Digital Disruption

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Certainly we are in some form of bubble.

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Certainly there is too much capital

chasing, too many possibilities

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and there will be a lot of tears

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somewhere down the line.

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This is a show about the future of tech

and the future of work.

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I'm Jeff Nielsen and today

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we're diving into

AI as an engine for business innovation.

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My guest today is Bill Reichert,

general partner

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at Pegasus Ventures

and a 20 year veteran technology investor.

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Bill is what I

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consider an AI startup whisperer

and one of the best people on the planet.

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To provide the inside scoop

on what we need to know about

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the innovative tech

coming out of Silicon Valley right now.

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I want to ask him how much faith he has

in the current crop of AI startups,

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where he thinks we'll see the next wave

of cutting edge technologies, and what we

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can all learn about how to actually build

the next generation of tech.

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Let's find out.

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Well, thanks so much for joining today.

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Really excited to have you here.

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Look, you've been a tech investor for you

know, let's just say you're a veteran.

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In the space these days.

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And so I'm curious

when you look out at the,

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you know, the tech startup, the

AI environment you're seeing these days,

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what makes it unique

or different from other,

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you know, startup periods or cycles

you've seen in the past?

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Yes. Well, first of all,

thank you, Jeff, for having me on.

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I really appreciate the opportunity

to be with you here today

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in terms of this cycle,

compared to other cycles,

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few differences

that are pretty substantial.

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One is the speed at which things seem

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to be changing in a very broad based way.

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Is is unprecedented.

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I mean, we've had technology breakthroughs

before the internet, the smartphone,

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it seemed to be pretty dramatic,

but the reach and impact

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potential of this dramatic AI explosion

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seems to be faster

than what we've seen before.

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One, two.

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The other aspect of it

that is dramatically different is

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the amount of capital

that is being allocated to this, the, the,

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the, the quantity of capital

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that's being dedicated

to this particular cycle.

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Absolutely.

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Swamps previous tech innovation cycles.

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And so we thought we thought

the internet boom was a big deal.

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And, you know, it is nothing

compared to what we're seeing right now.

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And then the third thing

that is happening is

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you are seeing startup companies

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grow revenues at a pace

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that, again, has never been seen before

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in terms of the speed

to $1 billion of revenue.

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Are you kidding me?

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You know,

we had you know, we were we were sort of

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amazed by, you know,

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companies that got to 100 million

in revenue in just two years.

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I mean, that was amazing, you know,

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ten, 15, 20 years ago now it's nothing.

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Lots of companies

are getting to 200 million in revenue.

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And, you know, just several months.

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So, you know, many factors

that make this very,

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very different from cycles

we've seen in the past.

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I find all of those to be

pretty interesting and pretty compelling.

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And I want to dive a little bit.

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Deeper

into some of the implications of those.

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So maybe we'll start

by talking about growth

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and I guess the implications

for the volume of capital.

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Do you do you sense that for a lot

of these companies this is sustainable.

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And the tech is going to enable this

to continue.

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And I guess what I'm really getting at is

when we look at the volume of capital

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here, you know, some people have described

it as kind of a gold rush.

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And, you know,

there's been narratives that everybody's

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just kind of gotten a bit

greedy chasing these returns.

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But at some point, you know, there's going

to be an awful lot of, you know, losers.

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In addition to the winners

from the investment perspective,

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do you buy that or do you think the growth

that we're seeing is sustainable

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and it's just going to remain a pretty

hot business for the foreseeable future?

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No, certainly

we are in some form of bubble.

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Certainly there is too much capital

chasing too many possibilities,

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and there will be a lot of tears

somewhere down the line.

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You know, not all of

these companies are going to be able

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to, you know, to win

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or, you know, or even sustain.

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And so we're going to see lots

and lots of failures,

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you know, over the next several years. So.

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But that having said that,

you know, similar

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to the internet boom, you know,

there was a

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just a huge number of companies

that failed during the internet boom.

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But no one suggests that there wasn't

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enormous value creation

because of the internet boom.

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And so it's not as though

this is going to go away.

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It's just going to be very messy.

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And so, you know,

where you sit in that mess

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will be in a sort of depend

on kind of exactly how you were,

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how you were participating

in the whole process.

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But there's no question whatsoever

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that the momentum of innovation

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and the implications for everyone in terms

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of adopting these innovations

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is, is positive and sustainable

as far as the eye can see,

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particular products, technology,

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services, companies, capital investments,

those are going

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to be highly variable in terms

of, you know, who wins and who loses.

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And, you know, sort of by sheer count,

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most are going to lose.

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I think that makes a lot of sense.

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And, you know, I'm sure you know

better than most the ins and outs of,

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you know, the winners and the losers

and what that looks like.

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And I'm curious, on that note of caution,

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if there's any particular,

I guess, you know, trends or

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unique qualities

that you look for these days in companies

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that that you and Pegasus are investing

in, whether it's the sector they're in,

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whether it's some sort of moat,

whether it's,

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you know, the founders themselves,

what what to you

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are the best indicators that this company

could really be a winner.

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Yeah.

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You know, so our number one factor is

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they delivering a compelling value

proposition.

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And, you know, in order for it to be

compelling, it's got to be differentiated.

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And so if they're just delivering

something that everybody else

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is delivering,

then by definition it's not compelling.

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And so that relates to sort of the other

critical important factor,

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which is a variation on the moat theme.

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And that is

do they have an unfair advantage

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that is going to separate them

from the rest of the crowd

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that is going to differentiate them

and enable them to sustain,

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in spite of all of the other players

that are chasing them?

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And so we look for that unfair advantage.

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And, you know, one of the challenges

in this environment is the baseline

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technology of generative

AI is now essentially a commodity.

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And so so for any company

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that launches a new app that enables you

to automate

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some particular part of your world,

it's really hard for that company

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to differentiate because, you know,

next weekend, a couple of grad students

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can launch something

that's a little bit better, right?

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And so that's a huge challenge right now

for startup companies

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and for investors in this in this space.

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So we look for companies

that are in some part of the ecosystem

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that other people can't easily penetrate,

with some unfair advantage

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that other people can't easily acquire.

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The Unfair Advantage framing is really,

really interesting to me.

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And you mentioned the

I guess on one side, the,

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you know, can a couple of grad students

do it in the weekend?

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And I was thinking

about the other side as well,

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which is what happens

if one of the incumbents.

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You know, one of the winners from the

the web cycle of the last handful of years

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decides that they want to do it right.

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To what degree do the Googles and

the anthropic and the Microsoft's like?

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Do they have an unfair advantage

in this space?

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I'm curious

to what degree you look at that

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and how it influences

where the bright spots are.

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Yeah, yeah.

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I mean, guys like OpenAI

and obviously Google,

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but even Anthropic and Microsoft

obviously have an unfair advantage.

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So each has a different unfair advantage.

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You know, Google and Microsoft

have massive multi

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multi-trillion dollar businesses

as it is independent of,

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you know, generative AI

and large language models and all of that.

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Guys like OpenAI

and anthropic have backers.

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And now momentum in terms of customers,

that gives them

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an unfair advantage at this point.

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So it is you know, it's hard

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for a startup

to have an unfair advantage of,

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you know, $10 billion of revenue.

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But but yes, it's,

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you know, to

to have that level of commercial success

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gives companies like OpenAI and anthropic

an unfair advantage,

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in addition to the partnerships

that they've been able to build

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with some extraordinary partners

like Nvidia and the whole sort of data

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center infrastructure

that they've been able to capture.

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So I guess to

use, you know, kind of an old expression

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in the business, like where do you see

the blue ocean these days?

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Where?

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Where are some of the areas

where there is still that ability

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as a smaller player

to have an unfair advantage

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and not get your lunch eaten

by one of these,

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you know, $10 billion plus behemoths.

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Yeah.

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Well, I mean, the big blue ocean out there

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is an entirely new architecture for AI.

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That's the big blue ocean.

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I mean, so in sort of the current

generation of architectures,

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it's, you know, largely

what we got is maybe a lot of lakes there.

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There are a lot of lakes out there.

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But but no, the, the, the,

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the blue ocean is that clearly

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there's got to be another architecture

for large language models.

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There's got to be

another architecture for, for robotics.

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And so that's the you know, that's

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the next wave, which is,

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you know, it's going to take some work

for somebody to figure out,

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but it's not as though,

you know, you can go into,

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you know, fish

farming or nail salons and create

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the next billion dollar business

because nobody's attacked that yet.

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So but there are plenty of plenty,

plenty of beachhead

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opportunities out there for for companies,

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for startups,

for corporations to develop and,

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you know, take your current customer base,

whatever it is, and look at

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what is already solved

and what is not yet solved,

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or even more kind of

what can be solved better.

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And that represents,

you know, opportunity for innovation.

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So looking at some of the

more recent investments that you've made,

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or some of the recent investments

that you're exploring, making,

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you know, to, to the degree of specificity

that you're comfortable with.

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Can you share some of, I guess, the,

you know, the themes or opportunities

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that, you know, have caught your attention

or exciting to you?

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Yeah.

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So a key aspect of our investment

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strategy is working

with our corporate partners to find

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emerging technologies

of strategic value to them.

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And so we are very much driven

by our network of over

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40 multinational corporations who are our

partners in pursuing innovation.

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And so we look pretty much across

the universe

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and opportunities for innovation,

you know, very, very broadly.

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So we look at material sciences

and life science and,

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and enterprise software

and consumer and gaming and whatever.

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So we look very, very, very, very broadly.

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So for example,

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we're looking at alternative foods

and what are called functional foods.

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And so you know, in the whole food world

massive, huge amazing,

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you know, part of our world,

that sort of tech and venture

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doesn't pay that much attention to.

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But we pay attention to the world

of agriculture and food and food

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distribution and health and wellness

and that whole value chain there.

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And so starting at the farm with ag tech

through distribution.

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Through functional foods and considering

sort of new ways to process food

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to make it healthier for you

or to last longer to reduce waste.

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All of those

domains are really interesting

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and huge domains,

but nobody talks about it much, right?

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In the sort of tech venture world

we also look at,

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you know, novel materials

and so everything, you know,

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physical in your world has some aspect

of material science associated with it.

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You know,

simply the screen on your smartphone

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that, you know, amazing

material science technology in there.

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But there are better alternatives

out there for,

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you know, the windows behind you,

the screens you're looking at,

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the electronics in the

in the devices that you're working with.

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Materials science can improve

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the energy efficiency,

can improve the bandwidth,

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throughput can improve the quality

of all of these devices and materials.

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That's an interesting space.

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And then how you manufacture things

and how you distribute things.

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I you know, the

AI can help a lot in optimizing things.

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Machine vision can help with that as well.

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So there are just an enormous number

of interesting areas.

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HealthTech is another one.

