Josh Wolfe: Opens Up On Bill Gates, Danny Kahneman, & Parenting | The Danny Miranda Podcast 245

Well, Josh, thank you for coming on the podcast. I really appreciate you taking the time and I'm really excited to dive into your story today.

Good to be with you, Danny.

So anytime somebody says to you, I hope you make a billion, probably good things are going to happen. And that's a nice way to start your career. Take me back to that moment. How did that feel?

The feeling when somebody believes in you, I think, is a powerful moment. It's something that we try to remember when we back entrepreneurs. Uh, that quote is very specific from a very specific person, which is Bill Conway. Bill is one of the three founders of the Carlyle Group. And when we were starting out and we went to raise friends and family money, we joked that we had a lot of friends, we had a lot of family, none of them had any money, and Bill had a lot of money. At the time, I want to say Carlyle was just a few billion dollars under management. Today there are hundreds of billions of dollars under management. But we got a chance meeting with somebody who was, for whatever circumstances, that particular day primed to listen to two relatively ambitious and naive people, Peter Eber and myself, the co-founders of Lux. And basically we laid out why we thought that Lux should exist, why we were going to be differentiated. Um, and he asked a whole bunch of questions, you know, why should the world need another venture fund when there's nearly 800 or 1,000 of them out there at the time? This is going back 20 years post-dot-com boom-bust. And what was going to be your competitive advantage? How are you going to compete with Kleiner Sakhoi and Accel and Benchmark and, you know, the great funds that would emerge? And we answered those questions thoughtfully and dutifully. And he responded, well, I'll help you make a billion. And for him, that was serious, and for us, it just seemed like some crazy number. And, um, yeah, that feeling when somebody believes in you, when especially you face a lot of people who don't believe in you, is a very powerful one.

How do you put yourself in situations where people— you often talk about that particular scenario and say that he woke up on the right side of the bed. How do you make sure or put luck in your favor so that you talk to more people who are excited to talk to you? And why was he so willing?

Well, I, I have to ask him that question, but when I say that he woke up on the right side, or it's an acknowledgment and a little bit of humility that it isn't all just us. It's the circumstance of the person. And, you know, are they, are they hungry or hangry? Are they in a good mood? Did they just, have sugar, coffee, or chocolate? Did they just get good news or bad news? Is something weighing on their mind? He might have just an hour before the meeting that I had with him just received news that they just made their limited partners a ton of money and was feeling really, you know, flush with positive emotion and flush with cash. So I think you have to have the humility to understand that if you were to have the same conversation with the same person at different times, in different places, different contexts, different circumstances, the outcomes might be different. Now, the process compared to that outcome is in your control. So how you prepare for a meeting, you know, how articulate you are for it, how— the kind of impression that you want to make on somebody. And so I think that in any situation, when an entrepreneur comes in here, they should know something about the partners. You know, when they're pitching us for capital, they should know the kinds of things that we've invested in. Many of us are very public with our views. And so there's a lot of different hooks for people to latch on to. And we intentionally do that as well because we want to find points of connection. Somebody might— love the band that I love, or they might hate an idea that I have, but it's all a point for— to engage. Um, preparedness is entirely something that's in your control. And so you want to walk into a room, you want somebody to be super impressed with you so that when you walk out, they are thinking, wow, he or she is incredibly smart or competent or ambitious, or wow, um, I just like— that's the most interesting person I've met today.

Hmm. And what specifically do you do to prepare or get excited about the things you're doing on a day-to-day basis?

Some of it is competitively driven. So I'm a voracious reader, uh, I read pretty much everything. Uh, when I meet somebody that is telling me something that they've read and I don't know anything about it, I get information anxiety and immediately want to at least level up to, you know, I have a, a basic competent ability to converse with them about whatever that topic is. So I'm very intellectually competitive and I just want to connect ideas and you know, it depends. If I'm going in to meet somebody in a deeply technical area, I might spend weeks or a month talking to the best people in the space and trying to understand what they understand so that I can more impressively communicate with somebody. If I'm talking to somebody in the financial markets and it's a more complex topic, it's the same thing. If I'm talking to somebody that is a potential CEO candidate, I want to understand— you know, I'm both vetting and selling at any given point in time when we're recruiting people. So I'm assessing their ability to do the job. And there's a series of criteria for CEOs that we sort of have of what we think are the 4 or 5 most important things. But then we're also selling them on, you know, why they should be doing it. So preparation really is in part, you know, a known goal of what do I hope to achieve with this? If it's a limited partner, I want them walking out of the room wanting to invest and trust Locks as a fiduciary with their capital. If it's an entrepreneur, I want them choosing Locks as their main funder. If it's a CEO candidate, I want them joining the company that I want them to help lead and manage. If it's somebody that's joining Lux as an investor, I want them to choose us over other firms. If it's somebody in the media, I want them to walk away saying, wow, that's the most impressive or interesting person that I spoke to today. So all of it is competitively motivated in pursuit of some end goal with this sort of jazz riffing that sometimes the conversations might start on some totally random topic because they're like, oh, I just went to this random place in New York and we might spend 20 minutes just riffing on that. And so the fluidity of being able to just converse about pretty much any topic is something that is a secondary goal, is just being able to connect on a really authentic level with people.

