(applause) - So, you know, within crypto today, there are sort of three
interesting categories of base blockchains. There's the Bitcoin blockchain, which is optimized for
security and decentralization, so if you are trying to redefine money that thing better be secure
and it better be split up across lots of people. There's the Ethereum blockchain, which is optimized for programmability. So if you wanna build a
shadow financial system you wanna do derivatives,
options, escrow, contracts, stable coins, prediction
markets, all of these things, those need rich application
programming interfaces, which is a direct trade off with security because the more
programmable something is, the more doors there are into that system, the more avenues of attack there are. And the more complicated it is, the harder it is to scale but the more applications
it can be used for. And that's kind of where Ethereum and dozens of other blockchains actually compete, but
Ethereum is the best known. And there's sort of this
sector of privacy coins, which include Zcash and
Monero and a bunch of others and that's all around replacing
cash with digital cash so it's anonymous, it's protected. But you can some really cool
things with cryptography, like with something called
zero-knowledge proofs, where I can like pay my taxes, I can prove that I paid my taxes, but nobody other than me and the IRS knows how much was paid,
event though it's done on a public blockchain or you could build a voting base blockchain where each of us can cast a vote, each of
us can check that our vote was properly recorded and tallied, with exactly what we put in there, but nobody else can see our vote. Only we each can see our vote. And the system collects all the votes and gives the right provably, mathematically provably right answer, but nobody's in charge. Nobody other than the
individual who cast the vote has the ability to go
in and change their vote or count it or not count it. So these kinds of systems can be developed in top blockchain technology. So I think those are the three most interesting categories right now. We will see more categories emerge later, but that's sort of where
the token field plays out. - And, great summary. With regards to tokens,
and then especially in the New Zealand context,
I'm curious if you could wave a magic wand, if
you were a regulator, and say okay, here's
the kind of environment and policy environment strategy
as a country around tokens, what would be some of the things? - Yeah, so in the US there
was, or even globally, there was sort of a
free for all with ICOs, where people were selling
coins very liberally to anyone who would come along and we suddenly went from
no fundraising online to fundraise anywhere, anytime online. People raise ridiculous amounts of money, and now we've sort of swung
the pendulum all the way back, where the regulators have
said well this is a security and everything falls back under the old school securities laws. And those are extreme so I think a lot of companies now that are building actual utility tokens are trying
to sort out how this works. So in the US we have Verizon and AT&T and a few others, right? But telecom carriers tend to
be monopolies or oligopolies. They're not the fastest moving. They don't necessarily
give you high bandwidth wherever you want it,
whenever you want it. And today we have the
capability, for example, to stitch together Wi-Fi networks. You know how everyone has
Wi-Fi networks in their homes but they leave them closed because there's no real incentive to open them up. It kind of opens you up to hacking, but you could imagine a world in which the Wi-Fi access points
have an incentive mechanism built in, where if I open
up my Wi-Fi access point anyone going by can use it and their phone will automatically connect
and pay some micropennies using a Wi-Fi coin and
I'll collect the Wi-Fi coin in my network and that
will be credit for me so that when I go traveling I can use other people's Wi-Fi access points and it's now all done seamlessly. And wherever there are gaps in coverage, entrepreneurs will say oh, I
can make a lot of Wi-Fi coin by dropping a Wi-Fi access point here. So you could use a
blockchain based network to create a global
distributed Wi-Fi network that would be very high
bandwidth throughput maintained by all the
nodes and owned by nobody and would be upgraded on demand, just based on where
there were usage needs. Now, to create that kind of a network, now let's say I'm a group of developers who creates that network, what I'll do is early on I'll program the network to give a lot of tokens to the people who are providing the
first Wi-Fi access points. So in a sense I'm boot
strapping the network, and what I'm basically
saying to them is like if you're an early
adopter, your Wi-Fi tokens are gonna be worth a lot more later and you'll be able to get
a lot more Wi-Fi credit or even sell it for cash. Same way if I was trying
to compete with Uber with a blockchain based network, the early drivers would
get a lot of compensation in my new Uber coin so
that when my Uber beats the normal Uber, they'll be rich because they took risk early
on by driving people around before there were enough riders. So tokens kind of can
help bootstrap networks and solve the cold start problem
that networks suffer from. But now, in the regulatory
environment we're in, these are all considered securities. So under securities law, I can't just distribute you a Wi-Fi
coin or an Uber coin because I have to worry about did I comply with securities
laws, am I ripping you off, are you speculating? And there's such onerous restrictions that it basically just
kills the whole thing. So, at least in the US,
we seem to have gone from this model of
everything is a utility token to everything is a security token. And that kind of uncertainty is making it very hard to innovate. So one example that I think
a forward-looking regulator could do is they could say okay, when things have a dual use case, like a utility token and a security token, we will err on the side of letting it be used for utility early on. We're gonna work with the companies to have a clear, regulatory framework. And then you could see a
whole bunch of companies that want to experiment
with utility tokens basing out of here and
bootstrapping large networks that could then eventually
go on and compete globally. Because it is the nature of these things to be winner take all. So if we build a ride sharing
coin that takes away from Uber or we build a Wi-Fi coin that takes away from Spark or Verizon, that's
gonna be a global network. This is what's interesting about crypto, you can launch a crypto company from here than can literally take
over the whole world. There are no barriers
to adoption in crypto. There's no language barriers, there's no app store download barriers, there's none of that. So if you had a friendly
regulatory environment here you could literally build the
internet and financial system that runs the world 20 years from now instead of everyone here being a vassal of Facebook or Google or YouTube. You know, if they're all
using a New Zealand developed property and all the people
here who adopted those coins early on would actually
be fabulously wealthy. Let me give you the extreme example. The extreme example is if
I was a dictator for a day, (laughs) you know, I would probably just
