Kalanick Rebukes Venture Capital as He Builds Robotics Startup Atoms

Travis Kalanick 在 Atoms 部署专用机器人以推动工业自动化 工业规模化需要专用机械而非通用人形机器人，因为物理效率需要严格契合领域执行需求的专用工作流。 Travis Kalanick 详细阐述了在现实物理世界中打造超高速增长企业所面临的运营、经济和心理现实。他深入剖析了 Uber 在中国与滴滴的残酷商战、将密度转化为效率壁垒的网络效应算法，以及他与根深蒂固的出租车利益集团之间的意识形态交锋。Kalanick 还分享了他在多房间同步进行风险投资竞价的战术手册，坦诚回顾了 2017 年被 Benchmark Capital 罢免的经历以及自身的稀缺心态，并解释了他目前创立的 Atoms 如何利用专用工业机器人和处于混沌边缘的管理策略，推动实体产业的数字化转型。 Travis Kalanick 的物理 AI 创业公司 Atoms 正在食品、采矿和仓储领域部署专用机器人而非通用人形机器人，以实现更高的吞吐量和更优的单位经济效益。 (0:02) 运营型组织的规模化遵循公式 d(解决问题)/dt >= d(产生问题)/dt，即如果解决新增运营挑战的速度落后，领导层就必须停止制造新问题。 (1:56) 在激烈的市场平台争夺战中，效率胜过补贴；在价格更高的情况下仍能保持 50% 的市场份额，是检验结构性密度和运营护城河优于依赖资本补贴的竞争对手的决定性指标。 (24:49) 为防止风险投资人掌握交易筹码，Kalanick 通过在同步进行的多房间竞价中将投资人的出资承诺映射到估值需求曲线上，成功筹集了多轮巨额融资。 (72:03)

In a conversation with David Senra, Uber founder Travis Kalanick argues that building industry-defining companies requires an exceptional capacity to endure pain, out-execute entrenched cartels through unit-economic efficiency, and balance organizational order with chaos as he transitions to automating the physical world with his venture, Atoms. Embracing Pain and the China Crucible (3:51) Kalanick defines entrepreneurship through the maxim that "excellence is the capacity to take pain," arguing that progress requires pushing past the threshold of suffering while maintaining righteous indignation rather than becoming numb to adversity. This mindset drove his 2013 decision to enter mainland China despite warnings from Meituan founder Wang Xing that it was impossible. Because Western tech playbooks and GPS systems did not transfer to China, Uber had to rebuild its architecture from scratch. In 2014, Uber bypassed licensed taxis to launch peer-to-peer ridesharing via "People's Uber," prompting fierce, rapid copying from domestic rival Didi. Although Chinese cities quickly became Uber's top ten global markets by trip volume, fares of $2 to $3 (compared to $13 to $15 in the U.S.) triggered massive capital burn. Refusing advisors' consensus to surrender a 50% joint-venture stake, Kalanick gave up roughly 7% equity to partner with Baidu for local legitimacy. He also assured China's Minister of Transportation—who was alarmed by July 2015 European taxi riots—that Uber would harmonize progress with social stability. Ultimately, Kalanick notes, the Chinese government tilted the scales, as sovereign wealth funds poured billions into Uber's regional rivals globally to drain the capital Uber needed inside China. Network Efficiency Versus Cartels (22:33) Rather than relying on protectionist lobbying, Kalanick argues that market dominance should stem from serving customers best through an "efficiency edge." In ridesharing, frictionless onboarding and routing reduce driver dead time and pickup wait times (ETAs), increasing driver hourly earnings while lowering rider fares. While a challenger one-tenth the size of an incumbent can initially steal share with smaller absolute subsidy burn, subsidies become mathematically impossible at a scale of 10 billion rides a year, allowing the more efficient network to win. Kalanick contrasts this hyper-capitalist efficiency with the legacy taxi industry, which he characterizes as "legalized corruption" and a government-condoned cartel. Tracing New York City's system to the 1920s and 1930s, he notes that license holders lobbied to cap licenses at roughly 13,000, outlawing competition until Uber challenged the status quo. Venture Capital Friction and Scarcity Instincts (57:30) Reflecting on governance, Kalanick claims that "real founders don't listen to VCs," comparing operators working 60 to 80 hours a week to chess grandmasters and venture capitalists to enthusiasts who check the board quarterly. To maintain leverage during peak Uber fundraising, Kalanick paired analytical "QED" pitches with a simultaneous five-room auction tiered from $25M to $250M+ checks, using investor commitments across valuation bands ($8B to $14B) to build an empirical pricing demand curve. However, Kalanick warns founders against raising from Benchmark Capital, alleging that in 2017 the firm ran a covert war room against him driven by partner Bill Gurley's "catastrophism" and desire for liquidity, even as Uber quietly prepared for an IPO. Taking accountability for his role in the 2017 boardroom coup, Kalanick admits he failed to manage investor relationships, kept misaligned executives, and had "chalk on his shoe" from stepping out of bounds. He attributes this boundary-pushing to a scarcity hangover from his prior company, Red Swoosh—where he went four years without a salary—which left him running a $70 billion enterprise as if he might starve the next week. He adds that reaching a world-class level required unlearning the fear of failure. Atoms and Managing Between Order and Chaos (0:02) Following six to seven months of post-Uber civil and criminal "lawfare," Kalanick launched City Storage Systems (now Atoms) to pursue "physical automation to transform industries" one at a time. Rejecting general-purpose humanoids as suited only for low-cadence home chores, Atoms builds specialized industrial robotics. In food e-commerce, where meals have a 30-minute half-life, Atoms combines urban real estate hubs within 15 minutes of consumers, robotic production, and robotic couriers to bring prepared meal costs toward grocery prices. In mining, Atoms deploys automated machines to lower operating expenses and extract 20% more gold annually from existing mines, expanding raw materials for global industry. To manage multiple business units inside Atoms, Kalanick acts as "problem solver in chief," arguing that management capacity is the only constraint on imagination. He seeks the razor's edge between bureaucratic order and unstructured chaos—the "fewest number of rules while staying out of chaos"—just as he once used a single mandatory pricing call at Uber to keep young city launchers aligned. Kalanick views civilization as a "negentropic" effort to build structure against natural chaos. By organizing the physical world—where everything is grown, mined, manufactured, and moved—he defines ultimate progress as structuring the world toward human happiness, liberty, and transcendence.

[0:02] Travis Kalanick: Physical automation to transform industries. [0:02] Travis Kalanick: the only constraint on our imagination is management capacity. [3:51] Travis Kalanick: The harder it is, the more weird, gnarly, whatever words, whatever superlative you want to put in front of it, the more awesome it would be to solve it... The more excited I get. And the problems that are more awesome to solve are the ones that people think are impossible to solve. [17:22] Travis Kalanick: progress must be in harmony with stability. [28:43] Travis Kalanick: the one who serves the customer best gets all the customers. [37:36] Travis Kalanick: Being anti-competitive is illegal in the United States, unless you get a government official or regulator to do it for you. Then it's legal. [50:20] David Senra: Excellence is the capacity to take pain. [57:30] Travis Kalanick: Real founders don't listen to VCs. [57:30] Travis Kalanick: I got to first shoot the arrow, which is you definitely shouldn't raise from Benchmark Capital. Got to get that out there. [58:42] Travis Kalanick: I never get attached to a price. I get attached to a process. [81:24] Travis Kalanick: running a $70 billion company the way somebody who thought he was going to starve next week would run it. [83:28] Travis Kalanick: The fear of failure could either stand in your way or it could push you from behind... but ultimately you will never be truly world class if you have a fear of failure. [102:26] Travis Kalanick: the fewest number of rules while staying out of chaos. [102:26] Travis Kalanick: pricing in the transportation space is the sum of all strategy. [106:05] Travis Kalanick: Progress is sort of the organization and structuring of the world towards human happiness and liberty and transcendence in some fashion.

[0:02] I want to start with Adams. [0:03] >> Yeah. [0:04] >> You have this great line on the website [0:06] that I actually love. It's this awesome [0:07] sentence. It says, "Physical world [0:09] autonomy requires AI for the physical [0:10] world. This kind of intelligence [0:12] requires computation we haven't invented [0:14] at an efficiency we can't yet fathom [0:16] with deep learning models to understand [0:18] and act in the physical world that don't [0:21] yet exist." Tell us what you're [0:23] building. [0:24] >> Let's start at the mission. It's easier [0:25] that way. Physical automation to [0:27] transform industries. [0:30] So you start there. You can sort of go [0:32] it's almost socratic like what does that [0:34] mean? And sort of in the terms that [0:37] people use today is physical AI and [0:40] robotics to transform industry and you [0:43] go okay well [0:46] uh so what is it a humanoid? And no it's [0:49] not. It's not it's I I wouldn't call [0:52] myself anti-humanoid. It's just what [0:54] we're doing is not that. It's [0:56] specialized robotics that it's not like [0:59] we make robotics and anybody can have [1:01] some. It's more like robotics and AI [1:05] that go after an industry one industry [1:07] at a time. And in the industries we [1:10] think it makes massive moves, big moves. [1:14] And once we get our sea legs, [1:16] we go to the next and the next. If [1:20] you're doing it really well, I I like to [1:22] say that um the only constraint on our [1:24] imagination is management capacity. [1:27] >> What does that mean? [1:28] >> We're solving problems every day. If I [1:32] have to solve lots of small problems [1:33] because I don't have a lot of management [1:35] capacity under me, we're not going to do [1:37] very much. I'm going to be constrained [1:40] in what portion of my imagination can [1:42] become possible like real. But if you [1:45] have lots of management capacity, lots [1:47] of problem solving capacity [1:50] then those constraints unwind. [1:53] >> So how do you broaden and expand the [1:55] management capacity you have? [1:56] >> Okay. So why don't we step back and talk [1:59] a little bit about like I have a lot of [2:02] uh frameworks for this kind of stuff. [2:05] One of them I I call the meta problem. [2:08] Imagine if you had this equation which [2:12] is uh the derivative of problem solving [2:18] dt [2:20] uh must always be greater than or equal [2:22] to the derivative of problem creation [2:26] dt. And if that's ever not true, you [2:28] have a real problem. I call that the [2:31] meta problem. So what's happening is is [2:34] that if you are creating problems faster [2:38] than you can solve them then you're kind [2:41] of effed. But when you create problems [2:43] like in an Uber context would be like [2:45] let's go to China. That's creating a [2:48] problem. Right now the way I think about [2:51] problems I don't think about them in a [2:52] negative way. I think about problems the [2:54] way like a math professor would think [2:56] about a problem. is a math professor [2:58] without interesting problems to solve as [3:00] a sad math professor. Yeah. So it's like [3:03] a good thing. So you want to create [3:05] interesting things to solve. You want to [3:07] create problems to solve. You have to [3:10] predict well the nature of the problem [3:12] and your ability and capacity to solve [3:15] it. You create a problem today. You may [3:18] not understand the nature of the problem [3:21] solving you're going to have to do. You [3:23] have to predict it. And those problems [3:26] start coming ashore in like 6 months in [3:28] like a real heavy way and maybe even [3:30] longer. And so you have to be good at [3:33] predicting what it's the nature of that [3:36] problem and saying okay well what is my [3:39] management capacity to solve it. If that [3:42] equation gets out of balance then you [3:44] have to stop problem creation while you [3:47] get the solving going so that you're not [3:50] drowning anymore. [3:51] >> Right. [3:51] >> Can you give us an example of what [3:53] happened in China then? I mean, China [3:55] was like amazing, but very difficult and [3:59] in some ways impossible to predict. [4:02] Let's go to China. Sounds like fun. It [4:04] was a It was a a super awesome adventure [4:07] because what happened was is I was like, [4:10] "Sounds cool." And I got it was 201 [4:14] probably 2013 or early 13. Uber started [4:17] in 2010, so it was still early crew. [4:22] And I got a crew of folks, like super OG [4:25] guys, and we stayed in an apartment in [4:29] China for a week or two, a week and a [4:31] half, two weeks, something like that, [4:33] and met with everybody we could. It's [4:36] actually when I first met Juan Shing, [4:38] uh, at Muan actually. Um, and he told me [4:42] I was crazy. Don't do it. [4:44] >> It's the worst idea ever. [4:46] >> What was your response when people tell [4:47] you you're crazy, it's not going to [4:49] work? Like that's the best thing ever. [4:52] Okay. So I mean we're there's many [4:55] threads here. We're already poking [4:56] through. We're gonna go everywhere. [4:58] >> Okay. So in engineering we call this [5:00] BFS, breath first search. So I'm not [5:03] able to go deep. We're like we're [5:05] painting the breath of the tree before [5:07] we're going deep. So uh we have a [5:11] cultural value for that at Uber and I've [5:13] pulled it into our new value system at [5:15] into my value system at my current [5:17] company. Uh, but it's called super [5:19] pumped, which is about infectious [5:21] enthusiasm about the hard things. [5:25] The harder it is, the more [5:30] weird, [5:32] gnarly, whatever words, whatever [5:35] superlative you want to put in front of [5:36] it, the more awesome it would be to [5:39] solve it. [5:40] >> Mhm. [5:42] >> The more excited I get. [5:45] And the problems that are more awesome [5:47] to solve are the ones that people think [5:48] are are impossible to solve. Sometimes [5:51] people think something is impossible. [5:53] They perceive it that way, but it's very [5:55] possible, but it's actually easy. And [5:58] there's other ones that people think are [5:59] impossible that are super difficult, but [6:02] possible. That's how you think about [6:04] Adams now, right? When I hear you speak [6:06] about it, and when I read about it, [6:07] you're like, "This is going to be super [6:09] difficult, but it is possible." [6:11] >> So Adams is the name of my company. We [6:13] just named it this. It came from a a a [6:17] crazy obscure name that was done on [6:19] purpose. We basically went ultra [6:21] stealth. But the real question is is [6:26] coming out of Uber. What was the next [6:28] thing and why? And [6:32] it is Adams. We just started calling it [6:36] that now. I was yearning or had a [6:39] pension for an affinity for something [6:41] that's super [6:44] hard, [6:46] super complicated. [6:47] >> Have you always been like that or was [6:49] the exper like was the experience of [6:51] Uber that crystallized how important [6:53] that was? when did this this desire [6:55] >> it's always it's always been this way [6:57] which is and I think it's funny how you [6:59] got there because it's like that feeling [7:02] when somebody tells you something that [7:04] is impossible and you're like is that [7:07] right [7:09] and that and I'm like watch this [7:13] I've always had that like when I was a [7:15] kid I'd always have a sparkle in my eye [7:18] to do something somebody was like [ __ ] [7:21] that kind of thing did you know at when [7:24] you started it like how there's no way [7:26] you could have known like how difficult [7:27] it was or did you like this is a hairy [7:29] problem I'm going to there's I'm going [7:30] to be fight [7:31] >> complexity there's a complexity to it [7:32] that