Michael Gibson and Danielle Strachman, co-founders of 1517, join the show to discuss their rebellion against higher education, why universities stifle creativity, why IQ doesn't correlate with innovation, and how betting on "misfit toys" is the way to go—plus we explore Girardian mimesis, the perishable nature of creativity, the laziness of pessimistic storytelling 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.
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Highlights
From Bunk-beds to IPOs
“…there's been a meme put out there for a long time by institutions, larger nonprofits, things like this, that you can't trust the individual. "How dare you give money to an individual person?”…we actually believe the exact opposite, that giving to the individual has a very powerful outcome. And in fact, yesterday we had a very powerful outcome happen where we helped kickstart Dylan Field's career by giving him a Thiel Fellowship grant when he was, I don't know, probably 19 at the time. He credits us with helping him to move to San Francisco and get bunk beds for him and Evan to start Figma. And yesterday, this is something like 13 years later, he's announcing that they filed for IPO. And all that started by focusing on the individual and giving someone a shot. And I think there's also a lot of memes out there about young people having to wait. Our theme is some ideas just can't wait. And why not start now?”
Funding an Island of Misfit Toys
Jim: “when I was pitching [the fellowships] originally to some more conservative friends, they're like, "So basically you're going to fund an island of misfit toys." And I looked at them, I went, ‘Precisely.’”
Danielle: “I think the thing about the misfit toys label though, which is interesting to me, is that genuineness is so important to what we do at 1517. And so when people come to us, you can— it's like the status-seeking people, they just ooze it. You can tell who those people are right away. They're the name-droppers, they're the ones flashing the fancy watch. They're the ones who— yeah, the one-uppers, all of that. And so the misfit toys label I think is great because those people can't help but be themselves. Those people are also easy to spot because it's like, "Wow, you are weird in all the right ways. And other people probably don't even know what to do with you. But we're here for that.”
Stories as Motivation
“…people don't have agency to solve problems in the world. We meet young people and I guess they're lost to the Borg because they'll tell us that climate change means doom for mankind. And you know, maybe nations could act to change the situation, but no way a small group of individuals could ever make a difference. And so what I think is we need examples out there. We need stories to show that this can be done. And it's not just about sometimes it's like a Mayan temple with these steps where maybe Elon Musk is at the top. And okay, he is Jordan, he's going to inspire. But what we need are more people on that first and second step, just a few steps away from the beginner. Those can be really relatable and powerful. And I was saying this last week is we know what needs to be done. We need to cure cancer. Apparently saying that statement is not enough. We need to appeal to the non-rational part of man, the heart, the labyrinth of the heart. It's motivating people is just a really complicated thing. And I think stories are just the most powerful way to do it.”
Why Hardship is Compelling
“…The Tom Wolfe book, The Right Stuff is just so fantastic because it gets into some of the motivations behind [test] pilots. And I think that— I can't remember exactly. I think it's something like a 23% chance of dying across 20 years as a pilot in the Navy. And that's not counting combat deaths, so Vietnam or whatever at that time. Can you imagine any startup in Silicon Valley that advertised jobs that said you have a 1 in 5 chance of dying at some point due to the job? And what's crazy about these pilots is they loved it. It was they were dying to be the best of the best. Getting into the test pilot schools and then becoming astronauts. And so what motivates people to do that? It is some larger mythopoetic story about our nation and in competition with others. I mean, that's just— I think it can be such a powerful well.”
Reading List
A Mind at Play: How Claude Shannon Invented the Information Age; by Jimmy Soni and Rob Goodman
Collective Illusions: Conformity, Complicity, and the Science of Why We Make Bad Decisions; by Todd Rose
"A Gift for My Daughter"; by Harry Browne (Full text available here)
Paper Belt on Fire; by Michael Gibson
The Idea Factory: Bell Labs and the Great Age of American Innovation; by Jon Gertner
The Right Stuff; by Tom Wolfe
The Status Game; by Will Storr
The Two Cultures; by C.P. Snow
What Works on Wall Street; by Jim O'Shaughnessy
White Mirror: Stories; by Tinkered Thinking
Zero to One; by Peter Thiel
The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley; by Jimmy Soni
Rome's Last Citizen: The Life and Legacy of Cato, Mortal Enemy of Caesar; by Jimmy Soni and Rob Goodman
How I Found Freedom in an Unfree World; by Harry Browne
🤖 Machine-Generated Transcript
Jim O'Shaughnessy: Well, hello, everyone. It's Jim O'Shaughnessy with yet another Infinite Loops. One of my problems when I have super interesting guests on is I spend the first 12 to 25 minutes chatting with them about other things. And then my producers ping me because I am a cat that they try to herd and tell me, "Jim, you actually have to start recording the podcast now."
My guests today are Michael Gibson and Danielle Strachman, the co-founders of 1517 Fund. You know, Michael, your background kind of reads like a dossier for a thriller novel. Your father was in Intelligence and died under questionable circumstances. You yourself were at University of Chicago and NYU for undergrad. You went on to get a PhD, or so you thought, from Oxford. Then you decided, "What the fuck am I doing this for? I got to figure out how my dad died," applied to the CIA. That didn't work out. You and I are pretty similar in that they would look at our applications and say, "Absolutely not." But then you— I love the way you put it— you decided, "You know what? I'm going to be an unemployed writer in LA." You met Peter [Thiel], and we'll get to that in a bit.
Danielle, you also have a really fascinating background. You did a left turn out of college and decided, "You know what? I'm just going to start a private tutoring company and homeschooling community," found [it] very interesting. And then you guys came together to found the 1517 fund.
So let's start out— Michael, we are publishing or reissuing your book Paper Belt on Fire. And 1517 actually is kind of a jihad against the paper belt. And for those that don't know what that is, the Acela corridor runs from Washington, D.C. all the way up to Boston. That's the— I'm sitting, by the way, in the center of the paper belt. And you guys are moving mountains and kind of saying, "Hey, that's all wrong. We got it all wrong." So for people who don't know about 1517, just a little background of the philosophy and why you felt compelled to found the fund.
Michael Gibson: Yeah, sure. Okay, yeah. I'll speak my version and then you go. Yeah, I called my book Paper Belt on Fire because I thought the failure of universities was on par with some of the failures in other institutions across the last 50 years. And you can look at polls and all of them speak to just how little trust people put in institutions because of their failures. This could be the financial crisis of 2008, it could be the institutional response to COVID, just a lot of different ways the media has failed and so on. And I thought that was part and parcel with the way universities weren't living up to their stated purposes.
So it's— I don't know if it's interesting, but most criticisms of the universities nowadays focus on the politics, especially among Northern, let's say liberal arts or Ivy League schools. They've just gone so far left that people are questioning whether these are woke madrassas, let's say. Okay, that is a criticism, but that's not where we come from. I think that is a problem. But what we're upset about and what prompted us to work on the Thiel Fellowship and what we're doing now is we actually think universities are stifling creativity. And this is very antithetical to their stated missions on their website where they claim that they're teaching the leaders of tomorrow and so on.
So with the Thiel Fellowship, it was really that some ideas can't wait, and in fact the university was holding these people back. There are all sorts of bottlenecks. And then culturally I think also it was limiting people's imagination. So whether it was the grant to get people out of school or what we do now when we make investments in dropouts, it's really about freeing people and liberating them to pursue those interests. And don't believe the hype that these universities are going to help you.
Danielle Strachman: Yeah, I'll add to that a little bit because I think some of the sort of mimetic or philosophical underpinnings of our work stems from my time working with homeschoolers and unschoolers and watching these people who are very child-led in what they did. And one of the phrases that comes up for me a lot is non-coercion. And so this isn't about forcing somebody to do something. This is helping them to guide in what they want to do.
And something that came up in our event that we had last week that OSV participated in— our Renaissance Reimagined event for fellowship leaders— was that I think there's been a meme put out there for a long time by institutions, larger nonprofits, things like this, that you can't trust the individual. "How dare you give money to an individual person? Don't give money to your family. No, you should give all of that money to an institution such as a college, such as a group that is supposedly going to enact on this mission."
And we actually believe the exact opposite, that giving to the individual has a very powerful outcome. And in fact, yesterday we had a very powerful outcome happen where we helped kickstart Dylan Field's career by giving him a Thiel Fellowship grant when he was, I don't know, probably 19 at the time. He credits us with helping him to move to San Francisco and get bunk beds for him and Evan to start Figma. And yesterday, this is something like 13 years later, he's announcing that they filed for IPO. And all that started by focusing on the individual and giving someone a shot.