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We recently invested in a company

that is has developed a number of

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AI models for predicting

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how molecules will interact

with other molecules,

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and how combinations of molecules

will interact in the cell.

00;16;25;20 - 00;16;29;04

How do they get through the cell wall,

how do they interact

00;16;29;04 - 00;16;33;25

with the nucleus and other plasmids? NSL.

00;16;33;26 - 00;16;38;06

I mean, it's extraordinary science

that is, you know,

00;16;38;09 - 00;16;42;18

sort of way down, way down in the biotech

00;16;42;18 - 00;16;46;29

biochemistry plus AI models domain.

00;16;47;02 - 00;16;49;26

So I'm, you know, space tech, right?

00;16;49;26 - 00;16;54;11

I mean, so we're investors in space tech,

really, really interesting things

00;16;54;11 - 00;16;58;28

happening, you know, beyond

just launching and satellites.

00;16;58;28 - 00;17;04;09

And so, you know, we're big investors

in space from way back.

00;17;04;09 - 00;17;08;10

But we're also investors in Axiom Space,

00;17;08;10 - 00;17;11;10

which is building a space station

up there.

00;17;11;22 - 00;17;16;13

And then investors in some other

some other technologies

00;17;16;13 - 00;17;23;02

that take advantage of space to do things

better, faster, cheaper here on Earth.

00;17;23;02 - 00;17;27;09

So it's I mean, it's just an absolutely

00;17;27;12 - 00;17;31;12

amazing world that we live in right now

in terms of opportunities

00;17;31;12 - 00;17;34;12

to find innovations that can make a dent

00;17;34;12 - 00;17;37;12

in, you know, in any given ecosystem.

00;17;38;02 - 00;17;40;00

It sounds really, really exciting.

00;17;40;00 - 00;17;43;14

And I guess for me, what caught me

a bit off guard in a good way

00;17;43;14 - 00;17;48;18

is that what you didn't say is, you know,

Llms or LLM adjacent technology

00;17;48;18 - 00;17;52;03

or where it feels like

this capital is probably,

00;17;52;04 - 00;17;55;22

you know, densest

or kind of most oversaturated.

00;17;55;22 - 00;18;00;18

And yet it seems like a lot of these

areas are still leveraging cutting edge,

00;18;00;23 - 00;18;03;25

you know, whether it's AI technologies,

whether it's machine

00;18;03;25 - 00;18;07;02

learning,

it is sort of future tech and algorithms

00;18;07;02 - 00;18;11;02

as a way to optimize and automate

what's being done in these spaces.

00;18;11;03 - 00;18;13;18

Is that is that a fair read?

00;18;13;18 - 00;18;14;15

Absolutely.

00;18;14;15 - 00;18;17;15

Again, you know, for the most part,

00;18;18;21 - 00;18;20;14

Llms and AI,

00;18;20;14 - 00;18;25;08

broadly speaking, are sort of baseline

commodity,

00;18;25;15 - 00;18;29;20

you know, technologies that are available

for a wide range of applications.

00;18;29;20 - 00;18;32;19

Now, you know,

00;18;32;22 - 00;18;34;19

admittedly,

00;18;34;19 - 00;18;39;12

there are opportunities

to invest directly in Llms, as we have,

00;18;39;13 - 00;18;42;22

you know, we've invested in OpenAI,

we've invested in anthropic,

00;18;42;22 - 00;18;46;08

we're investors in AI now part of space.

00;18;47;08 - 00;18;51;19

So we have made those bets

because we do think, you know,

00;18;51;20 - 00;18;54;20

those are pretty fundamental

00;18;54;24 - 00;18;59;05

technologies

and companies in terms of the future.

00;18;59;05 - 00;19;04;15

And they enable a whole bunch

of other things out there.

00;19;05;05 - 00;19;10;07

But yes, other aspects of our investment

00;19;10;07 - 00;19;14;26

thesis is the infrastructure

to support all of this going forward.

00;19;15;00 - 00;19;19;18

So, yes, massive amounts of money

are going into building data centers,

00;19;19;18 - 00;19;21;03

but then there are a whole bunch

00;19;21;03 - 00;19;24;25

of problems around data centers

that need to be solved.

00;19;24;26 - 00;19;27;26

You know, how do you provide

enough energy to data centers.

00;19;27;26 - 00;19;32;15

And so we have invested in a company

that is developing technology

00;19;32;15 - 00;19;36;17

to provide behind the meter energy

for data centers.

00;19;36;23 - 00;19;37;11

Right.

00;19;37;11 - 00;19;41;28

And then you've got the water cooling

issue of data centers.

00;19;41;29 - 00;19;44;12

Is there a better way to cool data

centers?

00;19;44;12 - 00;19;47;29

Well, the best way to cool

data centers is to reduce the heat.

00;19;48;00 - 00;19;49;10

How do you reduce the heat?

00;19;49;10 - 00;19;54;05

You increase the efficiency of all of

the compute inside the data center.

00;19;54;05 - 00;19;59;25

And so chips and other technologies

that improve the energy efficiency

00;19;59;25 - 00;20;03;18

of compute, that's another domain

that we're investing in.

00;20;03;19 - 00;20;07;28

So yeah, you know

we're in the thick of that as well.

00;20;09;02 - 00;20;12;03

You know,

as then all of the adjacencies out there

00;20;12;03 - 00;20;15;16

that could take advantage

of these new technologies.

00;20;17;10 - 00;20;21;07

It's it's so exciting to me

00;20;21;21 - 00;20;25;06

just hearing, I guess, about the fact

that it feels like, like almost

00;20;25;06 - 00;20;28;29

every sector is exploding with possibility

at once.

00;20;29;00 - 00;20;31;08

Right. Like it's

there's the foundational piece.

00;20;31;08 - 00;20;35;06

There's every individual sector,

like anywhere you turn over a rock,

00;20;35;09 - 00;20;39;10

there's use the word speed earlier,

but it feels like this speed

00;20;39;12 - 00;20;44;02

isn't just in little,

you know, cute app startups with AI.

00;20;44;03 - 00;20;47;17

It's literally all over the economy,

right?

00;20;47;19 - 00;20;49;22

No, it is, and it is.

00;20;49;22 - 00;20;52;22

You know, it's one of the massive

00;20;53;10 - 00;20;55;05

evolutions of Silicon

00;20;55;05 - 00;20;59;16

Valley is back in the old days,

you know, you were sort of

00;20;59;17 - 00;21;03;26

touching on the application that I was

there back in the old days, which is fair.

00;21;05;12 - 00;21;09;03

So back in the old days, you know, we,

00;21;09;06 - 00;21;10;09

you know, we built computers

00;21;10;09 - 00;21;14;07

and software and networks and, you know,

that was good stuff,

00;21;14;07 - 00;21;18;02

but it was mainly sort of

corporate infrastructure.

00;21;18;15 - 00;21;21;23

And we had some home stuff

and I did some edtech stuff.

00;21;21;23 - 00;21;23;11

And, you know, that was nice.

00;21;23;11 - 00;21;26;11

But the world went on. Right.

00;21;26;12 - 00;21;30;28

And, and then, you know,

and then came the internet

00;21;30;28 - 00;21;34;18

and then came smartphones

and now coming AI.

00;21;34;18 - 00;21;38;17

And so all of a sudden,

sort of Silicon Valley, broadly

00;21;38;17 - 00;21;41;17

defined in terms of the tech, you know,

00;21;41;17 - 00;21;45;20

ecosystem of startups and venture, now

00;21;45;21 - 00;21;50;27

touches everything that everybody does

every day.

00;21;51;14 - 00;21;55;05

You know,

from when you get up in the morning to

00;21;55;07 - 00;21;59;26

how you get to work, what you do at work,

what you do over the weekend,

00;22;00;06 - 00;22;03;06

you know, leisure time,

00;22;03;10 - 00;22;05;29

you know, services, information.

00;22;05;29 - 00;22;09;07

It's hard to think of anything that you

00;22;09;07 - 00;22;12;08

touch during the day that is

00;22;12;10 - 00;22;17;01

that is not subject to this innovation

00;22;17;01 - 00;22;21;14

ecosystem that has grown up over

the last many, many years.

00;22;23;13 - 00;22;24;26

It feels so.

00;22;24;26 - 00;22;29;05

So I'm I'm not a Silicon Valley insider.

00;22;29;05 - 00;22;32;13

I'll put that on the table, but

it feels like one of the interesting sort

00;22;32;13 - 00;22;36;01

of trends here is maybe a generation ago,

if I can call it that.

00;22;36;01 - 00;22;37;23

In Silicon Valley.

00;22;37;23 - 00;22;42;05

It wasn't Silicon Valley everywhere

in terms of touching

00;22;42;06 - 00;22;45;07

all these different sectors,

all these different areas of technology.

00;22;45;07 - 00;22;48;07

It was much more focused

in this sort of core,

00;22;48;18 - 00;22;53;07

you know, applications, core software

build outs, the things that now can,

00;22;53;08 - 00;22;56;28

as you said,

be written by a couple of grad students,

00;22;57;10 - 00;23;00;09

you know, over a weekend

is part of the reason.

00;23;00;09 - 00;23;03;11

I guess it's part of the reason

we're seeing this shape change is

00;23;03;11 - 00;23;07;16

it feels like that area that used to be,

00;23;07;26 - 00;23;11;00

you know, so rich for VCs,

00;23;11;08 - 00;23;15;13

probably doesn't need VCs as much anymore

because of what the, you know,

00;23;15;14 - 00;23;17;06

if you can build it in a weekend

with two people,

00;23;17;06 - 00;23;20;18

why do you need venture capital fund

if it's really moving that quickly?

00;23;20;18 - 00;23;26;08

And so it feels like there's the world is

changing in the shape of it is changing.

00;23;26;08 - 00;23;28;14

And where we'll see

investments is changing.

00;23;28;14 - 00;23;29;23

Is that a fair reader?

00;23;29;23 - 00;23;32;17

Would you characterize it differently?

00;23;33;23 - 00;23;36;23

No, it's a very, very fair rate.

00;23;37;15 - 00;23;40;04

No, it's a very, very fair read.

00;23;40;04 - 00;23;43;25

And and you know,

we've had this discussion and debate,

00;23;44;19 - 00;23;48;06

you know, on panels here around how is it

00;23;48;06 - 00;23;51;13

that things are evolving

and what are the implications of it

00;23;51;14 - 00;23;54;23

now that you can build an app

over the weekend?

00;23;56;01 - 00;23;58;21

You know, what does that mean

for the role of venture

00;23;58;21 - 00;24;02;26

capital in, in, in supporting innovation.

00;24;02;26 - 00;24;08;27

So while it is true

that it has never been easier to develop

00;24;08;27 - 00;24;14;24

a significantly powerful,

innovative application of some sort,

00;24;15;16 - 00;24;19;15

it has never been harder to scale it.