Yeah. One of the things in doing research for this conversation that you harped on in a bunch of different other podcasts was, wow, if you talk to the person next to you that's on a plane and they have a connection, you don't know what it is until you introduce yourself. And literally 20 minutes before recording here, I, I'm at the gym and I'm talking to this woman And I introduced myself to her because I was like, you know, Josh Wolfe said so. And turns out she was working in marketing her whole life, had a company, sold it, was done. And I'm like, oh my God, who are all these people around us? And when you're able to connect worlds, it gives you a superpower. Do you have any stories like that of sitting next to somebody or making a connection where you're like, how was this person right here? And I almost didn't talk to them.

Oh, there's a ton of them. Uh, they're almost hard to like Narrow down, but it's a phenomenon that I call randomness and optionality, that you never know, and I always say ex post facto, so after the fact, you know, is all logical about how all these things connected, but a priori, you never know, and I agree with you. There's a scene in Fight Club, if you've seen the movie, when one of the characters, you know, sort of sees these like old VH1 pop-ups of everything that's happening, you know, like the $100 couch and whatever, and I constantly walk through the streets, and technology will eventually enable this in a more fluid and maybe invasive way, but what is that person's deal, right? And there are people, they always say, don't judge a book by its cover, but there's somebody that you might meet in the gym or you might be sitting next to on an airplane, they might be super introverted, but then you see them reading something, you're like, oh my God, I just was with the guy who wrote that book, or I was just with the author who wrote that scientific paper, and then you start riffing. And so a lot of these things are totally random connections. There are also people that I've become very open to that are these connectors in life. And it's interesting because a handful of them, they themselves have not, and this is gonna sound very condescending, have not achieved the kinds of things where you're like, oh, I really wanna be friends with that person, right? They're rich, they're famous, they're accomplished author, but they have a sense of interesting people and they're sort of a collector of these interesting people. And some of the most interesting people that I have met have been through these nodes, these connectors. And I've come to appreciate that they play a really important role in the serendipity of making these connections. There was a random person who was somebody who connected me to a guy, Michael Mauboussin, who is a longtime Wall Street investment strategist and sort of a polymath with lifelong learning, curiosity, and interests. And by becoming friends with Michael and hitting it off on a bunch of different books we read, one in particular was a book by E.O. Wilson called Consilience. And it was like, hey, we have the shared interest. Often for me, You know, I posted this. If I ask people the bands that they listen to or the books that they've read most recently, like, I really hit it off with people, you know, that are just interested in like non-pop mainstream stuff, people that have read stuff off, you know, on the beaten path. And so Michael and I hit it off, and then we became friends. I would speak at some of his conferences, he would speak at mine. We'd get together, and the first thing at every meeting that we would have be like, so what are you reading? And we each list, you know, 10 books or whatever, and then some of them we'd read together or whatever. And then there were other people like that. And then, you —there was one dinner where I think it was a Santa Fe Institute dinner, and that itself is a magnet for a collection of really interesting, unique, diverse thinkers. And I met Danny Kahneman at that dinner, and I didn't know that Danny was going to be there, and we would become friends. And then years later, I had also independently met a famous poker player and connected her to Danny, and they were like, oh my god, I've always wanted to meet you. But I was the connector in that case. Was it Annie Duke? It was. And so I got this Annie and Danny connection. Anyway, it was just, you know, those things in hindsight feel very rewarding because you're the person to connect them. You know, there were even famous people going back in the day when I was fundraising for Lux2, sort of our second venture fund. The first one was primarily sponsored by Bill Conway at Carlyle. You know, you go out and you try to meet people, and it was, again, a random guy that I knew who I happened to authentically like, and we actually talked about books all the time and ideas and philosophy. He happened to be friends with a famous guy, Pete Peterson, who was one of the founders of Blackstone, and he was sort of a conciliatory to Pete, helping him with his media affairs personally, spent some time at Blackstone. He's a wonderful guy named Dan Burstein. But Dan got me an audience with Pete, and I got to meet him because Pete trusted Danny— trusted Dan. Dan trusted me. Dan did not feel like I was going to embarrass him or hurt his reputation. If anything, he's like, Josh is interesting, and Pete will probably think highly of him, and therefore maybe he'll think highly of me more. And so Pete Peterson would end up becoming an investor with me, and I was able to connect Pete Peterson to Bill Conway. So you have the founder of Blackstone and the founder of Carlyle who didn't know each other, uh, knew of each other. And I was this kid from Coney Island, Brooklyn, you know, in my early 20s, like connecting them. And so it just, everybody's accessible in some way. Yeah.

