3 Hours for the NEXT 50 Years of Your LIFE | Business Knowledge

No business has ever survived without sales. And as an entrepreneur who's creating a company, whatever your product or service is, if that's not the most important thing and you're just dying and excited to tell people about it, then you're not going to succeed.

I would encourage anybody, if anybody listening to this is an entrepreneur, has a small business, whatever, think about the things that are not going to change over 10 years. And those are probably the big things.

One philosophy that I've always had is I actually think the thing that determines your destiny is not a competitor. It's how you execute.

90% of the people That buy stocks don't think of them the right way. They think about something that they hope goes up next week and they think about the market as something they hope goes up. And if it's down, they feel worse. I feel better.

Selling is just helping. I've always looked at it about putting myself in the shoes of another person and asking a simple question. Can I help this person?

In a world that's changing so quickly, the biggest risk you can take is not taking any risk.

This is the most interesting time in all of history. So enjoy the ride.

Hey, it's Evan Carmichael and I watch these videos every day because I need them for motivation. Being around successful entrepreneurs Every morning helps me believe that I can do great things too.

It's like your morning coffee, but for your goals, kickstarting your day with a blast of positivity. So here is a challenge for you.

Try watching one video every morning for the next 30 days, and let's find out together if they help you do great things too.

If you're in, leave a hashtag #believe in the comments below so I can celebrate with you.

So let's condense 50 years of priceless business knowledge into just 3 hours.

Believe.

What makes a great entrepreneur?

Somebody who's curious. They want to keep on learning because business is ever-changing. It's never static. Somebody who's agile because as you learn new things and the environment around you changes, you have to be able to adapt and make the changes. And somebody who can sell because no business has ever survived without sales. And as an entrepreneur who's creating a company, whatever your product or service is, if that's not the most important thing and you're just dying and excited you're not going to succeed.

Speaking of Peter, and it's sort of a closing question, what's the best piece of advice he ever gave you? I think Peter was the person who told me this really pithy quote that in a world that's changing so quickly, the biggest risk you can take is not taking any risk. And I really think that that's true, right? I mean, a lot of people, I think, think that, you know, whenever it comes to— whenever you get yourself into a position where you have to make some, some big shift in direction or do something, you know, there are always people who are going to point to the downside risks of that decision. And locally, they may be right, right? I mean, for any given decision that you're going to make, there's upside and downside. But in aggregate, If you are stagnant and you don't make those changes, then I think you're guaranteed to fail and not catch up. So to some degree, I think it's really right that over time, the biggest risk that you can take is to not take any risks.

Given what you know about what's happening in artificial intelligence and maybe in other technologies as well, what advice would you give to someone who's trying to figure out what skills should they focus on or not focus on?

What should they major in?

What are the jobs going to look like or not look like?

Well, the AI will make people more productive. And, you know, in some cases like writing software, you know, there's a lot of unmet demand for good software. You can make it higher quality software. Exactly what the job market looks like is very hard to predict, but the deeper your skill set, whether it's medical consultation or scientific thinking or customer support, the more value that's going to have, even in a world where your productivity will be enhanced by having this sort of almost free worker looking over your shoulder, giving you advice. Giving you lots of feedback on what it is that you're doing. So I don't think there's anything like, you know, don't become a barber or a radiologist that we have in mind because the new capabilities are very horizontal in nature. It's not a topic-specific set of advances.

So it's kind of like, Everyone's going to have an intern or a research assistant or an analyst.

So maybe the answer is don't be the research assistant or the intern or the analyst, learn to manage them.

Yeah.

And of course, jobs like helping handicapped elderly, helping to motivate students, there's such an infinite demand for those things, even in the rich world, but even more dramatically so in developing countries, that jobs that require deep human connection and empathy, we'd say it's a long ways off before there's a substitute for those things. We have two revolutions kind of in parallel. We have this ChatGPT-enabled sort of reading and writing white-collar enhancement. But in the meantime, people shouldn't underestimate that the blue-collar sort of robotics eventually leading to a humanoid robot that's quite general purpose in terms of the physical skills— arms, legs, things that it can do. That's also happening. And so the good news is that we're going to have more leisure time, that a lot of the shortages that we have on medical advice, or when we get confused, being able to be straightened out, You know, we have this supply of these new capabilities and, you know, the unique roles that humans take on or, you know, how they'll take their extra spare time and make that fulfilling. Those are our challenges.

Technology will help you do anything that you want to do and more of it. So, like I said, I think we are headed to a very interesting future. The most interesting— this is the most interesting time in all of history. So enjoy the ride.

Also, to make sure you're actually taking action after watching this video, I've designed a special free worksheet just for this video.

The worksheet will highlight our favorite lessons from the video that will inspire you to remember what you learned today and actually apply them. The worksheet will also give you space to write down what your key takeaways are and your specific plan of action to make sure you're getting results. If you want the worksheet designed specifically for this video, absolutely for free, there's a link in the description below.

Go click on it and start building the momentum in your life and your business.

I'll see you there.

Can you explain this day one thing?

This is a really powerful way to describe the beginning and the journey of Amazon.

It's, it's really a very simple and I think age-old idea about renewal and rebirth and like every Every day is day one. Every day you're deciding what you're gonna do, and you are not trapped by what you were or who you were or any self-consistency. Self-consistency even can be a trap. And so day one thinking is kind of, we start fresh every day and we get to make new decisions every day about invention, about customers, about how we're gonna do it. How we're going to operate, even as deeply as what our principles are, we can go back to that. It turns out we don't change those very often, but we change them occasionally. And when we work on programs at Amazon, we often make a list of tenets. And the tenets are kind of, they're not principles, they're a little more tactical than principles, but it's kind of the main ideas that we want this program to embody. Body, whatever those are. And one of the things that we do is we put, these are the tenets for this program, and then in parentheses we always put, unless you know a better way. And that idea, unless you know a better way, is so important because you'd never want to get trapped by dogma. You never want to get trapped by history. It doesn't mean you discard history or ignore it. There's so much value in what has worked in the past, but you can't be blindly following what you've done. And that's the heart of day one, is you're always starting fresh. I've asked people about your genius, whatever we describe it.

No, I'm a bright guy who's terribly interested in what he does. So I've spent a lifetime doing it. I've surrounded myself with people that bring out the best in me. And you don't need to be a genius in what I do. That's the good thing about it. If I went into physics or a whole lot of other subjects, I'd be an also-ran. But I am in a game that you don't need— you probably need 120 points of IQ, you know, but you— but 170 doesn't do any better than 120. It may do worse, probably do worse, but, but, uh, you don't really need brains.

What do you need?

You need the right orientation. You know, 90% of the people— I'm pulling a figure out of the air— but 90% of the people That buy stocks don't think of them the right way. They think about something that they hope goes up next week. And they think about the market as something they hope goes up. And if it's down, they feel worse. I feel better.

And you think about?

Pardon me? What do you think about? I think about what the company's going to be worth 10 or 20 years from now. And I hope it goes down when I buy it because I'll buy more.

How do you sell? What do you mean by selling?

Selling is just helping. I've always looked at it about Putting myself in the shoes of another person and asking a simple question, can I help this person? Can my product help them? From the time I was 12 years old selling garbage bags door to door and just asking a simple question, do you use garbage bags? Do you need garbage bags? Well, let me save you some time. I'll bring them to your house and drop them off. To, you know, streaming. Why do we need streaming when we have TV and radio? Well, you can't get access to your TV and radio everywhere you go. So we kind of break down geographic and physical barriers and, you know, cost-plus drugs. You know, what's the product that we actually sell? We sell trust. In a simplistic approach, we buy drugs and sell drugs, but we add transparency to it. And bringing transparency to an industry is, is a differentiation and it helps people trust an industry that's highly lacking in trust. Exactly.

We have a lot of competitors in pretty much everything we do, from social media to devices to advertising to like all the different areas. But I don't know, I guess one philosophy that I've always had is I actually think your biggest— the thing that determines your destiny is not a competitor, it's how you execute. And I think most companies probably focus too much on competitors and maybe even focus too much on ideas. And I think at the end of the day, a lot of what makes great companies great is the ability to just relentlessly execute and efficiently execute and do that rigorously and just get better and better at it all the time. And that's one of the things that we've really focused on. So I don't know, maybe it's sort of like a very martial arts view of the world or something that you— it's like when you go into a competition, you're not fighting another person, you're fighting yourself, right? And you're, you're just trying to be a better version of yourself and make the company better and able to better execute, um, every day.

We're always working on the big things. Like, if you ask me, the— and, and most of the energy goes into the big things, as it should. So, um, and you can identify the big things, and, and I would encourage anybody, if, if any, you know, anybody listening to this is an entrepreneur, has a small business, whatever, um, you know, think about the things that are not going to change over 10 years, and those are probably the big things. So like, I know in our retail business at Amazon, 10 years from now, customers are still going to want low prices. I know they're still going to want fast delivery, and I just know they're still going to want big selection. So it's impossible to imagine a scenario where 10 years from now, I say, where a customer says, I love Amazon, I just wish the prices were a little higher, or I love Amazon, I just wish you delivered a little more slowly. So when you identify the big things, you can tell they're worth putting energy into because they're stable in time.

Okay.

But you're asking about something a little different, which is in every customer experience, there are those big things. And by the way, it's astonishingly hard to focus even on just the big things. So even though they're obvious, they're really hard to focus on. But in addition to that, there are all these little tiny customer experience deficiencies, and we call those paper cuts, and we make long lists of them. And then we have dedicated teams that go fix paper cuts because the teams working on the big issues never get to the paper cuts. They never work their way down the list to get to— they're working on big things, as they should, and as you want them to. And so you need special teams who are charged with fixing paper cuts.

The biggest impact a company can have is staying within its area of expertise. So, you know, to make sure that the education systems around the world, that they get good software. And we have a donation program where we've done— it's called Partners in Learning. We have deals with 132 countries, how we grant them software and fund teacher training in each of those countries. So Microsoft's main thing will be about that library access, that school access, the free software, the training, you know, the job skills and the partners that are in that country. Not so much healthcare. Whereas the big drug companies, we need to get them into the healthcare issues. And the banks, we need to get into microfinance. And the food companies, we need to get into to micronutrients and buying the output of the farmers in these poor countries so that their economies get going. So I think everybody's got a big role to play, but it's going to be fairly centered on the thing that, that the employees know and drives their, their specific contribution.

When you think about education and self-education, what do you recommend?

I encourage people to read a lot of books, just read like Basically, try to ingest as much information as you can and try to also just develop a good general knowledge. So you at least have like a rough lay of the land of the knowledge landscape. Like try to learn a little bit about a lot of things. Because you might not know what you're really interested— how would you know what you're really interested in if you at least aren't like doing it peripheral exploration broadly of the knowledge landscape and talk to people from different walks of life and different industries and professions and skills and occupations. Like, just try to learn as much as possible. I would encourage people to read broadly in many different subject areas and then Try to find something where there's an overlap of your talents and what you're interested in. So people may be good at something, or they may have skill at a particular thing, but they don't like doing it. So you want to try to find a thing where that's a good combination of the things that you're inherently good at, but you also like doing.

Do something you're very what you're passionate about, and don't try to chase what is kind of the hot passion of the day. I think we actually saw this. I think you see it all over the place in many different contexts, but I think we saw it in the internet world quite a bit where, you know, at sort of peak of the sort of internet, you know, mania in say 1999, you found people who were very passionate about something, they kind of left that job and decided, "I'm gonna do something on the internet," because it was almost like the 1849 Gold Rush in a way. I mean, you find that people, if you go back and study the history of the 1849 Gold Rush, you find that at that time, everybody who was within shouting distance of California was, they might have been a doctor, but they quit being a doctor and they started panning for gold. And that, that almost never works. And even if it does work, you know, according to some metric— financial success or whatever it might be— I suspect it leaves you ultimately unsatisfied. So you really need to be very clear with yourself. And I think one of the best ways to do that is this notion of projecting yourself forward to age 80. Looking back on your life and trying to make sure you've minimized the number of regrets you have.

All the early businesses that we owned together have disappeared. They didn't disappear, they failed. They failed, yeah, right. But we took so much out of them before they failed that we— it still worked out fine for us. We evolved them. I mean, but, but literally, the, the 3 base businesses all ended up disappearing and They went out of business. They didn't— they no longer fit into society in a sense. And actually, the very first deal that we joined in on was something called Diversified Retailing, which was in Baltimore. We bought a department store there and we had Sandy Gottesman had 10%, Charlie had 10%, and in his partnership he had 10%, and I had 80% in our partnership, the three of us. And we always treated it as, you know, we may have had 80 me, but we were equal partners. We had some terrific people who were running it for us that were actually related to Sandy's wife, uh, and definitely honorable, really honorable people, and smart. If you're losing money in a business with a smart, decent person, you know, we got a problem. I mean, that's the business. Use the smart, decent person to move them over some other place and move the capital some other place. The company was not yet losing money, but we could see— we soon realized was about to lose money. Yeah. And so we sold the department store. It went out of business in 1983. But Hudson's, which was the silk stocking department store, they went out of business in, I don't know, 1985 or so. They're gone. And the people there quite understandably wanted to build more branch stores. But you don't want to put more money into a business that's destined for failure. Now, we put $6 million of capital in that. It was a dumb decision, everything. But that $6 million, what would it be worth now, Charlie? They got 4/10 of a share. Great many billions. Oh, it's tens of billions. Yeah. Now, if the department store had succeeded, we'd have a nice little business. Then send us a little check. But because it failed, we've made $25— well, we made more than $25 billion in that. It didn't look like it at the time, though.

So when you realized it was a mistake, mistake, what did you do?

How did you address it? We asked Sandy, who was the best salesman among us, to go sell it. And we sold it and we put the money into Berkshire. We got about 95% of our money back. Yeah. And we'd borrowed $6 million in there. So now we had that. We bought Berkshire stock and we bought blue chip stamp stock and eventually put it all together. It looked like a plate of spaghetti at one time, which was not good. It was just complicated. And so we, we put them all together. And, you know, I've still got stock and Charlie's still got stock that came out of Doris White Retailing, as do a number of my partners from the old days. Best thing that happened to us was that this place failed. Obviously was a failure.

Why?

What did you learn? I mean, leave quickly.

Yeah. And, and use the capital someplace.

You've said that business is the ultimate sport.

Yeah, it is.

Explain what you mean by that.

You know, In basketball, you play 82 games plus the playoffs. You know who you're going to play. You have time to prepare. There's an offseason. You get some time off. In business, you don't even know who your competition may be, and you're competing with them 24 by 7 by 365 by forever. You know, if I start a business and you're in my industry, I'm coming to kick your ass. And if you start a business and you're in my industry, I'm coming to kick your ass, right? And And so that's why I keep on, you know, investing in companies, starting companies, whatever it may be, because that competitive side of me, that's where the juices flow. And it's just that ongoing, nonstop intellectual challenge to be great at whatever industry I'm in. Doesn't always work.

Yeah, but your goal is to be great.

Yeah, you're not going to go 82-0 in business either.

So everybody thinks they know like what it means to like be an entrepreneur or be a business man, but it actually feels like a very specific thing when you really think about it.

To be an entrepreneur.

Yeah, yeah, yeah. How would you describe it?

You've got to be willing to be all in, right? You know, some in sports you can be athletically gifted, right? And that'll carry you a while. And then, you know, if you want to be one of the top 450, it's not only being athletically gifted, it's, you know, what's your skill set and how do you work on it and what's your basketball IQ. And business is very similar except that it's ever-changing. You know, we talk about, you know, 3-point play and analytics changed basketball some and, you know, less than the big man, whatever. And business is changing every day.

Yeah.

You know, there's some new technology, there's some new approach, there's some new rule, there's some new tax law, whatever it may be. So the rules are always always changing. And so you've got to be curious, you've got to be agile, you've got to be able to sell, you've got to be able to communicate, you've got to be empathetic, you've got to be considerate, you've got to be nice. There's all these different skills that come together to be good as an entrepreneur.

Phase 1 is build a thing that kind of sparks some joy and that people appreciate. Then from there, you want to get to something that is retentive, so that way people who have a good experience with the thing come back and want to keep using it. And those two things are not always the same. There are a lot of things that people think are awesome but may not always come back to. I mean, I think some of what people are seeing now around ChatGPT is part of that. It's like, I mean, this level of AI is, it's like a miracle, right? It's awesome. But I mean, that doesn't mean that everyone is going to have a use case every week, right? So I think that there's, first is like create the spark. Second is create the retention. Then once you have retention, then you can start encouraging more people to join. But if people aren't going to be retained by it, why would you ask people to go sign up for something? Sure. Right. So kind of step 1, spark. Step 2, retention. Step 3, growth and scaling the community. And then only at that point is step 4, which is monetization. And I mean, we take a while to go through all of those. I mean, we're really in some sense only getting started on the monetization of the messaging experiences like WhatsApp now with stuff like business messaging.

But it took a while.

2 billion people use the product every day, right? So it's, I mean, we like, we scaled it pretty far, but I think with our model that sort of works.

I remember one great fear I had when we did Microsoft Research was that they, if we weren't careful, it'd be a block to our view of what was going on in the academic community. That is, we would hire somebody who had an approach and that academia as a whole would have like 20 approaches, you know, a number of which would likely be better than some internal approach. And so I wanted somebody who was open-minded enough to say, no, the, you know, this group here, uh, is doing it the right way. And I I was worried, would that fluidity exist? So a lot of these programs, like having students come here, like the faculty summit, have contributed to the idea that, okay, we're part of a broader community. We publish great things. People come and go a lot. So I feel super good about that. In terms of work, I would say most of the opportunity to make computers improve work is in front of us instead of behind us. Only at kind of a very mechanical level of it's better than whiteout, you know, are we like, oh, wow, this thing helps me get my work done. For extremely structured tasks like creating financial statements, you know, where the application logic is very opaque and you're just led through it, or for very horizontal things where you really understand what you're up to and the machine doesn't, see, oh, that email's part of personnel review, that email's part of planning the sales force meeting. So we have kind of the low-level horizontal, which in this way is amazing, and then we have this very structured applications world. The idea of matching what you in your head have as the intention of the overall activity and the semantics around it and therefore sort of maximally helping you with those things. I think now that a lot of base-level things are done very well, including gathering the data and learning from it, that we should be able to have what the machine thinks you're up to and what you think you're up to match each other and improve the productivity, quality, quality quite dramatically.