And I think there's also a lot of memes out there about young people having to wait. Our theme is some ideas just can't wait. And why not start now?
Jim O'Shaughnessy: Why not?
Danielle Strachman: With 1517, we do grants and investments, and it's all about asking that question: "Well, yeah, let's see what happens. Why not give someone money to see if they can build a deep tech company or something that could just become massively influential in the world?"
Michael Gibson: Yeah. There's one more thing I'd like to riff on based on what Danielle just said. I love the idea of this phrase "giving someone a shot." Giving someone an opportunity even though they're young, even though their resume isn't as full as a tenured faculty member. Because it touches on this idea that our culture is almost too obsessed with the past in the form of, "Okay, what credentials have you earned? What work have you done? Which recommendations do you have?"
If you look at the length of time it takes scientists to finally get a grant to do something nowadays, whether through the NIH or the NSF, they might have to wait till they're 40 before they get their first shot at doing their own experiment. And I think that's because we're backward-looking as a culture. We're always looking, "Well, how do you know it's going to be good? Well, look at his resume." Whereas I think with a 20-year-old— I love this idea of giving someone a shot. They may not deserve the money in full, but what we believe is that in the future they can earn it. It's what they do in the intervening time in the future will retroactively make that desert whole. It'll be like, "Yeah, we gave him a shot and he lived up to it." And I think we need to do that more as a society.
Danielle Strachman: I'm going to add one more piece to this, which is that you say that we're too backward-looking, but I would take that to the extreme that we don't look backward enough. One reason why I think radical life extension is interesting is because it would give us the ability to look really way further backwards, viscerally than we can now. And so I think people only really look backwards to maybe their parents, maybe their grandparents' generation. And that's kind of viscerally what we can kind of hold in our tiny brains here.
But if you look really far back, people didn't go to college and people were inventing and creating and writing and doing things in the arts without an institution stamping them. So I think in some sense we don't look backwards enough. We only look to the recent past, which I think is a huge fault.
Jim O'Shaughnessy: Again, you're preaching to the choir here. We agree almost entirely with everything you've just said. The idea that we look at it this way: a degree suggests competence. That's it. It suggests it. But then we also say, "But what kind of person has the ability to get into fill-in-the-blank— Yale, Harvard, Stanford— and are they molding them in such a way?" I think, Michael, you said something along the lines of what it takes to get accepted into an Ivy or Stanford or MIT gives you a certain type of person, right? And that certain type of person seems to be uniquely unqualified to be the founder of a startup. Elaborate on that for a bit.
Michael Gibson: Yeah, so— and this is a bit of a tangent, but I think it'll start to make clear this point— so Peter Thiel, our old boss at the Thiel Fellowship, is a big fan of this French literary theorist René Girard.
Jim O'Shaughnessy: I'm a Girardian enthusiast as well.
Michael Gibson: So right. And so to boil down Girard's theory of social dynamics, he believes humans are motivated by envy. And when we start to compete with each other over rival goods, we start to become more and more alike. So it's the more you compete, the more alike you become.
And so what I think Peter saw was that in American society in particular there's this massive competition to compete for children and teenagers to impress a college admissions committee. That massive competition has now forced everyone to become more and more alike because they're competing for those very few scarce spots, those status, positional goods.
And then the further twist that maybe is Thiel's add is the more you become alike, the less unique you are. The less unique you are, the fewer new creative ideas you have. And so as everyone is fighting to get into MIT and Harvard and so on, in some ways it's incredible that they've reached that level of achievement, but in doing so, they have shaped their character to be quite similar to the other people in that mix. It's a certain type of person for sure. Someone who's good at getting tasks done and taking tests.
But then this was another curiosity that Danielle and I discovered over time, which is people are obsessed with IQ and smarts, but there's not a strong correlation. There's some kind of threshold effect where creativity is just some other faculty that is very different from IQ. There are so many high IQ people who are just conformist and do not invent new things or write novels or poems or plays. And so the types of people who are creative are just different types of people from high IQ, high-achieving sorts. And I think our institutions are totally blind to that.
The types of people that we found who became successful in the Thiel Fellowship were not those achievement-seeking hounds. They were a little weird in different ways. I mean, to go back to Dylan Field, he wouldn't even share his SAT scores because we asked for that originally and that was something we learned that yes, it did not matter in the end. It didn't have a lot of predictive value about how people are going to fare in the wild. So I— that's what I mean when I say universities are stifling creativity. I think it is that character-deforming effect that is most problematic.
Danielle Strachman: Yeah, I think that's a huge effect. But I also think one thing that's stifling about that creative act is the debt people go into for school, because if you're a creative person and you come out of school— when I started my tutoring company, I had very little debt and a very low interest rate on which to pay it off. And so that meant that I could do something crazy like move from Boston to California with really no idea what I was doing and throw up some Craigslist ads before Craigslist was creepy, and be like, "All right, I'm going to start this tutoring company and I'm going to try it out." And I didn't need to just go get a job somewhere because I wasn't saddled with debt so I could let my creativity flourish because I didn't have something weighing me down even after the indoctrination of school.
Jim O'Shaughnessy: Yeah, yeah. I sort of am the old version of that kind of person. The only reason I have a degree at all is because my mother begged me to get one. I thought it was the biggest waste of time. And I was much more interested in actually doing things, starting companies, that kind of stuff. And— but back then, in the dark ages, man— and then, of course, it turned out for the best because in my highly regulated former profession of asset management, you are required to have a BA to be an asset manager. So I'm like, "Ooh, lucky. Thank you, Mom." But my degree in economics was completely worthless. In fact, it probably put up some roadblocks that shouldn't have been there. And I had to realize, "Oh, that's wrong. Oh, that's wrong, too. Oh, my God. Everything they taught me is wrong." And persevered that way.
But then there's a paradox, because basically, when you look at your success both with Thiel Fellows, but your own 1517 alumni network, it's kind of become a prestigious badge of honor in much the same way that it used to be "I went to Stanford" and it's now, "Hey, I got a 1517 grant." And to me, that's a paradox that brings in kind of Will Storr, who I've had on the podcast, who wrote The Status Game, and he basically maintains that playing the status game is hardwired into our human OS, right? And his argument would be, if you play the right kind of status game, right— adding to the culture, adding to civilization, adding to all of that— then that's great. But you're still playing it.
How do you guys— Do you guys have a plan for identifying when your own brand crosses from being kind of literally the signal that's helpful to a stifling orthodoxy?
Danielle Strachman: Yeah. There's a couple of things that come to mind. One is when we're running the Thiel Fellowship, we're constantly reminding Thiel fellows, "Hey, it's cool to be building and doing what you're doing out in the world. It's not cool to be a Thiel Fellow." It's not like having a badge isn't the cool thing, it's what you're doing. And we're often reminding people of things like that.
Even this morning, actually, I run a group chat that's just for wiley makers and founders in San Francisco. And it's not 1517 oriented, it's just really anybody and someone in the group chat today was talking about being a grantee and then he messaged me privately and he's like, "Hey, is that okay?" And I was like, "Listen man, what's cool is that you're building and doing the thing you're doing, not the resources that you got from somebody to do it. So let's keep the content to what you're doing and not the resources that you received."
And so it's something that we sort of struggle with because, you know, the Thiel Fellowship used to be called "20 Under 20." And even just that whole thing of like, "Oh, and then there's 30 Under 30, now there's 40 Under 40." And all these sort of status things— we know that we're a part of that and we rail against it.
Michael Gibson: I think for my part, I'd add that as long as you're solving hard problems, I'm not worried about status-seeking because it's just going to be really hard to do things like invent fusion energy, cure Alzheimer's and dementia. There are a lot of hard, outstanding problems that we still have yet to solve as a society. And so where I think the mimetic angle comes in is more the me-too stuff related to almost trivial software, I think consumer apps, or just trying to be a founder rather than someone who is using a company as a vehicle to solve a major problem. I would love a world where 10,000 people decide it's the cool thing to try to discover fusion or cure cancer. That would be a great world.
