<div style="text-align: center;"> <img src="6-ChrisPaik.jpg" alt="6-Chris Paik"> </div> *Dialectic Episode 6: Chris Paik - Intentionally in Search of the New - is available on [Spotify](https://open.spotify.com/show/2IEN4eE9HvNKJHnLv5EMG9?si=02kLV5jCRNWzN2SQdNBd6w) and [YouTube](https://youtu.be/zFA_iiEtm_8?si=DBUUwbLMrV1BUz_b).* <iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/7cs0LRayow5Qc09fMt6Y4L?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe> <iframe allow="autoplay *; encrypted-media *; fullscreen *; clipboard-write" frameborder="0" height="175" style="width:100%;max-width:660px;overflow:hidden;border-radius:10px;" sandbox="allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation" src="https://embed.podcasts.apple.com/us/podcast/6-chris-paik-intentionally-in-search-of-the-new/id1780282402?i=1000684798243"></iframe> # Description [Chris Paik](https://x.com/cpaik) is a General Partner and Co-founder of [Pace Capital](https://desktop.pacecapital.com/), a Venture Capital firm in New York City. He invests in technologychnology and internet businesses at Pace, and previously did the same at Thrive Capital, which he joined in the earliest days. At Thrive, Chris invested in Twitch, Unity, Patreon, among others. Chris is a profoundly deep thinker who relies on behavioral economics to build robust frameworks for understanding technology, businesses, the internet, and human nature. As we discuss, intentionality runs through Chris's life and actions. While Chris has strong views about incentives and markets that may seem in conflict with some kinds of idealism, he is also strongly optimistic and earnest in his love for the world and its people, and for what we might create for each other. We discuss Chris's frameworks and approach to explanations, markets and incentives, top-down and bottom-up thinking and companies, approaches to new markets and raising capital, his obsession with discovering the new, how his ideas become published thinking, the positive and negative impacts of the internet, Pace and its values, and the inner-workings of Chris's truly unique and fascinating approach to the world. # Timestamps: - (01:08): What does it mean to be intentional? - (05:21): Good Explanations - (07:28): Sharing explanations and thinking publicly - (14:45): Pendulum Theory - (22:14): The efficient market hypothesis - (27:34): Top-down vs. bottom-up thinking and companies - (48:09): First-to-market vs. best-to-market - (55:44): Cost of capital and when venture capital makes sense - (1:03:28): How Chris finds new things and how he curates what he consumes - (1:07:59): Chris's ideation funnel: thinking > sparring > publishing - (1:10:42): Is the internet actually good for us? What about capitalism? What rules above capitalism? - (1:18:56): The internet as a lever on agency and ability to take risk - (1:23:47): Pace Capital: Values, Brand and Reputation, Truth-Seeking, and People - (1:32:20): A pre-mortem on Pace's failure - (1:34:06): The first piece for a theoretical Pace Capital art gallery - (1:35:55): Questions for Chris about himself - (1:36:07): Is Chris's unique set of worldviews and thinking more due to nature or nurture? - (1:37:21): What has Chris compounded most continuously? - (1:38:23): What Chris's best or favorite “investment” in the universe? - (1:40:01): How do Chris use laziness as a lever? How might other people? - (1:41:50): Meta-analysis and cognitive biases - (1:45:11): How Chris hacks his brain: what's at the top of the usuer manual of being Chris? - (1:47:51): Where is Chris most confident in the conensus view? - (1:49:01): How does Chris apply pre-consensus thinking to his personal life? - (1:51:36): Alignment: with Keely in life and Jordan at Pace - (1:55:43): Every second counts # Links - [Frameworks v0.2](https://docs.google.com/document/d/1-UiEeoiV0xBFVZgid63FRaph03OCmHzyEExubn63j0U/edit?tab=t.0) - [PACE DESKTOP](https://desktop.pacecapital.com/) - [The Shadow of Disutility: Technology’s Hidden Cost](https://docs.google.com/document/d/15am9011fnAePUsxgpdMklo7E8-Lhc2b0hci4VPe7hOU/edit?tab=t.0) - *[Zen for Film, 1965](https://www.moma.org/collection/works/128108)* by Nam June Paik Dialectic with Jackson Dahl is available on all podcast platforms. [Join the ⁠telegram channel for Dialectic⁠](https://t.me/dialecticpod) [Follow ⁠Dialectic on Twitter⁠](https://x.com/dialecticpod) [Follow Dialectic on Instagram](https://www.instagram.com/dialecticpod/) [Subscribe to Dialectic on YouTube](https://www.youtube.com/@Dialectic) # Transcript **Jackson:** [00:00:00] Welcome back to Dialectic. It's been a little bit of a break, and I hope you all had a great holiday and end of year. But 2025 is going to be a big year for Dialectic, and I'm so excited to be back. Today's guest is Chris Paik, general partner and co-founder of Pace Capital, a venture firm here in New York City. Chris is one of my favorite people to, frankly, argue with. He has such a unique mind and worldview, and the way he thinks, particularly from small seeds of ideas and frameworks into explanations that he uses to interrogate the world and opportunities and businesses, I just find deeply, deeply energizing. Chris spent time at Thrive Capital from its earliest days, where he invested in Twitch and Unity and Patreon, among other companies. And today at Pace, he focuses on internet and software businesses. I hope that this conversation puts Chris's unique thinking and frameworks on display, and that some of his ideas challenge how you see and approach the world. With that, here's my conversation with Chris. **Chris:** [00:01:04] I'm really excited for this. Thank you for having me. **Jackson:** [00:01:07] It's a pleasure. ## What does it mean to be intentional? [00:01:08] We're going to start with a question that I don't know if I've ever talked to you about or anyone else has, but it is the only thing in your Twitter bio, and that is, what does it mean to be intentional? And within that, how do you think about it? What are the costs? What are the trade-offs? **Chris:** [00:01:27] Great, great question. Also, I don't know if anybody's ever asked me that. Okay, so my Twitter bio says, "In pursuit of intentionality." And what is intentionality? What does it mean to be intentional? I would argue, or my definition of intentionality, is that what happens is planned. **Jackson:** [00:01:54] Hmm. **Chris:** [00:01:56] That there is an idea of something, a direction, a heading that you're moving towards, and where you end up is a result of a why and a how, not just happenstance. **Jackson:** [00:02:16] Is that the same thing as control? **Chris:** [00:02:21] Is it the same thing as control? I don't necessarily think so. I think you can have a lot of control without being intentional. Authority has a lot of control without necessarily requiring intentionality. I think thoughtfulness might be a closer synonym to intentional. What is the opposite of intentionality? **Jackson:** [00:02:56] Carelessness. **Chris:** [00:02:56] Carelessness, things happening by accident. **Jackson:** [00:03:00] My intuition would be that intention is more divorced than outcome than at least how you described it. Is the inverse of a control idea true, meaning if you are intentional, does that necessitate control? **Chris:** [00:03:16] If you are intentional, does that necessitate control? It necessitates control over the inputs, but not necessarily over the outputs. You can have a process that is deeply intentional, yet the outcome is not necessarily desirable. I think you can have outcomes that are desirable that are void of intentionality. **Jackson:** [00:03:46] So an intentional life is more about inputs than outputs, but the description you made at least implies some level of the outputs going according to, quote unquote, plan. **Chris:** [00:03:57] Well, I would say the definition of intentionality is an alignment between the set of outcomes and the desires going in. **Jackson:** [00:04:15] You seem to be, it seems to run through very almost everything you think about and how you approach the world, so I'm excited to pull that curtain back a little bit more. **Chris:** [00:04:24] It's sometimes it's a blessing and sometimes it's a curse. **Jackson:** [00:04:27] Maybe we'll get into the trade-offs. You're clearly compulsive about understanding the world, but you're also specifically compulsive around identifying where the world is going and presumably getting there intellectually or otherwise ahead of everyone else, or ahead of most other people. You have talked about this publicly as being pre-consensus in contrast to being just contrarian, pre-consensus being ahead of the curve. One of my observations that I think you would probably agree with is one of the core ways that manifests is explanations. And so you've even said explanations are a good way to accelerate going from pre-consensus to consensus. **Chris:** [00:05:14] It's true. That's true. It can be marketing for the pre-consensus. **Jackson:** [00:05:17] Right, or maybe even more than marketing. ## Good Explanations [00:05:21] I'm curious, what makes a good explanation? And maybe within that, one thing that feels particularly akin to you, which is, what makes a good metaphor? **Chris:** [00:05:34] I would say a good explanation is trying to communicate a concept but using the ingredients that the audience has at their disposal. **Jackson:** [00:05:49] Meeting them where they are. **Chris:** [00:05:52] Exactly. And this also dovetails with what I think a good metaphor is. There's a great subreddit. I believe the subreddit is r/ELI5. **Jackson:** [00:06:06] Yeah. **Chris:** [00:06:07] Which is an acronym that stands for "Explain Like I'm Five." I think that that prompt pushes you to really distill down what it is that you're trying to communicate into relatively simplistic, easy-to-understand concepts. And interestingly enough, that's harder. That's really hard. It's much easier to be incredibly verbose and use a one-dollar word instead of a ten-cent word. But what's the goal? The goal is trying to communicate information effectively. In order to do that, I think that meeting people where they are is much more important than sounding smart. So I think a good explanation helps communicate as effectively as possible. Maybe you can think about it as, what is the bitrate transfer per second between the person communicating the concept and the person understanding the concept? A good explanation, a good metaphor, is a high bitrate transfer per second. **Jackson:** [00:07:23] Especially relative to the density of it. **Chris:** [00:07:27] Yes, the original density of it. ## Sharing explanations and thinking publicly [00:07:28] **Jackson:** Given what you do, you're a venture capital investor. You have a small team you work with, but on a relative basis, you probably don't need to have amazing external explanations to at least be decent at what you do for a living and be at least pre-consensus on your own or individually. So why is it, why do you think you're still so inclined to develop great explanations? And maybe within that, what group are you most inclined to explain to? **Chris:** [00:08:03] I think we'll probably have to rewind the clock a little bit, and I'll do some maybe self-reflective psychoanalysis. Let's see. Publicly posting information, whether written or doing stuff like this, is relatively new, I think for me. I would say in the very beginning of my career in venture, I blogged a little bit because I thought that's what you were supposed to do. I read a lot of much smarter, more accomplished people's blogs, and it seemed like in order to be a successful venture capitalist, you had to have a blog. In the beginning of my career, I religiously consumed the blogs of Fred Wilson and **Chris:** Dixon and whatnot. Naturally, the 22-, 23-year-old me was like, "Yes, I should blog." I think I got to maybe three or four posts before I realized, "Oh, I know nothing." And not only do I know nothing, it would be incredibly dangerous of me to put anything out into the ether that was remotely close to prescriptive advice unless I knew what I was talking about. So I stopped blogging altogether. **Jackson:** [00:09:40] Do you wish you had blogged more, or was that the right decision? **Chris:** [00:09:43] I think that was 100% the right decision. That was very much the right decision. **Chris:** [00:09:55] There's some incredible quip where the saying is, "It's best to keep your mouth shut if people think