What would you say to young people that want to change the world, that have big ideas? What advice could you give?

I would say, you know, go do it. Um, just, just go out there and, and do it. Um, the— I mean, the biggest thing I think people, uh, fail to do is that they, they're, they're too afraid to try things, you know, that they shouldn't be afraid of failing, and they should just Go and do it.

Did you fail at anything that you tried?

I've lost— I mean, I've not lost a war, but I've lost battles, certainly. I mean, the first 3 flights of the Falcon 1 rocket, they crashed.

Wow, that must have been a big bummer.

It was a big bummer.

Did you cry?

No.

How do you encourage your employees to be innovative?

Well, this is a fantastic and important question. To be innovative, you have to experiment. If you want to have more invention, you need to do more experiments per week, per month, per year, per decade. It's that simple. You, you cannot invent without experimenting. And here's the other thing about experiments: lots of them fail. If you know it's going to work in advance, It is not an experiment. And what happens in big organizations— Amazon's a big organization now too, the Air Force is a big organization— is that we start to confuse experimentation with operational excellence. So, you know, operational excellence is one of our four key principles at Amazon. We're building a fulfillment center. We've built over 150 large fulfillment centers around the world now. We know how to do that. That is not an experiment. If we build the 151st fulfillment center and screw it up, that's just a failure. That's not the kind of failure we're seeking. We want failures where we're trying to do something new, untested, tested, never proven. That's a real experiment, and they come in all scale sizes. So you need to teach people that those two kinds of failure are different, um, and you need to have— you said something about that hard middle where ideas don't go up. I think this is such an important, uh, thing at Amazon. One of the things we try to do is have multiple paths to yes.

What brings you the happiness? Oh, that I would have to honestly say that what makes me happiest is what I'm doing, what I'm doing. You know, I enjoy two things about it. One, I know I'll win over time. That doesn't mean I'll beat everybody else or anything like that, but I mean, the game is very, very, very easy if you have the right lessons in your mind about what you're buying. I'm not buying stocks. I'm buying pieces of overwhelmingly American business. And I'm happy when that's happy, when I'm doing it. I'm happy when stocks are going down. I'm happier when stocks are going down because I can buy more of them with the same amount of money. I'd be happy if I was a farmer. I'd want farmland to go down so I could buy more average, you know, if I was, I mean, it just makes sense. And I'll tell you the second thing I really like. I like being trusted by people. And, you know, I like, I would rather do what I do with partners than do it sitting in a room myself, even though I might make more money that way.

In Ratatouille, the chef says, "Anyone can cook." Do you believe, Mark Cuban, that anyone Anyone can be an investor and an entrepreneur?

Yes, of course. I mean, I think we're all inherently entrepreneurs. It's just you have to find the thing that you're good at so you can be a successful entrepreneur.

And what would you say, in addition to luck, is the best, most valuable trait that can really help someone survive?

Effort. Yeah, for entrepreneurs, it's effort because it's nonstop. You don't know what to expect. You don't know what tomorrow is going to be. You know, your business may be crushing it and then somebody makes a mistake on the term of their notes at Silicon Valley Bank. And the next minute you go from I'm on top of the world to how am I going to make payroll? That's the nature of being an entrepreneur.

So I'm always very focused on people, and I think the most important decision you're probably going to make if you're in college is who you surround yourself with, because you become like the people you surround yourself with. And I sort of have this hiring heuristic at Meta, which is that I will only hire someone to work for me if I could see myself working for them. Not necessarily that I want them to run the company because I like my job, but like, but, but in an alternate universe, if it was their company and I was looking to go work somewhere, um, would I be happy to work for them? And I think that that's a helpful heuristic to help balance, you know, when you're building something like this, there's a lot of pressure. To, you know, you want to build out your teams because there's a lot of stuff that you need to get done. And, you know, everyone always says don't compromise on quality, but there's this question of, okay, how do you know that someone is good enough? And I think my answer is I would want someone to be, to be on my team if I would work for them. But I think it's actually a pretty similar answer to like if you were going to go, if you were choosing friends or a partner or something like that. So when you're kind of in college, trying to figure out what your circle is going to be, trying to figure out, you know, you're evaluating different job opportunities. Um, who are the people, even if they're going to be peers in, in what you're doing, who are the people who in an alternate universe you would want to work for them because you think you're going to learn a lot from them, because they know, because they, they are kind of values aligned on the things that you care about, and they're gonna like, um, and they're gonna push you, but also they know different things and have different experiences that, that are kind of more of what you want to become like over time. So But I don't know, I think probably people are too, in general, objective-focused and maybe not focused enough on the connections and the people who they're basically building relationships with.

A long time ago, 1991, I gave a speech called "Information at Your Fingertips," and we sort of have it in a low-level sense that it's all online. And if you can write SQL statements, you know which database, and you have the right permission, you know, it's there. Well, now some of it's in other forms of database, so maybe you need to know 3 or 4 query languages. But, you know, how far away are we from letting you utter a, what any information worker might typically want to ask about finding an expert or the history of an account or the sales in this region versus the sales in that region and engage in a in a dialogue on that. I think we are extremely close to being able to do that. And that's pretty fantastic. It's kind of nice to see some of the original dreams come true. There is a dream about really understanding text in a deep sense that I have no idea how quickly we'll get to that. But I do think in the next 5 years, the semantics of tasks and natural language navigation all of the company's information in a rich way and having an agent participate in the meeting that kind of listens and even kind of passively can put things up on the screen that might be of relevance or can be told explicitly to go get something and bring that into the conversation and it's keeping the transcript. I mean, that kind of demo that has been done for decades, that thing will be real. I mean, people actually want to use it, and the amount you'll have to charge them is so little that it might almost be the default way of doing things.

I mean, I'm generally of the view, philosophically, that it's better to be optimistic and wrong occasionally than pessimistic and right. You know, I think you want to look look on the bright side of things. And I'm a little worried that young people today maybe sometimes are a little pessimistic about the future. But I'd like to just assure people that so long as we are not complacent, we will solve the climate crisis and we will solve these issues. Obviously need to take them seriously and work hard to solve them, but they will be solved. And that people should be optimistic about the future and work to make that optimistic future real. You know, they say that the best way to predict the future is to create it. And so if you take the actions necessary for there to be a good future, then we will have a good future. And So I'd encourage people to be optimistic, take the actions that will create a good future, and we will have one.

Talk to me about long-term thinking and your point of view on— Well, long-term thinking is a lever. It lets you do things that you could not do or couldn't even conceive of doing if you were thinking short-term. So if I, you know, that's why, you know, I have a project where I'm helping a group of people build the a 10,000-year clock. It kind of ticks once a year and dongs once a century, and the cuckoo comes out once a millennium. It's a big 500-foot-tall thing inside a mountain right here. Inside one of those mountains. In this mountain range. And the 10,000-year clock is a symbol. I don't think it'll do anything for the first few hundred years, but after a few hundred years, once it's old, people start to pay attention to older symbols. And so a few hundred years from now, I hope that people will think about that as a symbol for long-term thinking. If I, you know, if I collaborated with somebody here in this audience and I said, look, I want you to solve world hunger and I want you to do it in 5 years, you would properly reject the opportunity. You would say, look, it's not possible, it's not practical. But if I said, look, I want you to solve world hunger in 100 100 years, that's a job you'd take because it's a much more addressable problem. You can first create the conditions. You have time to create the conditions where then you can solve the problem. And so that's a very important way of thinking, and it works with everything. I mean, you have to back up and find the right time horizon for what you're trying to do, but, you know, at Amazon, we probably We usually do most of our things, we expect to get some results in sort of 5, 6, 7, 8 years, but we find a lot of our, you know, other companies that compete against us in various ways, they're often trying to get things done in, you know, 2 or 3 years. And so we can do things that, you know, if everything has to work in 2 to 3 years, then that limits what you can do. If you give yourself the breathing room to say, okay, I'll— I'm okay if it takes 7 years, all of a sudden you have way more opportunities.

Long, long ago, people don't even know about this, but we own 2 small insurance companies at Berkshire that both went broke, uh, except we didn't let them go broke. I mean, in other words, we could have walked away from them, uh, and left the money because they were separate companies, and we didn't walk away. We haven't spent our lifetime working at things to try and figure out ways to walk away from debts or have things in indentures and play games like they have, you know, with credit default swaps to figure out ways to take advantage of the lenders. It's just not our game. If we owe money, we're going to pay it back.

You said that it's—

it would occur to you both that it was the more profitable way, but that's certainly not necessarily how the majority of people in business think.

It's the way our dads thought in both cases. Who the hell knows where you get your values from exactly? But basically, you know, you have a few people that are teachers to you in life that are not formal teachers, and the most important people are your— generally are your parents. And I never heard my dad say to me in my life, you know, be sure you pay all your debts, but I just watched how he lived. And you want to have certain people in life that you don't want to disappoint. You want to have people that, that make you a better person than you otherwise would be. Charlie does that for me now, but my dad did it for me early on. I didn't know his dad, but from everything I've heard about his dad, you know, he had the same experience.

I never ever thought in terms of money. Okay, I need to make millions. I always thought in terms of time. Has always been my driving motivation. How can I control my own destiny? How can I control my own time? I started a company called Micro Micro Solutions, and from there we just grew and grew and grew and ended up selling that. That's how I got my first stacks. So here's the rundown of when I sold Micro Solutions for $6 million. So $1 million went to employees, $2 million to a partner I brought in, $2 million to me. I lived like a student, but the first thing I did was buy a lifetime pass on American Airlines, and I just went all around the world taking friends and partying like a rock star. Other than the air pass, I wasn't just buying I was saving it. I could have gone out and bought a bigger house, bought a nicer car. I didn't care. What it bought me was freedom. I never thought I was going to work again. I've made a ton of money in the stock market. I was worth $20+ million.

Life was good.

Then one of my buddies from college, Todd Wagner, sat down with me, and this was in 1995. He was like, you know, there's this whole new thing called the internet. There's got to be a way we can use this to listen to Indiana basketball. We set up this website called AudioNet, and the next thing you know, video comes along, and we turned it into a company called Broadcast.com. And so we started what turned out to be the very first streaming company. On July 18th, 1998, we went public, and we're guessing, you know, what, what's the stock going to open at? And I was the high. I'm thinking $33. Goes $62.75. All of a sudden, I'm worth $300 million plus. And I'm sitting there thinking, oh, fuck, if this stock price triples, I'm a billionaire. Well, we took that company and became the biggest media portal on the internet. And Yahoo came along and made us an offer. And all of a sudden, that stock price tripled, and I was a billionaire.

Companies are learning organisms, and you can make decisions that either make it so that you learn faster or you learn slower. And, you know, in a lot of ways, building a company is like following the scientific method, right? You try a bunch of different hypotheses, and if you set up the experiments well, then you kind of learn what to do. And I think that's an important philosophy. So there are all these different decisions that we make inside the company, you know, everything down to really empowering individual engineers. We invest in this huge testing framework, right? At any given point in time, there aren't— there's not just one version of Facebook running in the world, right? There's probably tens of thousands of versions running because engineers here have the power to, to try out an idea and, and ship it to, you know, maybe 10,000 people or 100,000 people, and then they get a readout on how that version of what they did, whether it was a change to, you know, show better content in newsfeed or UI change or some new feature, they get a readout on how that version performed compared to the baseline version of Facebook that we have on everything that we care about: how connected people are, how much people are sharing, and how much they say that they're finding meaningful content, business metrics like how much revenue we make, and engagement of the overall community. And by running tens of thousands of different experiments and putting the power in people's hands to try all these different things, You can imagine we just make so much more progress than we could if every change had to be approved by me, right? Or any— every idea had to come from, from management. So I do think that there's something very deep about building this, you know, learning culture and moving quickly towards that that just helps you get ahead over time.

Well, I've chosen to spend my time and Melinda spends her time building the foundation as an institution that really has an impact. And I get a lot of enjoyment. This is, you know, how I've taken everything I've learned from Microsoft and the position I'm in and helping to drive the strategy and go out and see what's going on with this work. That's my full-time job, and it's a wonderful job.

I know you're a huge reader, but from a lifelong learning perspective, constantly trying to add to your toolkit, so that you're a better leader, a better CEO. Are there recommendations that you have for the audience about those kinds of things that you do to keep yourself mentally sharp?

Well, I read a lot less these days than I used to. When I was a kid, I just read all the time. I mean, mostly subscribe to scientific peer articles. Like, the daily news I find to be a lot of noise and just very negative. So I generally try to not read the daily news all that much. Because generally newspapers try to, seem to be trying to answer the question, what is the worst thing that happened on Earth today? It was big, okay? There's a lot of people. Something terrible happened every single day, guaranteed. It was just a big, big plant. Also, something great happened, but they don't answer that question. So that's— the daily news just tends to make more measurable events. Like the science and technology peer articles are quite interesting. And usually, if there's something, some new discovery, it'll be in there. So, and I find Twitter enlightening at times, you know, learn a bit there. And talking to smart people all the time is very helpful because that can be a distillation of a lot of interesting things that are going on.

And, you know, certainly, like, try to ask people, like, for the car, like, what are we doing wrong?

You know, what can we fix? What can we make better? And they usually just want to tell me, oh, it's great, you know, I love it. I'm like, sure, I understand, but what's wrong with it? And like, what can we make better? You know, this is this theory of, like, how do we be less wrong?

Right. Jeff, you've built one of the greatest technology companies in the world in just 20-some years. You've taken a company from nothing to Amazon, which everybody in the world now knows, and most people in the world seem to use, was that harder to do than trying to get a space company off the ground? Which is more of a challenge to you?

Totally different challenges. So one of the things that I find, if I think back on the last 20 years, you have to remember 20 years ago, I was driving the packages to the post office myself in my 1987 '97 Chevy Blazer, dreaming that one day I might be able to afford a forklift. And the internet, that's 1995. And 21 years later, the internet is this gigantic thing, and there are many, many successful companies. And the entrepreneurial dynamism that you see on the internet is incredible. And really with Blue Origin, this new challenge that I'm taking on with Blue Origin, what I want to do is put the heavy lifting infrastructure in place so that the next generation can have a dynamic entrepreneurial explosion of ideas and inventions in space, just like we've had with the internet. And the reason you can't do that today is because there's just too much heavy lifting involved, literally. Getting to space is so expensive and so hard. When we started Amazon, I didn't have to build a logistics infrastructure system to deliver parcels. There was something already— UPS already existed and the U.S. Postal Service already existed. I didn't need to build a remote payment system. There were already credit cards. And similarly, you know, there were computers around and, you know, that didn't have to get— all those things would have been tens of billions of dollars, hundreds of billions of dollars of infrastructure. The long-distance phone network became the backbone of the Internet, but it already existed. And so you You could have this dynamic entrepreneurial explosion because all the heavy CapEx infrastructure was in place. For space, it's not like that. The price of admission is so high. So that's the big difference. And what I'm super excited about is lowering that cost. I want to dramatically lower that cost so that 20 years from now, a new generation of people with startup money, real entrepreneurs, small entrepreneurs could do amazing things in space. Think how cool that would be.

Anybody who's working and getting paid by the hour is going to have a challenge when something goes wrong, right? Do you lose a job? Does the dishwasher break? Does somebody get sick? Is it more than your deductible? Or, you know, or if you haven't covered your deductible yet, can you cover your deductible? If you're getting paid by the hour, it's hard to save money. I don't care if it's $10 an hour, $15 or $50 an hour, it's a difficult position. The only way that people really improve their wealth is by buying a house, condo, whatever it may be, owning shares of stock. And so I think that's where you start to change the rules. What would you say is the hardest part of running Meta?

Well, I think the hardest This may just be for me because of the way that I'm oriented, but it's a big company and I think getting the people right and the culture right is the thing that both matters the most and is sort of the hardest to dial, especially as the company scales. And one of the things that I've found over time is we've gone gone through these different periods as a company where sometimes people think we're awesome, sometimes people think we're terrible. Sometimes people think we're just like, everything we do is going to be a winner, and sometimes people think we're like the gang that can't shoot straight and just nothing that we do is going to work. But regardless of what people are saying externally, I've found that if you can keep sort of a good amount of internal cohesion, you can get anything done, right? Whereas even when, you know, sometimes people are very excited about the company, if people internally aren't actually aligned on what we need to go do, then it's very hard to get things done. So for me, I mean, it's maybe somewhat of a trite thing to say, but I think like, I mean, this is all about getting people, right? Like, and getting the right people to, involved and building great teams of awesome people to, to be able to build new things that are super impressive for a lot of people. So that's, that, that to me is probably what I spend the most time focused on. And, and it's probably the most important part of running a company.

When your mother first said, I'd like you to come and have dinner with me and Warren Buffett will be here, you should meet him, you didn't seem that interested.

Why was that?

Well, Warren, I thought of as I was somebody who bought and sold securities, which is a very zero-sum thing. That's not curing disease or a cool piece of software. And the idea of, you know, kind of looking at volume curves, and it doesn't invent anything. And so I thought my way of looking at the world, what I wanted to figure out and do, and what he looked at, that there wouldn't be much intersection. And that's why it was so shocking when I met him He was the first person to really ask me about software and software pricing and why wasn't IBM, with all of their strength, able to overwhelm Microsoft and what was going to happen in terms of how software would change the world. And he let me ask him about, OK, well, why do you invest in certain industries and why are some banks more profitable than others? And he was clearly a broad systems thinker. And so it started a conversation that has been fun and enriching and, you know, an incredible friendship that was completely unexpected.

