think fortunately, even though I'm the chairman of the board, I've extricated myself to the point where I'm gonna make sure it wins. But it's not only my fault anymore. I think it's really important. Right. With any, you're doing like is it my fault that this fails? I say, How are people who are extremely confident that other investors are betting on when they're the owner and you really have to Only one thing at once, I know maybe sees this differently, and he's alluded two or three things.

[00:29:50] Even with him, I've seen things that he's my best entrepreneur in the world and because he's doing so much at once, there's certain things around him that aren't doing nearly as well as they could if he was able to give it more time.

[00:30:00] Dan Saks: And you reference like mentors in terms of how they manage their network really effectively. Who are people you look to that you think do this in a really good way?

[00:30:07] Joe Lonsdale: In terms of managing networks? That's an interesting question. I think Alex Carp is smart about people, although I don't think he's nearly as broad as I am about. I think all of the successful venture capitalists in the valley, they do this in different ways.

[00:30:22] This this's kinda what you're doing as a venture capitalist is you're, you're training ecosystem and you're managing a network and you're doing it in a disciplined way. So you look at of the top venture firms and see how they operate, I think it's very impressive what they've done. I may be more aggressive than some of them.

[00:30:35] I think for several years we were doing an average of 180 events per year. We built a system, in fact called Affinity. Drew and I co-found this with two amazing talented young guys outta Stanford who are this now a very big company. Thousand forums are using it. But we basically built a system that used AI driven CRM to help us, and we basically ally with differents and different CEOs.

[00:30:57] And it really helped track the network and prioritize for deal flow, for other things for us. And so if people are interested, I guess how I think about networks like Affinity, which is now used by firms including the majority of EC firms in the world at this point. I kinda grew outta thinking on that.

[00:31:11] And there's books I read early on, like the Never Eat Alone book by Keith. Keith Ferrazzi I think this is quite good. And that was over a decade ago and I just think it's worth thinking about cause making it something that you actually make it as something you think about. Build conceptual structures around.

[00:31:26] Force yourself to have some kind discipline around and it shouldn't take over your life, but it has to be a big thing for what you're doing if you're gonna do venture capital, if you're gonna do certain types of activities.

[00:31:36] Dan Saks: And I definitely think like a lot of people are not methodical about it, but what I see in you is that it benefits so many ways.

[00:31:42] Like you said, diverse networks and then things come of it. But one of the things to call out about you is that while you're very busy, you're also one of the most responsive people. I know you came to my engagement party, you're the first to respond to something. If the answer is yes or no, you know, with this podcast, you're just like, Yep, let's do it.

[00:31:57] You didn't really need to involve your team as a question. You're just like, Are we doing. So how do you balance that? Do you have a philosophy or a value around like responsiveness and transparency, and how do you balance that with all the things you do?

[00:32:08] Joe Lonsdale: Yeah, you know, I, I have so much going on that I, I, I realize just I have to be responsive.

[00:32:13] Otherwise, if I don't get back really quickly, I might never get back to the person because there's gonna be something else tomorrow, you know? So, Actually, it's funny, I got subpoenaed, I mentioned online in this Twitter thing, right? Because I guess I know you a lot. I'm not involved in Twitter, but Twitter subpoenaed me cause they're phishing everything.

[00:32:27] So I have to upload all my emails until the lawyer systems in order to like see which ones are gonna have to go to Twitter, is the way this process works. And I've crashed out. The first two different systems they used. Cause they, they've never had this many volume of emails before that they've had to upload.

[00:32:41] That's prefer, thats . We're still to distract the emails, but I don't, we're gonna, anyway, but, uh, yeah, no, I try to, I, I, I do fire 600 a day I spend three or four hours on it now, which is annoying, but I'm really fast. So I'll be flying home tonight on the plane back to Texas, and I'll just get the rest of it back.

[00:33:00] I try to do it in real time. Sometimes it's very rude in meetings and so I try not to do it too much, as much real time as I have. It's a trade off. Get back to people with these people you admire and people. You like, like you respond, you do think with him. I actually, Daniel would love to spend more time with you.

[00:33:13] I haven't got to see you nearly enough and so I'm obviously honored you asked me and happy to come on. But I think it's just in general it's good to just like do things forward and spend time with good people around you and do as much as you can.

