Venture capitalist and physicist Arkady Kulikov returns to Infinite Loops to explore the psychology behind founders, responsibility, and self-deception.
We discuss why the hardest problems in business are almost always human problems, how great founders deal with stress, and why the biggest lie entrepreneurs tell is often to themselves. Arkady also explains how investors evaluate founder psychology, why difficult conversations are essential in business, and why resilience is more about adaptability than stubbornness.
Arkady is one of my favorite people to speak to - smart, wise and always surprising. I’ve shared some highlights of our conversation 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
Arkady’s deep tech venture fund: rpv global
Arkady’s previous episode: Bridging Science & Entrepreneurship
Links
Highlights
What do you do on a Monday morning?
Arkady Kulik: Another question I ask is, "Assume you got acquired by whoever is the leader in your industry and you get a position of a chief scientific officer, chief technological officer, CEO, whatever. Would you take it?" They're like, "Yes." I'm like, "So why don't you just go and apply for a job, dude? Get your salary. In a couple of years, in the same time span of the next 10 years that you're going to battle every day for building your startup, you're going to have a very comfortable job and you can rise in the ranks in this corporation, become this C-level, whatever." And "I never thought about it." And I'm like, "Oh, great. Dodged the bullet, not going to invest."
Another thing that I often ask people, and I used to ask that when I was hiring people in my previous life as an entrepreneur, is "Assume you have a billion bucks in your bank account. You took care of all of your families, relatives, homes, cars, etc. You spent two, three years touring the globe, going on parties, flying jets, whatever you have in your system, all of your teenage and child fantasies. What do you do on a Monday morning?" And either a person has an answer and then you dig deeper, or they don't have an answer. That's the first time they think about it. So I'm trying to put people into theoretical situations when there are no constraints around them of that type or another type, or in other theoretical situations when there are too many constraints of a certain type. And that's how you start understanding how they act at the fringes, in extreme situations.
The Phone Curfew Success Predictor
Arkady Kulik: I can talk about specific rituals of specific people that predict their future success.
Jim O’Shaughnessy: Please.
Arkady Kulik: In my opinion, what is really important is any kind of self-reflection. Whether it’s meditation, journaling or anything like that, or just staring at the wall, being in the silence is very important. Another really weird, probably the smallest one that I’ve seen is people who put their phone away at 7 or 8pm or 9pm. They just leave their phone in the office or whatever, in a separate room, and they don’t go to bed with the phone. And this is one of the things that weirdly enough is one of the biggest predictors of success. And I think the reason is that it shows the level of self-control that very few of us have.
🤖 Machine-Generated Transcript
Jim O’Shaughnessy
Hello everyone, it’s Jim O’Shaughnessy with another Infinite Loops. I have a return guest and one of my favorite people, actually. I said to him before we began recording that I could just talk to him endlessly and it would end up not as a great podcast because it’s all kind of the inside baseball stuff. My guest is Arkady Kulik. Arkady, I love your path through life. You are a trained nuclear physicist, but your career path was really circuitous, let’s put it that way. You started out with a pay-what-you-want music distribution company, to booking global headliners, to running tour logistics for major movie studios, to being the founding partner at RPV, a deep tech venture fund. You’ve got a great quote that I love: civilization-level progress depends on truth-seeking mechanisms and forcing them into contact with the messy market. Arkady, welcome.
Arkady Kulik
Jim, thank you very much for having me again. It’s a pleasure to talk to you always. And by the way, I think inside baseball jokes is what our listeners could really benefit from. There’s so much grandstanding in this industry and there is so much noise, and very few people are actually talking for real about those things for whatever reasons. Thank you for having me, Jim. I appreciate the second invite.
Jim O’Shaughnessy
So my first question is, on that career trajectory, what skill survived every jump?
Arkady Kulik
Resilience. Resilience and agility, which in my opinion is very close. Those things, because I don’t think resilience is about rigidity and just banging your head through the wall. It’s about seeing your goal clearly and finding the path to achieving this goal, this way or another way. And this is the thing that survives everything, not just my career. For example, my fat is very resilient, especially around my belly, more resilient than my eating habits, that’s for sure. But yeah, resilience is very important. If you’re an entrepreneur, you have to have it, otherwise you will never be successful. You have to be able to wake up and no matter what life throws at you, good and bad, you have to keep moving. And when I say good and bad, I mean sometimes really good things distract entrepreneurs. Firstborn child, this new relationship, this amazing trip, something else. There are things that keep our focus moving a little bit to the left, a little bit to the right. We need to keep it straight all the time.
Jim O’Shaughnessy
And I agree. Agility. I’m glad that you added that to resilience because Ken Stanley has that great book, Greatness Can’t Be Planned. And one of the things that he points out that I really deeply believe in is that you’ve got to be agile. In fact, it’s at the top of my list when I’m looking at founders because I saw a tweet not too long ago that was what percentage of companies got successful doing what their original idea was?
Arkady Kulik
Zero.
Jim O’Shaughnessy
Closing in on zero. But what’s interesting to me is I do think deep tech is a really different skill set than a generalist venture capitalist. And let’s talk about that a bit. You’ve said the hardest problems are humans. I say that a lot too. So if you don’t mind, give me your deep tech human failure taxonomy. The top five interpersonal failures that can derail even great science. The science is great, but we’ve got the messy human and human OS hasn’t changed very much since the beginning of time.
Arkady Kulik
I would go on a limb and say that there is no difference between deep tech, software, restaurant entrepreneur. It’s all pretty much the same set of human problems. If we talk about human operating system, it’s pretty much the same stuff all the time. And we see it all over the place. Whatever type of business they build, if they build a small restaurant chain or even a single cafe in Pakistan, if they build an AI in California, or if they’re building some kind of government-related focused agency in France, the human mistakes are always going to be the same. And by the way, I would even go further and say that interpersonal relationships are prone to the same types of mistakes. People do the same stupid stuff at home with their spouses, people do the same stupid stuff with their friends, and so on and so forth. I don’t think there is any specific deep tech thing. Sure, there is a flavor of a little bit geekier people, a little bit more PhD, a little bit more introverted, but we’ve seen it all in software industry on its own. I would argue that a system administrator is an even more introverted person than a PhD. One of my good friends, Richard Silberstein, the head of our scientific board, he told me a joke: How do you tell an introvert from an extrovert at a scientific conference? An extrovert is looking at your shoes when he’s talking, not at his own. But you deal a lot with those types. You know exactly what I’m talking about.
Jim O’Shaughnessy
I do.
Arkady Kulik
Sure, maybe we talk about a little bit more geekier, intellectual, less sociable people in deep tech than say in movie business or media business. But I would say that they’re not that far from developers and from the coders that built all of the software that you and I are using on a daily basis. Just look at Steve Wozniak. If we have to go all the way back, same idea, same type of person. I think it boils down to a couple of things.
There is intrapersonal and interpersonal things. When it comes to intrapersonal, it is what I call founder’s agency. In my opinion, it’s the combination of three things: it is the resilience we talked about, it is their obsession or passion. Can they put their heart, not just their mind into it? Do they really obsess about the particular problem? And it is capacity. Can they figure it out? Because as much as I would love to figure out something in biology, I have zero training, I have zero understanding of that. I will never be a successful biotech founder. So it’s ability to wake up every day and go at it with passion, capacity. That would be intrapersonal, so something about that particular person. And if one of those things is missing, I would never make an investment in the first place. Sure, over time those things can fluctuate. Somebody can have a better day, a worse day, but usually they stay there. If they are there in the first place, they will stay there. Then we come to interpersonal things, how people communicate with other people. And this is much harder to gauge. You can play and act for a while that you know how to do those things. But when stress comes into the equation, and stress can come from personal life as well, people change and their behavior changes and they show their ugly sides in a pretty dramatic fashion. I would argue that the most important thing in business and in personal life is always communicate, always talk to each other, be open and be genuine, especially about the difficult problems. Whether it’s your wife, whether it’s your husband, whether it’s your business partner or your client, be ready and ask them for those hard conversations. Is it about me leaving my socks next to the bed or not washing the dishes in the evening? I want my wife to tell me that she’s pissed about that. I want her to share frustration. And if it’s a client who is not happy with my service, I want him to share his frustration. People who shy away from those conversations are the ones that fail at interpersonal things.