Jim O'Shaughnessy: I mean, that was one of the driving forces when we decided to do the fellowships. It was kind of like, in the past, geniuses, creatives, innovators were all born, lived and died without knowing that they had all of those talents and skills, right? And now we have kind of a global colossus because we're interconnected and we can now find and more importantly fund those people. And I just kind of felt compelled to do that, right? Because the idea— when I was pitching originally to some more conservative friends, they're like, "So basically you're going to fund an island of misfit toys." And I looked at them, I went, "Precisely."
Danielle Strachman: Yeah, exactly. You're like, "Good. You get it." Yeah, exactly.
Jim O'Shaughnessy: Yeah.
Danielle Strachman: I think the thing about the misfit toys label though, which is interesting to me, is that genuineness is so important to what we do at 1517. And so when people come to us, you can— it's like the status-seeking people, they just ooze it. You can tell who those people are right away. They're the name-droppers, they're the ones flashing the fancy watch. They're the ones who— yeah, the one-uppers, all of that. And so the misfit toys label I think is great because those people can't help but be themselves. Those people are also easy to spot because it's like, "Wow, you are weird in all the right ways. And other people probably don't even know what to do with you. But we're here for that."
Jim O'Shaughnessy: Which is really cool because you guys also do character screens and you've walked away from, on paper, technically stellar deals. And after half an hour of coffee with the founder, you're like, "No way. Not gonna back this." I find that fascinating. And I read about some of the things you look for. You use the term "the ATM founder," right? The guy who ghosts you until it's time for money. They're all over your text, pinging you.
Danielle Strachman: It's like coming to, you know, Danielle and Michael, mom and dad, like a 20-year-old. And you're like, "Wait, why do you only come to us when you need a 20? What's going on here?" And we have structures set up so that's not the only time people come to us. So it's when people are trying to negate— you know, people love to game systems. It's part of, I think, what makes the human spirit. But at the same time, we're trying to build relationships on trust and goodwill and good work. And that looks a lot different than, "Hey, can I get a 20?"
Jim O'Shaughnessy: So yeah, the other one that you guys have talked about, you call it "rich too early." I call it the lottery ticket syndrome. I've had a lot of experience with people who get lottery ticket syndrome. How do you— Is that correctable? Let's say you— he or she makes it through all of your character filters and everything else, but then, God damn it, they get funded at a hundred million dollar valuation and suddenly their shit doesn't stink and their way is the only way. What— do you guys have a way to deal with that if you're already in?
Danielle Strachman: Oh, I mean, we have a few things. I mean, we often— we have a whole post that we've written called "Your Cap Will Kill You." And it's all about, "Hey, listen, that shiny number might feel really good in the moment, but you also have to grow into that. Then that's a heavy lift." And also we've seen this over time. When people go through different accelerator programs and things like that, they get this "I'm better than other people" thing going on. And at this point we've become pretty good and pretty clear at just saying to people what we see. "Hey, we've noticed a little— some of the humility is lacking right now and some of the gravitas is going to get you in trouble."
I mean, I had a conversation with one of our founders last week who I think was getting a little too spunky over Twitter for the wrong reasons and things like that. And it was like, "Hey, listen, we are on a mission, a calling level mission here and we— meaning all of us together— and shitting on people on Twitter isn't going to help you fulfill your mission. So let's get you back in the right saddle so we can get back to work here and not in the pounding one's chest, blah, blah and getting into the mimetic bullshit that happens all the time."
Michael Gibson: Yeah, one that touches on a character trait that in psychology sometimes it's described as this difference between external locus of control versus internal. And when people start looking outward to blame the world for their struggles or challenges and failures, that's a huge negative signal for us as a fund. Just the more people take sort of that extreme ownership position, the more effective they are. It doesn't guarantee success, but it just seems to correlate with it strongly and it makes sense.
But yeah, one of the ways people will turn to the world and start blaming it is they'll start blaming the world of startups and VCs. It can take many different forms. You know, "Oh, look at this guy raising 10 million on dog walking app on the blockchain and he's got nothing. And I'm working so hard down here and I get nothing." It's like you can't do that kind of— Those kinds of comparisons are killer. So yeah, we try to pay attention on the margin. I think we can help people. But sometimes, I don't know, it's like character seems to be destiny in some ways which is why we want to try to avoid backing the founders who turn to the dark side.
But you know, it is also still true that bad people can create good things. So we have— Or sometimes we're wrong. Danielle and I might disagree on that character assessment or there's someone out there right now. We won't name names. But you know, he, I think it was a billion dollar company. I can't remember. But when he pitched us— to me, he felt a little manipulative. To Danielle, it felt authentic. This guy was crying in the office. Me, I don't know. There's sometimes I feel like people might use tears as a way to—
Danielle Strachman: Sure.
Michael Gibson: You know, hijack your empathy or something. And so I don't know. You know, he's cruising, doing really well out there. But— And we disagreed on it, so it's hard to say. Yeah. So it's— And we make mistakes all the time. This game is the power law. Only a handful of our companies are really going to do extraordinarily well. So it's really humbling to see all the times that you're wrong. Sure.
Jim O'Shaughnessy: Yeah. The "what's bred in the bone will out." The character question I think is a really legitimate one. My son has a friend who also kind of sorts along what he calls pre-fall and post-fall. And what he means by that is pretty obvious, right? The pre-fall haven't had this kicked out of them by the world. Right. And on Wall Street that's a huge thing. Right? And on Wall Street they're called dead players or live players. And essentially somebody who is post-fall, that's who you want to do business with. Right? Because the world has punched them in the face so many times that they're definitely post-fall and the character traits that might be latent in the pre-fall definitely come out.
So that leads to a question of how do you guys deal with the maturation of a founder? Right? So you had fellows that went kind of from teenage hackers to public company CEOs quickly and what have you learned or unlearned about how to help a 19-year-old or a 20-year-old develop really good executive judgment at kind of warp speed.
Danielle Strachman: That's interesting. You know, for me this, a lot of this goes back to learning from the homeschooling community and treating each of them individually, but also giving them very specific explicit feedback of saying, "Hey"— And it's not a judgment, just saying, "Here's what I've noticed in watching this maturation process happen," you know, and being able to build those trusting relationships with people because if someone doesn't trust you, they're also not going to open up about what doesn't work. So being able to be a sounding board that's not going to be reactionary, that's going to hear them out fully, that you can have a real dialogue with and a real Socratic dialogue with of, "Gosh, wow, this interesting crazy thing happened. Tell me more about that. Tell me why do you think that happened or what could happen in the future? What would you—" We love reflective questions at 1517.
"Hey, what would you—" We just onboarded our new group of Flux scientists, who are working to commercialize their research and we had three of our current science-oriented founders on a panel and we said, "Hey, all of you are doing really well right now. Some of you just started 18 months ago. Some of you have been doing this for a few years, even through market downturn, tell us what you would have told yourselves from four years ago when you first got started." And that kind of dialogue we think helps in building that relationship, but also just giving them the space to have that reflective time. Because I think all of us have a hard time slowing down and taking a look and saying, "Gosh, what is really happening here? What is maturing?"
Michael Gibson: I think we also look at in terms of predictive character traits. Really big one is curiosity paired with ambition. So the people who are great at learning on their own, they're going to apply that skill to learning how to manage and how to grow into that CEO role. We've seen that with— we have different phrases for this. It could be "acorn to oak" or "crawl before you walk" and then "walk before you run." But what's guiding that is some deep curiosity into, "Okay, I need to learn these tools."
Yeah, there are other things too, like do they surround themselves independently with mentors and good coaches, good feedback mechanisms. But in the end— God, this reminds me, we had a funny— We called it the summit at the time. It's a conference of Thiel Fellow applicants and people like them. And it was in Las Vegas. What year was that?
Danielle Strachman: That was 2014.
Michael Gibson: Okay, 2014. We had Tony Hsieh giving a talk and then followed right after him was Peter Thiel. And Tony Hsieh gives a talk where he's talking, he says the number one thing that matters in the success of a company is the culture. Creating a strong culture. And that starts with leadership and so on. So Tony Hsieh gives that talk immediately after Peter gets on stage and says culture doesn't matter at all. The only thing that matters is success. And then he gives this— At the time the example was Twitter. He's like, "Look at this company. They have the worst management, they have no leadership. And yet this product is doing remarkably well. So I'm not so sure culture is everything."
