Young, polymathic, and full of energy — Tommy Potter is on a quest to build a “CIA for Entrepreneurs.” He calls it “The Power Hour” — a startup community in Michigan that hosts dropouts, undergrads and PhDs across many industries: enterprise, consumer, CPG, aviation, gaming, robotics and AR/VR, as they work together to build cool projects.
I had a great time chatting with Tommy as we spoke about non-linear career paths, embracing authenticity, working with dazzling, delusional people and more!
I hope you enjoy this conversation as much as I did. We’ve shared some highlights below, together with links & a full transcript. As always, if you like what you hear/read, please leave a comment or drop us a review on your provider of choice.
— Jim
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Highlights
Taking a Non Linear Career Path is How You Win
“I had this theory that being nonlinear would give you 100% success. [To me] random nonlinear stories seem to always prove true. So whether that's from ARV or immersive media research, some investment analysis and publishing pieces there over to co-developing the space entrepreneurship curriculum with a good friend from Michigan and then moving into filming a documentary on homelessness in Ann Arbor for three months. Everybody thinks that you're all over the place. What are you doing? Find a niche. Dive deep, right? And I don't know, it doesn't really make sense to me. I think if you look at a lot of these top companies that are being built, even the top five and Fortune 500 right now, they're all built by these polymaths, these people that learn a lot about a lot of things. What's the quote? Jack of all trades, master of none, right? But then the second half of that quote is ‘oftentimes better than a master of none’”.
You Only Get Two Sentences To Pitch Yourself
“And so you really start to understand that you have to pitch yourself in two sentences. You get two questions, is what I realized over time. You get two questions. They ask you maybe where are you're from, where you go to school, and what are you doing out here? Then if they like you a little bit, or there was some sort of connection maybe with Michigan or from Illinois, they might follow up with, okay, where do you want to go and what are you going to do with your degree? Something like that. And I learned over time, over maybe the first month that the only way they could help me is if I said that I wanted to be in their shoes. And so I started to illustrate that I wanted to be right where you are, sir, Mr. Insert Name, and then light bulb, "Hey, I can help this kid." And so I don't know if it's not authentic to not illustrate your means specifically, but I think that that was a way for them to maybe assist me if I wanted to hopefully be in their shoes one day. And something I kind of learned as you start to get your one sentence pitch down, that's all you get.”
The Beauty of Diverse Communities
“I think that's the beauty of [OSV] similar to ours, that this isn't just one CS group of people and very technical talent. And you see a lot of those groups and societies and all of these brand names that you go through this accelerator, but it's only for technical people. We have a guy that has 7 million followers. We have a guy who's maybe a laser physicist, AGI researcher. Like a deep marketer, 10 plus million in revenue at age 20. Folks declining Doge. It's all over the spectrum because that's where I think these new ideas, these diverse perspectives come in rather than just one person being praised within that hierarchical system because they've had the most money raised, most traction, most results. And to me, that person isn't receiving, they're only giving some advice when you're kind of at that top”
Forming Communal Bonds
“There was this one time where we're sitting at the top of an apartment building for a hangout, I don't know, maybe 20 people, 40 people showed up. And you see at the beginning who maybe are some of the ones that not are transactional, but are there to quickly stop in and say, " Hey." Aren't there much for the group, maybe they're for themselves. Right? And the ones that stick around and you're there four, five, six hours. It's 2 AM. We're on the couch talking about philosophy, which government's going to win, anarchy, neoliberalism. And I remember that specifically this one time, I think it was 4 AM, and I was like, "Guys, I got to go. I got class at nine. I got to get out of here. You guys continue. Let me know which government wins, but I got to run." And many people think, "Oh, you're not talking about startups, you're not talking about the next idea?" Of course not. That's not the point. Because we're challenging each other's opinions, beliefs, and that's where I think a lot of progression is. It's almost a time for us to not even think about the next best company.”
Books Mentioned
The Third Door: The Mindset of Success; by Alex Banayan
One-upmanship; by Stephen Potter
Class: Style and Status in the USA; by Paul Fussell
Dignity: Seeking Respect in Back Row America; by Chris Arnade
The Science of Getting Rich; by Wallace D. Wattles
The Act of Creation; by Arthur Koestler
Transcript
Jim O'Shaughnessy:
Well, hello everyone. It's Jim O'Shaughnessy who Tommy basically said, "How the fuck are you so high energy?" And my answer was because I get to talk to people like Tommy Potter.
Tommy is a polymath, an amazing guy who we discovered not too long ago, and my chief of staff met him and he called me on the phone, he goes, "Jim, you absolutely are going to love Tommy. You got to have them on the podcast." That almost never happens. So already, Tommy, you're very special.
You are currently at the University of Michigan doing a self-designed degree. You got bored with high school because you thought it was all basically bullshit. I agree. But then you went to Austin and got a better thing going there. You are the head of Power Hour. I love this. The CIA for entrepreneurship, highest signal society for college kids in the world.
Tommy, please tell me you are not running a new version of MK Ultra.
Tommy Potter:
I hope not. I hope not.
Jim O'Shaughnessy:
Welcome.
Tommy Potter:
I appreciate it, Jim. Thanks for having me. It's a pleasure to be in your presence and in your orbit.
Jim O'Shaughnessy:
So honestly, going through all of your accomplishments at such a young age, first off, very impressive, but let's start at the beginning. Give me your origin story. I know that you've been hustling since you were five, lemonade stands, selling Girl Stout cookies. I loved seeing that because what one does when they're young often is a good indicator for what they're going to turn out as adults, but give us the origin story.
Tommy Potter:
Yeah, I don't think my sisters necessarily deserved those badges, I think. I was the one going door to door. But yeah, I think even Nick and I talked about this, that it was kind of the... There's that orange dot, which in Don Lowry's framework of color personalities, and it's that athlete, it's that person that is a spontaneous, adventurous, and the competitive drive to win. And I think that's always been innate for me, hence Yankee Candle fundraising and such. But yeah, I think it all kind of transpires from a small town, Moline, Illinois. John Deere headquarters is my backyard, so it's nice to have a Fortune 500 company in the middle of nowhere.
And then, yeah, from 12 to 18 was completely competitive golf around the country. And I loved to look for that exceptional, not to say that was exceptional on my end, but exceptional talent that isn't related to building whatsoever in young entrepreneurs and founders, trust masters, Olympiads with math, et cetera. I think that exceptional talent directly translates over to exceptional building and exceptional passion. But yeah, that was from 12 to 18. Major, major golf every day, a lot of time on the course.
And then, yeah, for the latter half of high school went to the University of Texas online high school. And that was a way... I think online high school was even more hands-on than in-person high school. I'm sure this might be a little topic that we should probably discuss because I'm curious even your thoughts on these rudimentary systems and industrial age systems.
But yeah, I never saw the value in eight hours of school, five hours of homework, and then not much left to do much else. And I think many people don't take action to actually get out of that system that you're kind of indoctrinated into. But instead, for me, I was like, "Let's move. Let's get the hell out." And yeah, online high school was for me. I started building solar houses in my living room, studying the pH levels of the Mississippi River in the backyard, and was even more hands-on, I think than in normal school, and you start to see these alternative schooling... It's starting to pop up. Stanford's online high school, UT, kind of the top one and two. You have Ad Astra with Elon Musk and his new school. Sandbox is even another one in college where they'll allow you to build.
And people in Utah churning YC companies. It just shows... Are these builders in Utah, not necessarily, but if you give the time and allocate the time and resources to builders and just letting them build you, you'll get into some pretty interesting accelerators and build some pretty good companies. So I think that's kind of where it all begins is this Charlie Munger inspired theory to learn a lot about a lot of things transferring into Michigan now, created my own degree in business, psychology, philosophy and poly sci, very, very human centric and love learning people.
Yeah. Now, that kind of brings me into saying yes a lot freshman year. I had this theory that being nonlinear would give you 100% success. I'm curious your thoughts on that, but random nonlinear stories seem to always prove true. And almost if you can purposefully live very random, very nonlinear. I'm curious if I'll be successful with that. So whether that's from ARV or immersive media research, some investment analysis and publishing pieces there over to co-developing the space entrepreneurship curriculum with a good friend for Michigan and then moving into filming a documentary on homelessness in Ann Arbor for three months. Everybody thinks that's so you're all over the place. What are you doing? Find a niche. Dive deep, right?
And I don't know, it doesn't really make sense to me. I think if you look at a lot of these top companies that are being built, even the top five and Fortune 500 right now, they're all built by these polymaths, these people that learn a lot about a lot of things. What's the quote? Master of none? Jack of all trades, master of none, right?
Jim O'Shaughnessy:
Right.
Tommy Potter:
But then second half of that quote is oftentimes better than a master of none.
Jim O'Shaughnessy:
Yeah. So wow, a lot to go on there. We'll get to high schools in a bit because I completely agree with you. They were designed by industrialists, essentially with the marching orders. Yeah, we need you to train people to sit placidly for eight hours, follow instructions, and do it without complaining. And voila, you got your public high school system in the United States of America, and whenever you change the dominant zeitgeist of an era, you see it ripples out. And it's not just one segment, it's all of society.