You mentioned about how you play around at the fringes and that's the place you enjoy, but it was interesting because you mentioned your wife is into pop music. Yes. And so Take me through how you connected with her, even though it's so— it's opposite to how you describe the people you like.

Well, it's very interesting because the balance that Lauren and I have in our interests and in the dynamic of the relationship is very similar to Peter, my co-founder at Luxe. Pete is more optimistic. He is perma-smile. He's— he loves being around people. He likes social engagements. He doesn't read as much, but, you know, he's just— he's got a very magnetic personality. And he's always— I joke, you know, wearing pastels and positive colors, reflective of that positive personality. I'm always in black, you know, Prince of Darkness, expecting the worst, cynical, sort of prepared for bad things to happen to protect myself emotionally so that when they do, I'm not surprised. Lauren is very much like Peter, like positive, optimistic, beautifully attractive and intelligent and gorgeous in every way, but she's the one that people will stop on the street to ask for directions, whereas I joke that they will see me and sort of cross the street, right? And so there's this sort of opposites attract phenomenon in both cases that I admire, respect, and trust both of them, but very different dispositions. I think over time I might have made Lauren a little bit more skeptical, not quite cynical, but of certain things. And she has made me more optimistic and positive about certain things. And it's just a great balance. But yeah, we were very, and still are very different in our likes and whether that's music or shows. I like really, you know, dark and complex and surreal things, very, you know, artistic. And, uh, and I like that in music. I like heavy metal and hardcore rap and, and weird eclectic stuff. And Lauren likes, you know, Casey Kasem Pop 40, and, um, and you know, he's much more, you know, cheery, uh, puppies and unicorns and, you know, positive things. And I'm like, you know, death, destruction. It's a good balance.

Yeah. You talk about, uh, your wife a lot and your children a lot in the podcast that I listened to, and I'm curious what advice you would have for somebody who is equally forward-minded in thinking about having a family in the future.

Again, I can only run this as, you know, it's so hard to imagine the counterfactual, but I had, I was like a serial monogamist. So I had a series of long-term relationships, you know, between like 3 and 5 years, all with very different personalities. Somebody gave me the super cheesy advice, but there's elements of it that are true. And it was actually a famous venture capitalist who I'd met early on when we were starting Luxe. And doubling on why this is horribly cheesy advice, it was a bit hypocritical because he gave me this advice on relationships. I think he was twice divorced. So, but the advice was that in a mate you can find somebody, in his colloquial thing, was a triplet of smart, sexy, sane. And he said, you know, you can find any two of those three in people that you might have dated or one of those three, but it's very hard when you find all three. So, you know, intelligence and attractiveness and then sanity. Now I found that the proxy for sanity is your future mother-in-law. So I happen to have a great mother-in-law and a great father-in-law and love them both. And so I got very lucky. But intelligence is something that stays or compounds. You know, beauty may fade over time. I'm very lucky. Lauren, I think, is beautiful. And you can go to the evolutionary reasons of symmetry and the golden phi and spiral and all those kinds of things. And you want to find somebody— and this is something that Michael Mauboussin used to talk about all the time— like, that is way better than you, right? And so in almost every way, I think, if you're a 6 or 7 or an 8, you want to marry a 9 and a 10. And you get lucky. I mean, the circumstances to imagine billions of people on Earth are tens of millions of people in this, in, in our, uh, demographic age group, or, or millions of people in the city. It's just so improbable, you know, to, to meet somebody. And, uh, we started dating before, you know, any of the apps existed. And, um, you know, I think cell phones were out at that point, but we, we started our romance on AOL Instant Message, you know.

And what was your screen name?