you are unintelligent, rather than open it and remove all doubts." It's no surprise that this industry really advantages. I think it's a fundamentally human-based industry. It revolves on trust and rapport. So maybe it's no surprise that a lot of the work in this industry is talking to people. It's meeting with founders, it's exchanging ideas, it is person-to-person communication. You know, I don't want to reduce down human connectivity to these terms, but maybe, perhaps for a moment, having a good UI interpersonally is advantaged in at least the world of venture capital and startups. And so I think for many years of my career, I relied on a proclivity for in-person interactivity and maybe overly relied on that as the way that I moved through the ecosystem and I practiced my craft. It actually wasn't until the pandemic where I couldn't meet with people. You couldn't just grab coffee, you couldn't chop it up and share ideas. All of a sudden, this motion that I was so used to engaging with, having dinners with people, exchanging ideas, rock tumbling thoughts in person, gone. I felt like there was an entire slice of me that was missing. That is what forced me to start writing again. I published this Google Doc with a bunch of investment frameworks and thoughts and aphorisms, things like that. I put that out there into the ether, and I got a lot of positive response. I am just as human as anyone else, and so that positive response drove a positive feedback loop. It was a nice surprise to have your thoughts validated by other people, especially those that you respect. So that was probably the beginning of sharing more of my thoughts and thinking externally. **Jackson:** [00:13:00] The implication of how you describe that suggests not someone who is just interested in their ideas getting more exposure, but specifically someone who is using external feedback as a way to make the explanations and thoughts better. **Chris:** [00:13:18] Totally, absolutely. I think one of my hesitations with using any kind of publishing platform except Google Docs was the almost hubristic implication that what you put out there was final, right? **Jackson:** [00:13:37] Your framework stock is currently Frameworks 0.2. **Chris:** [00:13:43] Yeah, probably overdue for an update, honestly. **Jackson:** [00:13:46] Pretty robust for a 0.2, all things considered. **Chris:** [00:13:49] The intended communication of that format is: these are the best current form of these thoughts, but by no means are they immune to editing or updating. New information should change the conclusions. **Jackson:** [00:14:18] There's like 1500 comments on the document. **Chris:** [00:14:21] Yeah. **Jackson:** [00:14:22] Your ability and willingness to post just a Google Docs link on today's version of Twitter and have it go, have it bang, is both impressive and daring. **Chris:** [00:14:34] It's a good -- Google Docs is a good product, and I refuse to submit to the new rules of algo hacking. **Jackson:** [00:14:42] Frameworks bring up a great example, probably the most robust example of the fact that you have a lot of these theories living out in the world. Some are frameworks, some are theories, some are aphorisms, but you've done a lot of work to allow those things to become slightly more concrete. Perhaps this is an explanation in and of itself, but one of the first things I can remember ever talking to you about, at least from a cultural standpoint, is pendulum theory. I'll just read the way you've described it in the past and feel free to revise. You say the world is a series of pendulums swinging back and forth between poles. Decentralization eventually gives way to centralization, political parties in power, anonymity to identity, et cetera. Special opportunities arise when multiple pendulums are simultaneously aligned in their motion. Maybe it's an entirely different thing, but at least an adjacent idea would be the cyclicality of things. From everything from fashion, or simple things, to ideas like the fourth turning. I am curious, and we don't necessarily have to get into cyclicality, but I'm curious how you hold pendulum-type thinking, maybe specifically around culture, next to many of your other frameworks, which feel a little bit more progressive and like they're just going to continue to compound over time. Pendulum theory, if it were a meta theory over everything, would kind of break. It would presume that it's hard to hang on to any truth. No truth is perpetually useful, it's useful seasonally, maybe. Is that way of arranging it makes sense? Or is it better to just think about pendulum theory in specific contexts around things like culture or fashion? Human nature stays the same. The way we express it in certain contexts goes back and forth. **Chris:** [00:16:37] That's a good question. I think my best answer is maybe it's a question of scope. I would argue that pendulum theory may be akin to examining the movement of bodies in our solar system. So, understanding that it takes 365 days for the Earth to orbit the sun, and all of these other factors are in play, it really helps to understand that. But largely that doesn't impact the day-to-day life that we live on Earth. What's more impactful of the day-to-day life that we live on Earth is, how does wind work? **Jackson:** [00:17:26] The little micro macro. **Chris:** [00:17:27] Right. What is sunlight? Understanding the balance of the system inside of Earth rather than zooming out to maybe wider than Earth. So, I think maybe it's like the scope of the truth. They're not necessarily incompatible with each other or only applied at certain moments in time. They're all true at the same time but applying at different levels. **Jackson:** [00:18:00] Is there any specific or generalized implication of pendulum thinking that you've come back to often that you find is more dominant than people normally see? People will probably benefit from seeing more clearly. **Chris:** [00:18:20] I'll use a relatively nationalistic-centric example. Let's look at the state of US politics over the last 20 or so years. We'll start with Bill Clinton. We had eight years of Bill Clinton, and that gave way to eight years of George W. Bush. That, in turn, gave way to eight years of Barack Obama. Then that gave way back to the Republican Party with Trump for four years, and then another four years for the Democratic Party. Now we're back to four years with the Republican Party. You kind of see the way that the pendulum swings back and forth, whether it is our general dissatisfaction with whatever current administration exists and we want something else. But just noticing that as the output of a system is a helpful truth. You don't want to read too far into it, but you objectively can't deny that that is the pattern that has emerged. Maybe one thing that's noticeable is it seems like with the dissemination of information, the amplitude of that pendulum swing is starting to tighten. We're starting to maybe even get a little bit more frenetic in our energy. Maybe two-term presidents aren't going to happen anymore. I don't know. **Jackson:** [00:19:59] Or for areas that are less constrained by, "It has to be at least four years," could we see that swing really accelerate? How fast is it going between the two poles? **Chris:** [00:20:09] That is an example of one pendulum that is swinging. There's another. We can talk about the pendulum swing of anonymity on the internet. I grew up with an internet that was anonymous, where a screen name, your username online, had no connection to your actual identity. Enter Facebook, and all of a sudden everybody's screen name was their actual identity. There was an entire generation of people that grew up on Facebook and social media where their internet identity and their real identity were the same. It feels like we are swinging away from that now. You see things like people with fake Instagram handles or the rise of the Anon account on Twitter. Turns out there is merit to delinking your real identity and your internet representation. It's only natural, I think, that once we reach a pole of one system, we start swinging back away from that pole. **Jackson:** [00:21:21] It's interesting that that was the example we were chatting about probably three years ago, where you first brought this up. Clearly, the magnitude or the degree to which anonymity or pseudonymity is more common is clear. The question, of course, with any of these is, where are we in the swing? My suspicion would be there's probably still a lot of room to go on the pseudonymity front. **Chris:** [00:21:42] I agree. The two most popular streamers on Twitch are Kai Cenat, which is his actual name, and Iron Mouse. **Jackson:** [00:21:53] Crazy. **Chris:** [00:21:54] There's a Vtuber. **Jackson:** [00:21:54] Crazy. **Chris:** [00:21:57] She streams as a digital representation, and nobody knows her real identity. **Jackson:** [00:22:05] Yeah, whereas when we were chatting about this three years ago, it was like, there are some big Twitch streamers, not the biggest. **Chris:** [00:22:12] Yeah. ## The efficient market hypothesis [00:22:14] **Jackson:** I want to talk about a handful of broad business-building and investing frameworks before we get into some other stuff. The first one I almost think has become a little bit of a bit, but you are a firm and strong believer in the efficient market hypothesis, including statements such as, "Markets are so efficient," and, "In this house, we presume markets are efficient." Others, my favorite example of this is Matt and Nat Friedman, have pushed on this idea a little bit. Nat has a thing on his blog that says, basically, "The efficient market hypothesis, if it's not totally false, at least it's false in the areas that matter." Or, "You'd be better off imagining the world of 500 people rather than 8 billion people." I'm curious, one, maybe for your rebuttal to that, if you're interested in it. But two, are there areas where this is at least pushed or blurred? For example, is the market for ideas maybe less efficient? Or is Darwinism as efficient as capitalism? What is the root of this framework, and how—maybe the reason I push on it is it feels so central to so much of how you view the world, at least from a commercial standpoint. I'm curious how you think about that foundation. **Chris:** [00:23:34] It's a great question. There's an adage that describes the efficient market hypothesis, or some aspect, which is: there's no such thing as a $20 bill on the sidewalk. **Jackson:** [00:23:47] Yep. **Chris:** [00:23:48] Which, to the vast majority of people, is true. To the extent that there have been $20 bills lying on the sidewalk, that statement has not been true for the person who picks it up. Objectively, when that person picks up the $20 bill, they're like, "Oh, actually, there was a $20 bill here, and I have now picked it up. There is no longer a $20 bill here." And now that statement is true. But in that moment in time, there was a $20 bill on the sidewalk. I think maybe the space where I would agree with Nat's view of the efficient market hypothesis is particularly true around seams of innovation. When there is a technological breakthrough, there's a change that has happened. Something is now possible, and it was impossible before. Regulation change has occurred. The efficient market hypothesis—the market doesn't immediately teleport to becoming efficient. It is driven to be efficient by the individual actors inside of it over many iterations. The high-level thinking about profit in a sector is not that there is no profit in a sector ever. It's that if there is profit in a sector, more firms will enter that sector to eventually compete that profit down to zero. **Jackson:** [00:25:16] It has a half-life. **Chris:** [00:25:17] Right. But it's not saying there is no profit ever. **Jackson:** [00:25:22] I think maybe the reason I'm inclined to push you on this in particular is that of all the types of people, in some sense, it is your job, quite literally, to find the glitches in the efficient market hypothesis. Do you feel that's unfair? Or another way of thinking about this would be that in some ways your job is to harmonize everything you understand about the world, the fact that the efficient market hypothesis is the current of capitalism, and yet you're also looking for those blips of space to find the $20 bill. **Chris:** [00:25:58] Yeah, so on some level, yes. Holding to that analogy, I might