go through the top 20 coins, the tokens on Coin Market Cap and crypto, and I would figure out which ones have very high quality code,
like Bitcoin for example, is very well maintained, but I'd find like a fork of Bitcoin that still has a really
good developer base and is well maintained
but relatively low priced. Like the whole thing is
worth a few billion dollars. I would secretly buy up
as much of it as possible. (laughs) And these are unregulated
markets for the most part so there's no disclosure
rule but let's say the government of New Zealand buys up half of a $5 billion coin. And then basically
announce that we're going to start making this coin legal tender over the next decade. We'll slowly start weaving
it into the economy, people would pay taxes on it, we'll roll it into credit cards, people start accepting
it, you can bank with it, we'll pay interest on
it, you know just start making it legit and viable. Now all of a sudden, you have a winner in the cryptocurrency wars. You've anointed a winner. You've basically said here is a coin in a major country that
all of us take this. And it'll create what in game theory is called a shelling point for the rest of the crypto universe to coalesce around. So all of the developers
will start building for it, people will start storing
value and wealth in it, people will start building on top of it. And that coin will end up
winning the crypto wars with a very high likelihood and it could be worth hundreds of billions
of trillions of dollars and as early adopters, New
Zealanders would get filthy rich. So basically today there is no government that has put its weight
behind any cryptocurrency. Whichever cryptocurrency
gets a legitimate government putting their weight behind it first will win the crypto wars. Winning the crypto wars is worth a minimum of $10 trillion, which
is the value of gold, not even counting all the other use cases, and so if you're willing to
be the first one out there and put your neck out there and bet on that your people benefit. You're essentially the founding
shareholders of that thing. And maybe it's not 50%. Maybe you keep 10 or 20% and
the rest of the world splits 80 but either way you've sort of disproportionately batted
out of your weight. And the key observation here is a lot of crypto is just norms. It's like we're trying to establish do you drive on the left side of the road or the right side of the road? Do you speak English or do you speak Moari or do you speak Japanese, right? We're trying to decide on norms. But these are financial
norms so if you are the one who establishes the
financial norms for the world then you have the benefit,
the financial benefit, of those stored assets. So that is an example of how
one could hack the system. - And you have a tweet that says you get paid for being right first and to be first you
can't wait for consensus. - That's right. To make money, especially
in a financial context, or to kind of win these
sorts of situations, waiting for consensus is expensive, right? By the time everybody, like
we say in Silicon Valley, if you wanna make a
good venture investment you wanna be non-consensus right, right? If you make a wrong investment,
you lost your money. If you make a right
investment, you can make money. But if it's conventional wisdom, if it's consensus that
it's heavily competed, the prices are bid up you're not gonna make that much money. So you get paid for being
non-consensus right. And non-consensus, especially in a technology context,
means being first. So you take risks. And this is trite and over-communicated but Silicon Valley places zero penalty on failure, essentially. Because we know that you're
gonna fail nine times out of 10 or even 99 times out of 100, but the one time you win the victory is 1,000 fold, 10,000 fold, 100,000 fold. And that's just a consequence
of us now operating in virtual and intellectual domains instead of physical domains. We're evolved for the physical world, where it's like one input, one output. You spend one resource,
maybe you win one back. But in the digital world
it's very different. You know, you have almost unlimited upside if something works and you
have very limited downside. One of the sad things is, it probably is just as hard to start a successful restaurant as it is to start a successful tech company. Restaurant owner's working just as hard. They're working to the
maximum number of hours that they have, and they're putting all their time and effort into it. But the starting of Facebook, you have an unlimited
market of 7 billion people and you can just stamp that product out with no marginal cost of replication. So in the digital world,
the upside on the winners is so large that there's
almost no such thing as risk. - And on that point about being first, what advice would you have as
a culture within New Zealand, but also what advice would
have to entrepreneurs in terms of cultivating that willingness or that courage or whatever
those ingredients are to go be first on something? - At least in the technology business, whatever the geeks are doing
in their garage on weekends is what the entire world will be doing 20 years later as a mainstream thing. So you sort of have to have
a culture of tinkering, experimentation, following
intellectual curiosity. You know, for example,
all of the weird things that you guys do in terms of
environmental conversation, recycling, composting, all the strange little technologies
that seem idiosyncratic, you can see how those will eventually, the ones that work will be transported out to the whole world. But that is true all across technology. The story of technology is
one monkey discovers fire and then everyone starts discovering fire because they can spread that. So the beauty of it is
that just one person has to figure out how to do it and then everybody can do it. But you're not gonna figure that out unless you have people who
are obsessive tinkerers. You have to be kind of
obsessive about weird things. The good founders tend to be strange. The good businesses all
look strange at first. It's only in hindsight that they become accepted asset classes. So, for example, when
Microsoft was first funded, before their IPO, back
then people didn't used to invest in software companies. Venture investors thought that you could only make money in hardware. What, you're just selling bits? You can't do that. People can just copy that. There's no money in bits. But then Microsoft came along. And then nobody thought that a pure cloud services
business could be that big, but then you have Google
come along, right? And up until then venture capitalists wanted to invest in paid
software, not free services. Or it was a media company like Yahoo. You know, you can make analogies
to media to make money. When Uber came along, a lot of VCs passed because the belief was
we don't invest in atoms. We only invest in bits. We don't invest in moving
physical people around. That's not what venture capital does. That's private equity. So every great business
just looks weird at first. It breaks the paradigm in some way. But every terrible business also looks weird at first, right? (laughs) This is true in humans, too. To the average person, a genius is indistinguishable from a
mad person or very close to it, but there's 1,000 of them
and 999 are crazy and one is a genius and the art is in picking out who that person is or the