Jim O’Shaughnessy
Again, you and I agree so much. That was the one rule when I was still running O’Shaughnessy Asset Management: we over-communicate. When things are going against us, you do not—the urge with many people is when you’ve had a great quarter or a great year, you’re just calling all of your clients. And I would say, no, quite the opposite. Do not do that. The time that we’re going to over-communicate is when things are really shitty. And this comes into the problem of humans, right? A lot of people just feel so uncomfortable with that they’ll do almost anything to avoid it. And it’s human OS. I’ve been fascinated by human OS all my life. But if you lean into the things that you really just don’t want to do, oh my goodness, there’s so much alpha there. Because I remember during the great financial crisis, I was on the phone with one of our bigger clients, and he was unhappy with me, to say the least. But he closed off the conversation by saying, “You know what? You’re the only incoming call I got from one of our managers today.” And that just kind of blew me away. The ability to have difficult conversations is such an important aspect of running a business. And yet, and it’s so obvious, right, to me and to you. What else other than—and I love the way, by the way, that you extend it to not just business, to your wife, to your family, to all of those things. That kind of continuity just gets you in the habit of being like, okay, hit me. What have I done that’s wrong this time?
Arkady Kulik
I think it’s intellectually easy, but it’s emotionally very hard. A lot of people, especially subconsciously, try to shy away from those things because they don’t want to hurt somebody. Look, the whole idea about not responding to somebody’s email if the answer is no—come on, why not just say no? But no, “Well, if I say no, I will hurt their feelings.” If you don’t reply to me, you hurt my feelings even more. And you and I can go all the way down the rabbit hole of Marcus Aurelius and Gestalt therapy and talk about can anyone but you hurt your own feelings? Is it really on the external part to hurt you, or is it about your perception of what they did that hurts you? That’s a whole different layer of that whole conversation. In my opinion, it is very important to communicate openly and freely about everything with anyone, because otherwise we all become locked into the small shells of our own worlds and we drift apart and then they have to collide. And that’s when real pain happens, when people come into conversation with very different assumptions about all those things.
Jim O’Shaughnessy
Yeah. And I love that nod to the perception, right? That’s another thing that I look for when looking for partners, people to work with, people to invest in: are they outer-oriented or are they inner-oriented? And by that I mean, listen, read what they say. When something doesn’t go their way, does the finger point outward? I’m not terribly interested in that person, right? Because it’s always somebody else’s fault.
Arkady Kulik
There is a Russian musician called Noize MC, one of the best poets Russia has ever seen in the 21st century. He’s a hip-hop artist, but he has some really deep thinking embedded into his songs. And one of the things—of course, it’s not going to be poetic when I translate it—but one of the things he says is, “Defeat does not require any expense or any effort. All you have to do is say, ‘I’m not to blame.’” He’s like, that’s all you need. And it’s very easy. And that’s how people lose in life, whenever they try to externalize the responsibility for their own life. This is the moment everything starts breaking apart. At the end of the day, it’s you who made those choices, who made those decisions to end up in that point in life. And if you keep on delegating responsibility, yeah, this will all go downwards from there. I agree. But it’s hard, Jim. It is hard. It is hard to understand that it’s on us. It’s always on us. And it’s again, it’s not just business, personal life, your friends, your spouses, everything around you. It was your decision that put you in this position. And if this position is horrible, what was the famous saying by Churchill? “If you’re going through hell, keep going.”
Jim O’Shaughnessy
Yeah, exactly.
Arkady Kulik
At some point you will get out of there. So that’s it. But unfortunately, it’s easy for you and me to say about that. Maybe because of the life experiences that shaped us, maybe because of how we got brought up, maybe because of all the scars that you and I have. It is much easier for some people, much harder for some other people to embed this thinking and embed this philosophy of life.
Jim O’Shaughnessy
My son has a friend who has the dichotomy of looking at people pre-fall or post-fall. And by that he means what you just mentioned. We have a lot of scar tissue, you and me. And so we’re both post-fall. And one of the things that I have noticed about post-fall people is they don’t do that “not my fault, not my fault.” In fact, they’re quite the opposite. They’re like, okay, that’s on me. And every company that I’ve ever started—well, let me add an asterisk: not the first company. I had to learn it. I had to learn it at my first company.
Arkady Kulik
That hits a little close to home.
Jim O’Shaughnessy
And boy, did I learn it because I got repeatedly punched in the face. And I was young, I was 28. I was arrogant. I was all of these things that needed to be beaten out of me. And I remember the first couple of times, I’m like, oh, that didn’t go the way I was planning.
Arkady Kulik
One of the most embarrassing moments of my life was when I showed my wife—we’ve been together for a while at that point—one of my emails to one of my employees when I was 22. I’m not going to go into details because I don’t want to embarrass myself again publicly, but I’ve shown the email to my wife and she’s like, “Oh my God, if I met you when you were 22, I would have never even went on a date with you, arrogant asshole.” Oh my God. Go ahead.
Jim O’Shaughnessy
Yeah, yeah. But that’s actually an interesting theme. I mean, I love to build mental models of everything. And I wonder, is there some value to that initial arrogance, right? Is there some value to “You know what, I’m gonna change the world”? And yeah, I think so. But then it really requires getting punched repeatedly in the face and learning some humility.
Arkady Kulik
I think, yes, I agree. And yeah, it’s an interesting way how you see how people go arrogant, humble, more arrogant, more humble. And then some of them just go into the stratosphere of arrogance. We see those examples every day in the media, for example. And some people never learn humility. Some people never learn to understand how their ego can control them. This is a sad story. It’s like with addicts, whether it’s gambling or alcohol, doesn’t matter. Any kind of—whenever one function of your psyche controls the whole behavior, that person is a slave of that function. Again, whether it’s ego or addiction. I had not even a friend, an acquaintance, who told me that he had a sex addiction. And I was like, that’s not a thing. That’s something invented by rich folks to explain themselves away in the court of law during the divorce proceedings. He’s like, “No, you don’t get it. I can see a girl’s wrist on a steering wheel of a car, and I will cancel all of my meetings until I get a date with her.” I’m like, “You serious?” He’s like, “Yeah.” I’m like, “Oh my God, that’s a real thing.” But unfortunately, when a single function controls the person, I think that it’s a really lopsided version of a person. I would never invest in a founder like that, for example.
Jim O’Shaughnessy
Yeah, but how do you ferret those things out when you’re chatting with a potential founder? Let’s go through some of the questions that you ask to see, oh, this guy might be brilliant, but he’s blocking traffic on I-95, and I don’t want to invest in that guy.