And so I've seen both sides in working with our founders where some of these young people— An analogy we use is imagine a race, a car race where it's no holds barred. Any kind of car can be entered into the race. And there are some people who have really good standard NASCAR F1 cars. They're— And they've got amazing drivers. These guys have Harvard MBAs, the CEOs and so on. But then our younger founders come along and they've got this car souped up with five rocket engines. This thing's going to hit into every wall imaginable. And they're not great drivers, but the engine is just so powerful. It doesn't matter. It just goes so far.
So you know, we do what we can to help people. But the— I won't go so far as Thiel in that respect. But it is true that sometimes the competitive advantage, technological advantage can be so powerful that it makes up for a lot of some of the shortcomings.
Danielle Strachman: Well, and I'll also add in the current day and age. I think what's really interesting is that I think one reason we're also seeing younger and younger people building in hard tech areas is that there are these role models that have come before them that are only in their 30s now who are setting that example. And so it's the Palmer Luckey's of the world, the Vitaliks of the world. Dylan, all these people, they've gotten to sort of watch build companies literally as they were 20 years old and do that throughout. And so they see these actual real time examples. And I think that is gonna— I think that's gonna get even deeper in the young entrepreneurship culture of, "Hey, I'm gonna try to model"— Not necessarily off of, I don't know, Steve Jobs or something. That's what, you know, it's like, okay, we have these newer groups of people who are doing extraordinary work who they can similarly look up to now and model some of that behavior off.
Jim O'Shaughnessy: I do love that when we started the fellowship in 2010, 2011, I mean, there was one or two startup books on the bookstore shelf, and now there are a hundred. There's just so much lore being passed down, know-how transferred from friends or just podcasts like this. And it's just really incredible how much is out there. That does go a long way. Yep.
Jim O'Shaughnessy: Yeah, several things to react to there internally. Our little tagline at OSV is "crawl, walk, run."
Danielle Strachman: Oh, funny.
Jim O'Shaughnessy: And so also, "mistakes are portals of discovery." We literally want you to make mistakes. We don't want you to make the same mistakes time after time. But we think that we reframe them as, "Hey, these are the greatest learning opportunities that we're going to face, and we've got to look at them that way" as opposed to the standard, "Oh, I made a mistake." "No, great. What do we learn?"
And then the other thing that really resonates with me is the idea that I think both the guy who gave the speech on culture and Peter are both right. And here's why. We believe that everything is downstream of culture. If you look at our verticals, you will see that they are all designed to tell better stories. A book publisher, a movie maker that focuses on documentaries, guess what kind of stories we want to tell? We want to tell stories that are optimistic about the future, optimistic about the benefits that humanity can build with innovation and all of these things.
We have been under a regime, I call it the World Economic Regulation Forum. I hate those guys. Literally, thank God that they are so tone-deaf with their propaganda campaigns because it's "2030, you will own nothing, you will eat the bugs, and you will live in the pod and you'll be happy." But the idea of this pervasive culture of negativism, of learned helplessness, of all of these things, it's been at epidemic levels for maybe the last 30 or 40 years.
And so we need better stories, better movies, better aspirations, and that is what we're trying to do with our various verticals. And, you know, it's funny, the reactions— Joe Wiesenthal of Bloomberg, he was on my podcast once and he was listening to me and he goes, "Are you an anarcho-capitalist, man?" "No."
How do you guys deal with the kind of people who are kind of drawn to what you're doing, but they still have that— they have their Harvard or Yale degree on the wall behind them and they still put a lot of meaning into that. How do you flip that kind of thinking?
Danielle Strachman: I mean, I don't know how much we work with those people. I think we flip that by making things about what people are doing in the now and not what piece of paper did they get or who stamped them or something like that. One of the things we hear when people come to our events is, "Gosh, it's so refreshing. Nobody asked me where I go to school." You know what I mean? So we're trying to normalize that you would just talk about what you're building and what you're doing and not who stamped you to do the thing that you're doing.
Michael Gibson: Yeah. What occurs to me on a couple of themes you were touching on there is this sense that people don't have agency to solve problems in the world. That we meet young people and I guess they're lost to the Borg because they'll tell us that climate change means doom for mankind. And you know, maybe nations could act to change the situation, but no way a small group of individuals could ever make a difference. And so what I think, to your point, which I love, is we need examples out there. We need stories to show that this can be done.
And it's not just about sometimes it's like a Mayan temple with these steps where maybe Elon Musk is at the top. And okay, he is Jordan, he's going to inspire. But what we need are more people on that first and second step, just a few steps away from the beginner. Those can be really relatable and powerful.
And I was saying this last week is we know what needs to be done. We need to cure cancer. Apparently saying that statement is not enough. We need to appeal to the non-rational part of man, the heart, the labyrinth of the heart. It's motivating people is just a really complicated thing. And I think stories are just the most powerful way to do it.
Danielle Strachman: Well, and I want to touch on that for a second because Michael and I are children of the '80s and so we grew up with very tech-positive movies and culture. And it's interesting because I think it was so easy because, you know, when you're swimming in the water you're in, you don't realize you're in it. And when we came up with our Flux program to support scientists to get started on R&D and then to commercialize their work, were thinking about what to name it. We ended up— we were originally going to name it the Flux Capacitor. Now we just call it Flux. And of course that's from Back to the Future.
Jim O'Shaughnessy: Sure.
Danielle Strachman: And we had to watch the movie again just to see, "Hey, how does this hold up if we're going to name something after it?" And what was really shocking and amazing to me was, "Oh wow, this is so 1517." This is a crazy mad scientist and a 17-year-old working together to change the trajectory of the world. And that's what we're so about. And so to what you guys are doing in bringing culture and film forward, I think that's really important because it does have the— only in hindsight can I see what an absolutely profound effect it had on my current like present and future. And so we're always making our team members watch old Ghostbusters. You have these academic scientists drop out to start a company to solve this ghost problem. WarGames. Real Genius.
Jim O'Shaughnessy: Real Genius might have— Real Genius. Exactly. I predate you guys. So I was going from age 10 to 20 in the 1970s, which unfortunately really sucked as a decade. Let's be honest. And I was still a young guy in the '80s and remember every one of those movies, right? And they all had a very different theme. And I just basically when we started thinking about it, I'm like, "Where are all of those inspirational movies? Where are the inspiration—" We just published this. I don't have it here. A book called White Mirror— take off on Black Mirror. It's the antithesis of Black Mirror. And here's what's cool. The collector's edition which was on pre-order only— 100 copies— totally sold out in 48 hours.
Michael Gibson: Oh man. Amazing.
Jim O'Shaughnessy: Only place it was available was online. Only place anyone was talking about it was on social media, Twitter primarily. And I was like, "This is the coolest thing in the world." It's priced pretty high, right? Because you get a graphic novel with it, you get a drawing from the author who's also a trained artist, etc. But people— and I talk to younger people and— Have you guys heard of Todd Rose and the work he's done in the book Collective Illusions?
Michael Gibson: No.
Danielle Strachman: No, I don't know that one.
Jim O'Shaughnessy: You guys— I should intro you guys to him. He's really fascinating. He wrote a book called Collective Illusions and it's really all about this kind of thing that thank God we're coming off of now, but the forced conformity of thought, especially among elite universities, etc., and it's basically people's real beliefs versus their stated beliefs. There's never been a wider chasm, especially among young people. And they figured out— his foundation or think tank— figured out a way to do polling in a way that gets to revealed preferences and beliefs, not stated preferences and beliefs. Because essentially we've become so kind of terrified to state what we actually think. Right? That we're living in an Emperor's New Clothes type environment.
But his way of polling shows the actual— And what I love about it is I'm an empiricist from way back. Right? I was a quant. And the data is incredibly predictable. So for example, what was it, 15 months before the election? His polling had Trump winning by basically a percentage point within the actual numbers. And you talk to anyone here in the Paper Belt and they would look at you like you're insane. You know, you're crazy, man. That's absolutely not going to happen. Okay. Yet from politics to— Our interest is less in politics and more in startups and that kind of stuff. Also incredible data there.
So— Okay, interesting. Yeah. One thing we've seen change over the last, really four to five years, I think that's related to this is younger people rebelling against the stated attitudes and views of the establishment. So one person put it this way to me is in the 1950s, the conformist establishment was these men in gray flannel suits who had pocket protectors and boring views. And the counterculture was the bohemians and the beats and so on. But now that's flipped where the establishment is the hippies and so on. And the counterculture now are these— And they're primarily young men and they're in places like El Segundo, the Gundo, where they are rebelling against that. Right.