was part of the attraction [7:34] >> okay and you saw that from the from the [7:36] first spot [7:37] >> yeah from the very early days I knew it [7:38] was complicated I didn't understand [7:39] exactly how it was complicated [7:41] >> I'm very curious what you said was very [7:42] interesting you're creating all these [7:43] problems some of the problems you're [7:45] creating are not coming ashore I think [7:47] is the word you use for [7:47] >> it takes time to to see what the nature [7:50] of the problem is that you created [7:51] >> so can Can you give an example of like a [7:54] problem you're creating when you start [7:55] in China, how long it takes to come [7:56] ashore and what happens when it does? [7:58] >> Okay. So, what you learn when you go and [8:00] do what we did in China is you learn [8:03] that when you go and take your business [8:06] and go to China, you have to start over. [8:09] So many people think that you can take [8:11] your business and take it somewhere [8:13] which by the way Uber kind of like [8:16] trademarked that if there's such a thing [8:18] like we made that a thing where like [8:20] cities countries didn't matter we [8:23] created a system that was inevitable but [8:26] China was different because of how that [8:30] country works [8:33] everything's different and that means [8:34] you have to start from scratch right [8:38] it's like as something as simple as like [8:40] uh the phones uh or let's say maps GPS. [8:44] >> Mhm. [8:44] >> There's a different GPS system in China [8:47] than there is here. [8:49] >> What does that mean? Well, it's like [8:50] different. So, if I want to understand [8:53] how cars are moving through space, I [8:56] have to change my GPS system so I can do [8:59] that. [9:00] >> So, I understand. And that's like one of [9:03] like a hundred things that are different [9:05] in China, which means you have to start [9:08] over. And so, yeah, you're starting a [9:10] new business when you take it to China. [9:12] And you have to [9:14] you have to be in a very receptive like [9:19] I am going to learn how to do things [9:22] differently in this very different place [9:25] and be excited and interested in how [9:28] different it is. Whereas most [9:31] entrep let's say western entrepreneurs [9:33] that go to China that almost none [9:35] succeed. Have any succeeded [9:38] >> at the time? Like Apple, [9:40] >> I'd say the two that you would come up [9:42] with in our area, in our neck of the [9:43] woods, there are others, but like in our [9:45] neck of the woods, you're like, "Okay, [9:47] Elon definitely did." Right. And Apple [9:50] definitely did. Tim Apple and and [9:53] Elon, right? [laughter] [9:55] Right. Those are the two guys. [9:57] >> I want to tell you about the presenting [9:58] sponsor of this podcast, RAMP. I have [10:00] been reading a lot about SpaceX lately. [10:03] SpaceX is one of the most valuable [10:04] businesses in the world and one of the [10:06] main themes in the history of SpaceX is [10:08] constantly attacking and questioning [10:10] your cost. Ramp helps many of the most [10:12] innovative businesses in the world do [10:14] exactly that. The median company running [10:16] on ramp cuts their expenses by 5%. And [10:19] one thing SpaceX has demonstrated is [10:21] that a religious dedication to [10:23] controlling costs can help actually [10:25] increase revenue because you can pursue [10:27] opportunities you couldn't otherwise. [10:29] And we see that in the ramp data too. [10:32] The median company running on ramp also [10:34] grows their revenue by 16%. So when [10:37] you're running your business on ramp and [10:38] your competitors are not, you have a [10:40] massive competitive advantage that [10:42] compounds over time. Ramp is the only [10:44] platform designed to make your finance [10:46] team faster and happier. Many of the top [10:49] founders and CEOs I know run their [10:50] business on RAMP. I run my business on [10:52] RAMP and you should too. Go to ramp.com [10:55] to learn how they can help your business [10:56] save time, save money, and grow revenue. [10:59] That is ramp.com. [11:01] Deal is how the best founders turn the [11:03] world into their talent pool. [music] [11:05] I've been studying how history's [11:06] greatest founders operate for a decade. [11:08] And one thing they all have in common is [11:10] they understand that recruiting and [11:11] hiring the very best talent is your most [11:13] important priority. A players recognize [11:16] other A players, which is why top [11:17] companies like Ramp, Shopify, 11 Labs, [11:20] Uber, and Door Dash all use deal. Many [11:22] of the top founders I know have [11:24] personally invested in Deal after using [11:26] their product. And what they discovered [11:28] is that deal is the best company in the [11:29] world at building infrastructure for [11:31] global hiring. Deal will help your [11:32] business hire, pay, and manage any [11:34] [music] worker anywhere in the world. So [11:36] you can retain the best talent anywhere [11:38] and spend the rest of your time focusing [11:40] on what you do best, delivering value to [11:42] your customers. The founder of 11 Labs [11:44] has [music] a great description of the [11:46] value Deal can give your company. He [11:47] said, "We built 11 Labs to break down [11:50] language and communication [music] [11:51] barriers. With deal enabling us to hire [11:53] and support exceptional talent anywhere, [11:56] we can accelerate our innovation and [11:58] bring more [music] voices, stories, and [12:00] ideas to every corner of the world. Deal [12:02] is trusted by over 40,000 [music] [12:04] businesses. Learn how they can help your [12:06] business today by going to [12:08] deal.com/enra. [12:10] That is deal.com/enra. [12:13] So, you start getting in this war with [12:16] DD. Was there anybody else besides was [12:18] there multiple competitors? [12:19] >> We um we eventually rolled out. So Uber [12:22] Black was one thing much smaller than [12:23] like a DD thing. There was another [12:25] company called [12:26] >> Quaid. Mhm. [12:27] >> And we were just in this corner sort of [12:30] doing a niche thing which is a super [12:32] high-end thing in China which is like [12:35] so niche, right? An S-class in China at [12:38] that time is like very it's thin. I mean [12:41] we're growing. It was fun but it was [12:42] thin. But I think it was 2014 I believe [12:45] it was 14. Yeah I believe it was 14. [12:49] must have been where we we basically [12:52] said, "Okay, we're going to do ride [12:53] sharing in China." [snorts] Nobody had [12:56] done that. [12:58] Di was [13:00] taxis. [13:02] And if anybody who's used taxi app with [13:04] taxis, the problem is you're a secondass [13:06] citizen. Meaning taxis want people to [13:08] wave them down. They don't want to take [13:10] rides from an app where they have to [13:12] give a percentage of the revenue to some [13:13] middleman. That's not a thing. Right. [13:15] >> So, it sort of will fill in the gaps, [13:18] but it's not their main jam. [13:21] >> But we went to full ride share, which is [13:24] like peer-to-peer ride sharing where [13:26] anybody driving a car could offer a ride [13:29] to a citizen in the city, [13:31] >> which before you did not exist at all in [13:33] China. [13:33] >> Certainly not coordinated by an app. [13:35] This is now a ride sharing, what was at [13:38] the time called peer-to-peer ride [13:39] sharing. think of some people would [13:42] think of Lyft or Uber X, this kind of [13:44] thing in the US context. Uh, but what we [13:47] called it was the people's Uber. And so [13:49] in the app, you'd open it up and it was [13:51] red cars. [13:52] >> Mhm. [13:53] >> But we became Chinese. We had a a [13:56] massive awesome [snorts] brand there [13:58] because we cared and we were passionate [14:01] about the user [14:03] uh the customer in ways that these other [14:06] companies just weren't. [14:08] But what was interesting about what was [14:10] going on with Dee was that while we were [14:14] in inventing, innovating, [14:17] they were copying. [14:20] And these guys were so good at copying, [14:23] it was kind of it was almost an art [14:25] form. [14:27] To be able to copy as quickly and [14:29] fiercely as they did was like warrior [14:32] mentality in its own right. [14:34] >> [snorts] [14:34] >> But it's like I like to say like the the [14:36] the place to be is it's like a brave [14:38] heart which is like the warrior poet. [14:41] These guys were just pure warriors. [14:43] There was no poetry. They weren't [14:45] creating the new thing. They were [14:47] copying the they were copying [14:49] >> but almost to a level of poetry in their [14:52] ability to copy and the speed at which [14:54] they were able to do it [14:55] >> right. But while they were getting ready [14:57] copying it, it was a very wild sort of [15:00] half technology half regulatory [15:04] arbitrage. [15:06] Very bold. It took them a while to copy. [15:09] And while that happened, it went [15:12] vertical. [15:13] >> Uber did. [15:14] >> Yeah, Uber did. And I'd say like so [15:17] vertical it almost leaned to the left. [15:20] Like it almost started bending. The [15:22] curve almost bent to the left. Okay. [15:26] And um [15:30] that was what it was. The opportunity [15:31] was massive where we would basically at [15:34] some point probably our top [15:37] 10 cities were all Chinese cities. [15:40] >> That's wild. in rides. Yeah. [15:42] >> Not in revenue because the rides instead [15:44] of like [15:45] >> at the in my day 13 bucks, 15 bucks, [15:48] whatever, [15:50] >> they were these were like three bucks, [15:53] two bucks type stuff, right? I remember [15:55] we were doing this fund raise in China. [15:57] We had to raise money in China because [16:00] we [16:02] >> I mean it was a huge I mean it was just [16:05] pulling a huge amount of money. [16:06] >> You mean you were burning a ton of [16:08] money? were burning a lot of money, but [16:09] also we needed a partner. When we first [16:12] went to China, everybody told us that we [16:14] needed a partner. [16:15] >> And they'll just tell you that. We're [16:16] like, "What is a partner?" They're like, [16:17] "Well, that person or that entity has [16:20] like 50% of your company in China." I [16:23] go, "Why is this a law?" They're like, [16:25] "No, but if you don't do it, you're [16:27] totally screwed." And I just never got [16:30] it. Nobody could tell me why. And why I [16:33] had to. I just said, "I'm going to try. [16:34] Screw it." which is like again [16:38] Apple, Tesla, these guys said screw it [16:41] and they just did it right now and we [16:43] eventually did get a partner but instead [16:45] of giving up 50% we gave up I think it [16:48] was 7%. [16:49] >> And it was to buy do but it was because [16:52] we were getting massive regulatory heat [16:55] and as long as we had a partner by our [16:57] side we could be Chinese. [17:00] >> Yeah. [17:00] >> Right. And like this is like when you [17:02] start meeting with ministers in China, [17:06] you know, like at the top at the highest [17:07] level, you have to be vouched for by [17:10] somebody in China or things get start to [17:13] get weird. [17:13] >> And that's what the 7% is for. [17:15] >> That's what the 7% was for. [17:17] >> BU needed we needed a partner inside [17:19] China that was trusted essentially. But [17:22] like I remember, you know, right about [17:24] the time that we got that partner, you [17:26] know, we of course were doing this and [17:28] there was a a strike, a a panuropean [17:33] strike [17:35] for all taxis in all European cities. [17:40] And at some point, I think there were [17:42] like I think this is 15, I believe, [17:45] 2015, uh, July, I think. Um, [17:51] you know, there were [17:54] vehicles being lit on fire in Paris, you [17:57] know, but it was like every major city [18:00] in they just tried to shut the [ __ ] [18:02] down. And [18:04] >> what are they protesting? [18:06] >> Progress. [18:09] So I'm going and meeting with the [18:11] transportation minister in China [18:14] and he throws down three newspapers, [18:17] western newspapers [18:19] that [18:22] top of the fold old school newspapers, [18:24] right? remember those [laughter] because [18:27] pictures of this chaos across all these [18:29] cities and he's like [18:33] this is a problem [18:36] and this is not going to you know this [18:38] is not something we're okay with and I [18:41] said [18:44] why [18:46] and you know there's obvious I knew what [18:48] I you know I knew what he was going to [18:49] say and I said but this is all western [18:52] democracies And I'm like in western [18:56] democracy [18:58] is we know is it's a popularity contest. [19:01] Um and what that means is that the the [19:06] politician succeeds by being popular. He [19:09] doesn't succeed when progress comes. And [19:12] the only way to get progress [19:15] in a democracy [19:17] is for that [19:20] for that politician who seeks to be [19:23] popular when he's under threat. [19:29] When there is a threat of [19:33] disruption or instability [19:36] is the only time you'll get progress in [19:38] Western democracy. [19:40] And I'm like, "But [19:42] so what? We're here in China and it's [19:45] totally different." He goes, "What do [19:47] you mean?" And I'm like, "Well, [19:50] the only time I get I'm able to get [19:53] progress in China [19:56] is when [19:58] uh stability [20:00] is in harmony with progress." [20:04] So [20:05] or or let's say progress those two must [20:08] be harmonized. You will only get [20:10] progress when it is in harmony with [20:13] stability. And I said it in that way, [20:16] those three words. And [20:20] that was very Chinese, [20:22] >> you know, and totally different. It's [20:25] like I'm like, if there was ever any [20:29] hint of instability that we were to [20:31] bring to China, we would be shut down [20:34] immediately. [20:37] But as long as we [20:39] create a foundation of stability, [20:42] progress is super welcome. [20:47] Progress must be in harmony with [20:49] stability [20:50] and totally different. [20:53] >> So when did they take the viewpoint if [20:54] they took the viewpoint that Uber is [20:56] injecting instability into their city or [20:59] area? They never did. [21:02] >> Yeah. [21:02] >> But they at some point [21:06] felt like we were we may win. [21:11] And instead of really seeing super [21:13] problems at the we didn't for the most [21:16] part we were treated fairly at the [21:18] cities for the most part. Not completely [21:20] but for the most part. But what happened [21:22] was the [21:25] what I would what I'd say at the time is [21:27] that the China war went global. [21:30] So, we were spending, let's say, tens of [21:32] millions of dollars a month fighting DD [21:36] in all these cities. And the fight was [21:39] like, uh, I needed to subsidize rides [21:44] >> to gain market share. When I gain market [21:47] share, there's network effect because if [21:49] I'm bigger, then my system is more [21:53] efficient. And if I'm more efficient [21:55] than them, they have to subsidize more [21:57] than I do to compete with me. [22:02] So how do I subsidize where, when, how [22:07] to get that efficiency edge, that [22:10] network effect efficiency edge so that I [22:13] subsidize less than them? This is why, [22:16] you know, like Lyft is smaller than Uber [22:19] because we were better at this part of [22:22] this the thing and people don't really [22:24] know that's what it takes. It's but like [22:26] how do you get efficiency edge? [22:28] Efficiency edge starts when somebody [22:29] even downloads the app and signs up. If [22:33] it's easier to sign up on one versus the [22:35] other, you have an efficiency edge. If [22:38] it's easier to call a vehicle and like [22:41] get it to you without problems, you have [22:43] an efficiency edge because you'll have [22:45] less support. You'll have less like [22:48] people are getting their higher [22:49] completion rates. Like if the cars are [22:53] moving to where the demand is because [22:56] they the driver app has good sort of [22:59] ways to point drivers to the right [23:01] place, that means you have shorter [23:02] pickup time. Efficiency edge. [23:05] Efficiency edge means you get bigger [23:07] faster. You get bigger faster means you [23:10] have a bigger network of drivers which [23:11] means wherever you are in the city you [23:14] are going to get a faster pickup. [23:17] Um and it will be cheaper because well [23:19] if there's less dead time for the driver [23:21] to pick you up then if he's generally [23:23] trying to optimize for dollars per hour [23:26] then [23:28] then the whole thing just starts working [23:30] better. That's the network effect. So [23:32] you're like okay how do I get bigger? [23:34] Well, I'll make the rides really cheap. [23:35] That's one way of doing it. And if your [23:38] rides are cheaper than them, then all of [23:40] a sudden your network gets bigger. Your [23:42] network gives you efficiency, which then [23:44] means you can get to a lower price point [23:47] without subsidies that the competitor [23:50] still has to subsidize. [23:51] >> You'd make money profit at a a place [23:54] where they would make a loss. And the [23:56] Robert Barons all understood this like [24:00] Carnegie all [24:02] >> Yeah. when you're talking I'm like [ __ ] [24:03] this is Rockefeller [24:04] >> it totally so I I read u I think it was [24:06] a churnout biography [24:08] >> Titan [24:09] >> yes [24:09] >> okay there's actually a better one I'm [24:10] going to send you [24:11] >> and what it is is this book from 1970 by [24:14] David Freeman Hawk it's called [24:16] Rockefeller the founding father John D [24:18] the founding father of Rockefellers [24:20] >> Titan is 800 pages and you got a lot [24:22] about his like family history this is [24:24] like 250 pages of how he built Standard [24:26] Oil and it's this [ __ ] [24:28] >> it is exactly what you're describing I [24:30] want to interrupt you one second before [24:31] you go back to My question to you now is [24:33] like I spend [24:35] >> thousands of dollars a month on Uber and [24:36] I only use Uber at Black SUV. It's [24:38] insane. What in a mature market in the [24:42] United States in these big cities that [24:44] I'm using Uber? What would how would [24:46] >> the network effects of Uber be reversed? [24:49] >> Okay, so there's a couple things. First [24:51] is a small player competing against Uber [24:53] has certain advantages. [24:55] Let's say a small player said, "I'm [24:58] going to have cheaper rides than the big [25:01] player." Okay, the small player, let's [25:04] say, is onetenth the size. Let's just [25:06] say their subsidies on an absolute basis [25:10] are somewhere around onetenth as much. [25:13] So, if I am the small guy and I go and [25:15] subsidize rides, I'm going to gain [25:17] market share unless the big guy is [25:20] spending 10 times as much as me. [25:25] Now the efficiency edge can make it [25:27] instead of 10x can make it 7x. [25:29] >> Mhm. [25:30] >> Okay. But you you ultimately a [25:34] wellfunded competitor you have to let [25:36] them grow [25:38] to some degree so that they they have to [25:41] feel the weight of the size of what they [25:43] are. So when they're subsidizing it [25:45] becomes a problem [25:45] >> and it hurts some more. I like to talk [25:48] about situations where if we had a [25:50] competitor we weren't exactly sure what [25:52] was going on because what happens is you [25:54] have to guess when you're subsidizing [25:57] you have to guess do I have an [25:58] efficiency edge on them or not. You try [26:00] to make yourself as efficient as [26:02] possible but you don't know if you are [26:05] more efficient than them or not. So you [26:07] need signal [26:08] >> to determine whether you're better. [26:10] >> One of the ways you could totally do it [26:13] is let the competitor get to 50%. So [26:15] it's 50/50. you have the same network [26:17] size, [26:19] then you would start to see, okay, is my [26:24] price lower than theirs while [26:26] maintaining a 50% market share or is my [26:29] price higher than theirs while [26:30] maintaining a a 50% market share? If I [26:33] can maintain 50% market share while [26:35] having a higher price, then my system is [26:38] more efficient than them. [26:39] >> Mhm. then I could start dialing because [26:44] I know they'll lose because why? Because [26:46] at some point efficiency outstrips [26:49] subsidy. What I mean by that is when [26:52] you're subsidizing you go through huge [26:53] growth and at some point you get so big [26:57] that you can't really subsidize a lot. [27:00] Like if you're doing 10 billion rides a [27:02] year, [27:04] you can't subsidize two bucks a ride [27:06] >> because you run out of money. [27:07] >> Just $20 billion a year. Nobody's going [27:08] to fund that. [27:09] >> Okay? [27:09] >> Right? And so as you get bigger and [27:12] bigger, the amount of subsidy you can [27:14] actually put to it is smaller and [27:16] smaller. And at some point, the amount [27:17] of subsidy you can put to it [27:19] realistically is smaller than your [27:20] efficiency gain by just being better. [27:24] >> And so then you efficiency outstrips [27:26] subsidy. Anybody who's a small player in [27:28] a market has a natural advantage if [27:32] they're wellunded. is that you can gain [27:34] market share very quickly and you can [27:36] force the big guy to burn money. [27:38] >> But why wouldn't the big guy be able to [27:40] drown the smaller competitor faster? [27:42] >> Well, there are there are ways to [27:44] reverse it. So, for instance, [27:46] >> uh the other way where there's [27:48] asymmetric going the other way is uh [27:50] recruiting drivers. [27:53] So, for instance, I could give subsidies [27:56] to drivers if I'm the big guy. I can [27:58] give subsidies to drivers that are like [28:02] uh [28:03] they're like uh [28:06] $1,000 if you join Uber and you're you [28:10] know you do a 100 trips in that first [28:13] week. [28:13] >> Mhm. [28:15] >> I could suck up that supply. The only [28:18] way they're going to be able to keep [28:19] those drivers is they're going to have [28:22] to subsidize across pole of their [28:24] drivers [28:26] even though I just took a small number [28:27] of them. [28:28] >> Mhm. [28:29] >> So, I'm going to suck up all of their [28:30] drivers unless they defend their driver [28:32] base. [28:33] >> There's like a lot of little things like [28:34] this and and I'm almost like remembering [28:37] it's been 10 years since I did any of [28:38] this, but like I'm trying to remember [28:40] all the ways where it's asymmetric one [28:41] way versus the other way. And I'm Yeah, [28:43] >> I think you hit on it's it's this paying [28:45] attention to every single little detail. [28:47] So like when you were speaking about [28:49] even the sign up flow and like how fast [28:51] the ride comes and how easy to put in [28:53] your credit card information, everything [28:54] else. My what I'm sitting here thinking [28:56] is not necessarily about you and Uber [28:58] and China. I'm thinking about [28:59] Rockefeller walking by and saying, "Hey, [29:01] >> you guys are putting 50 drops of sold [29:04] solder on these barrels [29:06] >> and you're doing that because you think [29:07] it's 50 so it doesn't leak. [29:09] >> Try 48." They try 48. This is in [ __ ] [29:12] Titan. They try 48 it leaves. What about [29:14] 49? [29:15] >> 49 doesn't leave. And he says the first [29:17] year that only saved us $2,500 a year [29:19] cuz that one drop, [29:21] >> but we were tiny. Now it's hundreds of [29:23] thousands of dollars. And he did that [29:24] with a thousand different things. So by [29:26] the time he got to his scale, you're not [29:28] competing at all. It's impossible. [29:30] >> And so that's super important. Now [29:33] I read Titan after Uber. [29:37] [laughter] [29:38] Okay. And I'm reading him going, "Holy [29:42] [ __ ] this dude was [29:45] way more hardcore." But the reason why [29:48] is because I got an anti like there we [29:51] had antitrust attorneys at Uber and [29:52] they're like very making it very clear. [29:57] Like there's certain things you can do, [29:58] certain things you can't. They're like [30:00] training me and educating me on [30:02] antitrust law. [30:03] >> Yeah. Now, at first when you hear that [30:05] and you're just a startup kid, like [30:07] literally just get you're like antitrust [30:10] law. That's like what are you [30:13] can't wait to have that problem, [30:14] [laughter] [30:14] you know? Uh but it it ends up being [30:17] obviously very important. Um but [30:19] Rockefeller didn't have that. [30:21] >> No, [30:22] >> he the laws passed because of him, [30:24] >> of course, but it's like he's the super [30:27] like people use OG, they use it the [30:29] wrong way. It means original gangster. [30:33] He's the OG. OG. [30:37] >> I found one of my all-time favorite [30:38] quotes when I was reading the book 0ero [30:40] to1. The quote says, "The single most [30:41] powerful pattern I have noticed is that [30:44] successful people find value in [30:45] unexpected places. [music] And they do [30:47] this by thinking about business from [30:49] first principles instead of formulas." [30:52] That is exactly what Apploven has done [30:54] with their advertising platform. [30:55] Apploven connects you with over a [30:57] billion potential new customers inside [31:00] mobile games. Apploving allows you to [31:02] capture undivided attention. Apploving [31:05] ads are full screen video ads that are [31:07] watched for an average of 35 seconds. [31:09] That is retention that blows other ad [31:12] platforms out of the water. And you can [31:14] launch on Apploven [music] in minutes. [31:16] You set the goal and Apploven achieves [31:18] it. There's no complex setup, no [31:21] expertise needed. And Apploven scales [31:24] quickly. They can put your ads in front [31:26] of over a billion potential customers. [31:29] Other businesses have seen immediate [31:31] results have scaled to hundreds of [31:33] thousands of dollars of spend per day [31:35] and increased their revenue by millions. [31:37] So you want to get started quickly [31:39] before all of your competitors are on [31:41] Apploven. And you can do that by going [31:43] to apploven.com. [31:44] That's apploven.com. [31:48] I think the other thing about monopolies [31:50] too is there's there are different ways [31:52] there different things because sometimes [31:57] the monopoly emerges because the company [32:00] is so competitive. [32:02] Sometimes the monopoly emerges because [32:05] the company is anti-competitive and [32:07] they're different. [32:08] >> That's interesting. Say more about this. [32:09] >> Yeah. Well, where I ended up at Uber was [32:13] it basically sort of the motto was more [32:16] like the one who serves the customer [32:20] best gets all the customers. [32:22] >> Very Bezos. [32:24] That's where we ended up. So, you can be [32:27] highly competitive. And look, we had [32:30] never at Uber, we never [32:33] got a regulation passed that would hurt [32:35] a competitor. We never would do that. [32:38] That's just not how we rolled. We never [32:41] donated to a campaign [32:44] ever to try to get something passed. [32:48] >> You wanted to win because you built the [32:49] best service. [32:50] >> That's right. [32:50] >> I'm reading this biography right now. It [32:52] was published in 1975. It's on the [32:55] founder of Honda who's competing in [32:56] Japan. He founds Honda 1948. Japan's in [33:00] ruins. [33:01] >> Yeah. [33:01] >> And they're the technology in Japan is [33:04] really low at the time. And so all these [33:06] all of his the people that are building [33:07] motorcycles and cars, they're like, [33:08] "Let's b uh let's get together and [33:11] petition the government to not allow [33:14] imports." And he's like, and he was the [33:16] only one that voted against it. He goes, [33:17] "No, no, no." He goes, "The way to win [33:18] is to build the superior technology." [33:20] >> Yeah. [33:20] >> Cuz if we have the best product, that [33:22] product will go, it won't just be [33:24] profitable in Japan, it'll spread [33:26] throughout the entire world. [33:27] >> Very much like what you're saying here. [33:28] It's like, "No, I don't want [33:29] protectionism. I want to win because I [33:31] built the best product and customers are [33:33] choosing me." And also remember what we [33:35] were overcoming to do what we do was a [33:38] system that was perfectly [33:41] anti-competitive. [33:42] >> Can you explain a government a [33:44] government condoned monopoly or a [33:48] government condoned cartel called taxi? [33:51] >> People don't understand this. Can you [33:52] explain the environment in which you [33:54] started Uber? [33:55] >> Let's start with what is a taxi. [33:59] Okay. What is a taxi? Um, [34:02] we'll do New York cuz it's the best it's [34:05] the best way to tell it. In the early [34:07] 1900s, there were people that were [34:10] picking up other citizens [34:13] uh that needed a ride across town and [34:15] charging them for it. And um [34:21] eventually the city decided, hey, look, [34:23] we want to have this to be licensed and [34:25] controlled in some way or like certainly [34:26] rules of the road, just rules of the [34:28] road. So, you'd get a license, but [34:30] anybody could get a license. You'd get [34:31] that license for free and they would [34:33] make sure like you weren't like a felon [34:35] and like different things like this, [34:37] which you'd go, "That sounds great. Good [34:38] idea." But anybody could get a license [34:40] and get it for free, a taxi license in [34:43] New York. [34:45] And eventually that number got to, I [34:47] don't know, somewhere around 13,000. [34:50] And [34:53] then those 13,000 people who had [34:55] licenses, this is now like, let's call [34:57] it the 1920s, the 1930s, [35:00] decided that they would lobby the city [35:05] to give no more licenses out. And the [35:08] city, they they did some deals. Who [35:11] knows, you know, that era in New York, [35:13] you know, how that went down, but no [35:16] more licenses. And of course that was [35:18] great for the people who had them [35:20] because as the city was growing there's [35:23] more and more demand to get across town [35:26] but there are a fixed number of licenses [35:29] people who could do it who are allowed [35:31] to do it. [35:33] Then the taxi guys go to city council [35:35] and they they lobby again. And the next [35:39] version of the lobbying is we want to be [35:41] able to sell the license [35:45] to somebody else. [35:47] So now I have this thing now. It's known [35:49] as a medallion. Now I can I can it's [35:52] it's sort of artificial scarcity. Um and [35:55] I can sell it to somebody else who wants [35:57] to get a cash flow that's an [35:59] artificially high cash flow because [36:01] nobody's allowed to compete essentially. [36:05] And then they went to city council one [36:07] more time and they said, "We want to be [36:08] able to lease out this license to an [36:11] individual [36:13] on a daily or weekly basis." [36:16] [snorts] And that is the modern taxi [36:18] system today. When Uber rolled into New [36:21] York, [36:23] uh [36:26] the driver [36:28] was getting a 12-hour shift 7 days a [36:30] week, but