Invest Like the Best with Patrick O'Shaughnessy
· Palmer Luckey, Patrick O'Shaughnessy
And we talked about this before, but it's especially interesting because lots of companies make poor technical decisions and they decide to go down a product path, it doesn't make sense. I personally feel like this is a case where you have dozens of governments around the world have decided to commit to a particular product path that isn't optimal. It's not the optimal end state or the optimal near term, and they're dumping hundreds of billions, maybe trillions of dollars into that bet. It's something that I'm worried about. [00:00:00] S0: When you find an idea like this. First of all, I'm curious how you found this one in particular, but the world has just gone through the superconductor craze, which for a week there it was like, well, if this is real, it changes everything. And then very quickly realize, oh, it's not real, and it seems like, again, a remote possibility and not terribly likely. So maybe there won't be loads of dollars trying to create superconductors. With something like this, how do you weigh the potential against the odds of us being able to do it with your own time and investigation?
· Palmer Luckey
[00:00:00] S1: Well, in this case, it's 1950s era Department of Energy documents regarding potential energy futures for the United States, accounting for what they assumed would be a nuclear future. I always find it interesting when I go into an area that I don't understand to try and understand it better. Even -- if I want to understand what's going on in the modern day, you want to go back to the future and say, what were people saying, back then, what are the ideas that people aren't even discussing right now? Because I don't want to be too pessimistic on present, but if you look through a lot of the academic literature and government literature today on energy solutions for the United States, they're really, really narrow minded. They are really, really politically driven, it's all about what is aligned with the current debates going on between political parties. The people in these agencies are largely tied to the things that have already been deemed important. And if you go back on the other hand, to let's say, post-World War II America, where we were really thinking from first principles, what do we want the world to look like? What do we want the United States to look like? And what are all of the ways we could get there? They were thinking very expensively. And so this idea of extremely cheap synthetically manufactured biofuels that would get rid of strategic dependence on limited oil supply or allow us to sell off our oil supply to make money in the near term while still having a robust renewable base of energy to power our industrial machine, our war machine, you name it. That was an idea that was of interest to people in the '40s, the '50s, the '60s. I think mostly all of this fell apart when it became clear that we were not going to be a nuclear economy mostly in for political reasons, not practical or technological reasons. So this was the case, right? I didn't actually have to be a big thinker. I just had to go say, what were people thinking when they were allowed to think whatever they wanted and when they could think really, really big things? And it's not even just on fuel. There's other interesting things they were thinking about back then, like today, if you say, what's the best way to help the environment in the United States? It's actually very calcified.
· Palmer Luckey
There's very little consideration for things that are better than what currently exists. You kind of preserving the status quo as the ultimate good. There's very little consideration for what is better for people, what would be better for more animals. And if you look back again the earlier parts of the United States history, there were serious proposals by the Department of Interior to say, what should the United States ecosystem look like if we could make it whatever we wanted? What animals would we have? Would we have hippos? Would we have rhinos? Why not? Why don't we put hippos in Louisiana? There was just this endless possibility, big thinking. But what's crazy is it's not even big thinking in the way that we would think of today. When people think a big thinking, they immediately jump to really hard ideas, fusion power and what if we could bio-engineer ourselves? The ideas they were having, they would have a big impact, but they're actually easy ideas. Just what if we brought some hippos, put them over there on that swamp? The big idea is what could we do economically? Would that be a good meat source? Could we use that as a better protein source that is less damaging to environments that we're trying to preserve than what we're currently doing with cows? And those types of ideas, they're not taken seriously today. People treat you like a crank if you step outside the orthodoxy.
· Patrick O'Shaughnessy
[00:00:00] S0: When you think about, I'll call it, the soil of, let's just use the United States to keep it local, the soil and the quality of the soil for potential innovation and you had to rank that today 1 through 10, what score would you give our soil today?
· Palmer Luckey
[00:00:00] S1: Probably give it a solid 6. It's one of those things when it comes to the talent. We've got really, really good talent. On the volume of talent, we have a lot fewer engineers graduating than our strategic adversaries like China. That's definitely counting against us. I've heard this idea pushed forward that we'll still stay ahead because there's something great about American engineers and American ingenuity we're going to stay ahead no matter how many people we have in these areas because we're just so much better. Which I feel like -- I don't say this lightly. It feels like a soft form of racism to say, "Hey, we're going to just be way better than them to the point where an American engineer is going to have to generate 10x the value on average of this other highly developed advanced nation that graduates people from advanced schools. I don't really buy into it in the long run. This is another reason I think the United States needs at least 1 billion people. The idea that we're going to compete with China geopolitically, that we're going to remain relevant when we only have a few hundred million people and they're climbing to billions of people. You have to believe that every American is going to be so much more relevant on a global basis. Is it really true? Is an American 10x more influential and impactful than an average Chinese person? I think that that's true right now today because of our head start and how we positioned ourselves over the last 100 years. But I don't think that continues to be the case. So…
· Patrick O'Shaughnessy
[00:00:00] S0: What's the additional list of things it would take to get us from a 6 to a 10?