add that from a system design perspective, it's really important for people who are trying to be change agents and push the limits to believe that the market is not efficient. **Jackson:** [00:26:29] Right. **Chris:** [00:26:30] If everyone thought that the market was perfectly efficient, nobody would innovate. **Jackson:** [00:26:32] Yes. **Chris:** [00:26:32] It would feel hopeless. And so it's really, really important for every founder, for every entrepreneur to truly, deeply in their bones, sigh off. **Jackson:** [00:26:38] Or any creative person, in some sense. **Chris:** [00:26:40] They believe that they can create something, and that is true. We run this Monte Carlo simulation and try to pick the lock of innovation, and somebody gets it right. Now, when you zoom out and you look at the system as a whole, the efficient market hypothesis is describing the behavior of the system over time and its consistency, not necessarily a snapshot. Yes, exactly. And so, I firmly believe in gravity. **Jackson:** [00:27:23] Right. **Chris:** [00:27:24] But that doesn't necessarily mean that things are touching the ground at all times. **Jackson:** [00:27:28] Right. Or that something couldn't leave the atmosphere. **Chris:** [00:27:30] Sure. Yes. ## Top-down vs. bottom-up thinking and companies [00:27:34] **Jackson:** This parlays nicely into an idea we've chatted about, and I don't know if you've spoken about it publicly, which is your orientation around top-down and bottom-up thinking. Maybe the right place to start would be that you've said at least once, it's hard for me to think in a top-down way. Maybe that's a good place to start in terms of what you mean by that. Then we can talk about why this framework is useful for investors, for company building, et cetera. **Chris:** [00:28:02] Sure. So, maybe I will caveat this entire section with: this is very much an alpha thought and a work in progress. It may also suffer from a semantic issue, where top-down thinking and top-down company may not mean the same thing. I'll start at a high level by saying that I think about the definition of top-down as you start general and then over iterations of thinking, you get to specificity. With bottoms-up, you start with specificity and then over time, you get to general. I think those are largely the principles that I would describe as top-down versus bottom-up. So, top-down thinking, what is that? I'm sure you have seen a market map posted by a venture capital firm where they say, "This is our industry, and here is the market map of opportunities in this industry." They have these sections carved out of this area, this area, and this area, "and these are the companies that are working in them." I think a top-down investor approach may feel like that, where you define the limits of the system and then reach your answer from the defined boundaries. **Jackson:** [00:29:42] The boundary of the game is clear up front. **Chris:** [00:29:44] Yes, right. That is not necessarily the way that I'm wired. The way that I'm wired is to find kernels of truth and then see how widely they can extrapolate. **Jackson:** [00:29:59] And it might be infinite. **Chris:** [00:30:00] It could be infinite. One of the really wonderful parts about venture capital and startups is that oftentimes, it is really hard to fully understand just how impactful some of these companies can be. It's incredible. We get to work in an industry where we talk to obviously tons and tons of founders, tons of companies. And just by the laws of the power law dynamics of it, not everyone makes it. But a handful change the world, fundamentally changing the way that we exist, which is kind of insane. And they start from nothing. So, I am much more wired to be this sort of truffle hunter, trying to find these kernels of truth and then extrapolate them and understand the limits of, or just how far the limit of their impact is. **Jackson:** [00:31:07] That describes the first part of what you described, which is bottom-up and top-down thinking. Conversely, at least I think your belief is that companies themselves have a bottom-up or top-down shape or profile or DNA. **Chris:** [00:31:23] Yes. Yes. I fear I will make some enemies with this dichotomy. But at the risk of making enemies, yes, I do think that there are largely two kinds of companies: top-down companies and bottom-up companies. There are hallmarks of each. Top-down companies are what we understand to be these sort of visionary founders. They have this idea in their head that they're executing against, and they're somewhat unattached to the means of execution against that goal. **Jackson:** [00:32:09] But the boundary of the game they want to play, personal computers or electric cars or whatever it might be, is pretty clear. **Chris:** [00:32:17] Yes, there's a clear heading that they're moving towards. One characteristic of top-down companies is that they ship many products over their lifetime. What are some examples of top-down companies that we know? Apple, Tesla, SpaceX, Amazon. These are founders that had a vision of the way that the future could, would be, and relentlessly execute on products to move towards that future. **Jackson:** [00:32:57] Just to pause you there for a second, one reaction here might be, oh, some of those companies started really, really specific. **Chris:** [00:33:05] Yes. **Jackson:** [00:33:06] Tesla started with the Lotus Elise. Amazon started only with books. **Chris:** [00:33:09] Yes. **Jackson:** [00:33:10] How do you square that? **Chris:** [00:33:11] Each top-down company starts with this general vision and then is boiled down to a specific go-to-market within that boundary. Yes, every single top-down company starts obviously with a specific product. It doesn't stay this general amorphous blob forever. The go-to-market has to be in a specific product, specific motion. Tesla, obviously the Roadster. Apple, you had the original Macintosh, the Apple 2, the Apple 1. But after that initial product, you have many other products that follow it because they're executing against the same vision. **Jackson:** [00:33:55] Growing back into that big boundary, in a sense. **Chris:** [00:33:57] Exactly, because each product is advancing incrementally more towards that ultimate goal. Bottom-up companies, conversely, only ever ship one product. They ship a single product. It is a really good product. They capture lightning in a bottle. It is such a good product, in fact, that the entire company forms around the goal to optimize that singular product and scale it to infinity, to see how far that product can go. So what you get culturally is you have bottom-up companies that are really focused on optimization, and you have top-down companies that are focused a little bit more on innovation. What is the next thing? **Jackson:** [00:34:53] Can you give a few examples of bottom-up companies first? **Chris:** [00:34:56] Yes. Bottom-up company, good examples of bottom-up companies: Google, Facebook, Airbnb, Reddit, Craigslist, Twitter. **Jackson:** [00:35:09] Is there an example of one that isn't like a software website type thing? **Chris:** [00:35:15] Hmm. **Jackson:** [00:35:18] Because, interestingly enough, almost all the first examples you gave are like atoms. They're making products or delivering products. And almost all the examples you gave in bottom-up are digital. They're bits. Perhaps that's just a pattern. **Chris:** [00:35:32] Sure. The first example that comes to mind is Nike. **Jackson:** [00:35:39] Nike is top-down. **Chris:** [00:35:40] Nike is a bottom-up company. Here's a good litmus test. Remove the product from the company. Is it still a company or how good is the company? Let's take Apple. You remove the iPhone from Apple, you have taken a big, healthy organ out of this body, but it's still a great company. It has its laptop division, all these other things. It is still, by and large, a very valuable company. **Jackson:** [00:36:12] Right. **Chris:** [00:36:13] You take Amazon, you remove Amazon Web Services, you still have e-commerce. You remove e-commerce, you'll have Amazon Web Services. If you take like shoes out of Nike, what even is it anymore? **Jackson:** [00:36:28] Yeah, it's a little less pure than Google as an example, in part because Google products can't evolve forever. **Chris:** [00:36:33] Right. **Jackson:** [00:36:34] But the core ethos is there. **Chris:** [00:36:36] Right. If you remove Google Search from Google... **Jackson:** [00:36:41] Yeah. In some sense, Nike is optimizing shoes for 50 years. **Chris:** [00:36:45] Yes, that's right. **Jackson:** [00:36:48] And even Tesla now has batteries and robotaxis and all these things. **Chris:** [00:36:52] Yeah. I would argue, thinking about it, a lot of physical brands are bottom-up because there is a reflexive motion between brand, the consumer purchase of brand, its understanding, and optimizing that brand and how consumers understand it to expand margin. **Jackson:** [00:37:17] Right. This is obviously interesting and useful for people who are investing in new things. Can you talk a little bit about why you think this is broadly applicable? Whether somebody's thinking about joining a company, somebody who runs a company thinking about what their company is, maybe even a public market investor. It's very easy to map to the VC headspace. Why? And part of your implication, by the way, I think, is that you can't change, and which one you are actually matters a lot. **Chris:** [00:37:46] Yes. So I will say that I don't think that. I think the top-down nature and bottom-up nature is encoded at a DNA level of the company. It is calcified as the company grows because every layer of personnel that is hired is hired to either optimize or innovate. It's one of the two, and it's like making a jawbreaker. You start with this core, and over time, you're creating every incremental layer. It gets large enough, it's immutable. It's calcified. So what does this mean? It means that, you know, I'm sure you've heard the meme of, "No Google APM has ever started a company." Why, right? **Jackson:** [00:38:37] Well, Google has started other things, other research projects, and eventually Waymo. **Chris:** [00:38:41] Well, so let's take the Google APM. No Google APM has ever started a company before. It's because to become more senior at Google, you have to be really good at optimizing, not be really good at innovating. **Jackson:** [00:38:54] Especially if your core job is on the core part of Google. **Chris:** [00:38:57] Exactly, exactly. **Jackson:** [00:38:59] They had so much extra cash that they ran some side projects. **Chris:** [00:39:03] Yes. So I think, what does it mean to work at a bottom-up company? It means that if you are working on the core product, it's probably pretty exciting. And if you're working on anything that's not the core product, well, that will never be the core product. **Jackson:** [00:39:25] Which is totally the opposite of Apple. **Chris:** [00:39:29] Very much so. If you are working at a top-down company, there are constantly new product initiatives. I would maybe conceptually think about a top-down company as a root system underground, where trees grow up from it. But every new product is a new tree. The breadth of the root system underground is hard to fully internalize except when you see trees break through the ground. **Jackson:** [00:40:04] Right, right, right. **Chris:** [00:40:05] And so I think, what does this mean in company analysis? I think every time you see a bottom-up company posture, advertise, or market a new product, it's never going to work. **Jackson:** [00:40:20] It's like Twitter and Periscope. **Chris:** [00:40:22] It's just never going to work. Discord game store, not going to work. Meta Horizons, not going to work. None of these bottom-up companies are capable of shipping new products because their entire corporate apparatus is around optimization. **Jackson:** [00:40:42] Facebook, or Meta, with maybe the single exception over 20 years of Reality Labs, which came out of Oculus, has basically never really shipped anything new, despite having many products. They optimized Facebook, and then they bought more products and continued to optimize them. **Chris:** [00:40:58] Yes. A hallmark strategy of product footprint expansion for bottom-up companies is M&A. So Meta buys Instagram, Meta buys WhatsApp. YouTube is purchased by Google and is now a very large part of the entity. But these products