there are two 12-hour shifts. [36:34] Each of those drivers was paying $40,000 [36:38] a year to rent a car for half time. [36:42] >> Insane. [36:43] >> Which means the guy who had the license, [36:46] whose grandpa got it for free. Okay. All [36:50] right. The guy who has a license, whose [36:52] grandpa got it for free, is getting [36:55] $80,000 a year renting a car to a taxi [36:59] driver. And that taxi driver who's [37:01] paying $40,000 a year for 12 hours a [37:04] day. [37:06] He's renting a car for $40,000 a year. [37:09] For that privilege, he gets to be [37:10] impoverished. [37:12] That is the taxi system. And they are [37:15] over a hundred years. So [37:20] it's like uh Stockholm syndrome or [37:24] regulatory capture is so freaking tight [37:27] that the [37:29] the regulators the difference between [37:31] the regulator and the taxi company is [37:33] almost indistinguishable [37:36] >> and it had to be jarring for you to walk [37:38] into a system where you just described [37:40] you're just describing corruption. [37:42] >> It is not [37:43] >> legalized corruption legalized [37:44] corruption. So remember it is so what is [37:46] a taxi system? It is a government [37:49] condoned cartel that outlaws competition [37:53] but it be jarring for you because then [37:55] you come in with with a better product [37:57] at a better at a cheaper price that [37:59] customers love a thous [38:02] you've had you caught me in 2010 or [38:04] whenever you open up in New York you've [38:05] kept me since then. I've never opened up [38:07] another app like 16 17 years however [38:10] long long it's been. It's like I'm [38:13] choosing to do that and then the [38:14] governments are like no no this [38:16] legalized corruption is good. You Travis [38:18] and Uber get the hell out of here. [38:19] >> So what happens is [38:22] >> uh being anti-competitive [38:25] is illegal in the United States unless [38:29] you get a government official or [38:32] regulator to do it for you [38:34] then it's legal. [38:38] Pretty interesting. [38:40] We were talking before we started [38:42] recording about capitalism and he has [38:44] some interesting thoughts and ways to [38:45] describe it. I would also say like [38:48] >> you know this this show is a love letter [38:49] to capitalism. It's very pro [38:50] entrepreneurship. I'm the son of a Cuban [38:52] immigrant. I grew up meeting people that [38:54] came over here in rafts. From the time I [38:56] was 9 years old, I knew I I'm obviously [38:58] born into a very special place. if these [39:00] people risk their lives to get here and [39:02] the wealth that this this country has [39:03] created. What I think also has to be [39:05] called out is this crony capitalism [39:06] where it's like you don't I like the [39:08] Hondas of the world where it's like no [39:09] no I want to win because I'm the best [39:12] not because I gave you a bunch of money [39:14] and you shut down my competitors. That [39:16] [ __ ] should be called out. So it's super [39:18] interesting because you go okay well in [39:20] this case Uber was [39:24] was the symbol of [39:27] hyper capitalism if in many ways like it [39:30] was like embracing all of the [39:35] values and um [39:38] principles of capitalism but it started [39:41] with the most important which is an [39:44] individual has a right to choose between [39:46] different [39:48] uh suppliers of a good or service. [39:51] >> It's like a pro competition thing. The [39:54] consumer has a right to choose between [39:57] different offerings. The other side of [39:59] that is an individual can start a [40:02] business to provide that service or [40:05] offering. [40:07] So you go okay. So capitalism at its [40:10] foundation [40:11] is somebody can start [40:14] a legal business like a you know any [40:17] make a product or a service and offer it [40:19] to people and the people have the right [40:22] to choose which one they use. That's [40:24] capitalism. [40:26] So the question is what's anti- [40:28] capitalism? [40:30] Anti- capitalism is the constraint on [40:33] people being able to start a business or [40:36] a uh have a vocation that they choose [40:42] andor individuals [40:45] not having the right to choose which [40:47] service or off or product that they buy. [40:50] At the core, that's what it is. Now, [40:52] people get confused. Sometimes they [40:54] think something is capitalism that is [40:57] not. [snorts] Uh it's pretty obvious, [41:00] you know, anybody watching any part of [41:02] this conversation on taxis, it's super [41:04] clear that taxis are definitely not [41:06] capitalism. [41:07] >> Mhm. [41:07] >> But it's why they are not very good and [41:10] it's why they are more expensive than [41:12] they need to be. And if people are [41:14] taking Ubers today in New York and [41:16] wondering why it's so expensive [41:20] and why it's getting more unreliable, [41:22] it's because after I left Uber, they [41:26] started passing a bunch of laws that are [41:29] turning Uber into the taxi system. [41:32] >> I didn't know this. [41:33] >> Yeah. They've they have a limit on the [41:35] number of drivers that can be on Uber. [41:39] They've turned it into a medallion [41:41] system that cannot be traded. And as [41:44] people retire out of driving, the number [41:46] of Ubers, I believe, I may have this [41:49] wrong, but it's something it's either [41:50] fixed or shrinking right now. And that [41:53] is why the prices are going up and the [41:55] service is going down. But Uber's [41:57] thought of as a capitalist thing, but [41:59] actually the government is constraining [42:03] it. This is a And why? Because of the [42:06] taxi owners who want their medallion [42:08] prices to go back up. [42:10] >> This is madness. Have you ever read [42:11] Atlas Shrugged? [42:12] >> Of course. Yeah, [42:14] >> I mean a lot of people are like what's [42:15] happening now feels like the scenario, [42:17] you know, the scenes in from that book. [42:19] >> I haven't it was like recommended to me [42:21] a million times. There's a bunch of [42:22] people guests that have been on the show [42:23] that have talked to me about it in [42:24] private and finally I was like all right [42:26] the 12th [ __ ] person that recommended [42:28] I finally read it and I'm like and then [42:29] I went looked up I was like wait this [42:31] was written from like 1946 to 1956 I [42:33] think the 10-year period she was writing [42:34] I was like this sounds the the the [42:37] people in this book is exactly it's the [42:40] same kind of person today. [42:41] >> Yeah. Yeah. For sure. I agree with that. [42:43] >> The whole book is like we have these [42:45] prime movers and then we have these [42:46] people that are just trying to restrain [42:48] their competitive and they're I love [42:49] what you said like what are they [42:50] protesting? [42:51] >> Progress. [42:52] >> Yeah. [42:52] >> But what happens when the people [42:53] building the progress then go on strike? [42:55] That's very fascinating like theme [42:57] throughout the book. [42:58] >> Yeah. I mean we get to some pretty [42:59] interesting places with this kind of [43:01] thing. [43:02] >> In your career, did you only run into [43:04] this government corruption in Uber? Have [43:05] you run into any I know you started uh [43:08] city storage systems? cloud kitchens was [43:10] in city storage systems. Now you renamed [43:13] it at Adams. Have you run into because [43:14] you're your whole thing what I love [43:16] about you is just like [43:18] >> all physical world. I think you said [43:19] it's a you consider it a calling. [43:21] >> Yeah. [43:21] >> To digitize [43:22] >> the physical world. [43:23] >> I love that you use the word calling [43:25] though. I think that's really important. [43:26] Have you run into other forms of [43:28] >> It's everywhere, but taxes is by far the [43:31] most intense. Literally competi we talk [43:34] about anti-competitive things and [43:36] antitrust law and Rockefeller and things [43:39] like this. No, no, no. Taxis, [43:42] competition is illegal. [43:45] But why do they still have power? [43:47] They've captured the regulators [43:49] through lobbying, through donations, [43:53] through legalized corruption. [43:56] And it's not like the only industry [43:57] where this exists. You know, there are [43:59] obviously many other industries, but in [44:01] terms of what I've seen, [44:04] competition is outlawed. [44:06] >> How does the China Diddy Uber story end? [44:09] Did they the government put the hand on [44:10] the scale and favored Diddy over Uber? [44:13] >> So, they ultimately did. What happened [44:15] was is the China war went global [44:19] and what happened is the sovereign [44:22] wealth uh their sovereign wealth funds [44:24] in China started pouring billions of [44:27] dollars into my competitors Uber's [44:30] competitors in different regions so that [44:32] they would subsidize in those regions [44:35] and drain my resources. Wait, before you [44:39] go there, take me your mindset when you [44:42] realize the game that they're playing. [44:44] >> Yeah. I mean, you're like, damn, [44:47] that's real. You're like, [44:49] >> what are you like not sleeping or are [44:51] you like [44:51] >> Well, I mean, the entire Uber thing was [44:53] like a lack of sleep, you know? So, it [44:55] wasn't like this was a new lack of sleep [44:56] thing. It was just I mean it was a new [44:58] thing but lack of sleep generally was a [45:01] thing just because I had a global [45:03] business that was really intense and and [45:05] very game theory oriented in the ways [45:07] that I'm describing which means it was [45:09] always on and crazy weird things happen [45:12] in cars at night. So like uh the first [45:16] time I got woken up in the middle of the [45:19] night because there was a a driveby [45:21] shooting from an Uber. [45:25] You know what I mean? Like that's not [45:27] good. The the thing is is that [45:32] what happens in a city [45:35] happens in an Uber. [45:37] >> So you're exposed to all the vagaries of [45:39] human behavior. [45:39] >> Yeah. The roads [45:41] the roads are the cardiovascular system [45:43] for the city. There's nothing that [45:45] happens in a city that road doesn't [45:47] touch. You know, people are people. They [45:49] do things they shouldn't do. [45:52] What we our goal was to make Uber the [45:54] safest place in a city. And I think we [45:57] accomplished that. We got pretty close [45:58] to that. Um, and I know they take it [46:00] pretty seriously today. [46:02] >> But go back to the stress. Like you [46:03] wanted the stress, right? [46:05] >> It was fun. [46:06] >> Okay. So, Herb Keller, do you know that [46:08] is [46:09] >> founder of Southwest Dwith Airlines, [46:11] most successful airline in history 40 [46:13] straight years was was profitable. Yeah. [46:15] >> And you know, he he has what he was a [46:18] gangster, right? uh drink a fifth of [46:20] bourbon every day, smoke cigarettes on [46:22] the planes, [46:24] >> and he was he unfiltered guy. I would [46:27] love if he was still alive. He'd be like [46:28] one of my top uh you know guests I want [46:31] to talk to. And I love he was giving he [46:33] was doing interview one time. They're [46:34] like, "You undergo a lot of stress. How [46:35] do you handle it?" And he goes, "I don't [46:37] handle it. I like it." [46:38] >> Yeah. [46:39] >> I get that same vibe from you. [46:41] >> The lifestyle of an entrepreneur I I [46:44] believe at its core. There's a couple [46:45] other things, but this is one one one [46:47] prism, one one one part of it, one [46:50] pillar of it is I can take more pain [46:54] than the other guy [46:56] and I'll prove it. [46:59] Once you take on that lifestyle, [47:02] I mean it's a real thing. It's not just [47:04] that I choose to take it on. It is the [47:06] nature of the thing that I am doing. [47:08] Then you are taking on a a life of [47:12] adversity and overcoming all the time. [47:16] And once you are seeing adversity all [47:18] the time and overcoming it, it just [47:20] becomes normal. [47:23] The downside of it is you can get used [47:25] to adversity. [47:26] It just becomes very normal. [47:28] >> Why is that a downside? [47:30] >> Because you almost start accepting it. [47:35] You don't like something bad happens, [47:37] you don't even get mad. [47:39] >> You're like, "That's interesting." [47:41] >> But wouldn't it be beneficial to be like [47:43] unruffled like that where [47:44] >> there are benefits, but you need to make [47:47] sure you don't get so used to it that it [47:49] doesn't even bother you. [47:51] >> You can get so zen you're unbothered. [47:53] >> Now, you still act, but there's [47:55] something special about the extra [47:58] fierceness of being bothered, [48:01] being upset about something that is [48:03] wrong. Yeah. Wrong things. When what is [48:06] adversity? [48:08] What is adversity? [48:11] >> Usually adversity is like some bad [ __ ] [48:14] went down that shouldn't have. [48:17] And it was done to you. It's adversity. [48:20] You [laughter] know what I mean? Like [48:22] for a farmer, it's like a drought, you [48:24] know? It's like terrible. [48:27] >> Um, so or it could be a lot of things. [48:30] Could be somebody stole his crops, could [48:32] be could be pests, could be, you know, [48:34] it could be anything. So, uh, [48:36] >> are you just getting numb to it? Is that [48:38] what you're saying? Like, was there [48:38] parts? Just saying once you fully embody [48:42] the lifestyle of [48:45] adversity and overcoming it, you have to [48:48] be careful of the [48:52] ease at which you walk through it [48:54] because there is an extra power in being [48:58] bothered by something that is wrong. [49:01] You can get too used to wrong things [49:03] happening. [49:05] >> Have you reached that point in your [49:06] career before? [49:07] >> Well, no. I I I would say today there [49:10] are very few things that actually stress [49:12] me out. [49:14] >> Are you worried about that? [49:15] >> Of course. So I remember the things that [49:19] are important [49:22] and that's where I channel fierceness [49:25] through what is right and what is wrong. [49:29] >> You're almost telling me you've been [49:30] inoculated [49:32] from pain. [49:33] >> Yeah. something like uh there's a zen [49:35] that can happen when a warrior has [49:37] fought [49:39] >> for a long time. You can get used to it. [49:44] >> Yeah. But you still for at least from [49:45] the outside you still have this like [49:46] crazy I told you you're the most intense [49:48] person [49:49] >> I've ever met and I've met almost all [49:50] the top founders in the world. [49:52] >> But imagine fierceness with calm on the [49:54] inside. [49:55] >> That's what you want or that's what [49:56] you're [49:57] >> That's what I got. Yeah. [49:58] >> That's where I'm at. [49:59] >> Yeah. [49:59] >> You weren't calm on the inside when you [50:00] were building Uber. That's what you're [50:02] saying. I'm just saying as one [50:04] entrepreneurs longer and longer and does [50:07] [laughter] it properly [50:09] >> I've never heard it used as a verb [50:10] >> you get you get to that place [laughter] [50:14] you just get to that place entrepreneurs [50:16] for longer and longer I'm using that [50:17] line man [laughter] [50:20] >> you just get to that place [50:21] >> well I love what you said though about [50:22] like the pain because you know there's a [50:24] bunch of maxims from the history of [50:25] entrepreneurship that I love like um I [50:27] think something that we we both uh like [50:30] support is like trying to to win based [50:32] on you know providing the best service. [50:33] So like one