[00:33:23] Dan Saks: Yeah, I appreciate that. And one of the things that I admire about you, if I were to look over the years is you've had very deep first principle thinking I could probably ask you something across any subject and you would always have an opinion.

[00:33:35] But more than just having these ideas in your head, you're executing on them and bring it back to the topic. We're decoding around diverse networks. I truly admire and, and there's like very few people that can see something similar where not only do you have this network, not only do you have these ideas, you're able to execute on them in a way that allows you to do many things at once in an effective way.

[00:33:56] But also what I've found is that those people that you're mentoring or partnering with or co-founding with, they're all better off for that partnership and you're enabling them to lead and thrive. That's something I find super inspiring at the same time

[00:34:07] Joe Lonsdale: I really appreciate that one. I do do a lot of things these days.

[00:34:09] It's very important to me to try to only take upside when I'm gonna be creating to the person. So I actually probably taking a lot, a lot of things I've built in the last decade I'm not saying I always get this right, but I think it's just really, really important to try to like exceed expectations, you know, based on what your share is.

[00:34:30] Even if you couldn't take it more then because I'm doing so many other things, it's a very positive thing to do if you do it right.

[00:34:37] Dan Saks: In terms of your co-founders, whether it's at OpenGov or with the University or Palantir or any of these examples, like, and maybe I bring it back to this kind of concept that you shared around.

[00:34:46] You have one thing to fail on. It seems like you must have this methodology, which is like I'm co-founding with you, but it's your neck for the failure. Like what's your philosophy around like accountability in teams and how do you get people to be a part of the team, but then also like know that this is on them?

[00:34:59] You know,

[00:35:00] Joe Lonsdale: I'm still learning over time how to get accountability, right. I've biased very strongly towards loyalty. And towards being a good partner, someone I'm building with. And there are cases where we've had to replace CEOs or a couple cases shift the CEO's role to really, you should be head of product but you shouldn't be CEO here.

[00:35:19] And most of those cases, maybe all of them, they all exceptions. It was like a year or two too late that we did the shift. Cause you kinda knew it, but you kinda really wanted get the person a chance. And that's a really hard thing for me about business. There probably are some of these things in business like that.

[00:35:35] Or I might benefit from being a little more of a jerk, or at least a little more willing to like break the glass a little faster. And I see people like Bezos who are willing to do that really aggressively and Elon is starting to move in that direction.

[00:35:49] So I'm still learning, turning 40 soon, so I'm getting to be an adult now. So learning how to be properly aggressive. Well, I'm obviously extremely aggressive with trying to succeed and being ambitious. And for me, I will try to hold myself accountable. Like if the company's doing a certain level well, like I will make sure that financing is done right cause I've done that times and we'll get that right together.

[00:36:08] Go the work together, it make sure to help with certain things, make sure the right people are giving feedback on certain things, whether you need it in the engineering side or product side of a product. I historically, I spend a lot of time on marketing these days where marketing is to find as kind of like a top level sales strategy that kinda theose between product and between the sales cohorts and how you're gonna go after that, how you're gonna find markets and find things for them.

[00:36:32] So there's parts I try to make sure I'm holding up my own on and then you kind of give them expectations and make sure they're holding up their own. I think the only thing that really drives me crazy is if you have someone you're working with and it's clear they're not getting their all to it, it's they're misaligned somehow, or there's something else that's making them.

[00:36:47] Hold up their part of the bargain and to build these companies, again, it's like winning a gold medal in the Olympics. You have to be that intense. If you're not training hard enough to win a gold medal in the Olympics, you're not gonna have a multimillion dollar tech company most of the time. So I need making sure are their all, like, that's their job as the main founder.

[00:37:02] You know,

[00:37:04] Dan Saks: And I feel like this is great, taking a story arc to where we are today and all the amazing things that you've. And I really want to touch on some of the big problems that exist today because the last time we spoke, you talked about how people aren't doing enough in deep check or solving hard problems.

[00:37:20] So I wanted to give a minute to kind of talk about what you think are some of the biggest problems to solve, and what are some examples?

