How to Think 10x in the Silicon Valley | Fund Manager Joon Yun

So thank you for your time this morning. I want to welcome you all to the first day of Draper University. I got to tell you, it's going to be an amazing experience. I've been able to stay in touch with a lot of former students who are off and doing amazing things. But this time together that you guys have, both with the staff here and with each other, is going to be amazing. So I want to share with you just 3 things that I would like you to remember. They're easy to remember. And we're gonna go a little deeper into each of these subjects. The first thing, the first rule of being an entrepreneur, in my opinion, is to be a camera. Now, what does that mean? What does that mean to be a camera? Well, as it turns out, once we exit our childhood, our brain behaves more like a projector than it does a camera. What do I mean by this? When we're young, we can see almost anything. Have you guys been around little children? I mean, doesn't it seem like they can see things we can no longer see? They keep pointing out things for us, and they amaze us by what they're able to see. They call it out for us. And after age 12, we're still able to think, we're doing great things out there, but we lose that ability to see. We also lose the ability to acquire things like language, acquire complex skills like skiing, All these things are really available to us in their first 12 years. So what is that all about? First of all, do you even believe me that it's hard to see what's in front of you? That our brain is behaving like a projector instead of a camera? I'm gonna put you guys to a test. This is a very easy test, not a trick test. All you gotta do is read this one sentence and count the number of times the letter F appears. It's a short sentence. After you're done, look at me so I know that you're done. You guys ready? Yes. And by the way, ironically, it's easier to get this test right from the edges. But yes, go ahead and sit back there and count the number of times the letter F appears in this one sentence. Read it front to back. Read it once. When you're done, look at me. OK. How many people saw all 3? I saw 3. 5. 6. 5. Somebody saw 4. Somebody saw 5. 6 Fs. A couple people saw 6. OK, so the real answer is— well, how many people saw 3? Just raise your hands. How many saw what? 3. 3 Fs. How many people saw 4? How many people saw 5? How many people saw 6? How many people saw 7? I have a question. Yes. How can there be 5-winged flies? Ah, good question. How could what? 5-winged flies. It's a made-up idea of a 5-winged fly. And it said experience of many years. How can flies have experience? The goal was to write a nonsensical sentence so it's easier for you guys to pick up the Fs, and yet it's still hard. So in tests that are done across the country, you guys are obviously younger than the average. The answer is 6, and kids under 12 never get it wrong, and the older you get, the more likely it is that you're going to get the answer wrong. Now, now that you know the answer, see if you can count all 6, those of you who saw something different than 6. 5 flies, of, of, fic, and of. You skipped one. So this is an amazing thing. As it turns out, very few adults can see See all 6 Fs, even though it's right in front of us. And the majority of people see 3. I'm talking about 90% plus of adults see only 3 Fs. So what's going on here? Why does our mind go from being a projector— going from being a camera when we're young to being a projector? Now, to answer that question was the subject of the first talk I gave at DraperU. That's all on video. So instead, I'm going to focus on The second thing to remember as an entrepreneur, which is the idea of aiming high. Now aiming high, thinking big, all these things are things you've heard about. But I'm gonna tell you about how difficult this really is and what it's gonna take to aim high. And for the sake of it, I'm just gonna say aiming high, I'm gonna define it as aiming at least 10x. So as it turns out, the majority of us aim too low. Now when I talk to my friends who are in their 40s now, they're looking for about a 20% return on the rest of their life. What I mean by that is they can kind of see what, where, how their life's gonna head. They're gonna, they know who they're gonna be married to. They know how they're gonna retire, where they're gonna be. That's aiming too low. That's aiming for 20%. Aim for 10x. Means you have no idea where your life's going to end up, even at age 40. Mm-hmm. Now, the majority of us are pretty good at aiming high when we're young. The older we get, the, the lower we set our horizons. Now, what is this all about? In fact, I think it's pretty easy to pick out somebody who's aiming too low. You can tell by the kinds of questions they ask. So in an investment business, you want to aim for high returns, right? Whether you're a venture capitalist or a public company investor, you want high returns. As it turns out, most people are aiming for low returns. They're typically looking for about a 20% return. And the way you pick them up is by listening to their questions. If they say, I like that stock, but I want to look for a 10% dip in the stock price to buy it, they're letting you know that the expected return is only 20%. That 10% matters. That's half your gain. Whereas, if you're aiming for 10x returns— On your investment, you don't care about a 10% difference in entry price. That's rounding error. And yet the majority of the world is looking for low returns. Now, there are several issues with aiming too low. The biggest one is that you actually get there. So success in aiming low is defined by you make your 20%. Whereas if you're aiming 10x, even if you fail, you might still do 3x. Furthermore, aiming too low has become the crowded trade. Everybody's afraid of risk. And I gotta tell you, oftentimes the risk of not doing something is a lot higher than the risk of doing something. And yet we become so conditioned to be afraid that the majority of people are aiming too low. So aiming high is the uncrowded trade. There's almost nobody that's looking