I think you really want to try to learn at every opportunity. And, you know, it's great to read books and talk to interesting people and learn as much as possible. And, you know, I suppose it was Plato or someone who said, or maybe attributed to Socrates, if I know anything, it's that I know nothing. And so essentially, just taking that attitude that really We wish to be less foolish over time. But I think it's actually— if you accept the premise that you're a fool, then we are all a fool to some degree, then I think that you wish to be less foolish, then I think that's a good approach. And this avoids— that maximizes your feedback loop. Your ability to learn. As soon as you start thinking you know too much, people can't teach you things, that's when you start getting very dumb. So yeah, I always try to learn new things and being able to talk to interesting people. And you can often learn more by the questions that are asked than the answers that are given.

I get 8 hours of sleep. I prioritize it unless I'm traveling in different time zones. Sometimes it's impossible, but I am very focused on it. And, and, and for me, I need to sleep. I think better, I have more energy, my mood is better, all these things. And think about it, as a senior executive, what do you really get paid to do? As a senior executive, you get paid to make a small number of high-quality decisions. Your job is not to make thousands of decisions every day. So let's say that I slept 6 hours a day, or let's go really crazy and say I slept 4 hours a day. So now I just got 4 so-called productive hours back. So if I was going to, you know, have, say, 12 hours of productive productive time during any waking day. Now all of a sudden I have 12 plus 4, I have 16 productive hours. So I have 33% more time to make decisions. So if I was going to make, you know, 100 decisions, now I can make 133 decisions. If I did that arithmetic wrong, I'm sorry. And, and so you make 100 133 decisions. Is that really worth it if the quality of those decisions might be lower because you're tired or grouchy or any number of things? Now, it's different if it's a startup company. I mean, you know, you're really, you know, when Amazon was 100 people, it's a different story. But, but Amazon's not a startup company, and all of our senior executives operate the same way I do. They work in the future, they live in the future. None of the people who report to me should really be focused on the current quarter. I always tell people, sometimes I get, you know, we'll have a good quarterly conference call or something, and Wall Street will like our quarterly results, and I'll get— people will stop me and say, congratulations on your quarter. And I say, thank you. But what I'm really thinking is that quarter was baked 3 years ago. Right now I'm working on a quarter that's going to reveal itself in 2021. Sometime. And that's what you need to be doing. You need to be out sort of, you know, 2 or 3 years in advance. And if you are— and then why do I need to make 100 decisions today? If I make like 3 good decisions a day, that's enough. And they should just be as high quality as I can make them. Warren Buffett says he's good if he makes 3 good decisions a year.

I met Bob Woodward back and he'd just come out with all the president's men. And all of a sudden, is it below 30 years of age, he was getting quite wealthy. And we had, we had breakfast or lunch over at the Madison Hotel. And he said, what do I do with this money? And I said, I said, investing is just about assigning yourself the right story. I said, imagine Ben Bradley this morning said to you, what is the Washington Post Company worth? What would you do if you have to write the story in a month? You'd go out and interview TV brokers and newspaper brokers and owners, and you'd try and value each asset. I said, that's what I That's what I do. I assign myself the right story. And it's nothing more than that. Now, there's some stories I can't write. If you ask me to write a story on what is some glamorous but nonprofit-making business worth, I don't know how to write that story. But if you ask me to write a story on what is Potomac Electric Power worth or something like that, I can write the story. And that's what I'm doing every day. I'm assigning myself a story and then I go out and—

So you get—

I don't know anything about business. I didn't go to college. Neither of my parents went to college when I was young. They were like, you're gonna have to figure it all out. And so, you know, start figuring it out. You know, so I started selling baseball cards. I sold garbage bags door to door. You know, I sold the garbage bags. Then I sold candy door to door. I was one of those kids, right? Hey, you know, you know, and then you hope you make some tips. And I would literally sell magazines door to door, sold candy door to door. Then I had my own crew of kids selling candy when I was like 16. So then I was starting to make some money. Once I learned how to sell, like the garbage bags, I was fucking fearless, right? 'Cause like, no one, who says no to a kid, right? I'd be selling magazines. Darius, if you tell your wife that you're spending 75 cents a week for the education enjoyment of your family, is she gonna be upset or is she gonna be proud of you? And it was just like, bam, bam, bam. And once I could sell 'em, right? And it's just like people coming outta work and there I am hustling candy bars, right? And once people realized I could sell, they were like, okay, now you can drive? Why don't you take these kids around and show them? And then from there, that's what gave me confidence. Like, because once you can sell, it's like when you guys got started here, right? You guys are ballplayers, you want to do this, but then there's the business side of it. And the hardest part is selling, right? Having the confidence to say, okay, you know, this is why we're good and this is why you should be a sponsor and this is why you should work with us. I had none of that fear. None of that. And so once, you know, like, that's my big game shot, right? Some, you know, big shot Rob, when it came down to just being able to close the deal, I was fearless. And to this day, man, y'all walk in anywhere, anytime, anyplace, and I'll sell and I'll close.

Do you think the advent of these AI personas that are way more intelligent will accelerate interest in the metaverse and VR? Well, I think that all this stuff makes it, uh, more compelling. So I'm not— I mean, so yes, I think that this will kind of make all these things more useful. Yeah, I think it's probably an even bigger deal for smart glasses than for VR. I think you need something, you need a kind of visual or a voice control for something. Well, I kind of thought, you know, when I was thinking about what would be the key features for smart glasses, I kind of thought that we were going to get holograms in the world, and that was one. So that's kind of like augmented reality. But then there was always some sort of vague notion that you'd have an assistant that could do something. But I thought that things like Siri or Alexa were very limited. So I was just kind of like, okay, well, over the time period of building AR glasses, hopefully the AI will advance. And now it definitely has. So now I think we're at this point where it may actually be the case that for smart glasses, the AI is compelling before the holograms and the displays are, which is sort of, you know, where we got to with, um, with the new version of the Ray-Bans that were shipped— that were shipping this year, right? It's, um, you know, it was— when we started working on the product, all this generative AI stuff hadn't happened yet. So we actually started working on the product just as a— as an improvement over the first generation, right? So the The photos are better, the audio is a lot better, like the form factor is better, it's like lighter. So it's just sort of like a much more refined version of the initial product. And there's some new features like you can livestream now, which is pretty cool, right? Because you can livestream what you're looking at. But it was only over the course of developing the product that we realized that, hey, we could actually put this whole generative AI assistant into it. And you could have these glasses that are kind of stylish Ray-Ban glasses, and you could be talking to AI all throughout the day about different questions you have. And, you know, this isn't in the first software release, but sometime early next year, we're also going to have this multimodality. So you're going to be able to ask the AI, hey, what is it that I'm looking at? Like, what is— what type of plant is that? Um, like, where am I? How expensive is this thing? Yeah, I mean, because it has a camera built into the glasses. So then you can just like look at something and like, all right, um, and you're filming with, you know, some Canon camera. It's like, like, where do I get one of those? Um, I think that that's, that's like, I think it'd be very interesting. And again, this is all like really novel stuff, so I don't, I'm not pretending to know, you know, exactly what the key use cases or how people are going to use that. But, um, but I think the idea— smart glasses are very powerful for AI. Because unlike having it on your phone, glasses as a form factor can see what you see and hear what you hear from your perspective. So if you want to build an AI assistant that really has access to all of the inputs that you have as a person, glasses are probably the way that you want to build that. How do you balance your capacity for risk, your risk tolerance, against your desire to continue to innovate?

I think that— I mean, I was certainly facing the loss of all assets. I mean, technically I would have been negative because I would have been owing people money, but I figured I could always make enough to, you know, or at least borrow enough to pay the rent and, you know, buy food and that kind of thing. So I didn't think we would starve or lack for shelter, although it would be— would have been sad to not have lost all the assets gained from prior companies. But really, the toughest decision was, was not whether to invest the money into Tesla. It was really that I had Tesla and SpaceX, and the tough decision was if I split the money between the two companies, then it's possible that both may still have died. And so I had to decide, would I dedicate funds to just one company and let the other one die for sure, or split the funds between the two companies? And that was the real difficult decision.

Stress primarily comes from not taking action over something that you can have some control over. So if I find that some particular thing is causing me to have stress, that's a warning flag for me. What it means is there's something that I haven't completely identified, perhaps in my conscious mind, that is is bothering me and I haven't yet taken any action on it. I find as soon as I identify it and make the first phone call or send off the first email message or whatever it is that we're going to do to start to address that situation, even if it's not solved, the mere fact that we're addressing it dramatically reduces any stress that might come from it. So stress comes from ignoring things that you shouldn't be ignoring, I think in large part. Stress doesn't come— people get stress wrong all the time, in my opinion. Stress doesn't come from hard work, for example. You can be working incredibly hard and loving it. Likewise, you can be out of work and incredibly stressed over that. Likewise, if you use that as an analogy for what I was just talking about, if you're out of work but you're going through through, you know, a disciplined approach of, you know, a series of job interviews and so on and working to remedy that situation, you're going to be a lot less stressed than if you're just worrying about it and doing nothing.

When I put my daughters to bed, we go through this thing and like they call it the goodnight things because we're basically what we talk about at night. And I just, I go through them. Sounds like a good show. The Good Night Things. Yeah. Priscilla's always asking, she's like, can I get Good Night Things? Like, I don't know, you go to bed too early. Um, but it's, um, it's, but I basically go through with Max and, and, and Augie. Um, you know, what are the things that are most important in life, right? That I just, it's like, what do I want them to remember and just have like really ingrained in them as they grow up? And it's health, making sure that you take care of yourself and keep yourself in good shape, loving friends and family. Because having the relationships, the family, and making time for friends I think is perhaps one of the most important things. And then the third is maybe a little more amorphous, but it is something that you're excited about for the future. And when I'm talking to a 4-year-old, often I'll ask her what she's excited about for tomorrow or the week ahead. But I think for, for most people, it's really hard. I mean, the world is a heavy place, and I think like the, the way that we navigate it is that we have things that we're looking forward to. So whether it is building AR glasses for the future, or being able to celebrate my 10-year wedding anniversary with, with my wife that's coming up, it's like I think people You know, you have things that you're looking forward to. Or for the girls, it's often, I want to see Mom in the morning, right? It's like, just— but it's like that. That's a really critical thing. And then the last thing is I ask them every day, what did you do today to help someone? Because I just think that that's, that's a really critical thing is like, like it's, it's easy to kind of get caught up in yourself and, and kind of stuff that's really far down the road. But like, did you do something just concrete today to help someone? And, you know, it can just be as simple as, okay, yeah, I helped set the table for lunch, right? Or, you know, this other kid in our school was having a hard time with something and I like helped explain it to him. But, but those are— that's sort of like if you were to boil down my overall life philosophy into what I try to impart to my, my kids, those are the things that I think are really important.

You were just a college dropout. You were very young looking. Did you get taken seriously by businessmen who were much older?

For some people, that youth, uh, and geekiness, uh, was like, hey, should we trust them? You know, that's so weird. We've never seen something like that before. So yes, we had to fight for acceptance. I couldn't rent cars, uh, so I had to take cabs around because I was too young and, you know, probably some people were a little tough. But then as we got a little bit of success, people were fascinated by this deep belief we had in software.

And I think in the future people will look back and say, wow, I can't believe we had to drive these cars ourselves. You know, it'll— like, self-driving cars will just be just as normal, like self-driving elevators. You know, elevators Elevators used to have elevator operators, and there's someone there with like, you know, a big relay switch operating the elevator, and then every now and then they'd get tired or, you know, make a mistake and shear somebody in half. So now we, you know, we made elevators automatic, and you just go and you press the button, and you can be in a 100-story skyscraper and don't really worry about it, just go and press a button, and the elevator the elevator takes you where you want to go. But it used to be that all elevators were operated manually. It'll be the same thing like for cars. All cars will be automatic. And then, and electric, obviously. So there will still be some gasoline cars and some manual cars, just like there are still some horses.

I went to my boss and said to him, you know, I'm going to go do this crazy thing. And I'm going to start this company selling books online. And this is something that I had already been talking to him about in a sort of more general context, but then he said, let's go on a walk. And we went on a 2-hour walk in Central Park in New York City, and the conclusion of that was this. He said, you know, this actually sounds like a really good idea to me, but it sounds like it would be a better idea for somebody who didn't already have a good job. And he convinced me to think about it for 48 hours before making a final decision. And so I went away and was trying to find the right framework in which to make that kind of big decision. And, you know, I'd already talked to my wife about this, and she was very supportive and said, look, you know, you can count me in 100%. 100% whatever you want to do. You know, it's true, she had married this kind of, you know, fairly stable guy in a stable career path, and now he wanted to go do this crazy thing, but she was 100% supportive. So it really was a decision that I had to make for myself. And the framework I found which made the decision incredibly easy was what I call which only a nerd would call a regret minimization framework. So I wanted to project myself forward to age 80 and say, okay, now I'm looking back on my life. I want to have minimized the number of regrets I have. And, you know, I knew that when I was 80, I was not going to regret having tried this. I was not going to regret having wanted, you know, trying to participate in this thing called called the internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn't regret that. But I knew the one thing I might regret is not ever having tried. And I knew that that would haunt me every day. And so when I thought about it that way, it was an incredibly easy decision. And I think that's a very good— if you can project yourself out to age 80 and sort of think, what will I think at that time? It gets you away from some of the daily pieces of confusion. You know, I left this Wall Street firm in the middle of the year. When you do that, you walk away from your annual bonus. And that's the kind of thing that in the short term can confuse you. But if you think about the long term, then you can really make good life decisions that you won't regret later.

I'm wondering what habit or habits have contributed most to your ability to continue learning improving your investment decisions in a changing business and financial environment?

I would say that, at least in my case, I haven't been continually learning in terms of the basic principles. You always learn a little more about given techniques, or we learn, you know, I learn more about some industries over time, and therefore maybe I've widened the universe in which I can operate operate, although more funds narrows it back down, unfortunately. But I know more about businesses than I knew 20 years ago or 40 years ago. I haven't really changed the principles. The last change— the basic principles are still Ben Graham. They were affected in a significant way by Charlie and Bill Fisher in terms of looking at the better businesses, but I didn't leave any of— I didn't leave Graham behind on that. And I really haven't learned any new fundamental principles, but I may have learned a little bit more about how business operates over time. And there's really nothing— I mean, you ought to get an investment framework that comes straight from, in my view, from The Intelligent Investor and from Phil Fisher, more from The Intelligent Investor actually. And then I think you ought to learn learn everything you can about industries and businesses that— where you think you have the ability to get your mind around them if you work at them. And with that arsenal, you'll do very well. And if you've got the temperament for the business.

COVID, you have said, has changed the world in terms of opportunities.

It's obviously hurt people, but it's obviously helped people who are entrepreneurial.

So you've said this is a good time to actually figure out new businesses, new areas of business. Is that Is that a fair statement?

Yeah, you know, it's so unfortunate, but it's true. I mean, you know, we've heard Warren Buffett say, you know, buy when there's blood in the streets. And it's almost analogous here. So many small businesses are closing. So many, you know, retail stores are closing. Malls are, you know, going bankrupt. Companies that are unable to transition to selling digitally or really taking full advantage of e-commerce are struggling. Big companies don't understand, don't really, aren't sure about how to protect their legacy businesses. That type of uncertainty creates a lot of opportunity. And combine that with people becoming far more comfortable with purchasing online and living a digital lifestyle, I think there's a lot of unique opportunities that are available to people who are creative, who have a vision for the future. I think, you know, 10, 15, 20 years, we'll look back and there'll be 10, 20, 30 world-class companies that were created by people who we probably are thinking are crazy right about now.

The more that there's interoperability between different services and the more content can flow, the better all the services can be. And I guess I'm just confident enough that we can build the best one of the services that I actually think that will benefit and will be able to build better quality products by our products making sure that we can have access to all of the different content from wherever anyone is creating it. And I get that not everyone is going to want to use everything that we build. I mean, that's obviously the case. And it's like, okay, we have 3 billion people using Facebook, but not everyone wants to use one product. I think making it so they can use an alternative but can still interact with people on the network will make it so that that product also is more valuable. You can increase the quality of the product by making it so that you can give people access to all the content even if it wasn't created on that network itself. So I don't know. I mean, it's a bet. Yeah, I think it takes some confidence, but I don't know. I think it's both good to give people choice I know there's kind of this funny counterintuitive thing where I just don't think that people like feeling locked into a system. Yeah. So in a way, I actually think people will feel better about using our products if they know that they have the choice to leave, right? And if we make that super easy to happen. And obviously there's a lot of competition and, you know, I mean, we do download your data on all our products and like it's, you know, people can do that today, but like But it's, you know, the more that that's designed in from scratch, I think it really just gives, you know, creators, for example, the sense that, okay, like, I'm not— it's— I have an agency. Yeah, yeah, yeah. So in a way, that actually makes people feel more confident investing in a system if they know that they have freedom over how they, they operate. So I don't know, I think like it's maybe for phase one of social networking it was fine to have these systems that people felt a little more locked into. But I think for the mature state of the ecosystem, I don't think that that's going to be where it goes. So I don't know, I'm pretty optimistic about this. And then if we can build threads on this, then maybe we can over time, as the standards get more built out, it's possible that we can spread that to more of the stuff that we're doing. We're certainly working on interop with messaging. And I think that that's been an important thing. The first step was kind of getting interop to work between our different messaging systems. Right. So they can talk to each other.

Yeah.

And then the first decision there was, okay, well, WhatsApp, we have this very strong commitment to encryption. So if we're going to interop, then we're either going to make the others encrypted or we're going to have to decrypt WhatsApp. And it's like, all right, well, we're not going to decrypt WhatsApp. So we're going to go down the path of encrypting everything else, which we're making good progress on. But that basically has just meant completely rewriting Messenger and Instagram Direct from scratch. So you're basically going from a model where all the messages are stored in the cloud. It's like you're completely inverting the architecture where now all the messages are stored locally and just the way that they're— While the plane's in the air.

Yeah.

Yeah. So I mean, that's been sort of this like heroic effort by like 100 or more people over like a multi-year period. And we're basically getting to the point where it's starting to roll out now. But, you know, now that we're at the point where we can do encryption across those apps, we can also start to support more interop, which I think is with other services like Meta that Meta doesn't own, other messaging. Yeah, well, I mean, the plan was always to start with, with the interop that between our services, but then, and then to get to that. But yeah, we're starting to experiment with that too.