aren't born from within these companies; they're acquired. When you are large and calcified as an optimization engine, the way that you ingest innovation is through acquisition of companies that still have that innovative dynamic, not necessarily tasking anybody internally with it. **Jackson:** [00:41:44] People will come up with nitpicky examples. You could talk about Google and Gmail, or Waymo, or whatever. I think the broad essence of the thinking here is that understanding the natural tendency, inclination, or almost flow of the water for a company's shape will be really helpful in understanding what is likely to happen over time, even if there are exceptions. **Chris:** [00:42:08] Yeah, what is the state of entropy for this system? **Jackson:** [00:42:11] Twitter is a product that has had eight different leaders, different ownership, and it's the clown car in the gold mine that's been there the whole time. **Chris:** [00:42:19] No. Furthermore, no product except the core product of Twitter will ever work. **Jackson:** [00:42:27] And you're also specifically talking about it from a commercial standpoint, right? **Chris:** [00:42:30] Sure. Airbnb is an incredible company, incredible leader, creative leader, great team. It feels like Airbnb has tried to make experiences work for a really long time, and they're just not going to. It's just like they're not going to be able to make any new product work except the core product of Airbnb. And so, really, I would argue that in order to grow as a company, you should optimize that core engine, or there should be a view of M&A to expand the product footprint. **Jackson:** [00:43:14] With all this thinking, it seems bottom-up, the core product is really what matters, and how you should think about the company's long-term success and how wide that can go. **Chris:** [00:43:26] Yes. **Jackson:** [00:43:27] Conversely, it seems that top-down companies are actually very much about vision and leadership. I'm curious if you've noticed or have any theses around what makes for a really great top-down leader, the prototypical example being Steve Jobs or Elon. What makes for a really good top-down leader, assuming that's the existentially important thing in a top-down company? **Chris:** [00:43:50] You have to be able to recruit incredible people. Let's talk about the importance of the personnel at the organization. Bottom-up companies: how do I even describe this? You can cut 80% of the headcount in a bottom-up company, and it still largely works. Like, what does the chief product officer at Craigslist do? It's just funny to think about. And so, when Elon comes into Twitter, cuts 80% of staff, it's because it is lightning in a bottle. It's because it works, and it's because, to some degree, it kind of doesn't matter who's running it, because that's how good the product is. **Jackson:** [00:44:38] There can be optimizations made in terms of how the scale works and all these things, but substantive changes are unlikely. **Chris:** [00:44:46] Yes. If you cut 80% of the staff at SpaceX, the next rocket ship explodes. **Jackson:** [00:44:52] Right. **Chris:** [00:44:52] You can't cut 80% of the staff of top-down companies. And so, top-down leaders have to be really, really, really good at recruiting. What are the sort of maybe second-order implications of this? Founders are probably more likely to come from top-down companies than they are from bottom-up companies. **Jackson:** [00:45:15] Meaning previous employees who would be founders. **Chris:** [00:45:19] Yes. **Jackson:** [00:45:21] Or if you're thinking about joining a company that's promising you this inflection point due to this new product they're about to ship, and in fact, they're a bottom-up company, there might be some reason for doubt. **Chris:** [00:45:31] Yeah, particularly the more senior somebody has been at a bottom-up company, the more specialized they are in optimization rather than innovation. **Jackson:** [00:45:47] Cool. I'm sure there's more to pull apart there over time, and maybe even in a Google Doc. **Chris:** [00:45:52] If you're a public market investor, I think you basically have to discount every single new product announcement of any bottom-up company. Simultaneously, top-down companies are chronically undervalued in between product lines because the market can't see the root structure underneath. The market can only see the trees that emerge from the ground. Before SpaceX launched Starlink, people could have said, "Well, how big is the space launch market?" And then all of a sudden Starlink is out there. It's like, "Oh, wait, this is all of telecommunications." It's really hard to see the underlying root structure, the fitness of the innovation flywheel that underpins these new products that emerge from the ground. Top-down companies are just chronically undervalued in between product launches. **Jackson:** [00:46:54] And perhaps the inverse is true for bottom-up companies in that when people are underrating the reach of the core product, they are being undervalued. **Chris:** [00:47:04] Yes. **Jackson:** [00:47:06] Just maybe a little less common. **Chris:** [00:47:08] The way that bottom-up companies are underestimated is in market size. **Jackson:** [00:47:14] Right. **Chris:** [00:47:15] The classic example is Facebook. If you invested in Facebook Series A or C, you're like, "How big is the college social network? How much money can you really make off college students?" And what you would be missing is, wait, this actually doesn't apply just to college students, it applies to everybody in the world. Bottom-up companies are almost like a crystalline structure. At an atomic level, it is the same. If you break off a piece of a crystal and you put it under a microscope, it looks the exact same in one area as it does any other area. It's just how wide that crystalline structure has been expanded. **Jackson:** [00:47:58] It's not a company, but you could make this case for the entire crypto market. **Chris:** [00:48:04] Am I prepared to... **Jackson:** [00:48:06] We don't need to open that can of worms. Maybe Bitcoin. Okay. ## First-to-market vs. best-to-market [00:48:09] There are two ideas that I think are particularly useful around the approach to starting a thing. The first is first-to-market and best-to-market, and the notion of what is the right timing or the right arrangement of the chess pieces to begin, assuming a market's going to be really successful. I would love for you to interrogate how you think about evaluating first-to-market and best-to-market from the standpoint of how much being early is rewarded, whether that be a historical example like Facebook and MySpace, or a modern example like AI, or something in the future. **Chris:** [00:48:48] For better or for worse, I think that due to survivorship bias and early first-market companies kind of getting taken out early, most of the examples that we have to draw from are best-to-market examples. Let's walk through some of them. MySpace was a really successful social network. Friendster, too. I believe Friendster sold for $80 million, and MySpace sold for $580 million or $850 million to News Corp. Back then, that was a lot of money. This was a very successful exit for a social network, even before we really understood the power of these things. But Facebook is worth hundreds of billions of dollars. Clearly the best to market in the social networking category, and the lion's share of enterprise value goes to them rather than any of the quote-unquote "first to markets." As a founder, if you are first to market, you're not competing against anyone. You're not trying to substitute out. You're not addressing a pre-existing user behavior. You're actively trying to be the first attachment of a user behavior. And if you're not first to market, well, your strategy is definitionally best to market. You are trying to replace, for at least some subset of users, largely the early adopters, you're trying to replace the pre-existing product that they're using. It's not to say that you aren't going to be the first product that a normie uses, but for the early adopters, you are trying to replace the product that was probably an earlier mover, a first to market, or maybe an inferior best-to-market competitor. Now, I don't think anybody starts a company not trying to be best to market or just trying to be first to market. Maybe there are some founders out there that are particularly savvy about timing markets and technology. **Jackson:** [00:51:17] I think people spend a lot of time thinking about trying to time technology and time markets, for what it's worth. **Chris:** [00:51:24] Sure. Arbitrage windows are attractive. **Jackson:** [00:51:27] What's your AI strategy? What GPT wrapper are you going to start in the three years before superintelligence makes starting anything not worth it anymore? **Chris:** [00:51:37] The explosiveness of value creation, when it is palpable, certainly inspires a lot of people to start companies. But I would argue that the vast majority of people start companies with the hope that they are ultimately the best product. I don't think there are very many people that start companies aspiring to just be the first product that people use, but not necessarily the last product. **Jackson:** [00:52:07] In some sense, maybe even being first will allow me to eventually be best. **Chris:** [00:52:10] Yes, exactly. First to market and best to market are most suitable as descriptors later on in the evolution of an industry. **Jackson:** [00:52:26] Right. **Chris:** [00:52:26] To understand the position that each company has played in the unfolding of the industry. But it's perhaps less valuable to use that framing at point of inception. **Jackson:** [00:52:42] Is there a world where it actually maps, at least in some degree, to some of the top-down, bottom-up stuff? Is there a world where, more often than not, bottom-up companies and products are more likely to be first to market in that they're emergent and new, and top-down is more likely to see something that seems compelling as a design space and prescribe a right or quote-unquote "best" way of doing it? **Chris:** [00:53:10] Hmm. **Jackson:** [00:53:11] In a way that's more helpful, at least at the starting point, and is for somebody who is considering starting a company or joining a company and trying to evaluate that trade-off of where the company sits in the playing field. **Chris:** [00:53:22] Again, I think due to survivorship bias, the vast majority of recallable examples are definitionally the best-to-market examples in their category. I will say that bottom-up companies that are really successful have a higher chance of being both first-ish to market and also best to market. **Chris:** [00:53:50] The prior art for Airbnb was couch surfing, arguably, but couch surfing wasn't monetized. Vrbo was still squeaky clean within the bounds of regulation. Airbnb was really the first to market to commercialize, in a transaction, a standardized homogenous transaction on a marketplace, this idea. And it is also the best market. There are some counter-examples. Google was not the first search engine, but it is the best search engine. Facebook was not the first social network, but is the best social network. Ebay was largely the first auction site, as I believe it was called Auction Web, and is also the best online auction site. **Jackson:** [00:54:49] Maybe the most helpful takeaway would be that, to the extent there is an opportunity to become best by being only, there's uniqueness there. **Chris:** [00:55:03] Bottom-up companies tend to possess what we understand more traditionally as moats. **Jackson:** [00:55:10] Right, right, right. **Chris:** [00:55:12] And those moats protect the company as it scales from challengers, and it mitigates incremental attacks of would-be best-to-market competitors. **Jackson:** [00:55:24] Right. **Chris:** [00:55:24] Top-down companies, there are certainly a number of top-down companies that have maybe quote-unquote moats, but they don't enjoy them to the degree with which we understand network effects, for example. That's much, much more common in bottom-up companies. ## Cost of capital and when venture capital makes sense [00:55:44] **Jackson:** Another idea that may be more topical now and in the near future than ever is the notion of the cost of capital for people raising venture capital, raising money to start, raising equity to start companies. I