How I Invest with David Weisburd
00:58:28 · David Weisburd, Matthew Harris
[00:58:28] S1: So it might be a bubble from an investment side, not necessarily from adoption side. [00:58:31] S0: Correct. So I do think are there is there a chance that venture returns are depressed in this vintage? Yes, that's greater than 10% chance. But we also have this phenomena where the winners are arriving at a scale that no one's ever seen before. So in a power law industry, just because you make goofy decisions against, you know, 49 companies in your portfolio and you systematically overpay if you get one of them right and it ends up being 25% of an anthropic, you're still good and your LPs are still good, even more importantly. So I can't even say with great certainty how venture returns look like in this vintage. I do know from our perspective, we try to keep pacing even. So we invest the same amount 500,000,000 a year. I don't think this is 2021, but I do think you never know. And you do generally know that when you want to do more, everyone else is having the same animal. [00:59:27] S1: It's a Stanley Drunken Miller, which is nothing looks as cheap as after it's gone up 40%. Right. [00:59:33] S0: It's exactly the paradox. It's a huge paradox. And so... [00:59:36] S1: And the opposite is true too. Something goes down 80% even if there's fundamental value, it looks expensive and you want to sell. [00:59:42] S0: Right. So those human factors act on us and all we can do is recognize them. And the conclusion we've come to is you just got to pace. [00:59:50] S1: Just give up some of the potential upside for staying in the game.
00:59:50 · David Weisburd, Matthew Harris
[00:59:50] S1: Just give up some of the potential upside for staying in the game. [00:59:53] S0: Yeah. And avoiding some of the massive the other the human factors of of investing a ton in a given ventures that ends up being a bad one It was really significant. Like, there are firms out there who tripled their pace between '20... The industry tripled its pace between 2020 and 2021. So that just means there's like legions of partners sitting on boards that they massively overpaid for, and they're probably terrible SaaS companies that aren't gonna be worth anything. Like, the human factors of that actually go well beyond the returns of the vintage. They can actually cripple. [01:00:26] S1: It's the other side of the survivorship bias. Yeah. You only hear from the survivors. Well, how do do you know you weren't lucky? You don't think about the the people that did not survive. [01:00:34] S0: Yeah. Exact. So I think, anyway, this is what we've resolved to as a kind of [01:00:39] S1: a [01:00:39] S0: behavioral, you know, thing that we can put in place to discipline ourselves. And it's... It is challenging. [01:00:47] S1: Going from the existential dread of not knowing where AI is going to the existential dread you have, I think, six kids 18 or younger. True. So you have to deal with this this topic all the time. I'm having my first first kid on the way. What skill set survives in terms of... In a post AI world for somebody that's growing up today?
01:00:47 · David Weisburd, Matthew Harris
[01:00:47] S1: Going from the existential dread of not knowing where AI is going to the existential dread you have, I think, six kids 18 or younger. True. So you have to deal with this this topic all the time. I'm having my first first kid on the way. What skill set survives in terms of... In a post AI world for somebody that's growing up today? [01:01:09] S0: The one thing I see in my kids, because I have 18, 15, 13, nine, nine, seven. So I've got kids that are doing stuff. I certainly have kids who have this sort of ineffable quality that people in the valley refer to as agency. And just because it's commonly said doesn't mean it's not important. I find it to be actually the defining. [01:01:29] S1: Do you get credit for that or were they just born that way?
01:01:29 · David Weisburd, Matthew Harris
[01:01:29] S1: Do you get credit for that or were they just born that way? [01:01:32] S0: That's more like their mom, I would say. Oh, in terms of our parenting. I think Montessori school is a good idea. So at a Montessori school, they show up and they can choose whatever they want to work with. There's no program for the day. That's the characteristic of Montessori preschools. And I think that our kids all directionally then have this instinct upon a new situation of like, I get to choose. And you can see it's varying degrees. But I would say, you know, when you have more and more kids, every every belief you have gets shaken out of you over time because you're like, oh, this is true for one kid. Oh, it's not true for the second kid or whatever. And there's very few things that survive all six kids because sort of one by one, all of your priors get knocked out by the kid number four. Turns out that rule isn't true, etcetera. And the [01:02:25] S1: one in terms of parenting?
01:02:25 · David Weisburd, Matthew Harris
[01:02:25] S1: one in terms of parenting? [01:02:27] S0: Correct. In terms of human nature in general, but certainly in terms of parenting. The two rules that actually survive. One is Montessori preschool is just good. Just do that. They're actually very, very consistent. Wherever you live, can find one. Send your kids there. Two is don't answer their questions. Kids ask questions all the time. And as a good parent, you want to be like, oh, my my daughter wants to know why the sky is blue or whatever. It is not useful for you to answer their questions. They will never remember the answers to, you know, just say, why do you think what do you think? Why do you think it's blue? And so our kids find it incredibly annoying, particularly as they get older. They just want to know, like, what subway stops to get off. But that I would just I just commend that to you as a new dad. And congratulations, by the way. Just you have no obligation to answer their questions and you're not doing them any favors. [01:03:21] S1: And that builds in them these processes to answer their own questions. Correct.
01:03:21 · David Weisburd, Matthew Harris
[01:03:21] S1: And that builds in them these processes to answer their own questions. Correct. [01:03:25] S0: And it's all about this agency. I mean, this is what the world demands right now is when faced with a blank screen. What are you going to do? And you have the ability of everything at your fingertips to do anything you want, anything you don't know how to do, you just ask it and it tells you. So if you have agency, you start a business at age 12 or do whatever you want, write a college level thesis at age 12. But most people don't have that kind of agency. So I don't hold myself out as a great parent. I certainly though have a pretty big sample size and those are the only two things. [01:04:00] S1: You're an experienced parent, at [01:04:01] S0: least. Those are the only two principles that have survived the ringer of six kids. [01:04:07] S1: I'm sure your kids have grown up in quite a privileged background. Is there a way to account for this in terms of how you parent them?