Arkady Kulik
Well, it’s a combination of things, right? I don’t necessarily care when it comes to founders if they have that or other preferences and how they spend their time. But here are a couple of questions that I usually ask. I would ask the founder, “How do you deal with stress?” I would always get, “I go exercise, I go meditate, I go blah, blah.” I’m like, “Great. And when all of that fails, what happens?” And then you see that, like, “Oh, damn, I got all of my lies in front of me already headed out. What do I say now?” And their eyes are darting left, right, left, right. And you can see how they think about it. Some of them actually tell me the truth at that point. One of the best answers I’ve ever heard was, “I talk to my mom.” That makes sense. When I’m losing my shit, when I have no idea how to deal with my own internal struggles, I call my mom. That’s real. Somebody told me, “I play video games for a couple of hours.” That’s also real. Is it a good way to deal with stress? I don’t know. And maybe for that person it helps, but I’m not going to judge. That’s completely fine. Somebody told me, “If nothing helps, I’m just going to open a bottle of wine and have a silent evening in front of a fireplace.” Is it good for his health? Maybe not. Does it help him to get through the day? It does. That’s one question I ask. Another question I ask is, “Assume you got acquired by whoever is the leader in your industry and you get a position of a chief scientific officer, chief technological officer, CEO, whatever. Would you take it?” They’re like, “Yes.” I’m like, “So why don’t you just go and apply for a job, dude? Get your salary. In a couple of years, in the same time span of the next 10 years that you’re going to battle every day for building your startup, you’re going to have a very comfortable job and you can rise in the ranks in this corporation, become this C-level, whatever.” And “I never thought about it.” And I’m like, “Oh, great. Dodged the bullet, not going to invest.” Another thing that I often ask people, and I used to ask that when I was hiring people in my previous life as an entrepreneur, is “Assume you have a billion bucks in your bank account. You took care of all of your families, relatives, homes, cars, etc. You spent two, three years touring the globe, going on parties, flying jets, whatever you have in your system, all of your teenage and child fantasies. What do you do on a Monday morning?” And either a person has an answer and then you dig deeper, or they don’t have an answer. That’s the first time they think about it. So I’m trying to put people into theoretical situations when there are no constraints around them of that type or another type, or in other theoretical situations when there are too many constraints of a certain type. And that’s how you start understanding how they act at the fringes, in extreme situations. Does it give you a full picture? Of course not. You will never know the true color of a person until you’ve worked with them for some time. And both you and I have heard stories of people building multiple companies together for 30 years plus and then having a falling out. Things happen. Not a single human is a static system. So as much as I want to say that I’ve got some answers, there are only partial answers, always. You know that you’ve been doing investment for a while. There is never a whole picture.
Jim O’Shaughnessy
Yeah, and that was the thing that intrigued me so much and got me obsessed with markets, right? You’re never getting the full picture. You have to learn to infer. You’ve got to learn that it’s a base rate game. You’re going to be wrong a great deal of the time. And mistakes are portals of opportunity, in my opinion. But again, that goes back to pre-fall and post-fall because the underlying process is often just incredibly boring and dull. In other words, okay, what’s the base rate? How often did this occur? What’s my base rate? Okay, let’s see. Everything I’m doing—every choice we make really is a bet. It’s a bet on some outcome. And if my friend Annie Duke calls people who focus on just the outcome of a single bet—she calls it “resulting.” In other words, let’s say we’ll just make it pure gambling, right? So you and I have money together and we bet on landing in the roulette wheel of red two. Okay. And it lands in red three. People who are what Annie calls “resulters” say, “Oh, our entire strategy was wrong from that one spin of the wheel.” But that’s a silly example, but it really underlines the fact that people do it. It’s much more difficult to see when it gets much more complex. But people do that and take that attitude far more often than one would expect.
Arkady Kulik
Yes. One of my venture partners and a good friend, PJ Jarvis, he keeps on drilling a hole in my skull every time about Bayesian versus frequentist statistics. He’s like, “You need to think about your confidence level and your level of your belief, not about the statistical probability of something happening.” And I’m like, “Yeah, that makes sense.” And in investment, that’s even more true. And the idea of—I would, to defend those guys, to try to make, to try to learn something from just one shot—the idea is good. Try to accelerate your learning cycle. Try to condense your learning cycle. The underlying core idea is a good idea. They just do it wrong. It’s like assuming that I can have a physique of Arnold Schwarzenegger by doing one squat and one chest pump and that’s it. I’m going to look like Arnold. That’s not how it works. But if it did and I could just do one squat in my life and have an amazing physique of my lower body, I would definitely do it. But that’s just not how these things work in life. Yeah, you probably want to accelerate your learning cycles. It’s just not the way to do it.
Jim O’Shaughnessy
Totally agree. And another one that I’ve noticed, I’d be curious as to your reaction, is time preferences. So time preferences, if you have a very long time preference, right? I used to say continually my view, my time horizon is infinite. And by that I mean I have children, grandchildren, hopefully great-grandchildren. I have organizations that I would like to support, etc. So my time preference is not literally but figuratively infinite. Hyperbolic discounting is a real problem in public market investing, but I think it’s a problem in startups, in all areas of life. How do you look for some potential founders? How do you calibrate their time preference methodology?
Arkady Kulik
I think I should embed this as an explicit thing. I don’t think I have it explicitly done right now. I don’t think I ask people about their time preference. I would also go on a little bit of a stretch here and say that there are some founders who win because of a very short-term preference and some founders who win because of a very long time preference. It depends on how their psyche works. For somebody, a very clear goal—get this pilot, get this client—they work in a very sprint-oriented manner, but they recharge every week or every month and then they sprint again and sprint again, and that’s how they win. And we know about organizations—say, I would argue that Google was an organization like that. They’ve tried so many products over their lifetime, so many of them failed, but some of them stuck and some of them are the best in the market right now. And then we have organizations like Amazon, which is a marathon runner with a very long time horizon. “Okay, if we can sell books, we can sell anything.” And then they expanded and expanded and now they do everything. They have pharmacy, they have medical services, they have so many different things. AWS on its own. I think that it’s a good idea for me to add time preference as an explicit metric, but I never thought about that when I evaluated founders. Jim, thank you for showing me a blind spot. Appreciate you, man.
Jim O’Shaughnessy
Of course. That kind of leads me to a question I’ve always—and I don’t know that it’s specific to deep tech. I think it’s probably more generalized. But what are some things you’ve noticed where they’re basically lying but they’re not lying to you, they’re lying to themselves?
Arkady Kulik
That’s the hardest part of them all. And that’s the hardest for two very different reasons. It is the hardest one to distinguish because people can really say something with a lot of belief. And when you recognize that, it is the hardest one emotionally because you’re like, “You’re such a good man, you’re such a smart person. Why do you have to live in this world full of illusions?” It’s emotionally tough when you see somebody talented apply themselves into a wrong direction just because they had a couple of assumptions figured out in the wrong way. This to me is those repeated questions, layered questions. The one I’ve shared with you before is “How do you deal with stress?” When they’re like “blah, blah,” “Okay, when all of that fails, what do you do next?” This is one of those things. Another tool is we focus very much on the founder’s motivation. One of the lessons learned is we have one of our portfolio companies—the one that I promise not to mention by name—fantastic founders, they will be successful, but it’s never going to be a VC-scale business. It’s going to be a lifestyle business for those entrepreneurs. So probably our investment is not going to do that well, if at all. But the point is now I am asking about founders’ ambitions three times in the process: very early on, in a very kind of short way, 30 seconds. At some point some of my partners will ask them about ambition in a very different way, different phrase, and maybe spend 10 minutes on that. And then the very last point before we make an investment, when I meet them in person, I would talk about their life goals and their ambitions, not necessarily tied to the company. But in general I would say things like, “Assume everything with this company was successful. Assume it is whether public or acquired, you’ve made it. What happens in your life next? How do you change after that happened? Not your company, not your family, how will yourself change?” And those, I think it’s all variations of layered questions. Keep on digging a little bit deeper with every iteration and try to understand their motivation deeply.
Jim O’Shaughnessy
And so what answers are you like, “I might be onto something here”?
Arkady Kulik
I’m not going to tell you, otherwise everybody’s going to give me those answers. No, Jim, that’s not true. I will tell you honest answers. Honest answers. The way I see it, everybody’s talking product-market fit or founder-market fit is the most important thing. When we talk about the person not lying to themselves, when we talk about a person being able to be honest with themselves and looking for honest answers. I genuinely invested in the guy who told me, “I pop a bottle of wine when I’m stressed.” I’m like, “Okay, that’s fair. You do damage your health a little bit.” But have I never drank an alcoholic drink in my life? No, I had. Was I blackout drunk when I was 18? Yes, I was. More than once?
Jim O’Shaughnessy
Yeah. Who wasn’t?