Uh, I think it was just Wolfe Josh, or, you know, so same as Twitter today. Uh, and I don't remember hers, but, um, I remember Peter used to walk into the office in the early days of Lux and say, are you IMing with Lauren? And I'd be like, yeah. He's like, you're looking off into the distance, sort of, you know, like dreamy, whatever. But yeah, I just, I was most attracted to her intellect and, you know, and her beauty. And I was also primed from circumstances that I deeply wanted a nuclear family. And my circumstances, my parents split when I was very young, raised by a single mom and my grandparents. 4 of us in a 2-bedroom, 1-bath apartment in Coney Island. And I just wanted a house, and I didn't really want a lawn, but— Why not?

Why not a lawn?

I just never experienced a lawn. I lived in an apartment building, like, yeah, just hundreds of people in our building. And I never— I always say that the serenity of the suburbs, the peace and quiet stresses me out. Mm. I need the serendipity of the city streets and the ambulance and the chaos and the noise and the alarms and, you know, the late-night bangs and gunshots in Coney Island. And so I still pine for that when we go away on weekends or somewhere. I, uh, I can't sleep unless I have a white noise machine or something that's creating some ambient sounds. Yeah, addicted to the noise.

Well, it's funny because you have this quote which is loosely related to your future family, and I'd love to read it here. It's from 2008. Years ago, I calculated that while my primate peers watched 6 to 8 hours of football on Sundays and another 6 to 8 hours of basketball during the week, I could be learning something they weren't. They were celebrating the competitive talent of others. I wanted to develop my own. I was a bigger fan of my own future and my own future family than I was of the all-star and his family on TV who could bounce a ball better or run in tights faster. The most valuable investment you can make is in yourself. To trade learning or creating something new today for idle entertainment tonight will have consequences you will feel tomorrow. I like that guy. He's a smart guy.

Yeah, I like that guy. Um, I miss that guy. Uh, yeah, I, I love sports. I love playing sports, but, um, I had friends that watched a lot of sports and, and, uh, again, it's sort of condescending because sports are a beautiful thing for people. It's a great bonding mechanism. It's a great emotional outlet. But, uh, at a time when I was very motivated and ambitious and in some cases jealous of people that were born into different circumstances and wanted to have what they had and fought whether by deserved objective truth or my own egotistical sense that I was more intelligent than them and that I, you know, could beat them. And so somebody once had a quote, I don't remember to whom it was attributed, but to be the man, you must beat the man. And so I've just always been sort of motivated to figure out, you know, who's on top and, you know, how do you dethrone them in some way or how do you achieve? So, so yes, for me, as I was learning things, I saw that I was gaining value because I knew things that other people didn't know, which made me more valuable. And so wanting to compound that, I became really from a young age, just playing lots of video games and watching a shit ton of TV, a voracious reader. And, um, and this was before you have the world at your disposal today to be able to, you know, let alone read all of Charlie Munger's speeches or Buffett's old letters and the wisdom that was embedded in those, to be able to watch, you know, all these videos is just insane today. So, uh, I can't imagine if I had the medium of today at my fingertips, you know, 15 years ago, if that would have been a good thing, a bad thing. I don't know. But, um, I think it's amazing accessibility to spend the time while other people are basically consuming content that really doesn't change week to week. I mean, the people on the field change, but, you know, it's, it's a very vicarious, you know, thing you're doing versus learning something that could make you more valuable, particularly on a relative basis. I just, I, yeah, I find it super valuable.

Yeah, it's very interesting you said that. And you talk often about chips on shoulders, put chips in pockets, and it's a famous quote, I'll go so far to say, from you. And I'm curious, you often say that, but is there a moment that you look to the most of like a particular time you were bullied or somebody looked down upon you that you go back to often and say, oh wow, like that's the scenario, that's the situation?