of my favorite maxims comes [50:36] from Henry Ford where he says money [50:37] comes naturally as a result of service. [50:39] If you go read his autobiography you see [50:40] how he organized Ford Motor Company like [50:42] we're going to provide the maximum [50:42] amount of service and I'm not the money [50:44] will take care of itself if I'm just the [50:46] delighting the customer. The bank [50:47] account will be fine but my favorite [50:49] maxim from all of history [50:51] entrepreneurship is excellence is the [50:53] capacity to take pain [50:55] >> which is exactly what you said. [50:56] >> Oh this is Oh I love that one. That is [50:58] 100% true. So once you say [51:01] entrepreneurship is the lifestyle of [51:04] entrepreneuring, [51:06] [laughter] [51:07] the lifestyle of entrepreneuring is [51:11] the [51:14] uh this sort of pride and I can take [51:17] more pain than the other guy. You go [51:19] why? Well, the best example is like [51:23] world class marathoner [51:25] on mile 21. [51:28] You ever seen You ever seen a marathon? [51:29] You ever seen a marathon or a mile 21? [51:31] Probably on TV. Is that dude smiling? [51:35] >> [ __ ] no. [51:36] Of course not. [51:39] Why? Because if he were smiling, if he [51:43] were just [51:45] not feeling pain, there's somebody else [51:47] who will. [51:49] What is the difference between feeling [51:51] pain and not feeling pain? is that extra [51:55] push. [51:57] That extra push means he loses if he's [52:00] not getting into that pain. [52:03] And that's what excellence is. [52:05] Excellence is about pushing into [52:09] the extent the the the what is a human [52:13] capable of that the the full potential [52:16] because if you don't somebody else does. [52:19] >> Yeah. And then that becomes the standard [52:21] of excellence. [52:24] And all of human progress is through [52:28] that push [snorts] towards excellence. [52:30] That is a push through pain. If it is [52:34] not painful, you're clearly not pushing [52:37] hard enough. And I love that you've tied [52:39] this to if you're doing something that's [52:42] easy, you're doing something that's not [52:44] valuable. If you're doing something [52:46] that's easy, it may be valuable, but [52:49] you're about to get your ass whooped. [52:51] [laughter] [52:52] Or [52:55] it [52:56] may not be valuable. It just depends. [52:59] So, you know, easy could be sitting on [53:02] the beach for 6 months. [53:05] Now, it could be valuable to you, [53:07] respect, and that's all good. Everybody [53:10] has that choice. That's all good. But [53:13] you're not you're you're you're not [53:15] bringing human progress. And then you [53:17] go, well that's interesting. So if [53:19] somebody sits on the beach for 6 months, [53:20] they're not bringing there's no part [53:22] they're not participating in human [53:23] progress. I'm like, well, how could [53:26] they? You're like, well, what if they [53:27] start thinking deeply about [53:31] life and about philosophy and about [53:35] society and they had really amazing [53:37] thoughts. I'm like, well, did they write [53:39] them down? [53:41] I'm like, "Okay, he wrote him down." So [53:42] now he's on the beach writing it down. [53:44] >> And I'm like, "Okay, but there's lots of [53:46] people doing that. [53:48] He's got to be better than those other [53:49] guys if he wants to be about progress." [53:51] So now he's really [ __ ] writing them [53:53] down. And he's honing those words to [53:56] such a degree that it's beautiful and [53:58] perfect before somebody else has that [54:01] thought and does it themselves. And now [54:02] he's in pain. [54:04] How long did you take from when you left [54:06] Uber, which obviously had to be [ __ ] [54:08] devastating, heartbreaking, to jumping [54:10] into the next thing? Did you sit on the [54:12] beach for a little bit? Like, what did [54:13] you actually do? [54:14] >> No. So, it was like 7 months, six, seven [54:17] months, something like this. And most of [54:20] it was [54:22] uh fending off lawfare. [54:24] >> So, wait, the lawfare was it criminal? [54:25] Were they trying to like [54:26] >> It was civil and criminal for sure. [54:28] Yeah. [54:29] >> Yeah. [54:29] >> Yeah. [54:29] >> So, you're fighting off that for [54:31] >> Yeah. It's like a corporate cancel [54:32] culture, lawfare, like all the things on [54:35] the corporate side of all of those [54:37] things. Remember I said, remember [54:38] earlier we we talked about [54:41] >> uh business became politics. [54:43] >> We were talking about this off camera. [54:45] Can you talk about this now? [54:46] >> Yeah. So there was a you know in the [54:50] 2010s [54:52] there was something that happened in the [54:54] media and it was that business became [54:57] politics. If you just think about your [55:00] favorite politician and just go on the [55:02] internet today, [55:04] do you think you're gonna see a lot of [55:06] happy golucky stuff about your favorite [55:08] politician? Like, of course not. We know [55:10] that because politicians basically just [55:14] the nature of what it is they do. [55:15] There's a lot of mudslinging and a lot [55:18] of stuff and a vast majority of it is [55:21] just untrue. [55:24] Um though I I'd say with some of our [55:26] politicians today maybe a lot of it is [55:28] true but but you know it's just a doggy [55:31] dog mudslinging thing and the headlines [55:34] are often not true which I think we know [55:37] that in politics. What we didn't know in [55:39] the 2010s is that or that was just [55:42] starting to happen was that business was [55:44] becoming politics. That the headlines [55:46] you were starting to read about business [55:49] were just narratives and often [55:52] fabrications with substantial material [55:57] perversion of truth. [55:59] >> And you were exhibit A for this [56:01] >> for sure. I I would I would say so. [56:04] >> Yeah, I would say so too. [56:05] >> Yeah. So, you know, like talk to anybody [56:08] who knows me, they would basically say [56:11] the difference between, especially if [56:14] you talk about 10 years ago, the [56:16] difference between [56:18] the public persona and the actual person [56:22] couldn't be more different. [56:24] >> Well, I can I can speak to this and I [56:26] know when I we before started recording [56:28] and I've been chasing you for a while. [56:30] and I saw you at Michael's house and [56:32] everything else which was funny by the [56:34] way when you walked up to us and I was [56:35] like do you remember me go like yeah I [56:38] go it's time to do the [ __ ] show and [56:39] you go it's time to do the [ __ ] show [56:41] [laughter] [56:42] >> I love that but what I would say is just [56:44] like in terms of founders that actually [56:48] know their [ __ ] [56:49] >> your reputation is [56:51] >> perfect [56:52] >> sterling like if you're a killer [56:54] entrepreneur [56:55] >> you say great things about Travis [56:58] >> it's the only [ __ ] I've ever heard comes [57:00] from like investors. This is why [57:02] >> I don't necessarily believe it comes [57:03] from investors, but [57:05] >> I'm saying what I hear. [57:06] >> No, it's interesting because where I, [57:08] you know, [57:10] >> Yeah. a lot of times it's from the the [57:14] gallery. [57:16] Now, sometimes investors are in that [57:18] category, but [snorts] [57:20] when I go and do pitches and [57:22] fundraising, I don't feel like [57:24] >> you're Travis C. Come on, bro. I'm just [57:25] [laughter] saying [ __ ] Tra. Of [57:28] course. Like you you basically [57:30] unlimited. So this is one I was texting [57:32] Daniel E about uh that I was going to [57:34] see you and he wanted he's like you got [57:36] to get him talk about fundraising which [57:37] we'll get to in a minute. I think we [57:38] have to hit on something really [57:39] important because what I loved about our [57:41] dinner is you just straight interrupted [57:42] me which I loved because you should have [57:44] and but I was trying to tell you I was [57:45] like man listen there's just something [57:47] weird that all the content and the [57:49] podcasts that entrepreneurs and founders [57:52] are consuming are created by VCs and you [57:56] like and then I went to say another [57:57] thing and you cut me off. You put like [57:58] your hand in my face which is hilarious. [58:00] You're like real founders don't listen [58:02] to VCs. [58:04] We need to talk about this because [58:06] >> sure [58:06] >> if you're friends with founders, [58:08] >> you hear atrocious horror stories and [58:12] bad behavior by investors all the time [58:15] that they will not sit talk about [58:17] publicly, [58:18] >> right? You went through one of the worst [58:21] of the worst. Like going back, it's like [58:23] is it just when you're doing Uber, is it [58:25] just you raised money from the wrong [58:26] people? What did you how do you look at [58:27] it now? And how could you what would you [58:29] tell like a young founder now that has [58:31] to raise a ton of money? I always I got [58:34] to do the I got to first shoot the [58:36] arrow, which is you definitely shouldn't [58:37] raise from benchmark capital. Got to get [58:39] that out there. Um and then okay, let's [58:42] get into the real stuff. Um [58:46] look, I think it's really interesting to [58:48] start with what where where did it get [58:51] weird? I mean, basically at the peak, so [58:56] 2017 was a was my problem year, right? I [59:00] mean, it was always hard, but this is [59:01] when it got dialed up. And Benchmark was [59:04] running a war room. [59:07] They were an an unspoken activist [59:09] investor that was creating [59:12] a once a week crisis, [59:17] but without [59:19] >> against you. [59:20] >> Yeah. Against me, uh, without speaking [59:23] of it. Again, there's some things I [59:25] don't know, but the best I can see is [59:27] that they wanted liquidity and they felt [59:29] like I wouldn't give it. [59:32] [snorts] [59:34] We were already preparing for an IPO, [59:36] but I didn't tell them that. [59:37] >> Why didn't you tell them that? [59:40] >> Because [59:42] we wanted to sort of make sure we'd done [59:45] the right thinking, got prepared, so we [59:47] could just say, "We're going to do it, [59:49] and here's how we're going to do it." [59:51] And Bill Gurley is a bit of a [59:52] catastrophist. it's always the end of [59:55] the world. [59:56] Um, and so that forces you to do really [60:00] weird things if you think the world is [60:01] always going to end, including try to [60:03] take me out. [60:05] So instead of dealing with that [60:08] catastrophism, [60:10] let's just go do the damn thing. be I [60:14] give you lots of examples like uh I [60:17] think on the we had a we had a fund [60:19] raise in 2014 mid 2014 [60:24] um where the last round we did was in [60:29] August 13 was $3.5 billion that's when [60:32] we brought Google and um [60:36] Google and TPG in and then mid 2014 so 9 [60:40] months later that was three and a half [60:42] billion 9 months later we did around. [60:45] Girly was like convinced it was the end [60:48] of the world and we got a raise and just [60:50] take your first term sheet. Just [ __ ] [60:52] take it. And you have a whole philosophy [60:55] on this which is like if you want a [60:56] round to go well and to go fast. [61:01] You have to have a process. If you just [61:04] go take the first term sheet, getting [61:06] the round done will actually take longer [61:09] because there's no alternatives. You [61:11] don't have alternatives. And then it [61:12] gets weird and then the VC will just [61:14] keep pushing pushing pushing push [61:16] getting more and more more more and it [61:17] gets weird to a point where it actually [61:19] becomes highly likely that the the deal [61:21] just blows up. So I like to say I never [61:23] get attached to a price. I get attached [61:26] to a process. That process is about [61:27] excellence in fundraising. Anyways, can [61:30] you explain that process though? [61:31] >> We'll get there. [61:31] >> Okay. [61:32] >> Okay. [61:32] >> Don't let me forget. [61:33] >> I won't. [laughter] [61:35] >> BFS. [61:37] Okay. We're going have to sit here for [61:39] 10 hours to cover everything. But he was [61:41] convinced like, "Hey, just take the [61:43] first deal. Like, just do a $6 billion." [61:46] It was like, "I think you could get a $6 [61:48] billion round valuation done right now. [61:51] It's 9 months after the three and a [61:52] half. Just go take the first term sheet, [61:55] make it happen." [61:57] Now, if you're a founder hearing that [61:58] and you're just like, [snorts] [62:00] [sighs and gasps] [62:01] you're like, "Dude, I hear you. But even [62:05] if the world is about to end, [62:08] the best thing you can do is have [62:09] alternatives. and the deal will actually [62:12] get done faster. [62:15] So, we got to a place where like I just [62:18] wouldn't talk to him and not if he [62:22] reached out to me, I would re I would [62:24] talk to him, but like I just wouldn't [62:25] try to engage [62:28] because it was always that. So, Emil [62:31] Michael would handle this part. He would [62:34] handle a lot of the the investor [62:36] relations, especially as a relationship. [62:37] >> Shout out Emil Michael. That dude is [62:39] loyal as hell to you. Well, he's just an [62:41] awesome guy. Not because of loyalty, but [62:43] because he's just an awesome guy. But of [62:45] course, that too. And he would do it in [62:49] a genuine authentic way, like try to [62:51] handle the the objections or whatever. [62:55] [snorts] Anyways, [62:57] two months later, we got a round done at [62:59] a 17.5 billion pre. [63:02] >> Whoa. So, that's my point. So, when you [63:06] want to do things right, you got to do [63:07] things right. And VCs don't, [63:12] not all, but many, most, [63:17] they're just, they're worried about [63:18] other things. [63:20] So, we were already planning IPO stuff. [63:24] They didn't know it, but they also never [63:27] expressed [63:29] the desire to like, "Hey, dude, you got [63:32] to IPO." It's never brought up. [63:35] So, it was like this weird cat [63:38] catastrophism [63:40] mixed with if you think the world's [63:43] about to end and you've got this thing [63:44] that's worth a ton of money, [63:46] you could get to a weird place. [63:48] Especially when you're in a VC, you [63:49] don't have any control. You're not like [63:52] running anything. So now you're like [63:54] your entire holy [ __ ] big your outcomes [63:58] in life are due to this guy and you [64:01] think the world's about to end and he [64:03] doesn't. [64:04] You're like you could get into a place [64:07] where you're running a war room to [64:08] destroy him [64:10] and that's that's kind of what happened. [64:13] What's the alternative scenario if you [64:14] raised just from somebody that wouldn't [64:16] have done that? Like I'm just going to [64:17] make this up but like how Founders Fund [64:19] says they no matter what they'll never [64:20] remove a founder. will not do like a [64:22] warfare war room against them. [64:24] >> Well, I think there's two parts. So, [64:25] first I'd say the most the the the [64:28] actually a super high bar for a VC is do [64:31] no harm. There's a lot of reasons why [64:33] that's hard for a VC. [64:35] >> Elaborate, please. This is important, [64:37] man. No one talks about this [ __ ] [64:39] >> Everybody wants to make a mark on the [64:41] world. [64:44] Everybody wants to make a mark on the [64:46] world. [64:47] And you might believe one thing or [64:50] another. [64:53] You want to make a mark in the world. [64:56] And the the way I think about it is an [64:59] operator who's running a company is a if [65:03] they're