[00:37:26] Joe Lonsdale: It was funny, I was talking to a reporter doing a story today on the Palantir Path, which I guess is her version of the PayPal Mafia, and it was kinda interesting for me to go back and look at like the 30 or 40 companies that I'm aware of that have come out.

[00:37:39] I've helped with. From that group. And what I'm really proud of from Palantir and Addepar and other companies like OpenGov as well, is the willingness to take on these problems that seem just like really intractable and really, really, really big. So, you know, it's almost comical to say you're gonna go and you're gonna fix the information architecture for the tens of billions of dollars spent in the US in defense intelligence world and for the 40 main allies.

[00:38:04] Right. I just, that's a big problem. And how it go about doing. You almost need to be a little bit crazy to attack these things. So for me, the biggest problems in the world are like, where are there giant gaps and things that are broken that should not be broken. Probably the most important one today is just like a bunch of these areas of government.

[00:38:22] That's what I'm obsessed with right now. Just so many examples and keeping it totally nonpartisan. There's just so many examples of just. Bad incentives and just things that are, lack of accountability and just, just all sorts of messes. I think similar to government, when you kinda go towards that side of the spectrum with these kinda big, giant slow institutions that aren't responsive, you get lots of things in healthcare, the way we run hospitals the way.

[00:38:47] Competition works in general. In healthcare, we have these cartels blocking competition, stopping competition. You have very little incentive to get things right in hospital and get things efficient. We talked about engineering being about efficiency, right? And about doing more with less, and that's just not how hospitals or healthcare systems are set up at all right now.

[00:39:03] There's just waste everywhere. There's no feedback, and I get rid of that. You see this in so many areas, society, they're very important. You see lots of areas of education that are very important right now as well. Just not feedback and to improve the broken universities to improve. We did something again, nonpartisan.

[00:39:20] We did something with vocational education recently. We saw educational schools we're failing their graduates, people going there, coming out with low salaries. We change the incentives for the schools. In this case, I guess the policy solution versus the tech solution. And we made it. The schools, vocational schools only get their funding with a portion to the salaries of the students coming out since they're supposed to be people, jobs, the whole of the school and the salaries to these schools all throughout the state of Texas, over six years, as of two years inflation.

[00:39:48] And just dramatically changed based on having incentive. We've taken this to a bunch of other states, and so for me, I'm looking at what are the big gaps in the world and how could technology, entrepreneurship and up policy entrepreneurship fix them? And you, I'm doing all the policy stuff with doing a lot of things in a lot of industries on the tech side.

[00:40:06] I mean, I guess another giant gap in the world for me right now is nuclear energy is just obviously an answer that could be so much better and people just vastly underestimate how much. Better new energy could be if we actually put the resources on it and we're allowed to iterate on it in the right way the next decade for all these problems.

[00:40:21] There's just a lot of kinda really big problems you can solve with these kinda bold projects and just trying to help other people push forward.

[00:40:29] Dan Saks: Yeah, and one of the things we talked about last time was the methodology in which you do it. So back in the day. You didn't have access to funding. Now there is, we see with App Direct just so much transformation within traditional industries and still so much opportunity to transform the enterprise through technology.

[00:40:45] But one of the things that you mentioned, which I think is super interesting, is kind of really the intersection of private equity and technology. Can you speak a little bit more to your thoughts on how you fuse let's say, a venture funded model with private equity to create really interesting outcome?

[00:40:59] Joe Lonsdale: Private equity's interesting. It's, I've written a few pieces on this in the past where I think it plays a really important role in the economy. A lot of what private equity can do, if used correctly, is to help scale an idea really quickly in an economy. So let's just say for example, that there's like 80,000 loading yards around the us, which are these like logistical hubs that are used and there's a lot of people working at them.

[00:41:18] There's a lot of costs that get things in and out. And let's say you figure out how to use like autonomous driving and AI loading, and you make these things. Or way more efficiently for, you know, way less cost with less emissions. Let's say if you have a technology doing that, a private equity firm would probably be a way to take that tech company, which might be doing this in a few places and scale out really quickly.

[00:41:37] Cause a private equity firm could buy 10 or 20,000 of these, or may already own that many, and now take this world out right away, which is much, much more efficient way for the economy to very quickly do that. So I think venture is about like solving the problem, improving it, and then sometimes it's companies to scale themselves, but sometimes you can use private equity to scale better.