think a concise explanation you have is that, without a sufficient answer to the question of "why now," any venture capital invested into the company or category is subsidizing company building that would be better served by alternative capital instruments — instruments with a lower cost of capital, i.e. debt. It seems that investors are very attuned to the cost of capital, even raising bigger and bigger funds, all these types of things. And yet entrepreneurial people are perhaps on the opposite end of the spectrum, at least around how expensive it might be to sell equity in a business. Do you want to talk about that and why people should be really thoughtful around whether venture capital is the right way to fund what they're going to do? **Chris:** [00:56:45] Okay, so I think there are a number of confounding variables when talking about this. One of the confounding variables is, is the supply side of capital efficient? One could make the argument that the supply side of capital in venture capital is plagued by the principal-agent problem and really long feedback loops. So the corrective feedback loops for the supply side of venture capital are not as tight as they could be. And so you end up with venture capital firms that have large funds that they are incentivized to deploy to raise their next fund because the fee stream off of their AUM base is meaningful. So they're incentivized to deploy capital, they're incentivized to deploy the capital so they can raise their next fund, and they're incentivized to raise the next fund to maximize the fee stream. You multiply this by dozens, if not hundreds, of firms, and you have this glut of venture capital. You have individual actors at these firms that sometimes can be completely price-insensitive. Let's say you have a junior partner at a venture capital firm, and they are trained to be a heat-seeking missile because they're gunning for a promotion. All they care about is momentum in a deal, and they'll pay whatever price for that momentum because that is more likely to guarantee them a promotion in the short term versus, are they actually investing in a company that has durable, defensible free cash flow at terminal state? **Jackson:** [00:58:35] Okay, so doing something is better than doing nothing, also. **Chris:** [00:58:38] The vast majority of investors at firms will outsource their restraint to the firm. **Jackson:** [00:58:51] Right. **Chris:** [00:58:53] And so you have this like, by the way. **Jackson:** [00:58:55] It is an opportunity for entrepreneurs as well. **Chris:** [00:58:58] 100%. I mean, look, if you were selling something and you knew that the bidders on the other side were price insensitive, it changes your calculus of what your clearing price is. **Jackson:** [00:59:14] Right. **Chris:** [00:59:15] Value is in the eye of the beholder. Well, if the beholder is kind of drunk, the value goes up. And so the question is, okay, is the supply side like, quote unquote, perfectly rational, or is there this exogenous factor that's impacting the size of the supply side and therefore the average market clearing price of a transaction in venture? When I say, if there isn't a why now for a company being created, venture is largely way more expensive as a financing instrument for that company. It's because, well, one, it assumes that the capital market is efficient. The second thing is a lot of companies that are starting on the back of a fundamental technological change or regulatory change, they have pretty big J curves that they need to go through, whether it's capturing market share or developing a product before shipping it. It's pretty rare for them to have revenue that they can predictably optimize, and maybe even optimizing for revenue is premature and ultimately hamstrings their ability to capture the fullness of the market that they're targeting. And so the high-risk, high-reward capital instrument from venture capital is really well-suited to these companies that have a really high mortality rate. **Jackson:** [01:00:53] And who need to get to the future fast. **Chris:** [01:00:55] Exactly. **Jackson:** [01:00:55] They're almost pulling the future forward with money. **Chris:** [01:00:57] Exactly, exactly. If I told you I was starting a lemonade stand tomorrow and I want to raise venture capital for it, I think an easy first question that most people would ask is, well, why don't you just get a small business loan? Or why don't you borrow money from, you know, isn't there an easier way for you to finance the creation of this thing? Also, by the way, you're generating revenue from day one. So, as you scale this business, it should be a little bit clearer, more clear to be able to borrow against the revenue that you're creating rather than needing to sell equity in your business to finance it. A lot of, quote unquote, true venture-backed companies don't possess those characteristics and have to build out. You know, a lot of these companies are operating for years without turning their. **Jackson:** [01:01:53] First dollar of revenue structurally, not just out of preference, but literally by necessity. **Chris:** [01:01:57] Exactly. The J curve is deep that they have to dig into. **Jackson:** [01:02:00] But how common is that? And maybe the presupposition in my question is, as software gets cheaper to create, as an example, some of the things that may have been true five or seven years ago are no longer true about how much you need to buy the future forward. **Chris:** [01:02:16] Very, very, absolutely. I would argue that there's a large swath of, like, software out there that is revenue generative from day one, that has no need for venture capital. **Jackson:** [01:02:32] And that's particularly more true today than it was even two years ago. **Chris:** [01:02:35] Absolutely, absolutely. **Jackson:** [01:02:36] Yeah. **Chris:** [01:02:37] I mean, there are plenty of examples of the capital efficiency of software businesses, and venture capital is really expensive. It's really, really, really expensive when you think about it from an equity perspective. **Jackson:** [01:02:54] I think the sad fact of the matter is many people aren't even really thinking about optimizing for owning as much of the company someday because they don't value it that highly. **Chris:** [01:03:06] Yeah, I mean, we're going back to principal agent problems. When it feels like monopoly money to founders and venture investors. **Jackson:** [01:03:16] Yeah, the whole everyone in the game. **Chris:** [01:03:18] You lose a sense of the worth of a dollar. ## How Chris finds new things and how he curates what he consumes [01:03:28] **Jackson:** You are one of my favorite people to talk to because you are an original thinker. I think there are a bunch of components of that in terms of how you learn, where you get your information, how you explain, and how you teach. Maybe something inside of the orientation towards thinking in a bottom-up way is that, at least my read of you, is very much that you're someone who sources ideas via discovery more so than hypothesis, although obviously, there's both. I'm curious, one way you've articulated this is like "hang out on the edges of the internet, hanging out in fringes." So much of information flow has shifted from pull to push as algorithmic content platforms have come to dominate. So when it comes to your safaris, your unique discovery, which is not mainstream—it's almost like finding uncommon music that's good or something—are you finding ways to still pull? Or are you just really good at putting yourself in contexts or areas so that the content that gets pushed to you is unique or different? Broadly, how do you find—how do you do your discovery in a unique way in the year 2025 when scarcity is rare? **Chris:** [01:04:47] My answer to this is twofold. One is, I think the first cut is actually the kind of content. What I mean by that is I spend zero time consuming content that is understood as social media from people that I know. If you looked at my screen time, I don't spend any time on Instagram or Facebook or Snapchat. I love my friends. I'm really not interested in spending my time consuming information from my social graph. **Jackson:** [01:05:34] It's not about who, it's about what. **Chris:** [01:05:36] I spend 100% of my time on the internet consuming information from people that I do not know, that I do not consider friends: Reddit, TikTok, Discord servers. **Jackson:** [01:05:53] For what it's worth, I would argue this would be a version of you being pre-consensus in some sense, which is this has been the shift for everyone's consumption behavior as the internet gets more mature. You look at something like TikTok compared to early Facebook. Everybody else is kind of doing more of what you've been doing, right? **Chris:** [01:06:11] Yes, yes. And I don't follow anyone I know in real life on TikTok. I don't follow—I mean, I have a lot of friends I've made professionally through Twitter, but I don't really follow any of my real-life friends on Twitter. **Jackson:** [01:06:26] Right. **Chris:** [01:06:26] I'm not looking to overlap those two things. I'm just trying to find signal from communities and parts of the internet that I believe to be assembling around things with high potential. What's interesting about hanging around the edges of the internet is, based off of the efficient market of people allocating their own time, a lot of these hobbyists, a lot of these early adopter communities, they're doing so with really critical judgment of how they allocate their time. More often than not, when they assemble around these emergent areas of potential, the "why now" is answered, even if it's not fully visible in that time, just because the tailwind is there 100%. **Jackson:** [01:07:26] And anyone who's ever—most people aren't doing this holistically in the way that you are, but anyone who's ever found themselves in some niche relatively early when it comes to a music scene or a hobbyist community or some kind of technology or some kind of weird YouTuber or creator or whatever, anyone who's experienced that in some forum— **Chris:** [01:07:44] Definitionally pre-consensus. They know what this can be and is definitionally pre-consensus, definitely taking advantage of something that is early on in its adoption curve. **Jackson:** [01:07:53] Because people are showing up there despite the odds, in a sense. **Chris:** [01:07:57] Yep. ## Chris's ideation funnel: thinking > sparring > publishing [01:07:59] **Jackson:** We talked about this briefly, but when it comes to how you think, I see it as sort of... there are a few modalities. There's the internal interiority **Chris:** mode. Then there's you thinking verbally, often sparring with or explaining ideas to people. And then there's maybe the... I'll call it writing, but it could be any kind of mass media, which is making it more compact and solid and turning it into a blog post or whatever. Are you conscious about those three modes and how something has to sort of stay inside until it's at a certain breaking point, and then it can be discussed, and it sort of expands out the funnel bottom-up in a way? **Chris:** [01:08:43] Yeah, I think so. **Jackson:** [01:08:48] Maybe there are some crazy bangers that just haven't entered phase two yet. **Chris:** [01:08:52] Okay, I'll compare this to how some people get dressed. **Jackson:** [01:08:57] Okay. **Chris:** [01:08:58] So, my internal thinking is when you're trying to decide what to wear. You have an idea, and you kind of pull... you put some sort of outfit together. That is internal monologue, internal thinking. Okay, maybe there's something here. The external thinking--sparring conversation--maybe I would describe as rock tumbling, where you're talking with people. That's when you ask other people's opinions. You take a picture, you text your friends, "Hey, what do you think? Does this look good? Does it look bad? What's going on?" This is where you are echolocating with your friends and your network that you respect to try to have a higher-fidelity view of the thing that you have thought internally. **Jackson:** [01:09:58] It's probably a seed, though. **Chris:** [01:10:00] Yes. What are you missing? What are you not seeing? What is good about it? Maybe what's not so good about it? **Jackson:** [01:10:06] I'm kind of thinking about taking a risk here, but I'm not totally sure. **Chris:** [01:10:11] Exactly. But through that