so when you think about something like that, do you think about it as, "Well, I know something no one, some people don't, so this person's gonna, you know, arise as the winner," or, "This person is the winner, and so I'm gonna play the game with the winner." Is it the former or the latter? How do you think about the decision-making?

Oh, with the Trump, so with the Trump thing, you know, like, we try to be as apolitical as possible, but w- we had run into massive problem with the Biden administration on kinda two fronts.

One was, uh, crypto, and then the other was AI.

So on crypto, they basically...

They didn't outlaw it, so they didn't-- They did these extralegal things, so they kicked all the crypto entrepreneurs out of the banking system.

They hit them with Wells notices that were, like, fake lawsuits, um, you know, on things that were just undefined.

Uh, and so we were trying to get them to, like, "Can we just have some laws? Can we have some regulation?" And they blocked all of that, and they just kind of attacked the industry 'cause they didn't want it.

Me as a hu- you, you know Ben as a human, when you leave, it's like you've-- What, what makes you feel accomplished? What makes you feel like, oh, I did my thing?

And I think too many players just focus either just on the learning thing or just on some other hybrid and don't create the bundle that is the value prop that is truly, truly competitive.

Yeah, so I think that we're kind of starting out a little more specific and then we'll, you know, really ace that.

But the core idea of it is it's for people who want to build something and do something and make an impact kind of in the world, outside of, like I said, being a scholar.

And to do that, be it in technology or in music or in any field, you kind of want to learn how to do it as opposed to just study about it.

And so if you think of something like music appreciation or art appreciation or so forth, that's great.

But, like, we wouldn't do that kind of thing.

We would do the kind of thing where it's like... oh, you want to major in music? Let's write some songs.

Ben, let's talk about if you were 18 today, how would you be thinking about your own sort of growth or education, learning? What's it like to be 18 today in terms of what do you think people should be excited about, nervous about?

So Ben, why don't you introduce the foundation and maybe let's get into the origin story as far back as you want to go as to how this came to be.

Yeah, so Paid in Full is an organization meant to honor the legacy of the people who created one of the most important musical art forms of all time, hip-hop, and make sure that they're paid in full financially, spiritually, and culturally.

And the idea kind of started with me, Steve, and Nas.

So it always bothered me that I bought Paid in Full, the album, for ten dollars, and I got, you know, in my career, and you know, people in tech know this, I probably got at least five million dollars worth of value out of that record, but there was no way to pay it back, and it needed to be paid back.

And so I had the idea originally, and I called Steve.

Steve and I have been friends for many, many years, and I said, "Steve, I have this idea.

What do you think?" And he said, "Well, it's not only a good idea, but it's a very timely idea because people are talking about this right now, but they're not doing anything." So if you listen to the podcast, people are saying, oh, these rappers, these old guys, they don't have any money, they're dusty, they're this, they're that, and all these kinds of things.

Mm

That's something that I think deserves a lot more airtime than it's gotten.

Yeah.

Actually, let's get a little deeper on the safety thing, 'cause it's been very interesting to me in that it felt like in the beginning, safety was like, okay, let's make these things not say nasty stuff [chuckles] that people don't like.

And so the approach that was taken was kind of a surface around the edges.

Okay, we'll put some filters on this guy and we'll RLHF around the edges.

But if you get deep into the thing, you'll be able to get the bad words out.

But if somebody wants to go through that to hear bad words themselves, who cares? But then, [chuckles] you know, when you get into, okay, now these things are really good at cyber hacking and other kinds of ideas, now you need kind of a more architectural idea where the model itself knows not to reward hack in a way that's going to be dangerous, and so forth.

You need to move, use these frontier capabilities that you have differential access to, right? We're-- we have trusted access programs, things like that, to bring these capabilities to defenders, and you can use that to move yourself up so that as the frontier capabilities get better, you get pulled along too, right?

What do you see, one, is the analogy to the past that lessons we can borrow, and what do you see that's really going to be the challenge and missing pieces going forward?

It's a little bit reminiscent of the MPAA, right? Where it's like, what's art? What's porn? Where's the line? When is it R? When is it X? And by the way, the definition of that has changed over time, I think.

Things that used to be [laughs] X are now R and so forth, and, and then what's PG-13, all that kind of thing.

And there is no...

And the, the famous line is, "Well, I, I know it when I see it." And I think that this one, I just think it's gonna be necessarily fuzzy, but there will develop norms over time.

And you know, like, if enough kind of people who run companies or run finance or run whatever it is kind of agree, "Yeah, no, that's a norm," then I think it is, as opposed to kind of what we have a lot now in the open benchmarks, whereas if you can solve this specific problem, then you're at this level and so forth.

I think that's, one, attackable, and then it's too narrow.