What few people understand is the change from the age of monarchies to the age of democracies, the age of scientific inquiry, et cetera, that was rough. They had a little war called the Napoleonic Wars because the old system was collapsing, the new one was emerging, and everything needed to be changed. And sometimes you can do it just right as I think the American founders managed to do.
Sometimes you can take it way too far like our friends in France with the Reign of Terror. But what comes out on the other end is a completely reordered reconfigured system, and we are still in the death throes of the industrial era, moving into the era I hope of abundance and people having a lot more choices in their life. But cultural lag is a real thing and it takes a while to reorder stuff. We invest in an offshoot of Ad Astra called Synthesis Schools, which does AI tutors for math and soon-to-be-other subjects. The results, you really can't debate them when you look at those kids and what... You take kids who self-reported hating math and make them love math and not only love math but be really good at it, it becomes pretty evident that the alternatives are going to ultimately be the new way of doing things.
But we're going to have to do a lot of pushing and a lot of rooting for that type of stuff because stasis is rough, but that's the way we've always educated our kids. Well, yeah, it doesn't work. Trying to install a correct answer machine in young minds, I think is laughably idiotic. And what we should be doing is say, "Hey, Tommy, figure it out, man. Show me. Show me what you're thinking about." You should have a lot of free time to explore, to do all of that kind of stuff. We'll get to that in a bit, but I'm also was really interested on the golf angle because you turned down a lot of internships, traditional internships because you wanted to be a caddy in the Hamptons for rich guys. Tell me what was driving your thought process there?
Tommy Potter:
Yeah, I am not one for formal programs as you can probably tell already. And so freshman year, most people would flaunt different ideas out there, maybe go back home, maybe do an internship if you're lucky. And for me, I think there's this amazing book called The Third Door. I'm not sure if you read it. I've always loved being able to backdoor into circles that I'm not supposed to be in. And for me, that would've been the Hamptons, obviously from a small town, not my usual scene, but had some good golf background and some experience there.
So kind of cold-emailed 200 real estate agents to find me a place to stay in a woman's basement. And for 90 days it was like 12 hours caddying, two hours playing pickle ball with their wives, two hours chauffeuring them around in their Range Rovers at night.
And this was a way that I think I realized instead of just building a relationship with some of these important people, that are in the Hamptons, I was able to rapidly expedite some of these relationships over multiple contexts and multiple settings because if you just have a working relationship, it's not as great as maybe when you see them drunk or maybe when you see maybe their family, kids, wives, et cetera. I think that expedited some of the relationships. And I was able to [meet] very, very [interesting] hedge fund, very real estate, I think group of people out there, but it was a very unique 90-day experience. It was actually directly after the homeless documentary that I filmed in three months, so one week in between and it was bottom of 1% of America, top of 1% of America. And that was an insane kind of switch and a kind of surreal six months overall. But yeah, I was able to get into a decent club out there and it was a good time.
Jim O'Shaughnessy:
There's a great book you might like, it's old, so it might seem antiquated, but it's by a British guy named Stephen Potter called One-Upmanship. And I suspect that there's a lot of that going on out on Hampton golf courses. There's another one by Paul Fussell called Class, which would speak directly to your experience from going from the bottom 1% to the top. His theory is... He's wickedly funny, Paul. And his theory is that... He doesn't do traditional classes like there's working class, middle class, upper middle class, rich, et cetera. He has a much more detailed group of classes.
But the joke is, as you get to the end of the book, he says that what he calls the top out of sight, those are the folks you were with, are identical to the bottom out of sight. And then he goes through all the ways that this is true. Hysterically funny. It's like normal people very rarely see them in the one hand.
Tommy Potter:
Very true.
Jim O'Shaughnessy:
They're living behind walls on huge estates and on the other one they're lost somewhere in the streets. But let's dive right into that. Did you notice any similarities between the homeless people that you documented with your documentary and those rich folk in the Hamptons?
Tommy Potter:
Yeah, I think you're hitting it perfectly. A lot of people have asked this: what's the takeaway from those two groups of people? Well, I think we're very similar and many people have problems on different levels. I'll say that. Whether it's I can't get a shower to have an interview for a job or it's all the way up to my WiFi on my beachfront property is not working.
Jim O'Shaughnessy:
I hate it when that happens.
Tommy Potter:
Frantically running around the course for three holes, calling your IT guy to get it fixed before you're home, and stopping play on the course for a little bit. Yeah, I think we all have problems, but on different levels.
So yeah, there are some interesting similarities that I did find and that was definitely one. But yeah, it is a unique little bubble in fantasy land and one that I think, I don't know if it's right to say, obviously these people that we just don't know and are kind of unheard of. You kind of have the face of America and these celebrities that everybody thinks kind of, whether that's run America and pull these puppet strings, but I don't think in reality that's true and kind of saw that vividly.
Jim O'Shaughnessy:
Interesting. Keeping on that theme, there is an old movie starring Dudley Moore called Arthur, in which he plays the son, the ne'er-do-well son of one of America's richest families, and he's a drunk and everything's a joke to him and everything. And so finally his family forces him into rehab and he's there with a bunch of regular folks and they're all attacking him, and they're like, "You're just a drunk, just like the rest of us." And he looks at them and he goes, "That is correct. However, the difference is I'm a drunk who knows exactly where my next drink is coming from."
What did you find, what were your observations about those rarefied circles? What'd you learn, if anything? Good and bad.
Tommy Potter:
I think I was ignorant to think that they would care about a 19-year-old because I think I really did think that they would care that I hustled my way into the circle. But in reality, I think that I was spilling coffee on people that were more likely to give me a chance. And that was the whole point. You're bumping into the right people maybe at the right time. And I think a lot of the time you have to be in the wrong place at the wrong time in order to be in the right place at the right time. And yeah, I think the circles that you're surrounding yourself in there and to be able to maximize that, and that can be extrapolated outside of the Hamptons itself. Go to the coffee shop next to Sequoia headquarters if you're raising for your startup, find the cliques, find the Equinox because you might stumble into a better founder there.
There's different circles that you can manifest into that would hopefully give more chance for more opportunity. And so that would be the generalized theme, I think, of going to the Hamptons specifically. But yeah, I don't think these people would necessarily cared sometimes, and I was ignorant to think so. And so you really start to understand that you have to pick yourself in two sentences. You get two questions, is what I realized over time. You get two questions. They ask you maybe where are you're from, where you go to school, and what are you doing out here? Then if they like you a little bit, or there was some sort of connection maybe with Michigan or from Illinois, they might follow up with, okay, where do you want to go and what are you going to do with your degree? Something like that.
And I learned over time, over maybe the first month that the only way they could help me is if I said that I wanted to be in their shoes. And so I started to illustrate that I wanted to be right where you are, sir, Mr. Insert Name, and then light bulb, "Hey, I can help this kid." And so I don't know if it's not authentic to not illustrate your means specifically, but I think that that was a way for them to maybe assist me if I wanted to hopefully be in their shoes one day. And something I kind of learned as you start to get your one sentence pitch down, that's all you get. That's all the time you have. But yeah, it was unique. It was wild. I want to go back, but I think the ROI is on some other adventures, too.
Jim O'Shaughnessy:
Yeah. Well, between a yes and a no, there's always a maybe, and that's why persistence helps, right? Because you can't tell until you ask. I think it's interesting from another perspective, I don't golf because my father, golf was a religion to him. And so according to him, I was a really good natural golfer. But I did realize that my mom for many, many years was a golf widow because, at least in the summer, I grew up in Minnesota, so she had him around during the winter. But during the spring, summer, fall, he was always out on the course.
But I think it seems to be an artifact of an older age to me at least because, and I'm going to get into trouble for saying this, but a lot of rich people I know are really fucking boring and they're not... I really prefer the kind of crazier-
Tommy Potter:
You got energy, Jim. You got energy. Whacking around a ball doesn't make sense.
Jim O'Shaughnessy:
I guess. Have you ever seen the movie Caddyshack?
Tommy Potter:
Of course.
Jim O'Shaughnessy:
Yeah. I would've been Chevy Chase in that one. If I had to play golf, I'd tried blindfolded and all that kind of stuff because what did Mark Twain not say? Everything that everyone said... Very rarely is a quote from Twain actually from Twain. I've gotten the point where I actually try to have our AI find it in the actual book, but I think he might've actually said this one, golf is a good walk, spoiled.
Tommy Potter:
It's also a great book itself, too.
Jim O'Shaughnessy:
Yeah. But I think golf can also be... I think one of the reasons why it is so many very successful people like golf is it's a great environment to have a casual conversation, which oftentimes leads to, "Hey, why don't we do that deal together?" Or whatever.
And so I do find that interesting. I'm really fascinated also what motivated you to make the documentary about the homeless people. And then I also have a question about that. What if a documentarian followed you around for 90 days? What would the viewers see that would maybe conflict with your public persona?