environment picks that person to stand out eventually. And actually, many of
those so-called mad people aren't actually mad. They're just mistimed genius, right? So it's just the nature of the beast that you're gonna have to figure out where the needle is in the haystack. And that's just a process
of constant experimentation. And so a lot of time, people
look at Silicon Valley and they say oh, it's so wasteful. Why do you have 1,000 incubators? You only need one Wicom knitter. Why do you have so many investors? You just need a few. Why do you have so many companies? Most of these companies
are doing useless things. There's no way to tell which ones are useful or useless
until you run the race. It's actually we're at
a horse track, right? It's like why do we have horse races to figure out who the winning horse is? Why don't we just pick the winning horse and say that's the
winning horse, that's it. Only this one's gonna go around the track. Right? (laughs) Well, you have to run the race to see who the winning horse is, and you have to do it over
and over and over again. And that's what these ecosystems do. They run races all day long. - And in the New Zealand context, given that we're a small country, how do you think about that tension between running a lot of experiments and having a lot of what
could be replicating functions versus kind of tripling
down on a couple key winners or industries and the
like and how does that potentially look in the
development of this ecosystem? - Yeah, it's a tough one. You know, as an individual,
if all you do is train chase, you will go insane, right? Oh, AI's hot. I better go brush up in AI. Well by the time you get good at AI, it'll have moved on to
autonomous vehicles. So I think you're much better off following your genuine
intellectual curiosity rather than chasing
whatever is hot right now. The equivalent for a
nation is whatever it is that you're naturally good at doing and have both geographic and cultural and educational advantages in doing, which somehow aligns in the world stage. And I don't know enough about New Zealand to say what that is
but you mentioned to me in one of our conversations, for example, that Wellington has a
lot of content creation, design, art production capability. So, for example, if that
was a nationwide strength, you could see okay, maybe we should be looking at VR and AR kind of industries. The crypto stuff we talked about you can combine regulatory arbitrage with we're in three hours from
the Pacific west coast in the United States so we
have a timezone advantage and it's English speaking and rule of law and non-corrupt and all that and a gateway to Asia Pacific Rim but still from a western host so I think there's
multiple places to play in. I don't know if it's a top down decision. I think maybe it's just a combination of let's have some friendly
immigration policies for innovators combined with some friendly regulatory
policy for experimenters. And you just kind of see what bubbles up. There's nobody sitting
around Silicon Valley saying what the next big trend
is or deciding what it is. What they, rather, are
is it's just a good place for the witch's brew of
entrepreneurship to come together. You just import as much
technical talent as you can and you sort of get out of the way. - So I'm gonna invite
people who have questions, you can start queuing
up at the microphone. I'm gonna ask a couple more,
shifting gears a little bit, before we go to the questions. You talk a lot about happiness, and one of your tweets
was a rational person can find peace by cultivating indifference to the things outside their control. - Yeah, this is not popular
because the current environment is to get interested and
outraged about everything and then signal your involvement as a way of sort of
getting social validation. - Would you call this
signaling virtue as a vice? - It's a vice in multiple directions. You know, one of the traditional virtues is you don't talk about
your virtues, right? Because people who do that, they're signaling a little too hard and then it's a holier
than thou sort of thing. It also, you can just
get trapped in signaling. A lot of society is just about signaling, everything from both buying handbags to being a little over the
top eco-friendly, right? So really what I mean, the tweet was, and all these tweets are to
myself, fundamentally, right? I'm just talking to myself. So if it doesn't make
sense to you, that's fine. But I'm basically saying
and reminding myself that there's a few things
in life that I care about and there's a few things
in life that any of us can truly, passionately,
deeply care about, things that we wanna change and affect. And you kind of wanna focus on those and not get distracted by caring about everything that comes along. Because we're evolved to
live in tribes of 150 people. We're not meant to have all of the world's breaking news and emergencies packaged up into click-bait news,
attached with graphic images and videos, and delivered to us with your phone buzzing in your pocket. And while I'm saying this, my phone is buzzing in my pocket, right? That might be Twitter alerting me to something horrible that's happening somewhere in the world, right? You're just not meant to take on the entire world's problems all the time. It'll just destroy you internally. I see that a lot here, for example, in the environmental crusade. There's a lot of people here who care a lot about the environment and they're developing technologies
and they're fighting hard to save it and that's all great, but just make sure you
don't ruin your happiness stressing over every
little thing that's wrong with the environment because
you can't fix it all. And if you destroy
yourself in the process, you're just gonna drown. And you can't help people
while you're drowning. One of the problems I have with the modern environmental
movement is that it is a culture of pessimism, and that does not appeal to people. It's a culture of fear,
and I would rather appeal to people through greed and optimism, which people respond to. Instead of saying the world's gonna end unless you do what I
say and then, you know, someone will tell me
1,000 ways it's gonna end and I acknowledge all
1,000 and then they're like well I got another 1,000,
I got another 1,000. Did you hear about this one? Okay, let's start small. Can we clean up this river? Can we reforest this area? Can we make this person's life better? So I just think that you really have to be indifferent and
not in a reactive way. Not in a I must be indifferent, just by realizing that if you take on all the world's problems
it will destroy you. 1,000 years ago, if you saw a
murderer, that was a big deal. If you saw a dead body,
that was a big deal. People would talk to you
about it for months or years while you tried to get
over the trauma of that. But now you turn on the
tv, by the age of 18 you've seen thousands of graphic murders. Where is that energy being
stored inside of you, right? That's damaged your psyche
at some deep levels. It's desensitized you, right? In some ways we are desensitized to the horrors and then we are constantly being over-sensitized with just this wave of news just
constantly coming in. And you have to be okay
with saying to people, I've got my thing. I'm working on it. I'm solving that problem. You've got yours, fantastic. I'm glad you're solving your problem, but I can't take on all