for 10x returns. Almost everybody is looking for very low returns. It's called Treasuries. The majority of people over the last 5 years have been invested in Treasuries, which has almost no returns. And because that's the crowded trade, they're not even going to get there. In fact, the yields on Treasuries have been negative over the last 5 years. Here's another issue with aiming too low. When the stakes are low, people fight, right? And you hear this about oftentimes in academia. Because the stakes are so low, they fight over everything. They fight over parking spots, who's got the corner office. When the stakes are high, it brings people together. You realize it's all about growing the pie, whether it's sharing stock options, sharing the opportunity. Aiming high tends to build teams. It tends to encourage people to collaborate. I mean, if the Earth was suddenly at risk of getting hit by a meteor, everybody would get together. We'd fight this common enemy together. So when the stakes are high, people tend to unite. When the stakes are low, people become dividers. One of the issues in healthcare is people see the— say that the costs are high. Well, one of the issues for costs being so high in healthcare, I've never heard anybody discuss. I think one of the things that's driving up costs in healthcare is that the pharmaceutical companies are aiming way too low. So guess what happens when you aim low? Let's say you've got 8 drugs out there for schizophrenia, and you try to bring a 9th one to market that's slightly better. Well, guess what? In order to show any benefit, you gotta run massive trials requiring tens of thousands of patients for that small difference. So that's why the clinical trials cost hundreds of millions of dollars. The vast majority of drugs out there are me-too drugs trying to gain small increment of advantage over the status quo. And so because the development costs are so high, the price that we all pay as consumers is so high. So ironically, aiming too low within the healthcare system is one of the causes of costs being so high. I think the biggest cost of aiming too low is that it actually is depressing. So imagine being 40 and knowing how you're going to live What you're gonna do, where you're gonna retire. I mean, you can see all the way through to the end. Linear thinking gets you all the way to the end, and seeing the end is pretty depressing. Whereas when you're aiming high, when you're aiming 10x, you have to think in curves. You can't see around corners, so life remains a mystery. You can remain engaged. Alright, so aim high. Now, here are some things— oh, and aiming high, by the way, is what we all did as children. We didn't call it aiming high, right? We called it dreaming. We all dreamed when we were children. And what happens as we grow up? We stop dreaming. Reality kicks in. Reality kicks in. But I would say, I think we start setting our horizons too low. The reality's always been available to us. They're available to children, too. And yet they see something much bigger. So 3 things you can do to— Aim 10x. Aim 10x. One, this is the easiest one, be positive. The reason it's easy is because you're here with Tim Draper. I mean, there's no more positive a person I know than Tim. So when you spend time with him, you realize there's so much upside to everything that's going on. The second, being selective. So in a world with so much opportunity, we have to be selective. We have to curate down to a few things. If you do everything that's interesting, What happens? You're completely saturated. In the same way that in order to generate a 10x in the investment world, you have to concentrate your portfolio into just 10 things, or 15 things. In your life, if you try to do everything, you become a mutual fund, right? Your expected returns can be just what the market average is. So if you do everything, you're not gonna generate the 10x return. You have to do very few things. The genius is in what you choose not to do. And you gotta have some criteria for that. I'm gonna spend more time on this third thing called compound thinking. The first 2 I covered in a prior lecture here. Compound thinking, what is this all about? Well, compound thinking is what linear thinking is not. So let's talk about this a little bit. My son, Who, at the time, was 6 years old, was tying his shoes one day, or I was tying his shoes, I should say. And he stops me and says, Daddy, the number 1,000 is a really small number. It's only 50 20s. That's a really small number. And I thought about that for a second. When I was— when I was little, I used to think 1,000 was— Big. A big number. When I used to hear something happened 1,000 years ago, my mind heard it as it was like ancient history, right? This is Charlemagne. When I used to think about 1,000 years ago, that seems so remote. But now that I've been around for almost 50 years— I'm rounding up a little bit— I've been around half a century. It went by like a blink. 50 years went by like a blink. So if 50 years is a blink, how many blinks is 1,000 years? 20. 20 blinks. That's all it is. 20 blinks in 1,000 years. In fact, if you go back to the beginning of recorded history, 10,000 years, how many blinks is that? 200. 200 blinks? That's nothing. It makes you realize how small big numbers really are. What's going on here? So our mind tends to underestimate how quickly things grow. This is an old study from the 1950s. And in the study, these scientists asked the audience to estimate what the product of the numbers 1 through 8 is. And when you multiply 1, 2, 3, 4, 5, 6, 7, 8 in that order, people estimated around 500. 500. When they reversed the numbers, guess what happened? 