Um, I guess h-how do you think about the right division of labor here? Like, what, what should, um, you know, government agencies, um, control or endue themselves and, and w-where they should, like, you know, partner or trust, um, you know, private, uh, companies to, to take care of? And where do you see the gap that's happening today?

The horse, yeah.

Yeah.

So, but he was right, but around his own kind of power, which is extremely powerful, is the good news.

Um, so, you know, just starting with power, uh, y-yeah, that's gonna be, like, very, very different.

I think with cooling-- So th...

And this gets into...

So yes, we're going air cooling to liquid cooling.

To, to-- Why can't utilities and hyperscalers just build faster?

You know, what, what lessons do you learn for the next time versus, you know, what do you make sure to keep and continue because that's what, that's what got you there?

Well, I, I thought that was actually a really good way to characterize it, which was, you know, he thought he was in survival mode when he had twenty thousand people working for him, and that, that, that idea, um, is dangerous, uh, when you have such a big organization.

It, it, it's dangerous on two levels.

One, it's dangerous 'cause you're not, as he said, bringing enough people along with you.

But it's also dangerous in that you've got all these people working for you, um, and their interpretation of that idea could be a lot.

You know, you kinda have to [laughs] you have to stay way on this side of the line so the guy, you know, eight levels down doesn't do something stupid.

And so that, you know, that's a big change, I would say.

Yeah.

So that, I think, speaks to the significance of where we are right now, that he was like, "Okay, it now is the time to, you know, speak out about this and get all of these companies to, like, you know, co-sign it." Um, what do you think are some of the risks right now from, like, a government action perspective on open source?

source?Well, look, I think, uh, there's a huge push with a lot of money behind it, um, you know, particularly from Anthropic to ban open source.

I think that it is, uh, uh, uh, kind of n-nefarious from my point of view, but, uh, you know, whatever their motivation is.

Um, they do have-- So one of the things that happened with cryptography is there are people who are very senior in the intelligence community who didn't understand, uh, the technological aspect of it, who pushed for banning cryptography because they wanted control.

Uh, and I think that it's a similar thing here where it just feels like more control if you can stop some kind of AI.

Uh, and, y-you know, but that-- those are very powerful forces in the conversation right now, and I think that there is certainly a kind of pretty strong community pushing, uh, for the banning of, of, uh, open source.

And so that's why this letter was so important.

... a different thing? I mean, there's obviously supply chain and stuff.

It was something crazy.

It was just...

So I was like, "Ah." And so I gave it to Mark and John O'Farrell to do.

And then all I remember, [laughs] so I remember something different at this point, but I got it all from them, so I wasn't there.

There was something about the employee option pool or some shit.

It was one of these things where it's like, "Okay." [laughs] "Okay." But, like, I just assumed we were doing the deal, and then the next thing I knew Shervin had the deal, and I was like, "Geez." And I regret...

[laughs] I can't tell you how long...

Yeah

Oh, how, how will you navigate the idea maze?

Yeah, yeah, yeah.

There, there is no maze.

This is it.

Like, he's, he's been following this idea for, you know, his whole life now.

And so, a- and, and it's the thing that makes it so powerful in that, um, uh, he and I actually had a conversation with a potential investor the other day, and they're like, "Well, how come somebody won't be able to replicate the technology?" And my answer was, "You know, the technology by itself is somewhat interesting, but it's part of an integrated vision that one per- literally one person has." And the thing that I would, um, uh...

The, the analogy for me has, has kind of been Apple, where if you look at Apple kind of, and what Steve Jobs did in particular when he built the product line There was no piece of software, there was no piece of hardware, there was no nothing that wasn't already done.

We will sell our first asset in a month, and, uh, we'll keep a management deal for the unforeseeable future.

[laughing]

So you really have a natural built-in instinct to wanna be liked, and the easiest way to be liked is to tell people what they wanna hear.

And you know what everybody wants to hear? What they already believe to be true.

And so the last thing they wanna hear is an original idea that contradicts their belief system.

So it's very hard to even bring that kind of stuff up.

But those are the things, those are the only things, things that you believe that everybody around you doesn't believe, when you're right, that create real value in the world.

Everything else, people already know.

[laughing]

So Ben, why don't you take us through this announcement around our global ambition and how all the pieces between global affairs, international go-to-market, LP relations on the global partnership level kind of fit in together?

Yeah, well, it really kind of starts with America, interestingly.

And it's kind of been our belief, our strong belief that drop a person into any country in the world, and they don't have the culture, and they don't have money and capital resources yet, and they just have an idea of how to make the world a better place, their best shot is in America.

And that's just a very, very special thing.

And so a big mission of our firm is kind of trying to preserve that special thing that is America, and that means America has to be a leader.

It has to be a leader economically.

It has to be a leader culturally.

[laughs]

Am I, am I crazy, or is there a-an analogy here which is quite similar?