the world's problems. Otherwise I become a problem. - But on that point, I mean you're extremely well-read and you're in touch with a lot of these
exponential technologies and the risks, whether it's
AGI or the environmental crisis or synthetic biology and the like and so how do you reconcile
that kind of recognition of how enormous, not just the headlines, but how enormous at a
deeper level the risks are to everyone and at the same
time maintain that equanimity? - I think if you just look at
history we got here all right. The world is not perfect, but it's better than it used to be. I know that there's a lot
of habitat destruction, but I grew up in India just long enough to see what the average person lives like. We're extremely lucky. The average poor person
is getting better off. There's good news, too. It's just, you can cherry pick. This is why I don't like reading
macroeconomics or history because just depending on
which data points you pick, you can weave whatever narrative you like. And I'm not saying that one
has to be a blind optimist, but I think it's rational to see that the average individual human's life is getting better as time goes on. Average, right? Not always. Not across all domains
and disciplines and times, but we are better off than
we used to be as a species. Now the Earth may be more vulnerable, but even there you can
see that rich societies, wealthy societies start
caring about the environment and people are becoming more and more environmentally conscious with every day. I think the percentage of people that are environmentally conscious, for example, is not going down. It is going up. So I think the trend lines
are in the right direction. And if you want to be effective, if you actually just
wanna make a difference, you need your mind rested. You need your body rested. You need to be capable. And that's not gonna happen if you're just frantic about everything. Maybe it's just because
I'm also desensitized. Right? And I've also been around long enough that I've heard the end of
the world thing so many times that even when I say it, and
there's a podcast coming up where I talk about it and
all the different ways the world could end, I'm actually
not that worried about it. The human race seems to be pretty good at figuring these things out. But part of the reason it's good at figuring these things out is because certain people do get alarmed at it. It's just I'm not gonna get alarmed over every little thing. I'm gonna work on my piece. You work on your piece. I mean when I see the, now I'm gonna embarrass
him but I was at his house, and he's trying to do a zero waste thing where it's literally
like every little thing in the house has to be composted. The tea bags are folded
up and put away and reused and it's insane. I look at it and I'm like
there's no possible way I could do this and function as a human. But I'm hoping you'll figure it out, you will solve it, you
will systematize it, and maybe you'll help the rest of us get 80% of the way there. Because that's your mission
and your pride and your joy that you're working on. It's your tinkering. You're tinkering at the edges of environmental science to do that. So I think if we each kind
of stay focused on our task and do it well without stressing out over the whole world
we'll be more effective and we can actually make it. - All right. Let's open it up. The mic is open. We have 30 minutes. - I've heard you talk a lot
about sort of what sounds to me kind of like
consciousness, evolution. And I find that it's a
very interesting question and I think Elon at one point was also asked something similar, like do you think we'll be able to evolve ourselves through what is now a
natural sort of process of us learning through language, et cetera to be able to evolve our consciousness. I'm kind of curious,
from your perspective, do you see that there's a way that tech will be enabled for us to be able to grow our consciousness over time to effectively accelerate that process? - Yeah, technology is a tool and it can be used for anything,
good, evil, whatever, whatever judgment you wanna make. You can use it to increase
our consciousness through, you know one thing I was surprised about, is how the mediation apps
are all doing really well. Like people are using headspace and calm and insight timer and so on. And it's becoming a thing, and technology is helping meditation. It was bizarre for me, because for me the idea of meditation is
like be quiet, dark place. I don't want someone talking in my head or telling me what to do, right? So it almost seemed
like technology couldn't make a difference there, but yet it has. You could even argue
that some of the things that are making a difference
in the consciousness movement, everything from so-called
plant medicines to yoga, these are ancient
technologies that are just becoming more prolific. They're becoming more widespread, but they're becoming more widespread as a consequence of technology. It feels like everyone in Silicon Valley is going to Peru for
mysterious reasons recently, (laughs) but that's facilitated by a
technology called airplanes, another technology called the internet. So these are tools. In terms of like is just technology itself gonna raise human consciousness? I see some interesting experiments. There's this artist, Android Jones, who's doing a lot. There are definitely
people who are doing things like with brain adaptation,
brain wave scanners. There's this fantasy of this thing called wireheading, which is
really scary and interesting. There's a Stanford lab working on this, and wireheading basically says well, your brain is
just electrical signals. What if I can put a little
headband on your head and give you the electrical
signal to be happy right now. And it's consequence free. It's not like a drug
where you have to take it, and it has to hack it's
way through your system and go through enzymes
and overload your liver and then some small amount
cross the blood-brain barrier. No, I literally just
go and change the dials and now you're happy and you're like well that doesn't feel right. I need some meaning in my life. Okay, great. Now you have meaning. (laughs) But I need love. Great, love. What else do you want, right? And it sounds really far-fetched,
but it's actually not. They've already done
wireheading on monkeys for the bliss machine, the
bliss box, not the meaning box. But right now it involved
drilling a hole in your skull so it's not quite ready for prime time. But you can imagine that technology will start giving us these answers. Another extreme example is, in Roman times one of
the ways that you kept the masses from fighting
each other all the time was you had bread and circuses, right? Very famously, you give them some bread, you give them some entertainment, they're busy. Keep them out of trouble. Luckily, modern society,
we're very enlightened. We're not gonna be fooled by such things. So we have cannabis and video
games and Netflix, right? Which are the advanced
technological versions. I guess it's just a long way of saying technology is a tool. You can use it for anything. You can use it for consciousness. You can use it for unconsciousness. Social media brings people together to form digital mobs to fight each other. Right? It can play on both sides. And as I said in the