8 times— I'm sorry? Bigger than higher. Yeah, higher number. So 1,000. And the real answer is? Yeah, 40,320. I mean, here we are, we're all trained in math, what's happening here? So the authors concluded the fact that the order matters. I look at this That thinking, well, it's not just the order that matters, they're both wrong. That's the most interesting part of this whole study. So what's going on here? And this story's been told in many different ways. There's the chessboard problem. If you double the number of grains of rice, you start with 1, by the time you get to 64, it becomes some astronomical number. Our minds can't go— get around how fast things grow. So when things occur through a recursive process like multiplication, Things grow really rapidly. In fact, everything in nature occurs through some recursive process. Right? The population of rabbits goes from 2, 4, 8, maybe one dies, you got 7, then 14. It often follows what's called a Fibonacci sequence. Fibonacci is another recursive function, just like multiplication. And therefore, if you open up any science magazine, You don't even have to look at the data. The charts all show a graph. Have you guys opened up any science magazine, any math magazine, any physics magazine? Everything in nature occurs through a curve. Why? Because everything in nature occurs through recursion. There's not a single thing in nature that goes from 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, even though that's how we're trained to do math, right? So we're taught this thing called linear math, and yet nature does its own thing, which is it emerges through recursion. And therefore, you end up with a world like this. We live in a world where everything in nature is a curve. Look around you. Everything in nature is a curve, and all the straight lines are man-made. No one's ever described this. So we live— we've built up this linear world based on linear math, which is a very good math. It's Cartesian math, Sumerian math. And we fit that into a world that is naturally curving. So the math that we all use was invented in several civilizations independent of each other. And I think it emerged because linear math became necessary as a function of transactions. We'll go over that in a second. So the Sumerian math, the Mesopotamian math, the Chinese math, all have linear basis. And that's what we're taught in school. And the linear mathematicians will tell you that the difference between the number 10 and 1 is identical to the difference between the numbers 100 and 91, right? They say it's 9. Well, let me tell you how nature would look at this. Here's the difference between 10 pebbles and 1 pebble. And does that look the same to you as the difference between 100 pebbles and 91 pebbles? No. No. So in this case, it's actually the ratio that matters. So in linear math, we're taught these are identical. In natural math, we realize these are completely different things. In fact, if you were to take away numbers and just place, let's say, chips— Here's how a modern student would place the chips on a scale of 1 to 100. They would place it this way. Right? There's 1 and 10. That's 91 and 100. This is the linear scale, right? Well, it turns out, if you go to people that are untrained in modern math, this is how they would space Quantities. So this next data was taken from Aborigines. This is how they space quantities. Remember, they have no math system. This is how— when you ask them to space pebbles on a 0 to 1 or 1 to 100 scale, here's how they do it. In fact, this is also how American children do it. Before they enter preschool. So we're all wired to be able to do this. Let's just call it compound thinking, for the lack of a better word. And then we're trained into linear math. So think about the scale I just showed you. The best way to describe what we just saw is a compressive scale. Our minds were wired to think in a compressive scale. What I mean by compressive scale is There's high resolution at low numbers, right? You can see bigger spaces, and low resolution at high numbers. Why in the world would our brains be wired in this way? Why high resolution? Why can we discriminate between low numbers and we can't discriminate between high numbers in the natural world? Well, the first reason is because it's relevant. Low numbers connote scarcity, and it makes a huge difference whether you can tell there's 3 bananas or 2 bananas when you're making your choices, right? It makes no difference if you can discriminate difference between high numbers. 100 bananas versus 91, who cares? It's not relevant, right? So nature has wired in this ability to discriminate at low resolution and low numbers and have no resolution at high numbers. The second reason is Pareto's Law. Have you guys heard of Pareto's Law? The vast majority of things in nature happen infrequently, so most things happen at very low numbers. Very few things occur at high numbers. The third reason is— the third reason for the compressive scale is that you can compact a lot of information in a small amount of space. So the way our senses work, our hearing, Our vision. Everything works on a compressive scale, kind of like the Richter scale. You can pack a lot of information on the Richter scale, whereas if you had to depict seismographic information in a linear scale, it would go from here to the moon, right? So that's the third beauty of a compressive scale. It's highly efficient in terms of storing, and processing, and displaying information. So I was driving home one day, and I realized, wow, even lampposts— When you really think about it, is a compressive scale. Right. And this is nothing more than what we used to see in nature, trees. So when a lion is between the 2nd and 3rd tree, that's really relevant, right? It's about to get you. When the lion is between the 100th tree and the 101st, who cares? It's far away. So nature has wired in this capacity to do compressive-scale thinking, and yet, because of the linear math we're taught, sometimes it can actually cause a lot of confusion. We can make the wrong decisions. I've been floored at the inability of the financial markets to truly factor in risk, especially when things accumulate. So you could see in 2007 that if housing went down, The mortgages market would go down, which would take the banks down, which would take the stock market down, which would take the economy down. It was all lined up in sequence. 