00;24;20;00 - 00;24;23;26

And so what what we're seeing is that

00;24;24;00 - 00;24;28;10

it takes a lot of resource

and a fair amount of luck,

00;24;28;10 - 00;24;33;07

but a lot of resource,

you know, to get out above the noise.

00;24;33;10 - 00;24;36;13

And so, you know, because there's

00;24;36;13 - 00;24;40;03

so much noise

now in the innovation ecosystem,

00;24;40;20 - 00;24;42;16

your ability as a startup,

00;24;42;16 - 00;24;45;12

you know, you've got this great app

you've developed over the weekend.

00;24;45;12 - 00;24;48;22

So how is it going to break out now?

00;24;48;22 - 00;24;52;12

Sometimes they break out,

you know, serendipitously.

00;24;52;25 - 00;24;57;02

But generally generally

it takes a lot of resource

00;24;57;02 - 00;25;01;27

to get interesting innovations

to break out above the noise.

00;25;01;27 - 00;25;05;15

And so that's that's the role of venture

00;25;05;15 - 00;25;10;22

capital

now is to help startups with the capital

00;25;10;22 - 00;25;14;18

and the connections

that they need to break out

00;25;14;18 - 00;25;19;08

and get above the noise to be able

to scale their businesses.

00;25;19;08 - 00;25;24;11

So, you know, there's still

a real important role for venture capital.

00;25;24;23 - 00;25;27;11

But what has happened is you've now

00;25;27;11 - 00;25;30;13

got this massive influx of

00;25;31;06 - 00;25;33;15

of sort of new characteristics

00;25;33;15 - 00;25;37;03

of capital, generally not venture, but,

00;25;37;08 - 00;25;41;11

you know, project development

for all these data centers and,

00;25;41;27 - 00;25;44;23

you know, sort of late stage

00;25;44;23 - 00;25;47;23

private equity types of capital,

00;25;48;00 - 00;25;52;01

you know, for these massive multi-billion

dollar financings,

00;25;52;21 - 00;25;56;04

you know, bringing in a whole bunch

00;25;56;04 - 00;26;00;03

of different types of capital

into the innovation ecosystem

00;26;00;19 - 00;26;06;13

that now, you know, swamps

the traditional venture capital, emerging

00;26;06;14 - 00;26;11;04

tech, startup

ecosystem, kinds of investments.

00;26;13;12 - 00;26;14;27

Do you see that as

00;26;14;27 - 00;26;18;28

something that trickles its way down

to actually creating value for customers?

00;26;18;29 - 00;26;21;04

I mean, I can understand why it's good.

00;26;21;04 - 00;26;23;10

You know, if you're an investor,

I can see why it's good.

00;26;23;10 - 00;26;26;17

If you're a founder and you're looking

to make a buck, I can see why that's good.

00;26;26;18 - 00;26;31;06

If you're a customer, does that ecosystem

make things better for you?

00;26;31;27 - 00;26;35;14

Well, the great thing,

the great thing about,

00;26;36;23 - 00;26;40;21

you know, sort of the open market

capitalist

00;26;40;21 - 00;26;44;24

economies is that as a customer,

you get to choose, right?

00;26;44;25 - 00;26;47;14

You don't have to buy if you don't want.

00;26;47;14 - 00;26;51;17

And that's actually,

you know, that's actually in some senses,

00;26;51;25 - 00;26;56;27

you know, a big problem

for the pace of innovation

00;26;56;27 - 00;27;00;02

is all of the sand and the gears

00;27;00;03 - 00;27;03;15

of the adoption cycles

00;27;03;25 - 00;27;09;24

by, you know, corporations, governments,

you know, consumers, you know,

00;27;09;25 - 00;27;14;14

there's there's an inherent resistance

to adopting new things.

00;27;15;05 - 00;27;20;10

And so that's part of why

the cost of scaling has gone up so much,

00;27;21;05 - 00;27;25;12

is that is the need to overcome

that inherent resistance.

00;27;25;29 - 00;27;30;17

But another aspect of this diffusion

of innovation

00;27;30;17 - 00;27;34;28

across every aspect of our lives

is that now

00;27;35;01 - 00;27;40;01

it creates a sort of whole

big public policy discussion

00;27;40;03 - 00;27;43;05

that we didn't really have that much

before.

00;27;43;06 - 00;27;48;06

I mean, again, in the olden days,

there were these, you know, kerfuffle

00;27;48;06 - 00;27;53;15

over, you know, Japan getting ahead of us

in semiconductors and cars.

00;27;53;16 - 00;27;53;28

Right.

00;27;53;28 - 00;27;55;09

And so there was,

00;27;55;09 - 00;27;58;17

you know, public policy around innovation

and all that sort of stuff.

00;27;58;17 - 00;28;02;19

And then, of course, China that became,

you know, a very interesting

00;28;02;20 - 00;28;06;11

topic in terms of intellectual property

and all of that.

00;28;06;11 - 00;28;10;21

But now, you know, you've got just this,

00;28;10;21 - 00;28;15;01

because tech touches all of our lives

in so many different ways.

00;28;15;04 - 00;28;20;20

Now you've got politicians

who are involved in this on a daily basis,

00;28;21;14 - 00;28;25;12

you know, sort of within each country

and then across continents.

00;28;26;00 - 00;28;31;27

All of a sudden, innovation has become

a very significant topic for politicians

00;28;32;11 - 00;28;35;06

in sort of in every direction, in terms

00;28;35;06 - 00;28;39;28

of of competing with other countries

and or protecting

00;28;39;28 - 00;28;44;23

your citizens and regulation

about data leaks and privacy.

00;28;44;23 - 00;28;48;14

And I'm, you know, it has expanded

00;28;48;15 - 00;28;53;15

the sort of noise in the system

just dramatically,

00;28;53;25 - 00;28;57;04

which, again, makes it increasingly

00;28;57;04 - 00;29;00;06

challenging to be an entrepreneur.

00;29;00;06 - 00;29;01;11

That makes sense to me.

00;29;01;11 - 00;29;04;21

And there's a couple of,

you know, follow ups I have to that.

00;29;04;22 - 00;29;06;01

One of them is we were speaking earlier

00;29;06;01 - 00;29;09;12

before we started recording

about your recent trip to Shanghai.

00;29;09;13 - 00;29;12;14

And I'm curious,

you know, for your sort of reflections

00;29;12;14 - 00;29;16;24

on, I guess, the geopolitics of innovation

and the future of tech.

00;29;16;25 - 00;29;21;03

You had been mentioning that,

you know, things just are a bit different

00;29;21;03 - 00;29;24;12

in China for, for better and for worse,

I guess.

00;29;24;12 - 00;29;26;01

What are your

some of your implications on that?

00;29;26;01 - 00;29;30;03

And if there's any takeaways for you,

for what the implications should be

00;29;30;03 - 00;29;31;20

in Silicon Valley

00;29;32;24 - 00;29;37;00

now. So yeah, lots of really interesting

00;29;37;00 - 00;29;41;00

discussions with, you know,

a variety of people from around the world.

00;29;41;00 - 00;29;44;23

While I was at the world

AI Conference in Shanghai.

00;29;44;24 - 00;29;51;04

So one of the things that is very clear,

that is, I think a good thing in many ways

00;29;51;04 - 00;29;55;26

is that you cannot keep technology

00;29;55;27 - 00;29;59;18

within the borders of any given country.

00;29;59;26 - 00;30;03;13

So technology will always diffuse

00;30;03;13 - 00;30;07;15

globally, and it doesn't matter

what sort of firewalls you put up or what

00;30;07;16 - 00;30;11;26

sort of fences you put

up, technology will diffuse globally.

00;30;12;14 - 00;30;15;03

You can put some, you know, some,

00;30;15;03 - 00;30;18;27

you know,

a little bit of interim blocks in there.

00;30;18;27 - 00;30;23;13

But fundamentally technology

is going to diffuse globally.

00;30;23;13 - 00;30;27;04

And we see that,

you know, sort of all over the world.

00;30;27;20 - 00;30;31;12

Obviously, China has been able

to take great advantage

00;30;31;18 - 00;30;35;01

of every innovation

that's happened elsewhere in the world.

00;30;35;01 - 00;30;39;10

And then sort of poor additional resource

into accelerating it.

00;30;39;10 - 00;30;45;02

And so as a result, they have,

you know, caught up in many, many areas

00;30;45;02 - 00;30;49;28

and they have surpassed the rest of

the world in many, many areas now.

00;30;49;29 - 00;30;55;03

So obviously in areas

like renewable energy,

00;30;55;18 - 00;30;59;12

you know, ten years ago,

you would have wouldn't have quite

00;30;59;13 - 00;31;02;02

thought that it would have played out

the way it has.

00;31;02;02 - 00;31;06;00

But now China deploys

more renewable energy

00;31;06;00 - 00;31;08;12

than the rest of the world combined.

00;31;08;12 - 00;31;13;11

I mean, it's overwhelming in terms of wind

and solar and other sources.

00;31;13;28 - 00;31;18;15

And then that has played out into

the whole electric vehicle side of things.

00;31;19;14 - 00;31;22;02

You know, China was way behind the curve

00;31;22;02 - 00;31;25;29

in electric vehicles, you know, up

until just the last few years.

00;31;25;29 - 00;31;31;24

And now, you know, it's

it is shocking going back to Shanghai.

00;31;31;29 - 00;31;33;28

You know,

I haven't been there for eight years.

00;31;33;28 - 00;31;39;12

The last time I was in Shanghai, on a

on a cloudless day,

00;31;39;27 - 00;31;43;26

the air was yellow with,

you know, pollution

00;31;44;20 - 00;31;47;09

and, you know, you could see

00;31;47;09 - 00;31;50;19

the iconic buildings on the Bund,

you know,

00;31;50;20 - 00;31;54;07

sort of through this yellowish,

you know, miasma.

00;31;55;05 - 00;31;58;05

You go back now and,

00;31;58;15 - 00;32;01;07

you know,

I don't know what the number is, but,

00;32;01;07 - 00;32;04;26

you know,

you look at the traffic and EVs have green

00;32;04;26 - 00;32;07;29

license plates in Shanghai, and you're

00;32;07;29 - 00;32;11;00

looking at the traffic and like almost

all the license plates are green.

00;32;11;06 - 00;32;14;19

It's unbelievable

the transition they've made

00;32;14;19 - 00;32;19;07

to electric vehicles

and to cleaning up the air.

00;32;19;23 - 00;32;23;02

And so now the air is is

00;32;23;02 - 00;32;26;12

you can taste the difference literally,

00;32;27;20 - 00;32;30;05

you know, in the air in Shanghai again

00;32;30;05 - 00;32;34;27

you know, what they've been able to

execute is just, you know astonishing.

00;32;34;27 - 00;32;38;09

So but you know, it's you can

00;32;38;09 - 00;32;42;16

you can't control the the diffusion

of technology around the world.