morning, unfortunately, I think that in many cases
the destructive power of technology arrives
before the creative power. But the creative
capabilities of technology are actually unlimited. Whereas the destructive,
it's limited downside. You know what happens when
you destroy something, whereas when you create something it's almost impossible to predict the levels that it could go to. No one sitting around in
Jesus's time, for example, could've predicted anything of
what is going on here today. It would be impossible
because the way you can just combine and recombine and
recombine and create life and civilizations is unlimited. But if you wanna talk destruction, that always ends the same way. It's just barren. - Cool. All right, next question. - Kia ora, we in the room
have, we're all mostly facing in the right direction
and we're collaborating, but sometimes we find
ourselves in competition so can you speak to different kind of ways that we could think around cooperating while we're trying to
compete for the same ground or trying to compete for the same investor where we're actually trying to compete against a new way of changing the way the market's trying to think? - I think it's a competition
is a terrible trap you can fall into. A lot of it comes through,
you know if you've read Rene Girard, he's this French
philosopher in polymath and he talks about Mimetic Theory, which is most of your desires are actually mimicked from the people around you at a very young age and you take your cues from other people in
terms of what to desire, what to go for, and the
explicit forms of this are advertising, but the implicit form could be I went to law school. I see everyone competing
to get that law clerkship with that Supreme Court Justice and so I believe that's
the highest calling when actually the correct answer for me might be to go be a food entrepreneur. But I'm just not even thinking about it because I'm in law school,
surrounded by law students. So there's a way of getting
sucked into competition by looking around you. And the way to escape competition
is through authenticity. Because no one can compete
with you on being you. No one can compete with your business and doing what it uniquely does. The more authentic, and this
is the beauty of the internet. The internet enables you, no matter how strange or odd
or weird or specific you are, to find your tribe. You know, you can be obsessed
with LEGOs as an adult, and I guarantee you there are enough LEGO collectors
out there on the internet that you can make a fortune just collecting and building LEGOs. So I think the most
successful entrepreneurs are extremely authentic to who they are and what they uniquely can do
and as such they don't really operate in competition. And I've learned this the hard way because I'm actually a
very competitive person. So when I was doing my early
career in Silicon Valley, I used to focus on my competition a lot. So one of the companies I
started was called Epinions, and we did product reviews on the net and it turned into this online
comparison shopping site where you could go and compare prices. And our fierce competitors
were Bizrate and Nextag and I'm trying to think, Price Shopper, and I forget all the names. There were about seven of them. And we competed fiercely, and it was just completely wasted time
because it turned out that all retail got won by Amazon. And all the reviews
that we were working on, we should've gone local instead
of online price comparison but because we were focused on competition we actually did the wrong things. Whereas if we had been authentic to what we really focused on, which was reviews and stuck with that, maybe we would've been Yelp. And that entire market just disappeared, and actually all of those
founders are now my friends because we commiserate over
our experiences together. (laughs) So competition is sort of this, it can suck you in into
thinking it's the reality, but it's actually not a reality. And the easiest way to
see that is think of any human being that you know. It can be any single person you know. Now think of, if that
person was not in your life, who would be the substitute? Who would provide the same demeanors, the same intellect, the same insight, the same behaviors, the
same emotional support, the same actions, the answer is no one. Every human being is so unique that there is no substitute
for them whatsoever. And parents who have
children see this, right? Like you have three kids and they're all completely different. Like where did that come from? So companies are the
same because companies are just collections of humans. So if you're competing,
you're kind of establishing a similarity to each other
that doesn't actually exist. And I think even consumers and customers are starved for authenticity. They're looking for
brands that are unique, that are authentic to the founder, that are expressing something
they can't find elsewhere. People don't wanna go to
Starbucks for their coffee. They wanna go to the local, unique, you know every time you
walk into a store now you look to see what's
different and what's unique about that store. And I think that's a
consequence of wealth, it's a consequence of taste, it's a consequence of technology, consequence of individualization. But we're coming out of a
factory-based, industrial world that was built in the 1800s,
where one size fits all for efficiency reasons, and we're heading into a boutique, artisanal world where 7 billion people will
want 7 billion products. So I would say that yes,
competition is a real thing. It does exist. I'm not saying it doesn't exist. But it actually exists more
in fake human made games, like sports and politics, where
for one person to be above another person has to be below, right? Those are status games. But when it comes to
actually creating new things, whether it's ideas or writing books, here's another example. No two authors compete with each other. You can't take a book and substitute because these are
authentic self-expressions of who the author is. And I think all products
are headed that way, and all services are headed that way. You do not wanna compete. You wanna be a market of one. - Kia ora. So my question is really around the fact that the capital markets
and the financial markets need to evolve, and I know that generally things are getting better for some people, but the growth between rich and poor is actually growing, at
least in New Zealand. And what do you think that next evolution of the capital markets is? What is a thing that is actually gonna be the step change that we need to bring everyone along for the ride? - Yeah, unfortunately,
I don't think that's necessarily a consequence
of capital markets that the divide is growing. I think it's a natural
consequence of technology. And this is the unpopular thing to say because you know I'm
supposed to sit up here and say how great
technology is, and it is. But technology is a form of leverage, and it's the ultimate form of leverage. If I'm a programmer,
what people don't realize is I have a million robots working for me. If I come up with an
idea, I code that idea up. Now there are a million robots
who will carry that idea. They're just sitting in a data center for heat and efficiency
reasons and space reasons. They're loaned to me by
amazon.com, who takes a little cut with Amazon web services,