Tommy Potter:
Very interesting. The reasoning for the film, it's actually really interesting. My good friend was a senior, I was a freshman, and we were very busy people. The best way to be friends and learn your friends even more is to do a project together.
Jim O'Shaughnessy:
Yep.
Tommy Potter:
We were very curious people. We were walking down the street one day, and we see a homeless folk. And we're like, what's life at 2 P.M, what's life at 2 A.M? We only see the four second panhandling, we always look the other way. If anything, I always thought we need to lean into their stories even more, because they're failed stories that often have very teachable and kind of great learning outcomes. That I think at least some of them, we partnered with five folks that cared to, in that sense, partner with our journey and were willing to roll around 90 days with a camera.
And we were in tent communities at 2 A.M. seeing how these people lived in the forest. All the way over to abandoned industrial buildings that they were living in and trespassing in. And filmed some of that with heroin needles on the floor and going into this kind of dark room that was a little dangerous. I don't know if my parents were too fond of the adventures I was going on for a couple of months there, but 7 A.M-
Jim O'Shaughnessy:
I could just hear them. You're doing what? What are you doing, Tommy?
Tommy Potter:
... 7 A.M. breakfast. We tried to see all of the emotion, all of the thrill. And no, we weren't just putting a camera on these folks. We were trying to assist them in a way. And at the end, it's the philosophies of the streets documenting their journey and some of our people were successful to escape. I think the best way for me to actually convey homelessness, and we went into this film specifically thinking that there was some sort of and inflection point, like homeless now, reasoning is because of blank.
There was no point. And we realized that kind of halfway through that each reasoning was... I think of homelessness as a thirty story building and you're born on said level, say 15, 20, 25. Homelessness is this compilation of series that you miss a paycheck, you get in a car accident, you missed work once, you're out of a job and it's this step by step by step all the way down to rock bottom, ground zero. But then I was always thinking they're jumping out of the window, they're coming down very fast and it's kind that one thing. But no, they finally get to rock bottom level by level and soon enough they can't take the elevator, they have to take the stairs. The society is kind of... And there's grease on the stairs and it is a struggle to kind of walk back up and climb your way out of the society that's very much stacked against you.
And so that's, I think, a little interesting analogy that we kind of figured out along the way. But yeah, very much thrill of emotions across it all. Some successful people get in apartments, help them get a Planet Fitness membership to then have a shower, have a place to go, maybe even work out to then get them that interview, to then get them that job. And that's all it really... Almost like a shower was literally all it took to get the boost, ironically. All it takes is a shower. It was odd that it's something maybe that simple. But yeah, a unique experience.
Jim O'Shaughnessy:
Have you read Chris Arnady's book on the Back Row Kids? It's called Dignity.
Tommy Potter:
I don't Believe so I'm going to write that one down as well.
Jim O'Shaughnessy:
It's really interesting because he's a photographer. He is an old Wall Street trader who retired and took up his love of photography and walking. And his book Dignity, I had him on the podcast when I just started the podcast. And one of the things that he pointed out to me that really resonated with me was that he went in thinking, Jesus man, there are all of these programs, food stamps, food assistance, public housing, etc. Why do we have this problem with homelessness? And he goes, I figured it out when I befriended and talked with them. Most of them were absolutely horrified by having to go as the supplicant to whatever bureaucratic busybody was overseeing the dispensing of said benefits. And so he was like, these are oddly very proud people, and they would kind of rather be homeless, rather not take the assistance. If the opposite, it means that they have to comply with some petty bureaucrat and they're kind of power grab over them. Did you see that?
Tommy Potter:
Very much. Food was not an issue at all. There's two or three free meals. Everybody thinks, we actually did interviews on the streets with just some random folks to say, what do you think? Why are people homeless? That was a common answer and it's not an issue at all, there's plenty of honestly food to go around. There's plenty of systems. The voucher program to get a house was actually some people waiting nine months in line. And if they weren't at 2 A.M. on the 31st with their person to check in, they're bounced off the list. We had one of our folks eight months in and gets bounced off because they were not on time and they didn't show up or were a day late, or something like that.
Yeah, I think also people very much mentioned that you have to be very, I wonder if this actually relates to founders now that I think about it, but shameless to be panhandling. Many of them were very uncomfortable that very first time to ask for things. And I think you're kind of hitting the point where to go ask from the bureaucratic system for something, to be handed something. They wanted to earn it, but it's very hard to earn something at that level. Similar to founders where you have to be very scrappy. And it kind of converts into going door to door, being told no however many times.
And so yes, I think you definitely see wanting to pick up your own bootstraps and get going, but it's very hard to do so. So I definitely think there's a pride issue there and there and a responsibility issue there. But yeah, there's honestly a ton to unpack and all this... Is it also even a crisis? Can you call it a crisis if only. Not only, but in terms of population, I think it's just around 600,000 people are homeless. It's a lot of people in terms of the population. There's other things to do with money though, I think, when you have a lot of people struggling with an issue. In terms of a percentage, is that a crisis? Another thing to kind of think about.
Jim O'Shaughnessy:
So now let's turn the camera on you. We're going to follow you around for 90 days and make a documentary about you. What are we going to learn about you that might conflict with your public persona?
Tommy Potter:
Yeah, I think it'd be very hard to show complete true colors. I think you try to be as honest and as forefront with whether that's actions or words. And I sometimes think back to the only maybe true self is the family group chat. Can you be more true? And actually one guy was trying to make a startup around the family group chat and biometrics around being able to have access to the family group chat in your bloodline. Really interesting concept. But I don't know if you can really be true. I don't know if I could be completely transparent in all things that I do and I guess live stream or maybe build that documentary around me for 90 days. You hope your actions are the same, but I would think otherwise.
Jim O'Shaughnessy:
My friend, Ron Howard, made a movie called Ed TV a long time ago and that was the premise. The premise was they were just going to film him. Unfortunately, it came out at exactly, well almost exactly, the same time as the Truman Show, which did a little bit better. But if I'm right, if my memory is correct, persona is actually the Greek that leads to personality. But a persona is almost by implication, your public face. T.S Eliot had a great line in one of his poems where he says that he's preparing his face to meet the faces that he meets. This idea that essentially everyone has a mask, if you will, that they give to the public. And the worry there, of course, is that you become what you consistently do. And so I've always been very fascinated by that because part of freedom, to me at least, is to be as absolutely close to the way you actually are just in real life.
And so those are things that come often with some challenges, right? Because as you mentioned, shameless, you've got to be very willing to disagree with other people in social settings where the norm would be being polite. I maintain that you can be polite and disagree at the same time. It's an art form. But I think that you're right, when the cameras get trained on you, it's like uh. Now obviously some people are natural performers and others aren't. But I wonder, what did you learn from making the documentary about the way you approach founders with Power Hour?
Tommy Potter:
I first want to hit on the masking and I think about authenticity. And so the masking aspect, I wouldn't necessarily go completely against you, but I think that is very much how I've lived to... I'm not a filmmaker, but I guess a portion of my life did allocate some time toward a film. I wouldn't call myself a filmmaker. But now when I come in contact with a few close friends that are in film, I have a piece of myself to resonate in that conversation. Now, do I emphasize that right now a little bit more than I probably should be? Yes, I do. And I wonder if that's, some people say I'm masking, I'm playing a role that isn't true to myself. But I think it's the whole point of living this random story, this very-
Jim O'Shaughnessy:
Yeah, yeah. But see, I would differ with you there. You're not masking anything. You made the fucking movie. I mean, you did have that experience.
Tommy Potter:
... Fair.
Jim O'Shaughnessy:
And I love your point about authenticity because I've had a lot of people ask me, yeah, but can you coach me and teach me how to be authentic? No, I can't do that. And where do you think that comes from? Do you think it comes from fear? From the worry that other people are going to laugh at you? I mean, it seems to go away, at least in my experience, as you get older. When you're young, you are heavily into socializing. And I think that's from our evolutionary past because we lived in tribes and what do you want to do in a tribe? You want to fit in. Because if you don't fit in, they exile you and you die. So you definitely want to fit in. And that seems to be younger people, that vibe is very strong. But as you get older, you realize other people aren't thinking about you at all. Honestly. They're thinking about themselves for the most part. And so it gets easier.
Tommy Potter:
As you should.
Jim O'Shaughnessy:
Exactly right.
Tommy Potter:
The great Wallace Wattles quote. I don't know if you've read much of him.
Jim O'Shaughnessy:
I have actually.
Tommy Potter:
He's wonderful. The Science of Getting Rich, I could talk about that with you for a little bit of time. It's kind of my bible to live by. And add more value to the world than you collect. And the only thing you can do for this world, is to make the most of yourself, is his kind of quote that there is no other reason to live.
Jim O'Shaughnessy:
Absolutely. And it is not at all selfish to fix yourself first because you've got to. And the only way to do that is to be as introspective and honest as you can be. And that's hard sometimes. A lot of people are like, there's a great quote from Jed McKenna where he's quoting Socrates and says, "the unexamined life is not worth living." And he goes, I think most people would have a really hard time even examining that statement much less their own lives.