00;32;42;25 - 00;32;47;05

You can control the diffusion of capital

around the world.

00;32;47;05 - 00;32;51;23

And so unfortunately,

I think for the world,

00;32;52;13 - 00;32;55;13

you know, we now have this barrier

00;32;55;13 - 00;32;59;13

in terms of capital flows

between ecosystems.

00;33;00;11 - 00;33;03;00

You know,

China has been able to make up with it,

00;33;03;00 - 00;33;06;12

for it, with with government funding.

00;33;06;16 - 00;33;11;08

And so the private sector venture world

00;33;11;08 - 00;33;14;08

in China has,

00;33;14;13 - 00;33;18;07

you know, by

some accounts, close to collapse.

00;33;18;08 - 00;33;22;19

I mean, not everybody would say that,

but it's dramatically down.

00;33;23;04 - 00;33;27;07

But the total amount of capital

going to innovation has dramatically

00;33;27;07 - 00;33;31;01

increased, you know, entirely

because of the government.

00;33;31;20 - 00;33;36;17

So, you know, so we see these advances

that China has made

00;33;36;21 - 00;33;40;16

thanks to government sponsorship,

which, you know, we're never going

00;33;40;16 - 00;33;43;27

to really be able to do here in the US

and in the West.

00;33;43;28 - 00;33;47;19

We just don't have

that kind of government.

00;33;47;19 - 00;33;51;11

And for the most part, thank God, right?

00;33;52;24 - 00;33;55;24

For the most part, thank

God we don't have that kind of government.

00;33;55;24 - 00;33;59;01

But, you know, you see, I mean, you

00;33;59;01 - 00;34;02;05

visit Shanghai

and you see that you see the trade off.

00;34;02;26 - 00;34;03;10

Yeah.

00;34;03;10 - 00;34;05;29

I would not make that trade off.

00;34;05;29 - 00;34;10;28

But but we need to be aware of the fact

00;34;11;01 - 00;34;14;23

that that has given them a,

00;34;15;25 - 00;34;18;04

you know, a significant advantage in terms

00;34;18;04 - 00;34;21;03

of catching up and surpassing,

00;34;21;07 - 00;34;24;02

you know, the West more,

you know, Silicon Valley

00;34;24;02 - 00;34;28;22

and the West more broadly in terms

of advanced technologies.

00;34;28;24 - 00;34;34;20

And so, you know, the next interesting

step is going to be quantum computing.

00;34;35;08 - 00;34;40;23

And, you know, who gets to fault tolerant

00;34;41;11 - 00;34;44;11

quantum supremacy faster

00;34;44;27 - 00;34;48;21

is an anxiety on both sides.

00;34;49;11 - 00;34;54;05

You know, both sides

want to win that particular race.

00;34;54;05 - 00;34;58;25

It will be interesting

to see if it really does matter.

00;34;59;15 - 00;35;03;13

So, you know, I don't know if maybe

00;35;04;10 - 00;35;08;03

there's an there's an analogy

between OpenAI and anthropic.

00;35;08;04 - 00;35;10;27

Does it really matter who wins that race?

00;35;10;27 - 00;35;15;21

I mean, both can be successful,

you know, from week to week.

00;35;15;29 - 00;35;18;29

Benchmarks

suggest one is ahead of the other.

00;35;19;06 - 00;35;22;01

If if, you know,

00;35;22;01 - 00;35;26;07

five years from now, we finally get to

commercial quantum computing.

00;35;27;29 - 00;35;29;23

You know,

00;35;29;23 - 00;35;33;13

maybe the Chinese will be a little head,

maybe will be a little bit ahead.

00;35;33;13 - 00;35;37;25

But whatever it is,

the difference is going to be a little.

00;35;37;25 - 00;35;40;14

It's not going to be, you know, binary.

00;35;40;14 - 00;35;43;14

You know, these guys win, these guys lose.

00;35;43;26 - 00;35;48;29

I mean, so

you can have successful quantum computing.

00;35;49;02 - 00;35;56;03

So on on both sides obviously

we would prefer to win on this side.

00;35;56;06 - 00;36;03;00

But you know if if they get ahead of us

what does that mean.

00;36;03;01 - 00;36;07;22

It to some extent means God damn it,

we got to try harder.

00;36;07;23 - 00;36;08;04

Right.

00;36;08;04 - 00;36;12;27

And that's arguably arguably

that's an incentive to

00;36;13;15 - 00;36;16;20

that's an incentive

to innovation and investment.

00;36;16;27 - 00;36;19;27

Is this competition. So

00;36;20;25 - 00;36;24;27

you know how it plays out

I'm not sure I can predict,

00;36;24;27 - 00;36;30;14

but it certainly is an issue

we need to be paying attention to.

00;36;30;16 - 00;36;33;21

We need to understand

what is going on over there.

00;36;34;15 - 00;36;40;03

I think they're doing their best

to understand what's going on over here.

00;36;40;10 - 00;36;46;01

And so, you know, it's only fair

that we make sure that we don't

00;36;46;02 - 00;36;50;08

slip behind by not paying attention

to what they're doing.

00;36;51;13 - 00;36;52;04

Do you.

00;36;52;04 - 00;36;56;11

Subscribe to the narrative

that the Chinese model is really just,

00;36;56;12 - 00;37;01;15

you know, IPFs paired

with massive amounts of state funding?

00;37;01;15 - 00;37;05;13

And so, you know,

if we do our part to minimize IP theft

00;37;05;13 - 00;37;09;12

and maybe we can't based on what you said

about technology being transborder, but

00;37;09;28 - 00;37;14;04

if I if I believe that narrative,

it seems to me that,

00;37;14;23 - 00;37;18;16

you know, the quantum leaps,

you know, to use that term will come from

00;37;19;06 - 00;37;23;06

and then we'll maybe we'll get,

you know, leapfrogged by China

00;37;23;08 - 00;37;26;01

at some point,

but that they don't have a model

00;37;26;01 - 00;37;28;24

that will actually help them

achieve that breakthrough.

00;37;28;24 - 00;37;32;07

Do you buy that or is that just more of

kind of an anti-Chinese sentiment?

00;37;33;01 - 00;37;35;29

I mean,

I think it's an outdated perspective

00;37;35;29 - 00;37;38;29

on the Chinese model of innovation.

00;37;39;18 - 00;37;42;06

And, you know,

00;37;42;06 - 00;37;45;24

yes, there was certainly,

you know, many, many, many years

00;37;45;24 - 00;37;49;09

where it seemed that their strategy

00;37;49;09 - 00;37;53;16

was primarily to steal from the West,

00;37;53;21 - 00;37;56;17

and they had a whole bunch

of different ways of doing it.

00;37;56;17 - 00;37;59;12

Some were legal and some were not legal.

00;37;59;12 - 00;38;03;20

But it goes back to,

I mean, the history of technology,

00;38;03;26 - 00;38;06;26

the United States, you know,

00;38;06;27 - 00;38;11;09

dramatically accelerated

its textile business

00;38;11;09 - 00;38;15;08

locally by stealing IP from the UK.

00;38;15;24 - 00;38;16;07

Okay.

00;38;16;07 - 00;38;21;04

I mean, so, you know,

we did that, what, 200 years ago.

00;38;21;17 - 00;38;26;00

And and, you know, it worked out

reasonably well for New England.

00;38;26;00 - 00;38;32;04

But and you know, arguably

arguably the development of the railroads

00;38;32;04 - 00;38;35;11

was dependent upon, you know, borrowing

00;38;35;11 - 00;38;38;11

some IP from, from Europe.

00;38;38;11 - 00;38;41;11

And so,

you know, the history of technology

00;38;41;12 - 00;38;44;12

suggests that you can't necessarily,

00;38;46;08 - 00;38;47;03

you know,

00;38;47;03 - 00;38;52;14

be surprised that that, you know,

over the last century,

00;38;52;15 - 00;38;57;27

Japan, Korea

and now China have borrowed IP from,

00;38;58;10 - 00;39;01;21

you know, the West in order

to accelerate their own innovation.

00;39;01;21 - 00;39;06;13

But, you know, you look at

what's going on in China now and

00;39;07;17 - 00;39;10;17

again, I have,

00;39;10;22 - 00;39;16;02

you know, very,

very little doubt that they have people

00;39;16;02 - 00;39;20;07

who are as creative

as people we have over here.

00;39;21;01 - 00;39;25;07

And I do think they they are handicapped

00;39;25;08 - 00;39;31;11

to some extent by the information controls

that the Chinese government imposes.

00;39;31;11 - 00;39;36;03

But for advanced technology,

the Chinese government is, you know,

00;39;36;04 - 00;39;39;12

very happy for Chinese innovators,

00;39;39;12 - 00;39;42;12

academics, researchers, engineers

00;39;42;13 - 00;39;45;23

to learn as much as they can

about what's going on in the West.

00;39;46;14 - 00;39;51;28

So and then taking advantage of that

and improving it either

00;39;51;28 - 00;39;57;20

incrementally or by leaps

and bounds with their own talent. So

00;39;58;19 - 00;40;01;15

I would not bet against

00;40;01;15 - 00;40;04;15

the ability of China to be innovative.

00;40;06;10 - 00;40;09;19

I want to keep following that thread

and maybe a slightly different direction,

00;40;09;19 - 00;40;14;16

but I'm thinking about these creative

individuals, the structures

00;40;14;16 - 00;40;18;28

that can enable or stifle that creativity

and actually kind of unlock

00;40;18;28 - 00;40;20;04

and unleash innovation.

00;40;20;04 - 00;40;20;25

And, you know,

00;40;20;25 - 00;40;24;19

one of the things that you said earlier,

Bill, that I wanted to follow up on,

00;40;24;21 - 00;40;28;26

was that what you and what Pegasus do

when it comes to innovation?

00;40;29;05 - 00;40;33;27

A lot of it is working with corporate

partners and not just direct investing.

00;40;34;15 - 00;40;38;11

There's been an awful lot of talk

for a long time about how, you know,

00;40;38;12 - 00;40;43;16

large enterprises can be more innovative

or how they can have an innovation arm.

00;40;43;16 - 00;40;46;20

And whether that's doing it themselves,

whether that's

00;40;46;20 - 00;40;50;02

acquiring a business, whether that's

some sort of partnership or investment.

00;40;50;10 - 00;40;54;06

I'm curious what your perspective is on

00;40;55;03 - 00;40;57;10

how enterprises can best,

00;40;58;20 - 00;41;02;05

can best be

like, explore and develop that innovation.

00;41;02;06 - 00;41;05;09

Which of those models works best,

or is it really a blend?

00;41;05;09 - 00;41;08;09

That depends on the the enterprise?

00;41;09;06 - 00;41;09;28

Yeah, yeah.