but that leverage means that if I decide
on the right thing to do versus the wrong thing to do, I can make $100 million or zero dollars. It's a wide swing. Whereas for someone who is not leveraged through technology, they don't
have that force multiplier. So someone who's working
a traditional industry does not have that force multiplier. So I think when we talk about
the distribution of capital, we're used to thinking of money as the main source of capital. And before that, the
main source of capital used to be people. How many people are
working for you, right? That's why like older
individuals in society tend to be really impressed by how many people are working for you? And people who are a little more savvy are like how much money are you managing or what kind of revenue are you doing? But really, the correct questions is how many robots are working for you? How many programmers are working for you? How many machines are working for you? Because those are the
ultimate force multiplier. So I believe that the way out is through technology education. And where technology education falls down is that it's really popular
to preach education for kids. Everybody wants to educate kids. Why? Because kids can't talk back. They have no choice. Go to school, sit down,
shut up, and learn. But what about adults? We have this myth that
adults can't be educated. Adults either self-educate
or they can't be educated. We have this myth that
if you're 45 years old and you lost your job,
your factory shut down, that you're done. Your only options now are
either you're destitute and we have to figure out how
to bail you out as a society or we have to somehow preserve your job through some false tariffs or
barriers to trade or whatever. Tax breaks for some company,
even though the world doesn't need you to do that job anymore. Really I think we need to have
a culture of adult education. What if we had a model
where, every four years, you were expected and it was socially and culturally acceptable and there was a financial support that you
would go to school for a year? So after every four years, you say okay, now it's my school year and this year I'm gonna go and learn about, I'm gonna learn electronics. Like that's the thing that
I'm gonna learn this year. And you spend a year going to
school learning electronics. And you could be 54 years
old learning electronics, and I think that should be
a valid part of society. We need continuous education to be built into society because the
leverage that you're craving, the leverage that you're asking for is actually permissionless. It's available to everybody,
but it's knowledge based. The gate to it is not some banker sitting on a pile of money,
although that would be good too if that released, but the gate
to it is really knowledge. And it's the building of that knowledge and the sharing of that knowledge. - I would think that the
gate is actually community and how you activate them
around what you're doing, but it's a discussion for later. - Sure, I mean that's also, there's many ways to get that out there. You're not gonna be able
to learn that kind of thing without massive community
support, for sure. - Thanks, Anna. - Hello, thank you so far. I'm hearing lots of talk
that decentralization comes with some promise. We're talking about collaboration as well, and there's a lot of good will and intent that's certainly in the room. We fiddled a little
bit about that already. I'm trying to reconcile
that with a statement you made earlier that winner take all when it comes to blockchain technology. Is that really the position,
that it's winner take all? And if so, should I be
talking to Alpha back there because it sounds like he's
sorting some cool stuff. - It's winner take all in the sense that blockchain technologies
are really protocols. And protocols are how
we communicate things, communicate information with each other. So they are winner take all by nature. For example, language is a protocol. Within New Zealand, people
are speaking English and Maori and that's it. If I were to launch an effort
to speak Hindi in New Zealand, it just wouldn't get very far. It's inconvenient. Everybody has already
established English and Maori and they wanna communicate
in those tongues. So similarly, once there is
a protocol for money transfer or wealth storage in crypto, let's say if that ends up being Bitcoin, you probably wouldn't want a number two. It can't get there. But separate winner
take all from ownership. Who owns Bitcoin? And the answer is nobody. Anyone can play in it. It's a level playing field. Now it is a meritocracy, it's a market. And markets can be brutal and unforgiving. They don't necessarily look
out for the weaker elements of society so there always
has to be a human layer that is on top of that. Because markets, they have their own very cold and clinical
definition of fairness. But what they bring is
they bring efficiency. In the case of a protocol
market, like a Bitcoin, they at least bring uncorruptibility. Like in a Bitcoin economy, if the bankers crash the
economy and hold us all hostage, they don't get bailed out. We don't need them anymore. So it gets rid of some of the worst excess of crony capitalism. But is not in itself fair. It is winner take all, but it's winner take all for a protocol. To give you examples of other
winner take all protocols, TCPIP, which underlies the internet. SMTP, the simple mail transfer protocol, which runs email. These are winner take all protocols, but we're okay with that
because they're decentralized. They're not owned by any entity. On the other hand, if I look at a protocol like the app store on our phones, that's owned by Google and Apple. That's not an open system. I hope that some day that will be replaced by an open protocol
because those two companies just have far, far, far too much power. It's funny to me how people
worry about Facebook, but when Facebook, one of their apps, was leaking information, Apple kicked them off the app store. Instantly, all their apps. Everybody on Facebook was scrambling. That tells you who's really in charge. It's Tim Cook, it's not Mark Zuckerberg. That app store is the
critical access point into the entire technology ecosystem. And the fact that that's
owned by private companies means that all of the means of leverage, now this is where Karl Marx
would have a field day. Karl Marx today would not be attacking the people who owned the
money or the machines, they would be attacking the people who own the gateways to the app stores. Because that's where
the means of production are really gated. And they get 30% of
everything on your phone, which is your entire life,
and they get it all in profit. It doesn't cost them
anything for that 30%. So I think even a decentralized world, we can converge upon protocols
that are winner take all for certain use cases, but
as long as they're not owned by a single entity we're fine. - Kia ora. You don't really strike me as a busy guy. I was wondering if you had an
extra two hours in your week, how would spend that if it was towards advancing the human race? - Yeah, I'm not a busy person, actually. And I'm not busy because I
refuse to schedule things. I'm famous for not scheduling things and not doing meetings and not at being at as specific place at a specific time because I think busy is