And there's this notion that we kind of come into this world, no owner's manual for human OS. And yet there are tons of shrink-wrapped systems that you can just sign onto. Oh, okay, this religion was the one I was born into. Cool. I'm doing that. I'm going that way. I'm going to do that whole thing. And to me that was just never an option. It was always like, well fuck that. I mean, I'm not interested at all in that. When you are trying to recruit people for your CIA Power Hour, what do you look for? What kinds of traits stand out and you're like, ah, okay, this man or woman is going to fit in really well.
Tommy Potter:
Yeah, there's a lot to touch on here. And I think specifically you have a lot of people vetting on—I would think of it in terms of a graph—on y-intercept: this current credibility and this current established knowledge base or kind of status symbols on a LinkedIn resume or something like that. And I always wonder, as I kind of call it people collecting these infinity stones. People that be able to scoundrel up maybe two or three nice brand names. I wonder if the first one fucked up, right?
Jim O'Shaughnessy:
Yeah.
Tommy Potter:
You question their ability to maybe directly source the right person and then that compiles on the next name and the next name. And then everybody's giving this name to a person that maybe didn't deserve it. And so sometimes you have to question all the way back. And it's very hard to do so because they're like, they worked there, they worked there, they went through this. And so I think that's where it comes to the rate of change is what I love to see. And so less why intercept. How fast in the slope at which they're moving? And less brand names, but give me more of what you've built, what you've done. Weird exceptional talent in the past like chess master, Olympiad in math, exceptional musical composer. Diving into things that are very curious and less related to building itself in any form.
I don't really care if they're designing fashion. It's something that is very, very deep and can directly translate over to deeply building and learning into their company. And so then the last thing that I kind of search for, which I'm not sure if many communities do, is the culture dynamic and culture fit. You kind of have these two types of founders. The asshole founder over to whether that's Travis. I think you mentioned Steve Jobs on some other podcast. These people that are phenomenal yet aren't fit for a community probably.
Jim O'Shaughnessy:
Right. I always joke that Jobs would've been voted right off the island, first thing.
Tommy Potter:
You wonder, right. And so although we praise some of these people and you look for those people with a chip on their shoulder, many venture capitalists do, are they a fit for the group? And are they the "being like all boats rise with the tide." That's one that you kind of search for, someone that's elevating the lives of others. The founder that is more uniquely passionate rather than that has the chip on their shoulder.
And so the culture and personality fit within the group I think is very important to continue sustaining that community. And so the way I guess my group operates is less on applications. We don't churn cohorts. We don't have applications. The CIA model is actually very interesting. I'm not trying to make some secret society, it's more about the model in which I've kind of studied with them and how they don't have necessarily a branch and office in Ann Arbor here. They just have a couple agents.
Jim O'Shaughnessy:
Right.
Tommy Potter:
And you go to each system and ecosystem and you see, does Stanford need another entrepreneur club?
Jim O'Shaughnessy:
Absolutely not.
Tommy Potter:
Right? So I'm like, let's just look at the existing landscape, let's infiltrate, extract the best individuals, recruit those agents, so called. And then add the most immediate value to where, not that we're trying to take them away from the scene that they exist in, but intro them to 20 other, 30 other delusional people where that delusion is corralled and the delusion becomes reality, is kind of how I've thought of it. And so when you're sourcing, I think what does delusion mean? To me it's like self-efficacy, the ability to have high self-worth and understanding your capabilities. High self-respect. I think if you have one of those teetering, you're looking at a psycho killer if you're on one spectrum and then a person [inaudible 00:48:17] that you don't want to be around. So make sure you have both. But then I think the delusion aspect is someone who believes they're capable more than they actually are.
And that's where the sense of delusion, something that they actually are trying to attain that is not even possible in the realm. But as you put those people together there, the self-worth kind of boosts up and that delusion hopefully can become reality. So I think that's that little section on the graph that I'm looking for in people. And we're hoping... We find them, rather than churn some applications and a bunch of cohorts. It's supposed to be one community that lives on. Everybody asks, who's my successor who's going to operate this once you're graduated college? And I'm like, why do I have to be done?
Jim O'Shaughnessy:
Right.
Tommy Potter:
I'm going to put some time into this for a few years and then I'm just going to be moved to a different section of the platform. And now I'm going to be an advisor or an alumni? And I'm going to be set off in the dust the corner and I have to be tapped on a new tab in order to see my name. To me, that doesn't make any sense and I hope for this, and the people within this group, can just continue on in this. I don't even know if I'll recruit, so-called recruit afterward, after a few years. It might just be 37 people for the rest of, I guess, our lives. And maybe companies at 30, maybe we build companies at 35, but it's just the right people that are within the group.
Jim O'Shaughnessy:
So Dan Tapscott said your network is your filter. And so maybe we're trying at OSV to scale that a little bigger than you are with the Power Hour. But I think you're absolutely right about that. And your environment plays a really big role with how you're vibing. And they've done study after study after study that literally introduced one turd into the punch bowl and nobody's going to drink the punch bowl. And people's energy, enthusiasm, commitment, all those things, authenticity, can bring up an environment several quantum leaps. And then the naysayer, that'll never work.
And I'm not saying that we should be Pollyannish. We shouldn't. We should always be fucking things up and learning from that. Like, oh, okay, we really fucked that up. Let's fix it from what we learned. And I love the delusional thing because I myself don't say that's what we're looking for. But the number of times when I was starting a company that those near and dear to me said, Jim, you are delusional, was very, very many. And just recently I had a good old friend from high school, we caught up when I was back in Minnesota. And he's like, you know what I love about you man, is you just decided you're going to start a film company, production company. Oh, a publisher too. And new media. You have no experience doing any of that, Jim. And I'm like, that's right. That's why I'm really excited about it because I get to learn and because I'm not burdened by the, that's the way we've always done it here.
Tommy Potter:
I think that's the beauty of your group similar to ours, that this isn't just one CS group of people and very technical talent. And you see a lot of those groups and societies and all of these brand names that you go through this accelerator, but it's only for technical people. We have a guy that has 7 million followers. We have a guy who's maybe a laser physicist, AGI researcher. Like a deep marketer, 10 plus million in revenue at age 20. Folks declining Doge. It's all over the spectrum because that's where I think these new ideas, these diverse perspectives come in rather than just one person being praised within that hierarchical system because they've had the most money raised, most traction, most results. And to me, that person isn't receiving, they're only giving some advice when you're kind of at that top. But that CS kid might not know a damn thing about a personal brand, how to package themselves or maybe storytelling, things like that.
Jim O'Shaughnessy:
We actually had that happen at the... Last fall, we had all the fellows that we give out through OSV gathered here in Connecticut. And a highly technical scientist who was building an at home device where you could basically test your baby's poop and make sure that there weren't pathogens or whatever in it. Sat down with our, now officially named CEO and editor in chief of Infinite Books, Jimmy Soni, and pitched him on what she was doing. And I was kind of in the earshot and I was listening. I'm like, oh, that's cool. And I kind of went to a different group and then she found me like an hour and a half later.
And she goes, I cannot tell you how happy I am that I had that last hour and a half. She goes, I learned that I knew nothing about pitching people who were into the doing things this way, etc. And Jimmy essentially listened to her in terms of what she was trying to accomplish, who her target market was, all of that and gave... She had been just focused on the science and gave her an entire marketing plan. And one of the things that I'm a big believer in is cognitive diversity. I am crap at many, many, many things, and I'm not saying that those are not important things. I'm really shitty at some really important things. So having someone on my team that is really good at that, it helps very, very much.
Tommy Potter:
You're hitting on the generalist-specialist [divide], I think here.
Jim O'Shaughnessy:
Exactly.
Tommy Potter:
Even the cross country tour. I was just recently kind of going campus to campus, cross country, and finding the most intelligent and talented individuals at each of these campuses. SF Boston, New York City, went over to Canada, to Waterloo, UICU, Michigan. And so what's really interesting is that what I saw on the East coast and how that is kind of different than the West coast. I think these bubbles have different DNA. You have your longterm researcher over at MIT that is very, I think of it as a calm lake. Just pure technical talent that is very long term. Very, I'm going to research for five years and then I'm going to build. And they're very adamant about that. You start to see maybe the flip side in the Harvard maybe entitlement, which I don't think is bad. I think that's a negatively connoted word, but entitlement can be good, especially in this founder world.
And then you move over to SF where there's people getting a capital allocation for barely having an MVP, but they have all the right founder DNA. It's really interesting to see these different groups of people and the different bubbles of, if we want to talk about being your friends, your closest... Some of who you surround yourself with, I guess that quote is kind of who you are. You can kind of easily see in those bubbles how people are. Whether that's growing up or... You even think about, you can choose your friends, but you can also choose your college. You can probably choose your friends. You can choose the former a lot easier than college, but I think some of these college campuses have a type of person or persona you want to be around. Maybe a reason why you go to college, I'm sure.