Paul, Paul, the-- I, I think the analogy, it's a little different, but I think the thing that's the same is it's always very dangerous when you get the feeling the entrepreneur is telling you something that you wanna hear, but they don't believe.

So wh-when that kind of distance comes in- You know, it very reliably is not going to work.

So, you know, one of the things that Mark and I used to do a lot in the early days was basically try and convince the entrepreneur to do what we wanted.

And then if they did that, we would not invest because they didn't, you know, they're coming in with their beliefs, but, you know, they want to tack over to the market.

And that's false.

I mean, it's just a false idea because, like, if you're truly going to have a breakthrough, you have to kind of get to something that the world doesn't understand that you see.

But how do you know? Again, how do you know?

Do they have to get good at it, or are there other paths for them to get their company the attention it deserves?

Yeah.

[laughs] So I think this is tricky.

So if you, if you just go, okay, old media and how did that work and new media.

So old media, um, you had, like, very restricted channels with very restricted formats, um, and the brands were the companies.

So, like, that, that, that's basically the setup.

So y- yes, you could talk to The New York Times or CNN or whatever if you wanted to get the word out, um, but then you were forced into, like, a quote or a very short interview or something like that.

[laughing]

... te-tell us about that.

Yeah.

So I, I, I do think it starts with the problems that, um, AI causes.

And actually, one of the, the first thing, I woke up in the middle of the night one day, and I was like, "Oh, my God, somebody's gonna go on a Zoom.

They're gonna...

It's gonna be AI me, and they're gonna tell my finance team to wire, like, you know, $500 million to Nigeria." [chuckles] And, and that's gonna be a problem.

So, y-you know, and then w-we're like, "Okay, everything's hardware root of access.

But, um, but I guess, what, what do you think the world of venture capital looks like kind of today? We've obviously done a lot of things internally as a firm to try to embrace AI, like very, very fully, but you know, now, five years, ten years from now, just given what's potentially gonna happen to white-collar work.

Um, what do you find has worked best in teams trying to attract top talent early on when they don't have as much of a brand or track record just yet?

Well, if you don't have a brand, all you have is a story, right? So this is something that I think founders often neglect over time, is the...

So the story of the company is also the strategy of the company.

Nobody's got some strategy in their back pocket that's entirely secret, and then they've got a story that's different.

So, like, that's the one thing.

And the truth about strategy is, it's not like a meeting that you have, and you go out with your team, and you go like, "What's our strategy? Okay, everybody, give me your input," and then we assemble this strategy by committee.

What really is happening is you have the initial idea, you're learning about the market, you're learning about the customers, you're learning about the technology, you're learning about each other, and in your mind, you're kind of adjusting that strategy a little bit at a time every day.

What are the opportunities out there that y-you would be most excited to potentially build and sound good?

Right.

And I think for us, you have to take a step back and say, "Okay, for the technology industry, and particularly for kind of new technology companies, what does it need to be?" And you have to think about it on a large scale.

And th-the way we've been thinking about it is, well, if you go all the way back to humanity, like, what's important for humanity? What advances humanity? And it really kind of comes down to, do people have a chance to contribute? Because when people have a chance to contribute, then they can have an impact, and then they can kind of advance the state of things for everybody.

And there's really been no country in the world that comes close to America at giving people a shot, giving them a chance to succeed.

And it's not a completely equal chance.

Some people are born rich, some people are born poor, some people have better genetics, some people live in dysfunctional families, and so forth.

But a chance.

Uh, do you, you think that signals anything about where venture is going as an ecosystem, as an industry? Um, what is it, what is it-- what do you think it looks like in the state of venture capital today?

But I think to get there, we should rewind a little bit and start with what was the system that you created to even allow capital to get to this point?

Yeah.

So, uh, you know, we started the firm back in 2009, and at that time there, there, there were a couple of ideas about venture capital that I, I, I would say, uh, we thought were dated.

Um [chuckles] one was like it was mostly an investment idea, so the product for investors, LPs, was really good in that they had very high returns.

But the product for entrepreneurs I thought was, like, pretty bad in that they didn't do much for you other than, uh, give you money.

So that was kind of idea one, that we thought we could just build a better product for entrepreneurs.

And then the other idea that was very, very kind of prevalent in venture capital was this idea that, you know, in any given year, uh, there would be-- and the, the historical data really supported this.

Often not reported on.

... te-tell us about that.

Yeah.

So I, I, I do think it starts with the problems that, um, AI causes.

And actually, one of the, the first thing I woke up in the middle of the night one day, and I was like, oh, my God, somebody's gonna go on a Zoom.

They're gonna...

It's gonna be AI me, and they're gonna tell my finance team to wire like, you know, five hundred million dollars to Nigeria.

[chuckles] And, and that's gonna be a problem.

But, you know, now five years, ten years from now, just given what's potentially gonna happen to white-collar work.