Arkady Kulik
Why would I be a moral judge? I would have put myself on some very wrong moral high ground, and “Tomorrow, don’t drink alcohol, blah, blah.” It’s just stupid. Another guy who I also invested in, he’s like, “I play video games with my friends when I’m stressed out. I can go on like four or five hours binge playing with my friends, multiplayer.” I’m like, “Yeah, I get that. I do the same stuff. There is nothing wrong with that.” Maybe somebody would also say, “You’re a grown man. You play video games. How dare you.” The point is, if they’re honest with themselves, that’s what I’m looking for. And for different people, honesty would take different forms. Just to wrap up my point about founder-market fit, there is the founder fit. It’s a weird way to put it, but my wife and I were talking about that. You know how they all say, “Be aligned with your true self.” This whole spiritual/psychological/esoteric knowledge. “Be true to your ideal self. Be the best version of yourself.” Whatever words you put around it, if you’re genuine with yourself, then you will succeed. It doesn’t mean that it will be without problems. But my wife and I were having a dinner and she’s like, “I realize what happens when you’re honest with yourself.” I’m like, “What?” She’s like, “Suffering goes away. Pain stays. Stress stays. External irritating moments, they all stay. It’s not that just life becomes a miracle and then, you know, butterflies in a Disney movie. No, but your suffering comes from your resistance of those moments when yourself does not accept what’s happening with your life. That’s where suffering blooms. That’s when you start to really hate your life.” So when people know themselves, when people understand themselves, there is no suffering. There is acceptance of their own responsibility, of external circumstances, of their ability to change what’s going on. That’s the most important part.
Jim O’Shaughnessy
Your wife is extremely wise because that just rings so true to me. Most suffering comes from attachments. And if those attachments are to how badly you feel about this particular outcome, the “why me,” all of that, you don’t understand that you are literally programming yourself. There’s a great line: “The happy man lives in a happy world. The sad man lives in a sad world. The angry man lives in an angry world.” And that’s because they are attached to those things. And the way your wife put it just really nails it so succinctly because it is so difficult to get people to understand that simple truth. And I like what you appended to it. Suffering goes away. The problems don’t go away. The stress doesn’t go away. None of that changes. But your whole attitude, the way you attack it, the way you either correct it or say, okay, I’ve got to learn from this particular mistake, etc. That changes dramatically.
Arkady Kulik
Yes, 100%. Now, the whole idea of psychology, the whole idea of, say, Buddhism or whatever other—Marcus Aurelius mentioned before—all of them are talking about pretty much the same idea. Accept your responsibility. Accept who you are, accept where you are in life and start acting consciously towards the direction you’re looking forward to. I was surprised to learn there is a thing called ACT. It’s Acceptance and Commitment Therapy. It’s this new wave of therapy. I was never a client or anything of that particular, but I read about it online. I was like, that’s so powerful. Accept your feelings and emotions in a moment, commit to your values, and take action in the direction of your values. The problem with that, Jim, is that before people can act in that way, before people can do it, they either have to experience the fall, they either have to have a lot of scar tissue, or they should be very lucky with how they were brought up in the first place. And the society and the civilization we live in today does not promote that thinking. It’s so much easier to blame somebody else. It’s so much easier to point fingers. It’s just easier on every single level not to accept responsibility for your life. And this is something, if I see behaviors like that, this is a hard pass for me immediately on any founder. And if I ask questions—I would ask them to tell about a story of how they were not happy in a relationship or how things went with their previous boss—the moment I see this behavior, the finger-pointing, that’s when my ears go very high and I’m like, “What’s going on here?”
Jim O’Shaughnessy
Yeah. Learned helplessness is maybe one of the most toxic mind viruses that has been making the rounds in Western civilization for the last 20, 30 years. And the results are very predictable.
Arkady Kulik
Yeah. Yeah. And we see it every day in the media today. Yeah, unfortunately.
Jim O’Shaughnessy
Yeah, that’s very sad.
Arkady Kulik
I agree. That’s something where I am losing my stuff with my brother. I’m losing my composure sometimes with him. He’s 23 years old and I’m like, “Oh dude, you’re old enough to start understanding those things. Come on.” I love him dearly. He’s an amazing person. It’s just sometimes he would say things and my eyes go wild. Like, “Seriously?” But then I remember myself at his age. Like, “Yeah, seriously. Not surprising at all.”
Jim O’Shaughnessy
It is always helpful. I’ve been a journal keeper all my adult life. Actually, I started as a teen and oh my God, I’m so happy I did that because I can look back and I just laugh.
Arkady Kulik
I bet you didn’t laugh at the moments when you were writing those things down in a very angry manner.
Jim O’Shaughnessy
Very insightful on your part. All right, here’s one that I was thinking about for you specifically. You’ve got no pitch deck. Okay, I’m going to give you three things. I’m going to give you the lab notebook, I’m going to give you their hiring plan, and I’m going to give you three customer emails. What would you be able to infer from those three things?
Arkady Kulik
I assume I cannot ask for any follow-ups. I cannot ask to talk to a customer. Nothing, right? I can only get those deliverables. I would not make an investment. I need to see the people. That’s my honest answer, Jim. I need to talk to people. So based on paperwork I would never make an investment in the first place. But if you ask me what I would be interested in the most: customer interviews, then the hiring plan. And I don’t care about lab notes. Back to your original point of how many companies succeeded exactly in the direction they wanted to succeed in the first place. The lab notes is just an artifact of their original idea that will be pivoted many times before they actually succeed. So I don’t care for lab notes at all as long as there is no—I would skim through that to make sure there is no crazy statements like “fusion reactor the size of your tabletop” or something that breaks the second law of thermodynamics. So as long as there is no absolute nonsense there, I would probably not even pay attention to that. I care about customers and I care about hiring plan. Because again, business is a system of humans interacting with other humans, and customers is external interaction and hiring plan is internal interaction. Every time I hire somebody, I create an individual career plan for the person for at least the next three years. So that person and I have a clear set of goals, mutual goals on how to make the person successful in my company and how to make their life as stressless as possible. Because they know they’re going to get a salary bump, they’re going to get a bonus bump, they’re going to get some additional maybe equity or something else, as long as they hit their goals. And their life becomes so much less anxious, so much less ambiguous. They can just focus on delivering on a daily basis and they know how they will progress. So I would care about customer interviews and hiring plan. That’s it.
Jim O’Shaughnessy
Interesting. Another thing that we agree on is truth-seeking mechanisms, right? Rituals, routines, etc. What’s the smallest daily ritual you’ve seen in a lab or a team that predicts integrity under pressure?
Arkady Kulik
I don’t know if I can mention anything about the team dynamics, but I can talk about specific rituals of specific people that predict their future success.
Jim O’Shaughnessy
Please.
Arkady Kulik
In my opinion, what is really important is any kind of self-reflection. Whether it’s meditation, journaling or anything like that, or just staring at the wall, being in the silence is very important. Another really weird, probably the smallest one that I’ve seen is people who put their phone away at 7 or 8pm or 9pm. They just leave their phone in the office or whatever, in a separate room, and they don’t go to bed with the phone. And this is one of the things that weirdly enough is one of the biggest predictors of success. And I think the reason is that it shows the level of self-control that very few of us have. In terms of the team dynamics, I’m not involved in day-to-day businesses of my operating companies so I wouldn’t know in the first place. And going and telling you about how my company succeeded because of the things that I embedded into my companies is a little bit too self-promoting and egotistical. And I also think it’s bad advice. It’s the survivor’s bias. It’s like this famous picture with a plane full of bullet holes and how they try to armor those bullet holes which they should never have done. It’s the same thing here. Different teams through different times will have different rituals that work. For somebody, it would be a daily standup meeting to review the sprint. For somebody, it would be annual strategy sessions. It depends on the manager, on the team, on the customers and the market. So many things. Self-control, the ability to reflect, the ability to do it on a daily basis to get—what was that? Also, it’s a meme. It’s like if you improve by 1% every day, you get a huge outcome by the end of the year. If you degrade by 1% every day, you go very, very low. Just tiny habits of making yourself better. Your cognition, your psychology, your empathy, whatever you’re working on today, your belly fat, cortisol secretion. You see, this is a pain point for me.