00;41;09;28 - 00;41;17;09

I mean, there are a whole bunch of things

that get in the way of large corporations

00;41;17;10 - 00;41;21;06

being as innovative as startups can be.

00;41;21;17 - 00;41;24;17

And, you know, one of them

00;41;25;11 - 00;41;29;15

is the fear of failure is that is

00;41;29;18 - 00;41;34;04

can you know who's the who's

the manager executive who's going

00;41;34;04 - 00;41;37;07

to stick their neck out and try something

00;41;37;11 - 00;41;40;11

that has a good chance of failing,

00;41;40;26 - 00;41;43;12

you know, to help

innovate the organization?

00;41;43;12 - 00;41;46;20

Most corporations have a culture

00;41;46;20 - 00;41;51;26

that punishes failure and rewards

not making mistakes.

00;41;51;27 - 00;41;53;03

Right.

00;41;53;03 - 00;41;57;01

And so that's inherently anti innovation.

00;41;57;03 - 00;42;01;10

And so if you want to innovate

you've got to experiment.

00;42;01;10 - 00;42;06;08

And by definition experimentation

means there's a chance of failure.

00;42;06;11 - 00;42;10;14

And so that is something that is core

00;42;10;18 - 00;42;15;10

to enabling corporations

to enhance their innovation.

00;42;15;21 - 00;42;19;28

The other thing

that that is related to that,

00;42;20;19 - 00;42;25;07

that makes innovation

hard, is the whole concept

00;42;25;07 - 00;42;29;06

that we have in the startup world

of a minimum viable product

00;42;29;11 - 00;42;33;01

is something that is unacceptable

00;42;33;01 - 00;42;36;22

in a corporate brand environment. Right?

00;42;36;23 - 00;42;41;10

So, you know, the the reason startups

can get away with a minimum

00;42;41;10 - 00;42;44;25

viable product, which is a product

that doesn't always work

00;42;44;25 - 00;42;50;00

the way it maybe should

and sometimes breaks, is,

00;42;50;07 - 00;42;54;21

is that that corporation, that startup,

you know, doesn't have a brand anyway?

00;42;54;22 - 00;42;59;28

I mean, there's, there's there's

no brand to devalue, but big corporation

00;42;59;28 - 00;43;03;16

that has a brand, you know, and launches

a minimum viable product.

00;43;03;16 - 00;43;05;06

Oh my God. Right.

00;43;05;06 - 00;43;08;13

I mean, if that breaks,

if it doesn't work, you know,

00;43;09;04 - 00;43;13;13

then it damages this larger,

you know, brand.

00;43;13;24 - 00;43;19;18

And so what corporations

need to figure out is how to create a,

00;43;19;27 - 00;43;23;10

you know, a sandbox or sandboxes of sorts

00;43;23;16 - 00;43;26;16

where they can do this experimentation,

00;43;26;26 - 00;43;32;05

sort of outside of the concerns

of the global corporate brand

00;43;32;07 - 00;43;37;17

in such a way that they can learn

and experiment and discover and innovate,

00;43;37;17 - 00;43;40;25

and then eventually get to the point

where they can

00;43;40;27 - 00;43;44;07

integrate with the larger corporate brand.

00;43;44;07 - 00;43;50;11

But, you know, that's you know,

we used to have a a reasonably sort of

00;43;50;12 - 00;43;55;03

well understood model of that

in the concept of a skunk works

00;43;55;29 - 00;44;00;04

and or,

you know, to some extent a research lab,

00;44;00;20 - 00;44;04;24

you know, a Bell Labs or a Sarnoff Labs

or some of these

00;44;05;03 - 00;44;08;24

more traditional approaches to doing

00;44;08;24 - 00;44;12;03

R&D outside of the corporate brand.

00;44;12;19 - 00;44;14;19

But for whatever reason,

00;44;15;19 - 00;44;16;04

you know,

00;44;16;04 - 00;44;19;17

those things have kind of gone

away, right?

00;44;19;20 - 00;44;24;06

I mean, you don't not a lot of Bell Labs

anymore, right?

00;44;24;18 - 00;44;28;10

And so I now where does this happen?

00;44;28;10 - 00;44;29;24

Inside of a corporation.

00;44;29;24 - 00;44;33;23

And so what we work

with our corporate partners

00;44;33;23 - 00;44;38;23

to try to do is to enable them,

you know, to set up

00;44;38;23 - 00;44;42;09

these sort of separated sandboxes

00;44;42;09 - 00;44;46;10

so they can explore innovations

00;44;46;10 - 00;44;51;09

without the sort of fear that happens

within the larger corporation

00;44;51;12 - 00;44;56;12

of any failed experiments, damaging,

you know, the corporate brand.

00;44;57;00 - 00;44;58;29

It's something that's

really interesting to me.

00;44;58;29 - 00;45;00;03

And I say that in part

00;45;00;03 - 00;45;04;08

because I used to lead an innovation

arm of the company I worked for.

00;45;04;08 - 00;45;07;06

But it's also interesting to me

because I think, as you said,

00;45;07;06 - 00;45;10;22

and you very clearly highlighted

a lot of the the factors

00;45;10;22 - 00;45;14;29

that historically, the risk of failure

here is extremely high, right,

00;45;15;00 - 00;45;19;25

that that most companies and corporations

are just not very good at this

00;45;19;25 - 00;45;24;00

because there's a fear of failure

because it's not a true sandbox.

00;45;24;13 - 00;45;27;13

You know, maybe they don't

have the right by in or they don't.

00;45;27;13 - 00;45;29;08

They just really aren't

set up for success.

00;45;29;08 - 00;45;33;14

And so you mentioned that,

you know, part of what you do is often

00;45;33;14 - 00;45;37;09

more of a partnership

where it's finding external partners

00;45;37;09 - 00;45;42;01

or startups that can pair

with organizations to do this.

00;45;42;05 - 00;45;46;04

Do you see that as a more fruitful model,

or is how would you decide

00;45;46;04 - 00;45;48;10

if you're a business leader,

whether this is something

00;45;48;10 - 00;45;49;15

that you should build

00;45;49;15 - 00;45;51;26

as your own little lab

or skunkworks in-house,

00;45;51;26 - 00;45;53;16

or whether you should find a partner?

00;45;54;18 - 00;45;54;29

Yeah.

00;45;54;29 - 00;45;58;28

And so the, the

whole, the whole idea of open innovation

00;45;58;28 - 00;46;04;06

and the idea of sort of corporate venture

capital innovation is

00;46;04;20 - 00;46;09;25

you use these startups as your sandboxes,

as your skunkworks.

00;46;09;25 - 00;46;12;27

And so, you know, rather than

00;46;14;12 - 00;46;17;11

buying them and trying to integrate them,

00;46;17;11 - 00;46;20;11

which was kind of an old model

for doing it,

00;46;20;29 - 00;46;27;00

leave them independent

and invest in them, support them, partner

00;46;27;00 - 00;46;31;05

with them, collaborate with them,

but leave them independent.

00;46;31;19 - 00;46;36;24

And till you know you get to a point

where it makes sense to integrate them, to

00;46;36;25 - 00;46;40;03

maybe acquire them or to license

and then to integrate them.

00;46;40;03 - 00;46;44;21

And so that's the beauty of this corporate

00;46;44;22 - 00;46;50;26

venture capital open innovation model is

you don't have to sort of reorganize

00;46;50;26 - 00;46;56;20

your corporation into skunkworks

or into R&D labs or into sandboxes.

00;46;56;21 - 00;47;01;29

You can use investments

in startup companies as multiple sandboxes

00;47;01;29 - 00;47;05;03

for experimentation, potentially failure.

00;47;05;03 - 00;47;10;21

But, you know, the cost of the failure

of an investment in corporate venture

00;47;10;21 - 00;47;13;23

capital is so dramatically lower

00;47;13;29 - 00;47;16;25

than the cost of spinning up an innovation

00;47;16;25 - 00;47;20;03

within the corporate structure

and then failing.

00;47;20;17 - 00;47;24;04

And so that's the virtue of this model

in terms

00;47;24;04 - 00;47;28;29

of of risk versus

reward in terms of innovation.

00;47;28;29 - 00;47;29;16

So Bill,

00;47;29;16 - 00;47;33;28

and I think about developing some of

these new innovations or capabilities,

00;47;34;01 - 00;47;36;14

you know, coming back to a few things

you've said already,

00;47;36;14 - 00;47;41;14

it feels like more organizations

than ever are working with technology

00;47;41;14 - 00;47;44;17

vendors, technology partners

to actually augment their capabilities

00;47;44;17 - 00;47;46;13

versus

doing some of these things in house.

00;47;46;13 - 00;47;50;06

And as you've said,

the whole market is kind of a wash

00;47;50;06 - 00;47;53;09

with all these, you know, startups

who are trying

00;47;53;10 - 00;47;58;13

to have some new piece of value

that they're creating now.

00;47;58;13 - 00;48;01;23

Now, I'm curious, you've been doing this

a long time.

00;48;01;23 - 00;48;03;01

From a VC perspective,

00;48;03;01 - 00;48;07;00

I'm sure you've heard more pitches

than almost anyone in the game.

00;48;07;09 - 00;48;10;13

And so to capitalize

00;48;10;13 - 00;48;15;08

on what I'll call your what I imagine

is an extremely finely tuned BS detector,

00;48;15;12 - 00;48;18;12

what should what should business leaders

and tech leaders

00;48;18;13 - 00;48;23;02

be listening for or asking

when someone is pitching them?

00;48;23;03 - 00;48;27;27

You know, the hottest new capability to

bring into their organization as a vendor?

00;48;29;14 - 00;48;32;00

Yeah, the

00;48;32;00 - 00;48;35;17

you know, the the reality is

that entrepreneurs

00;48;35;17 - 00;48;39;26

do have a tendency to exaggerate,

shall we say.

00;48;40;18 - 00;48;44;02

And so that is a that is a challenge for

00;48;44;08 - 00;48;47;18

for investors and for,

you know, customers.

00;48;47;19 - 00;48;50;25

The the best way, the best way to test

00;48;50;26 - 00;48;55;03

an entrepreneur

is to talk to their current customers.

00;48;55;13 - 00;48;59;13

And so I you know, you have got to

00;48;59;14 - 00;49;04;16

you've you've got to make sure that the,

the entrepreneur of the company

00;49;04;16 - 00;49;09;18

is actually delivering real value to,

you know, to customers

00;49;09;18 - 00;49;13;11

as a way of validating whether they can

deliver real value to you.

00;49;13;27 - 00;49;17;15

And then the other side of it is

you've got to develop

00;49;17;15 - 00;49;21;25

a mechanism

for validating within your own company.

00;49;22;01 - 00;49;26;14

And so you've got to have some form

of proof of concept

00;49;26;14 - 00;49;31;23

or trial or a pilot mechanism

whenever you're dealing with innovation.