We should always measure the good impacts and the bad impacts of the stuff we have. You know, certainly whenever a new technology comes along, there's a lot of fear about what what it's going to do. You know, when the printing press came along, there was a great fear that people would just read books and not go out and seek, you know, real experiences. And, you know, I tried that when I was that kid, just reading books. And, you know, maybe I'd be more rounded if there hadn't been books around. So I think it's hard. I haven't seen any evidence of any significance that social socialization has really broken down in some bad way. You know, I know that, you know, Skype now, I meet my daughter's boyfriend's parents when I walk into her bedroom, and there they are on Skype. So socialization is changing, but I don't think— I'm not sure you can really say that there's a negative vector there. And there's so many positive vectors about If you're curious and you want to learn something, you know, I was young and I'd ask a question about, hey, what's fertilizer? You know, if the World Book didn't have it, I wasn't going to get the answer. Now, of course, you can go online, watch videos, and, and, you know, my children are always asking questions where if I don't know the answer, we just go and it's actually kind of fun to learn it together. So I'd say on balance, you know, I think we're quite quite far ahead. You know, there are some things about privacy, you know, maybe misuse of— overuse of pornography, you know, letting your kids play too many video games, so you have to set a quota, just like I had to have a quota for how much I was allowed to read. But I think overwhelmingly we've got mostly positive things, including the opportunity ahead of us of how the tool gets used in mainstream mainstream education?

I think, uh, so when you, when you create a company, I mean, if you think, well, what is a company really? A company is a group of people gathered together to create a product or service, and that's really all the company is. And so you have to really believe in what you're creating and, and that it's— and, and, and know in your heart and mind that this is something that matters, that, and, and, and that, uh, the world ought to have. And I think it's important to investors to show that you're all in. And I think, for example, with Tesla, the fact that I invested all the money I had— literally, I had to borrow money from friends to pay the rent in 2008. The fact— so the fact that I was all in, I think was hugely— made a huge difference to investors to convince them to invest in Tesla at the same time that, say, GM and Chrysler were going bankrupt. And yeah, I think you have to show that you really care. Like, it's like, you know, that you've got skin in the game, that if you've given it everything that you've got, and then the other people at the company will follow suit, as will investors. I think that's really important.

If you want to be an entrepreneur, the most important thing is to be customer obsessed. So don't satisfy your customers. Figure out how to absolutely delight them. That is the number one thing, whoever your customers are. Passion— you have got to have some passion for the arena that you're going to develop and work in, because otherwise you're going to be competing against people who do have compassion for that, and they're going to build better products and services. You can't be a mercenary, you have to be a missionary. Missionaries build better products and services, they always win. The mercenaries are just trying to make money, and paradoxically, the missionaries always end up making more money. You have to pick something that you actually have a genuine passion for. You have to take risk. You have to be willing to take risk. If you aren't going to take risk, if you come up with a business idea, there's, there's no risk there. You're probably you know, it's probably already being done. Those ideas are already being done. They're being done well by many, many people. So you've got to have something that might not work. And so you have to accept that your business is going to be in many ways an experiment, and it might fail. And that's okay. That's what risk is. The good news is, and Evan Hands-on, we still take risks all the time and we encourage it and we talk about failure. We should be failing. Our failures have to grow with the company. We need big failures if we're going to be moving the needle. We need to have, you know, billion-dollar-scale failures. And if we're not, we're not swinging, we're not swinging hard enough. You made your first investment when you were 11 years old.

In 1942, 80 years ago, I took $114.75, every penny I'd saved. And I bought 3 shares of City Service preferred. And City Service was a pretty well-known name now and then. In fact, in 1920, City Service, I think, was the 4th largest company in the United States in terms of number of shareholders. It was a big company. And so it had a preferred stock that was selling at 38. That it started skipping the dividends during the Depression. So it accumulated dividends on it of $60 or $70. And of course it was par value of $100 too. And it was selling at $38. And at breakfast one morning, I follow those stocks every day, but then I made my plunge and I had roughly this amount of money. So I bought 3. I don't remember this precisely, But I think I told my dad in the morning, "Now let's move, Dad." Pop, I called him.

But I said, "Let's move, Pop." But you felt the thrill of it then.

Oh, I've been reading about it and following it the whole morning. I really had read every book in the Omaha Public Library that was on the stock market. By 11? By 11, I'll guarantee you. And some of them twice. I started out reading the ones in my dad's office, and I just love to read.

I just think part of learning is failing. But obviously, when you're getting started with something, you're not going to be an expert at it immediately. So you just need to be willing to go with that. But I think this is like— I don't know. I mean, maybe I've just been embarrassed enough times in my life. Yeah, I do think there's a thing where, like, you know, as people grow up, maybe they don't want to be embarrassed or anything. They've built their adult identity, and they kind of have a sense of who they they are and what they want to project. And I don't know, I think maybe to some degree, you know, your ability to keep doing interesting things is your willingness to be embarrassed again and go back to step one and start as a beginner and get your ass kicked and, you know, look stupid doing things. But at running the company, it's like we just take on new adventures and You know, all the big things that we're doing, I think of as like 10-plus-year missions that we're on, where, you know, often early on, you know, people doubt that we're gonna be able to do it, and the initial work seems kind of silly. And our whole ethos is we don't want to wait until something is perfect to put it out there. We want to get it out quickly and get feedback on it. And so I don't know, I mean, there's probably just something about how I approach things in there, but I just kind of think that the moment that you decide that you're going to be too embarrassed to try something new, then you're not going to learn anything anymore.

Every software project is a glass half full in terms of things that went super well and things that didn't go super well. And the great thing about software is, particularly if your software is popular, you hear back from users. They tell you what they like, what they don't like. Maybe there's a device driver missing. Maybe the error message isn't perfectly clear on exactly what you're supposed to do. You hear about it and it's great because that creates that, that feedback loop. What drives you? What is it that when you wake up in the morning, do you see a problem and you want to solve it?

Yeah, I think the thing that drives me is that I want to be able to think about the future and feel good about that. So that, you know, we're doing what we can to have the future be as good as possible, to be inspired by what is likely to happen, and to look forward to the next day. So that's what really drives me, is trying to figure out how do we I want to make sure that things are great and going to be so. And that's the underlying principle behind Tesla and SpaceX, is that I think it's pretty important that we accelerate the transition to sustainable generation and consumption of energy. It's inevitable, but it matters if we if it happens sooner or later. And then SpaceX is about helping make life multiplanetary and doing what we can to continue the dream of Apollo and ultimately make a contribution to life becoming multiplanetary.

If I have a new idea that I am in love with and I want to see it pursued, I do have to build support for it, just like anybody would, because you need very smart people to embrace the idea and move it forward. We have a framework at Amazon. It's one of our leadership principles. It's called Disagree and Commit. And that is extremely useful because after you've discussed an idea, you do need to make a decision and move forward. And people, the whole team needs to really commit to that. When I really feel strongly about something and the team disagrees with me, I have a phrase that I like to use, which is helpful, which is, I want you to gamble with me on this. It's very different from phrasing that in a different way, because the truth is, when you're in a position like that where nobody knows what the right answer is, you're not saying, I'm right on this, go do this. You're saying, I want you to gamble with me on this, because I don't know if it's right either. I disagree and commit all the time, and I promise the people when I do it, Very clear, I don't agree with this. I think it's probably not going to work, but I will never say I told you so, and I'm going to be on your team. I will do everything I can to make it work.

You have a competitive spirit, clearly. Yeah, clearly. Well, but you got to be careful about what you compete in. It's a good thing I don't have a competitive spirit in chess or football or anything like that. No, I've been an observer. Observer there. I enjoy watching things like that. But I try to keep my competitive spirit in a game where I can win. Do you have a killer instinct? Nah, not exactly. I've got— I wouldn't call it a killer instinct. But I do know this. When I want to do something, I always want to do it big. I put my whole net worth in City Service Preferred, you know, $120. $114.75. I put my whole net worth in and I've never since I was— well, since that day, March 11th, 1942, I have never had less than 80% of my money in American business. You can call them stocks or equities, but I see them as American business. I've owned a piece of American business for at least 80% at all times. I don't want to own anything else. I want to own a home and things my family wants and all that. But owning 5 homes doesn't mean anything to me because I can be happy in one home. And there's a certain amount of things that go wrong with everything. If I got two homes, I know I've got more problems than I don't have more happiness. What brings you the happiness? Oh, that— I would have to honestly say that what makes me happiest is what I'm doing, what I'm doing. Allocating time. I enjoy two things about it. One, I know I'll win over time. I don't beat everybody else or anything like that. But I mean, the game is very, very, very easy if you have the right lessons in your mind about what you're buying. I'm not buying stocks. I'm buying pieces of overwhelmingly American business. And I'm happy when that's happy, when I'm doing it. I'm happy when stocks are going down. I'm happier when stocks are going down because I I can buy more of them with the same amount of money. I'd be happy if I was a farmer. I'd want farmland to go down so I could buy more acreage. You know, if I was— I mean, it just makes sense.

What's the worst idea you've ever had?

So like right out of school, I got fired from a job and then I was trying to come up with something to sell and it was powdered milk. And it was just— I'm like, well, people need to save money on milk. So, you know, if it doesn't taste quite as good, No, I learned the hard way. That didn't last a week. What other shit have I fucked up? I mean, it's just, you know, I'm like everybody else still, right? It's just like you'll think of something.

Yeah.

And you'll start thinking about it and then you'll Google it, right? And you'll see if it's out there.

Yeah.

It's not. No one's done this before. Then you'll tell your guys or your friends like, okay, that's not bad.

Gain a little traction that way.

Gain a little traction.

A little bit of confidence.

But then you got to try to actually get someone to buy it. Right. And that's always the hard part. And what people forget, you know, when you go out there and start Googling and it's not there, there's a pretty good chance it's because they went out of business. Right. And it's already been there. But yeah, I've, I've had plenty, plenty of bad ideas. But that's okay, man. You know, like I tell everybody, you only gotta be right once.

Yeah.

Does no one, no one remembers like how many times I screwed up.

Let's talk about the, the training yourself to be uncomfortable or to become more comfortable with discomfort. Does anything come to mind just in terms of managing your psychology? For my own psychology, the way that I try to manage this stuff is I wake up in the morning and you get whatever emails you have of stuff that's going on in the world. So it's world events, it's team events, whatever trends we're seeing across our products. And often in there, there's a fair amount of bad news and new things that I need to absorb. One of the things I've found that just for managing myself is that if I try to just go straight into the day, it's like almost every morning when I wake up and read through my emails and get the news, it's almost like getting punched with a ton of new context and it's like, okay, I need to internalize this. So I found that basically doing something physical and something that's meditative to take my mind off of it for an hour, so then I can reset and go do work is really important. So that's why things like foiling or surfing have been really important to me because when you're out there in the water, it's pretty hard to focus on anything else. I mean, it's like when you're on the board, you're focused on making sure you stay on the board and don't mess something up, especially if you're kind of towing or something like that. There's not a whole lot of downtime. I've found that for my own performance is significantly better When I have something like that, that's meditative and physical and allows me to output some energy and then I can come back in and it's almost like I'll have subconsciously settled all of the things that have sort of— all the news that have happened in the world. Now it's like, okay, let's go deal with it. Now, obviously, if there's something that's really an emergency, I'm not going to go do a sport or something, I'll go deal with it. And obviously part of life is you don't always get to control your schedule and that's kind of how that goes. But when I compare how I do on the days when I get to have some time to soak that in or to have an outlet versus just jumping right in, I find I'm often stewing in bad news or something and then I'm not as productive. So I think that's sort of my own personal way that I try to manage situations like this. But obviously a key part of this is having an awesome team and it's not primarily about me at this point. It's a big company and We have awesome people who are, who are running all these different groups. So I get that what I'm, what I'm saying, kind of how I've worked out the system for myself isn't necessarily something that would work for a lot of other people.

Recently you said that the biggest mistake you've made professionally was that Microsoft should have had the Android technology. Why was that the biggest mistake?

Well, when you're in a field, you know, we were in the field of doing operating systems for personal computers. We knew the mobile phone would be very popular, and so we were doing what was called Windows Mobile. We missed being the dominant mobile operating system by a very tiny amount. We were distracted during our antitrust trial. We didn't assign the best people to do the work. So it's the, the biggest mistake I made in terms of something that was clearly within in our skill set. We were clearly the company that, that should have achieved that, and we didn't. We allowed this Motorola design win and therefore the software momentum to go to Android, and so it became the dominant non-Apple mobile phone operating system globally.

It sure is important to get the rules right, and You know, it's sort of, in terms of legislative and executive actions, you know, it's sort of like, you know, if you think of, say, like professional sports or something, if you don't have the rules right, if there isn't, you know, if the game isn't set up properly, it's not going to be a good game. So it's real important to get the rules right. I think it's worth noting that I think still in the United States, the rules are still better than anywhere else. But the— you know, it's very easy to put something in place which is an inhibitor to innovation without realizing it. So in terms of In terms of the regulatory environment, it's always important to bear in mind that regulations are immortal and they never die unless somebody actually goes and kills them, and then they get a lot of momentum. So a lot of times regulations can be put in place for all the right reasons, but then nobody goes back and and gets rid of them afterwards when they no longer make sense. You know, there used to be a rule in the early days when people were concerned about automobiles, because that was a pretty scary thing, to see a carriage just going along by itself. You know, you never know what those things might do. So there were like rules where you had to, in a lot of states, where you had to carry a lantern in front of the automobile. It had to be like 100 paces ahead of the automobile. There has to be someone with a lantern on a pole. I'm like, okay, but you really should get rid of that regulation. And they did, you know, because that would really be awkward. So just regulations, even if done correctly and being right at the time, it's always important to go back and scrub those periodically to make sure they're still sensible. Am I still serving the greater good?

You should wake up worried, terrified every morning, but don't be worried about our competitors, because they're never going to send us any money anyway. Let's be worried about our customers and stay heads down focused. And so, I, you know, these are big, most of these are big markets. Another way to answer your question about competitors and Walmart is to say, look, they can succeed fabulously and it won't stop us from succeeding. These retail markets are huge. So we can— it often doesn't make sense for us to think of it as a pitched battle. You know, sometimes people think about business as it's kind of like a sporting event. There's a winner and a loser.

It's not a zero-sum game.

It usually isn't. I'm I'm sure there are cases where— but most often, industries succeed. So I can tell you, I think e-commerce is succeeding. And the way we think about it, nobody else has to fail for us to do well. I think ebooks is like that. I think there are going to be many winners. I think ebooks is going to be a huge industry. Well, there are many competitors now. You've got Barnes Noble is one of them. Sony is another now. Apple is another. We have a list of 50 competitors that we could walk through. I mean, all over the world doing different things. Our focus is going to be, you know what, we'll try to pay attention to those competitors, but we're not going to obsess over them. We're going to obsess over readers, because those are the people who are buying that device. It's not just a business for us, it's a mission for us. Missionaries build better products. How come you haven't bought Amazon? Is there still time to buy? Would you still buy it?

I always admired Amazon. Jeff. I mean, I met him 20 years ago or so, and I thought he was something special, but I didn't realize you could go from books to what's happened there. No, I mean, he had a vision and executed in an incredible way something that it would not have, you know. But there's a lot of games I miss. I would have missed, you know, I would have missed Microsoft even if I'd gotten the Nobel earlier or something. Those just aren't my games. I don't worry about the things that I miss that are outside my circle of competence of evaluating. I do, I have missed things that were within my circle, and that's a terrible mistake. Those are my biggest mistakes. You haven't seen them. And, but I don't, it's not a mistake because I missed Netscape or something like that at all. I would say that maybe 5% of the companies or 10% of the companies that most most are within an area of my circle of competence. There's something I should be able to understand.

Would you say the number one— not to pivot that hard, but like, would you say the number one reason why people are failing then is because their lack of ability to work hard and to kind of dig in? What would it be?

No, I, I'd say they're misguided and they sell themselves— they lie to themselves when they start, right? Oh, I think this business is good. Everybody goes through that same process with the new business. You know, hey, what do you think about this idea?

Right?

Then you go on Google and you look at—

oh, I don't see it.

It's great. Of course, no one tells you that it's not there because 50 companies have failed doing the same thing and there's nothing left to show that they died. But, you know, then you get excited, you check with your friends, and then they try to raise money. Yeah, that's what screws them up, right? Raising money is not an accomplishment, it's an obligation.

Yeah.

You know, if at all possible, you want to start just organically. With sweat equity. Those are the best businesses because you get to, you get to retain 100% of it, right? You know, and there's no rush. And then the second mistake people make is they push the top line instead of the bottom line or gross margin dollars.

Yeah.

You know, it's like, oh, I'm a million in sales, like that's an accomplishment, or $10 million. Where like, if you've raised funding, you have your quote-unquote KPIs, right?

Right.

Or what is, what's the new one, QOKs or something? There's something ridiculous that, um, QKP, I don't know, they always come up with these acronyms.

What is it?

QKP, I don't know. Okay, just the one I started seeing. And so everybody's like, oh yeah, you know, and they think it's an accomplishment if you're doing— I went from $1 million to $5 million in sales. Okay, that's somewhat great, but what matters is what's your gross margin, right? Because if you're in that hamster wheel where you're growing but you need to keep on raising money to grow, right? You know, no, you see what's happening now when people can't raise money, you're done. You know, and while others have said, well, you know, I've, you know, raised $30 million or $50 or $100 million, unless you have a really good reason, you know, that you're Relativity Space and you need to raise money because you're building, you know, 80-foot-tall 3D printers.

Yeah, right.

You're not going to do that out of your basement. But for most entrepreneurs, it's something where there is an arbitrage on their time.

Yeah, right.

Here's— I can do this more efficiently than Jen or Mark can. So it's worth it for Jen or Mark to buy this product or service. From me so that they can use their time more efficiently.