When I was, uh, 8, my, my mom went after my dad for child support, which he never paid. And, uh, in a crazy set of circumstances, he, because there was a father's rights judge, uh, won custody. And it was supposed to be temporary custody and it ended up being more permanent. I was supposed to be with him for about 3 months, and it ended up being 2 years. And it was a period that physiologically and psychologically was very tough on me. I was an 8-year-old kid. I lost weight at a time you should be growing. I was peeing my bed at 8 years old. It was just sort of a trauma with a little t. I was in a small town with these kids that were, I think I was the only Jew, and I was by far the most intelligent person. And every day I was the kid who had the whiz disease, 'cause I was the smart kid, so I was like it every day. And there were 2 kids that, basically like took me in and sort of protected me. One was this kid Adam Simon who's today an actor and a screenwriter in LA. The other perished. He was both an addict and a— I guess he was addicted to thrill, but he was a mountain climber and would perish from a heroin overdose, a guy, Micah Dash, whose mom and my mom are still close with. But both sort of protected me from that. But I really resented those kids when I came back. I resented some of my home friends who had accelerated in learning. I remember being deeply insecure. That they had all learned in 4th grade and half of 5th grade, which I missed, and half of 3rd grade, probability. And so I became obsessed with understanding probability because I was getting all these questions wrong and people were getting them right. And so that actually became sort of defining foundation in my own learning, just thinking probabilistically. And then I just always had like a chip on my shoulder, whether it was, you know, physically having a big nose, being short, you know, being poor, seeing kids with money. Like at every phase I encountered somebody who I thought had something that I didn't, and I didn't feel like it was deserved or like it was something that they earned. And so anytime I felt that personal jealousy or resentment, which is a very petty feeling, it was this great fire inside me. And so yeah, I think anybody, whether you are a fat kid, you know, whether you are a minority in a mostly homogeneous white neighborhood, whether you have a lisp, you were abused, you came from a broken family, like I am most attracted to the sort of misanthropes and the people that have this pain inside that I feel like is this perennial force that propels them forward. So yeah, that's, uh, yeah, you meant powerful.

Yeah, you mentioned probabilities being something that is very important to you based on what you just said. And it's funny because your 100-0-100 framework is probabilities in action.

Yeah, yeah, this is a poetic way of basically saying with a little bit of humility and a little bit of arrogance that I have 100% certainty. So that's so 100-0-100, each one of these is sort of where are we going to find our next opportunities at Lux? And I say that we have 100% certainty that we'll be investing in the most cutting-edge crazy stuff that you can imagine over the next 2 years. 0% probability— this is a little bit of false humility— of what those things will actually be. And it's true, like, I really don't know in 2 years what thing I'm going to be like obsessed with, but there's a good chance that I'm going to be obsessed with some new technology or some new person that I just haven't even met yet. But I know that serendipity will lead me there in the sort of sense of randomness and optionality. So 100% certainty we'll be investing in crazy cutting-edge stuff over the next 2 years, 0% certainty what those things may actually be. And near 100% certainty where we will find them, which is at the edge of our already cutting-edge investments. And we have path dependence and proof, meaning that we've invested in one company in the past that has led us to the next, which has led us to the next. And again, post facto, you can see this daisy chain. So in all kinds of examples, we invested in an autonomous vehicle company called Zoox, which Amazon would buy for $1 billion plus, and sort of the heart and brains of their autonomous vehicle effort, ultimately for the future of delivery. Being inside of that company Zoox in the early days, it was 6 people, and we were in the Slack Center of Stanford Stanford Linear Accelerator in the secret firehouse. And all these people look like they were playing video games. And I don't mind video games because I played a lot of them growing up. But I was like, what the heck are these people doing? And we had invested about $25 million into the company at the time. And the CEO reduced my ignorance and said, no, no, they are not playing video games. They are training these cars. And the cars can be trained one of two ways. They can be trained by actually ingesting real-life sensor data using LiDAR and optics and all this kind of stuff. Or you can train them in silico, and the machines don't know the difference whether they are training in effectively Grand Theft Auto with very high, uh, reality, uh, fidelity physics simulations, or they're training on actual sensors. So that led us to invest in this cutting-edge chip, uh, company, and an insight that NVIDIA on the public markets and another company called Nirvana Systems on the private markets were sort of the soul of the proverbial new machine. They were the, the GPU movement that was going to replace the CPUs. I never would have had that insight if it wasn't for a mistaken observation of a bunch of people playing video games, not understanding why they were doing that. So it's at the cutting-edge companies that we're invested in that leads to the next thing. Uh, same thing in space. Like, we found this crazy breakthrough in a scientific journal around these metamaterials. People were talking about it in the media about using, you know, these materials that could have a negative index of refraction so that you could bend light. And people were talking about invisibility cloaks at the time. Harry Potter was super hot. And it turned out, no, no, you can't actually do that at the visible spectrum. You could do that with different electromagnetic waves to be able to steer beams electronically without having a moving part like a radar or satellite dish that has to actually turn and move. And so we funded a company, started with Bill Gates. I mean, that itself was a crazy surreal experience. And being in the boardroom there, I got wind that there was this company that wanted to take these thin antennas that had no moving parts and put them on their small satellites. And so we invested in that company. A company now public called Planet. And then the imagery off of Planet that was coming gave an inspiration for another entrepreneur who wanted to take the imagery and process it using artificial intelligence to look at longitudinal, you know, changes over time and sell that to hedge funds or to intelligence services and government. And so one thing sort of parlays to the next, to the next, and you just never know. But, you know, in hindsight, it all makes sense. And that's the basis of this 100-0-100.

