The universe can evolve in one of many ways. What differentiates those possibilities is choices. We can extend lifespans, or make our current ones healthier; we can go to the moon, or clean up the Earth; we can replace human labor or augment it. Propulsion systems can build planes or missiles; nuclear energy can power homes or make mushroom clouds; social media algorithms can manage cacophony or radicalize those who go deep enough down the rabbit hole. As a society, consciously or not, our task is to choose from these possible futures.
Our mission is to make the future happen, but faster and better.
When we look at a technology, we want to see that it is so radically new that it actually changes our perspective of the world or a problem. This can be achieved by a new capability or a difference in degree so drastic it becomes a difference of kind. Because paradigm shifters are disruptive of previous mental models, they seem crazy until you realize that the old way is now not just obsolete but stupid.
It is critical that founders are missionaries. After all, if they can’t radicalize themselves, how can they convince skeptical and disinterested minds? Those who just listen to the world will freeze when they hit the trough of disillusionment and stop pushing once they achieve the kind of success that changes individual lives but doesn’t change society (or produce outstanding returns). They’re also needed to convert employees into believers.
Most VCs care about product-market fit. That is critical. But just as important, though underappreciated, are business-team and idea-timing fit. There are many businesses that have incredible people that are poor investments simply because that team, though awesome, is not fit for the industry. Similarly, there are businesses based on amazing ideas that are simply too early or too late. We love teams that not only show that the idea is good but show why they’re the right people coming in at the right time.
Power laws and compound interest are two of the most important mathematical ideas underpinning both the world and business. However, since they involve logarithms, they are hard for most people to intuitively understand. We look for ideas that incorporate these two principles and have a long enough time horizon that we are willing to embrace the uncertainty that goes along with such world-changing ideas.
Fundamental technologies can change everything. However, cumulative technologies are sometimes given short shrift. But some of the most transformative technologies ever are such drastic changes of degree to be a change in kind. A computer, after all, is just a hyper-fast abacus, and lithium-ion is just a very high-density battery. Yet, transformative tech is often built on transformative capacity increases, and we’re as open to that as new capabilities or new markets.
The Industrial Revolution was powered by the recognition of the fundamental role that energy plays in the universe as a fundamental unit of account. From Kelvin to Tesla to Maxwell to Diesel, the critical technologies of the day involved the use of energy. This culminated in electricity, which enabled the modern world and is now table stakes for civilization. We believe that information will serve the same role in the Technological Age. Computers are the most important invention in half a century, and we want to power the next wave of information technologies.
Machines should complement humans, and building tools to do so is good business. Success requires being in tune with real needs and going out and talking to your customers. The best companies solve real human problems and eliminate mundane tasks to expand and enhance our capabilities. Experience and research show that while machines may beat humans at some tasks, humans and machines working together win every time. It turns out, centaurs beat HAL-9000, and our strategy reflects that.
Superior technology is what makes life better. In fact, it’s the only thing that ever has. Without technology, there could be no be no mass sanitation or transportation, so no cities. In fact, there would be no fire or hunting tools—meaning that there would be no humans at all. It is also what drives insane success. Even Standard Oil, commonly thought of as a barbaric monopoly, was built on the technology of better barrels, the Frasch process, and can sealing.
In business, execution determines success. There are many great ideas out there. But a great idea is ultimately an abstraction. To materialize it and put a dent in the universe, institutions need to be sure they’re in the right problem space and actually get their ideas out there, as well as fend off competitors. What matters isn’t being first. It’s being the first best, with a strong hiring pipeline, clear vision, and a nimble culture.
Current concerns that technological progress is slowing down are overblown. Some areas are just saturated. On the one hand, many secular trends have come to a close. The internet has penetrated most of society. Plane speeds have plateaued. But every technology eventually gets tapped out. This has no bearing on orthogonal areas of innovation. When Ford was playing around with nuclear powered cars in the 1960s, a period hailed as a period of innovation, there were no drastic changes in canal building or electric motors. Yet, innovation went on. The same is true today. We are opinionated but open to being shown new frontiers. We want to invest in those areas.
Business is one of the best organizational structures for social good precisely because it is effective at diffusing technology through incentives. It is not utopian, like anarchism or communism, because it does not erase human nature but controls it. It acknowledges people’s need for actualization and allows them to internalize some of the gains of their inventions as a reward. Business is necessary to create sustainable and efficient social change, and is almost definitionally good: every business must make something that serves a need well enough that someone will pay for it. We stay away from certain sin businesses, like addictive substances, and guide our founders towards ethical behavior.
We only invest where we think we can add value. We will take your calls during hard times and strategize. We will get you in touch with our network. We will get into the nitty-gritty and help you negotiate individual contract terms. We will make sure you are properly capitalized. But we will not nag you. It’s not that we don’t believe in our founders—it’s precisely that we do trust them to select investment partners who can supercharge their growth.
For all the reasons above, we don’t believe that it is helpful to pattern match. We specifically look for ideas and technologies that shift the paradigm. As a result, previous mental models are precisely designed to miss this type of massive change. Wilbur Wright noted that a mere a few years before he invented the airplane even he wouldn’t have predicted that flight was possible, let alone that he would have been the one to crack it. The only way to proceed is to evaluate companies and ideas individually, as a truly novel future is unpredictable.
We’re missionaries ourselves. We’re exploding with excitement every day because amazing people expand our minds every day by pulling back the curtain and showing us the future. We’re in it for the intellectual adventure and the chance to change the world. So go build the future and enjoy the returns.