'Cause things occur through compounding, recursion, as cascades, right? Everything dominoes. But if you were to think about that from a linear perspective, people are doing linear models of risk, they all underestimated how deep the abyss was. Right. So think about this as the mathematical reasoning behind the Black Swan. Have you guys heard of the Black Swan? Black Swan basically is Nassim Taleb's idea that outlier events are systematically underpriced by the market. So negative consequences are underpriced. What I just provided to you is the Darwinian reason, or the biologic reason, why People can't do this kind of estimation, especially if it involves recursive things, which is most things in nature. But it's not only the downside. What we're here to talk about is the upside. I actually think that linear math is great for a lot of things, including surviving in this linear world, in the linear financial system. But in terms of thinking about growth, opportunities, thinking about your life, I think linear thinking gets in the way. I would recommend doing compound thinking because from what I see, the vast majority of people underestimate how great things are gonna be, whether it's your life or the future. Oh, I give this example. We're all required to take a lot of math to get through medical school, and it leads to some issues because We're trained to think linearly in medicine, so we do this thing called the annual checkup. And yet if you look at our biologic decline, all of our biologic systems fail in a compounding way, right? If you look at our pulmonary function, renal function, cognitive function, everything's declining in a recursive way, and yet we do annual checkups. So what ends up happening is we oversample people when they're young, and we undersample people when they're older. The way we age, we're literally going from 69 to 72 to 85 to 150 to 500 to 6,000. We're getting that old that fast every year. So the linear construct here actually gets in the way of actually serving patients well. OK, let's talk about the upside. So if you go back into '93 and read about what people forecast about what's going to happen to the world because of the internet— Even the most optimistic projections completely missed it. And people have admitted to this. Because it's hard to foresee back then, through linear thinking, how the world was gonna be completely transformed. I mean, it's insane. Of course, 20 years ago, many of you were not even alive. But I tell you, we were there, and people were, you know, saying they had these crazy projections, and yet they completely underestimated where we would be in 2013. And that's because everything on the internet is recursive, right? The more websites there are, the more nodes there are. The more nodes there are, the more websites there are. Everything occurs through this recursive process. So as great as you think the world is today, imagine what the next 20 years are gonna be. In fact, I'm telling you, it's hard to. Remember, the 2 things to remember is we gotta get outside our heads. We gotta see what's in front of us in order to see the problems. But then you have to get back inside your heads and do this imaginative thinking, compound thinking, to really see how big the opportunities are. And when I think about the world today, it is— the world I imagine is gonna be transformative. It's gonna be incredible. It sort of defies our thinking. And it's gonna be something really great. Now, there's risks out there. Bad things can happen too. But by and large, I think the opportunities vastly outweigh the risks out there. And I'd be getting ready for something really transformative coming. So one of those things I believe is healthcare. I'm gonna go through, walk through an example of the process I just described. So let's just be the camera on healthcare system for a second, right? So people, healthcare is great. We spend $2 trillion a year. We've been increasing lifespan for 200 years linearly. And, you know, we come up with more and more therapies to solve more and more diseases. We're doing great things. Now, that doesn't mean that we can't make it better and make it dramatically better, and one of the processes we can use is be a camera. Okay, so here's an example of being a camera. Germ theory's been around 100 years, and yet when you walk into the hospital, what do they have? They still have doorknobs, right? Yeah. They have elevator buttons. I mean, this makes no sense, right? If you weren't sick before, Now you're about to get sick. I was watching— I took a bunch of Stanford d.school students on a safari of Stanford Hospital. And I'm like, just, you know, OK, let's just watch this. Let's watch that leper hand over that coin to the cashier. And let's watch the oncology patient receive the same coins from the cashier. I mean, this is insanity, right? We've known this stuff for 100 years. Mm-hm. I think Stanford— Cardiology, yes. So why do doctors, like, why can they walk out of the hospital with scrubs on? I don't know, I don't know. So disgusting. I don't know, it makes no sense, right? Makes no sense. Stanford helped cultivate the idea that bacon, eggs, and potatoes kill you. They invented that on the 2nd floor of the hospital. And if you walk down the stairs and go down to the 1st floor Stanford cafeteria, what do they serve you? Bacon, eggs, and potatoes, right? I mean, it's just all hiding in plain sight. Pediatricians will tell you, keep your kids away from public places in the wintertime when every kid has a virus where they're gonna share a toy, like museums. They say stay away from that. And you look at a pediatrician's own waiting room, what do they have? Books. They have books and toys, right? So if you weren't sick before, you're about to get sick. These are all like easy stuff. This is easy stuff that's gonna transform healthcare. Think about the billions of new problems that are created that are completely avoidable just by Being a camera and calling out all the obvious stuff, right? Things like this are all over healthcare. Here's another one. Emergency open daily 9 to 8:30 AM. Emergency knows no time of day. In fact, studies have shown if you go into a hospital with a heart attack or stroke after hours