Doing the rebrand when you did, and did it achieve what you hoped it would? Well, yeah, no, I think that that's— that is a good place to start. I'll just start off by saying that, you know, about a year ago this time, you gave us a lot of trouble by breaking the news of this rebrand. So sorry about that.

No.

Well, you know, it's— you were doing your job and I respect that. So I appreciate that. But I think that that was just about the biggest thing of the year that we were trying to, we tried so hard to keep it under wraps, but somehow you got that one. So touché. I know there's a bunch to reflect on here. So first is this is a long-term journey, right? I mean, it was never like, okay, we're trying to, the internal conversations we had actually always expected that the initial moment of the rebrand was going to be quite negative. And, um, then that over time we would just sort of build this out, right? Just because like there are all these questions around what the future vision is that we're building. And, um, and we just, and all this stuff is ahead, right? I mean, we're kind of, this is the, you know, the first version of the, the Work VR device line that we're shipping. And, you know, it's not going to be until, you know, later this decade when we're on v4, v5, that this stuff really starts to get fully mature. And so I just figured there's so much story here left to fill out, and this is like a long-term thing. So I'd say the initial response to the rebrand dramatically surpassed my expectations about kind of what could be achieved in terms of people hearing the vision that we wanted to put out there. And I think like almost overnight, You know, in the first few months you had all these other companies sort of jumping in and talking about how they wanted to do stuff in the metaverse too. And I think it really popularized that term and that vision in a way that just dramatically exceeded what I had actually expected. In the business world, really everywhere. And now there's chief metaverse officers at companies, right? I mean, it sounds like you didn't expect for it to catch on quite like that. No, I kind of assumed that we were going to have to just continue building out the roadmap and that, I mean, maybe sometime like 5 years from now, things would start to click and people would start to understand what we were putting together. Instead, I think a lot of people really got a lot of the vision for what it is. I mean, obviously it's still this high-level concept and there's a ton of stuff that still needs to get built, but I think, you know, it caught people's excitement. Just as sort of a kind of a long-term hope for what we want to build, more than, more than I'd actually thought was possible. And that, I think, actually poses different opportunities and challenges. On the one hand, a lot of folks are really excited about working on it. On the other hand, I do think it just sets up for a trough of disillusionment at some point because, you know, it is a vision that's, that's, that's far out. And we're obviously investing a lot in the products are working really well. I mean, Quest 2 is working working really well. And I think a lot of the research that we have in mixed reality, augmented reality, neural interfaces, like all these, I think these are leading across the industry. So I'm really excited about what we're doing, but it's not like this stuff is gonna be fully mature in, you know, in a year or even, you know, 2 or 3 years. It's gonna take a long time to build out the next computing platform. So we'll see.

Education. Is essentially a social construct. It's not that the universities have secret knowledge that only they have available. You know, I took, these numbers won't make any sense anymore, but the hardest freshman math class was called Math 55. I assume it's not called that anymore. But it was a group of, group of 80 people whose personal positioning was they were the best person at math that they had ever met. So there were 79 frauds, one person who really was the best at math. I ended up, the guy who came in first in the class is a lawyer in New York now. The guy who came in second is a professor of chaos theory at Princeton. And then I came in third. So I knew, okay, math, geez. That's interesting. Anyway, I didn't take Physics 55, but I read the Feynman book. And so if you're motivated, seriously, you don't have to take a course. The Feynman book, if you're hardcore, just read the Feynman book, do the problems. You want to learn to do software? Read The Art of Computer Programming. Good luck doing the problems. But, you know, anyone that's rated 30 or harder is like super hard to do. And so a MOOC in a sense doesn't change what counts. It's always been in the textbook, but the percentage of students who just buy textbooks and read them and know the subject is vanishingly small. You kind of have to have this thing where a bunch of kids all come at the same time. And if you don't study, you're gonna get a bad grade and your parents may not like that. You have to create all these social things in order for people to get into this mode of hyper-concentrating and actually understanding why should I concentrate. You know, if I'm a high school student, they put X's and Y's up on the board. How does that relate to my life? Now if you understood that being good at math lets you get a good job, travel the world, you might say, okay, it does relate to me, but that's a very a very indirect thing, and the kind of discipline to care about that, to concentrate, that's what's missing. And so MOOCs, to the degree that it's easier to take a MOOC than it is to read a textbook, yeah, that's nice. It's a little bit interactive, there's a video. That's partly why I like The Learning Company, like all their economics. There's a guy named Timothy Taylor who has 5 courses on economics I super recommend. And you learn to like him and his way of explaining things. So a MOOC is a slightly more digestible form of learning, but it doesn't take, particularly for somebody at a young age, it in no way changes this question of why should people engage in that learning and how do you create the environment and the sense of achievement and the sense of capability that sitting in there and looking at Xs and Ys and manipulating them seems like a smart thing to do.

I think like if you're trying to work on something and like my experience is like it's really hard to like if you're trying to figure out what others love but you don't love it, it's really hard to make that great. So when you work on something, if you fall in love with it, that's a good sign. And then don't worry about if others do. If you do, others will.

Day 2 is stasis, followed by irrelevance, followed by excruciating painful decline, followed by death. And that is why it is always day one.

It would be a tough consideration for me if I were going to school whether I wanted to not only invest— I'm talking about college— but I wanted to invest the 4 years. I didn't want to go to college that much when I got out of high school, but not only the 4 years, but if I had to and incur hundreds of thousands of dollars in student debt, I don't know which decision I would make. No, it's— higher education is really expensive. And we've helped out many thousands of students, and the Gates Foundation has done the same thing, and other foundations that I support. But it's just expensive. It's very expensive.

Is it still worth it?

It depends on the individual. It depends on the individual more than the school. I mean, there's a lot to learn in those 4 years. I mean, there's a lot you can learn in those 4 years, and whether you do or not depends more on the individual. I don't think it makes sense for everybody to go to college, you know, and I'm not so sure it made sense for me to go to college.

Really?

Come on.

No, I'm not kidding. I don't know. I mean, I learned I learned a lot by reading. And, you know, I spent 3 or 4 years— well, counting graduate school, 4 years that I could have been doing other things. There were a lot of intelligent things to do then. Who knows? No, I don't think it was essential. I mean, I had some wonderful people I met through it. The main thing when I went to Columbia, though, with taking Ben Graham's course, I already knew what he was going to say. I mean, I'd read it. I understood. I mean, he was a very good writer. But it was inspirational. It was inspirational more than it was educational.

You got to sell. Because in my experiences, the CEOs, the owners, the founders that didn't sell, they all failed. With no exceptions, 100% of them failed. And when you're just starting and it's just you, who else is going to sell?

Nobody.

And that's the other, you know, and that leads to another mistake entrepreneurs make. They, they try to hit hiring home runs, right? So when the minute they hit a roadblock, I'll just hire a, you know, I'll hire a new marketing person, right? Or I'll hire a new head of sales, um, hope thinking that, oh, this person's amazing. No one's ever hired somebody and said they suck really bad.

Of course, right?

Oh, I found the most amazing person. Why'd they leave the last 5 jobs. Oh, they were amazing, but—

right?

Um, that's such a good point. See, that's what I love, how your brain works. It's like, exactly, it's so true, it's so practical and common sense.

It's pragmatic.

Yeah, right, common sense. But common sense isn't so common. No, I know.

You know, you just ask why, why'd they leave? You know, but, but entrepreneurs tend to think, okay, I'm hiring this amazing marketing person and he or she is, is going to know what to do.

Yeah.

And then they tell that to their investors because that's typically why they're hiring a marketing person, and they say, oh, this person's amazing, you know, our next quarter is going to be great. Then it's not. Then they go to the next marketing person, you know, then they're in this hamster wheel again and they're screwed.

And it's also relying on other people.

Well, yes, and that's the whole thing, right? You, you've got to be able to solve the problems yourself.

Self-reliant.

Now, you know, at some point your business gets bigger and you have to learn how to do a lot of other things. You know, when you go to 5 people, it's one thing. You go to 10 or 15, it's another challenge. You know, as learn how to manage and deal with people. But at the same time, if you're not great at your core competency, how are you going to train those people, right? How are you going to know what the, the goals are for the organization and how to communicate to them how to do what you need them to do?

You did personal challenges annually for about 10 years.

Which, which challenge ended up being much easier than expected, and which one ended up being much harder than expected?

Either or. Just be curious to know. I still do stuff like this. I don't make as big of a deal of it anymore, but I think just kind of throwing yourself into different situations to learn new things is—

I don't know.

I think that that's just a big part of life.

So yeah.

Well, which ones were hard? One, I tried to meet a new person every day for the year. That was hard for me. I'm pretty introverted. I built some amazing relationships out of it. I started teaching this class at the local Boys and Girls Club with a friend and mentored the kids for— just talked to them a couple of weeks ago. None of their families had gone to college before and now they're all graduating college. It's pretty cool.

That's amazing.

But I'm super introverted, so I think that that's probably been another silver lining of the whole distributed work thing for me is having space to kind of think and kind of control my time and not get interrupted by other people so much. But it's Interesting balance being introverted, but also being pretty sensitive and caring a lot about other people. I think that people kind of think that introverts don't like other people or something. That's not true. I just get overwhelmed easily. And then some of the ones— the interesting thing is they all went in weird directions. So one year I did this year of running and And then it's like I just did all kinds of different running. I did sprints, I did long-distance running, and then my knees started hurting. So then I broadened out and did triathlons and training for this Ironman, but then I broke my arm biking, so that ended up not quite happening. So I mean, they all kind of go in different directions. I learned Mandarin one year. Learned Mandarin, you can't learn Mandarin in a year.

It's a challenging one.

I mean, maybe someone can. I cannot. We talked about my language deficiency earlier on. But I mean, that was partially— I like kind of throwing myself into things that are hard. And like I said before, I mean, I've studied a lot of languages in my life, a little Spanish, a little French, a little Hebrew, a lot of Latin, a bunch of Greek, but it's actually hard for me. So I kind of like doing things that are hard for me.

First time I met Warren, we were talking about getting together and doing something again, and he pulled out his calendar And the pages were so blank. And I said, wow, you know, you've managed to avoid getting tied into a lot of kind of meaningless activity. And Warren said, yeah, you have to be good at saying no and picking the things that really make a difference. And that's one of many things I've learned from Warren, but that's one of my favorites. And so I can blame it on him whenever I'm turning things down.

An important thing in innovation or trying to create new things is to try really hard to do that. Which may sound incredibly obvious, but that's what I find is most often what people don't do. They actually didn't try super hard to come up with something new. And it is helpful to have cross-pollination of industries. I mean, it's been quite difficult to run SpaceX and Tesla, but there has been good ideas this, you know, since I've got both in my mind space, this good idea is going back and forth. For example, on the car, with respect to the car, the Model S is the only all-aluminum body and chassis car made in North America. Very few cars are all aluminum. In the aerospace industry, that's the default. So it seemed like obviously the right move in order to minimize the the non-battery pack mass of the car. So in order to offset, you know, fairly heavy battery pack, we had to make the rest of the car light but, but still achieve a 5-star safety rating. I don't think it would have been possible to do that if we use steel, which is the traditional method. And what's helped SpaceX has been that the car industry is really good We're very good at making complicated objects at a low cost. I mean, it's actually quite incredible that, like, one can buy a decent car for $20,000. I mean, all the stuff that's in that car is— I mean, it's nutty how much stuff is in a car. So, at SpaceX, I hired a bunch of people from the auto industry run manufacturing, which has worked out reasonably well.

If you take the US Air Force, one way to make it nimbler would be to make it much smaller, but that's a really bad solution because the scale brings so many advantages. And I see the same thing at Amazon. Amazon, because of our scale, we can do things that we just couldn't ever have done as a garage startup. You know, there's some things that only big organizations organizations can do. I love garage startups. I was a garage startup, but you can't build a Boeing 787 in your garage. You need a big organization like Boeing to do that. So if we want scale, we love scale, and you would never trade the scale of the US Air Force for anything, but the The question becomes, how do I keep the advantages of scale but still have the advantages of a nimble startup? How do I get the nimbleness too? I want to be able to absorb a punch because of my scale, and I want to be able to dodge a punch because of my nimbleness. Well, the, the way you stay nimble is by making decisions fast. In a 20-person startup company, company, the decision-making speed is so quick, and that's why they're so nimble. And then in a big company or a big organization like the Air Force, that decision-making has a tendency to be— speed the decision-making. You get high-quality decisions. I think sometimes people think the decisions are low quality. I don't think so. I think you usually get high-quality decisions, you just get them slowly, which is a problem. And so the way to fix that in a large organization, this is what we do at Amazon, is we acknowledge that there are two types of decisions. There are decisions that are, we call them two-way doors. They are decisions where if you, you make a decision, you walk through the door, and it turns out you made the wrong decision, you turn around and come back, and the consequence of that misstep is small. That's a Type 2 decision. That's a two-way door decision. There's a Type 1 decision where it's really hard to reverse. When you walk through that door, you have walked through that door, and it's going to be expensive or impossible and time-consuming to reverse that decision. So you have to get that right. That's a high-consequence decision. Those decisions should be made deliberately, carefully, slowly. At Amazon, I find myself on those— I'm the chief slowdown officer. I slow those decisions down. Like, no, I want to see this one more way. And the teams working on it roll their eyes. I've already seen it 18 ways, but I thought of a 19th way, and I want want to see it. That's correct for a high-consequence irreversible decision. You owe it to your teammates to make those decisions.

It's absolutely true in my view that, that you can and should understand human behavior better as you do get older. You just have more experience with it, and I don't I don't think you can read— Charlie and I read every book we could on every subject we were interested in, you know, when we were very young, and we learned an enormous amount just from studying the lives of other people. But I don't think you can really— I don't think you can get to be an expert on human behavior at all by reading books, no matter what your IQ is, no matter who the teacher is. And I think that you really do learn a lot about human behavior. Sometimes you have to learn it by having multiple experiences. I think you— I actually think I, despite all the other shortcomings, and I can't do mental arithmetic as fast as I used to, and I can't read as fast as I used to, But I do think that I know a lot more about human behavior than I did when I was 25 or 30.

You can fake it till you make it in a lot of areas, particularly if you're working for somebody else. But at the end of the day, if you're going to be great at something, you've got to make the effort to be great at something. Whether it's sports, whether it's physics, math, science, business, whatever it may be, You know, it's not just a natural skill. You've got, you've got to, to learn, and particularly if you're in the technology industry because it changes every day. You know, when I got started, and, and, you know, after I got— I, I got it— I was a bartender when I first came to Dallas, got into the PC industry, got fired, started my own company. But there, I learned early on that there was always something new, and most people didn't put in the time to learn it. It's like now with artificial intelligence. Lots of people talk about artificial intelligence. Lots of people talk about machine learning and neural networks. Not a lot of people are putting in the time to take classes or do the tutorials or to learn how to apply it to business. And that's what it takes. And, you know, that's just something I've always enjoyed. So I've been fortunate in running a company for almost 20 years now.

One of the things that's been pretty clear is when you have a team that's cohesive, you can get almost anything done. And, you know, you can, you can run through super hard challenges, um, you can make hard decisions and push really hard to, to do the best work, even, you know, and kind of optimize something super well. But when, when there's that tension, I mean, that's, that's when, when things get really tough. And, you know, when I talk to other friends who run other companies and things like that. I think one of the things that I actually spend a disproportionate amount of time on in running this company is just fostering a pretty tight core group of people who are running the company with me. And that to me is, is kind of the thing that both makes it fun, right? Having, having, you know, friends and people you've worked with for a while and new people and new perspectives, but like a pretty tight group who can, who you can go work on some of these crazy things with. Um, But to me, that's also the most stressful thing is when there's tension, you know, that weighs on me. I think the, you know, just it's maybe not surprising. I mean, we're like a very people-focused company and it's the people is the part of it that, you know, weighs on me the most to make sure that we get right. But yeah, that I'd say across everything that we do is probably the big thing.

Well, in my 20s and 30s, I was fanatical about software. You know, I didn't believe in vacations, didn't believe in weekends. You know, I was focused on software day and night. You know, I knew everybody's license plate. I knew when they came into the parking lot, when they left. I knew every line of code. And it, you know, I enjoyed being a fanatic. And, you know, I was really focused on Microsoft doing great software and, you know, learning from our mistakes and hiring the best, the best people.

I don't really like risk for risk's sake or anything. It's— and I do think that a lot of things are, are very risky with a low chance of success. But if you want to try to come with an innovative breakthrough, that's kind of— that's going to be how it is. Anything which is significantly innovative is going to come with a significant risk of failure. And— but, you know, you've got to take big chances in order for the potential for a big positive outcome. And, you know, just— and if— I mean, If the outcome is exciting enough, then taking a big risk is worthwhile. It's really how I approach it. But then once executing down a path, I actually do my absolute best to reduce risk, you know, because— or to improve— another way of saying it, to improve the probability of success, because when you try to do something that is very risky, that you have to spend a lot of effort trying to reduce that risk as you embark down that path. I mean, when I started SpaceX, I thought the odds of success were very low. I thought we'd most likely fail. But I thought, well, we should give it a try nonetheless.