[laughs]

Uh, uh, I would say almost certainly illegal today.

But the th-thing that, uh, I think is very replicable, but only if you have a difficult product to sell, is the discipline.

And the discipline, it really came down to, okay, you're going into an account.

You know there are competitors, and how systematic are you about laying the traps for the competitors? You know, making sure you make a comprehensive technical case, a comprehensive business case.

Making sure that you've charted everybody in that organization who's in that decision process, and it's a very complicated decision process for PTC.

Getting assurances that they're all, like, lined up, and that's so complicated and requires so much courage and effort and competitiveness that that translates into anything.

Everyone's got the same ones.

Why don't you share some of the tenets behind that idea and how you came to it?

Yeah, so actually, it's interesting.

It's a really weird adjustment going from, you know...

I mean, I spent my whole career in old media or dealing with old media, and now we're in new media.

In the history of the firm, the one thing that we really, really, really, really defended against was basically leaked results.

And the reason, and it goes back to, in the pretty early days of the firm, The New York Times got a leak of our results.

And, I mean, we were, like, a young firm, so most of the funds were, like, a year old, and venture capital firms don't have high returns in the first year 'cause nothing happens in the first year.

That's, it's evidence of our, of our power and, and our interestingness.

Do, do you have a, a take on this idea i- in the spirit of nine nine six, that there is a finite window for, say, like, a entry-level people just graduating from college to, to earn whatever they're going to earn before they're permanently, uh, sentenced to an underclass?

Uh, I-- So I think that's, um, very incorrect, uh, because of the thing that, um, we talked about earlier, where, like, everybody can be an entrepreneur.

Like, I, I, I think that...

I think if you think-- look at it through the lens of this is an industrial revolution economic model, and there's workers and there's capital and, and, and all the things that we've been talking about, then yes, that would be true.

But I think that in, uh, you know, uh, in AI or in AI age, um, society, like, for the people with initiative, I, I just think there's going to continue to be unlimited opportunity to even, like, set up AI, i, A, uh, an army of AI agents to go work for you, um, and do useful things, and we'll have lots of consumers, and, um, you know, like I, I think that the idea that, like, we're gonna be out of ideas, um, and only the big AI is gonna do everything, yeah, I, I just-- I, I disagree with that kind of-

A- a- assuming that's the case, do you view investing in your crypto funds almost as an AI investment to the extent that you think crypto is the AI-native way of, of g- engaging in commerce?

commerce?...

Oh, well, I, I think it's, um, it's a little more like kind of the, uh, as the internet relates to the iPhone.

If you think about the period of takeoff of the firm in two thousand and nine, up until you reach, let's call it, like, cruising altitude, when was cruising altitude, and what was the most difficult part about getting it from takeoff to that point?

The first thing is we really didn't know that much about investing.

Mark and I had done some angel investing, but neither of us had any venture capital experience.

Credit to Sequoia, credit to Greylock and Kleiner and all the guys who were around at that time, they just had years and years of doing it.

We made more than our fair share of investing mistakes, missing things we should have done and doing things that we shouldn't have done, [chuckles] but missing things that we should have done was probably the bigger one.

And then the other thing is, how we thought about the profile of the investor was wrong.

We so over-indexed on our idea that we had to help the founder become a CEO, that we made it a requirement that you couldn't be an investor at Andreessen Horowitz if you hadn't founded and/or run a company.

It's just such an interesting case study.

And maybe you can kind of describe the evolution of the firm, you know, since you started, and again, maybe what your ambitions are, you know, for the future as well.

Yeah, so the original idea, and in venture capital, like, the fundamental thing that you have to be is you have to be what's known as top tier, because if you're not top tier, then the best entrepreneurs won't take your money.

And so, like, there are times when you can, you know, when the market is so blazing hot that, you know, you can be, like, a not important venture capital firm and dump into good deals and make money.

But in most times, if you're not top tier, you're going to go out of business and...

And so you have to be that.

And the difficult thing about being top tier is historically the way you became top tier was reputationally.

Oh, if you're Sequoia, you had invested in Apple and Cisco and Yahoo and Google.

A real breakthrough in

Maybe you'd agree with that.

Well, I definitely think So because the thing that we've seen, you know, in the U.S. over the last probably mainly over the last five years is, you know, we've always kind of a huge strength of the U.S. has been rule of law and the amount of case law and like the predictability of the law.

But that kind of presumed that you didn't have people involved.

who were above the law, who were judges and, you know, prosecutors and these kinds of things.

And so then what's happened in the last five years is, you know, particularly in the Delaware Chancery Court, is the chair of the Delaware Chancery Court just chose to completely ignore the law.

And make up her own law, which, you know, it was quite stunning.

You know, like the board of directors didn't have a say, and then even the shareholders didn't have a say in how the company— This is the Tesla case.

I don't know if you have any thoughts on that.