Jim O'Shaughnessy:
And where are you finding the most talent? One of the things that we're going to do is we're going to put somebody into the field full time. But I've sort of expressly said to them, don't go to Stanford. Everyone's already there. We're not going to find anything there. I want you to go to second, third tier universities because there's, I bet, a ton of diamonds in the rough there. But our strategy is very similar to yours, which is why Nick was excited when he met you. Because we are also going to give that person who is roaming for our venture division, check writing authority or wiring authority or Dogecoin authority, whichever you prefer. Where they can literally write a check up to $10,000 to somebody that they find incredibly promising. But you've got to go looking, is my opinion.
Tommy Potter:
It's low ego. Most firms won't do it. It's manual labor and it's low of many firms, many GPs. To actually put that effort in. Because not to say they want all of these people to gravitate towards them and all the applications to be put through their portal, but I think it slightly diminishes the brand to be going campus to campus to have some pop up shop, some event. I think you can do it in a manner that doesn't necessarily diminish the brand, but instead having access. I mean, being available I think is a huge...
Why be closed doors? And so it's kind of a different way to feel about the firm. But yeah, definitely a low ego play, but I think it's obviously the right play to find them.
Jim O'Shaughnessy:
Well, I'm very lucky because I don't have LPs, so I don't have to justify any of that to them. And it just seems very, like I know you admire Charlie Munger. He had this great joke about this guy who's in a fish lure shop and he's looking at these really fancy lures and he can't make up his mind.
And he walks over to the counter and he says to the guy, he's holding up a couple and he goes, "Do fish really notice the difference between these things?" And the guy looked at him and he goes, "I don't know. I don't sell this fish." So it's like the obvious acolytes or right college, all of that sort of stuff, it will give you a significant advantage in the beginning. Right? Says the guy who barely graduated from a state school, University of Minnesota. But it diminishes rather rapidly based on what you actually do. Right?
Tommy Potter:
Right.
Jim O'Shaughnessy:
So you also-
Tommy Potter:
Think Waterloo in those campuses, Waterloo.
Jim O'Shaughnessy:
Yeah.
Tommy Potter:
And not to say it's like a second tier or anything. I think it's a phenomenal school.
Jim O'Shaughnessy:
Sure.
Tommy Potter:
And a lot of talent, but I don't think it was on many people's radar until recently.
Jim O'Shaughnessy:
Yeah.
Tommy Potter:
And that's been one that's been churning a ton of amazing technical talent.
Jim O'Shaughnessy:
Yeah. And McGill is the big name brand up there in Canada. So we probably might go to McGill, but we'll definitely go to Waterloo.
Tommy Potter:
Oh, that's great.
Jim O'Shaughnessy:
You also though use, which attracted my eye because I sort of built a career on building algorithms to help me decide things. You use Elad Gil's algo after you've met people. Talk about that. Walk us through that.
Tommy Potter:
That's actually how I source for people. So yeah, that's partly this manual game on the ground. But that only gets you so far. And so we've, in a week and a half we will run our eighth national retreat for 20 builders, no phones, no substances for 72 hours. And that's one thing that when I ask people and invite them on this kind of all expenses paid retreat and treat them as such exceptional people, I ask them for maybe one or two people that you'd recommend and heavily vouch for that are after I say, "I've been cross country finding those exceptional people, you're one of the 20. Find me one or two that if we have some room at the end, I'll allow them in."
And mainly that's a play to find I think some people have called it a weirdo broker and that we're all around these weird people. I'm weird, I have some weird friends. And some of these people aren't very public online, so you can't always get the content play, but they have friends. And so that's been a way and Elad's way of hiring talent. You hire through the close people you trust and then you ask for their close referral. So that's completely why I don't have applications. It's completely referral based. It's completely through the three best friends and they're three that goes to nine, that goes to 27. You can kind of scale up fairly decently and find a boatload of amazing people just through establishing some credibility and some trust and providing the utmost value to those individuals and then them referring you a person or two and then they can be the reason for the connection.
Jim O'Shaughnessy:
So what has gone in groups that you've run, what has gone exactly as you expected it and what has gone exactly the opposite of what you were expecting?
Tommy Potter:
I don't know if I necessarily try to have expectations. It's one of my huge theses on kind of whether that's building communities or running events in general. I think there's having an itinerary I'm completely bearish on because for what reason do we have to move to the next activity and kill the current beautiful moment that we're in? Because it's nine o'clock, Jim, we have to go to the next activity.
Jim O'Shaughnessy:
You and I would get along at these things.
Tommy Potter:
Right. And very similar to when Nick came out, I didn't know what the hell was going to happen. I think that success is putting the right people in the room and that's about all there is. So when you put 20 people in a room, let's say, if a few people are on their phones, if you have to mandate no phones, I've been starting to think about this with my retreats. If you have to mandate no phones, instead act with the group and see if they pull out their phone, then you knew you failed. Right? Because you can just be an observational user on that side to see why did that person get on their phone?
They're probably not fit for the group, they're not engaged in the people that I've brought to the retreat or they're not engaging themselves. They're not highly intelligent themselves to go deep on a conversation with some of these intelligent minds that I've brought. So that's on me and that's the fault that I must have put in the group if you want to call it that, mind of one turd in the group, that kind of diminishes.
Maybe that's a negative infinite loop. I'm unsure, right? But yeah, I think that's one thing that I try to not have expectations with how an event is run or how a retreat is. I don't know if I had any expectations coming onto the podcast. Just have a good conversation. Hopefully the two intelligent minds that are hopefully brought to the table can speak well with one another. So that's how I usually operate most of these events so-called is mainly through serendipity, less itinerary.
Jim O'Shaughnessy:
And it is a great sorting mechanism as well because as you point out, right? People seem to have this hostility to learning via negativia. And your point about the pulling out the phone that's learning through negativia, right? I couldn't agree with you more that some of the best of those sessions that we've had had no agenda other than, "Hey, just show up and we'll see what happens." It seems to me that that also selects for people who have a lot of courage. I think that that is often overlooked and maybe even people will use different words. Right? It's like, "No, no, no. I'm not courageous. I'm obsessed."
Right? "I'm obsessed with making this and bringing this into the world." But I definitely think that to put yourself out there takes courage, right? It is your willingly going and putting your work whether you're building a company, whether you're writing a book, whether you made a movie, whatever. You're showing it to people who might make really hostile and derogatory remarks about it. And so courage is one that I'm always very interested in.
The ability to pivot is another one that I think is really important because I agree with you that if you think that you're going to have some linear plan that is going to get executed with military-like precision, you are diluting your, well, then you really are diluted. Because what you got to do is you're either going to succeed or learn, not fail, right? Like, "Oh, I failed and now I'm going to just throw all my chips away and I'm done." And the willingness to give up early just astounds me because 80% of things that I look at, "Hey, that shows really great potential.
Hey, whatever happened to that book you were writing or that podcast you started?" And just like the... People call or Annie Duke is a friend of mine. She was the champion poker player and she's doing a lot of consulting now around things like how to look at the world in of taking a much longer view. Right? And she calls people who judge an outcome are, a single outcome, are really doing themselves no favors. Right? It's what you should do is look at the process not the, necessarily the outcome.
So for example, if you and I got together and we had a really dumb idea and we thought, "Oh, let's give it a try," and it succeeded. If we're the type that makes our plans by the result of that one isolated outcome, we're going to get really fucked because it might not continue to succeed. What you want to do is look at the underlying process. What has surprised you? And I know you don't go in with an itinerary, I know that you are very open-ended about it, but give me a session where you were at the end of it, you were just like, "Holy shit, I never expected that that would happen" and you were just absolutely supercharged by what happened.
Tommy Potter:
So many examples. It's every time, right? Because you put the right people hopefully in the room. There was this one time where we're sitting at the top of an apartment building for a hangout, I don't know, maybe 20 people, 40 people showed up. And you see at the beginning who maybe are some of the ones that not are transactional, but are there to quickly stop in and say, " Hey." Aren't there much for the group, maybe they're for themselves. Right? And the ones that stick around and you're there four, five, six hours. It's 2 AM. We're on the couch talking about philosophy, which government's going to win, anarchy, neoliberalism.
And I remember that specifically this one time, I think it was 4 AM, and I was like, "Guys, I got to go. I got class at nine. I got to get out of here. You guys continue. Let me know which government wins, but I got to run." And many people think, "Oh, you're not talking about startups, you're not talking about the next idea?" Of course not. That's not the point. Because we're challenging each other's opinions, beliefs, and that's where I think a lot of progression is. It's almost a time for us to not even think about the next best company.
Of course we love our feedback on maybe a progress that week or give us an update, but honestly I might have a co-founder in the room here in the next month that I've just really enjoyed getting along with. And because of that, I want to build a company with them. I think that's one very vivid example and a lot of that happens. It's the deep philosophy talk on the couch after good subsect of four or five, six hours of a conversation and perusing the room. But soon enough you're not talking about startups anymore. It's usually the huge success point.
Jim O'Shaughnessy:
Are you finding that there is kind of a dominant philosophy among these types of people? You mentioned which government system is going to win? I'm intrigued by that.