So much has changed. If you were to go back in time to the '60s and bring, you know, the great engineers from that era to today, there are a lot of things that they would be astonished by. First and foremost amongst those is computation. I mean, what we can do with computers and software, they could have only dreamed about. Same thing with sensors. Those things have just made gigantic progress. There are things that have made no progress, like high-temperature alloys. Are basically the same as they were in the '60s. It's very interesting. But the way that we mill those things and weld those things and so on, that's changed very dramatically. We can make things with much less hand effort. So a lot of the manufacturing approaches have changed very dramatically. Some of the best ideas in rocketry were invented back then, and they haven't changed. Regenerative cooling and staging and, you know, common bulkhead tanks and so on and so on. So many brilliant people worked on the space program in the '60s that they came up with an amazing set of genius ideas that we're still using and harvesting today. But the details have changed a lot. One of the biggest things is not, you know, what's in the vehicle at the end, but is the design process now relies so much much on computer simulation. You can do a lot of things on the computer today, and certainly all of the aerodynamics can be very finely tuned. You still do some wind tunnel tests to kind of anchor your computer models, but by and large you can simulate very complicated vehicles in a very high-quality way. Even now, one of the hardest simulation, computer simulation problems is combustion. Combustion is a very difficult problem to simulate. So inside the main rocket engine, inside the thrust chamber, you're combusting an oxidizer and a fuel, and that's a very violent reaction. It's very hard to simulate on a computer. We're even making progress on that. And so that really cuts down on the amount of iterations, the kind of test, fail, fix loops that you have to do, trial and error. They did so much trial and error back in the day to get all of this to work, and with slide rules. I mean, it's extraordinary what they accomplished. And, you know, the more you know about the Apollo program, the more amazed you become. It just keeps going. We can do— we're doing now, we're building New Glenn, which is a Saturn V class. It's about half the size of Saturn Axiom 5 class orbital vehicle, which will fly for the first time in 2021. We're doing it with a couple of thousand people, and that would have taken hundreds of thousands of people back in the 1960s. And that's the dramatic progress with the computer-aided design tools and so on that you see today. It's huge.

By far the best investment you can make is in yourself. I mean, for example, communication skills. I tell the students that come, They're going to graduate schools in business and they're learning all these complicated formulas and all that. If they just learn to communicate better, both in writing and in person, they increase their value at least 50%. I mean, if you can't communicate, somebody says, you know, it's like winking at a girl in the dark, nothing happens, you know, basically. And you have to be able to get forth your ideas. And that's relatively easy. I did it myself with the Dale Carnegie course. Some people wish I'd taken a shorter course now in terms of my talking later on. But it's just hugely important. And if you invest in yourself, nobody can take it away from you.

When you're just getting started, you may not be a leader to anybody more than the 2 people who work for you, but it's still a responsibility. I think as you gain more success, however you define that, being a leader becomes more and more important. How you define success becomes more and more important. What you're able to do and the impact you're able to have becomes more and more important. Where I am in my life at this point, it means trying to accomplish things that I've dreamed about but was never in a position to try to accomplish. Or succeed at, and that's what I'm trying to do now.

I remember distinctly I had this one friend who I went and got pizza with almost every night. We did all our computer science problem sets together at Harvard, and at the time I remember talking to him about how I was working on this Facebook thing and I thought it would be cool for Harvard, and I really was excited about it because I wanted to use it, but at the same time how I thought that Over time, someone would definitely go build this version of this for the world, but it wasn't going to be us. It was going to be Microsoft or someone who built software for hundreds of millions of people. It's like, who are we? We're college students, right? We're not qualified in any way to build this. And I think a lot of my takeaway from that was that we just kind of cared more than those other companies about making it exist.

I think success is always a bit dangerous, you know, and you can think that whatever your success was was because, you know, you are magically gifted in understanding things, whereas of course any success, particularly a gigantic success, is a huge number of factors including hard work and understanding, but timing, you know, other people who came to work with you, other people who might have done the same thing who somehow messed up in doing it. And so often you'll, you'll have too much confidence about what you understand. You know, in science, as Feynman said, the easiest person to fool is yourself. And so you have to force yourself to go through, you know, again and again and think through, is this the right thing to be doing? You know, will this work? Am I doing it because it would be exciting if it succeeded? Am I really looking at these factors? In fact, in polio, several times we had to say to ourselves, was it time to give up, or really did we think there was a prospect of being able to move forward?

I think in general, if you want to recruit people that are really talented and driven, you have to say, you have to state what's the mission, what's the problem we're trying to solve, and just be clearly willing to pour a lot of blood, sweat, and tears into it. And have a convincing argument for why it matters. You know, there's, you know, say like there's 3 major things for, you know, in terms of motivation. It's like, first of all, somebody's got to look forward to coming to work in the morning. Like, if they're, like, are they enjoying the work itself intrinsically? That's very important. And the right work environment can really make a big difference there. I think ideally is that they also feel like that their rewards will receive fair financial compensation, like that the financial rewards are good and fair. And then third, for the really, for the best people in the world, they'll want to know, are they, is what they're doing going to matter? So if they spend 10 years doing this, will it make a difference to the world? The world, or, you know, will people notice? Will it matter?

Everything I've ever done has started small. Amazon started with a couple of people, and Blue Origin started with 5 people, and the budget at Blue Origin was very, very small. Now the budget at Blue Origin approaches $1 billion a year, and next year it'll be more more than a billion dollars. So, and Amazon, who literally was 10 people, today it's half a million people, but you, it's hard to remember for you guys, but for me it's like yesterday. I was driving the packages to the post office myself, and hoping one day we could afford a forklift. And so, for me, I've seen small things get big, and it's part of this day one mentality. I like treating things as if they're small. Amazon, even though it is a large company, I wanted to have the heart and spirit of a small one. And so anyway, the Day One Foundation is going to be like that. We'll wander a little bit too. So we have some very specific ideas of what we want to do, but I believe in the power of wandering. All of my best decisions in business and in life have been made with heart, intuition, guts, you know, not, not analysis. When you can make a decision with analysis, you should do so, but it turns out in life that your most important decisions are always made with instinct, intuition, taste, heart. And that's what we'll do with this Day One Foundation too. It's part of that that day one mentality. As we go about building out this network of nonprofit schools, we will learn new things and we'll figure out how to make it better.

The secret is to, if you can in life, work at what you love with people you love. And it comes back at you. Love is something you can't get rid of. If you give it to other people, you get it back. If you try to hold on to it, it disappears. I mean, it's unlike anything else. In the world. And we literally, we put on this whole show, we've got probably 300 to 400 people from our subsidiaries coming in. We have everybody in the world wanting hotel rooms. We've got, I mean, all the things that go with having 40,000+ people come and having a 200,000-square-foot exhibition hall and everything else. And that basically is handled by the people people in our office. We've got 25 people in the office. We had 25 last year, we've got 25 this year, exactly the same people, not one change of a person. This is a company with 350,000 or so people around the world working and added $16 billion to sales last year, but we did not add a person. And our CFO is down there working. I mean, he is working with projectionists or whatever they have up there and making sure this and that is right. Everybody. Our tax— the woman that is in charge of our taxes. You name it. Everybody pitches in and they all have a good time.

This is a story that I haven't told publicly and very few people know, but early on in our history, when— before things were really going well and we had hit a tough patch and a lot of people wanted to buy Facebook and thought we should sell the company, I went and I saw one of my mentors, Steve Jobs, and he told me that in order to reconnect with what I believed is the mission of the company, I should visit this temple that he had gone to in India early on in his evolution of thinking about what he wanted Apple and his vision of the future to be. And so I went and I traveled for, for almost a month. And seeing the people, seeing how people connected, and having the opportunity to feel how much better the world could be if, if everyone had a stronger ability to connect reinforced for me the importance of what we were doing. And that is something that I've always remembered over the last 10 years as we built Facebook.

There's tons of things that I'm not good at, and so the question is always, can I get somebody involved in a, you know, certain day-to-day management things, negotiating things, political things, scientific experts who really do have the time to focus in on one thing like I did in my 20s and just really, really see all the possibilities.

Well, I just think that, you know, you want to take a moment to appreciate things in life and the sensations Food's incredible. And like there's just so many good things that you can experience. Some of them cost nothing really. You know, have a walk in nature or just a nice meal and it's like, "Wow, that's pretty great." You know? And we should take a moment to appreciate these little things, the big things, the things that move your heart. I think that's probably the meaning of life, or as close a definition as I can think.

And then the other thing I would advise any entrepreneur, or large business, or large organization, you know, like a government organization, is you need to identify your big ideas. And there should only be 2 or 3 of them. And then if a senior leader— the main job job of a senior leader is to identify 2 or 3 important ideas and then to enforce great execution against those big ideas. And the good news is that the big ideas are usually incredibly easy to identify. You shouldn't need to think about them very much. You already know what they are. Let me give you an example. For Amazon, the consumer business, the 3 big ideas are low price, low prices, fast delivery, and vast selection. You don't need, you know, it's not the kind, and the way you know that they're the big ideas is because they're so obvious. The big ideas should be obvious. And by the way, it's very hard to maintain a firm grasp of the obvious at all times. So little things can distract you from the obvious, but you have to back up and say, I say these are the 3 big ideas. How do we always deliver things a little faster? How do we always reduce our cost structure so that we can have prices that are a little lower? And the good thing about these big ideas is they will be stable in time. So I know for a fact that 10 years from now, customers are still gonna like low prices. No matter what happens with technology and everything else, no matter what happens, people are gonna like faster delivery. It is impossible for me to imagine a scenario where 10 years from now a customer comes to me and says, Jeff, I love Amazon, I just wish you delivered a little more slowly. This is so inconceivable that you have— you can have great conviction as a leader to continue to put energy into driving speed of delivery. And whatever you're, you know, in AWS I know that customers, they like low prices, they like availability, they don't want the services to be down, they like data security. It's not very hard to figure out what the big ideas are, and then you can keep putting energy into those things and you spin up those flywheels and they'll still be paying you dividends 10 years from now.

You don't necessarily get it right, exactly right the first time. I mean, the car leasing business, you know, basically you were competing on the the cost of money to finance cars. And it's very hard to delight a customer when you just give them the car and tell them to send you a monthly check for 5 years and you'll be back at that time. So his talents were being wasted basically in that business. But at the age of 40, with all of that experience behind him, he found the golden key. And he, he took a very ordinary business and turned it into an absolutely extraordinary operation. And just like Mrs. B, or Rose Bumpkin, did with furniture. And the— he didn't worry about whether the Federal Reserve was going to tighten or ease. He didn't worry about whether the stock market was up or down yesterday. He didn't worry about the things he couldn't change, but he did worry, he did focus on the one thing he could change, and that was the customer's experience. And I have seen the one I didn't, the one that got away enterprise, I went down to Florida and tried to talk him into selling to Berkshire, and he was smart enough not to do it. Probably the value of the company has quadrupled since I made that visit. But he was smart enough to see that he would find that business. Henry Ford, as you may know, failed twice before he started the Ford Motor Company in 1903. I mean, the test The test isn't whether you get the greatest business idea in the world the first time out. The test is whether you keep learning as you go along what your strengths are and what you can do for your customers, what you can bring especially to the party. And to do that, you need the education that I know you've received through 10,000 small businesses. But you need a genuine, genuine desire day in, day out to delight the customer. I've never, I've never seen a business— and I've seen a lot of businesses— but I've never seen one that delights the customer, that, that doesn't doesn't succeed, I mean, what you want is that customer the next day, when they think, do I want to rent a car, or do I want to buy some furniture, what goes through their mind? It's the place where they've had a great experience. I don't know what I paid for this tie, actually probably somebody gave it to me, but for the purposes of this speech I will say, I have no idea, or the shirt, I'm wearing this, but I do know I will remember how I was treated when I bought it. I mean, you long forget about the price, but you never forget whether you had a good experience or a poor experience with the purchase experience.

I'm not a big mentor guy. I've always been a believer that if you really want to learn something and be great at something, you have to put in the time. A lot of people look for mentors as shortcuts when in reality, maybe they help you a little bit, maybe they help you avoid some mistakes, but when you're just getting started out in particular, it's okay to make those mistakes. And more importantly, you have to make the commitment to put in the time to learn what you need to learn to be great at something or good at what you want to be good at.

Recently, you shared in a press conference that one of Facebook's focuses for the next decade is that it is more important to be understood than be liked.

Will you just share what you meant by that?

Yeah, I mean, look, it's— let's be real here, I'm not, I'm not like— communicating is not my best thing, right? You know, I came out here, I've been planning for this, I'm excited about and then I messed up the name of our data center within 30 seconds. So, I mean, look, when, when I got started with Facebook, I was 19. And, um, and I, there were so many parts about building a company that I didn't know, right? I didn't, I didn't know anything about hiring or managing or building a company. And I certainly didn't really know that much about, you know, how to communicate about what we were doing with the world. I mean, I'm an engineer by training, right? I love coding. I like building products. That's, that's kind of the background. And, you know, my experience, you know, kind of growing up and running the company is, you know, went out, talked about what we did, say some stupid things, get called out for it and get like kind of go into a shell, right? And end up being really cautious about how we communicate. So You know, it kind of, it worked out okay for a while for the company because we built products that a lot of people really like. And you know, we weren't winning because we were communicating well, we were winning because the products were working well, I think in spite of the fact that we were communicating quite poorly about what we were doing. But broadly speaking, for a long time, the basic approach was okay, let's try to not like do anything that's going to be too offensive. Right? And we'll kind of explain what we're doing in broad strokes and talk about the mission of what we're doing, which is something that I really believe in, helping to build community and bring people closer together. But I think we just shied away for a long time talking about some of the things that— some of the principles that we believe in that, that are increasingly controversial in the world. And I just think that we, for one, don't have the luxury anymore. For two, I think that that kind of led for a while to a sentiment towards the company that was positive but fairly shallow. Because if people— if you're not kind of out there standing for things that people care about, then, you know, it's not possible for people to feel that strongly about what you're doing. But so now, you know, I've just— I've tried to change our approach more recently. You know, I went out and I joined at Georgetown last year, I gave this speech around our principles around free expression. And, you know, that's just one of the areas that I really feel like is under attack right now.

Certainly there are times when things don't go well, and then that's quite dispiriting for sure. And so then it's difficult to proceed with the same level of enthusiasm. But But I do think the things that we're doing are pretty important to the future. And if we don't succeed, then it's not clear what other things would succeed. And if we don't succeed, then we'll be certainly pointed to as a reason why people shouldn't even try for these things. So I think it's important that we do whatever is necessary to keep going.

You don't choose your passions, your passions choose you. And I fell in love with space and rockets when I was a 5-year-old boy and watched Neil Armstrong step onto the surface of the moon. And I have been passionate about it ever since. And, you know, there's a very real sense in which Amazon, which is an amazing, fun, interesting, interesting company to have started and lead is, you know, a lottery winning for me. And so I'm taking those lottery winnings and investing them in Blue Origin. And I've been working on that for 15 years. Our motto is gradatim ferociter, which means step by step ferociously. I like to, I like to do these things very incrementally. We have— there's a military phrase that I especially love, and it says, slow is smooth and smooth is fast. And I have seen that in every endeavor I've ever been in. That's the kind of thing that really allows you to make progress if you do everything in the right sequence, never skip any steps. And so we have been working in that vein for a long time, and, uh, stuff is coming out the pipeline, and I can tell you it's incredibly gratifying. We have, uh, now, uh, more than a 1,000-person team, uh, at Blue Origin, and that team is incredibly talented, and they're doing a great job. My vision for Blue Origin, the long-term vision, is millions of people living and working in space. We need a spacefaring civilization for a whole bunch of reasons, and And that's the vision. You've been famous for your investment strategy, basically that follows the opposite side of principles, invest when the chips are down and ride it up. That's served you well. So what's your favorite time that you were able to accomplish that, when you caught somebody down and moved up?

Well, I always think my favorite time's gonna be tomorrow. But it's always been fun. There's a company here in Washington called GEICO, you know, and I first got exposed to that in 1950. I was 20 years— I was 19 years old. It was '51, I'm sorry. I was 20 years old, and I came down here, and I came down on a Saturday because I'd learned that my professor who I worshiped at Columbia named Ben Graham was the chairman. I got down here and the door was locked when I went to the building because 'cause it was Saturday, and I pounded on the door and some janitor let me in, and a marvelous fellow named Lorimer Davidson spent 4 hours with me teaching me all about insurance, and he helped me so much in life. You're gonna get helped by some wonderful people in life. It's a great thing to remember later on when you get to be my age that all the help you've received from different people, because nobody does it alone. Obama got in trouble when he, said that in the campaign, that nobody does it by themselves. Nobody does do it by themselves. We all sit in the shade of trees that were planted by others, so it's obligatory, I think, to plant a few trees ourselves if we've had good luck. It's been a great ride, but it's not over.

Do you think, like, let's just say if we put 10 guys here, you interview them, okay?

You could, within a 5, 10-minute interview, say this dude's not gonna make it as an entrepreneur. Could you pretty much know that? You know, I'm not very good at interviewing. My interview skills more than—

really?

Yeah, I'm horrible at Shark Tank interviewing. Well, yeah, it is, but I get to do due diligence after the fact, right? So I get to play my henchmen, but I get to check. Yeah, I mean, I can, I can typically tell, right? I can tell, um, but by, um, their passion. I can tell by their focus. I can tell by their preparation. You know, there's a whole realm of things in any business here. You know, here's, here's the business you're in. And here's 1,000 things that influence whether or not you're going to be successful. And really, to me, by, you know, through my experience in businesses, I can put myself in his position and say, okay, here are 900 of the 1,000 things he has to be aware of, and then go through and ask. And by how many of those, or her issues, they've been able to address already, that kind of gives me a sense of how hard they're willing to work, you know. And I can tell by the questions they ask me, so all I have to do I do is say, okay, what do you want to know? And, you know, when they start saying, what should I do? They ask you. Yeah, you know, and that's fine, right? And I want them to ask questions. But, you know, people like to say, you know, the only stupid questions are the ones you don't ask. And that's not right, right? Because the questions you ask tell everybody— tell me, tell whoever— more about you than anything else you do. Because in particular, it tells me about your preparation. If you ask me questions about just basic things things that you should have known and you should have down to a science, that's going to disqualify you almost more than anything.

You know, it wasn't so long ago that, you know, I was a student and, you know, sitting in a seat in an auditorium like you guys are here today, listening to— I remember very specifically this time when Bill Gates came to talk at Harvard and I'm just like, wow. How do you do that?

And—

but, you know, the trick is, is that the media likes to sensationalize this as if you have some eureka moment or you are some singular person who can build something on your own, and that's just not how the world works. You know, You know, when I was in school, I built a lot of stuff that I just liked building. There was not a single moment when I had some revelation that Facebook was gonna be awesome. That's not maybe how the media or movies or whatever would like to portray things.