Jim O’Shaughnessy
I can see that. But, you know, again, I agree through lots of experiences and watching people, particularly under stress, right? I had numerous people that had worked for me over the years that—and I’m not going to name anyone here—but I had two really interesting examples. One guy was absolutely not from central casting for his particular job, and people would ask me about it and I would say, “Watch him and how he operates in the 10% of the most stressful times and you will understand why I love working with him.” Right? In other words, a lot of people, a lot of times people just look at the surface of things and that’s a really bad way to make decisions. I had another colleague who was literally from central casting—looked the part, walked the walk, talked the talk—but then under extreme stress, collapsed. And there’s an odd thing for a quant like me to say, but intuition becomes very important. And by that I mean I’m not just talking about, “Ooh, I have this intuition.” No, intuition gets better and better through repeated exposure to the pattern, right? In other words, an imbued intuition. You’ve seen the same thing so many times, all of a sudden your spidey senses start activating. And so now, very typical of a quant: How do I create an algorithm of this?
Arkady Kulik
What about my map, Jim?
Jim O’Shaughnessy
Well, exactly.
Arkady Kulik
Can I pause here for a second? Because I think it’s a very important thing. I want to add: people use intuition and gut feeling interchangeably, which I think is a big cognitive fallacy. Intuition is exactly what you said. It’s a very heady thing. It’s very much in your head. “I’ve seen the same pattern.” Chess helps you develop your pattern recognition. Chess is not about intelligence. Chess is purely about pattern recognition. And that’s how you can train your intuition. Gut feeling is something very instinctual. It’s a body feeling. That’s something that actually comes from your guts and goes up. Intuition goes from up to down. It’s a very important, distinct thing. And people don’t distinguish them. And that’s something I also talk to my founders a lot. Listen to your body, listen to your brain. Those are very different things. And sometimes they will be contradicting. One of my other venture partners, he says, “A full-body yes is when we do an investment.” It’s a very good thing. My mind, my heart, and my guts all point in the same direction. And once there is a conflict, when there is a contradiction, that’s when you should pay more attention than usual. Because that’s usually when something is off. It can be off in a good way or off in a bad way, but something is off at that point. I just wanted to make this distinction. That’s it.
Jim O’Shaughnessy
That is an excellent distinction. And I do something similar. When the gut and the head don’t agree, that’s when I really start writing. Because I think of writing as thinking. A lot of people don’t agree with that. I passionately believe it. How do you know until you write out your idea? You don’t know if your idea is any good or not. The need to externalize it. And I’m very old school in that.
Arkady Kulik
I actually wanted to ask you about that. Do you mean typing or you mean writing with a hand?
Jim O’Shaughnessy
Yeah, yeah, writing.
Arkady Kulik
That’s a different skill. It’s a different thing.
Jim O’Shaughnessy
It’s completely different. And so if you came into my office here, you would just find pens galore and notebooks everywhere. Because it is so different. It’s a different part of our brain. It’s a different way of doing things. Then once I’ve written it, once I’ve physically written it with my hand, I’ll look and I’ll be like, “I am such a dumbass,” or “Oh, there’s something here.” Then I’ll move it over and type it out and do that type of stuff. But I always start with writing. And I sometimes feel like the old man shouts at clouds when I’m talking to younger founders, right? Because they look at me like I’m insane. They’re like, “Okay, grandpa.” But, you know, “We keep all our notes in,” fill in the blank, right? Whatever the computerized note-taking system is.
Arkady Kulik
What’s next? Are you going to teach us how to use a payphone? I mean, there are certain things and there is a lot of, by the way, there is a lot of neuroscience behind the micro motor functions of your hands. There are some weird ideas that if you teach yourself how to write with another hand and you write the same thing with different—never tried it. Never. So I’m not an experienced practitioner of that. I’ve heard people who do that as well. They would try to write the same thing with different hands because apparently it activates different hemispheres of your brain and you can have different experiences when you write it out. It might be an overkill, especially for those younger founders. But yeah, I think whatever helps. But look, Jim, that’s exactly the example of when you ask me what’s the right answer? The right answer is honest answer, the one that works for you. For somebody else it will be walking and dictating stuff and then listening to them talking about that. But for you, writing down makes it easier. That’s a fantastic example of when I would say, “Yeah, let’s proceed because you’re genuine.”
Jim O’Shaughnessy
Yeah. And I don’t even know how to put this. I’m left-handed, right? So the joke is I’m the only one in my right mind. But I think that’s also part of it with me. Again, because the world conspires against me. I’m a left-hander and I write on a notebook this way. And so I’m always scraping my hand against the metal. But I like the way you react to that because I agree with you for other people. And that was also a big part of my early—when I was starting my first company, I would write everything out. My grandfather called it “premeditating.” And it’s basically what he taught me how to do was: here’s what I want. Here’s what happens if I get it, good and bad. Here’s what happens if I don’t get it, good and bad. It’s the dual nature, right? It forces you into a completely different train of thought than “No, I know I’m going to get it. I just know I’m going to get it.” And you also don’t think about the externalities of, well, a lot of bad might happen in your life if you actually get that. That kind of ties in with your question about “You’ve got a billion dollars in the bank, what are you going to do the next day?” Right? Your company’s gone, all of that’s gone. You’ve spent your—I love your example—you’ve fulfilled all of your teenage fantasies, what’s next?
Arkady Kulik
They are important, though. Those are the things that very many people are optimizing for without even understanding that’s what they’re optimizing for. And how many stories—in every single culture, whatever you take, Indian culture, Chinese, Western culture—in every single culture, there are stories of a person achieving their goal and understanding that now their life is empty. And maybe this goal was never their goal. It was something imposed on them by their family, by their associates, whatever, but it was never their goal. And now they’re completely lost, and they have all of this money in this beautiful house and whatever else they want in their lives—cars, yachts, harem, whatever—and they feel nothing. And they’re absolutely empty inside. And there is a reason why this is a transcendent story through all the cultures, because it’s very human. It’s more biological than even culturally imposed. So I think it’s important to understand why you live your life and why you go there, why you do anything in the first place. And usually when I start talking about this stuff, my friends are like, “Arkady, come on, that’s too complicated.” So I’m just gonna stop myself right now. But I do have exercises that I give my friends if they’re interested in how to dig deeper, how to go through those layers of fake meanings, how to actually get to your own core. And many people have very different things that they expected to hear there in their heart and in the very deep layers of their motivation. And they would come out of those exercises with big eyes and like, “Oh my God, never thought about that. Gosh, I should probably go and rethink my whole life.”
Jim O’Shaughnessy
There’s a great—and I’m paraphrasing it—but Jed McKenna has this great quote where he says, he quotes Socrates saying “The unexamined life is not worth living.” And he goes, “I know most people are terrified to even examine that statement.”
Arkady Kulik
I have a horrible saying, which I think might have a ring of arrogance to that. But I genuinely, I honestly feel like that. And that’s my phrase, I didn’t read it anywhere: “Life devoid of meaning seeks distractions.” And to me, this is very important, because whenever I feel that I want to spend a few more minutes on Reddit, or I want to spend 10 minutes watching some YouTube video, or I want to do something that is a clear distraction, there is no value. I’m not talking about walking a dog, for example, or spending a night with my friends. Those are different things. But when I really clearly want to get distracted. Or maybe pop this bottle of wine, right? And kind of go into this spotlight of mine for a while. I’m like, “Ooh, Arkady. That’s a red flag. What’s going on? Why do you want to get distracted? Is it that the task you need to do is complicated and you don’t feel great about it? Is it that you feel that what you’re doing right now is meaningless?” I train my brain to treat those signals as a red flag. “Oh, I want to get distracted. What’s going on? What’s going on? Stop, pause, breathe. Figure out.” And maybe sometimes get distracted. Maybe you’re just stressed. Maybe you need some meaningless time in your life. Half an hour of just pure stupidity. And then I would take some random, boring—no, not boring—random poorly written sci-fi book. Not Asimov, not classics, but some kind of whatever. One of those modern books when there is no meaning, like, blah, blah. Ten pages later, I’m like, “Okay, back to business.” But that’s very true. People don’t want to examine their lives. They don’t want to examine themselves. It’s painful, Jim.