or on a weekend, your mortality rate shoots up. I mean, here we are trying to prevent people from dying, and yet there's evidence hiding in plain sight. that we should actually be— we should have 24/7 service for emergency rooms and ICUs. We could easily save thousands of lives by stating the obvious, right? So be a camera, right? Be a camera, and you can call out the things that make no sense in the system. Anyway, these are some of the easy innovations. Now what if we do be a camera, And aim 10x, or maybe even aim a little higher. Oh, this is another one. Sorry. This one was so fun. So I have food allergies, and I carry this thing around called an EpiPen. Have you guys seen one of these? Anybody here have food allergies besides me? A couple. A couple of you. OK. So unfortunately, when people with severe food allergies get exposed, They go into anaphylaxis. Their airways tighten, blood pressure drops. And then you inject this, and in 2 minutes, everything reverses. So guess what my 7-year-old son asked? He said— because at that point, we were looking at what are the potential cures for food allergies, and we didn't find anything great. We found some interesting things, but nothing that's really curative or transformative. And so my son— Who's 7 years old, looks at this and says, is it possible that actually you just can't make enough epinephrine, that that's the real disease? I'm like, huh. So we went and tested it out, and after 5 patients, 5 in a row had, couldn't make epinephrine. So we now have a new scientific finding, never been looked at before, never been observed before. And now invites new questions and presents new opportunities for finding a cure for food allergies. So he holds his first patent at the age of 7. They asked him to write a grant. I'm like, are you crazy? This 7-year-old's not going to write a grant. So we're going to do this as the second medical prize, the second million dollars we're going to donate to figure out what the heck's going on with all these people not being able to make epinephrine. Unprecedented findings. So see how easy that is, guys? Yeah. Transformative stuff. Be a camera. OK. So what happens if you turn on your camera and you aim really high? Have you guys heard of the idea of a moonshot? Yes. The moonshot. OK. So John F. Kennedy, in order to get people to work together and do amazing things, you know, he created the idea of a moonshot. So I'd recommend not doing the moonshot. Because that's aiming too low, right? We've already been there 19 times, right? So let's aim much higher than the moonshot. So here's Mars, yeah, we can aim Mars, that's much better. So I'm asking for the Proximus shot. Proximus is the nearest star, right? Aim for Proximus. This is the modern call to action. So what would the Proximus shot of healthcare be? I think So this is aiming at least 1 million x, but probably a lot more. What's the million x return in healthcare? So the current system— well, the million x is not what we're doing today, right? What we're doing in the system today is incremental. This is the Plan A in healthcare, is actually great. This is what I did when I was practicing medicine, and this is what I do as an investor in healthcare. We play whack-a-mole. We see a problem and we go solve it. See another problem, go solve it. So as we age, we're basically exposed to a game of whack-a-mole, you know, and you try to do the best you can. We're doing pretty well, but in the end you still die. So for 200 years, the medical system has done a decent job of expanding our lifespan, making us healthier, live longer, and so it's a great system. That's Plan A. That's pretty reasonable, right? Yeah. In fact, I love investing in Plan A. But I have a Plan B. So here's the Plan B. Does it speak? Oh. And the Plan B is gonna require— this is the Copernican Revolution. You guys know this? I hate to use the phrase because you guys know what happened to Copernicus, right? He got beheaded. The Copernican Revolution of healthcare. might look like something like this. You have a question? No, I just— OK. So the Copernican Revolution was all about taking the existing data that everybody else saw and changing the framework. And all of a sudden, the math became simpler. That's all he really did, right? So before Copernicus, people believed that the Earth was the center of the universe. Now, we all know the center of the universe is Silicon Valley. What he did was he took the math and he basically made the sun the center, and all of a sudden, the orbit of the moon that used to have to be very complicated in order to fit the math now became sensible, right? So that's all Copernicus did. He just changed the framework, made it simpler, and things made sense. So what is the Copernican revolution of healthcare? What if you made medicine a lot simpler? What happens? Anybody know this person? Blaise Pascal? Another mathematician. Mathematicians tend to be philosophers. So he had a philosophy that he called Pascal's wager. This is Pascal's wager. Have you guys heard of Pascal's wager? No. OK. So basically, he says it's— You can't prove or disprove the existence of God. You can't prove or disprove this. But if you assume that he doesn't exist and you're wrong— well, I'm sorry. If you assume he doesn't exist and he does exist, you've got a big problem. If you assume he does exist and you're wrong, it's a small price to pay. That's Pascal's wager. You have this asymmetric payoff. You guys follow that? This basically looks like every McKinsey chart, right? It's a 4-quadrant. All right, so, and therefore, that was the wager that he made, and he actually scribbled this in the margins of his notes. This was discovered posthumously, so I hope he's happy with his decision. So I'm gonna propose to you this idea of Weissman's wager. So August Weissman is the 2nd most important evolutionary biologist ever, which is another way of saying we have no idea who he is, right? America only knows number one. So he's number 2. He's the guy who actually did a lot of work on the evolution of sexual reproduction. He was a successor to Darwin. And he was the first one