echolocation, you develop a higher-fidelity view of the thing itself. And then, once it is sufficiently high-fidelity and you're comfortable with it, that's when you walk out the door. And that is when you publish this thought. Now, maybe you got something wrong. Maybe you saw spinach in your teeth. But loosely, that maps to how I think. ## Is the internet actually good for us? What about capitalism? What rules above capitalism? [01:10:42] **Jackson:** You are a big believer in incentives, back to the efficient market hypothesis type of thinking. Something that I've been feeling increasingly as of late, and I've talked to lots of people about, is the notion that the core incentives of the internet, and possibly of capitalism, despite a whole bunch of access, GDP growth, and productivity growth, are not necessarily making our lives better. Despite all of the potential upsides--it should be great for agency and knowledge and learning and all these things--and yet most people's lived experience of the internet is sports betting, Instagram reels, and match-three games, sort of getting zapped. More than that, I think the expressed sort of Western mentality around it is, "I don't have control over it. I wish I was spending more deep attention in places. I'm lonelier than ever." So it seems that this thing is not serving us as well as we... in one notion just says, "Oh, we should all try harder to use our phone less." That doesn't seem to follow the "**Chris:**, incentives rule everything around me" view of the world. And you're also someone who, on one hand, is deeply commercial and rational and incentive-based, and also, as someone who knows you pretty well, has a pretty big heart and cares a lot about people. **Chris:** [01:12:06] The world has two sides: a for-profit world and a non-profit world. There are entities that are trying to drive profits, and there are entities that are not trying to drive profits. The for-profit world is as we understand capitalism and companies and all that: shareholder value. The non-profit world, or places that are not necessarily trying to drive profits, we understand as nonprofits and to some degree, religion and government, where the core focus is not driving shareholder value or dividends. For-profit companies are really good at pushing the world to the way that it will be. For-profit companies are very bad at being paternalistic. For-profit companies will give people exactly what they want. **Jackson:** [01:13:10] Right. **Chris:** [01:13:11] Exactly what they want. The nonprofit side of the world is really good at pushing the world into how it should be. **Jackson:** [01:13:22] Explicit counterweight. **Chris:** [01:13:24] The way that we think about, "Oh gosh, it ought to be like this." The nonprofit world is really good at being paternalistic. It's good at system-- We as individual actors kind of depend on the systems to imbue society and the system that we exist in with paternalism. Elegant system design understands all of the individual incentive structures and designs a system to funnel that incentive to optimal places. **Jackson:** [01:13:57] That presumes that there is a system above capitalism, right? **Chris:** [01:14:00] Sure. **Jackson:** [01:14:02] Do you think there realistically is today, or at the very least, that capitalism doesn't always win, or almost always win? **Chris:** [01:14:13] My instinctive answer to that is power is the system that exists above capitalism. **Jackson:** [01:14:28] Yeah, we've seen some tech people and venture capitalists make that jump. **Chris:** [01:14:33] I think power is a system that exists above capitalism, and power is not governed by money necessarily. Money is an input into power, but power is governed a lot by humans, the relationships that those humans have, bullets, arms, and not necessarily money. **Jackson:** [01:15:05] Right, risk, caution, all these. **Chris:** [01:15:07] Yes. And so if you were to think about, okay, what are the systems that exist as a superset to the corporations? It is nation-states and religions, and those are largely aligned around power. **Jackson:** [01:15:26] Yeah, it's hard to square some of this balance maybe then with some of the Peter Thiel-esque sort of libertarian, decentralized-- The notion of having our current capitalistic system without paternalistic counterweights seems challenging, I guess a little bit, with this view. **Chris:** [01:15:46] Say that one more time. **Jackson:** [01:15:47] One common view amongst people who are very pro-capitalism and pro-technology is also that a one-world government would be really bad, or overbearing governments or overbearing religions, or any of these paternalistic-style organizations. But yet, the critique of that I suppose here would be that decentralized systems, whether they be systems of belief like libertarianism or otherwise, or trying to establish decentralized regulatory systems, it's just far less likely to meet capitalism with the level of strength required to balance it out. **Chris:** [01:16:24] So maybe if I could tweak the framing of decentralization as competition, I think if there is competition, that is good. For example, think about how democratic-- So, you know, obviously we every American loves self-loathing. We talk about how bad our two-party system is. Think about how terrible it would be if it was a single-party system. **Jackson:** [01:16:58] Right. **Chris:** [01:16:59] You know who has single-party systems? Non-democratic countries. They have single-party systems. Competition is good. If there's not competition, we should be concerned. And so if the world was a-- **Jackson:** [01:17:09] The critique, by the way, is that Peter Thiel's whole argument around this type of stuff is we should let capitalism run. And then when it comes to critiques of capitalism or critiques of technology, e.g. the risk of single-party risk around world-ending bombs or bioweapons or whatever, a lot of people will tend towards suggesting consolidation of power or governance in the form of one-world government or the Greta Thunberg, whatever it might be. More competition on the power regulation governance side would allow what you're describing, and yet we don't totally always see that happen. It seems that, if anything, we're moving in the other direction, which is that there are more pleas for consolidation and more paternalistic behavior. So, obviously, I don't think you and I are going to solve this today, but it's an interesting thing to try to square. **Chris:** [01:17:59] Yeah, well, I mean... **Jackson:** [01:18:01] Competition around power is the core input that needs to persist, lest things get hairy. **Chris:** [01:18:08] I think I agree with this. We are safest and best when there is healthy competition of power. **Jackson:** [01:18:20] Right, right. **Chris:** [01:18:21] I think we're probably most at risk when there is no competition of power and monopoly because that depends entirely on the benevolence of the monopoly. **Jackson:** [01:18:36] On one related but more optimistic point, I think I've always been a believer that the Internet has been really net positive in just the way that it lifts agency. An idea that you've talked about that I'm quite interested in, and I really like, is that usually it's less about education than it is about motivation for getting people to do things that might be good for them. ## The internet as a lever on agency and ability to take risk [01:18:56] And there's this sort of notion around like, how do we have more agency in the world? Is there venture capital for people or better grant systems or things like this? Obviously, I always give the toy example of TikTok, of like, that maybe explains the education motivation thing, which is TikTok's like really, in some sense, has been a lever for agency for people to create stuff. Are you seeing stuff like that that makes you more optimistic? Are we getting better, despite all the critiques around attention and addictiveness on the Internet, of unlocking that motivation piece for people to have agency and do stuff? **Chris:** [01:19:33] Early on in the Internet's existence, I think there were a lot of people in education that were excited about MOOCs and Wikipedia and access to information. MOOCs are massive online, I forget what the acronym stands for, but like large-scale classes online. And I remember it was like this watershed moment when MIT and Harvard and Stanford uploaded all of their coursework. We thought that we would have all of a sudden we would have these millions of Harvard-educated people. **Jackson:** [01:20:17] By the way, this is the agency argument. This like, a kid with a smartphone in India has all the information a Harvard professor had in 1980, and like, it's all available. **Chris:** [01:20:24] Yes. And yet, I think we were faced, we were confronted with the clear reality that access to information is a much wider bottleneck than motivation to educate is. And so, your question, motivation to, like, how do we amplify agency in people? You know, I actually think the movie *The Social Network* was an incredibly positive psyop. Whether or not it's net positive for the people that monkey see, monkey do imitated or were motivated to start, I think, and this goes back to what we're talking about, like Nat Friedman, it is really good for more people to believe in themselves and to believe anything is possible. **Chris:** [01:21:30] Everything that we can do to instill that idea is good for the entire population and the system. This idea of American exceptionalism, this idea that you can do anything -- the more that we can beat that drum, the more that people, whether realistically or unrealistically, truly think that they can do anything, I think the better off we will be as a society. **Jackson:** [01:22:02] You have this idea that economic inequality is caused by an asymmetric ability to take risk. **Chris:** [01:22:07] Yes. **Jackson:** [01:22:08] In some sense, this is improving the ability or willingness, the motivation for people to take risk. **Chris:** [01:22:14] Absolutely. People who don't have the means to take risks because they cannot afford to are strictly limited in what they can do professionally. What happens is when you bound somebody's options, you end up with a completely different expected value function. The more that we can encourage, create environments that educate people earlier on to develop a fluency with risk, the better. **Jackson:** [01:23:04] Yep. **Chris:** [01:23:05] Now, there's a difference between risk and danger. Most parents will understand the difference. Your child standing on a block that could fall, and they could fall off and hurt themselves -- that is very different than your child trying to stick a fork in an electrical outlet. **Jackson:** [01:23:31] Right. **Chris:** [01:23:31] Developing a fluency with risk is really important, but at the same time, from a system design paternalistic perspective, we should protect people from danger. **Jackson:** [01:23:41] But allow for as much safe risk-taking as possible. **Chris:** [01:23:44] Exactly. **Jackson:** [01:23:45] Yes. **Chris:** [01:23:45] Very much so. ## Pace Capital: Values, Brand and Reputation, Truth-Seeking, and People ## [01:23:47] **Jackson:** Okay, we've talked a lot about how you think. We've talked a lot about your frameworks for investing and building companies and, frankly, the world. I'd like to zoom in a little bit. You run a firm called Pace Capital. You run it with your partner, Jordan, and a number of other wonderful people. Maybe unique to Pace, or at least uncommon in this domain, is you care a lot about brand. One of my favorite ideas around brand is this notion of -- I think it's like Steve Jobs talked about -- every time somebody interacts with your brand, you have a chance to incrementally improve their opinion of you or lower it. I think anyone who's interacted with you or Jordan or anyone at Pace has probably felt that. With that said, I'd love to hear you talk about the founding principles of Pace and to the degree, whether it was true then or now, the degree to which anything is holy or truly uncompromising. **Chris:** [01:24:52] Sure. I'll first say that I think that brand is obviously a term that we all understand and latch on to. I think the more important thing that we think about is reputation. They're similar but distinct. I think the way that we think about it is brand over time always converges to reputation. Your