[00:41:55] I see a lot of areas of the economy with these, these assets. That could be either using your technology like in that case or the assets themselves, have data that could then be used to make them run better, to solve other problems of the economy. And you know, you really can unlock this by selling software.

[00:42:10] You can also unlock it by being the owner in many cases, being the owner is just much more efficient with a way to unlock these things. And so you see kind this tech driven and private equity becoming a very important part of how you make the common more efficient. And obviously that scales prosperity in the world.

[00:42:24] Dan Saks: Yeah. One of the observations that I've definitely seen with Tech Stacks is that if you're, let's say develop it within one organization, there's gonna be a lot of bad incentive, a lot of tech debt. If you're a company that only services a few people, and you mentioned this as a bad outcome, you're gonna be concentrated, your roadmap's gonna be ripped up.

[00:42:41] But if you are fin tech company that can create microservices architecture with APIs that are really well documented and the ability to build a lot on top of that platform, then you can have a lot of people adopt and your roadmap's not gonna get hijacked. So one of the things I've been definitely thinking a lot about is like, what are the industries in which you kind of see this platform, but then you can use private equity to accelerate it.

[00:43:03] Or even a network of existing corporations or entities. But from your technology hat and seeing a lot of things play out, what do engineers and CTOs need to think of early days to architect for scale versus making some problems that are gonna create a lot of tech and slow you down

[00:43:19] down the road?

[00:43:20] Joe Lonsdale: No, definitely. I think you said some of its things I'm seeing in healthcare now, these things up as well where, and you have to design this thing in such a way. That it is an architecture with all these different microservices and with everything defined, but how it works together and why it's gonna work together a certain way and you, it's really fun with Addepar

[00:43:37] we're doing all these things now where we're creating different sandboxes where someone can create an app that runs on the platform but doesn't actually see the data in order to suggest things to you. Cause you don't wanna give everyone that kinda personal information, but you do wanna be able to be exposed to the right kinds of financial product.

[00:43:53] That might be specifically relevant for your information. If youre a portfolio, you know, it's a very complicated portfolio and just case, in this case, it's like we, the architecture in a way that it's not too hard do it, but you always end up having to go back and to kinda the architecture a little bit to make it scaled.

[00:44:06] So it's this much bigger, much more complicated use cases, and this is like the classic battle I'm sure you're constantly fighting as well, is like there's certain people on the tech team they're like almost always wanting go back and get rid of tech debt. Cause there's infinite theoretical tech debt and then there's a lot of people who are like the prototype hackers that will like create so much tech debt that they're gonna break your company in or three, they're not gonna be able to, It's be so slow.

[00:44:29] You see most of the big banks in the world, most of the big hospitals in the world, most of the government institutions, they have effectively infinite tech. The point where it's just so slow to build there and in fact ends up scaring away your best engineers. Cause they're like, I do not wanna deal with this environment.

[00:44:41] It's a total mess. So it really is an art at the end of the day. There's extremes that are both wrong, but you do need things like really, really, really done. So I tend to skew towards, you know, like the types of people who do wanna get of tech debt responsibly while also pushing ahead. So I a little bit more towards facing a tech debt side, but I've seen that that extremes really bad as well.

[00:45:02] So I think having a healthy tension there. If your engineers are all happy about how much that you're getting rid of, you're definitely doing it wrong. Not all be happy. There's no one pushing back on them hard enough, but at the same time, you don't want a disastrous situation. So it's a hard thing to get right.

[00:45:17] Dan Saks: Joe, this was really exciting. I appreciate you taking the time and I think when we look at the story arc of your career and knowing that you're not even 40 yet, I'm really excited of what's to come and the things you can achieve, and I feel like you've already made such a profound impact on the world and many entrepreneurs such as myself.

[00:45:31] So we thank you and we thank your ideas, policy and mentorship.

[00:45:36] Joe Lonsdale: Awesome. Thanks Daniel. Spend some time with you. Hope to see you soon.

[00:45:39] Dan Saks: Likewise. Take care, Joe.

[00:45:45] Thanks for listening to Decoding Digital. Make sure you never miss an episode by subscribing to the show in your favorite podcast player. To learn more, visit decoding digital.com. Until next time.