to use Darwinian theory to wonder if aging is a trait. Is aging a trait? Now, that idea was around for 50 years. Until it got killed by Peter Medawar, who's a Nobel laureate. It takes a Nobel laureate to kill a field. And Peter Medawar basically said any trait that emerges after reproduction cannot be selected for, and since aging occurs after reproduction, it can't be a trait. Now we all know it's a trait because Google said so 2 weeks ago, but along the last 50 years, people assumed if you said aging is a trait, they said you're crazy. And yet it's very easy to provide a counterargument to Medawar's argument and come up with examples of things that happen that we do after reproduction, so after age 45, that affect our evolutionary fitness. One is called grandmothering. This is called grandmothering, grandmother's hypothesis. I would call this Hefner's hypothesis, 'cause Hefner is clearly affecting, even though he's past his prime, he's affecting the fitness of those around them by plucking 20-year-olds off the market, right? In fact, if you look across nature, there's many examples of things that happen that make it seem like aging is a trait. Salmon go upstream, they lay their young, and then their hormones start going haywire, their system goes haywire, and then they die. They happen to die downstream of their own young, become part of the food chain, That their kids eat, and you just made better versions of yourselves, right? Yes. So you tell me that's not a trait. There's many examples of this in nature where it certainly seems like aging is a programmed process. There's also examples out there you've heard of where it looks like there's no evidence of aging in certain species. There's no evidence of biologic aging. They just seem to have this sort of indefinite persistence. In fact, it makes no sense from a thermodynamic standpoint that aging should be necessary. Because as long as you can— we're not a closed system as a living system. So as long as there's energy around, we ought to be able to rebuild ourselves. So it's not a thermodynamic necessity that we have to age and die. But because of this mental block we've had in science for the last 50 years from Medawar's argument, we've not considered the possibility that aging is a trait. This is good news. That means that this is the road not taken, and it's priced at zero. That means that there's actually an open possibility. If we've been trying for the last 50 years and not come up with a solution, it'd be one thing, but the fact that we haven't even tried thinking this way gives me enormous hope that we're about to hit the massive jackpot. Okay, so let's start with this idea that maybe aging's a trait. Maybe it's a code. So anytime there's a code, you can decipher it. And if you decipher the code, then you can hack it, right? That's what we do very well in Silicon Valley. So what if we could crack and hack the aging code? What might it look like? There's an old idea in biology called apoptosis. Have you guys heard of it? Apoptosis? Yeah. It's the idea that cells are programmed to die. This was a discovery made in the '50s and '60s. It took about 20 years for mainstream scientists to accept it, that there are genes built into every cell that allow it to age and die under the right circumstance. And now it's consensus. Everybody believes in apoptosis in cell biology. And yet no one's made the fractal leap to think about organisms as being programmed to die. The word would be called phenoptosis. So let's explore this. So every cell in our body is programmed to die, but there's a few cells that actually mutate, shut down their programmed death genes, apoptosis genes, and they become immortal. You know what we call them? Cancer cells. Cancer cells, exactly. So cancers are examples, living examples, of cells that have essentially shuffled a few genes and they're now immortal. So it shows you that, in fact, the default state is immortality, and that death was actually innovation that was built in. Right? So cancer, we need to solve it. It's the scourge of humanity, right? But I would suggest that at least a few of us should be focused on not what cancer's doing wrong, we should be focused on what cancer's doing right. As— Bob Marley said, your worst enemy may actually be your greatest friend. So there's something built into cancer biology that we need to decipher. Because cancer's happening all over the world, right? Independent of each other. And they're killing the host, but there's something going on. Okay. So where might the death codes be hiding? Well, most likely hiding in plain sight, right? Wow. So we are wired for predators, right? The most common cause of death in nature is a predator. It's predation, right? Because in nature, every meal you're either the prey or the predator. That's all that ever happens to you. And if you can survive a predator and go on to reproduce, the genes that help you survive the predator would become very popular. None of our forefathers or foremothers died before reproducing. That's unbelievable, right? So the collection of responses to help us deal with predators is called the fight or flight system. You guys have all heard of that, right? Yeah. So the fight or flight system's job is very straightforward. It's to help you deal with that 4 minutes of terror in the wild. You're hiking in the Santa Cruz Mountains, you encounter a mountain lion. In the next 4 minutes, you're either dead or you've made it. So during those 4 minutes, you shut down all your long-term projects. Digestion, that's a long-term project that takes 12 hours. Reproduction, that's a 9-month project. Right now, you need to find that hole and run through it. So the fight-or-flight system will turn on your brain, raise your blood pressure, turn on your immune system. It'll flood your body with sugars, shut down digestion, shut down reproduction. Now if you rethink about all the so-called diseases of aging, It's nothing more than the firefly system turned on all the time. Being alert all the time is called insomnia. Being scared all the time is called depression. Blood pressure being high