Jim O’Shaughnessy
And it’s also, you know, people who desire power over other people, not influence—power. They’re very different. They have almost perfected the—I always think of The Wizard of Oz. “Pay no attention to that man behind the curtain.” And that’s the person you need to pay attention to, because my first job when I was a teenager was I was a professional magician. I loved magic. Other people had Farrah Fawcett on their wall. I had Houdini. And yeah, I’m a geek, but I love—but one of the things that I really learned was, oh my God, people are so easy to distract. And it really stuck with me. And once you see it, you can’t unsee it. You can’t. It’s like, oh my God. And we’ve weaponized it and scaled it, right? TikTok, Instagram Reels—all of it is not good for moving society forward, in my opinion. I’m not saying ban them. I’m not saying get rid of them. I’m saying learn some discipline. Like, you read 10 pages of a newer sci-fi novel. There are strategies you can pursue.
Arkady Kulik
But then again, all of them demand willpower. And beyond that, look, traditional media, radio and TV and newspapers, all the same stuff. Alcohol, the same stuff. Now social media is just much more efficient in that. All of those dopamine cycles, all of this, like, “Here is a cute puppy. Here is some very negative news about somebody killed. Here is a cute kitten. Here is some new outrageous political news.” And they put people into this cycle of ups and downs and people get consumed. Social media just got very good at that. But it was always here. And it is not because there is some kind of an evil overlord sitting there trying to distract people. It’s because people are willing to be distracted. They’re happy to be distracted. They don’t want to face certain—there is, I don’t even recall what kind of movie it is. Or a cartoon. I think it was a cartoon. There is a character who tries meditation and he sits there, he puts his hands. And then he sees burning corpses and he’s like, “Oh my God. Never again.” Tells you everything you need to know about your inner world. The moment you sit with yourself for a minute in silence. Have I told you about my silent retreats? Have we ever talked about that?
Jim O’Shaughnessy
No. No.
Arkady Kulik
Every year in January and August, usually around January and August, I do a three-day silent retreat. I stay at home. I don’t go to any Vipassana, any monasteries or anything like that because I think it’s, in my opinion, it’s kind of counterproductive. But I stay for three days. No phones, no music, no writing, no reading, no painting, no, of course, no games, no movies, no communication. I don’t talk to anyone, including my wife, not even my dog, which is the hardest one, by the way, because he would do stuff when I cannot shout at him. So three days of silence. Three days of no communication of any sorts with other people or with other media. The first day you’re going to clean up your whole house because you had all of those chores. Then the second morning you wake up and like, “God, what’s going on?” And then on the third day, you start really seeing your own movements. You start understanding yourself. You spend time in meditation, you spend time in talking to yourself and understanding, getting closer to yourself. As weird and esoteric as it sounds, twice a year, three days. Everybody can find a long weekend. Friday, Saturday, Sunday, everybody can find it. Even if you have the busiest job in the world, you can have a day off. Not a single bite so far. Not a single person, not even my wife. But then again, from what I understand, when I was telling this to my friends, they’re like, “That sounds like a prison.” I never thought about it. To me, it’s very liberating. It allows you to reconnect with yourself. And people will tell me, “Arkady, that feels like I’m in a maximum security prison.”
Jim O’Shaughnessy
Yep. I do a different version of that. I don’t do it every day, but I try to every morning. I just sit with no phone, no music, no books, nothing, and sit in silence for between 15 and 20 minutes a day. And I also have a sensory deprivation tank, which I absolutely adore. That takes—I don’t do that every day, but I try to do it at least every other week. And you do it for about 45 minutes to an hour. And it’s really something.
Arkady Kulik
Where you float in the salty water?
Jim O’Shaughnessy
In darkness, no music, and it literally feels like you’re floating in space. And because the water is your body temperature. And I gotta tell you, I think I’ve gotten more out of those two practices than almost anything else I do. Why do you think—other than “I feel like I’m in a maximum security prison”—why do you think that people—is it simply they don’t want to examine that statement of “The unexamined life is not worth living”? Or is there something else? Kind of the cult of busyness?
Arkady Kulik
There is definitely a force of habit for sure. That’s how, that’s the thing that just happens. Lots of people are in the habit of checking their phone or whatever. There is—bad habit and addiction are different things for a reason. There are some people who have bad habits. They don’t necessarily have addiction to alcohol or something. They have a bad habit of popping a can of beer when they come back from work. It’s not that they’re alcoholics. If they replace it with a can of Coke or replace it with something else, it will still be the same bad habit for them. I think it’s a force of habits. So just pure reflexive, human thing. But at the core of it is that we are offered so many meanings by other external forces. Whether it’s your culture, your religion, your family, your country. We’re offered so many answers to this question of meaning that it’s easy to accept something and never examine that honestly and genuinely with yourself. There’s a very good old Jewish joke about a young boy coming to a rabbi and like, “Rabbi, what was the meaning of life?” And he’s like, “Dear boy, do you really want to trade this fantastic question for some simple answer?” And I think this is the core of it. A lot of people don’t want to ask this question. A lot of people, they have to face themselves, all the good and bad and ugly that is contained in them. And all of us, we’re human beings. We all have good and bad and ugly. None of us are saints. And I mean, maybe some of them are. I’ve never—have you met a saint person in your life?
Jim O’Shaughnessy
Never.
Arkady Kulik
Even the Dalai Lama says he’s not a saint. He’s not enlightened. He’s not whatever kind of moniker you want to attach to that state. We all contain multitudes. We all have good and bad sides. And facing your ugly sides, facing your desires, facing your anger, facing your fears, facing all of that stuff is very difficult for people. To them, they get attached, as you say, like, “Oh, if I have it, that defines me. If I’m angry about the guy who just cut me in the traffic and I want to shout at him, it makes me a bad person.” Doesn’t. Makes you human. You got afraid. Your fear converts into anger. Now you’re like, “Blah, blah.” I know a couple of people who are perfect at that. Usually women. But the point is, I think people don’t want to get close to themselves because they don’t want to see the real picture. They want to live in this imaginary world of “Me being a knight in shining white armor that has never touched a speck of dirt in my life.” And this beautiful, fantastic, ideal self. And clinging to this picture is the best way to never becoming the picture.
Jim O’Shaughnessy
I could not agree more. Jung has that wonderful quote about, until you integrate your shadow—that is all the things that you don’t like about yourself, right?—you will look at what happens in your life and call it fate. And I just—that I remember the first time I read that, I’m like, holy shit, is he ever right.
Arkady Kulik
My favorite psychologist of all times.
Jim O’Shaughnessy
Mine too. Mine too.
Arkady Kulik
I’ve read all of his books. When I was going through this period in my life that you mentioned, when I was acquiring all of this scar tissue, it was not the easiest period in my life. I lost my girlfriend, I lost my business. A lot of stuff seemingly at the same time just collapsed around me. So at that point, I was, “Okay, I need to understand what’s going on with me. Why do I react like that?” And I started reading Jung deeply. The concept of shadow, the concept of anima, the concept of synchronicity. I think those are the three most powerful ideas that he has written down. I know there are lots of critics. I know that a lot of people think he’s outdated. I don’t know. I don’t care honestly about that. I think he has very serious tools that he gives you. Not ideas, not concepts, tools he gives you. Go ahead and apply them. Sometimes it does feel, Jim. Sometimes it does feel like cutting yourself open without any anesthetics and then taking that stuff out from your guts and looking at that and understanding how ugly all of that looks and then sealing yourself back up. It doesn’t feel nice. But then again, that’s the only way forward, the only way I know. Maybe there are people who know how to do it easier and better. Please introduce me if you know those people.