Yeah, you mentioned Bill Gates. What What has surprised you most from working closely with him and exchanging emails with him? I remember one story you mentioned was about you had an emotional position and he emails you back like, well, if you look at it more rationally, A doesn't equal B equals C, so therefore we should do D. And I thought that was an interesting observation. But what has surprised you most about working with Bill Gates?

Well, in that particular exchange, we were in the same company, but on opposite sides of how we were going to finance it. And remember, he's, you know, then either the number 1 or 2 or 3 richest man in the world. And we're nobody. And so I'm at the poker table with the short stack. And, and so we were trying to angle and position to make sure that we didn't lose investors' money, knowing that he had a basic infinite amount of cash that he could keep investing in the company. And so I put forth an argument and then I think that was not met with great receptivity. And then I put forth a more strong emotional argument. And then rather than like just shut me down, he logically explained why there was a better path. And when I actually read it, I was like, he's actually right. So, yeah, I think, I think he is supremely rational, not in every situation, but in every situation that I've observed, he reads the material deeply. He will sit and, you know, he's got a sort of physical tic where he will rock and, and you can sort of tell when he's into something, like he starts moving a little bit more, you know, aggressively. And he also has a different style in boardrooms than you would see publicly. Publicly, there's sort of a Mr. Rogers wearing a sweater, very, you know, but he would, you know, drop F-bombs and curse and, you know, just completely undress somebody and be like, that's the stupidest idea I've ever heard. And, and so there was an aggressiveness, but the aggressiveness was not browbeating. It was always about the intellectual idea. And so that I admired very much.

Did you ever, or do you ever feel intimidated being in some of these rooms? Because I hear you talk about the idea of being just the Coney Island kid and, and sitting here. I'm sure part of you remembers or feels that at a deep level.

Well, the feeling is always the meta feeling of, does this person respect me? And so when you walk into a room and you're not known, and, you know, Bill Gates is sitting there like, who the heck is this guy, right? Then I felt that. But I remember there was actually a very palpable moment where I made a recommendation on this company in particular, Chimera, and he looked up and was like, so do you think we should do blah, blah, blah? And I was like, yes. He's like, yeah, I actually think that's a really good idea. And so Suddenly it was like validating, right? It doesn't matter who you are, it was the merit of the idea. And so that, I think, in any situation, if you can walk in and you can have an idea, over time, if you keep giving good ideas, then your reputation will precede you in your next interaction. So yeah, no, I think early on I was intimidated because ultimately you're intimidated why? Somebody could reject you, right? They can call you an idiot. They could. But even at a young age, my mother was always like, you know, you get up on stage, imagine everybody's naked and they're making fun of you. And so I've always sort of been primed to imagine the worst case scenario in this. There's, there's very few people where I feel intimidated that, you know, I, I can anticipate with some anxiety as I forecast the future, like I might not get what I want, right? I might not have control over the situation. They may not agree with me, uh, and that can cause stress. I think all stress is caused by a lack of control ultimately over what you want to be, but no, very rarely intimidated.

Yeah. You've mentioned before in a previous podcast that one of your proudest moments was when somebody introduced you as, or introduced your dad as Josh Wolfe's dad. Yeah. And that was like, wow, I made it at that point.

Yeah, I made it. I mean, for me, right? For nobody else would care about that moment. But being defined, or in both personally for me being defined, but for him being defined, you know, many people are like, oh, you're that guy's son, right? And instead it was, oh, you're Josh's father. And, and so It was sort of this measure of me eclipsing him in status, and I had a lot of resentment for him because he didn't contribute anything to— my mother worked two jobs, she sacrificed everything, sacrificed her life, and my father was more selfish in his orientation. And so I always say that I learned more as a father and as a husband by inverting, you know, the things that I observed from him. And I try to minimize regret. My son recently asked if he can connect with my father, and I didn't want my son to inherit any of my negativity or biases. And so I actually set it up so that they can connect and FaceTime, and he's like, he's a lot older than I thought, you know. And, uh, anyway, but, you know, went fine. Yeah.