Danielle Strachman: Getting married and having children is cool.
Michael Gibson: I'm religious, I have an American flag in my workshop. I lift weights. And yeah, having kids young is cool. Such a strange pendulum swing, but it's kind of— I'm here for it.
Danielle Strachman: I want to go back to what I really wanted to make a comment about— sort of film and culture and writing. I think it's really lazy thinking when people go towards all the dystopian stuff because it's so much easier to write about something crumbling rather than saying, "Hey, the positive is we're going to figure this out. And here's some creative ideas on how to do that." It's really hard to be a Neal Stephenson type. You have to be creative and inventive in your writing and you have to go down really deep rabbit holes. But just to say, "Hey, it all ends and the star hits us and it's over," that's fucking lazy. No. And so I feel like creative people need to stop wanting to make a quick buck on a movie and instead go back to being like, "How do we become Spielberg? How do we do something truly great?" Because it takes imagination, it takes creativity to do that.
Jim O'Shaughnessy: Yeah, totally. Could not agree more. Right? Pessimism is easy. It's the easiest thing in the world. "Yeah, that's never gonna work." "Yeah. Because of this and this and this." It's that external locus of control in a— Totally agree, totally agree. I can't do anything because it's all these other people messed up and— Exactly. And the external versus internal locus of control. I wrote a series of letters to my kids when my son was born. I was 24 when he was born. And I decided, "You know what, I'm gonna do this long term project and they're gonna be letters to my kids." And literally that— I just reread the first letter. That's the first letter. "What you will achieve is entirely inside you. It is not outside you." And I'm a big fan of Lao Tzu. And so I threw a couple of Dao De Jing quotes in there as well.
Danielle Strachman: Have you read Harry Browne's letter to his daughter?
Jim O'Shaughnessy: Yes. Yeah.
Danielle Strachman: So I— this obviously reveals my libertarian roots, but I love that letter. And I read that letter probably in my early 20s and it was— the letter basically states, just remember, nobody owes you anything. And it's like, that's gonna help you live your life in this crazy world if you keep reminding yourself that, "Hey, this thing happened and you didn't like it, okay, well, nobody owes you anything." And so what are you going to do from that place? And so I love that you're writing letters to your infant children to read when they're more cognizant.
Jim O'Shaughnessy: Yeah. What we did was my wife's a photographer, and she's the competent one between the two of us, and she took the letters and put them into a readable format because my handwriting— you know, I could have been a doctor, but— But basically she did them all with photos from the time that the letter was written and then put them in a book, which we gave them on their 21st birthdays.
Danielle Strachman: Oh, that's amazing.
Jim O'Shaughnessy: And so it's— But going back through them, it's fun for me because I'm like, "Oh, I've changed my mind on a lot of things." Yeah. But some of the core things like internal versus external locus of control, I have only deepened my belief in that. Right? Learned helplessness is a toxic mind virus, in my opinion. Really is. And it just kills people's initiative. It kills their life basically. Right? I just— it drives me absolutely insane. And I really agree with your idea. Pessimism that is so easy to be performative, to say, "Oh," and sound smart. It's the creative, innovative, imaginative founders who are building the real future. Right? And— But I definitely also believe the Kennedy moment, I call it. Right? Kennedy, when he made that speech, he knew that we didn't have any of the tools that it was going to take us to get to the moon. But that he knew that intentionally, but wanted a moonshot, and so that's why he gave that speech. And guess what? People are all like, "We can do— We could do it. We could actually do it." Right? And so those kind of "reach for the stars and hit the moon," right?
If everyone is like, "Why would we— Why go into space at all? It's a misuse of resources." Yeah, the— It speaks to the state of the culture where now when people use the term moonshot, they're happy to use it, but we have moonshots with no moons. It's like, smaller than the moon. It's like, "Hey, the moonshot is, I don't know, some small project to make a drug that treats something, doesn't cure it. Who knows?
Danielle Strachman: Well, we had a founder who— we have an event each year called Santarchy, which is a Christmas anarchy conference. And we have people come and talk about both scientific and controversial ideas. And one of our founders came and he talked about how one thing that made the moonshot and got the U.S. rallied around that was this idea of competition of, "We're going to beat Russia, we're going to make this happen." This is the space race. And this young man was interesting. He was— I don't remember the title of his talk, but it was something like—
Michael Gibson: —Why China should take the moon.
Danielle Strachman: That's right. "Why China Should Take the Moon." And it was, "Because it motivates Americans to do harder things." And it's that competition is actually really good and can feed into the soul of what you want to bring forth. I always thought that was really interesting that I think it's some combination of leadership, you know, and putting out a vision that we can't even understand how we'd fulfill it. But also that competitive nature that we all get into of, "I'm going to get you." It's going to happen.
Michael Gibson: Yeah. The Tom Wolfe book, The Right Stuff is just so fantastic because it gets into some of the motivations behind these pilots. And I think that— I can't remember exactly. I think it's something like a 23% chance of dying across 20 years as a pilot in the Navy. And that's not counting combat deaths, so Vietnam or whatever at that time. Can you imagine any startup in Silicon Valley that advertised jobs that said you have a 1 in 5 chance of dying at some point due to the job? And what's crazy about these pilots is they loved it. It was they were dying to be the best of the best. Getting into the test pilot schools and then becoming astronauts. And so what motivates people to do that? It is some larger mythopoetic story about our nation and in competition with others. I mean, that's just— I think it can be such a powerful well.
Danielle Strachman: And it's funny because even one of our own companies, Marathon Fusion, is experiencing this. And they're a fusion infrastructure company and they had put out internships at different schools and they weren't getting that many bites. And I think one of the professors had talked to the team and then when he messaged it to his class, he was like, "This is going to be the hardest, most brutal. It's going to be insane, this internship." And then all of a sudden all these people applied to it and all the people that applied— some of them, they've ended up hiring as full time hires. This team thought, "Gosh, we're gonna have to hire PhDs for what we're doing and all this stuff." And no, it turns out that hiring the graduate student interns has been a huge boon in their success. All because this professor put out, "This internship is going to eat you alive." And they were like, "Oh, that's how you do it."
Jim O'Shaughnessy: Yeah, yeah. It's the Shackleton ad for the people to join him on the trip. He wasn't getting anywhere until he was like, "This is going to be impossible. Most of you are going to die." And then suddenly they all came online.
The point you were making, both of you were making about an us versus them, about the space race and all that. I have a thesis that actually that was much more of a unifier— the Cold War— than people understand. It was literally a super simple meme that it was us, freedom, democracy, free minds, free markets, versus totalitarianism, the Iron Curtain, the secret police, etc. Real simple meme. And people could align on that particular meme.
If you look back, the differences between the Democrats and the Republicans on foreign policy during that period was very little, very de minimis. And then when the Berlin Wall fell and the Soviets fell not long thereafter, rather than being the end of history, it became the opening of this sort of— we didn't have a unifying goal in the West. Right? And so I think that's interesting. So it's— in that telling, we didn't learn the lesson of Yugoslavia in the 1990s. Exactly. The story, Yugoslavia after the Wall falls. Suddenly you have the reassertion of identities based on religion or ethnicity in that region that led to really bad conflict. And so maybe the myth was that we were different, but what really happened was we started to see the same thing, identity politics. All these conflicts in our culture nowadays could be traced back to that time.
Michael Gibson: I think that's pretty insightful. Yeah, yeah. And the idea is the simplicity of the meme. Right? St. Paul memed Christianity into existence. He was the ultimate marketing guy, man.
Jim O'Shaughnessy: You know, I've toyed with doing a Twitter thread on it, but everyone at OSV is like, "We stopped doing them as threads. We start doing them in our Substack, dude." But I definitely think that— I call it the great reshuffle and I started using that term in 2015. Everything— the declining and collapsing trust in institutions. There was a lot of rot that was pretty noticeable prior to all of this kind of coming down at once. But I definitely do think that lack of that simple "us versus them" of the Cold War. It was a simple unifying meme. The minute that went away, you had it— You made it much easier in my opinion for this descent into the evolutionarily fit, maybe not a great idea, but very evolutionary fit of our tribe versus their tribe. That's how you get identity politics. That's how— and because it's so easy.