Jim O’Shaughnessy
I don’t know them because like you, same sort of thing. I was in a period in my early 20s where I was just feeling like I was almost nihilistic. It was like, “Why fucking bother with anything?” And I had read some Jung when I was in college, but I went on a deep dive and like you, I’m like, “Okay, I found my guy” because it—and I love the way you correctly phrase it, he gives you tools, right? And you’re going to use those tools differently than maybe I use those tools, but we both get to use those tools. Which leads me to another thing I wanted to ask you about. You’ve lived in different countries, different business cultures. What do you think is the most misunderstood between American startup energy—we talked about it a little earlier, the chest-thumping and all of that—and post-Soviet technical rigor, right?
Arkady Kulik
Okay, so technical rigor. Post-Soviet technical rigor is a myth on its own. There are some very talented people. Granted, post-Soviet, it’s been 35 years. At that point, the Soviet Union doesn’t exist anymore.
Jim O’Shaughnessy
So, okay, so let’s make it more modern. I had Dan Wang on who wrote about the difference between America’s legalism and China’s engineering cultures. Maybe that’s a more fresh metaphor.
Arkady Kulik
I don’t think that Russia today has the same rigor when it comes to science and technology as Soviet Union had. I just want to put it out there. I think that they have lost a lot of really talented people. Not a single really talented physicist with whom I studied together is still in Russia. Everybody immigrated. Every single one of them left. Russia is going through the early—it was going through early ages of capitalism and this kind of puberty of capitalism in the ‘90s and now it’s a full-blown, you know yourself, judge yourself. What Russia became in the last, I want to say 10 years or so, it is pretty clear where the country is trending. The US is not a homogeneous culture either. LA versus New York are very different social interfaces. Miami versus Seattle, very different value systems. I cannot say that the whole US is the same thing. I can compare San Francisco startup culture versus say some kind of idealistic Soviet Union physicist, engineer. And then the differences will come from society that brought those people up. San Francisco: take your risks, shoot your shot. You failed. Good for you. Now you know more. A lot of people in San Francisco, if they failed at their first startup, that would actually be seen as a good thing by a lot of VCs. If you talk about Germany or France or Russia or any European country, you failed once, definitely going to fail again, never going to get any money because this is the culture where they don’t tolerate mistakes that well. When you talk about some kind of idealistic Soviet scientist, that would be a person who is driven by the party, by the ideals of the party, whether it’s conquering space or building the hugest nuclear rocket to topple the United States or whatever it is. By the way, the funniest dichotomy of a Russian person is that they either want to turn the US into nuclear rubble or they want a green card.
Jim O’Shaughnessy
We’re lucky that more want the green card. Either/or, no in-between.
Arkady Kulik
So that’s genuinely true. So I think that person who was brought up in a Soviet society, and again, I’m talking more about not lived experience, but what I’ve heard from my parents and grandparents, sure, Soviet Union had some good things about the respect for teachers and scientists, about the ethical codex of an officer of the army. The officer of the army was a very honorable person. If you’re an officer of the army, you are a person who is held to a very high ethical standard. You’re not here to bribe, you’re not here to cheat, you’re not here to abuse your power. They had some things figured out right. A lot of people were driven by the ideology of building this communism. So the drivers are different. United States, the biggest and the most important thing about the United States is a universally accepted personal responsibility for your life. And this is the biggest differentiator from all the other countries in the world. China, Germany, Russia. Take it. This is probably the most important part. Everybody here in the US understands that you’re on your own. And I think it’s a good thing because it makes people face those questions that we talked about a couple of minutes ago.
Jim O’Shaughnessy
Yeah, I agree with that assessment. A lot of the older cultures of Europe and Asia are not mistake-tolerant. And I’ve always had this idea, I bring it up a lot when I’m talking to people, of America almost has a different DNA in that. Basically, all of the people, at least originally, who came to America, what was different about them than their brother or sister who stayed in Ireland or Moscow or wherever, right? What was different about them was many of them were willing to get on a boat with absolutely nothing, you know, maybe $10 in their pocket, take a very arduous journey across angry oceans, come here and leave all their culture, all their family, everything they knew, right? And so it created a very different type of citizenry than—and then, of course, we had the platform, right? The constitutional republic, the rule of law, freedom of speech, all of that, where these people could really get busy. And it’s a very different culture. It is definitely not a monoculture. And I completely agree. There’s, Bill Bryson has a great book, One Summer: America, 1927. And it looks at the 1920s, and it’s a really fun read, but it also sometimes makes me a little sad because that American culture, in my view, is—it’s not going away, but it is certainly not as strong as it was back then. And it was basically, you know, the popular memes, “You can just do things.” Well, in America in the 1920s, they lived that. And so there’s a great story about Mount Rushmore. Calvin Coolidge was president at the time. He didn’t know that was going on at all. And he was vacationing nearby, and one of his aides said, “Hey, you know, I just heard that there’s this guy who’s chiseling the visages of American presidents that he likes into this mountain.” And Coolidge is like, “How cool. Let’s go look.”
Arkady Kulik
Yeah, people do stuff in the US. Yeah.
Jim O’Shaughnessy
Yes. And the difference between that and so many other cultures, to me is just incredibly profound. It’s just like, yeah, okay, he decided he’s gonna create these busts of presidents. No one said, “No, you can’t do that.” No one tried to interfere with him. No one—even Coolidge.
Arkady Kulik
Where is your permit?
Jim O’Shaughnessy
Where’s your permit?
Arkady Kulik
Exactly. Show me your papers.
Jim O’Shaughnessy
Exactly, exactly. And that’s what got you this dynamic environment that created the United States, right? And I’m not calling for pure anarchy. I’ve been accused more than once of being anarcho-capitalist. I am not anarcho-capitalist, but I love the freedom that this country was based upon, right? And it’s still present in many forms. But you’d probably really enjoy reading it because like, wow, just you want to talk about cultural dynamism, America during that period, just off the hook.
Arkady Kulik
Thank you. What’s the book name again?
Jim O’Shaughnessy
It’s America, One Summer. And I think it’s 1920, whatever. But the author is Bill Bryson.
Arkady Kulik
I’m gonna download it today.
Jim O’Shaughnessy
Yeah, it’s a fun read. And you can read.
Arkady Kulik
One Summer America 1927.
Jim O’Shaughnessy
There we go. It’s a lot of fun.
Arkady Kulik
Thank you, Jim.
Jim O’Shaughnessy
Of course. Let’s get back to another thing that you say, which I—let me just stipulate I agree with. But I want to hear your reasoning. And it’s a quote that is: “Science findings are discarded packaging and a happy user.” If I was in academia, I would think of that as a gut punch.
Arkady Kulik
If I had to live my life avoiding gut punches again, nobody can punch you in the gut by saying something. Only you can punch yourself in the gut by misinterpreting something. The whole idea of, in my opinion, the whole idea of understanding the world better, the whole idea of doing something with that knowledge, the end point is to make the life of humans better or whoever comes after humans, whatever post-human society we’re going to build. Even if you build a digital twin of Jim and you actually have an infinite timeline and you don’t have to ever die and you can be uploaded to a spaceship and go explore the universe and whatnot. Whatever sci-fi dream, teenage dream you might have. By the way, nobody ever gave me that answer. “If I had a billion bucks, what would you do?” “I would upload my consciousness into a spaceship.” Maybe I would vibe with the person better. But the thing is, in my opinion, there should always be an ultimate goal to anything that you do. If your ultimate goal is to have a beautiful equation on the whiteboard, cool. And this is where you end. You created this equation. You build a theoretical framework like Maxwell did. Did he contribute a lot to humanity? Of course.