Tommy Potter:
I think that was just a way for people to go against each other. And necessarily maybe something they believed, but they researched it and were like, "I don't necessarily believe in neoliberalism, but yeah, I'll fight this one. I know enough. Give me the reins, let me go." And so I am not sure if there's necessarily a specific government or belief that I could kind of give to you, but I think a lot of these people are very, very, not headstrong, but they're very intelligent and they can argue a side very well and they have that athlete in them to try to be competitive and win.
Jim O'Shaughnessy:
That's one of my theories, that it's actually harder to get a super intelligent person to abandon a no longer useful mental model. And the reason behind that is because they're so smart. Guess what? They build iron clad narratives around why that particular mental model works and they've thought through all the arguments and they have an answer for every one of them. And so-
Tommy Potter:
They're chess players, Jim.
Jim O'Shaughnessy:
Yeah, absolutely. Absolutely. And so I've always found it really an irony that some of the brightest people are the ones because they link that with being headstrong as you put it. And they're like, "Yeah, well it continues to work for me no matter what you say." And I'm like, "All right, that's good." Another Jed McKenna quote that I love because it happened to me, "The smartest thing I ever did was stop being smart." And being much more open to like, "Oh, I never thought about it that way. Let me see how that works."
Tommy Potter:
Treating every conversation as if that person is superior to you in some way. Very similar to the homeless documentary, why you approach someone in that circumstance, because they do have something to teach you. If anything, those people have more to teach you than some others. And I think that's very much the superiority that you hope to give to another person in their wisdom that they have. You even touched on it a little bit ago, dilution and dilutive. I think a lot of these communities, they think it's really awesome utility in the tagline to be the largest entrepreneur community at Harvard.
I laugh at that and completely turn the other way when I see it because that's another issue in these communities, the talent isn't high enough, the high curation isn't there. And that's a main flaw because as we talked about, it's a negative loop because the people won't come back. How I always measure this is if I have one amazing individual, now we're not. We're all amazing in different ways. I think these people as they all have different deep expertise, but if you search for that one person that if this person had a conversation with them, would they be tuned out? Right?
Would there not be a value on both sides? And that's usually how I go about. Put these two people one-on-one is their value add with kind of your maybe more intelligent person or person you respect hopefully the most within the group. And that's how I think you can vet people as well on a very case-by-case basis instead of having to say like, "Oh, this person looks great on paper and has all the things. I really like conversation." Now, put them with your other person that is really hard to maybe have conversations with. Are they going to thrive? And if you start to question, it's probably not a fit. Either got to be all in or if you're second-guessing, " Is he worth it? I don't know." Probably out.
Jim O'Shaughnessy:
One of the things that I was lucky to have happen in my life is my main career being in public markets. And if there's an old saying on Wall Street, there are old traders and bold traders, but there are no old bold traders. And what I took away from that is if you need to learn some humility, and I certainly did when I began my career, you'll get it by being completely trashed by Mr. Market time and time again. And what you realize very quickly is if you think you're right and the market thinks you're wrong, who's usually going to be the winner of that battle?
Tommy Potter:
Good.
Jim O'Shaughnessy:
So you have humility forced upon you, right? Because you've got to be willing to go from genius, idiot, genius, idiot, genius, idiot, because that's the pattern. And it also really helps you inure yourself from people being really nasty about you when you're doing poorly, then the long knives come out and then when you're doing really well, often the same people will say, "Oh, you're the best. This is great." And it's just very amusing to me. You've had experience in investment analysis and let's talk a little bit about that.
Tommy Potter:
I was just going to ask you actually, I'm curious, since you turned more venture or maybe not more venture but turned into venture itself. I'm curious, I've seen some people love being very liquid, hence some Hamptons people that I catch up with in New York and they're like, "I love the liquidity, the direct, immediate maybe return that I can get investing compared to the seven to 10 year." I'm curious what you think, why turn into venture if maybe public markets was your previous main career? Was there a love in the game for the immediate liquidity over to maybe a seven to 10 year outlook and kind of having your money all scrunched up in a company for maybe a little too long and that didn't feel... I'm curious just your thought process around that.
Jim O'Shaughnessy:
Yeah, so neither. What drew me to Wall Street was I looked at it as the Olympics of business. You got to know a ton of shit about a lot of things to do really, really well in public markets. And I felt that there a lot of people were doing it completely wrong. Right? And this is back before quants were a thing and before algorithmic investing was a thing. And I thought, "Well, everyone seems to be making their decisions based on their view on the CEO or the chief marketing officer or anything like that. I think that that's really dumb when you get to be a public company, but it's not really dumb when you're dealing with private companies."
So very, very different there. And that led me obviously to quantitative algorithmic style investing in public markets, but we started doing private investing in probably 2006 just because I was very intrigued by what you're all about. I was very intrigued about, because there's a really big difference between the personality and emotional profile of the CEO of a Fortune 500 company and a founder of a company that might not even have an industry yet. Right? This person over here who's climbed the ladder to become the chairman of the said Fortune 500 company, often might make a horrible founder because the skill set is very different. Right? And that's why you sometimes inflection points come along.
Jobs, again being the exception here right? He probably when he got fired was not the right guy to be running Apple at that particular time. He needed some time in the wilderness and he got it. Right? And went and did NeXT and oh, I don't know, Pixar. But he needed that time, I think to get seasoned, to be able to go back to Apple and say, "Okay, here's what we got to do to survive." It's just a very, very different personality profile, skill set, et cetera in public and private. And I just wanted to explore, hm, all right, that seems to be pretty evident. Let's see if that's true. And what we're finding is yeah, that's very true. And plus, we just have a ton of fun doing it. Right? We know the success rate is going to be small and that's fine. We conceivably have learned a lot more from the total bombs that we invested in than the ones that went according to plan. First off, nothing goes according to plan. And if it does, it's an accident. Right? And oftentimes we find that if it's going way too close to plan, either they're not dreaming big enough, either they are... And then so we'll come in and say, "Don't you think we should maybe push it a little harder here?" And they'll look at you like, "I'm doing everything, all of the milestones." And we're like, "Okay, but maybe you're accomplishing them too easy."
So very different kinds of investing, love both kinds. Because at the end of the day it all comes down to we humans. Right? And in public markets, I always say the last Arbitrage left is Arbitraging human nature. Right? All quants study, we all use the same data. Right? One of the things that I was doing at O'Shaughnessy Asset Management before we sold it was building out other data sets just to see if there was going to be a huge difference. Right? Everyone uses Compustat and their data has been audited. It's what I would use to write "What works on Wall Street."
It's what all the academics use. And guess what? If you kind of scratch the surface on quantitative public market investors, their models look very, very similar because they're using the same data. And so it's just got a little dull. And at the same time, machine learning was coming online and I'm like, "Aha, we have new ways that we can do this type of investing." But that just led me much more deeply into that world. And then we ended up selling the company. The company wasn't for sale, they came to us, not the other way around. But then we kind of thought, "Well, cool, we'll have an opportunity, do the things that are fascinating to us right now."
So the way I look at it is, life's an adventure and you shouldn't worry too too much about if you get a destination change. I see a lot of people, and this is not necessarily a function so much of age, but of disposition. A lot of people just live on cruise control, on autopilot. And I try very hard not to do that it. And when you don't, yeah, a lot of shit that happens, you ideally wouldn't have planned for that to happen. But you always, at least, I always seem to find something, a nougat in that like, "Oh wow, okay, I've got to upgrade this model that I'm using because I haven't executed it right here." But ultimately, it all comes down to us human OS, human operating system, and I'm fascinated by it.
And so when you're fascinated by that and you can arbitrage it, why on earth did we start a book publishing company? Well, because I've written four books, I love books, I read a ton of books and the current legacy system is broken and there's a huge amount of arbitrage in that industry. So let's try to arb all those inefficiencies away. I joke that legacy publishing companies are using best practices. The only problem is they're from 1925, not from 2025.
And so when I see things like that, I just get really excited like, "Ooh, we get to make this a lot cooler." And so I think that you've got to be just very, very open-minded in your approach to finding these things that are going. Who was that woman that was popular for one hot second? She was always going on about sparking joy. I don't remember her name. But for a while every tweet was, "But does it spark joy?" Maria Kunda? I don't know. Well, anyway.
Tommy Potter:
Interesting.
Jim O'Shaughnessy:
Tell me a little bit about what motivated you to do these investment analysis reports.
Tommy Potter:
Very much thought it was the initial path, kind of way back. Invested since I was 12. Dads in the business, sisters are in the business and kind was definitely dinner table talk. And so yeah, started to write. I really enjoy kind of the both cross industry analysis is actually really, really fun to me. Very, very, very fundamental investing on my side, but published some good pieces that got like 300,000 views and things that I started looking at with the GLP drugs and that impact maybe on the Lululemon. Right?
Or the difference in the Gen Z kind of shift with now CELSIUS and a new way of energy drink. So get away from Monster, but all the people want to drink healthier if what, does that make sense? But, right? There's a great marketing shift there and that's what I love to kind of analyze, more the maybe slight contrarian perspective as well being I just feel slightly contrarian myself with always trying to run against the grain.