good is a grandmaster of chess. [65:06] >> Mhm. [65:08] the VC and by the way that grandmaster [65:11] of chess, this operator entrepreneur [65:15] is playing this [65:18] chess match somewhere between 60 and 80 [65:21] hours a week [65:24] and is like really knows this thing and [65:28] it's like [65:30] knows many moves ahead and just sees [65:33] things other people don't see and [65:34] they're in it as well. [snorts] [65:37] And the VC is a chess enthusiast [65:43] and they check in on the chess match [65:45] once every three months [65:49] and they're like trying to make a mark [65:51] on the opinion. They're trying to make a [65:54] mark. Hey, why don't you do this or [65:56] that? and you're like, [66:00] you know, [66:02] uh, [66:05] don't go to Jordan and tell him how to [66:06] dunk and definitely don't go to him and [66:09] tell him how to dribble. [66:12] But it's hard because everybody has an [66:15] opinion and [66:18] you believe whatever you believe, you [66:19] really believe it. But like if you're [66:21] not in a thing all in all the way every [66:24] day 12 to 16 hours a day [66:28] on this game, it ain't a thing. But [66:31] that's a hard thing for most people to [66:34] take [66:36] who aren't running [ __ ] [66:38] >> Why do you think it's hard for them to [66:39] take? because VCs are uh glamorized and [66:45] they have a seat at the table in some [66:47] fashion and there are certain powers you [66:50] can make a mark [66:53] and so it's sort of like the way to [66:55] think about it is you're on the [66:57] Serengeti [67:00] and [67:02] uh [67:04] like if an analopee limps in the [67:07] Serengeti the lion will take it down [67:10] even if it's not hungry. Can't even [67:11] [ __ ] help it. [67:14] Uh it's just what is what he does. [67:17] And that's kind of the nature of most [67:20] VCs. [67:22] This the nature of it is they will if [67:26] the if you are on the Serengeti and [67:28] limping, you will you will be eaten. [67:32] It's just the nature of it. [67:35] And the lion doesn't even know why. [67:37] Sometimes you're just like this is what [67:38] I do. Yeah. [67:40] >> So when you're talking to other [67:42] founders, younger founders, you're [67:43] saying priority number one is just find [67:44] an investor that does no harm. That [67:47] would be a high bar. So achievable what [67:50] percentage of the time then you would [67:51] guess 10%. [67:55] And then the 1% is helpful, [68:02] but it's hard. How the [ __ ] are they [68:04] supposed to be helpful? There's [68:06] different times to be helpful, though. [68:07] helpful is hard times [68:10] is when you actually need real help, [68:15] right? [68:16] Uh helpful is [68:22] there, you know, maybe it's personnel [68:24] like you need epic people, but it's [68:27] still like hard hard for them to [68:31] participate because they're just not in [68:33] it that deep. So, can you explain [68:36] explain excellence in the fundraising [68:38] process and how you think about it, the [68:39] system you develop for this? [68:41] >> Yeah, and it it could be changing over [68:43] time, but I like I certainly have my [68:46] approach. It's interesting because I've [68:48] just I'm just finishing a fund raise [68:50] right now and it's it's interesting to [68:53] see the world change. But I think part [68:55] of what we're seeing right now is we're [68:57] in a we're in a super cycle or like a [68:59] super high [69:02] we're in a hype I don't want to call [69:04] hypo, but like in a a very bullish cycle [69:06] right now, which means different things [69:09] happen than if it's sort of average. [69:12] When it's average, [69:14] it's super important [69:16] to tell a beautiful story [69:21] that's woven like that that that's [69:24] that's like a story that numbers are [69:27] woven through. It's a it's a it's a [69:30] beautiful, entertaining, interesting [69:32] story [69:35] with [69:36] analytical numbers woven through it. and [69:40] you basically get to what I would call [69:42] QED, [69:44] which is [69:46] you've dissected the chess match to such [69:49] a degree that it's very clear [69:52] what it takes to win and that you have [69:56] the winning formula. [69:59] And you get to the end of the thing and [70:01] you're like, it's just proven. It's not [70:03] even like a question anymore. It's QED. [70:07] That's in normal times. And I think in [70:11] super cycles or whatever we want to [70:12] call, you know, kind of what's going on [70:14] right now, that rigor is not as [70:17] important. [70:19] And if you go too far on that rigor, it [70:21] could be too much. [70:22] >> Explain that. [70:23] >> You hear stories of entrepreneurs that [70:25] just sit down around a table and then [70:29] they have an idea and they get money. [70:31] That's the opposite of QED. [70:34] But [70:37] if you have a 2-hour long presentation [70:41] that goes QED [70:44] in a super cycle, you probably should [70:46] shorten that to 45 minutes. [70:48] >> Why? [70:49] >> I don't know how to put it. It just [70:51] looks like too much. Like, why are you [70:53] going so far, dude? What? What's [70:55] >> yourself out of the wrong? [70:56] >> Yeah, you'll talk yourself out of the [70:57] way. [70:57] >> Why are you so detailed? [71:01] >> It's this weird dynamic. It's very [71:03] funny. like [71:05] it's cool, bro. [laughter] You know, [71:09] maybe it's also because you're you're [71:12] projecting many years out. So, so the [71:16] more super cycle you're in, the more [71:18] forward you are, the more into the [71:21] future you are. And that future can't [71:23] really be presented as tightly with [71:25] numbers. [71:26] >> Yeah. So, when you're talking 2 hours [71:27] forward, you don't know. [71:28] >> So, then it's about the theory of the [71:30] case. That's probably the way to think [71:32] about it is that a mix of super cycle [71:35] plus the speed at which technology is [71:38] moving and the sort of true exponential [71:41] inflection that can occur. [71:44] You're talking 3 to 5 years out. [71:47] There's almost no set of numbers today [71:50] that can QED the 5year thing at this [71:53] crazy 100x situation that's probably [71:56] going to occur. Mhm. [71:57] >> So then you have to talk about the [71:58] theory of it [72:00] >> in many ways and so maybe that's why [72:02] it's a little bit different today. [72:03] >> What's the common uh in your approach in [72:05] a normal cycle and the super cycle you [72:08] just got? [72:08] >> Normal cycle is 2 hours QED. [72:10] >> What is something that you'll use in [72:12] both whether it's normal or super? [72:13] >> Well, I still do some version of I my [72:16] style is QED [72:17] >> and then the multiple bids thing is is [72:19] mandatory. Correct. So well I would call [72:20] it so it's QED is the storytelling and [72:24] then there's sort of like a [72:26] an auction process [72:30] that you hone [72:32] if when you're doing right now. This is [72:34] has to be measured against how many [72:36] resources you have to do QED and how [72:39] much deal resources you have to manage a [72:41] full auction. [72:42] >> Explain that part to me. [72:42] >> Like if I have five rooms going at the [72:44] same time, I have to have that. That's a [72:48] thing that you five rooms simultaneous [72:51] for an entire week. [72:53] >> Where did you even get that idea? [72:55] It was just the expression [72:58] of the right thing. It it's it's sort of [73:02] like if you keep incrementing on [73:04] something and keep making it better and [73:06] better, you will end up there. [73:07] >> What was the quality of the business [73:08] when you were running this like five [73:10] room process? [73:11] >> That's peak Uber [73:12] >> peak. So it's like there it's like you [73:14] can put money to this or nothing. [73:15] Nothing's even close. [73:18] >> No, there are other things but it was [73:19] peak Uber. But the point was I did it [73:21] QED. [73:23] So I showed at the atomic level how the [73:27] whole system works [73:30] with [clears throat] with a very [73:32] analytical view but also sort of a bit [73:35] of performance art cuz you're [73:38] storytelling. [73:38] >> Okay. Explain what's happening in these [73:40] five rooms then. [73:41] >> Five rooms, 12 hours, one week. [73:44] >> Who's in the rooms? You don't have to [73:46] say the people. [73:47] >> No, it's okay. So I'm in the $250 [73:50] million check or over room. Then there's [73:53] like a $100 million room and a $50 [73:55] million room and a $25 million room. And [73:58] there'll be a guy in the $25 million [74:00] room who's like [74:02] uh [74:06] who works for a guy who works for a guy [74:08] who works for me, right? And what are [74:11] you guys saying in in all these rooms? [74:14] >> We're telling the story. [74:15] >> Mhm. [74:15] >> That story is the core. [74:17] >> And now you have it being performed in [74:20] four rooms at a time. and there's this a [74:22] deadline price is going up. [74:24] >> Well, no, it's not prices going up. So, [74:26] that's the mis that's the [74:27] misunderstanding. [74:28] >> Okay. [74:29] >> The right way to do it is to start with [74:31] a low price. [74:33] >> Explain that. [74:34] >> So, a lot of entrepreneurs they go and [74:36] they say they really have remember I [74:38] said attached to a process not a price. [74:42] So, a lot of entrepreneurs will get [74:43] attached to the price and not the [74:45] process. [74:46] And you have to be careful. It's very [74:48] easy to get sucked into that where [74:50] you're like you get some signal that it [74:52] should be a price and you get attached [74:54] to it and then that becomes your price [74:56] but you haven't cleared the market. So [74:58] you have to be very careful about that. [75:00] So you get attached to the price and so [75:01] then when I throw a price out you're on [75:03] the other side of the table and you like [75:06] you come in under it and now we [75:07] negotiate, right? It's a very bad place [75:11] to be from my perspective. uh where you [75:13] really want to be is you want to start [75:15] at a low price and say look I don't know [75:18] where the price is going to go but I [75:19] know it's at least here [75:22] and if it's low [75:27] is like [75:29] okay now once they give you that read [75:32] once they lean forward like that you're [75:34] like okay we're good [snorts] you have a [75:38] bidder [75:41] and then you go to the next guy. [75:44] It depends on how the nature of the [75:45] round. If you're doing a winner takes [75:47] all round, then you would just go to the [75:49] next guy and you would then say whatever [75:52] that guy said x + 5 whatever x + y here. [75:57] Just say x plus 5. And that [snorts] guy [75:59] does the same thing. And then you go to [76:01] the next guy and then it's x + 5 + 5. [76:06] And the next guy x plus 5 plus 5 plus 5. [76:08] All the while while that's happening, [76:10] it's a winner takes all deal. [76:12] >> You go back to the original guy and [76:14] you're like, "Dude, it's going up. It's [76:15] going up." And you're telling people [76:16] it's going up. That's a winner takes all [76:19] approach. [snorts] [76:21] And then you sort of do a going once, [76:23] going twice, like when you start to peak [76:26] out where it's like people are getting a [76:28] little it's starting to get a little [76:29] high altitude, sweaty, [76:32] >> then you're like, "Okay, going once, [76:34] going twice, sold." and then you close [76:36] it down and winner takes all and they [76:38] take the deal. [76:39] >> But most deals that are big deals today [76:42] are not working that way. When you're [76:45] doing multiple rooms at a time in [76:47] something like this, it's more like [76:51] uh how much would you put in at this [76:53] price? [76:55] And how much would you put in, let's [76:56] call it, I'm just making this up, 8 [76:58] billion. And how much would you put in [77:00] at 9? And how much would you put in at [77:03] 10? How much would you put in at 12? How [77:05] much would you put in 14? Fill the sheet [77:07] out. [77:09] You decide how much you'd put in any any [77:11] price that we end up at. And you do that [77:13] across everybody. And [77:15] >> is that what you're doing now? [77:17] >> Hold on. Slow down. Slow down. [77:20] [laughter] [77:20] Then you aggregate how much demand I [77:22] have at every price. So as the price [77:24] gets higher, the demand goes down. You [77:26] now have your demand curve and you're [77:29] like, "Okay, I want to raise a billion." [77:31] So, but at the really low price I have [77:34] three billion of demand. [77:36] At the higher price, eventually I have a [77:40] billion dollars worth of demand. And I [77:41] go, "Okay, that's the price that I could [77:42] close at right now." Then you go and [77:45] tell all the people that [77:49] that got cut out because they didn't get [77:50] high enough of a price. There's less [77:52] demand at this price, which means [77:54] there's certain people that didn't bid [77:55] here. You go tell them they're out. And [77:59] you're like, "But you could fill out [78:00] another sheet if you want to make some [78:02] moves." So they fill out the sheet, you [78:04] do the demand curve again, everything [78:06] moves a little bit to the right, and [78:08] there's other guys that now get pushed [78:10] out. And you do it one more time, and [78:12] then you clean it, and you're done. [78:14] >> So what are you doing now? [78:16] >> I'm about to close a deal. [78:17] >> Do you want to say how you did it, [78:18] though? You don't say numbers, but like [78:21] I can't I can't do that. No, [78:22] >> I can't do that. [78:23] >> Okay, fair enough. Fair. come back on in [78:25] a few months and [78:26] >> yeah like yeah a couple years ago here's [78:27] how this one went. [78:29] >> You got to put time in between cuz it's [78:31] like you just did a deal. You know what [78:32] I mean? [laughter] [78:33] >> But I I would say I did a a slightly [78:36] different slightly different this time [78:37] around. [78:38] >> I'm very curious how you protect [78:40] yourself from [78:42] what happened with Benchmark and Uber [78:45] from ever happening to you again. So how [78:47] are you selecting is just obviously the [78:49] price. Look, [78:50] >> you're not taking the highest bidder. [78:51] Like how are you picking your partners? [78:52] >> Yeah. You have to also be careful like [78:54] um [78:56] there can be [79:00] you got to be really careful not to get [79:02] into victim mentality and what I mean by [79:03] that is what was my part in that in that [79:06] dynamic. I was thinking while you were [79:08] speaking I was like what if we could ask [79:09] them [79:11] >> what would they want you to do that you [79:12] weren't doing maybe say hey we're about [79:14] to [ __ ] IPO [79:17] [laughter] that probably would have [79:18] saved me but also like I didn't kiss the [79:20] ring I think girly wanted to feel [79:25] like [79:26] hometown with me and just never was [79:29] hometown to me is different than kissing [79:30] a ring though but it it's similar okay [79:34] just put it in that category we don't [79:35] have to [ __ ] go there. So, [79:39] so that's [79:41] there's that. That's one thing I could [79:43] have done differently for sure. Would [79:45] have changed everything. Um, there are [79:48] people [79:50] inside of the company who became his [79:53] partner [79:55] to do the coup. Those individuals [79:58] shouldn't have been there. Okay. [80:01] >> Did you suspect them at all before? [80:03] >> Yes. [80:04] Wow. There was definitely something [80:06] wrong is what I would say. Okay, let's [80:09] put it that way. Every decision I made [80:11] at Uber [80:14] defend to this