And you mentioned inverting, like Charlie Munger, you know, if you want to find out something good, well, figure out what's bad and then just don't do that.

Yeah, he got that from Carl Jacobi, a mathematician, uh, 18th, 19th century, uh, And yeah, invert, always invert. It was sort of like flip a thing on its head. So yes, I took that as a parenting and husband thing to be the reciprocal of my dad. But yeah, I think in problems, some people look and say, okay, well, what— Peter, for example, my co-founder at Lux, is always saying, well, what are we solving for? So rather than come up with lots of solutions, he starts with the endpoint, like what's the goal? And so yeah, I think inverting problems and thinking about the opposite. Is super helpful. But then also there's a debate where if you listen to Peter Thiel, Peter will say, you know, study the successes. And I actually think that, you know, sometimes luck plays a much more significant role in success than people are willing to either personally attribute or we observe. We put halos on people, we celebrate companies, and there's so many circumstances. Again, going back to that earlier discussion we were having about that particular moment in time that Bill Conway said yes, like, who knows, right? So You could study it and say, "Oh, Josh Wolfe must have said something right. What did he say?" But there's a whole other half or more to that equation. And so I think it's more valuable to study the failures. And you want to study the same thing, like, did they fail because the process was bad or the outcome was bad? They got, you know, unlucky. But I think it's really valuable to see the serial mistakes that people make. A lot of times it is, you know, being too emotional, you know, burning bridges. It's the things that we all try to reduce, you know, to be less emotional, more rational, and, human interactions. It's being overconfident, overplaying a hand, having less resources in any circumstance than you might need so that if something goes wrong, you have a margin of safety. That is true, as I tell my kids, whether you're following a car in front of you to have a margin of safety, whether that is having an umbrella in case it might rain. I would say that it's better to have it and not need it than to need it and not have it. And that's something that they've heard since they were, you know, literally like 1 year old each. And same thing for companies. It's better to have a balance sheet war chest, you know, than to be dependent on the benevolence and the kindness of strangers that you're going to either pitch for money or beg for it.

Yeah. I found it really interesting how you keep records of people who have made poor decisions. And one such instance of this was you telling your daughter, I believe, about somebody who fell to their death when they were looking at Instagram, where a lot of parents would, you know, say, shield them from that. You said, look, look at this, look at the mistake they made and look what we can learn from it.

I thought that was interesting. So there's like, you know, probably textbooks in Harvard that have, you know, amazing studies of what you can copy and philosophers and ideals. But the New York Post, if this inversion technique is just incredible, like you pull out any page of the New York Post and there's just some example of somebody who did something idiotic, regretful and whatever. Now, of course, you know, you have murders and, you know, um, you know, jealous lovers and suicides and people jumping, you know, but, but, you know, the teenagers, which is for my oldest is 12 and a half, the kids who are now like subway surfing, right? Like, what is subway surfing? Subway surfing are people that are literally riding the trains like on top of it, like Subway Surfer from the app, and they're getting decapitated or like, you know, ending up in the hospital brain dead. And so those are not things I want to shield them from. I want them to see this so that It's like if you ever have any friends, and they will have friends that do stupid things, because I remember being a teenage boy, and they will have teenage boy friends who will drive irresponsibly and make poor decisions, and that's just unfortunately an element of our species. And many of us survive that, but I want to protect them because how often you read these stories of these kids that were born into luckier circumstances in life and then just either make a bad decision or near somebody that made a bad decision. And so, um, yeah, no, the New York Post is great for inverting and learning lessons of what not to do from so many people.

Yeah. You, you have such a chip on your shoulder from the hardship you had as a child, but it seems like your children have it pretty good. And so how do you put that hardship on the children or do it in a way that helps them grow? Honest answer is I don't know.