00;49;31;23 - 00;49;32;26

And so

00;49;33;24 - 00;49;37;27

unfortunately

some companies they you know,

00;49;37;28 - 00;49;41;06

they read the headlines and they say, oh,

you know, we got to have that.

00;49;41;06 - 00;49;45;03

And so they initiate this massive,

you know,

00;49;45;04 - 00;49;49;06

sort of corporate wide

initiative to adopt,

00;49;49;08 - 00;49;52;19

you know, this new solution,

this new technology, this new approach.

00;49;52;19 - 00;49;55;19

And that never works.

00;49;55;23 - 00;49;59;06

What, what, you know,

what you need to do is figure out a way.

00;49;59;06 - 00;50;03;01

Again, back to the sandbox analogy,

where you can

00;50;03;01 - 00;50;06;19

test it out in a real world environment.

00;50;06;19 - 00;50;11;19

That is your real world

as a corporation to see

00;50;11;20 - 00;50;15;26

is it going to fit within what you do

as a corporation?

00;50;16;08 - 00;50;20;17

And so yes, it may work technically,

00;50;20;17 - 00;50;25;17

but does it work

in terms of the organizational workflow,

00;50;26;06 - 00;50;29;04

or is the organization

00;50;29;04 - 00;50;33;24

going to have to sort of twist itself

unnaturally in order

00;50;33;24 - 00;50;38;23

to make the workflow of this innovation

work for their organization?

00;50;38;23 - 00;50;43;26

And so that's an element

that's harder to predict in advance

00;50;44;18 - 00;50;48;21

that you really have to test

in order to know if it's going to work.

00;50;48;21 - 00;50;54;06

But as a corporation,

you never want to sort of wholesale adopt

00;50;54;06 - 00;50;58;00

an innovation, hoping,

hoping that it's going to work

00;50;58;02 - 00;51;02;01

that's,

you know, absolutely a recipe for failure.

00;51;04;18 - 00;51;06;03

When, when, when that happens.

00;51;06;03 - 00;51;09;03

And I'm sure it happens

more often than we would prefer.

00;51;09;26 - 00;51;12;10

Is it is it impatience?

00;51;12;10 - 00;51;13;29

Is it management?

00;51;13;29 - 00;51;14;20

Hubris?

00;51;14;20 - 00;51;17;22

Is it not knowing the recipe

for success? Why?

00;51;17;25 - 00;51;18;26

Why does it happen?

00;51;18;26 - 00;51;22;15

And is it just a matter of having

the patience and doing these things?

00;51;22;15 - 00;51;25;23

Or is there some sort of secret sauce

that's particularly difficult

00;51;25;23 - 00;51;28;23

for making this successful?

00;51;29;10 - 00;51;31;28

Well, it's both sides of this equation.

00;51;31;28 - 00;51;35;23

On the one hand,

there's pressure to innovate, right?

00;51;35;24 - 00;51;38;25

So if you're a public company,

whatever your board,

00;51;38;25 - 00;51;42;23

your investors, your shareholders,

the media,

00;51;43;12 - 00;51;46;12

they, you know,

puts pressure on you to innovate.

00;51;46;15 - 00;51;51;04

And that relates to every company

has pressure to grow.

00;51;51;04 - 00;51;56;20

And so you've got pressure to grow

your revenues and improve your margins.

00;51;56;20 - 00;51;59;22

So you have all these pressures

on the corporate side.

00;51;59;22 - 00;52;04;05

And so toying with experimenting

00;52;04;05 - 00;52;07;15

with innovation

is not going to move the needle.

00;52;07;15 - 00;52;13;20

And so, you know, you've got this dilemma

at senior management to say

00;52;13;21 - 00;52;17;25

if I just toy with this innovation

it's not going to move the needle.

00;52;17;25 - 00;52;19;19

And so why do I waste my time.

00;52;19;19 - 00;52;23;17

And so again,

that relates to a lack of patience

00;52;23;17 - 00;52;28;02

and or a lack of successful mechanisms

for knowing

00;52;28;03 - 00;52;33;21

how to start progress and integrate

over some period of time.

00;52;33;21 - 00;52;37;03

And so, you know, what the best

00;52;37;03 - 00;52;40;23

corporations have created

00;52;40;23 - 00;52;44;00

that, that pathway for innovation

00;52;44;00 - 00;52;49;07

such that right

now, the other end of that spectrum

00;52;49;07 - 00;52;53;24

is corporations

running pilots forever and ever and ever.

00;52;54;14 - 00;52;59;13

And and you know,

which is which is hell for both sides.

00;52;59;13 - 00;53;03;16

So startups, you know, hate the idea

00;53;03;16 - 00;53;08;02

of getting trapped in this pilot

hell that corporations create for them.

00;53;08;02 - 00;53;12;10

And similarly, corporations get frustrated

00;53;12;10 - 00;53;17;09

with their innovation process

when they get stuck in this, you know,

00;53;17;11 - 00;53;22;12

pilot cycle that never enables them

to to integrate more broadly.

00;53;22;12 - 00;53;28;10

And so we talk with our corporate partners

about designing protocols and systems

00;53;28;10 - 00;53;34;23

and methodologies

for the defining pilots to,

00;53;34;27 - 00;53;38;29

you know, tightly enough

and executing them fast enough

00;53;39;00 - 00;53;41;29

that you can come to a decision quickly

enough.

00;53;41;29 - 00;53;44;29

You know, you have a yes no decision.

00;53;45;01 - 00;53;48;22

One of the problems is once

you start a pilot,

00;53;48;23 - 00;53;51;28

there's organizational pressure

00;53;52;00 - 00;53;55;07

to say, well, we didn't make a mistake.

00;53;55;07 - 00;54;01;00

And so it's just a matter of doing

more pilots, and then we'll finally prove

00;54;01;00 - 00;54;04;27

that we didn't make a mistake

chasing this opportunity.

00;54;04;27 - 00;54;11;09

And so, you know, you've got to be willing

to say, no, it's not going to work.

00;54;11;09 - 00;54;12;23

Let's move on.

00;54;12;23 - 00;54;17;22

You know, let's celebrate

the fact that we failed, okay.

00;54;18;02 - 00;54;22;24

And, you know, when have you ever heard

that inside of an organization.

00;54;22;25 - 00;54;26;23

But it you know, it should be the culture

of the organization

00;54;26;24 - 00;54;32;19

that you know how to get to a quick

no around implementing an innovation.

00;54;33;09 - 00;54;35;20

And so similarly,

00;54;35;20 - 00;54;38;26

you've got to figure out

how to get to a fast. Yes.

00;54;39;03 - 00;54;41;21

In terms of moving the needle.

00;54;41;21 - 00;54;45;27

And so those are mechanisms

and methodologies,

00;54;45;28 - 00;54;50;07

sort of new muscles

that corporations need to develop

00;54;50;07 - 00;54;54;01

in order to accelerate innovation

inside the organization.

00;54;54;26 - 00;54;58;04

I like your use of the word

quick and fast there,

00;54;58;04 - 00;55;02;05

especially in light of our conversation

earlier about speed,

00;55;02;14 - 00;55;05;14

you know, and the rate of technology

increased, just, you know,

00;55;05;23 - 00;55;07;16

continuing to press forward.

00;55;07;16 - 00;55;11;14

Is that speed something you see

continuing to advance?

00;55;11;21 - 00;55;12;03

You know,

00;55;12;03 - 00;55;15;12

I don't want to use the word indefinitely,

but for the foreseeable future,

00;55;16;01 - 00;55;16;29

is it cyclical.

00;55;16;29 - 00;55;20;04

And we're about to see some sort of cliff

and reckoning in terms of

00;55;20;04 - 00;55;24;24

how quickly businesses

are actually able to digest this stuff.

00;55;24;24 - 00;55;28;17

And it necessarily, at some point

is going to stutter or slow down.

00;55;30;19 - 00;55;31;19

Oh my God.

00;55;31;19 - 00;55;36;20

I wish there was some scenario in which,

you know, anything was going to slow down.

00;55;36;20 - 00;55;40;23

But, you know, we are a, you know, the

00;55;40;23 - 00;55;45;23

the nature of the information technologies

that we've developed

00;55;45;23 - 00;55;50;08

over the last 40 years

or so have forced us

00;55;50;10 - 00;55;53;22

to just repeatedly run

00;55;53;22 - 00;55;57;04

twice as fast

just to stay in the same place.

00;55;57;06 - 00;56;02;04

And, you know, you think back,

you know, chunks of of your career

00;56;02;04 - 00;56;07;03

and you know what

what everybody experiences,

00;56;07;05 - 00;56;11;23

if you're at all close

to sort of the cutting edge

00;56;11;28 - 00;56;15;17

of technology and innovation, is that

00;56;16;02 - 00;56;19;17

every innovation just makes us have

00;56;19;17 - 00;56;23;09

to run twice

as fast to stay in the same place.

00;56;23;27 - 00;56;28;22

And and so, you know,

the good news is we have tools,

00;56;29;08 - 00;56;34;02

you know, these various technology tools

that enable us to run twice as fast.

00;56;34;02 - 00;56;38;20

And so, you know, we've got these

AI agents that enable us to run

00;56;38;21 - 00;56;42;27

twice as fast,

and we've got these communication tools

00;56;42;27 - 00;56;47;13

that enable us to connect with the world,

you know, faster

00;56;47;13 - 00;56;53;08

to propagate innovation

into absorb information twice as fast.

00;56;53;08 - 00;56;57;23

So so sorry, but it's we're

00;56;57;24 - 00;57;03;03

we're always going to be running,

you know, going to have to run faster.

00;57;03;12 - 00;57;07;07

You know again

fortunately we've got you know,

00;57;07;09 - 00;57;10;08

these these technologies that enable us

00;57;10;08 - 00;57;15;13

that are going to enable us to run faster

looking for sort of

00;57;15;14 - 00;57;19;19

an a, a metaphorical exoskeleton

00;57;21;00 - 00;57;21;23

that we can all

00;57;21;23 - 00;57;26;08

put on as well

as, you know, a brain enhancer.

00;57;26;08 - 00;57;29;22

And that's what these technologies

theoretically are doing for us.

00;57;30;09 - 00;57;33;00

And by the way, that's

that's exactly what I expected you to say.

00;57;33;00 - 00;57;34;23

But I had I had to ask the question.

00;57;34;23 - 00;57;38;13

And what I really wanted to get at,

Bill, is the implication of that is,

00;57;39;02 - 00;57;43;01

you know, what do you see

is the core enabling technologies.

00;57;43;01 - 00;57;46;29

And by the way,

is it fundamentally about technologies

00;57;46;29 - 00;57;51;00

or is it about process

and having the right, you know, systems

00;57;51;00 - 00;57;54;15

and structures and playbooks in place

00;57;54;15 - 00;57;57;15

to be able to do these things

faster as well?