day. [80:17] Like I wasn't 100% correct, but always [80:21] good intentions and [80:23] always coming from the right place. [80:26] Generally just did the right thing. [80:28] Yeah. One of my lawyers put it this way. [80:30] is like um you know did you if you're [80:33] like he he sort of made a sporting or [80:36] like a like a sports analogy which is [80:38] like do you have chalk on your shoe [80:40] would be like kind of going out of [80:42] bounds or doing something you shouldn't [80:43] have done. I'm like never had chalk on [80:45] my shoe. [80:47] But in order to know, [snorts] [80:50] you would need an electromagnetic [80:51] scanning microscope to see with reverse [80:55] angle of slow-mo replay to verify that [80:58] there's no chalk on the shoe. So the [81:01] problem was I ran too close to the line [81:04] in too many situations [81:06] that it [81:09] it [snorts] [81:11] when you are big and important [81:14] the scrutiny and the expectation is that [81:17] you don't run that close to line even if [81:19] it's correct and that is a thing I [81:21] definitely did not understand [81:24] um and it comes from what I did before [81:27] Uber which was I was doing a really hard [81:31] startup. First four years, no salary, [81:34] ran out of money several times, [81:37] like super grind, [81:41] like lose all friends, like everything's [81:45] it was just the hardest kind of I I like [81:49] to say the non-luckiest entrepreneur [81:51] journey of all time. You can't call it [81:54] unlucky. I eventually sold, but like you [81:56] definitely would never call it lucky. [81:58] That's for damn sure. [snorts] But [82:00] basically, it was so hard that I had to [82:04] be sort of [82:06] epically precise and hardcore just to [82:10] pay the bills and go to the grocery [82:12] store next week. [82:14] And that precision and intensity made [82:18] Uber what it was. But I was running a [82:22] $70 billion company [82:25] the way somebody who thought he was [82:27] going to starve next week would run it. [82:29] >> That is fascinating. [82:30] >> Like super intense precision, [82:34] perfection, [82:36] obsession [82:37] because he's not sure that he's going to [82:40] be able to pay the grocery bill next [82:41] week. [82:42] Did you understand you were that was [82:44] your approach at the time you had that [82:46] approach [82:48] >> or you had to leave and look back and [82:50] figure it out? [82:50] >> It's a little probably a little bit of [82:52] both. Yeah. But I take pride in that. At [82:55] the time it was like a pride in [82:59] going [83:01] all the way [83:03] but like not maybe understanding every [83:07] understanding it the way I understand it [83:08] today. I wonder how much of that is a [83:10] benefit. Like you're you're super you're [83:12] one of those most aggressive founders in [83:14] history. You're wiser, more experienced [83:17] now, more access to resources, better [83:20] network. I wonder if this version of you [83:23] >> could compete with that version or that [83:24] aggressiveness is just what that you you [83:27] created the entire category. [83:28] >> Yeah. No, I understand. It would be [83:29] super fun if there was a universe where [83:31] I could compete with my younger self. [83:32] That would be [ __ ] awesome. I would [83:35] love that so much. I would kick his ass. [83:37] >> You Okay. [laughter] [83:40] Now, there'd be certain things he's [83:41] doing because he's younger, and there's [83:43] a there's a certain thing to that. [83:45] Remember I talked about the um the [83:50] the passion for right and wrong, [83:55] right? As an example, there's something [83:57] to that. But also what I noticed today [84:01] is most of the things that would take me [84:04] x amount of time [84:07] 10 years ago, I can do an x divided by [84:10] three today. And not because I got [84:13] clawed over there, right? Like that's a [84:15] whole separate thing. I'm just saying [84:17] like [snorts] [84:19] like I don't know. You read my Adam's [84:21] vision note. [84:22] >> Yeah. [84:22] >> Okay. That would have taken me [84:26] I don't even know if I could have [84:27] written that back in the day. Like not [84:29] that good. [84:32] I can just flow and get it done. [84:36] Like the core of that was written in an [84:39] hour and a half. [84:40] >> Mhm. [84:40] >> You know that kind of thing. [84:42] >> What is it that caused you to [84:44] accelerate? Now though [84:45] >> there's different things. So like um a [84:49] lot of early founders have a fear of [84:51] failure. [84:53] But what that does is it creates [84:56] blockage around progress around ma [85:00] making progress because you're you're [85:02] just [85:03] you're bogged down. [85:06] The psyche around fear of failure [ __ ] [85:09] with your ability to to get there. [85:13] >> Well, the fear of failure could either [85:15] stand in your way or it could push you [85:17] from behind, right? It can push you from [85:18] behind, but ultimately you will never be [85:21] truly world class if you have a fear of [85:23] failure. [85:23] >> But how many entrepreneurs have you met [85:25] where they said like the fear of failure [85:27] is greater than the love of success? [85:28] >> I understand that. I'm just saying that [85:33] it will get you places but it won't get [85:35] you all the way. [85:36] >> Okay. In that version of Travis where [85:38] you're running a $70 billion company. [85:40] >> No, no, I would say I was transitioning [85:42] out of fear of failure [85:43] >> towards the end in 2017. just just just [85:45] let's just say like we don't have to put [85:48] a specific date. It's just a spectrum. [85:50] It's a and just I'm transitioning out of [85:52] it cuz remember where I came from. [85:54] >> It's just before. So I'm transitioning [85:57] out of fear of failure. [85:58] >> How old were you when you started Uber? [86:00] >> 33. [86:02] >> 33. And you had a couple million bucks, [86:05] >> right? [86:05] >> Yeah. I that I put all into all my [86:07] friends startups. [86:08] >> Okay. [86:08] >> I had nothing. [86:09] >> Yeah. It was kind of funny. [86:11] >> Yeah. [laughter] [86:11] >> It was kind of funny. [86:12] >> Did that work out? So, I was the first [86:14] investor in Expensify. [86:17] Uh, [86:19] there's like a healthcare IT company [86:20] that still hasn't gone public. [86:23] >> It's really funny. [86:24] >> Okay. So, not a lot of resources. Still [86:26] young. 33 is still young. So, you it [86:29] makes sense why you felt the way you [86:30] felt. [86:31] >> Yeah. But it it's it's just about the [86:34] background. It's just about what the [86:36] previous experience was, not about my [86:38] age, per se. [86:39] >> It was just about what experience I had [86:41] just come out of. So, I love where the [86:43] conversation has gone because what I'm [86:44] hearing from you is like there's just [86:46] this theme that runs through you as a [86:48] person and then your approach to company [86:49] building throughout these companies. So, [86:52] we barely touched on what you're doing [86:54] now. [86:54] >> Like, let's get into Adams [86:57] >> and you said you wanted to start uh with [86:59] the mission where it says physical [87:01] automation to transform industry and [87:03] move the world. AI and robotics [87:07] to totally transform [87:10] industries but one industry at a time [87:14] and specialized robotics to do so. So [87:18] for instance, [87:20] if you want to make a,000 pancakes an [87:22] hour, you wouldn't have a humanoid do [87:24] it. [87:26] If you wanted to [87:29] get a car to move down the street, you [87:32] wouldn't have a humanoid drive it. [87:35] I think humanoids have their place which [87:37] is let's call it low-cale tasks [87:41] in human design environments designed [87:44] for humans. So example you're in a house [87:51] clothes need to be folded [87:53] but it's not like you're folding clothes [87:55] all day long. [87:57] It's one of the things, but there's no [87:59] way you'd buy a robot for tens of [88:02] thousands of dollars to just fold [88:03] clothes because it's just not big enough [88:06] of a problem. So now you need a machine [88:08] that can do many different types of [88:10] things in the home. So it needs to fold [88:12] clothes. It needs to take out the trash. [88:14] Probably needs to wash dishes. There's [88:16] like a bunch of things, but that's a [88:18] very generalized thing. Has to be able [88:21] to do a lot of different things. And [88:23] it's in a very human environment. [88:26] The best form factor is a humanoid for [88:28] this thing. [88:30] But they'll bring up the thousand [88:32] pancakes an hour. Imagine a humanoid [88:34] making pancakes. Well, it would make it [88:35] like a human. It would be like, [88:39] "Okay, by the way, if you were just [88:41] making pancakes at home once a week on a [88:44] Sunday, because you need a machine that [88:46] can do many different things, including [88:48] make pancakes, it's all good. But if you [88:51] needed to do a thousand an hour, you'd [88:54] probably need like, [88:56] I don't know, [88:58] a hundred humanoids in a row doing this, [89:00] right? Versus a very simple iron [89:03] apparatus where the batter gets pushed [89:05] into it, it's hot already, and it's [89:08] pushing out like maybe even like a 100 [89:10] pancakes every few minutes. [89:12] >> You know what I mean? [89:14] So specialized [89:17] robotics uh specialized uh machines that [89:21] are specialized for the task at hand is [89:24] sort of how I look at what we do. And so [89:27] industrial scale where there's real [89:31] change to an industry by automating the [89:33] whole thing. And so you go, okay, well [89:35] I've got a lot going on in food already. [89:38] The idea is, [89:40] can you get a meal that's prepared and [89:42] delivered to you so efficient that it [89:45] starts to approach the cost of going to [89:46] the grocery store? [89:49] Pretty awesome if you could. It's got to [89:51] be a high quality meal, of course. But [89:53] like the the the question mark there, [89:56] can you requires you to have [90:00] what I would call industrial real estate [90:02] for food e-commerce. What do I mean food [90:04] e-commerce? We know what e-commerce is. [90:06] It's got Amazon warehouses everywhere or [90:09] like major hubs like big distribution [90:12] centers DC's but food e-commerce is a [90:16] little different you it is a warehouse [90:18] type you need to do logistics from it [90:20] but you also need to do manufacturing [90:23] like there's no manufacturing that's [90:25] happening at an Amazon warehouse because [90:26] everything's manufactured somewhere it [90:28] gets delivered to this big warehouse and [90:30] then it goes from there but with food it [90:32] has a 30 minute halflife so the [90:34] manufacturing the logistics has to [90:36] happen at the same place and it always [90:38] has to be 15 minutes from where you are. [90:41] So now you have a very different [90:42] situation where you have real estate in [90:44] urban and suburban environments that's [90:46] always 15 minutes from anybody. So you [90:50] have an urban logistics fabric [90:52] production and logistics fabric across a [90:54] city which is I have the real estate [90:58] then I have robots uh robotic food [91:01] production [91:03] cuz then I'm taking the labor cost out [91:05] and then I have robotic logistics [91:09] because right now your $15 bowl that [91:13] then gets delivered to you somehow [91:14] became 30 bucks. Mhm. [91:18] >> It's of course expensive to produce, but [91:20] every time there's a drop by a courier, [91:23] that's another 12 bucks. [91:24] >> Mhm. [91:24] >> Industrial real estate, robotic [91:27] production, robotic couriers. And then [91:30] >> was there a specific reason you you [91:32] started with food though? [91:34] >> It just caught me. [91:37] I mean, like that is like I don't have a [91:38] list. Well, first of all, of course, I [91:40] did Uber Eats, so like very familiar [91:42] with this part of things, but nowhere [91:45] close to the atoms that are necessary to [91:48] do what I just described. [91:50] >> You know, I like to say like I have lots [91:52] of ideas all the time. I mean, I I'm an [91:55] idea factory, [91:57] >> but other people have great ideas, too. [91:59] But like an idea comes to you or comes [92:02] to you, if that makes sense. And I'd [92:05] like to say, you know, you go out on a [92:06] date with the idea, right? Was it a good [92:09] date? Did it did it go well? Like how [92:11] did you and the idea get along? And it's [92:14] very much related to like who are you is [92:18] going to be a big part of which idea [92:21] works for you. [92:22] >> You call this finding your sport. [92:24] >> Yeah. Finding your sport or your [92:27] business soulmate. [92:28] >> Mhm. [92:29] >> Be in touch with who you are and then [92:31] when the right idea comes your way, you [92:33] just know. [92:35] You just know. I thought I I understood [92:38] how you [92:39] >> thought. Yeah. [92:40] >> And now, you know, we've been talking [92:41] for several hours. I'm I think I'm [92:43] getting a little closer there. But then [92:45] I read what you wrote where you're just [92:47] like, "Well, look around, dude. [92:49] Everything that you see in a city in a [92:51] civilization has either been grown, [92:53] mined, or manufactured." [92:55] >> And so I'm like, "Oh, he like is you're [92:57] into details like you were describing [92:58] the Uber signup flow earlier, [93:00] >> but you zoomed all the way out. Yeah. So [93:02] it's like I'm going to start with the [93:04] material constituents of everything that [93:06] exists in the world. [93:07] >> So when you look around you everything [93:09] around you is grown or mind [93:13] manufactured and moved and that's how we [93:16] look at the world. And then you go well [93:18] when you think about physical AI the [93:20] automation of movement and action in the [93:22] physical world [93:24] you look at the what I call the physical [93:26] AI tech stack. Real estate's part of [93:29] that for the reasons I I've described as [93:31] it relates to food. If you didn't have [93:33] the industrial scale, what I call high [93:36] infrastructure, [93:38] heavy duty energy, heavy duty mechanical [93:41] systems cuz you're extracting air and [93:42] then tempering it and pushing it back [93:44] in. Real estate is a big part. What is a [93:47] mining company? It's actually real [93:48] estate. So the ability to take land and [93:52] turn it into pro productive [93:56] pro progress essentially is a [93:59] underappreciated and not understood [94:01] thing and it is most definitely a big [94:04] part of the what I would call the [94:06] physical AI tech stack. You go like look [94:09] at you know you can look at Tesla and [94:11] all the things Elon's doing like it's [94:14] obvious that real estate is his jam or [94:16] certainly his team's jam. He doesn't [94:18] talk about it as much, but it's a big [94:20] part of what happens. He's got a [94:22] freaking city. He's starting a freaking [94:24] city, right? You know, the head of HR is [94:27] is basically the mayor of a city that [94:30] he's building. You know what I mean? So [94:33] it's a really important thing but also [94:34] when you you know you can go further [94:36] than that which is everything we're [94:39] seeing in technology you know a lot of [94:41] times we talk about super intelligence [94:43] is sort of the function of I need to [94:47] have energy and I need to have minerals [94:51] at the very base lots of energy we talk [94:54] about data centers now in gigawatts or [94:55] megawatts you know so [94:59] I need to have energy and I need to have [95:00] the minerals