Invest Like the Best with Patrick O'Shaughnessy
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?
01:18:43 · Patrick O'Shaughnessy, Micky Malka
[01:18:43] S0: What unexpected plot twist in the story turned out to be a great blessing? [01:18:49] S2: Oh my god. So many. For example, 2022, when everything started to blow up, the attention to this space died. Two thousand and twenty to twenty two was probably five years condensed into two because of COVID and lockdowns did so much to this space that accelerated everything. If we hadn't had air to breathe then and to take time to think, we would have made a 100 mistakes. So the plot of actually the market slowing down dramatically was one of the best blessings we had because we saw that FinTech was dying. And if we hadn't stopped, we wouldn't have seen it. We would have missed it and make a lot of mistakes. So you have to bless market cycles when they give you time to think And embrace it as a moment to think versus trying to say, Oh, momentum is gone. [01:19:42] S0: I remember a conversation we had then, I think it was the first time we ever met. And you said, I'm not an investor right now, I'm a risk manager. And it's such an interesting time. That was the beginning of now of this new foundation that you're building on. So cool to think back on. What makes you emotional in all of this? In a [01:19:58] S2: good way or bad way? [01:19:59] S0: I'm curious about both.
01:19:59 · Patrick O'Shaughnessy, Micky Malka
[01:19:59] S0: I'm curious about both. [01:20:01] S2: In a bad way, it's when somebody lies. I have no room for lying of any kind. My way of being, the way we're at home with our kids, we embrace mistakes. We embrace multiple mistakes, but never lying. Lying is the one thing that really just gets me emotional. I always start by trusting everybody 100%. And all you can do is lose the trust. There's people that are the opposite. They give zero trust and as I get to know you, you get to 100% or maybe 50%. I always start at a 100. And that part emotionally drains me, takes away my energy when there's lying. What gives me energy and when do I get emotional is when I see people around me having joy. When you see that they're doing what they're meant to be doing. When you see that they wake up and they are asking and they're learning and they're interacting and they're building what they wanna build, that gives me joy. And the younger they are, the more joy I get.