Raoul Pal: The Journey Man
00:20:09 · Micky Malka
[00:20:09] S1: So we... Because of all these investments and bets that we did over the last twelve years, we we were known as the fintech guy or the crypto fintech guy, investors, Ribbit. Two... Three years ago, next month, we went to our investors and we... On our Investor Day every year, 2022. And our first slide was our ten year anniversary. And the second slide was milestone that said fintech is dead twenty eleven, twenty twenty two. And what we were trying to say is that all the things that were started in the last decade, the ones that are going to win are already out there. And it's going to be really hard to win because the opportunity sets, the macro opportunity sets that were open with the App Store, with the financial crisis, and with unstructured data had been completely normalized. Those windows have been shut down. So what we think is gonna happen, our thesis was three years ago, was there'll be a handful of companies, 20, 15, 25, 30, that are going to compound. And now that they have a life of their own, they're gonna become the biggest companies in the world in financial services. It will be another decade for that to happen. And this is three years back. I mean, Coinbase, Robinhood, North Square were part of the S and P 500 back then. And now three of them are. And I know there will be a few more. So they are gonna... What's gonna happen with them is that they're gonna... The ones that are founder led still in building tech, they're gonna go now and take market share from the incumbents. So far, they haven't taken market share. They're taking a little bit here or there, but now they're seriously gonna go and threaten the ecosystem of incumbents. And the regulation is in their favor now. So that's what's gonna happen with them. And trying to repeat that window with mobile apps or trying to repeat that window with a crypto wallet from scratch ain't gonna work anymore.
00:22:11 · Raoul Pal, Micky Malka
[00:22:11] S0: So, I mean, it's a genius idea to say, okay. We used our platform at first to use the power law to to find the investments that are gonna work, these big companies. Yes. And just say, regardless of whether they're public or private, we're just going to just concentrate into these names. [00:22:29] S1: That's correct. [00:22:30] S0: And let that thesis play out. [00:22:32] S1: And let it play out. And it will take a decade to play out. And it doesn't matter if they're public or private, if they're late stage or early or they have a mode. But we know if they can... If they have control of their time, their brand, their people, and their money, we will... We were backing them, and we have been backing them in in those cycles. [00:22:54] S0: And as part of, Ribbit, you also have a a crypto group as well that does straightforward crypto investing both in VC and liquid markets. Why did you have those two things running alongside each other, or is it just the thesis that they're merging into the same thing anyway?
00:22:54 · Raoul Pal, Micky Malka
[00:22:54] S0: And as part of, Ribbit, you also have a a crypto group as well that does straightforward crypto investing both in VC and liquid markets. Why did you have those two things running alongside each other, or is it just the thesis that they're merging into the same thing anyway? [00:23:11] S1: I think they're merging. So I I was... What I'm about to say is brand new way of explaining it, and we we are thinking about it right now. But I will say the the crypto economy... I think it's a mistake to talk about crypto anymore separate from from normal assets because we're going to a world where everything is getting tokenized, so it doesn't really matter. What I think has happened in the last year since the new administration and the new regulation coming around the world is that you formed you have given a stamp of approval to the layer ones that are building true infrastructure for the world, like Ethereum or Solana, you talk about Zooey and others. And so now I don't think of them as crypto, actually. They're just networks. [00:23:56] S0: That's right.
00:23:56 · Raoul Pal, Micky Malka
[00:23:56] S0: That's right. [00:23:57] S1: And and now they they happen to be priced through a token that's raised $24.07 on chain. But they're just now networks. So now it's much easier to think about them as what's the price of the network? How do you price it? What scale do you need? What volume? What revenue streams? What business modes? So I think we're past... I think Bitcoin is debugging from everything else because they're becoming truly two different categories of assets. And you've seen it in the price action of the last six months. They have different price actions, more or less. So I believe that that is the best example that this is just... There was a time when you had to have a token only vehicle because of SEC and regulations and how to think about it. But now it's all the same because in the next few years, as we tokenize every single stock in the world and it trades $24.07, an Ethereum or a Solana token, it will be the same as buying a Robinhood stock token. [00:24:54] S0: So we think the difference between equity and token just collapses over time? [00:24:58] S1: I think it does. I think for the bigger projects and the bigger things, I think it does. And I think we're still in early stage experimenting everything around meme coins and what what are they and AI agentic coins and what are they, and that's the whole new new thing. But everything on top of that is just... They're just tokens. What is Equity. Yeah.
00:24:58 · Micky Malka, Raoul Pal
[00:24:58] S1: I think it does. I think for the bigger projects and the bigger things, I think it does. And I think we're still in early stage experimenting everything around meme coins and what what are they and AI agentic coins and what are they, and that's the whole new new thing. But everything on top of that is just... They're just tokens. What is Equity. Yeah. [00:25:19] S0: One of my thesis has been, and I just wanted to bounce this off you, is that that, you know, I think of meme coins as just a speed test, you know, stress test of instant capital formation. And you can... Before, you'd have to build a business, go to a v... Go to a bunch of VCs or angel investors, you know, beg them and everything else. And now it's like, if it captures attention, you can coalesce capital in seconds globally through a distributed network. How are you thinking about how disruptive that all is to the VC industry or the investment industry overall?
00:25:19 · Raoul Pal, Micky Malka
[00:25:19] S0: One of my thesis has been, and I just wanted to bounce this off you, is that that, you know, I think of meme coins as just a speed test, you know, stress test of instant capital formation. And you can... Before, you'd have to build a business, go to a v... Go to a bunch of VCs or angel investors, you know, beg them and everything else. And now it's like, if it captures attention, you can coalesce capital in seconds globally through a distributed network. How are you thinking about how disruptive that all is to the VC industry or the investment industry overall? [00:25:54] S1: I think it's super disruptive. I I think most VCs don't understand what's coming. Even for us. We... I'm I'm not a 100% clear. We know exactly what it means. But I I am shocked on the velocity of capital formation and attention that you can get. It's... It has... It's it's never been faster. You and I have met people that are are doing this full time, and what they're building is insane and how they get attention. So I will say we're not there yet because we're not at scale. It's, there's not a great, the early projects have not been great communicators on what they're doing. They've been a lot more of giving attention but not knowing what to do with it. I think we're gonna start to see a generation of founders who are 22, 23 that actually are so crypto native and so AI native that they will take it to a whole new level. So I'm very bullish on what's coming there. Extremely bullish.