the death of productivity. And people will spend a lot of time responding inbound to meeting requests and notifications and squander
all of their time and energy, whereas if you wanna
accomplish anything in life, it gets done through focus,
intent and focused action. And that only happens
when you have free time. You have to get bored
before you can be creative. Anyone who's ever done a creative job knows you have to be bored. You can not be creative on schedule. You can't be creative from 9AM to 11AM, you know five days a week. You can not be creative when you've just run from meeting to meeting to meeting, from task to task to task. And all the great endeavors
in life are creative, right? At some level, I do firmly believe that everything I've
done in life is useless. It's not gonna bring me any
lasting satisfaction or peace and it doesn't follow me to the grave. So it's kind of pointless. So if I'm gonna do it,
do it for the art of it. Do it because you enjoy it. Do it for its own sake. Do it for self-expression. And so just it's very
important to not be busy. How would I spend two extra hours? I would probably just play
with my kids, to be honest. I don't believe in work time. I just believe in like you have time and you spend it doing
what you wanna do it, and sometimes you spend it
doing what you have to do and you wanna minimize that. And if you have to do something,
you might as well enjoy it because you're still
there and it's your time. So why suffer? But just sort of avoid
getting into situations where you are sacrificing today
for some imagined tomorrow. Because tomorrow doesn't exist. Today is here. So I don't have unfree time. And I would encourage all of you to just be ruthless about not scheduling. You will have to disappoint people. You will have to disappoint society. You will have to let people down, but when they want your time that's their problem, not yours. And the best way for you
to give them your time is to spend your time
doing what only you can do and most uniquely do. And that is a gift to
the people who need that. But you can not be reactive. You can not respond. You have to act from inside,
if that makes any sense. Sorry I got weird there. - [Audience Member] Kia ora. - I'm very defensive of my
time, as these guys know. They've been, even at welcome week. - You didn't show up to this on time. - Well, I've probably
been the hardest person to corral at welcome week
because I need four to five hours of time a day by myself, doing nothing. Because if I don't have that time, then I will not be able to do anything. Because I mean think about your days. If you get up at seven in the morning and you run around and you're
going meeting, conference, meeting, conference,
conversation, then you come home, you watch a little tv,
you read a little book, you talk to the family, you're exhausted. You hit the bed. What actually got done? You haven't even detoxed from all the crap you took in that day, right? It's all just weighing in your mind, and some of it is lodged in there and that comment she made
and that thing he did and I'll sort that all out later. Probably on a therapist's
couch 10 years from now. (laughs) Right? You have to process your day. You have to let it go. Let it pass through you. And then you have to get a little bored. And then what's left,
you're kind of tinkering and something interesting
may come out of that. - On that note, we have
seven minutes and 50 seconds for the next question. - Exactly. 7:49. - Hi, Kia ora. I agree with you that the
big challenge is education. We have millions of people who can not participate in a discussion at this level. And technology can be the answer. How far we are off a
self-engaging platform for kids or adults to
keep their education going at the scale you are, free? - Yeah, we're very-- - And, sorry, initiatives you see that are around it could follow. Thank you. - We're very, very close, actually. I think the bigger problem
that this generation will face is adult education, not
children's education. Children are learning machines, and they just need the tools. And the tools are there, they're
just unevenly distributed so there was a experiment done in Pakistan where they, I may be
getting the details wrong so someone look this up,
but there was an experiment where they took a bunch of Android tablets and they left them in some poor village in a third world country
and the kids unpack them and hack them and reprogram them and figure out how to use them and were teaching the adults how to do it. Kids are self-educating. You just give them the means. They're curiosity machines. They'll figure it out. It's the adults that
are the bigger problem, and I think they're,
again, the means are there. The internet is there. MIT courses are there. Yale courses are there. I could even, if you had a
good software platform today, and you said hey, we're ready to reeducate all the adults who need it, I need volunteer teachers, you could get a million volunteer teachers
from the first world. - The problem is engaging. - The problem is the desire. It's a desire to learn that is scarce, and as we talked about
earlier, desires are mimetic. Desires are copied. Humans copy each other's desires. So if you see, so there's
the old Mark Twain line, there's nothing so
damaging to one sensibility as watching a friend get rich, right? It's kind of classic Mark Twain, but the same way if you are an adult that is facing a difficult situation, and right now you are not
thinking about education as a possibility, but then your neighbor goes and gets educated. Well that's interesting, right? Now all of the sudden you
wanna keep up with the Joneses so perhaps you'll do that. And the role for society and government might be carving out that space, saying actually, instead
of unemployment benefits, instead of universal
basic income or whatever, we're gonna give you a one
year education stipend, right? So, here is the money
to survive for a year while you get an education. Here's like 10 different
educations you can choose from. These are what people in
your neighborhood are doing. And also kind of
reconnecting employability to education, like the
four year university system exists in this fiction of do
what you love, which is fine. I'm actually a big believer
in do what you love. I'm just not a believer in spend $400,000 and four years learning what ya love. Like, because not everything can withstand that return on investment and
make sense for the taxpayer. So, I think some
commendation of giving people the space and time to learn as well as mimetically making it
acceptable in society, making it great in society. Like wow, you went back
to school for a year and you got your degree in X? Like that's amazing, right? That should be a positive. So I think we can get there. I think we can do it, but
the tools are already there. The tools already exist. - Kia ora, thank you. - Kia ora. So with the talk about education, I often listen to your suggestion on equipping everyone with tech literacy, and whether it's adults or children. Quite often, when we're going through becoming tech literate, it
becomes very, very consuming because it takes a very
steep learning curve for quite a lot of people, obviously. And then how do you balance it with, say, having four hours a day to be by yourself walking by the river so that you can be creative as you need to be because like I feel the same way so
