Invest Like the Best with Patrick O'Shaughnessy
01:09:36 · Micky Malka
[01:09:36] S2: Growing up in Venezuela, my wife and I are both from there. Venezuela had some of the most amazing artists in the world when we were kids. So in the fifties and sixties, Venezuela had the highest GDP per capita in the world. It was Saudi Arabia before we were even born. But... And the Venezuelan artists were leading some of the best art movements worldwide. And it was present everywhere. It was present in the highways, in the universities, in the shopping centers, in the museums. You saw it everywhere. So we grew up seeing modern, beautiful artists and their concepts. And when we started on this journey, she's the one that got us back to that journey together in the last number of years. But then during the 2022 downturn, when things started to cool down a bit and we had more bandwidth and I had more free time, I had missed completely the NFT craziness of the first vintage of nineteen to twenty. Completely missed it. Like, we were so busy with other stuff. I hadn't seen anything. I was like, what are these things? People are trading these tokens. I felt like it was like GameStop kind of meme stuff. But then in two thousand and eight, twenty two, stumbled upon, as I had more even more free time, a art piece that suddenly looked like something from the nineteen fifties that we knew. But it was completely different. It was the same, but it was different. It was dynamic. It moved. It was the same kind of concept. And I was like, what is this? This looks like real... This doesn't look like a meme, Manila. This looks like something completely different. We went down that rabbit hole and then said, what are the CryptoPunks? And, oh, wow. There's only 10,000 of them, and they're the first ever generative art ever put on chain. And what does it mean? And the community of Cryptopunks is stronger than any other community, literally. I think it's even stronger than the community of people that own a Ferrari around the world on how they speak, how they relate, how they identify themselves. These are truly aspects that I have not seen. You're seeing network states. There's a lot of talk about network states. There are network states getting built around some of these movements, And you can see their movements now. They're not just one artist doing one thing. So we slowly started to get into this, and then we started to meet these artists. And guess what?
01:12:03 · Micky Malka
These artists are the most amazing people to go hang out with. There's no prima donas. There's no language I gotta maintain or way of speaking that I gotta say about DI or some other... They're just genuinely people that were artists all their life, so they had to study computer science because they had to get a job and they could never express themselves and suddenly they can. So you just go, you meet people or you go meet Sam Sprat or you go meet MP Cos, which is a piece that you liked here, or Scott from The Dream Machine. And there are just amazing human beings and artists. And you can see what art looked like in Paris in the nineteen twenties when they gathered over coffees. And it felt like going back to Bitcoin conference in 2013 when the first people were starting it. It's just that kind of energy that you cannot see. And then my wife and I start to look at the museums of today, the MoMA and others, and they feel like bank branches feel. Like, why would you go to a bank branch anymore? Really? A teller, a window? What is this? And the museums feel like that. They're white, they're sterile. They have these big walls with one piece of art and a little plaque that you gotta just bend over and read, or you listen on your headphones. The two things you can do is either take a photo. Good luck seeing it again in your phone. You will never again see it on your phone. Or take a selfie of yourself. There's no immersive. There's no ownership. How would it feel if you go to a digital art museum that is born to be digital with physical. But the walls are digital, there's physical in the middle, you're immersed in the piece, in the way it was built, in the story that I was trying to say. It talks to you, it lives through you, and you can tap somewhere and live with some a piece of that art. How will that feel in your story, your life? It definitely feels a lot more richer, talking back to where people are heading. And so that to me is a proxy of where the world is going on everything. And art is just ahead. But that's how we're gonna feel about a lot of our things. And all the podcasts that you've done around IoT, AI engines, and where money's flowing and how people are invest investing. All those things will show in these things in the next couple decades.
01:14:24 · Patrick O'Shaughnessy
[01:14:24] S0: I wanna ask a little bit more about what you said earlier that this deep dream and passion of yours is that every time money gets better, the world gets better. Can you just say a little bit more about the dimensions of that that you've learned? What are the mechanics of that? Like, why is that true? Why is that the foundational belief? Because I also wanna ask a little bit more again about this grid of which money is a part and the way the world is shifting around. But what's behind this foundational observation of yours that if you improve money, everything else improves? Why is that necessarily true?
01:14:57 · Micky Malka
[01:14:57] S2: Because if you're sitting in Karachi or Bangalore or London or Caracas or Riyadh, and all of us have access to investing our money in the same product, the level of transparency on opportunities of investing are unique. Why does a customer only need to be at a private bank, super high end to get the best products? So if you can save the same way anywhere in the world, and that's the promise of crypto in many ways, the crypto rails, the grid, giving you access to the same product anywhere in the world, then people will have better risk return adjusted income, which will probably allow them to buy a better home or get their kids to go to a better college or pay for tuition or have less debt. And the same on the debt side. If you have to take a loan to expand yourself, to bet on yourself, to buy a car because you need to get a better job so you can drive there or buy a home closer to whatever kind of loan, you wanna make sure they're not paying high out of market rates. You wanna make sure they're not thinking about getting their knees broken with a bat because they cannot pay the tug on their neighborhood, but they're getting it from somewhere institutional that has a process, an underwriting, a credit score system, a discipline of losses and gains. That's why money makes life better when you can access those things. Because suddenly, if you can barely get a loan to pay for... Until the next payroll, but now you can get a loan to buy a car, a mortgage, or build your own company, it will make life better.
01:16:32 · Patrick O'Shaughnessy, Micky Malka
[01:16:32] S0: If you think back on Ribbit's whole history, the firm, let's pretend that you had to go start Ribbit two point o for whatever reason. Ribbit disappears. You gotta start Ribbit two. What mistakes from your history at Ribbit would make you most prepared to do an even better job in Ribbit two? And I'm sure these are all things that you're doing anyway, but that's a fun thought exercise. [01:16:53] S2: Wow. I thought you had asked me really hard questions. This is hard. I will say for as much as I told you about concentration, I will even be more concentrate, even more so. Wow. I try to correct that on a daily basis. Definitely a lot more concentrated. And the other mistakes that I'll probably correct on Ribbit two, I think we already are on Ribbit two, so maybe Ribbit three is it's probably the use of our time. The more time we spend in getting to know founders and spending time with them, like really getting to know them and become trusted, the more valuable and the more joy we have. So even though I feel really good that we have a bunch of friends and the best metric of that is that almost every founder that we've backed has later become an LP or an investor in our funds just because of that relationship, I will still double down and spend even more time with them. [01:17:57] S0: Say a little bit more about the conviction one. I think of you as a pretty concentrated investor. Why even more?
01:17:57 · Patrick O'Shaughnessy, Micky Malka
[01:17:57] S0: Say a little bit more about the conviction one. I think of you as a pretty concentrated investor. Why even more? [01:18:03] S2: Because the impact you can have is limited by the amount of people that you can touch. And the more concentrated you are there, the more impact you can have and the more present you can be. And I think, for example, if we do a good job on understanding the grid and we do thesis driven work on what needs to happen there, how do we solve identity first and how do we do this? And we find the one or two or three things that matter the most on identity, we should do that and not do anything else. And then think about the second chapter of The Grid and then do the same. But you don't have to do 50 things to express that opinion. And I think that's where it gets diluted. It's not us, but I will even do less. [01:18:43] S0: What unexpected plot twist in the story turned out to be a great blessing?