all the time is called hypertension. You guys call it out. Immune system being called— turned on all the time is? Inflammation. Inflammation. Digestion being shut down all the time is? Constipation. Constipation. Reproduction being shut down all the time is? Infertility. Infertility. In men, we call it erectile dysfunction. Flooding your body with sugars is called? Diabetes. Diabetes. So every so-called disease of aging turns out it's just one disease, um, and we just completely missed it. It's basically the fight-or-flight system that's activating. Um, and the fight-or-flight system is one half of a system called the autonomic nervous system. You may have heard of it. It gets ignored over the cognitive brain. Automatic— autonomic nervous system. Should be thought of as the automatic nervous system, is what controls your whole body except the conscious part. This is what it does, all the things that it does. So the Copernican Revolution idea in medicine is to look at all the stuff that looks really complex and now turn the whole thing around and basically make it look like, okay, what if we make this the center? Maybe aging is basically one disease. So this could be the Occam's razor of aging. This could be one of the pathways by which aging and death occurs, right? There's probably others too. So these are the examples of switches. Maybe aging's a switch, and this is the switch that turns on it in our 40s, is the fight-or-flight system. Of course, medicine is going the other way. We tend to atomize in medicine, right? We tend to add more and more diseases to the textbooks. And yet if you look at the symptoms that characterize all of those diseases, it's still only about 20 symptoms that ever occur, right? It doesn't matter what the disease is, it's still gonna be pain, nausea, dizziness, vomiting, rash. There's only a few things that ever happen, right? And the automatic nervous system controls all of these too. But things like heart disease, So heart disease doesn't occur in nature. In fact, in nature, the most common cause of a blood vessel getting injured is, you know, a lion's tooth hanging on your blood vessel, right? So— Laceration. You got a laceration, you got an injury, and the adaptive response that evolution has shaped is when the vessel is injured, tighten, coagulate, and inflame. That's the trauma triad. It's like the 911 response. When a vessel is injured, It just coagulates, inflames, and tightens down. Lifesaving in the wild, right? But in the modern world, when the source of vessel injury is smoking, diabetes, diet, our factory setting can't distinguish these modern sources of injury to the blood vessel from the historic sources of injury, so it executes the same factory setting response, which is you smoke, you have high blood pressure, the blood vessels will tighten. Inflame and coagulate. That's all a heart attack is. It has nothing to do with the heart. It's basically an evolutionary disease. It's a Darwinian maladaptation. Now this is not how it's viewed in cardiology. The medical system looks at these tight inflamed arteries and will go blow it up with a balloon. That's called angioplasty. Um, took 10 years to find out that doesn't really help you, so now they leave metal cages behind. They're called stents, but they're deployed by a balloon too, so it also initiates the injury. There's now a new disease that's been named called instant restenosis, which is the heart disease that occurs where the balloon deployed because the balloon is doing more injury than the underlying smoking or diabetes or hypertension. So we'll look back as one of the— this is one of the Stone Age therapies. It doesn't make sense, and what's lacking is the evolutionary biologic framework. Okay, so let me just simplify all of this. When we are young, we have this thing called the autonomic nervous system, which is basically a system of homeostasis. If you look up on Wikipedia what the autonomic nervous system, or the automatic nervous system, does is it keeps you in the middle. So what nature has selected for is the ability to maintain homeostasis. I show this picture, you guys have no idea what this is, right? This is called a Weeble Wobble. It's a famous toy from the 1970s. I know what it is. So no matter how you push it, it can basically self-correct. That's what our body is. No matter how we're pushed, we can self-correct. That's what the homeostasis system is. In fact, I have a new definition of health now. PR firms and marketing firms have been trying to come up with another word for health because, you know, things like wellness, and people are really struggling how to define health. Some people say vitality and energy. I mean, these are some You know, you see, you've seen these words, right? Health is associated with vitality and well-being. I would actually describe health as the feeling of nothing. So when you're in perfect homeostasis, you feel nothing. When you guys were 12 years old, you didn't feel healthy, you felt nothing. And I gotta tell you, once you hit 40, you start to feel something. Yeah. And by the time you're 80, you feel everything. Right. You know, when I was young, I could ride roller coasters. Now when I ride a roller coaster, I get nauseous. When I was young, I could stay up all night and I'd be fine the third day. Now when I stay up a little late to go to Lady Gaga, I'm tired for all week. When I was young, I got a flu, I'd be sick for 2 days and be fine the third day. Now when I get sick, I cough for a month. You know, now in the last 6 months, I've gone from being able to see to now my eyes, my focal length doesn't adjust, so it's blurry. I'm nearsighted. In the restaurant, when the lights dim, my pupils don't open up enough, so I can't see. All the things I used to hear old people talk about, it's happening to me in a 6-month timeframe. You think that's not programmed? It's happening across all my friends. I mean, a very narrow window of time. You think that's not a trait? Why do you think it's programmed? Why do I think it's programmed? Why? OK, so we can go back to some of the discussions— I'll come back to that. Why