it would be interesting if you have any observation. - Yeah, learning isn't that
time consuming, actually. I know that we have this model where you spend eight hours
a day in the classroom and that's how you learn,
but you're not learning eight hours a day. A lot of that is socializing. A lot of that is responding
to the teacher's requests. A lot of that is studying
things that, frankly, are kind of obsolete or you shouldn't be learning in school anyway. When it comes to actual
technology literacy, I'll bet you like two
hours a day for six months is really sufficient for most people. I'm not talking about turning everyone into a hardcore programmer,
I'm just talking about enough that they're not scared
of technology anymore, right? It's like when my mom
picks up her computer, not to pick on my mom, she's great. She's got an iPad, she's
fully functional with. First few times she's afraid
of touching something. She's like what if I destroy it? What if I delete everything? I'm like oh, mom, you're just being crazy. You don't have to worry about that. And she's like okay, well
how do I delete a file? I was like well you drag
it to the trash can. She's like then how do I eject this disk? Well you drag it to the trash can. But won't that delete it? Oh, yeah, you're right. That will delete it, right? And so she has a proper fear
because we have made technology still very complicated in a way that, to the average person, they
can make irreversible errors. Like if you hand your
parents a Bitcoin key, right? That's a high risk maneuver. (laughs) So some of it is just we have to make technology easier to use,
but I think the education is there to get over that fear. Like whatever your level of
mathematics proficiency is, for example, determines how
much science you can learn. Like wherever your math tops out, you don't wanna pick up a book past that because it's just gobbledy gook. It's just like a lot of
jumbled letters and numbers, and that's why I'm not a physicist today because my math wasn't good enough. So I think the same way with technology, your knowledge gets you
to a fear threshold. It gets you to the limit
of where you can learn. So I'm not saying we educate everybody to be a great computer scientist. But we get them to the level where they're comfortable pulling
a book off the shelf or going to a website and learning what they need to on demand. The beauty is that we
have this external brain called Google and Wikipedia
and Wikihow and so on. We don't need to remember everything, we just need to know how to use the tools to get the things that we
need when we need them. - Maybe just a point on
how to balance it though, with that aspect of gaining
energy that is outside of that particular area of literacy. - You mean in terms of the
time, the free time, piece? - Free time or other nature or whatever it is that brings you. - Yeah, I mean I'm from Silicon Valley where everyone's an egg head and everyone's spending
all their time indoors. All right, I think in New
Zealand you have a much better and more harmonious
relationship with nature. I'm probably not the person
to advise you on that because I spend too much time indoors. There is a not too unrealistic
joke in Silicon Valley that part of the reason
why people in San Francisco are innovative is because the weather is not very good, right? The summers aren't great and the beaches are actually cold and et cetera, whereas in Los Angeles, where
the weather is really good, and it's nice, it's actually
harder to get work done. Because the outdoors beckons. That's okay. - All right, we've got time for one more. - Kia ora. I am from Carwin, got an amazing group of people in this room, non-profits, social enterprise, startup people. What's your recommendation
for them to prepare for fundraising in the future and what do they need to
know to be ready for that? - Yeah, I could only speak to technology startup fundraising. I do not know enough about non-profit or social entrepreneurship fundraising. The only thing I would comment
on social entrepreneurship is if you really wanna have
an impact in this world, it's better to make your enterprise economically sustainable. So in that sense, get profitable, even if you're a
non-profit, get profitable. Because then you don't have
to go begging for money. Begging for money sucks. And be a profit center. And it is hard, but when you do it then you can truly scale what you're doing and it can last for a very long time. In terms of fundraising
for technology companies here and startups, it's
difficult because you're not in a technology hub. And funding markets
actually develop backwards. People think like oh, I'm
gonna have angel investors and then series A, series B, but that's not how the market develops. The way the market
develops is some company bootstraps its way to an IPO, creates a whole bunch
of millionaire angels, then those angels, the smart ones, actually don't invest in
seed stitch companies. They actually invest in companies that are about to go public. And then those ones, then
they form little firms and they invest in the ones that are just step before that, step before that, so you derisk all the way
back down to seed level. And when you see seed
investing crop up in an area where there's no series A or
series B or series C market, then those companies run
out of money very fast. Or you get brain drain,
where those companies, the winners get exported out and they go to Silicon Valley to raise
money and they never come back. The good news is that Silicon Valley has gotten insanely expensive. And we've been saying
that for a long time, but now it really is insanely expensive. Like, it might be twice
the cost of Manhattan to run a company in Silicon Valley. So it's becoming much more accepted now for companies to raise
money in Silicon Valley and then go back to their
hometowns and spend it. You still have the burden and
challenge of standing out. So it might make sense to have a Silicon Valley or New York office with one founder or key executive there who can build relationships
so that you can be part of the trust
network in Silicon Valley, which is really what makes
financing and capital work there. But then build the company here in terms of expansion. I think every large
company in Silicon Valley and every venture investor is looking for the next place that has tech talent. And so to the extent that you have a strong university system, you have a digitally literate populace, you have young people coming
up who are programming, and, I hope, older people
who are programming. I think that's very, very attractive. So in the bay area, it's now well accepted that, for example, University
of Waterloo in Canada stamps out all these amazing
engineering students. Vancouver has become like a legitimate, acceptable hub to have startups or have most of the
operations of a startup. Same with Toronto. There are a few of these
kinds of places forming. I don't see why Wellington
can't be one of those. I think it just, it takes a little bit of focus and effort,
but I think Wellington is well within striking
range of being a great place to build a startup and you just funnel the money in from Silicon Valley. - That's a great place to tie it off. How do people follow your
work and follow you online? - I'm just @Naval on Twitter
so that's the easiest way. - Lets give it up for @Naval. (applause)