But a lot of that investing style is very cross industry. And now for the most part, my investing is kind of two times leveraged, pour a lot in to the right companies, very much Tesla, Palantir and NVIDIA are where my kind of current continual investments and play the long-term game on double leveraged shares. And a lot of people think I'm very risky with that, but what billionaire was ever made not being risky? They all say diversification, but I don't think that's how you made your money, sir.
Jim O'Shaughnessy:
I have a really good friend because I was on the soapbox for a long time about trying to get people to understand that deterministic thinking is a relic of Aristotle and Aristotelian Logic where it's yes, no, zero, 100, et cetera. And we were together in Manhattan and he's like, "Jim, listen, you got to get off this trying to convince people to be probabilistic thinkers." And I'm like, "Sid, why would you say that?" And he goes, "Because if it was normally distributed, if appetite for vol or risk was normally distributed, we don't exist. There are no us because it would become an efficient market”. And I'm like, that's a really good point.
Tommy Potter:
That's why I love studying people, because it's all emotion. That's the whole point of the study of people as well, because I thought I might go into the investing route, still might, and that's how I loved learning emotion. And we're the ones moving the market, for the most part. Sure, there's some plenty of computer algorithms out there moving markets, but mainly it's people. And so I thought learn people, learn emotion, learn greed, learn fear. And it's really hard to buy and sell greed and fear, even though that's what you're supposed to do. But-
Jim O'Shaughnessy:
Well, Sir John Templeton, who was a legend in investing in public markets, told the story about how he made a practice of putting in price limited orders on stocks that he loved way below the price they were trading at. And people would say to him, "Sir John, why do you do that?" And he goes, "Because I know that if it ever gets to that price, I will not have the guts to pick up the phone and tell them to buy." And so he was aware of his own fragility, and like, "Okay, I guess I got to game this out and do it a different way."
It's absolutely hard. I think the thing that I was most proud of from my career in public markets was that I never overrode one of our models emotionally, and people look at me strange when I say that. Man, when you're at the center of a great financial crisis and people are literally taking $200,000 in cash and putting it in a safety deposit box, it takes a lot of fucking guts to say, "Back up the truck. We're doing it, we're buying it. We're not overriding." Because we are hyperbolic discounters, that's part of our nature, and right now, what's happening right now, we extend that as far as the eye can see into the future and think that it's always going to be happening that way, and it's the worst way to think about things.
Talk about first-order thought being a real limiting factor to the way people tend to do things, but when you're emotional, the amygdala takes over. The prefrontal cortex, no contest man. It's a knockout. The amygdala is meant to be there at rare moments when you're really in danger. We didn't get that memo from evolution, like, "Yeah, guys, you're no longer being chased by saber-toothed tigers here. This is not the same situation." The brain doesn't know that, and it's like...
Tommy Potter:
It previously talked about negativity too and how we're apt as humans to gravitate on that. It's because of that survival type fight-or-flight mode.
Jim O'Shaughnessy:
Totally.
Tommy Potter:
That's why we love the media. "Wait, wait, which car accident happened? Which shooting?" It's like where we gravitate toward this type of news and all this negative media, and then you hope to not have... Maybe hence the podcast, Negative Infinite Loops because of it. Right?
Jim O'Shaughnessy:
Yeah, and we are optimized to pay very close attention to novel dangers, and that comes to us from evolution and it fucks a lot of people up for life. It's like you want a simple way to calm yourself and get rid of that brain fog? Stop watching TV news, and if you can, stop reading the most what I would call popular news sources. I have one on my phone that's called The Paper, and it was basically just the facts. Here's what happened. No editorializing, like this happened, this happened, this happened, this happened. And it is difficult for people because we love drama. We're hooked on drama. Look at the antihero and some of the greatest shows are antihero shows. Breaking Bad, it's brilliant stuff. And so it is easier to entertain with that kind of dark shit than, "Hey, guess what? Another 7 million people left poverty over the last year." That is the true underlying thing that is going to transform the world, and yet it's like people yawn. It's like, "Oh, well. Yeah, that's good, but did you see that fight over there or what's going on?" And it's-
Tommy Potter:
Even on this similar topic to all the hedge fund talk or just investment talk we've been having, I've always found it interesting on the occupational status that has been over the past decades, of back in the seventies, you're a doctor. You move eighties, it's the lawyer. The IB in maybe the nineties. Moves over to 2000s and you're looking into consultant hedge fund, and then 2010s, you're venture capital, but then all these venture capitalists are now going to be entrepreneurs and builders now in the 2020s. And so I've always seen this shift over interesting decades, and I know you're a big fan of history. And the fact that there's now 32,000 plus venture capitalists when back in the nineties, it was like 150. It's crazy how much money is available. It's the best time to build right now, and I think maybe that's the shift in... I don't know if that's a shift in money necessarily, but there's definitely a shift in a mindset of people. I think it's the... You love movies, right? Close Encounters of the Third Kind.
Jim O'Shaughnessy:
Yep. Love it. Great movie.
Tommy Potter:
And there was an investor I respect and we chatted over coffee and he brought up the interesting concept of how that movie illustrates Devil's Tower being Silicon Valley. You might have heard of that, but it's like the many people that are gravitating for unbeknownst reasons to Devil's Tower. It's this internal pole. We're sculpting. We've had some sort of interaction with these aliens, but we don't know why we're going here. And although there's talent, although there's culture, although there is capital there, I think a lot of people... A friend texted me two days ago, "I got to get to SF," and it's just this pole that it's Devil's Tower, it is. And not to say it's a bad Devil's Tower, but I think that it's very interesting to see how, I think it's mainly just it's possible, that crazy dreams might just be possible out there.
Jim O'Shaughnessy:
Totally agree. So you call yourself a contrarian. What is something that you passionately believe that a majority of very, very successful founders say just ain't so?
Tommy Potter:
Interesting. I might get a lot of heat right now for this one. I don't know if I'm trying to convince myself not to drop out, but I think I'm even curious to hear your thoughts on the word dropout and is it overused, and is it less of even signal these days to be honest? And you go to college for these groups that you'd hope Michigan corralled some of the best talent. I think there's leverage in the title of student, and again, I think a lot of people would go against me on that to say that no, student has no utility. Dropout, that's utility. That brand name, to put it on the LinkedIn, "I'm done."
And I think it's a time to still mess around and almost not have responsibility. And another friend get on a call a couple of days ago and he said, "I'm in the real world now," and that was not a dawning moment. I think he loves it, but at the same time, it's the shift into, hey, this is real life now and you don't have four years of just play the... Well, I think there's a lot of utility playing the manual game on the campuses as we talked about. To do that as a dropout, it seems interesting. I don't know if there's as much leverage there to be a full-time community builder. There's less utility there, but again, I think that's something I might get some heat for after this.
Jim O'Shaughnessy:
Yeah, that is the current au courant thing, is to be the dropped out of Stanford to build.
Tommy Potter:
What's your new flag? Is there a new flag on the OSV radar that's instead of... Is it not even going to college for that matter? Give me high schoolers that are beyond their years. I am trying to figure it out myself, but what's almost the flag?
Jim O'Shaughnessy:
So a new flag would be the one you mentioned, people who are so different that they... For example, our CTO just turned 21, and literally what he accomplished in his young life, completely unconventional, amazingly talented. And so he was one of those people who didn't need that college time. To him, he just looked at it as a waste. Now, I want to be very clear, I am not anti-college. I think that for a lot of people, as you mentioned, it's a great time in a young life to have all of those opportunities afforded to you that you honestly can't or won't be able to do, as your friend said, in the real world, and so we don't make it a marker.
You don't get extra points if you open your pitch to us saying, "Yeah, I dropped out of Stanford to do this." We're like, "Okay, everyone's saying that." Talk to us about your idea, your vision, what you're doing. But yeah, we have found quite a few people who don't even... For example, we have a team that looks at all the various opportunities, and then when the team is like, "Wow, there's some legs here. We really think we should do this," that's when I talk to them. And when I talk to them, I have not looked at their CV. I don't ask them where they're at college if they're young. I don't give a shit. What I want to know about is what's your idea? Why are you getting my team so excited? Dazzle me, man.
I don't give a shit about credentialism, but I'm not opposed to college. So I have this weird... At a company I started, Net Folio, which was basically the first online investment advisor, sort of like a robo-advisor now except we founded it in 1999 and actually got patents on it, a lot of cool stuff about giving investment advice over the internet, and fulfilling that investment advice over the internet, we have a patent on that. We let it expire because we did it just for marketing reasons, because I didn't want to be a patent troll. But I had a guy on who wanted to come work for us and we were on a Polycom, and I was interviewing him and back then I did look at resumes and I knew full well that he had graduated from Harvard. And so I'm like, "Okay, so why do you want to work for an online investment advisor that's mostly quant?"