brand is what you will tell other people. **Jackson:** [01:25:37] Right. **Chris:** [01:25:37] And your reputation is what people say about you behind closed doors. **Chris:** [01:25:38] They're still both about this idea of like, "Well, what's going on? How do others perceive you?" But they're notably distinct. There's this screenshot from, I think it's the movie *Juno*, where these two characters are talking. One person says to the other, "Wow, you're so cool. It's like you don't try at all." And Michael Cera's character responds, "I actually try really, really hard." I do actually kind of think about that with the way that we're hoping to build Pace. We care a lot about our reputation. I think we're oriented to a few principles. We have a service orientation. We think that venture is a services business. If you were to really lay it bare, we sell capital. **Jackson:** [01:28:16] There's a lot of capital in the world. **Chris:** [01:28:17] We sell capital. There's a lot of capital in the world. Why would any one person choose any one salesperson of capital over another? I think we hope, we believe that it is because this industry is built on human connection and trust and reputation and guidance. We hope that the founders that choose to work with us do so because they find a deeper connection with us as partners and as individuals and as a firm than others. Now, reputation is something that you build one day at a time, one meeting at a time, one interaction at a time. It takes a long time to build that reputation, and it also can go away in an instant. **Jackson:** [01:31:19] Right. **Chris:** [01:31:20] It requires a sort of diligence of integrity, and it's important to program into the ethos of the company. So we have this deep service orientation. Embedded in that service orientation is that we're never in the spotlight. At best, maybe, maybe we are a third base coach. Right? We're like telling the runner to round third when they don't have their eyes on the ball. We're never in the batter's box. We're not building these companies. We're not putting the 100-hour weeks in building these companies. What we can offer to founders is perspective. We're in the crow's nest, not on the deck. It's important that we never forget that. One of the other core principles that Pace is built around is truth seeking. I think it feels, of course, it feels good to be right. It feels good to win an argument. It feels good to win a debate. But if that comes at the cost of making the wrong decision, that feels really bad. And so, this idea of truth seeking, we are the way that we work internally is closer to putting a puzzle together than it is a boxing match. There is some truth to be pursued, and every person can contribute to it equally. Whoever, there's no ego associated to more or less helping assist getting to the right truth of the situation. The thing that we need to optimize for is clarity rather than ego. Now, in an industry of very type A driven people, that is less common for sure. I think there are plenty of firms out there that are architected in a way that are optimized for really strong competition between people that have strong personalities. **Jackson:** [01:37:01] Mm-hmm. **Chris:** [01:37:01] And don't get me wrong, that's probably a good system design. **Jackson:** [01:37:04] Competition, baby. **Chris:** [01:37:05] Competition. We are competitive, and we're competitive with driving to clarity. We think about the quality of thought, the level of rigor with which we dissect and talk about companies and opportunities and founders, because that's the input of the process that we can control. I think the other thing that is holy or sacred at Pace is, if we do our best job, this firm is a collective of incredibly talented people. We sort of have this unofficial approach to hiring, which is: we want to hire people whose careers we would bet on regardless of where they are. And we kind of think about this firm as like maybe a, we've lassoed a bunch of shooting stars together. And gosh, that is so powerful. Pace, ideally, is a place where people can pursue excellence, hone their craft, learn from others, learn the most about themselves the fastest. And we want this place to be a great place to be, and of course, shooting stars are going to go off at some point. We want this place to be a great place to be and a great place to be from. ## A pre-mortem on Pace's failure [01:32:20] **Jackson:** Could you give a pre-mortem on Pace's failure? **Chris:** [01:32:33] This is a hard business. I think I read somewhere that there are fewer venture capitalists than there are professional baseball players. Maybe that actually is not true over the last four years. **Jackson:** [01:32:52] Minor leaguers. **Chris:** [01:32:55] It's a hard business, and it should be hard, right? There's a world realistically where you don't cut it. Now, do I think that is likely? No. But we all know that we live in this sort of probabilistically distributed world. So, is it a possibility? Sure. I think another way to pre-mortem Pace would be that the effort and time put into thought, thesis development, truth-seeking, and building frameworks is cute, but it doesn't stand up to the war machines that are other firms. **Jackson:** [01:33:55] Your intentionality was wrong for us. **Chris:** [01:33:57] Sure. **Jackson:** [01:33:59] I think you have to go down playing the game you want to and know how to play. ## The first piece for a theoretical Pace Capital art gallery [01:34:06] If you were going to start a Pace Capital Art Gallery, what piece would you use as your anchor? First or most essential, any medium. **Chris:** [01:34:24] So, I think it would just be a single installation, and it would be an artist. This artist, his name is Nam June Paik, no relation. He has a piece called the *Zen of Film*. What it is, is it's a roll of black film, blank, that's continuously running through a projector, and it runs 24/7. Now, film is an analog medium. It degrades over time, dust enters into it, so cracks emerge in the film. The idea of the *Zen of Film* is you know that it starts fully black, and you know that over enough time, it ends fully white. At any given time, an observer will see something different because the organic state of that roll of film changes over time. Somebody who sees it at the beginning will be different than somebody who sees it at the end of that film's life. I just think that it's this wonderfully beautiful encapsulation of ephemerality, the of time, of our interaction with technology. And like all good art, it makes us think. ## Questions for Chris about himself [01:35:55] **Jackson:** My last subject is a few questions for you about yourself. We'll go kind of not lightning round, but we can go through a handful. ### Is Chris's unique set of worldviews and thinking more due to nature or nurture? [01:36:07] You have an uncommon set of world views. We've hopefully put on display a little bit today in the conversation. In the way you think about the world, do you attribute that more to nature or nurture? **Chris:** [01:36:21] Before I was a parent, I think I would have answered nurture 100%. And on the other side of being a parent and seeing the sort of temperament that people are born with, I think it's probably not 100%. I still deeply believe that the vast majority of the way that we end up as adults is nurture and not nature. What is the good analogy here? Nature may drop us into an initial location, but the path dependency of nurture is sufficiently infinite that there is nothing close to fatalism. **Jackson:** [01:37:15] And you think it keeps going along beyond maybe most people might think it calcifies? **Chris:** [01:37:20] A hundred percent. ### What has Chris compounded most continuously? [01:37:21] **Jackson:** What have you compounded most continuously? **Chris:** [01:37:26] My knee-jerk reaction is curiosity. I am a new junkie. Every Monday, I get my new Discover Weekly on Spotify. I love it. I only recently learned that people like listening to music that they've already listened to before and that people like watching reruns. **Jackson:** [01:37:53] Revisiting stuff can be pretty great. **Chris:** [01:37:55] I agree. I agree. But I don't know if I've ever read a book twice. I'm not sure if I've ever read a book twice. **Jackson:** [01:38:01] I think with films and books at least, maybe given that they're rarely revisited relative to other mediums, I probably feel most strongly like you're much better off rewatching. I rewatch *Eternal Sunshine of the Spotless Mind* every four years, and every time I'm like, "That was just so much better than anything else." With music, I probably would be better off going the other direction. ### What Chris's best or favorite "investment" in the universe? [01:38:23] You have this quote: "The best long-term strategy in life is to make frequent karmic deposits in the universe." What is your favorite or best investment in the universe, or karmic deposit in the universe? **Chris:** [01:38:37] Wow. It is 100% sending a message to my wife, without a doubt. I'll date myself: it was a Gchat message. **Jackson:** [01:39:00] What made it karmic? Obviously the outcome, but... **Chris:** [01:39:01] That's a good question. Maybe the reason why I answered that is the payoff function is so astronomical that the quote-unquote IRR from any amount is near... **Jackson:** [01:39:20] Of a single trivial-ish action is near infinite. **Chris:** [01:39:23] It doesn't even matter how benevolent it was. It's just like, did it, did the thing happen or not? The best part about that approach, though, is if you do it authentically, you actually never keep tabs. And so, if you're asking like, what is like... **Jackson:** [01:39:41] What's a case for agency, I think. **Chris:** [01:39:45] Sure. I think I can't readily think of any example because you're just not a bookie. **Jackson:** [01:39:57] Yep, yep, yep. ### How do Chris use laziness as a lever? How might other people [01:40:01] How do you use laziness as a lever, and how might other people benefit from your learnings there? **Chris:** [01:40:08] So, I think laziness needs a rebrand. **Jackson:** [01:40:12] Okay. **Chris:** [01:40:14] I think laziness gets a bad rap. If you were to define laziness, I would argue that somebody who is lazy is trying to get to the same outcome but expend less work. It's not that they're comfortable with a worse outcome; they want the same outcome, but they just want to do it with less work going in. One way to do that is actually efficiency or even creativity. A lot of innovative thought comes from laziness, of wanting to improve the return function of something. **Jackson:** [01:40:59] Tough for David Goggins, but... **Chris:** [01:41:00] Yes. This isn't an argument against putting as much into your inputs as possible, but it might be a little bit closer to "work smarter, not harder." I love laziness. One might argue that every good thing we have to show for as humans is the result of laziness. **Jackson:** [01:41:32] It feels connected to constraint kind of begetting creativity, certainly. Maybe necessity is the mother of all invention; maybe laziness is the mother of all quicker invention, getting there more quickly. **Chris:** [01:41:46] Absolutely, yes. ### Meta-analysis and cognitive biases [01:41:50] **Jackson:** So much running through how you think is this meta-game analysis of reality. There's the game happening, and then there's the meta-game happening on top of the game. You've talked about the cat-and-mouse game of rational self and meta-analysis. I'm curious, what is your most common or dangerous failure case when you're wrapped up in the meta-analysis? Sort of missing the forest through the trees, perhaps? Not a perfect analogy, but... Yeah. **Chris:** [01:42:23] It's not if you are being subjected to a mental bias, it's what mental biases are you being subjected to. I think it's important to constantly remember that because it's natural for us to want to feel confident in our own views and self-assured. We have to hold our views basically at a healthy tension distance. I'll use this metaphor: we, as an investor, or even your view of yourself, you kind of are operating like a mafia boss. The way that you operate a large operation is through scale. You have to have things that you can depend on, and those things that you depend on are parts of your worldview. It's how you view yourself, these core assumptions, these