Um, We think about it a lot. We have debates about, you know, how much you share. I'm more in the, you know, we should be very honest about money and wealth. And we have debates about, you know, whether that's appropriate. I'd rather them have a responsible relationship with it, you know, than them Googling things or people telling them things or things like that. And so I remember sitting with Stan Druckenmiller, and I had given him advice before, or I asked for his advice, I think, right when I was married, but before we had kids. And must have been 15 years ago, raising our first fund. He was one of the anchor investors in that. And I remember he gave me this one piece of advice. First of all, he had this book, and the book was like everything I know, you know, by Stan Druckenmiller. And when you open it up, it was this great sort of gag of humility because every page was blank. And so somebody gave it to him as a joke or something, but like he proudly displayed it, right? As this like, even if again, it was false humility, this idea that, you know, nobody knows nothing. Yeah. But the advice that he gave was there's no such thing as quality time. And I'd heard from so many people, oh, you know, you go to work and then you carve out and you do this on Saturday or whatever. It's just— and his argument was it's just quantity. And so we spend a lot of time with our kids and we make it a principle here. If you have, you know, some bird recital or there's some chorus thing, or— I have never missed anything from all my kids. And, you know, now in 7th and 5th and first grade, like in anything that they've ever done. And part of that was, you know, I did not have a father that was present for any of that stuff. And I had a mother who was, but, um, I don't, I want my kids to just like, my biggest goal is that my kids are like, my dad was an amazing dad. That to me is great success. So teaching hardship, I don't know. Um, it's, it's, it's part, um, I know without a doubt when my oldest is, um, 14 and legally allowed to work, like She's gonna work. She's gonna work, you know, blue-collar hard jobs. I'm not getting her some, you know, fancy internship with somebody through meritocracy. I didn't have any of that, and I want her to appreciate the people around her who were born in different circumstances on the one hand, and then what, you know, the value of actually earning hard work is. At 10, she got a laptop, but I made her pay for half of it, and she's like, how do I make money? And I'm like, well, you got to figure that out. She came up with the idea for a yard sale, but outside of the park down where we live downtown. And, and I was actually very proud of her because she was selling all the stuff and she had one thing for $2. It was like a stuffed animal. And this kid that she knew from kindergarten came, was like, I want it. She's like, no, for you it's $10. And I was like, all right, she's gonna do all right.

That's amazing. You, you've mentioned before about how you— well, let's take it to a different direction of like, when did you know or feel the most rich? Like, people talk about moments when they had, like, their first paycheck or their first thing that made them feel like, oh wow, I've made it. And it's usually not at the highest point of their wealth, but like their first feeling of, oh wow, I'm, I'm in a much different circumstance.

Um, maybe when we bought an apartment, you know, and actually, like, owned something. But I still don't feel that way, and I think that's one of those things that like you can see in certain people. I, I've never had the ambitions for material things like watches and cars and boats and stuff like that. It's just not either something I enjoy nor something I seek to display. For me, it's more the freedom to be able to move or travel or go, or, um, and, and then to, to me, like, being rich is really the richness of ideas and people I respect respecting me back. So I, I would, I have zero interest in some mega mansion or some boat or some fancy car or some I couldn't even tell you what watch I wear. It's like digital watches or an Apple Watch, um, or, you know, fancy clothes. But to be able to call Danny Kahneman or email him and for Danny be like, yeah, let's go grab lunch— like, that to me is the coolest. And, and so that to me is the most important thing, is, is getting the respect from the people who I admire and respect, and for them to respect me back or think that something I have to say is valuable. And, and in a sense, it's, it's the ultimate wealth because it's invaluable. Like, you can't buy that.

Yeah, that's why I do this podcast as well. What, what have you learned from Danny Kahneman?

That no matter how many biases we can catalog and understand, that just like in an optical illusion, you can know that exists but you can't not see it. And so we are, uh, social primates. We're deeply flawed. We have biases. Knowledge can mitigate some of them, but for the most part, the reason that we make decisions is not often because we have rationally thought through the decision. Like, we might tell ourselves that story, but oftentimes the reason that we make the decision is because somebody in our social circle has also made that decision, you know?

What's the bias that you often come back to often that tricks you? Is there one that comes to mind?

Hmm, a bias that consistently Yeah, I think the biggest thing, which is why it's really helpful to have a partnership, is confirmation bias. Is I get set on something and then I'm absolutely dead set convinced on it and I need somebody else to tell me. Now, what's interesting is two different people can tell me the same piece of disconfirming evidence, but it depends on who it is that I will trust more. So if Peter, if somebody is like, you should take that tweet down. You know, like, it's— yeah, and I dismiss it. But if Peter or Lauren, who I trust and admire, respect like fully and unconditionally, are like, dude, take that down, like, I'll do it. So, or somebody's like, I really think you're wrong about this, like, it really depends on the source more than the actual substance of the idea. And that's probably the biggest thing that I've changed my mind on from Danny, that, you know, we're way more influenced by the people than by the idea itself.

Josh Wolfe, thank you so much for taking the time today. I'm really honored and grateful to have spent some time with you. I have enough notes where we could talk for many more hours, but I'm really grateful for you taking the time here today.

I'll look forward to our next. Thanks, man.

Appreciate you.

Cool. Okay, good. Here you go. Good questions.