It's not—

it's much less exciting. But the reality is I think most services in the world to reach the scale that Facebook has, you start off building something that you care about. And, you know, you don't necessarily think it's gonna be that big. I didn't. You know, I built Facebook, the first version of Facebook, for my college community because I wanted to be able to connect with the people at my school. And I remember very clearly talking to my friends at the time and saying, You know, it's— how cool is it that we have built this community for our school? You know, one day it's going to be awesome when somebody else builds this for the world, because something like this needs to exist for the world. But it didn't even occur to me that, you know, my friends and I might be able to play a role in doing that, right? Because we were college students, right? I mean, we didn't have any, you know, engineers to work with, or servers, or resources, or anything like that. And, you know, there are these huge companies that deliver products for hundreds of millions of people. I always assumed that it was going to be like Microsoft or Google or someone would build this for the world. And what basically just happened is at each step along the way, we just kind of kept doing the next thing and growing from there. And, you know, there were teams inside these other companies that thought social media was important and were working on it, but there were all these different memes and narratives in the world, you know, people would say, "Oh, well, you know, this is just a fad. People are gonna use it, but then they're gonna stop." So, you know, so a lot of the teams we were working on didn't take it that seriously, or, you know, the higher-ups in those companies didn't care, so they didn't get resources, and we just kept going and going. And then people would say, "All right, well, all right, fine, so maybe people are using it, but it's never gonna make any money, right? I mean, social media doesn't make any money." And we just kind of kept going and going, And then pretty soon we had a service that was bigger than any of these other ones, and that kind of is how we are here where we are.

First of all, my goal is not disruption for the sake of disruption. I really think there's— okay, there's some important things we have to solve in order for the future to be good. I would say like my, you know, my sort of algorithm or optimization is like, okay, what set of things do we need to do to ensure that the— increase the probability that the future is going to be good. And so if we have to solve sustainable energy, this is tautological. If we do not solve sustainable energy, then we have unsustainable energy, then it's just a matter of time before things go— before civilization collapses. We must— but even if there was not an environmental issue, since the availability of oil is limited, this is not something we can sustain long term. Yeah. My original interest in electric vehicles was actually not environmental. It was out of concern, just, you know, studying physics. And I'm like, wait a second, we need to transition to solar electric. Yeah. Or we're going to have a problem and we run out of oil, civilization collapses. That's a problem. Now, of course, the environmental concerns have added to the urgency because the The more CO2 we put in the oceans and atmosphere, the more we increase the probability that something will go wrong. Like I said, things are much more probability as opposed to certainty, but I think it's an unwise experiment to dramatically increase the CO2 in the atmosphere and oceans, given that we know we need to transition anyway because we'll run out of oil. So why run that experiment? It's not— it doesn't make any sense. We know we have to transition to a sustainable energy economy. Then let's just get on with it.

Yeah.

You know, let's just get on with it and not run the crazy experiment and see if that— what happens if the atmosphere has 2,000 ppm CO2. This is crazy.

I'm a member of the Business Council and I meet with lots of other kind of Fortune 500 CEOs from time to time. And I I often hear them talking about how stressed they are, and there seems to be, I think, this idea that if the more senior you are, the more stress you should have. I think that's the opposite, because the more senior you are, the more control you have over your environment. To a large degree, you get to pick who your senior staff is. To a large degree, you get to pick your schedule. To a large degree— not 100%, nothing's 100% in this world— to a large degree, you get to decide how you interact. You like to do lots of one-on-ones, or do you like to have small group meetings? You have, as a senior executive, you have a lot of control. And what I find is sometimes people forget that they have that control. Role as a senior executive or as a senior officer. They forget that they can construct to a certain degree their work environment every day.

You famously passed on Intel when it was getting started, I thought. And I knew Bob, Bob Noyce, pretty well. And we bought it. We bought the converts when they were private, just because of Bob. We bought them at Grinnell College and the endowment of Grinnell College went from $8 million to $1 billion in about 12 or 14 years. So Intel was a help on that. But I, you know, in the end, I don't worry about things I don't understand. I mean, I think it was Tom Watson Sr. said, I'm no genius, but I'm smart in spots and I stay around those spots, you know. And that's— there's a lot to that. And knowing your circle of competence is where that perimeter is, is enormously important. And you know, the fact that there are all kinds of things I can't do, and there's plenty of companies I can't analyze, but I don't have to worry about that.

If you're gonna have and run a business, if you don't understand accounting, you're already behind the 8-ball. Can't you hire a guy that knows that? But then they still have to communicate to you, right? I mean, there's people that don't understand the concept of, you know, the difference between profits and cash. You know, oh, your accountant might tell you you're profitable but your cash is going down, you know, not understanding the breakdown. And when you don't—

you think you need college to learn that?

Yeah, I think you do, right? Because it may not— for some people, look, if you're so self-motivated that you can take an online course in accounting and teach yourself everything, you're way ahead of the game anyways. But most people aren't. And I'm not saying you have to go to Indiana. I'm not saying go to an expensive school. I don't care if you go to a community college and take accounting and spend $99 for the class. Just, you know, spending the money forces you to be more obligated to do it, but accounting, finance, to a lesser extent marketing, sales if the school offers that, these are all the, that's the language of business. And so while it's possible to teach yourself these things, and while it's possible to hire them, when you're starting your own company, you don't want to have to spend money hiring an accountant, right? You're already probably going to have to hire a lawyer to set up your— well, let me take that back. If you've gone through all these classes, you probably don't have to hire a lawyer to incorporate, right? You can probably figure it out yourself. And so, your cost of opening up a business drops, but even more important than all that, that's the blocking and tackling, that's the language of business. The thing I learned at Indiana that was more important than anything else, I learned how to learn. And learning became far more important to me because the one certainty in business is that it's always going going to be changing. If you're not always learning, to this minute, if I'm not continuously learning, if I'm not just absorbing as much as I can absorb, someone else is going to kick my ass. There's probably stuff you can say about some insight that you had early on, and you thought to yourself, ahaha, nobody else knows this except us. But we have this great trick.

Do you remember any of them?

Well, Peter Thiel was really focused on network effects. And he had this model that I think is right for making decisions that as the complexity of the company grows, every day you're going to be faced with 100 things that you could potentially go do. And your job is to pick the one thing that actually matters, because out of those 100 things, it's really only actually going to be 1 or 2 things that actually matter. And that was pretty informative to me at the time because I had intuitively like I had a lot of self-direction intuitively, but as soon as I started getting all these people around me who all had reasonable perspectives on things, it was very hard for me to balance that. And Peter was always very useful for that. We were focused— He was good at saying, here's the one thing that matters.

Like, focus on the one thing that matters.

Well, partially that, and partially just the meta lesson of figure out the one thing that matters and do that. Do you remember what the one thing that mattered? Like, if someone— connecting everyone as quickly as possible, because, I mean, network effects were a massively important part of this.

One of the stories—

when you say connecting everyone as quickly as possible, you don't mean specifically getting more signups. You mean getting people to friend one another faster.

Yeah.

Well, how did you do that? Well, we built a lot of tools to enable people to do what they already wanted to. Where you can't, like, push uphill on this stuff, right? It's— it's— we were solving a problem that people had. and we just needed to remove as much friction as possible.

The key thing was that Paul Allen and I had loved working on software since we were lucky enough to be exposed— literally, I was 13 in 8th grade when this timesharing terminal came in, and we just did it day and night and, you know, got better. And we could see that the magic of software combined with this miracle of the microprocessor, subject to Moore's Law, exponential improvement, that that was a magic combination. And we'd look around and say, hey, how come everybody's not saying this is amazing? I mean, we're going to dethrone IBM. And why doesn't Digital Equipment get it? Why is the guy who runs it— this is a company that's long gone, but dominated many computers at the time— why isn't that guy up there saying it's wrong? We know it's right. And so the key event for us was it was a very cold Boston winter. And a kit computer came out on this Popular Electronics magazine, and we said, "Oh, damn, this is happening without us." I mean, here we are doing nothing. And so we called the company up and said, "Hey, we're ready." And then we called them back. We actually did the work, and then we called them back and said, "How do you make the stuff go in and out of the computer, the I/O?" And they said, "Well, that's interesting. Nobody else has ever asked that. You must really be doing something. So that was, anyway, our very first customer. And so we grabbed onto it to be the very first, and we were the first to say there should be a software industry and come and do it. In a sense, it was one of the lower-risk things I've ever done in my life because, you know, I could have always gone back. You know, my parents— my dad didn't say, hey, if you go away for a few years, I'll stop paying came for your education, they were nice and said, "Okay, go learn your lesson down there in the desert and get back to the serious stuff." And we're still waiting.

I think it's also important to reason from first principles rather than by analogy. So the normal way that we conduct our lives is we reason by analogy. It's, "We're doing this because it's like something else that was done," or, "It's like what what other people are doing.

Me too type ideas. Yeah, slight iterations on a theme.

And it's kind of mentally easier to reason by analogy rather than from first principles. But first principles is kind of a physics way of looking at the world. And what that really means is you kind kind of boil things down to the most fundamental truths and say, okay, what are we sure is true or as sure as possible is true? And then reason up from there. That takes a lot more mental energy. Give me an example of that.

Like, what's one thing that you've done that on that you feel has worked for you? Sure.

So somebody could say, in fact people do, that battery packs are really expensive and that's just the way they'll always be, because that's the way they've been in the past. You're like, well, no, that's, that's pretty dumb, you know, because if, if, if you applied that reasoning to anything new, then you wouldn't be able to ever get to that new thing.

First of all, I love space. I have been a space lover since I was a 5-year-old boy. And I feel like I won the lottery with Amazon. I know I won the lottery. And, and now I'm investing those lottery winnings in Blue Origin, which is the space company. We built— we're built— we are flying a suborbital tourism vehicle, and we'll start taking people up hopefully in 2018. That's coming right up. Working on it for more than 10 years. Hopefully this one, this overnight success is taking longer than 10 years. I don't know, we'll see, you know. And we're also building an orbital vehicle called New Glenn. New Shepard is named for Alan Shepard, the first American in space. He went on a suborbital journey. New Glenn is named after the American hero John Glenn, who was the first American to orbit the Earth. And so these These are both, these are reusable boosters, fully reusable. That's the key to lowering the cost. Our vision at Blue Origin is that we want millions of people living and working in space, and my personal hope is that I live long enough to see the kind of dynamism in space. I want to see a whole economy, entrepreneurs in space that I got to witness over the last the last 20 years on the internet. You know, the problem with being an entrepreneur in the space arena is that the price of admission is so darn high. So, you know, to do interesting things in space, the beginning, you know, kind of the beginning entry level is a few hundred million dollars. So you're not going to get, you know, two kids in their dorm room doing something amazing in space. Whereas that's literally what happened to Facebook, right? So on the internet, because the price of admission is so low, you can get these amazing experiments where like one kid in a dorm room does something and it turns into Facebook. And or, you know, Amazon's case, you know, I started this thing with an incredibly small amount of capital and the, you know, it was able to to grow because we didn't need a lot to get to, to begin with. The heavy lifting was in place for Amazon, right? So I didn't need to build a transportation network. It existed already. It was UPS and the Royal Mail and the US Postal Service and Deutsche Post and so on and so on. I didn't have to build a telecommunications backbone to connect with my customers. It was there, it was called the internet. And in fact, the internet was resting on top of the long distance phone network at that time. You guys remember the dial-up modems, some of you do. Some of you are too young to, some of you should go to a museum and see a dial-up modem. What was that sound? Yeah, and so I recently showed a group of youngsters a payphone. I came across one and I was like, my God, guys, come over here. This may be the last one. You have to see it. So, you know, the point is that Amazon was— got to rest on top of— we didn't have to build a payment system. It already existed. It was called the credit card. Computers were already on every desk thanks to, you know, Microsoft, IBM, and Apple. And, you know, but what were they being used for? To play games, not to buy things on Amazon. And so all that heavy lifting was in place. And I want to— you know, my greatest I would have such a good feeling if I could be an 80-year-old guy and laying there thinking about my life, if I could say, look, there is now a bunch of entrepreneurs in space because I took my Amazon lottery winnings and built the heavy-lifting infrastructure that does take billions of dollars in CapEx to lower the cost of access to space. That's how you get millions of people living and working. And by the way, we need that. For those of you who like to think about the future at all, you can do a simple calculation. You know, we can argue about, you know, what limited resources on Earth and so on and so on. But here's a calculation that you cannot argue with, which is you take current baseline energy usage on Earth, compound it at just a few percent a year for just a few hundred years, and you have to cover the entire surface of the Earth in solar cells. So, you have to— we're going to have to decide, do we want a society of pioneering, invention, expansion, growth, or do we want a society of stasis? And personally, I believe— because the Earth is finite, and if you want a society of stasis, I think it's going to— first So I don't personally believe that stasis is even compatible with freedom. So I think for me, that's a big problem. Second of all, it's going to be dull. Stasis is going to be very dull. You don't want to live in the stasis world. And so of course, we're going to continue to get more efficient too. We have been for hundreds of years. We've been getting more productive, more efficient. That's— that trend is going to continue. But even so, we're going to want to use more energy, more energy per per capita, and also I don't want a stabilized population. I would love for there to be a trillion humans in the solar system. With a trillion humans, we would have 1,000 Einsteins and 1,000 Mozarts. It'd be an incredible civilization. Don't you want that dynamism? It'd be so much more interesting. This is for your great-great-great-grandchildren, but what kind of world do you want them to live in? I want them to live in that expansive world that is, you know, learning more about the universe and moving out throughout the solar system. So that we have to do it. And anyway, so it's fun to work on that. And, you know, I get— I have a— I won so many lotteries in my life. I have the best parents in the world, my mom Jackie and my dad Mike. My mom had me when she was 17 in Albuquerque, New Mexico. She was still in high school. It was was not cool, and she did an amazing job. My dad Mike is a Cuban immigrant who came here when he was 16 without his parents, did an amazing job. So those are the things that are your little gifts in life. You get, sometimes you get, my greatest admiration by the way is withheld for those people, and I know several of them, who had terrible parents and still somehow made it through. That's hard. I had the opposite, so I got lucky.

You have said before that to me and to others that Berkshire is your canvas that you paint on.

It's your masterpiece.

I don't know why masterpiece, but it's my canvas.

So what is it that if you look at it today, Berkshire, you find fault with?

I Been faulted?

Yeah.

Well, I made plenty of mistakes along the way, so I've got a lot of brushstrokes out there that if I— just give me a little whatever it takes to remove that, I would do it. So I've made plenty of mistakes, but I expect to make mistakes, and I'll keep making mistakes.

Because unless you take chances, you won't make mistakes.

Oh, sure. And mistakes are part of the game. I mean, you're swinging at pitches and you miss a few. But no, I don't want to sound— I feel good about Berkshire. I mean, the people I'm associated with the businesses.

The—

we have a, a— we lay out our economic principles, and I laid them out many, many years ago, and we don't change them. I mean, we, we, we, we try to operate that way. It doesn't mean we're perfection. You got a company of 260,000 people, I'll guarantee right now somebody's doing something I wish they weren't. I mean, you can't have a city of 260,000 people and have no jails. But overall, I feel there's a, a culture that I don't think any other large, really large public company has, and I think it's enduring because it's so inculcated in the manager, the shareholders, the directors, everybody. So I feel good about Berkshire.

In terms of content, there's never too much content. It is just because what we want and who we are and how we consume content changes every day through our experiences. The challenge of content isn't can you make it or is there too much. The challenge of content, whether it's business content, the proposals you make, what you put on your website, how you connect to people, is can you tell a good story? You know, and now storytelling has evolved. It used to be we all congregated around the TV and there were 250 channels, but you know, it was the best alternative to boredom. You come home, you're worn out, you sit there, one hand hand goes in the pants, the other hand goes on the beer, and you watch TV. Now all the content comes to us no matter where we are. There's, there's a source of content, and who we are and how old we are and our experiences, that defines what we like. Just go to Twitch. Like, I have a 9-year-old son who plays Fortnite all day every day if we would let him, right? And he'll watch Ninja. Now Ninja is a— I don't know if you all know who he is. He's like big guy on Twitch that streams Fortnite games, and he came to the Mavs practice facility one day, 'cause we got to be friends just through random sources. He was a bigger star than when Tom Hanks came to visit. I mean, and this is a guy on Twitch. Now, Twitch is unlimited options of content related to gaming and other things, and they're expanding. YouTube, obviously, just unlimited content, and it's not like YouTube's struggling. The takeaway from all this is when there's so many options for content, as business people, you have to figure out how to connect with people. You have to know your audience, and you have to know how to tell a story. And honestly, that's not my strength. I literally— and I forget the name of the book, I'd have to look at my phone— I'm reading a book on storytelling because that's how people connect. We have so many choices. If you can't absorb us us with something that engages us, a story, and simplify it into a story that we want to connect with, the next person is going to be who come— the next person is going to come in and take your business.

There are probably a lot of people who can, who can run Microsoft and do a reasonable job. When I was growing up, Bill Gates was my, my hero. Oh, come on. Yes, he's like Darth Vader. He's not, he's not Luke Skywalker.

He's the bad guy.

No, he is not. Bill Gates ran one of the most mission-driven companies that I can think of. Right now, I think Microsoft, their mission is less focused than it used to be. But when I was thinking about, you know, what I wanted to be when I grew up, Microsoft, I thought, had a great mission. Put a computer on every desktop and in every office. Or maybe it was every desktop in every home. And, you know, I mean, there are companies that define themselves by a way of doing things, right? I mean, there's, like, the HP way that I was talking about. And there are companies that define themselves by making a concrete change in the world. And, you know, Microsoft did that. And I have a huge amount of respect for him for doing that. He pushed them, and it was an incredibly inspiring company during the time that he was doing that. I think that they still are doing a lot of a lot of things, but I think that they've lost some of the focus. And I don't know, I think he's one of the greatest visionaries that our industry has ever had.

You're running— you're CEO of two companies, you're chairman of SolarCity.

Talk about time management.

How on earth do you do this? Do you get any sleep?