Jim O’Shaughnessy
Very useful equations.
Arkady Kulik
People say that roughly 50% of our GDP is thanks to Maxwell today. But then there was another guy who took it to the next step. There was another guy who took it to the next step. Somebody created electricity. Somebody created the Internet, somebody created all these digital devices. At the end of the day, it’s an effort that spans over generations. But in my opinion, every single scientific discovery, or any discovery, anything that we understand better about the world around us should lead to some positive outcome. Because if it is just an equation, if it’s just an article, it’s an intellectual masturbation for the lack of a better word.
Jim O’Shaughnessy
You took the thought right out of my head. It’s a masturbatory exercise.
Arkady Kulik
Yes, it’s just stroking my own ego. “Oh, look how smart I am.” Who cares? Nobody benefited from that. Nobody benefited. And to me this is the point of us as venture capitalists is to be those people who help those scientists. Maybe somebody has an idea on how to heat or cool our buildings with less energy spent. Maybe somebody has an idea on how to replace the blood with some kind of oxygen-carrying liquid for the sake of emergency. Somebody else has an idea how to optimize inference in AI. All of us are trying to make the lives of humans better. And then it makes sense. If it is just to stroke your own ego, I’m not interested. I’m sorry, just whatever. Go to your own garage, basement, shut your door behind you and do whatever you want there on your own. Nobody’s going to watch.
Jim O’Shaughnessy
You know, as you bring up ego, I do make the distinction. I think when people say people have big egos, what they really mean is that person has a fragile ego. And by that I mean that we all know that person, right? I try to actively avoid them, but when you look at them, it’s not that they—I don’t think actually they have big egos. I think they have very fragile egos that need constant external reinforcement. “Oh, you’re so brilliant. Oh, you’re so great. Oh, you’re so—”
Arkady Kulik
Exactly. I would also say, just following up on what you say, that it’s not that they have big ego or small ego, fragile or non-fragile, it’s does their ego control them or not? Is it about them trying to look nice in the eyes of other people? I mean, I think the people who master their ego can have as little or as much ego in different situations when they need it. They can really tune it down, they can really tune it up and make a point and take a stance and dig their heels into that point when they need it and use their ego, their intelligence, their everything as tools to get what they need to do. However, when people are driven by their ego and it’s all that defines them, that’s a very sad picture, especially for a grown-ass person. Very, very sad picture.
Jim O’Shaughnessy
Yeah. And well, my advice would be everyone listening and watching, listen to what we said for most of our conversation if you want to avoid that, right? And it’s kind of like you got to take that first step. You’ve got to—and you know, as I was listening to you about people just kind of slipping into life, that’s been another one of my little pet peeves is there are so many shrink-wrapped ideologies, belief systems that people just like, “Oh, okay.” It’s like—and they’re all across the board, right? There are religious systems, there are political systems, there are other social systems that, “Yeah, here you go. Here are the rules. Play by these.” And that’s not—what a waste of a life.
Arkady Kulik
Yeah. There is no uniqueness to it. There is no individuality to it. There is no value to just following other people’s marching orders. That’s how people fall in line. And I really, really genuinely hate when people call other people NPCs, using the non-playing character from video games. I think it’s very derogatory and very inhumane and I don’t think there are any NPCs and I don’t think there are any players in this world. And this is not a video game. This is not—I just, I think it’s so arrogant to call somebody else an NPC. However, the people who are—in, say, in Hindu tradition they would call it, “He’s still asleep, he’s walking amongst us asleep.” Maybe that’s a little bit more of a gentle way to put it. But the point is, yes. People who are never examining their own lives, they will always be prone to being like a ping-pong, like a ball in a pinball machine, just being pushed by other forces. Today it’s your boss, tomorrow it’s your guru, the day after it’s your spouse. And then the person is all around and he never had control in his life. And why did he live his life in that case? What was the whole point?
Jim O’Shaughnessy
I again, wow. I’d forgotten how much we agree on and even to the terminology. I love that metaphor of they’re walking in their sleep. And I would argue that many of those shrink-wrapped belief systems are ambient to keep them asleep.
Arkady Kulik
100%. Yes, yes. And I mean I would never thought I would find myself quoting Lenin of all people, but he said, “Religion is the opium for the masses” or something like that.
Jim O’Shaughnessy
Yes, he did.
Arkady Kulik
And I think this is very true. And now we have all of these self-help books, all of those gurus and psychologists who again keep training you a very simple answer to the question that should never be answered in the first place. It should be the question that keeps you awake. Not in literal sleep, but in the sense that we’re talking about. Yeah, 100%.
Jim O’Shaughnessy
Yeah. And you know, again, that’s another one of my pet peeves. I remember seeing one of those ridiculous listicles. I think it was 2017 or 2018. And I had joined Twitter early. But I had looked at it and was like, yeah, I don’t like—back then, when I joined in 2009, it was people taking pictures of their lunch and I’m like, “I don’t give a shit about this.” Anyway, there was—I was still in asset management and I had a lot of people telling me, “Oh no, no, Jim, there’s this huge group on Twitter called FinTwit, Financial Twitter. You really have to get engaged.” I’m like, “All right, I will.” And so I’m looking at some of this stuff and I’m just like, “Oh my God.” And so I got so triggered by one of these lists, right, by some guru, that I just composed a thread right on the app and I’m like, “Please don’t read these. These are going to send you in exactly the wrong direction. There is nothing that unites ‘Five things every millionaire does in the morning.’” That’s—it’s just lies.
Arkady Kulik
This is—well, again, people are looking for simple answers. Is it not the same reason that conspiracy theories are so popular? Yes, they just give you a very simple answer to a very complicated topic. Like, “Oh yeah, now it makes sense because aliens are behind all of that.”
Jim O’Shaughnessy
Let me give you—I am currently writing a fictional thriller. My first, right? And it’s a lot of fun. Oh, it’s so hard. It is so much harder than writing non-fiction. And I’ve written four non-fiction books. But it’s fun. And as part of that is this theme. One of my villains is like, “No, no, no, you don’t understand. We sponsor all of the conspiracy theories. If you want to know where true power is, look for boring. Look for that which just is the anti-meme. You want to see true power? It’s in PDFs, it’s in notes from the Bank of International Settlements. It’s from all of these incredibly dull structures that bring no attention to themselves.”
Arkady Kulik
That’s an interesting take. Well, can I get a draft of your book when you’re done?
Jim O’Shaughnessy
Of course you can. In fact, I will make you one of my first readers. But it is definitely fun. Well, I’m getting the hook here from Ms. Ena. I always really just—I need to talk to you more, just not in terms of podcasts.
Arkady Kulik
Sure, let’s just schedule something. I’ll reach out to your assistant and then we can just—
Jim O’Shaughnessy
I would love it. Arkady, as you know, our final question is always the same. We’re gonna wave a magic wand and make you emperor of the world. You can’t kill anyone. You can’t put anyone in a re-education camp. In other words, you can’t force, but you can persuade. We’re going to give you a magical microphone and you can say two things into it. And whenever the 8 billion—apparently that number is suspicious. By the way, I’ve been reading about that. I don’t know whether you have as well, but I thought that was interesting. Anyway, everyone in the world’s going to wake up whenever their morning is and they’re going to say to themselves, “You know what? I’ve just had these two great ideas. These are what you’re going to incept.” And unlike all the other times, “I’m going to actually act on these two ideas starting today.” What are you going to incept in the world?
Arkady Kulik
Be true to yourself. Be true to yourself and be kind to each other.
Jim O’Shaughnessy
I love both of those. Those are great. “Be true to yourself and you cannot be untrue to any other.” What was the Shakespeare line? “To thine own self be true.” It’s in the soliloquy. It’s a great one. I used to know it by heart. I’m getting old.
Arkady Kulik
Really appreciate such a conversation. Wow.