and then I have those two [95:02] things and I can get super intelligence [95:04] eventually working those things hard. [95:07] [snorts] But where does the energy come [95:09] from? You're like, "Oh, it comes from [95:11] the sun." Okay, but how do you capture [95:13] it? Goes back to minerals. [95:17] Like [95:19] land is the whole damn thing. [95:22] So there's a really interesting [95:24] perspective about how land plays a role [95:27] in the future of physical automation. [95:31] physical AI [95:33] um and just [95:36] um autonomy in the physical world is is [95:39] very dependent upon it. And that's why [95:41] mining is so interesting. [95:43] >> You're not owning the mines. Correct. [95:44] You're just making them more productive [95:46] with gainfully employed robots. [95:48] >> Correct. [95:49] >> Yeah. What we call gainfully employed [95:50] robots, [95:51] >> which is hilarious, by the way. [95:52] >> Yes. [laughter] [95:52] But it's like because right now, you [95:54] know, you know, look, I do think of [95:56] course humanoids are going to be [95:58] gainfully employed. They're not there [96:00] yet, but they'll get there. But right [96:02] now, they're [96:04] the demos are dancing and martial arts. [96:07] You know, I talk about the Beijing. [96:09] There's a a a humanoid Olympics in [96:11] Beijing and they're they're doing a [96:15] marathon. You're like, "Okay, they're [96:16] not quite there. They're going to get [96:17] there." But I kept thinking like, man, [96:19] imagine if you put wheels on them, [96:22] right? And this gets back to humanoids [96:24] being good at certain things and not [96:26] others. And sort of having a [96:28] purpose-built machine for the task is [96:30] important. [96:31] >> So wait, you said two very interesting [96:33] things. Your life's work is digitizing [96:35] the physical world. And then you're [96:37] saying for Adams, you're going to attack [96:39] one industry at a time. [96:41] >> Mhm. [96:42] >> Physical world far outstrips the digital [96:44] world. Therefore, you almost stumbled [96:46] into or picked, you didn't stumble into, [96:48] you picked an infinite game. So there's [96:50] no limit to what you this company can [96:53] expand into. [96:54] >> Look, I I have a little bit of an issue [96:56] of infinite, but like it's a very [97:00] it goes very far. Like the dream like, [97:04] okay, look, the mission for mining is [97:07] more productive mines to power Earth's [97:11] industries. [97:13] Because we can go to a gold mine right [97:15] now, go to a gold mine CEO and ask [97:17] whether he wants 20% more gold per year. [97:20] Why? Because when you automate it, [97:23] that's the output. And you make it [97:25] cheaper to go to other places and even [97:28] get more gold out of that mine that you [97:30] wouldn't even get before. So, it's [97:32] getting more per year. It's getting more [97:33] than you otherwise would. And the [97:35] totality of that mine, plus being able [97:37] to go and do more mines than you [97:38] otherwise would because the opex is so [97:40] much lower. But if you're increasing the [97:42] raw materials, then you're also [97:44] increasing overall industry in the [97:46] world. Period. And then you could then [97:47] go and automate and enhance those [97:50] industries as well. Right? [97:52] >> The point is is that if you get really [97:54] good at minerals [97:57] and materials and land, [98:00] you get good at automating making land [98:03] productive [98:05] and powering progress with land. [98:08] It's sort of the lever that moves the [98:10] world. Exactly. [98:12] >> So if you automate the thing that is the [98:14] lever that moves the world, it's like [98:16] the ultra lever. [98:19] This is kind of fun. It's just actually [98:21] cool. If you see a picture of a, you [98:24] know, [98:26] a machine that loaded is over 2 million [98:29] pounds and it's the size of a building [98:31] and it's autonomously moving around. [98:34] It's pretty cool. The dream and like [98:35] this is like it's really Elon willing [98:38] really. But like one day he's going to [98:41] be sending [98:43] he's going to be sending missions to [98:45] asteroids to mine them. Yeah, maybe we [98:48] can help out in some way. That'd be a [98:50] lot of fun. [98:50] >> You have mining, you have food, [98:54] >> transport, [98:56] and the thing we call it the ignition [98:57] there is wheelbase for robots. So if you [99:00] have specialized machines that that act [99:04] and move in the physical world, that's [99:06] what we do for a living. [99:08] You have to have wheelbase. You have to [99:11] automate how they move. You know, some [99:14] people think about ride sharing when [99:15] they think about this, but there's just [99:17] a lot of there's a lot of things you're [99:20] not thinking about. You know, like I was [99:21] talking to one of the large food [99:22] suppliers in the US. They supply all the [99:26] food to the um uh to the restaurants. [99:30] They're spending $3 billion a year [99:35] on the labor that moves the pallets [99:41] on forklifts. [99:44] This like this just like a little drop [99:47] in the bucket of all the things that are [99:48] moving, right? Um but what about [99:53] freight? What about parcel delivery? [99:56] What about um [99:59] food delivery? [100:02] So like we talked about that on the food [100:04] side. Once I knew I had to get into [100:06] autonomy to complete the food story, [100:10] this is when the Adams thing sort of [100:12] came together beyond just food. One of [100:14] the things that I was talking to Daniel [100:16] Ek about you that he finds most [100:17] fascinating about you is your propensity [100:20] to build a ton of separate companies [100:23] inside of one company. You did this [100:25] obviously at Uber. [100:26] >> Yeah. [100:27] >> You're doing it again at Adams. Yeah. [100:29] >> Is that just your natural is that what [100:31] you meant? Like your business soulmate. [100:32] Just like I don't want to work on just [100:33] one product or one business like you [100:36] want a conglomerate. Like how do you [100:38] think about this? [100:38] >> I mean this goes back to no you don't [100:40] that's not how it works. It's um but it [100:42] is remember the con only constraint to [100:45] our imagination is management capacity. [100:48] So then the question is twofold. Do you [100:51] have an imagination and is it any good? [100:54] But if you do have an imagination, and [100:56] it's good, you're going to have [100:58] interesting ideas [101:00] that should happen. There's many ideas [101:02] that maybe either shouldn't or somebody [101:03] else should do, but there's going to be [101:05] many ideas that you should do. [101:07] >> So, what does the actual organization [101:08] inside of Adams looks like with all look [101:10] like with all these different [101:11] businesses? Like, does every business [101:12] have a CEO? They report directly to you. [101:14] Like, how how did you [101:15] >> business unit line leader and then you [101:17] might even have sub business unit [101:20] leaders as well. um you really try to [101:23] empower and that you know empower them [101:25] to do their thing that is you know I [101:29] sort of look at that as alignment [101:30] upfront accountability on the back end [101:33] so what are we trying to accomplish how [101:36] are we going to try to accomplish it [101:38] what do we view as risky and what sort [101:40] of no-brainer and how do we do [101:42] accountability as we go and then sort of [101:46] approach it with like a management style [101:49] which I call problem solver and chief [101:52] which is I spend my time on the most [101:55] impactful problems that are not already [101:57] being solved. [101:58] >> That's how you dedicate your time. [102:00] >> Yeah. [102:00] >> Is that the directive that you give to [102:01] everybody? That's that's okay. [102:03] >> Yes. So, I've got a certain number of [102:05] hours per day, but that's a tiny [102:07] fraction of the problems that need to be [102:08] solved. [102:08] >> Yeah. That's what I'm trying to figure [102:09] out like how [102:10] >> So, that flows down. Now, everybody's [102:12] got their their their their [102:15] remit, let's say. So, they solve [102:17] problems in this area. So it's flowing [102:20] down, but they are the problem solver [102:21] and chief deputized for their area [102:25] all the way down to the bottom. [102:26] >> Do you still put an emphasis? I've heard [102:28] you speak about this in the past, an [102:29] emphasis of hiring and empowering young [102:32] people. Is this business different than [102:33] like when you were launching new cities [102:35] in Uber, for example, where you gave a [102:38] lot of responsibility to, you know, [102:39] aggressive young people? [102:40] >> Well, okay. Again, so it it there's [102:43] really interesting ways to do it. I I I [102:45] sort of have this this concept I call [102:48] the line in sort of the maybe the [102:50] framework is finding the line. So [102:52] there's a line [102:54] on one side is order lots of structure [102:59] sorry structure like as you as you pull [103:01] away further further back into order you [103:04] have lots of rules lots of structure [103:06] lots of process and eventually lots of [103:09] bureaucracy. [103:11] And if you go too far back from that [103:13] line, you're going slow and people are [103:15] bummed. [103:18] And if you go to the other side of the [103:19] line, which is chaos, [103:22] lack of rules, lack of process, lack of [103:26] structure, and as you go deeper and [103:27] deeper and deeper into chaos, [103:30] you also get to a place where you're [103:33] going slow and people are bummed. [103:35] So that line between order and chaos is [103:39] innovation at speed and at scale. And [103:42] the job of every leader is to find that [103:45] line. And it's not in two dimensions. [103:47] It's like in 80 dimensions. Okay? And [103:50] the best leaders are able to find that. [103:53] And you know the probably the most [103:54] approachable way to describe this is the [103:58] fewest number of rules while staying out [104:00] of chaos is the is the approachable way [104:03] to describe this. But you go to back to [104:05] like launch at Uber, [104:09] you could think of it as like, okay, [104:10] there's a bunch of 23 year olds [104:11] launching cities. [104:13] What happened was at the beginning, the [104:15] first 20, 30 cities, I was deeply [104:17] involved in whether that city was going [104:20] to get launched. But what happened was [104:24] somebody go out, hey, go launch a city, [104:27] make something out of nothing. and [104:29] there'd be some kind of playbook there, [104:32] but [104:33] a lot of it was undefined. But nothing [104:36] would actually launch until they got to [104:38] a pricing call because pricing in the [104:40] transportation space is the sum of all [104:43] strategy. [104:45] And so the pricing call then goes, well, [104:47] what's the regulatory? What's the car [104:49] type that you're going to use because of [104:50] that regulatory? What is the average [104:53] wage in the city? Because that's on the [104:56] driver's side and that's part of the [104:57] cost. Of course, you basically go [104:59] through every aspect of the city that [105:01] relates to transportation. How long does [105:03] it take to get around? Like where are [105:05] people going? You ultimately get to a [105:07] price, but it means you have to [105:09] understand everything. And how you get [105:12] to that price matters. So in the first [105:13] 20 cities, I was on a pricing call in [105:15] some of those cities, man, it would be [105:16] like eight pricing calls. It could be [105:19] like 8 hours, 10 hours of pricing calls [105:20] before we launched London as an example. [105:23] But I never solved the same problem [105:25] twice. [105:27] Once we solved it, then it became part [105:29] of the playbook and [snorts] eventually [105:31] we get to city 20 [105:33] and that pricing call takes five [105:36] minutes. I stopped going to them. Didn't [105:38] matter anymore. But the key that I was [105:41] trying to get to is you have a [105:42] 23-year-old who then can go and launch a [105:45] city. Even at the beginning when I was [105:48] still involved in that pricing call, [105:49] they wouldn't see me till the pricing [105:50] call, but they knew I was going to be at [105:52] that pricing call. The one rule was you [105:54] can't launch until I say yes at that [105:56] pricing call. So they would come ready [105:59] to play at that pricing call and they [106:02] knew that if they didn't I'd be like no [106:05] and then they suck. And so they would [106:07] put everything they in into making that [106:09] successful which means all the other [106:11] things that they're doing before are [106:13] going to be organized towards doing it [106:17] right because they want to win. [106:20] And so now I've got one rule, which is [106:22] that pricing call, the fewest number of [106:25] rules while staying out of chaos. That [106:27] if you didn't have that one rule, you [106:29] now have 23-y olds running around doing [106:32] crazy [ __ ] That's awesome. It made me [106:35] think of another line that I love that [106:36] you put on Adam's website where he said [106:38] that chaos was the law of nature and [106:41] order was the dream of man. H [106:44] >> my interpretation of that line now [106:46] having spoken to you about this it's [106:47] like I feel that you're imposing order [106:50] on the chaos of the physical world. [106:52] That's what your company is trying to [106:53] do. I almost think of it as negantropic, [106:56] which means it's kind of a you could get [107:00] into a very interesting sort of uh very [107:04] uh I don't want to say you very [107:07] energetic debate with certain people [107:09] about negative entropy, but civilization [107:12] is an attempt to locally slow down [107:17] entropy [107:18] and maybe even go negative. It's [107:20] building structure against [107:24] the nature towards [snorts] chaos. [107:27] That's what civilization is. And so [107:29] Adams is essentially [107:32] the structure to defend [107:37] civilization and move it forward into [107:41] progress. There's another line when you [107:43] when you speak, there's a lot of things [107:44] that you say that remind me of [107:45] Rockefeller uh in when in the early days [107:48] of the oil refining industry. He used [107:50] that word that he thought it was a [107:52] chaotic industry. It was he's at the [107:54] very beginning. This is when the oil [107:55] industry the entire [107:57] >> it's solely concentrated in Pennsylvania [107:59] for God's sake. And he goes, I'm going [108:01] to impose order on this chaos. That's [108:04] the line he used. Progress is sort of [108:06] the organization and structuring of the [108:09] world towards [108:12] human happiness and liberty [108:17] and transcendence in some fashion. [108:20] That's how I view what we're doing at [108:23] maybe the very highest level. [108:24] >> I think that's an awesome place to [108:25] close. Travis mean really means a lot to [108:28] me for taking the time. Really [108:30] appreciate it, man. Thanks. Great. [108:32] >> I hope you enjoyed this episode. Please [108:33] remember to subscribe wherever you're [108:35] listening and leave a review. And make [108:36] sure you listen to my other podcast, [108:38] Founders. For almost a decade, I've [108:40] obsessively read over 400 biographies of [108:42] history's greatest entrepreneurs, [108:44] searching for ideas that you can use in [108:46] your work. Most of the guests you hear [108:48] on this show first found me through [108:50] founders.