frameworks that you're leaning on to parse through information and scale your impact. But here's the thing: you have to be paranoid about every single one of your lieutenants. **Jackson:** [01:43:49] Yes. **Chris:** [01:43:50] About their reports. **Jackson:** [01:43:57] Yeah. **Chris:** [01:43:59] Because they'll kill you. They want to kill you. They're trying to actively kill you. So if you have any, or maybe they don't want to kill you, but you have to be constantly on the lookout for any signal that any of them want to kill you, or you have misplaced your trust in them. Because if you trust, if you overly trust them, they will kill you. **Jackson:** [01:44:27] We do this thing in this context, too, that sort of resembles Gell-Mann amnesia, which is like, we presume that, yes, we've been so foolish and blinded by ourselves in the past, but now we see clearly. It rhymes with one of your favorite lines, which is, "This time it's different." **Chris:** [01:44:43] Yes, 100%. **Jackson:** [01:44:44] So it's sort of like there's a meta version of that all the time. **Chris:** [01:44:46] You're this mafia boss, and so maybe you develop some new level of self-awareness and you realize something about yourself. Oh, wow, that was so cringy. So you found a mole in your organization, you got rid of them. **Jackson:** [01:44:59] They're never going to be a mole again. **Chris:** [01:45:00] And there's, yeah, there's never going to be a mole again. No, no, no. The truth of the matter is, there is a mole, and it's just up to you to find where it is. ### How Chris hacks his brain: what's at the top of the user manual of being Chris? [01:45:11] **Jackson:** It's semi-related, but another idea that I don't know if I was rereading *Frameworks*, I think, and you have this idea of the user manual. I think maybe we've talked about this. I think about this sort of like an operating system for every person. And I think you say you can hack, engineer workarounds to avoid behaviors, do better. The best part of life is getting to intimately read your own user manual and sharing it with others. Many don't finish reading, others only make it halfway. Some never open the book. So my question would be, if someone was going to wake up tomorrow as **Chris:**, what would you put at the very top of your short list on the tips and tricks of using your user manual? **Chris:** [01:45:49] Oh, gosh. I mean, I have very dumb, simple, simplistic things. So, for example, let's say I'm trying to remember to do something before I go to bed. I'm not going to write it down on my phone. How do I set a reminder? I'll basically place a bunch of socks outside of my bedroom door. **Jackson:** [01:46:13] As a physical prompt. **Chris:** [01:46:14] As a physical prompt. So when I open the door, I'm like, "Oh, I have to remember to do that thing." **Jackson:** [01:46:19] It's sort of like a memory palace. **Chris:** [01:46:21] Yes, absolutely. Or like, let's say I'm in a situation where I don't have access to that, or I'm taking a shower and I remember, "Oh, gosh, I need to do this thing." I'll actually move my wedding band to a different finger, and I will only move it back to my ring finger when I have completed that task. **Jackson:** [01:46:42] It's funny how much this resembles the totem in *Inception* or the reality check for lucid dreaming. It's a jolt of awareness. **Chris:** [01:46:50] Yes. Yeah, I think it's because I don't do really, really well with to-do lists. **Jackson:** [01:46:54] Right. **Chris:** [01:46:55] My brain isn't organized that well to work through them, but I can sequentially process things very easily. **Jackson:** [01:47:01] Right. **Chris:** [01:47:01] Right. **Chris:** [01:47:03] One cue leads to another. **Jackson:** [01:47:05] Exactly. **Chris:** [01:47:05] And how do you use the emotions that you feel as a signal? For example, I would tell the new pilot of **Chris:**'s body, "Hey, by the way, when this light's flashing, which is low patience, that's actually the strongest indication that more patience is needed." **Jackson:** [01:47:38] Right. That one probably generalizes pretty well. **Chris:** [01:47:42] So that red light flashing doesn't mean push the frustrated button. It actually means you need more patience. ### Where is Chris most confident in the consensus view? [01:47:51] **Jackson:** We talked about pre-consensus and your desire to be ahead of the curve. Are there any areas for which you are most Lindy, or most confident that the classical, non-new, almost that the consensus is right? **Chris:** [01:48:11] I don't want to sound like a full-throated, red-blooded patriot here, but I have a deep, deep affinity for the country that we live in. I think it's the best country in the world. I think it's an incredibly elegant system design, inclusive of the two-party system and the Republic. I think it's awesome. It's one of the most beautiful things that humanity has created collectively, and I feel incredibly fortunate to be a part of it. Not a day goes by that it's not lost on me that just being born here was probably 90% of my success. **Jackson:** [01:48:57] Yeah, most of us don't cherish that that much. **Chris:** [01:49:00] Yeah. ### How does Chris apply pre-consensus thinking to his personal life? [01:49:01] **Jackson:** I interviewed our mutual friend, Tina, before you. Of course, you shared a generous question, and so I asked her to return the favor. Her question was, how do you apply your pre-consensus thinking and frameworks from your investing and professional life to your personal life? **Chris:** [01:49:18] Interestingly enough, I think my pre-consensus proclivities existed before being a venture investor. I think being a venture investor is actually just the snuggest fit of capitalism for my being. **Jackson:** [01:49:43] It's all any of us could ever hope for. **Chris:** [01:49:44] I love finding new music. I love finding new artists and restaurants. I love consuming new information. I'm a new junkie. My wife jokes that my hobby is starting hobbies, and so I can't get enough of things. I think it's one of the reasons why I love living in New York. The density of life here is amazing. It's incredible. It's why I feel very lucky to have been born while the internet exists because the internet is incredible. It's amazing. You know, the philosophical question: if you could live forever, would you? My instinct is yes, because I just want to know. I just want to know things. But specifically answering Tina's question, I fear that being pre-consensus on other aspects of life is also more insufferable because it comes with a superiority complex of, "Oh, that restaurant's not good." **Jackson:** [01:51:17] Keeping score is definitely less cherished. Keeping score and being a professional investor is pretty cherished. **Chris:** [01:51:25] It's most tolerable when it comes in the form of authentic, good recommendations, and it's most insufferable when it comes in the form of what's perceived as superior taste. **Jackson:** [01:51:35] Correct. ## Alignment: with Keely in life and Jordan at Pace [01:51:36] All right, penultimate question. You have one of your frameworks, or aphorisms, that is: optimize for alignment, not outcomes. You go on to say: if success is defined over long periods of time, the best way to ensure consistent collaboration between parties is to spend time on alignment. Outcomes are an output of the execution ability of the group, not an input. This is why value systems, manifestos, etc. are core to long-term business and professional relationships. I'm going to generalize it though. I would ask you about your alignment, maybe you could talk about it generally, but probably most interestingly in your two core relationships: alignment with your partner, Jordan, in business, and alignment with your partner, Keeley, in life. **Chris:** [01:52:19] Yes. **Jackson:** [01:52:19] What have you gotten right about alignment? **Chris:** [01:52:23] Well, first of all, I think both of them wouldn't necessarily be comfortable being lumped into the same sentence as the other. **Jackson:** [01:52:33] I apologize to both of them. **Chris:** [01:52:34] I'll answer those two separately. I think one of the things that I'm really proud of having gotten to alignment on with my wife is understanding how we both grow together. I think maybe one of the most important things to a successful relationship is our alignment of values. You understand not just who you are in that moment in time, but over time together, how does being with each other impact each of you as individuals? Do you like that? Is the vector of change for both of you over time going in the same place, going the same direction? And I'm incredibly grateful, incredibly grateful for that. I think we also have, we are also deeply aligned on our commitment to communication. I would argue that communication is the foundation of any relationship, personal or professional. It's because communication reduces information asymmetry between two parties. The less communication you are capable of, the more that information asymmetry exists and the higher the likelihood of miscommunication, misinterpretation, non-charitable interpretation exists. So I think communication is super, super, super important. We're really committed to it. Shifting gears to Jordan, I think similarly, actually, we have this commitment to communication that's rooted in this idea of truth-seeking. When we talk about people or investments, it's very much trying to drive to clarity. And that requires a high-fidelity level of communication and clarity between the two of us. We are also deeply aligned on values. When we think about, going back to reputation, what is the reputation that we want to have with each other, like as a firm? We're deeply aligned along the axis of PACE being a services-based organization. We're not in the spotlight. And also alignment on what this firm means to the people who are here. Deep, deep, deep alignment there. Now, we disagree a lot on investments. But if you showed me an investment decision where the investment committee was unanimous on it, I would be really scared. Because if the investment committee was wrong, it means that no one saw the truth. **Jackson:** [01:55:34] Yep. **Chris:** [01:55:35] And that's terrifying. So disagreement is competition, and competition is good. ## Every second counts [01:55:43] **Jackson:** All right, last and final. There is an episode of the Bear television show, a great show, great season two, episode seven, called "Forks," that I think was particularly resonant for both of us. There's a specific phrase at the end of that episode that I know is meaningful to you. Do you want to talk about that phrase and why? **Chris:** [01:56:06] There's a sign posted inside of the kitchen that Carmy, the main character, stages at. It's a three-Michelin-star restaurant, and he gets his own version of this sign to put in his own kitchen. It says, "Every second counts." And what does that mean? My brain goes to another scene from *Lord of the Rings*, a conversation between Frodo and Gandalf. Frodo laments to Gandalf, saying something along the lines of, "I wish we did not have to live in such times." And Gandalf responds, "Yes, me too, but that is not our choice. Our choice is what to do with the time that we have." It's this deep, deep, deep high-agency view, which is: Every second counts. Everything matters. You are capable. You are high agency. In the same episode of *The Bear*, another phrase is used: "Every day here is the freaking Super Bowl." I think it's important that everybody takes pride in what they do. There's something that I learned early on in my career, which was impressed upon me. For you, a meeting might just be one meeting during your day. But for the other person, it might be their most important meeting of the day, maybe the most important meeting of the week. You have to show up in that meeting with that internalization. You cannot phone it in. You can't cut corners. It's important to take deep pride in your work. I internalize the message of "every second counts" as: It is wholly up to you whether or not your commitment to the pursuit of excellence leads to it. **Jackson:** [01:58:41] Thank you. **Chris:** [01:58:42] Thank you. **Jackson:** [01:58:42] It was really fun. **Chris:** [01:58:43] Thank you, Jackson. This was great. This was really fun. **Jackson:** [01:58:46] See you guys next time. **Chris:** [01:58:47] Thank you.