But I always— when I'm talking to one of those people, I'm like, "Well you must really hate the blue-eyed tribe then, right? Because I'm a hazel-eyed guy and those blue-eyed people, they're the worst." And they look at me like I'm insane. I'm like, "This is kind of what you're doing with the rest of your identity politics."
I definitely think though that we are at a moment, right, and I think that there are tons of green shoots like you guys, like what we're doing at OSV. I'm seeing more and more of that. Do you guys agree with that? Are you seeing more people open to the message? You were pilloried, Michael, when Peter launched the thing, you had Larry Summers. Well, of course Larry Summers. But, you know, I remember when I read his thing about how it was the biggest misuse of philanthropic funds in the world and it reminded me of the quote that it's very hard to get a guy to understand something when his paycheck depends on not understanding it. But are you seeing more of that? Are there more people joining the rebel alliance?
Danielle Strachman: Oh yeah.
Jim O'Shaughnessy: I think when it comes to the idea that college may not be the only path to a fulfilling, successful career.
Danielle Strachman: That's becoming very normal.
Jim O'Shaughnessy: That's pretty normal at this point.
Danielle Strachman: The American gap year, very normal now. It did not exist before. 15 years ago people thought the European gap year— Americans never thought about a gap year.
Michael Gibson: So yeah, on the higher education point, I think a lot has changed. And then you add the politics to it, that has worsened and the price has gone up. So I feel like that crisis is coming to a head on its own.
When it comes to this deeper issue of agency and problem solving and just believing in a positive vision. I— yeah, it's like the subset of people we work with. Sometimes I'm like, "Oh man, I just have so much hope for the world." But then I talk to someone who's not operating in our world and they're deeply pessimistic and they'll tell me— I had a girlfriend who was an ER doc in San Francisco. So she saw all these problem cases coming through the door every day. And we'd get in arguments because she'd say, "Look, I see homeless people coming in for their drugs every month. And you get to see some young person who says they're going to solve space flight, travel to Mars, whatever. Your world is inspiring. My world is very depressing."
And so I feel like that conflict is very real and it's hard for me to get a finger on the pulse of where it stands.
Jim O'Shaughnessy: That's a really interesting point. Right? The old saw about the happy person lives in a happy world, the sad person lives in a sad world, the angry person lives in an angry world. Context is important. And I guess I think that's a great example. Right? If I was in an ER facing that every day, that's got to affect your attitude. Right? And so I— that's really interesting.
Michael Gibson: Yeah. She said the most accurate recent show is this TV show called The Bear.
Jim O'Shaughnessy: Yeah, we love that show.
Michael Gibson: Yeah. And you watch that show, you're like, "Oh my God, how do these people make it through this day?"
Jim O'Shaughnessy: It's absolutely true. I mean, that's— my wife and I watch— we don't watch a lot of TV, but our kids were like, "You gotta watch this show." And we thought it was great, but it was— They do overcome challenges. Yeah, yeah, I agree, I agree. But the vibe, if you will, is— it completely. Because I hadn't really put it in— That's a really great framework to look at it through because that's kind of my day too. My day is I'm talking to people like you, I'm talking to young guys who are going to change the world and have these off-the-wall ideas. "No, no, we're not going to use the cloud anymore. We're going to store data in plants. It's going to be the forest, not the cloud." You know, that's one of our fellows. And then we've got other ones telling me how they're going to do building everything in silico and you're going to have your digital twin that you'll be able to do all the most heinous experiments on. I joked, "Oh, we got Dr. Mengele here," but oh, my God. But the point is, it's— That's really true. It's really true. That's what I'm hearing every day. Right? And yeah, generally—
How do you think— One way that we're working to solve that is publishing books like White Mirror. Yeah. I was just gonna say, coming back to that storytelling, right? We got to get these stories out to the world. Yeah. One of our fellows is a young guy out in San Francisco, Jason Carman, who just impressed the hell out of us. He—
Danielle Strachman: Oh yeah, I've seen his stuff on X.
Jim O'Shaughnessy: Yeah. So speaking of the Spielberg, that was the first thing he said to us when we gave— when he was interviewing for the fellowship was, "I want to be just like Spielberg." And he had a long history of— We saw all the movies he made when he was 14. He's doing these really inspirational movies on deep tech, on hard science, all this other stuff. And we just hired him through our Infinite Films division to helm a movie we're making on Bell Labs using the book The Idea Factory as our script. And he was just so into it. He was like, "I cannot believe that I'm 20-whatever and you are letting me— You're gonna actually let me direct this movie." And we're like, "You've already demonstrated your stuff." So I definitely think the whole storytelling stuff is part of it. Yep.
What do you— what do you think about the whole idea? I just keep coming back to this because it worries me and because we're very similar in our outlook, what we're trying to make, the message and everything. How do we avoid— Let's go back to Girard, right? How do we avoid this sort of memetic pull that creates its own monoculture? Right? Sometimes when we're having a thing with our fellows and our grantees, I'm noticing, right, a lot of them are dressing the same. They're all using the same type of computer. How do you avoid— unintentionally, of course, unintentionally— but creating a monoculture of misfits, if you will?
Danielle Strachman: You know, one thing that was really special about the early days of the Thiel Fellowship is that it wasn't just startup-oriented. We had researchers, we had some people who were sort of on more the artist side of things. And it was nice because there was this diversity of thought throughout the group. And what's interesting as we've been curating our culture with 1517 is that we've been working more with makers and artists also. We just had a party last week that was a launch of the new fund and we had a lot of our makers who were tech people come, but we also had our makers who are artists come.
And I think being able to have these groups where it's not "I'm an entrepreneur, I'm saving the world, get out of my way" sort of thing and remembering "Hey, this community is doing things in very different ways with different amounts of capital, with different levels of support" and keeping the voices really fresh in the room on "Hey, what's going on and what are your experiences?" is maybe a way that we can keep it from becoming this monoculture of "startups are the best and the only thing you should do" or something like that. Because we don't believe that to be true, you know, and just having your culture be something about a bigger meta thing than startups, for example.
Michael Gibson: Yeah. And then I think geography is important. I think it's like the Galápagos Islands. Darwin sees all these different species because they were separated enough to develop different attributes. And likewise, I think it is important for everything not to be Silicon Valley or— you know, I think Austin has to develop its culture. The Gundo has— it's very different from Silicon Valley. And I think that's really great. So we need some diversity in region that'll help incubate some things.
I always think of reggae. It feels like reggae could not be possible today because it's just— that was a sound created on this island in the Caribbean over some period of time. And nowadays it feels like in the music industry there's nothing like that because everything is just all to the world at once. There's no time for a sound to develop in a region. I think, I don't know, maybe I'm just—
Danielle Strachman: And sort of isolated in a way. Yeah, okay, we're just really spinning on this thing.
Michael Gibson: Right. Because nowadays I think if you did come up with an interesting sound, you'd put it up on SoundCloud. Before you know it's playing in clubs in Europe and the US. And so everything feels more and more homogeneous. So I don't know how to create more Jamaicas for reggae. It's— we need that. Because that— You're right, it comes back to that point. The more alike we are, the more we'll think alike and the fewer different ideas we'll have.
Jim O'Shaughnessy: I love the reggae. Of course, I'm a huge reggae fan. That's how I spent my— My teenage years were very misspent. And my— I had a good friend who— Our later teen years, he dubbed the Dark Ages because we were very, very naughty, let's put it that way. Okay. But one of my summertime rituals was putting Bob Marley or Peter Tosh on the boombox. And literally just lying in the pool, listening along and loving every moment of it. Met my wife because of Peter Tosh.
Danielle Strachman: No way.
Jim O'Shaughnessy: Yeah. Literally. We were at a party and they say, "You should go talk to Missy." And I'm like, "Why?" And they went, "Well, two things. She went to Georgetown— I was at the School of Foreign Service at Georgetown at the time. Okay. And she was— she was at Foreign Service, but she also can't stop talking about Peter Tosh." And I'd just gone to a Peter Tosh concert, and it was the Peter Tosh one that got me really interested. I'm like, "You love Peter Tosh." But then the first thing that she asked me about Georgetown, because I was still at Georgetown at the time, was she looked at me and she goes, "Does it bother you when everybody asks you, 'What does your daddy do?'" And I went, "Yeah. I hate it." Yeah. I ended up falling in love with her and finishing at the University of Minnesota because, as I mentioned earlier, I didn't give a shit where I got the degree from. But, yeah, that's a really—
Yeah. There's something about—
Michael Gibson: I mean, globalization is wonderful. Trade has brought a lot of benefits and lowered the cost of goods. But there is some issue, I think, with the homogenizing of cultures. And you look at the music industry, it just all— You know, I'm a cranky old man talking about pop music, but it just feels all undifferentiated. And it seems to me like it'd be really hard for a reggae scene or even the grunge scene in Seattle. This last gasp of rock and roll was possible, I think, because those guys were so isolated up in Seattle in their basements, under gray skies and in their flannel shirts. So I— Yeah. I don't know how a scene develops. That's an open question that I think is kind of interesting.