Sometimes not enough. Sleep is really great. Because I find if I don't get enough sleep, sleep, then I'm quite grumpy. I mean, obviously, I think most people are that way. And also, like, I try to sort of figure out what's the right amount of sleep because I found I could have— I could drop below a certain threshold of sleep and although I'd be awake more hours and I could sustain it, I would get less done because my mental acuity would be affected. So I found generally the right number for me is around 6 to 6.5 hours on average per night.

That's not too bad.

Yeah.

And any other tips on—

that's an average though.

Any other tips on just managing to run two companies simultaneously? I mean, do you find— I mean, I know you're up here Monday, Tuesday. Is it all Tesla when you're up in Silicon Valley and all SpaceX Wednesday, Thursday?

Having a smartphone is incredibly helpful because that means you can do email during interstitial periods, like if you're in a car, you're walking, in the bathroom, everywhere. You can do email practically when you're awake. And so that's really helpful to have email for SpaceX and Tesla integrated on my phone. And then, and then it's just you have to apply a lot of hours to actually working. So the way I generally do it is I'll be working at SpaceX on Monday, and then Monday night fly to the Bay Area, spend Tuesday and Wednesday in the Bay Area, then at Tesla, and then Fly back on Wednesday night, spend Thursday and Friday at SpaceX. In the last several months, then I would fly back here on a Saturday and either spend Saturday and Sunday at Tesla or spend Saturday at Tesla and Sunday at SpaceX.

I did do a lot of soul-searching. I went to my boss at the time, and I really liked my job, and I told my boss I was going to go do this thing, start an internet bookstore, and my wife had already— I'd already told my wife, and she's like, "Great, let's go." And I said to my boss, "I'm going to do this." He's like, "This is a good idea." He said, "I think this is a good idea, but it would be an even better idea for somebody who didn't already have a good job." And that sort of made some logical sense to me, and he convinced me to think about it for a couple of days, so I went away. I was really trying to get my head around how to think about about this. And I think for me, the right way to make that kind of very personal decision, because those decisions are personal, they're not like data-driven business decisions. They are, you know, what does your heart say? And for me, it was—

I could—

the best way to think about it was to project myself forward to age 80 and say, look, when I'm 80 years old, I want to have minimized the number of regrets that I have. I don't want to be 80 years old in a quiet moment of reflection, thinking back over my life and cataloging a bunch of major regrets. And I think that regrets, our biggest regrets in most cases, you can murder somebody, okay, you'd regret that, but in most cases, our biggest regrets turn out to be acts of omission. It's paths not taken, and they haunt us. We wonder what would have happened. I loved that person and I never told them. And then, they married somebody else. I didn't do this. And so that's the frame of mind that I put myself in. And once I did that, once I thought about it that way, it was immediately obvious to me. I knew that when I'm 80, I would never regret trying this thing that I was super excited about and failing. If it failed, fine. I would be very proud of the fact when I'm 80 that I tried. And I also I also knew that it would always haunt me if I didn't try. And so that would be a regret. It would be a 100% chance of a regret if I didn't try, and basically a 0% chance of regret if I tried and failed. So I think that's a useful metric for any important life decision.

I don't know where I'm going to invest next. That's what makes my job interesting. I mean, I'm not kidding. I mean, if you went out and played golf and every drive went in the hole, you'd give up, the game wouldn't be interesting. I mean, what's interesting is when you get in the rough and have to come out and a few things like that. So I love the fact that I don't know what I'm going to do next. You mentioned the Israel investment. In 2006 in the fall, I got a letter from a fellow, and I never heard of him, and I never heard of the company he was talking about, but he said, my name is Eitan Wertheimer, and I wanna tell you a little about my company, Ishkar. The letter was a page and a half long, and he said if he sold the company, the family sold the company, the only company they wanted to sell it to was Berkshire Hathaway, and if I was interested, they'd be glad to come over from Israel and explain it to me. And it just jumped off the page that this was an interesting idea, so I emailed them and they came over very shortly, and we bought the business We handed him $4 billion for 80% of a company where I'd never seen it or anything. Eitan kept saying, you gotta come over to Israel and see the plants and everything. You won't believe how wonderful they are. And I said, Eitan, I don't go to Council Bluffs, Iowa. I mean, I am doing fine in Omaha. And he said, no, you gotta see it. I said, no, no, I said, we can make a deal without seeing it. If you buy the company, will you come and see it? I said, if we buy the company, I'll come. So we bought the company, and I went over there, and it's true, I've never seen plants like this. It was the greatest operation I've ever seen. And Eitan said to me, he said, you know, that's why I want you to come over to see these things. I said, listen, Eitan, if I'd come and seen them, I'd have paid more money. So we have a wonderful partnership with the people in Israel, but I don't know tomorrow. Well, our partnership with the people in Brazil, with Jorge Paulo Lemann and his associates, they are sensational people. I got to know Jorge Paulo when I was on the board of Gillette with him, and the opportunity to buy into a wonderful business like Heinz, and to be partners, and they'll do all the heavy lifting, they run the place, with Jorge Paulo and his associates, I mean, it's just, it's a great opportunity for us, and I don't know what the opportunity will be tomorrow. What Giorgio Paolo is, last December I was going out to Boulder, Colorado where he had a group that met, and he said, I think I've got an idea that might interest you when I get out there. And so I went out there, and as we came back on the plane, he explained what he was thinking about in terms of Heinz, and I said, count me in. And I will tell you one other thing which is quite impressive about him. After I said that and went a little, A little further on the thing, he sent me a one-page governance description of how it would work between the two of us, and he sent me a very brief description of what he thought would be a fair deal for both of us. I didn't have to change a word. I mean, those are the kind of people you like to associate with.

I'd like to talk a little bit about failure. You've had some, and famously, I think you were fired from your early jobs, right? Forced you to be an entrepreneur? Were there any failures that, you know, in hindsight were just super valuable and like set you on the path?

All of them.

Yeah. Yeah. All of them.

Yeah.

I mean, I learned more from the places I got fired from and the places I worked that I hated than I did from the places I liked, you know. I learned what not to do. You know, I got fired because I went to close a sale instead of opening up up a retail store and sweeping the floor, yada yada, thinking that when I brought back a check from a closed deal, he would be all excited and he fired me. I learned from that that sales cures all. That company was out of business not much later. And it just taught me so many lessons about how to deal with things, how to treat people, what to focus on. And that led to me getting started and also taught me that when I was living 6 guys in a 3-bedroom apartment, I had nothing to lose, nothing, right? And so, being young was a perfect time to start a business because what was my downside? We take in a 7th roommate? It's like, and so, there's so much I learned from the places where things on the surface seemed to go wrong, but I learned what not to do. And sometimes that's just as important as what you do do.

[Speaker:ROBERT_LEONARD] One of the things that I think we've done well is, is just giving the people at the company a lot of opportunity, right? So, you know, it's not just me who started when I was 19 and, and now, you know, I'm running this big company. There were a number of people who joined who were, you know, people I did problem sets with at Harvard, or they dropped out of Stanford, or, you know, different programs who have grown with the company over this long period of time. And, you know, one of the things that I'm the most proud of is we have about 12 different product groups at the company, and all of the people who are running them, with the exception of one, did not join the company running a product group or reporting to me. That's amazing. And the one exception was— is David Marcus, who was the CEO of a $50 billion public company. So, you know, so I'm pretty happy that he's on board, and having him run a product group I think is a pretty big coup too. But literally none of them started off reporting to me. You know, they all start off in different, different roles. Some were engineers, some were data analysts, some were product managers, and they've all grown. But I think what happens is, you know, people see that you create opportunities for people. And that also, I think, keeps the best people engaged and makes the best people want to come work at your company because they feel like, oh, I'm going to get those kind of opportunities too.

So do you have any regrets in your life? You seem to have a life that most people would love to live.

You've got a happy family, great marriage, foundation, business success.

Is there anything— can you make us feel good by saying you've done something that didn't work out? Or just make us— because all of us feel bad because we look at you and we can't do what you've done. So tell us something that's bad that you've done, or you feel inadequate about something. There must be something.

I am super lucky, you know, marrying Melinda, the experience at Microsoft that, although it had its ups and downs, was phenomenal, the work of the foundation.

And no regrets about anything?

I wouldn't try and go back and change anything. I mean, for example, the antitrust lawsuit against Microsoft, you know, was bad for the company. It created a lot of distraction. We would have done a lot of things, including the mobile operating system, better if it hadn't been for that. But in a way, you It was a lesson for me, and it probably accelerated my retirement by 5 or 6 years, which overall for me probably was a good thing. I don't think it was a principled set of activities, but that's another story.

First of all, you don't need college to learn stuff. Everything is available basically for free. You can learn anything you want for free. It is not a question of learning. There is a value that colleges have, which is like, you know, seeing whether somebody's—

is—

can somebody work hard at something, including a bunch of sort of annoying homework assignments, and still do their homework assignments and kind of soldier through and get it done. You know, that's, that's like the main value of college. And then also, you know, if you probably want to hang around with a bunch of people your own age for a while instead of going right into the workforce. So I think colleges are basically for fun and to prove you can do your chores, but they're not for learning.

So I know you have many interests outside of Amazon.

Tell me about the 10,000-year clock.

Well, I'm building a clock, a big clock. It's kind of a monumental scale. It's inside a mountain in West Texas. It's the invention of a brilliant guy named Danny Hillis, who had been thinking about it for a long time. It's a symbol for long-term thinking. It's a clock that, you know, you kind of think of it, you know, sort of ticks once a day and, you know, dongs once a century and the cuckoo comes out once a millennium. That's sort of thing. And it keeps time. It's a completely mechanical clock. It's powered by thermal night-day cycles. It's a very sophisticated piece of mechanical machinery. And everything is tested to last 10,000 years. It keeps time for that long. There's a lot of stuff to think through because it's synchronized at solar noon. And there could be— in 10,000 years, it turns out there could be 3-year periods where you have no sunlight. At solar noon. Asteroids hit the Earth and change the axis of rotation of the Earth. We have to account for things like that. And so beyond just the normal precession of the Earth. So it's a very complicated mechanical piece of equipment. But what's the purpose, you would say? This is an odd thing to do, to spend any time on. And I think symbols are really important. Symbols can be very, very valuable. And we have, as a species, become so omnipotent on planet Earth that we're really going to have to start thinking longer term. It can, you know, in a lot of different ways. It's— and, and you can accomplish so much if you think long term that you can't if you think short term. So if I said to you, you know, I want you to take this I want you to solve world hunger in 5 years, you would rightly just turn down that mission. You would say, that's not possible, why would you even bother trying? But if I said to you, let's solve world hunger in 100 years, now that's actually much more tractable. Now you can think about it and you can say, okay, well, how do we create the preconditions that are necessary to solve world hunger? And so long-term thinking is a huge lever And, and I think it gets harder to do as the speed of, of invention and civilization changes, in part because it sometimes doesn't make sense to think long-term if everything is changing so quickly. That's why, you know, kind of taking that back to the customer needs that I was talking about before, you need to find those things that we know as a society that we'll want even 100 100 years from now and then make sure that we go about, go about working on those things.

Any word of advice you give to somebody who's a young investor who would like to emulate you, what you would recommend that they do to kind of build something close to what you've done? I think you should look for the job that you would want to hold if you didn't need a job. I mean, you're probably only going to live once. Shirley MacLaine may differ with that, or a few people, but you don't want to go sleepwalking through life. And you really— whether you make X or 120% of X really isn't remotely as important as to whether, in most cases, you marry the right person and you also find something that you would do if you didn't need the money. And I've had that job for, you know, 50 or more years. And I was lucky in that I sort of found early on what turned me on that way. But, but don't set settle for something if you can possibly. Don't worry about making the most money this week or next month. I mean, when I went there, offered to work for Ben Graham, I said I'll work for nothing, and I meant it. You know, I mean, just the idea of being turned on. So look for, look, look for the job that turns you on. Find a passion.

You've got to go to AFWERX to see our AFWERX team. You just got to meet some more Spark Tank finalists. What, what advice would you give them on innovation and how to forward?

I mean, learn from what you saw up here. I mean, the brilliance of each and every one of those ideas is that someone saw a problem. And let me add, all of us have had ideas that we thought were gonna be the next great thing, right? We get that feeling in our stomach, oh, this is gonna be amazing. And then you talk about it with your friends or who you work with, and they say, what a great idea. And then most of us stop. What you saw up here and what made made it so compelling is that they didn't stop. There weren't complicated solutions, right? I mean, some of them were advanced technologically or they were super smart, but they were simple in that they just took basic problems and they tried to solve them. There's nothing— that's something each and every one of us can do. And so the best advice that I can give you is do it. You know, when you have an idea, when you you have that opportunity, do it, because that's what separates the people that, just separates the entrepreneurs or the intrapreneurs from everybody else. They just took that first step. Don't be afraid, take that first step. What's the worst thing that can happen?

You know?

There's this culture in Silicon Valley that kind of makes startups seem glamorous, And I never really believed that, right? I never had a goal of starting a startup. And my goal when I realized that I had a company was to get it to be a good company as quickly as possible, right? And kind of get out of what you'd call the, like, risky startup phase where you are just, like, constantly about to die and where you could get to a point where you can actually do some interesting things and make, make a lot more interesting bets. So I don't know. I never read a lot of the literature on this. And I mean, maybe if I had, then I wouldn't have made so many mistakes. But so I don't know if like if learning for me is the right way to go on this. But I mean, but it did. I think your model must have come from somewhere, though, even if it was—

even if it was unintentional.

Right.

Like, were you influenced by Peter Thiel or Sean?

Well, yes, I was influenced by all these people once I met them. I actually— I hadn't really heard of Peter Thiel before. I'm talking about, like, Yeah, right. Yeah. But I mean, he was massively influential on my thinking, right? I mean, like a lot of the, the early lessons that I took on how to think about strategy came from Peter and Sean. And I did pay a lot of attention when I was growing up to Microsoft. I thought— I mean, I grew up, you know, using, you know, Windows 3.1 and then Windows 95. And I just thought that those were like the most unbelievable things. And in a sense, they are. Yeah, they really were awesome, right? Well, I don't know if you meant that positively, but I did. And I thought, you know, building this ecosystem was really neat, and that kind of inspired me, right? In the way that they built a platform, I kind of thought, okay, well, maybe one day, you know, the tools that I'm building can be part of a broader ecosystem as well.

Most people over the last 200 years or so, whoever the wealthiest person in the world was, didn't usually work that hard when they got to be 60 or so. They kind took life easy.

You seem to be working pretty hard.

What motivates you to still work so hard?

Well, I love my work. The work of the foundation is super interesting. I get to meet with the scientists. I get to go out in the field. I do think your habits are sort of set in your 20s and 30s, and by my standards of the 20s, well, you know, I didn't believe in weekends back then, not to mention vacations. So I'm, you know, fairly lazy easy compared to myself in my 20s, where I was a true fanatic. You know, all I believed in was working on software night and day, and for my 20s that was perfect. I didn't have a wife or family at all, and my role was very hands-on role.

I think failure is bad. I don't think it's good. But if something's important important enough, then you do it even though the risk of failure is high. And so I think my advice if somebody wants to start a company is they should bear in mind that the most likely outcome is that it's not going to work. And they should reconcile themselves to that strong possibility. And they should only do it if they feel that they are really compelled to do it. Because it's going to— the way starting a company works is usually in the beginning, the very beginning, it's kind of fun. And then it's really hellish for a number of years.

You talked about chewing glass.

Yeah. There's a friend of mine who's a successful entrepreneur and started actually his career around the same time as I did. And he has a good phrase. His name's Bo Li. He said, yeah, starting a company is like eating glass and staring into the abyss.

And you agree with that?

Generally true, yeah. And if you don't eat the glass, you're not going to be successful.

Is there a particular recipe that you have in terms of how you actually innovate in that collaborative culture?

I don't think there's a particular recipe, but there are elements of what we do that I think help. One of them is that inside our culture, we understand that even though we have some big businesses, new businesses start out small. It would be very easy for, say, the person who runs our US books category to say, "Why are we doing these experiments with things?" I mean, that generated a tiny bit of revenue last year. Why don't we instead focus those resources and all that brainpower on the books category, which is a big business for us? And instead— that would be a natural thing to have happen, but instead inside Amazon, Amazon, when a new business reaches some small milestone of sales, email messages go around and everybody's giving virtual high-fives for reaching that milestone. I think it's because we know from our past experiences that big things start small. The biggest oak starts from an acorn. You've got to recognize— if you want to do anything new, You've got to be willing to let that acorn grow into a little sapling and then finally into a small tree, and maybe one day it'll be a big business on its own.

And in fact, that's one of the mottos for one of your initiatives, and forgive my pronunciation of the Latin, but gradatim ferociter. What does that mean to you?

Well, it means step by step ferociously, and it's the motto for Blue Origin. And basically, you can't skip steps. You have to put one foot in front of the other. Things take time. There are no shortcuts. And but, but you want to do those steps with, you know, passion and ferocity.

Charlie Munger and I have been making stock decisions and business decisions one way or another together now for 55 years. We have never let— well, the macro doesn't enter into it, nor does political. We have not made decisions differently because one party or the other's in power. We have not made decisions based on whether we thought interest rates were going to go up or down, or what was going to happen with labor negotiations someplace. You don't want to give up what you know how to do, because of opinions which you don't know whether they're right or not and which are going to be transitory in any event. So you really go out there every day and do whatever makes the most sense. So when we buy the auto dealerships last week, we don't factor in anything about the Fed, about the deadlock in politics, about what's going on around the world. Those are all important things, but they don't affect whether those dealerships which we're buying to own 100 years they don't affect whether they're going to make money in the year 2024 or 2034 or 2044. And the important thing is whether we get a good business with good management at a sensible price.

For 90 minutes of business growth advice that you needed yesterday, check the video right there next to me.

I think you'll love it.

Continue to believe, and I'll see you there. The first 350 public videos on YouTube, I couldn't watch.

I couldn't watch myself back. People have an attention span to watch, but they will leave in the first minute if it's not good.

After the minute, they'll stick.

And anytime