00;57;58;05 - 00;58;00;13

Well, it's, you know, it's

00;58;00;13 - 00;58;03;25

it's fundamentally about competition.

00;58;04;19 - 00;58;07;19

It's fundamentally about,

00;58;07;23 - 00;58;10;13

you know, I've got I've got to run

00;58;10;13 - 00;58;14;15

faster than the guy next to me

and he's got to run faster than run.

00;58;14;16 - 00;58;19;03

I mean, it's what makes us have to run

00;58;19;04 - 00;58;24;16

faster

is that we live in a competitive world.

00;58;24;16 - 00;58;27;18

And so, you know, good news, bad news.

00;58;27;20 - 00;58;28;16

Right?

00;58;28;16 - 00;58;32;15

So the good news,

the good news is the competition forces

00;58;32;15 - 00;58;35;15

us to be more innovative.

00;58;35;15 - 00;58;40;00

But the bad news is,

you know, we're never going to wind up

00;58;40;00 - 00;58;43;08

with a kind of Wall-E

00;58;43;10 - 00;58;48;03

kind of society,

you know, to use that Disney movie.

00;58;48;05 - 00;58;51;23

I mean, you hear people, there are some,

00;58;52;19 - 00;58;55;19

you know, pundits who think, oh,

00;58;55;28 - 00;58;58;28

you know, AI technology is going to,

00;58;59;00 - 00;59;01;28

you know, mean

that everybody loses their job

00;59;01;28 - 00;59;06;15

and they're going to be lying around

having robots take care of them.

00;59;06;21 - 00;59;10;02

And, you know, playing video games,

all that.

00;59;10;11 - 00;59;15;23

And no, no, I mean, it's

I have no doubt in my mind

00;59;16;01 - 00;59;21;00

that all of these new technologies

are going to make us all

00;59;21;00 - 00;59;25;21

just that much more competitive

and meaning

00;59;25;21 - 00;59;30;19

that we're going to have to figure out

a way to work harder,

00;59;30;19 - 00;59;34;04

while we also try

to figure out how to work smarter.

00;59;34;10 - 00;59;40;18

But, you know, forget about the five

Minute manager or whatever it was.

00;59;40;19 - 00;59;43;23

I mean, it it, you know, that's

00;59;43;23 - 00;59;46;27

not that's not the direction

that this is taking us.

00;59;48;10 - 00;59;48;22

Well.

00;59;48;22 - 00;59;51;29

And that's the harder versus smarter

piece is,

00;59;52;19 - 00;59;55;13

you know, there's a very cynical lens

on that as well, I guess.

00;59;55;13 - 00;59;57;20

And that's the part I'm grappling with is

how do you end up?

00;59;57;20 - 01;00;00;12

So you're not in a world where, you know,

you have to say to your kids,

01;00;00;12 - 01;00;01;21

you know, surprise,

01;00;01;21 - 01;00;05;02

you know, for you to stay competitive

and relevant in the workforce,

01;00;05;02 - 01;00;07;21

you're going to have to work way

harder and,

01;00;07;21 - 01;00;10;27

you know, way longer hours

than I ever did.

01;00;10;28 - 01;00;14;00

Like, it just it feels like

01;00;14;00 - 01;00;17;10

it's not quite the world

we should want to be building.

01;00;17;10 - 01;00;17;17

Right?

01;00;17;17 - 01;00;20;21

Like we should want to be able

to have technology and process

01;00;20;21 - 01;00;25;13

that enables us to do more

in a smarter way without necessarily,

01;00;25;18 - 01;00;28;18

you know, reducing our quality of

life, if I can call it that.

01;00;29;18 - 01;00;30;02

Yeah.

01;00;30;02 - 01;00;34;01

I mean, again, you know, there will be,

01;00;34;17 - 01;00;37;13

you know, sort of layers of behavior

01;00;37;13 - 01;00;40;13

in the workforce of the future.

01;00;40;27 - 01;00;43;08

And, you know, there will be

01;00;43;08 - 01;00;47;02

a, a layer that does have

01;00;47;07 - 01;00;50;14

a, you know, whatever, 9 to 5 job.

01;00;51;01 - 01;00;56;23

And, you know, and within that layer,

the people that get promoted

01;00;56;24 - 01;01;01;07

will be the ones who know how to work

smarter. But,

01;01;02;11 - 01;01;04;21

you know, there will always be a layer

01;01;04;21 - 01;01;08;09

of wherever, whatever you want

to, wherever you want to draw the line.

01;01;08;09 - 01;01;11;09

But of the sort of executives

01;01;11;09 - 01;01;14;09

who are the drivers who

01;01;14;10 - 01;01;16;25

who cannot limit

01;01;16;25 - 01;01;20;05

their efforts to 9 to 5 in order

01;01;20;05 - 01;01;24;15

to compete with the rest of the world,

I you know,

01;01;24;16 - 01;01;28;19

I just think that's the unfortunate

reality of

01;01;28;21 - 01;01;32;17

of innovation and competition.

01;01;32;22 - 01;01;37;08

And, and so I think some of us

01;01;37;08 - 01;01;42;18

will be better at managing

that than others.

01;01;43;05 - 01;01;46;01

And I, you know, I wish there were

01;01;46;01 - 01;01;51;12

a way to provide better support for,

01;01;52;06 - 01;01;56;16

for senior executives,

for startup founders,

01;01;56;16 - 01;01;59;26

for all of those people who

01;01;59;27 - 01;02;03;00

work till they're burnt out,

01;02;04;05 - 01;02;05;16

which is, you know,

01;02;05;16 - 01;02;09;24

not good, not healthy

and not even productive.

01;02;10;11 - 01;02;13;11

And and so maybe, maybe

01;02;13;11 - 01;02;18;15

we will find an agent that,

you know, can monitor

01;02;18;15 - 01;02;22;14

each of us in such a way to say, hey,

guess what?

01;02;22;15 - 01;02;27;05

You know, your productivity

is, you know, is going down here.

01;02;27;07 - 01;02;30;02

And if you really want to be competitive,

01;02;30;02 - 01;02;33;02

you're going to go to sleep right

now, right?

01;02;33;23 - 01;02;36;04

You know, I mean, I yeah.

01;02;36;04 - 01;02;40;29

So we're you know,

we're at the edge of having those coaches

01;02;41;19 - 01;02;44;29

individualized,

you know, executive coaches

01;02;44;29 - 01;02;47;29

that can that can ensure

01;02;48;00 - 01;02;51;08

that we we are

01;02;51;26 - 01;02;54;19

you know, we we sort of compete

01;02;54;19 - 01;02;59;07

aggressively

but don't damage the rest of our world,

01;02;59;09 - 01;03;03;10

our health,

our family or whatever as a result.

01;03;06;01 - 01;03;06;25

So maybe.

01;03;06;25 - 01;03;09;10

As we move to sort

of conclude the conversation,

01;03;10;25 - 01;03;12;24

I'd love to have you reframe that

a little bit, Bill,

01;03;12;24 - 01;03;16;20

because I suspect the note

you want to end on is not necessarily,

01;03;16;21 - 01;03;19;27

you know, hey, business leaders,

hey, founders work until you drop.

01;03;19;27 - 01;03;21;06

And that's the way to be competitive.

01;03;21;06 - 01;03;22;14

And I don't think that's

what you're saying.

01;03;22;14 - 01;03;27;03

But if I reframe that,

what is your best advice these days

01;03;27;03 - 01;03;31;05

to to that audience in terms

of how to get ahead, how to work smarter

01;03;31;05 - 01;03;35;02

and how to be more, you know, competitive

in today's environment.

01;03;35;24 - 01;03;39;27

The, the, the single factor that I see

01;03;41;00 - 01;03;47;13

very commonly

that causes burnout is the inability

01;03;47;14 - 01;03;52;12

of some people

to give up some amount of control.

01;03;52;20 - 01;03;56;09

And so where you see the burnout

01;03;56;11 - 01;04;01;15

happening in executives, in founders

and entrepreneurs,

01;04;01;16 - 01;04;05;22

is people who think

01;04;05;22 - 01;04;09;29

that they are the critical factor

in getting things done.

01;04;10;00 - 01;04;14;23

They're the only ones who are, you

know, talented enough to execute

01;04;14;23 - 01;04;20;08

on this particular aspect

and are not willing to relinquish control.

01;04;20;08 - 01;04;22;07

They're not willing to delegate.

01;04;22;07 - 01;04;27;16

They're not willing to invest

the resources in building the right team.

01;04;27;22 - 01;04;31;12

And so I think it is

01;04;31;12 - 01;04;34;26

absolutely pod possible

01;04;34;26 - 01;04;37;26

and certainly the right model

01;04;38;21 - 01;04;41;23

to proceed with innovation

01;04;41;23 - 01;04;44;23

around building a team of people

01;04;44;26 - 01;04;49;18

that you've got as partners in leadership

01;04;49;28 - 01;04;53;11

to help execute the innovation

01;04;53;11 - 01;04;56;20

strategy,

the growth strategy for your organization.

01;04;56;20 - 01;05;02;07

If you think you are the sort of

single point of failure that you are

01;05;02;07 - 01;05;05;28

the single most important controller

01;05;05;28 - 01;05;09;24

of the future of your organization, almost

01;05;09;24 - 01;05;13;10

certainly

you will drive yourself into a wall.

01;05;13;22 - 01;05;17;04

And so, you know, the personality

01;05;17;04 - 01;05;22;20

of executives who succeed

are those that have the ability

01;05;22;20 - 01;05;27;19

to find talent and trust talent

and execute as a team,

01;05;27;20 - 01;05;32;26

rather than trying to keep control

of their organization

01;05;32;26 - 01;05;38;04

in the face of dynamic change

that we're going through.

01;05;38;07 - 01;05;42;10

That really resonates with me

and is something that, you know,

01;05;42;11 - 01;05;46;05

I certainly have experience with

and have seen countless times as well.

01;05;46;15 - 01;05;48;20

Just to pressure test that a little bit.

01;05;48;20 - 01;05;49;28

I'm curious.

01;05;49;28 - 01;05;52;10

To me, the number one objection

you'll get there is.

01;05;52;10 - 01;05;55;19

But Bill, I really can do it best.

01;05;55;19 - 01;05;58;28

And no team can do this as well as I can

01;05;58;29 - 01;06;03;08

if I seed control

and therefore I have to do it myself.

01;06;03;15 - 01;06;05;16

You know, if you felt that,

how did you get over it?

01;06;05;16 - 01;06;08;16

If you've heard that,

how do you respond to it?

01;06;08;21 - 01;06;12;20

Well,

so to the extent that you retain control

01;06;13;04 - 01;06;16;15

of any aspect of the future,

01;06;16;15 - 01;06;20;09

then because you are only one human being,

you will

01;06;20;10 - 01;06;24;05

by definition limit

the possibilities for your organization.