Jim O'Shaughnessy: Yeah. I have a good friend, Alex Danco, who I've had on the podcast numerous times. And we have an entire podcast devoted towards how to create a scene.
Danielle Strachman: Oh, cool.
Jim O'Shaughnessy: Right, he coined that term. Yeah, he was in a ska band. Okay. And literally, he gave me a master's class on how to do that. But now I'm gonna— Now. God damn it, Michael. I'm gonna go down this rabbit hole for the rest of the day because I think— You're right about this.
Michael Gibson: So there's something— there are 4,500 universities in the United States, colleges and universities, and yet they all seem to have one point of view. It's pretty crazy. Exactly. And then you look inside who's teaching at those universities, and it's just all incestuous. These people get degrees from one school, and then they work at another one, and that person at the other school goes to the other one. It's—
I don't know how we would do it, because obviously people are free to work wherever. But it would be kind of interesting to see more flavor and style associated with certain schools, a certain way of doing things. You see this in science in the past, where the revolution in quantum mechanics, I think, is stylistically in line with these crazy Germans and Viennese people and Swiss in a way. I don't know. There's— It's hard. Everyone wants to say, "Physics is obviously about the reality, and reality tells us whether we understand it or not." But yet I still think there's even a style when it comes to science. The way you interpret the world, the equations you use. I mean, it's just so different, and I think we need all these different research paths.
There was an Italian science, there was an American way of doing science, and now it just feels like it's all the same.
Jim O'Shaughnessy: It's absolutely true. And it's like I have been on the soapbox forever about the fact that we need to be both Athens and Sparta. We need both Apollo and Dionysus. We— It's this idea— C.P. Snow's The Two Cultures. I don't know whether you've read that book, but I think he wrote that back in the '50s, if I'm not mistaken. And it's the stark wall between the sciences and the arts was weird because for all of human history it wasn't that way at all. Right? The physicists who also love poetry and Buddhism and all the crazy things. I think what— I think they got one thing right and that was the idea about diversity. But the diversity you require is cognitive diversity. It's idea diversity. It's creative diversity.
And one of the things that we did when we were setting up the fellowships was we wanted to make sure that it was not just startup, right? That we gave it to artists, that we gave it to sculptors and thinkers and all that kind of stuff as well. And I gotta tell you, at the first— or sorry, not the first, the second in-person meeting with the fellows on site here in Connecticut, we watched in real time as a computer genius guy got a complete marketing plan from Jimmy, by the way. Jimmy Soni. Okay. They talked for two hours and amazing. Wow. And he's like, "I— I learned that I had no idea how to present my ideas and Jimmy just helped me completely do that." And so with this overlap of thinking styles and everything else, we just think it's really bearing incredibly interesting fruit and wanna see more of it. Not less obviously.
You know, I didn't get to— I was fascinated by the whole Luther, Martin Luther idea of how you guys came up with your name. 1517. And I started wondering which of his theses would be most appealing to you. And I kind of went through them and I kind of thought, here's the ones that I thought might appeal to you. But I want you to tell me that I'm wrong. The priesthood of all believers. Wizards without credentials. Right? The sola scriptura. Learn by doing. Right? The sola fide. Invest in potential. He leveraged new media and man, you guys are really doing the same thing. Am I getting it right or do you—
Danielle Strachman: That's exactly—
Michael Gibson: These are all great.
Jim O'Shaughnessy: It's been a while since I've read his actual 95 theses. So we should go back.
Danielle Strachman: We should pick out our favorites.
Jim O'Shaughnessy: That—
Danielle Strachman: That'd be a fun experiment. That'd be a good write-up too. Good content.
Jim O'Shaughnessy: Yeah, yeah. So I went back to them. They're pretty cool. And I— What I liked so much about it was the revolt. Well, basically the printing press made his revolt a hell of a lot easier than it would have been. But then I also try— One thing that I do is I take anything that I really pretty deeply believe in. And we're building our own AI on-prem AI because we think that the commercial AI is going to get nerfed. We don't want our AI to be nerfed anyway.
So one of the things that I got in the habit of doing— it's multimodal as well— is I steel-man every argument that I vehemently disagree with and then I also do a steel-man on the opposite beliefs of what I vehemently agree with. It's really interesting because when I was going through your stuff, I steel-manned against you guys and in favor of you guys and because so many of my own views are very sympathetic with your own.
And one that came up that I thought was pretty interesting, let me go to that part. Was the idea of the credentialing. Arbitrary credentials. One of the things they say is that a lot of these founders who might have a Thiel Fellowship or a fellowship from you guys or for that matter a fellowship from us, end up hiring PhDs when the work gets hard, kind of showing, "Hey, these PhDs get hired by the founders that don't have degrees" and things like that. And that one kind of— I kind of was like, "That's an interesting point." How does that hit you guys?
Danielle Strachman: I think for me personally, and I think Michael differs from me on this, is that I've always been about choice and education and to me choice means having many different choices to choose from and not just abolishing. If someone really wants to spend seven years of their life in grad school, then that's what I want them to be doing. I don't want them to be doing what we're doing at 1517 because they thought it was cool or because they thought that was the thing to do or whatever. So I'm personally just into, "Hey, what is the right path for this particular person?" And maybe that's founding a company and maybe that's going through a PhD program and also thinking about the second and third order consequences of doing these things. I think that's really important. But I don't think it's, "Oh, well now I can see that the PhD is good because our founders are choosing PhDs." I concede that choice is good.
Michael Gibson: Yeah, I share your opinion, Danielle. You differ. Yeah, I think we just live in a world where the vast majority of people have to pursue those paths. So if they're going to do that thing. So it stands to reason that you're looking— it's going to be hard to find people who have, let's say, PhD-level knowledge in a field who haven't studied in a school. I mean, that's why we're out there hunting for these people. But I think we're starting to see more and more that's changing. I think AI as a tutor, as a tool, we're already seeing its effects among young people where they get to the frontier in a field much quicker than in the past. They're tackling hard problems and hardware and materials and so on that in the past wasn't possible. And I think this is due to that ability to get to the frontier. So I think, sure, it feels like it's the old technology, but we're starting to see change. And so my prediction in the future would be that we will see that level of knowledge and skill maybe authenticated in some other way.
Jim O'Shaughnessy: Yeah, I definitely agree with that. Max Planck's "one funeral at a time" is actually happening right now. I had an experience, though, that really pissed me off early in my career. Well, not so early, but I was pitching a university endowment on our way of investing. Right? They, I made what they call the finals and the committee was all PhDs in economics. Right? Yeah. And so the conversation was wonderful. Literally, I was really enjoying it because it was a deep dive in the weeds about why you can't measure risk using a standard deviation of return. I won't nerd out on you here. I won't go further. But anyway, it was really a great conversation. And then one of them looked at me and said, "Where did you get your PhD?" And I'm like, I literally kind of laughed and said, "I barely have a BA and"— I pointed at my book, What Works on Wall Street. I said, "That's my PhD." And literally, man, did the temperature change in that room. Literally it went from convivial and fun and everyone really enjoying to silence. They just put up the wall. Yeah. Right? Let's say they did not hire me.
But I definitely think that attitude might be dying out. Do you guys agree? We could go field by field. I think if we look at health care or, I don't know, some of the tougher sciences, it seems like that's where prestige is still the most powerful.
Danielle Strachman: I think what I would say overall, because I saw this in the homeschooling world all the time, that someone, you know, would be a homeschooler out in the world and they'd encounter a family that sent their kids to school, and the people are like, "Oh, are your kids sick today? Why aren't they in school?" And they'd be like, "Oh, we're homeschoolers." And other people would get so affronted. Because what people tend to hear when you do something different than them is they think the undertone is, "And I'm doing something better than you." And it is absolutely not what is true that's happening.