And he immediately was, "Well, when I was at school in the Northeast," and that was the prompt for me to say, "Oh, where did you go to school?" And of course I refused to do that. It was kind of mean of me honestly because I just kept letting him prompt until he got down. He was so frustrated by the fact that I didn't ask him where he went to college that on the seventh question, he was like, "When I was at Harvard." And then I was like, "Dude, why'd you go to Harvard if you're interested in quant? You should have gone to Chicago or MIT." His head was exploding, because I don't care. I care very much about how you think, I care very much about what your ideas are, but the rest of it-
Tommy Potter:
I'm want to see you building the helicopters when you're 15.
Jim O'Shaughnessy:
Exactly, exactly, and so that kind of stuff really resonates for us. I can't believe that we've been talking for an hour and a half and it feels like 10 minutes to me.
Tommy Potter:
Lovely.
Jim O'Shaughnessy:
I'm getting the metaphorical hook here from my nannies. I've got two more questions for you. Fast-forward 10 years. What would be the most Controversial headline about you that you would be incredibly proud seeing that headline?
Tommy Potter:
Well, I'll preface with planning is everything, plans are worthless. So the ten-year outlook for me has always been I don't know what I'm doing tomorrow, so I'll preface with that. That's another Charlie Munger inspired philosophy. This is a good one. I think... Wow, I'm going to go with many people have said to complete the Wikipedia page, I have to drop out, and so I want to go against that. Since that's what everybody is telling me, I'm very much one to go against the grain. And so that headline might... I don't even necessarily, I don't think I want it to be a headline. I think I want it to be a photo.
Jim O'Shaughnessy:
Okay.
Tommy Potter:
I'm not even sure I necessarily want text, just a picture of a man walking away from the crowd.
Jim O'Shaughnessy:
There you go. Okay. Now, I wouldn't look at that-
Tommy Potter:
I don't don't know if you've ever gotten... Have you ever gotten an image rather than text?
Jim O'Shaughnessy:
Oh, sure. Yeah, absolutely. In fact, I'm a big believer in that that's one of the modifications that is happening to us right now. We are going back to hieroglyphics with gifs and memes and all of that, and if you are not well versed in how to interpret those, you are going to be very, very sorry, because they're the new channels of communication. Text alone? You've got to speak more languages than text.
Tommy Potter:
I even love that you are a big movie guy. I think that long form in general, I'm bullish on people who are consuming long form rather than short form. Whether that is a book or-
Jim O'Shaughnessy:
Yeah, what's really funny about that is if you'd asked me that when I was your age, I'd say, "What do you mean long form?" I wouldn't even know the difference, because everything was books and you just committed yourself to reading all that.
Tommy Potter:
Absolutely.
Jim O'Shaughnessy:
And so yeah, I think that I'm delighted by the way that you are interested in long form because you want to get to deep, deep understandings of things. The cliff notes don't do it, man. The ChatGPT, give me the summation of all of the important points in Arthur Kessler's The Art of Creativity. And the only reason I know that is because I've read the book. And I've also queried our AI, and it gets 80%, so if you're an 80 percenter, great, but you get the really good shit when you really know and have really... If you're looking at many of the books that I have here, they're heavily underlined and chaotic notes.
Tommy Potter:
Even though I think books should be essays and essays should be tweets, I've started marination over motion and sitting with an idea.
Jim O'Shaughnessy:
Totally.
Tommy Potter:
That life isn't a highlight reel. You have to live it all.
Jim O'Shaughnessy:
Exactly, exactly. I love that one. I'm going to steal that from you, because we say the way we hire people at OSV, no one is hired immediately. We put everyone on a six-month contract, because we don't want to look at a snapshot, we want to watch a movie, but I like yours better. It's not just a highlight reel. I'm definitely stealing that and I probably will not even give you credit.
Tommy Potter:
It's your podcast, it's your rights.
Jim O'Shaughnessy:
I probably will. At least originally when I steal it, I'm going to give you credit, but then I'm going to probably overwrite my own memory and think, "Hey, I came up with that." And then you'll send me this podcast saying, "You motherfucker, you did not." All right. How do people find you? And then we're going to get to our last normal question.
Tommy Potter:
Yeah, email is best to find me, so TWPotter, like Harry Potter, @umich.edu is best. LinkedIn, X also works, but love a good email, cold messaging in general. That's how I got into this probably podcast, a simple cold message to Jim. I'm even curious, I know we're running on time, but what are your thoughts on cold messages in general?
Jim O'Shaughnessy:
I'm not opposed to them at all, but you better make it a really good one. Because everyone is sending them now and 90% of them are written by AI, and we have AI sensing programs because we have an in-house AI. We can tell instantly if something was written by an AI for us. And loving AI. I was originally like, "Are you sure that we're just going to ignore all those ones written by AI?" And the teammates who were reading them were like, "Trust me, Jim, if you read a hundred of these, you would issue a jihad against AI only." AI assisted, all fine, perfect. But yeah, a good cold email? Because you can't tell till you ask, and you got to get in the habit of asking. And the other thing that's great about it is you got to get just absolutely fine with rejection, right?
Tommy Potter:
Totally.
Jim O'Shaughnessy:
When I did my first book proposal, being one of the laziest humans on the planet, I wasn't going to write the fucking book until someone said they would publish it. So I just did a query letter and then I went to the bookstore and got the addresses of the hundred biggest publishers, and I photocopied the query letter and sent it around. The list of rejection letters, I lost it when we'd moved and I was so upset because some of them were so funny, like, "How dare you ask us to publish your dribbling piece of rotten business." I'm like, "I love these people," but all I need it was one, and I got two.
Tommy Potter:
It feels like all my friends and all my relationships these days are cold emails.
Jim O'Shaughnessy:
Yeah. 98 rejections, two yes, and I was on my way, man. And so yeah, I'm not at all opposed, but make them good. Take some time, and as you said in the beginning of our conversation, think about it like I got two lines to get this person interested. Make those two lines really, really good.
All right. Tommy, you're the emperor of the world. You can't kill anyone, you can't put them in reeducation camps, but what you can do is we're going to hand you a magical microphone and you can speak two things into it and it is going to incept the entire population of the world. Whenever their tomorrow is, they're going to wake up and they're going to think, "I've just had two of the best ideas I've ever had, and unlike all the other times, I'm actually going to act on these two." What are you going to incept in the world's population?
Tommy Potter:
That's a big ask. I think it's two parts here. So the first part being the life philosophy, the fundamental values, the mantra that I live by, and that's going to be adding more value to the world than I collect. And then that in turn elevates the lives of others, which is very much at the end of my grave, you hope that the meter ticks a little more green than it did red in terms of the resources you gave to the world rather than extracted, which is how I see that.
And I think secondly, how is the question. How do you do that? What's the applicable route? And so for me, I'd say the applicable route is more... I think it might be twisted and maybe hopefully my reasoning makes sense to folks listening, but for me, life is this bucket of water and you have to be very selfish. We touched on this a little bit, but you have to be very selfish. And that's a negatively connoted word in my opinion, but the best thing you can do for the world is to make the most of yourself. Therefore, this bucket of water is your life. The water is the love for yourself, and so instead of grabbing a shovel and splashing it onto other folks, instead, the best thing is maybe have a never-ending faucet and so have the water overflow. You did so much for yourself, you're the radiant of energy when you come into that room and things happen with your presence, and you do so much for yourself that in turn does a lot for others.
I think the best anecdote for this that I could maybe give, there was a friend and we had coffee, and I started to realize that they cared about reputation and they cared about their personal image. And so I was like, "How can I break this down that would maybe make them think differently?" And I started to think life as a car, and Jim, I'm going to let you drive around town for 15 minutes. All family friends, everybody's going to see your car, and are you going to clean the inside or the outside? And then they said, "I'm probably going to clean the outside." "Interesting, okay. Now we're in Michigan. We're going to take a cross-country trip to SF, probably 30 hours straight. Are you going to clean the inside or are you going to clean the outside? You're going straight. You're just maybe going to grab some snacks, some gas on the way."
And they said, "I'll probably clean the inside." I was like, "Well, that's life." I think we live in the short term and time is an illusion, but it feels like we're very present in the now and everything matters right now. But in reality, I think you're driving on the highway and these people are seeing you for blips of six seconds, which feels like maybe years. In reality, it might, but when you can convert that over time, it's honestly just a little glimpse of what they're seeing. And so those would be hopefully my 2 cents, and that it's a cross-country trip, so clean the inside of the car and the people there, the wife and the husband or the kids in the back and everything is the immediate close circle around you that's being affected and yourself, so clean for yourself and then those around you.
Jim O'Shaughnessy:
Very cool. My friend George Mac says that if you're a super high agency person, it's not glass half full or half empty. You're a tap that can be turned on and fill that glass up as many times as you want, so I like that metaphor.
Tommy Potter:
You said it best. Agency is what built America.
Jim O'Shaughnessy:
It absolutely is.
Tommy Potter:
DNA.
Jim O'Shaughnessy:
It is our hypomanic edge, making us a little crazy but very productive. All right, Tommy, my Wranglers are wrangling. I got to jump, but this has been super fun.
Tommy Potter:
Thank you, sir. I really appreciate it.
Jim O'Shaughnessy:
Bye-bye.
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