01;06;24;24 - 01;06;30;08

So to the extent that you can find talent

and develop talent

01;06;30;08 - 01;06;33;17

and build a team that you can delegate to,

01;06;33;18 - 01;06;36;21

then you do not limit your upside.

01;06;36;26 - 01;06;40;18

But if you

if you choose to maintain control,

01;06;40;18 - 01;06;43;19

you are by definition

limiting your upside.

01;06;43;19 - 01;06;45;27

And so what do you want?

01;06;45;27 - 01;06;48;29

I mean, do you want to have the potential

01;06;48;29 - 01;06;53;14

for unlimited upside

or do you want control?

01;06;55;10 - 01;06;56;08

I love that

01;06;56;08 - 01;06;59;09

it's extremely succinct and powerful.

01;06;59;09 - 01;07;02;11

And as I said, it

resonates with me very deeply.

01;07;02;14 - 01;07;04;08

Bill, I'm just going to move to a wrap up.

01;07;04;08 - 01;07;05;00

But before we do,

01;07;05;00 - 01;07;08;13

is there anything we didn't discuss today

that you were hoping that we could cover?

01;07;12;14 - 01;07;14;26

You know, we

01;07;14;26 - 01;07;17;29

we we, you know, we one of my

01;07;18;10 - 01;07;21;10

one of my sort of.

01;07;23;00 - 01;07;27;16

Significant issues is this question of

is there a new

01;07;27;27 - 01;07;31;17

is there a different architecture

for AI and robotics

01;07;31;17 - 01;07;37;08

that has not yet been discovered

that is going to significantly disrupt

01;07;37;13 - 01;07;40;26

the current architectures

and the current incumbents?

01;07;41;17 - 01;07;45;19

And I believe there is and in various

01;07;45;20 - 01;07;48;19

AI settings, I have raised what I call

01;07;48;19 - 01;07;53;18

the yellow jacket paradox,

the yellow jacket being, you know,

01;07;53;19 - 01;07;59;07

an insect of flying insect that is a pest

for a lot of us when we're outdoors.

01;07;59;07 - 01;08;05;18

And the yellow Jacket paradox came about

when I was having breakfast on this,

01;08;05;19 - 01;08;09;26

you know, in a sidewalk cafe

in Boston on a beautiful full day,

01;08;11;00 - 01;08;15;13

and, and having

a discussion about the future of AI.

01;08;15;20 - 01;08;18;26

And we're sitting there having breakfast

and all of a sudden

01;08;18;26 - 01;08;24;20

a yellow jacket comes in and starts

attacking our breakfast, and,

01;08;24;23 - 01;08;27;23

you know, so we're swatting it away and,

01;08;28;21 - 01;08;30;21

you know,

trying to continue the conversation,

01;08;30;21 - 01;08;33;24

but it keeps coming back

and we're swatting it away.

01;08;33;24 - 01;08;38;16

And we can't interestingly,

we can't actually hit this yellow jacket.

01;08;38;17 - 01;08;39;28

I mean, it's right there.

01;08;39;28 - 01;08;43;18

But as fast as we try to swat,

we can't hit it.

01;08;43;29 - 01;08;48;09

And then brilliantly,

the yellow jacket brings in a friend.

01;08;48;09 - 01;08;50;25

And so now we got two yellow jackets.

01;08;50;25 - 01;08;53;09

And so you know we swatted away.

01;08;53;09 - 01;08;56;20

But no it gets to Tina's breakfast

and it gets to my breakfast.

01;08;56;20 - 01;08;58;03

And we sweat it away.

01;08;58;03 - 01;08;59;28

And it keeps on coming.

01;08;59;28 - 01;09;04;17

And and so on reflection

we think to ourselves,

01;09;04;18 - 01;09;08;10

oh my God, that yellow jacket is

01;09;08;11 - 01;09;11;13

incredibly smart and capable.

01;09;11;16 - 01;09;14;00

But how big is its brain?

01;09;14;00 - 01;09;15;26

How big is its brain?

01;09;15;26 - 01;09;19;00

You know, it's

brain is smaller than a grain of sand.

01;09;19;09 - 01;09;22;14

How much energy does its brain take?

01;09;22;24 - 01;09;24;01

Virtually nothing.

01;09;24;01 - 01;09;27;03

I mean, and it flies. Right? Okay.

01;09;27;19 - 01;09;29;20

And it flies.

01;09;29;20 - 01;09;33;03

So how can it possibly be

01;09;33;23 - 01;09;37;02

that we need a gigawatt data center

01;09;37;04 - 01;09;40;18

in order to replicate conversations?

01;09;41;16 - 01;09;46;06

We need billions of dollars

to create these humanoid robots

01;09;46;06 - 01;09;49;25

that can kind of replicate what humans do.

01;09;50;06 - 01;09;54;15

How is it that we can't replicate

the brain of a yellow jacket?

01;09;55;13 - 01;09;58;13

So clearly the architecture

01;09;58;19 - 01;10;02;16

of a yellow jackets intelligence is,

01;10;03;26 - 01;10;06;21

you know, many orders of magnitude

01;10;06;21 - 01;10;10;02

smarter and more efficient than anything

we've come up

01;10;10;02 - 01;10;14;01

with, with all of our research

and all of our billions of dollars

01;10;14;02 - 01;10;17;08

of study, of artificial intelligence.

01;10;17;10 - 01;10;21;16

And so the mere fact of the existence

of that

01;10;21;17 - 01;10;26;06

yellow jacket says to me,

there's a better architecture.

01;10;26;16 - 01;10;32;06

And so the question is, what's

it going to take to get to that better

01;10;32;06 - 01;10;36;21

architecture, and what's going to happen

to the current incumbents

01;10;36;21 - 01;10;40;05

when we get that better architecture? So,

01;10;41;20 - 01;10;45;13

you know,

I would love to have more conversations

01;10;45;13 - 01;10;50;09

with more people who are really,

really smart about AI architectures

01;10;50;09 - 01;10;53;15

and the reasoning of robots

01;10;54;09 - 01;10;57;17

in order to sort of reconcile

01;10;57;18 - 01;11;01;12

what I see

as this huge discrepancy between,

01;11;01;24 - 01;11;06;29

you know, that tiny little yellow jacket

and the billions and billions of dollars

01;11;06;29 - 01;11;11;04

that we're spending

on compute and AI design.

01;11;13;00 - 01;11;14;13

Does that worry you

01;11;14;13 - 01;11;18;01

when it comes to this kind of data center

and infrastructure build out?

01;11;18;01 - 01;11;21;10

You talked earlier about,

you know, the importance of efficiency

01;11;21;10 - 01;11;24;03

and keeping temperatures

down in all of this.

01;11;24;03 - 01;11;27;14

Is there a world where we spend

all this money and we make all of this

01;11;27;14 - 01;11;31;10

technology functionally obsolete

in the next handful of years?

01;11;33;01 - 01;11;34;07

Absolutely no.

01;11;34;07 - 01;11;36;01

I mean, you know, two things.

01;11;36;01 - 01;11;40;01

One, because it takes so long

to build data centers, I think,

01;11;41;07 - 01;11;44;19

you know, a lot of the data centers

that are being proposed will never

01;11;44;20 - 01;11;50;28

get built because, you know, because one,

we're going to get more efficiency.

01;11;50;28 - 01;11;53;28

And two, you know,

we're just not going to have enough money,

01;11;54;12 - 01;11;57;11

but that's another

that's another question.

01;11;57;16 - 01;12;00;19

But if you think back to, for example,

01;12;00;19 - 01;12;04;11

the the internet, you know, bubble, we,

01;12;04;12 - 01;12;09;00

we built out massive infrastructure

in terms of optical fiber

01;12;09;17 - 01;12;15;09

and connectivity that wound up going dark

when the bubble burst.

01;12;15;09 - 01;12;20;13

And so it took, you know, we had all of

that infrastructure in place,

01;12;20;27 - 01;12;25;17

but it took many years before

we were able to then utilize it again.

01;12;25;19 - 01;12;28;18

I think we probably will have

01;12;28;29 - 01;12;31;29

some number of, you know, empty

01;12;32;00 - 01;12;35;27

data centers and, you know, quiet data

centers.

01;12;36;09 - 01;12;40;21

And, you know, as this buildout happens

and we make a transition

01;12;40;21 - 01;12;42;13

to the next generation.

01;12;42;13 - 01;12;46;17

So, you know, you've got, on the one

hand, quantum computing

01;12;46;17 - 01;12;50;24

that is probably going to make a dent

in the way we compute.

01;12;51;14 - 01;12;54;03

And then on the other hand,

new architectures

01;12;54;03 - 01;12;57;26

that are likely to make a dent

in the way we compute.

01;12;57;26 - 01;13;00;12

And then sort of up the middle,

01;13;00;12 - 01;13;04;19

you've got these technologies

that should increase efficiency,

01;13;05;23 - 01;13;06;05

you know,

01;13;06;05 - 01;13;11;12

of data centers,

which may reduce the requirements for

01;13;12;06 - 01;13;16;06

all of the data centers that are being,

you know, proposed right now.

01;13;16;07 - 01;13;20;09

So I think we will see

sort of a lot of turmoil

01;13;20;09 - 01;13;24;24

in that market over the next,

you know, three, 4 or 5 years.

01;13;25;27 - 01;13;28;01

You know, again,

01;13;28;01 - 01;13;30;07

overall, the momentum will continue,

01;13;30;07 - 01;13;34;24

but there will be some people who,

you know, lose a bunch of money

01;13;34;27 - 01;13;37;27

making bets

that are not going to play out.

01;13;38;23 - 01;13;39;06

Right.

01;13;39;06 - 01;13;43;04

And it sounds like you sort of file

that under the the price of innovation.

01;13;43;05 - 01;13;43;12

Right.

01;13;43;12 - 01;13;44;22

Like if you're going to keep building out

01;13;44;22 - 01;13;46;25

these new technologies,

there have to be losers.

01;13;46;25 - 01;13;50;25

And that's just, you know, a tax

you have to pay, right?

01;13;50;26 - 01;13;53;00

You know, creative destruction. Maybe

01;13;54;12 - 01;13;55;06

that's,

01;13;55;06 - 01;13;58;06

you know, that's what it's all about.

01;13;58;09 - 01;13;59;21

I love. It, Bill.

01;13;59;21 - 01;14;02;12

I wanted to say such a big thank you

for coming on to the program today.

01;14;02;12 - 01;14;03;17

I really appreciate your insight.

01;14;03;17 - 01;14;07;06

We covered a lot of ground and it's been

a really fascinating discussion.

01;14;08;19 - 01;14;09;23

Thank you so very much.

01;14;09;23 - 01;14;12;23

I really appreciate it

and really enjoyed the conversation.

01;14;14;18 - 01;14;18;06

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