So my hypothesis on what happened to you in that room is that those people were affronted with "How could this person be as smart and as articulated as us without having gone through the same gauntlet? That just can't stand. So therefore we will not hire someone who would make us feel like the emperor has no clothes because I went and did it this other way." But my view on all of these things is that no one is implicitly saying because they make their own choice, that their choice is better than someone else's choice. It might be better for them, but they're not implying moralistic or ethical value necessarily to it. And I think this problem is way more pervasive of people hearing that someone else is doing something different than them. And what they have to do is shame, attack, distance. And I don't think that's going anywhere. I think we're really bad as human beings at being able to go, "Wow, that is so cool that you're doing something different than me. Tell me more about that." We are terrible at that.
Jim O'Shaughnessy: Yeah. You know, I was talking to a guy who I think might be the closest real-world version to somebody who might actually be enlightened. I have kind of a rule of thumb that anyone who claims to be enlightened ain't. And he never makes a claim to be enlightened. But he was talking about our mutual interest in Carl Jung. And one of the things that he's put— The way he put it was really interesting to me. It was because we're talking about this, "Why do people get so pissed off by people who are different than them?" And he says to me, "Well, here's a story that I want you to consider." He goes, "There was a psychologist dealing with a woman who'd come to see him, and she had all these anger issues. And, you know, she would complain that, you know, 'My husband says that I'm dumb' or 'My husband says that I'm lazy.' And then the— what he did was he said, 'Would you get angry at me if I said that you were an ugly horse?' And her reaction was 'That's insane. No, of course I wouldn't be angry if you called me an ugly horse. I would wonder a little bit about your sanity, but I wouldn't get mad.' And he goes, 'That's—' Now this is the psychiatrist talking to her. 'That's because with every fiber of your being, you know that you are not a horse and that you are not ugly. The reason you have the reaction that you have to those criticisms is that some part of you believes that about yourself.'" Yep.
Danielle Strachman: Oh, that's very brilliant.
Jim O'Shaughnessy: And I'm like, "Wow, okay, that really—" And then you start thinking about, you know, all the great maxim writers, "What annoys you the most in other people are qualities that you yourself have or are trying to hide." Always.
So I think that I will— you know, maybe a simple policy reform that could help on this question would be if there was an authenticating body that was independent of the universities that could say whether or not someone had the requisite level of knowledge. I think that's a great idea. We are looking for— That's one of the ones that we actually have in our basket of ways to make things better. Because the other thing that's happening right now is the citadel of science, right, is still devoted to, in my opinion, unbelievably and unsupportably to materialism. And every scientific innovation that's happened over maybe the last 30 years, particularly in physics and quantum physics, right, negates the very foundation of all these things that these people are still hanging their hat on. And yet that loop, right, that we talked about earlier, you can't get a grant. You can't get a grant if you're not praying in their church. Right? And the whole idea of, in quotes, "peer review" is destroying innovative research. Right?
One of the things that we're going to do when our AI is up and running in its full and final— Well, never final. Close to final form— is we're gonna have it generate thousands upon thousands of null hypotheses because of the way things actually work. No one's gonna get a grant saying, "I think I'm gonna— I think that after we approach this through the discipline, scientific method, we're going to get a null result." Right? And they're going to be like, "Yeah, we're not giving you any money." So. But learning via negativa is profoundly good. Sherlock Holmes, The Hounds of the Baskervilles. How did he know that they knew the intruder? Because the dog didn't bark. Yeah, right? The dog didn't bark means he knew who the intruder was. And that's learning via negativa. And so we're just going to see if we can just have it generate thousands upon thousands of null hypotheses that we will auto-publish to a publicly available data set.
Michael Gibson: Yeah, well that's— I think that kind of stuff. One thing you said that I think is important that we see when we're thinking about character traits and founders and makers and so on is some people are creative and they're routinely unconventional and let's say they have tens of beliefs in their set. Those beliefs are going to have a constellation that is pretty wide and far. So it's we've met people who believe in UFOs but they're not working in UFOs, they're working on this. And that's the idea that matters. But the fact that they have this other crazy idea is part of that whole package. And what I think is filtered out in the process we've been discussing whether it's getting accepted to undergrad or participating in grad school is very much so that, you know, the materialist worldview, basically some soft atheism or something is pretty much, I'd say, prevalent among academic scientists.
And that worries me not because I'm interested necessarily in the truth or falsity of other views, but because I think it weeds out these thinkers who have just crazy ideas all over the place.
Jim O'Shaughnessy: Completely agree. And I passionately believe that if you could infer all of my beliefs about anything— right, about anything— by hearing only one of my beliefs, then I am brain dead. And I am completely— I am now sunk to just brain-dead ideological adherence. And I'm not telling you anything that you're gonna— Back to Claude Shannon. We were briefly talking about him before we started recording. I think Shannon's kind of cool. And one of the things that I love about him is that idea that information is what you don't expect. Right? And the wonderful analogy of a political speech contains zero information. A poem can be loaded with information. And I think the same is true of people and their beliefs and belief systems and all of those things. And so I'm far more interested in— Yeah, we need a philosophy of surprise. We do. We really do. I love that idea. Maybe we could collaborate and come up with some kind of prize.
Michael Gibson: That'll be my next book.
Jim O'Shaughnessy: There you go. Well, okay. I am— My nannies are texting me and telling me that it's time. I am the cat that they all have to try and herd, usually because I am unemployable. And they do their very best and sometimes I comply with them. So we are nearing our time here.
Our final question is I think a fun one. And you each get the same question, so we're going to hear more cool things. All right, so we're gonna make you empress and emperor of the world for one day where you can't— First off, you can't put anyone in a re-education camp. You can't kill anyone. What you can do is we're gonna hand you a magical microphone and you can say two things into it that are going to incept the entire population of the Earth. They're going to wake up— Whenever their next day begins, they're going to wake up and they're going to say to whoever's there, to themselves, you know, "Unlike all the other times when I had these great ideas when I was waking up or in the shower, I'm going to actually act on both of these two things today and keep acting on them going forward."
So, Danielle, I'm going to start with you. What two things are you going to incept into the world's population?
Danielle Strachman: I mean, the words that come to mind when I'm hearing this is if there was just a two-word phrase, it's "make it."
Jim O'Shaughnessy: I like that.
Danielle Strachman: Get out there and make it.
Jim O'Shaughnessy: No, I like that. Yeah, that's very good. That's one though. "Get out there and make it." You got another one. Two ideas.
Danielle Strachman: I'd also add something about urgency. Today's the day.
Jim O'Shaughnessy: Tempus fugit.
Danielle Strachman: Don't wait. Today's the day.
Jim O'Shaughnessy: Carpe diem. I love both of them. Michael, what you got?
Michael Gibson: Yeah, mine relate to that. I'll go with— I feel like people don't realize that creativity is perishable, that it has a shelf life and they wait too long or they take too much time and we really have to— And this ties into what we do in the whole conversation. And getting people started earlier is— I think like athletics that people have a prime in their lives. And so I think we should take that seriously.
The second thing would be— I'll go with "IQ is not creativity." And I wish we had a way to— It's surprising to me how little we understand where new ideas come from or new art and all that. It's just so mysterious and it's so clearly not just intelligence. So—
Jim O'Shaughnessy: I love both of your inceptions on the— The creativity one. I don't know, maybe about a dozen years ago I made the— It occurred to me that I was at best a co-creator. And when I really adopted that as a belief. Right? Guess what happened? The muses started singing to me in a way that they had never sung to me in the past. Yeah. Right? And when "this is my idea, you can't have it. I'm not going to share it with you." That isn't— That is a philosophy of scarcity. That is a philosophy of "this idea can't grow other ideas." Right? And so when I really— And this is the way I refer to myself all the time. I'm at best a co-creator and it really opens up the floodgates and the muses start singing.
Danielle Strachman: Maya Angelou has a great quote and I'm not going to be able to quote it quite right, but it's something like "Creativity is the only resource that when you use it, you get more of it."
Jim O'Shaughnessy: Yeah. I love it. Dorothy Parker, who is a member of the Algonquin Roundtable and a real witty woman, was "The cure for boredom is creativity. There is no cure for creativity." Right? Okay.
All right. Well, thank you.
Thanks so much for joining me.
Danielle Strachman: Thank you.
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