do I think it's adaptive? There's an adaptive benefit. Go ahead. Yeah, and I'm just curious how you think about it in terms of population growth, how that's combating it. Yeah, and I'll come back to that too, because there are obvious implications of this. And it's amazing how many people jump to the conclusion, OK, well, let's It'll probably happen, and let's figure out what the consequences are. I don't know the answers, but I'll come back to some of the discussion points, and I'd love to hear your perspective as well. So if the new definition of health is the feeling of nothing, what we're feeling is something. Essentially what's happening is, at my age, your homeostasis system starts leaning and it can't self-correct. That's the way to think about it. So the weeble wobble— Oh, it used to be— Well, unfortunately, I wish this was true, the feeling of nothing lasts forever, but in fact, nothing doesn't last forever, and now you start to feel something. The weeble wobble now is wobbling, and it can't get back to the middle, and it basically stays in this fight or flight state, and we can't get back. So that's essentially what I think disease is, and what aging really is. And then we, that necessitates the creation of a, $2 trillion healthcare system to try to get us back to the middle. And because healthcare system is a crutch, the body actually in some ways gets better but also can get weaker. And because you haven't fixed the underlying problem, eventually you die. So the short history of healthcare in each of our lives is we had homeostasis, the homeostasis leans, we create this $2 trillion system called the healthcare system to try to get us back to the middle, but because it's ineffective, you die. So that's— That's the short history. The history of medicine, that's what we're doing. So the gambit here, the proximate shot, is instead of playing whack-a-mole as we're leaning, what if we just fix the homeostasis system? Essentially put the $2 trillion healthcare system back in the body, right? The body can self-tune. Essentially return us to a physiology of a 25-year-old. We'd look 25, our organs would behave like 25. When we're young, when your sugars go high, your body naturally lowers it. When your blood pressure's high, it naturally lowers it. Now essentially, you're in this lag position, and you don't have the intrinsic capacity to get back to homeostasis. Essentially, all the diseases of aging would self-correct if we fixed homeostasis, right? And we can spend those $2 trillion a year on better things. So the Palo Alto Prize— just nicknamed the Weeble Prize, is to fix the homeostasis system. And ironically, the homeostasis system reside— is in a place where nobody studies. It's the automatic nervous system, and it's regulated by a switchboard called the hypothalamus. So one of the great ironies in all of biology is that science tends to study things that are brittle, doesn't study things that are robust, right? The reason almost nothing is known about the hypothalamus is because it almost never goes wrong other than atrophying starting at 40. There's, there's not a tumor on the hypothalamus. In fact, I mentioned this to Ben Barres, who's in the National Academy of Sciences, neurologist. He's like, oh my God, you're right. We don't study things that are robust, we study things that are brittle. We study things that break easily. That's boring. Why don't we study things that never break, that tells you something, that is really vital? Same thing with the pineal gland. We don't study the pineal gland 'cause it never breaks down, and yet it's probably the most central organ in the brain. And there's no money to study it because it doesn't manifest any disease. Is that crazy? That's also paradoxical, right? So the hypothalamus does 2 things. It controls our automatic nervous system, and it controls our pituitary gland. Pituitary gland makes sex steroids, makes growth hormone, and cortisol. So guess what are the 3 classes of drugs that we give everybody to make them feel younger? Growth hormone. Yeah, testosterone, which helps you hit, 73 home runs at the age of 40. Growth hormone and cortisol. Cortisol is the wonder drug. It doesn't matter what disease of aging you have, when you go to the doctor, they give it to you, right? When you have knee pain, they give you cortisone. Back pain, cortisone. MS, cortisone. Lupus, cortisone. If you have a skin condition, it doesn't matter what it is, they give you triamcinolone, which is cortisone, right? So as we age, that's essentially what we're lacking, because the hypothalamus died and the pituitary is dying as a result of it. So, So that looks like basically where one of the Occam's razors resides. My guess is there's multiple. Nature is too smart to just leave it for us to be able to fix it with one thing. But in fact, hypothalamus is now emerging as a place of interest just in the last 3 months. In fact, since I gave the talk last year here. And one of the nice things about the Paltrow Prize and studying the hypothalamus is it's very easy to measure. You can measure it off an old technology called the EKG. But instead of just reading it for what it is, you now measure the derivative, the heart rate variability. So old data, new use, and what's nice about it too is that there's a global footprint. These things are noninvasive and they're cheap, and there's already EKG machines all over the world. So as far as prizes go, you want something that is measurable and measurable by everybody. Well, luckily, what I'm asking the Palo Alto Prize is do some sort of intervention, That's going to take your heart rate variability of somebody that's over 45— it can be in an animal model too, or animals, real animals— and make it look like the HRV of a 25-year-old. Then you win the million bucks. Very quantitative, global footprint, non-invasive. You don't have to donate your blood or genes. You can just put electrodes on and measure it. That's what the Palo Alto Prize is, heart rate variability. So if we can actually take our homeostasis system back to that of a 25-year-old, and we're able to prevent those so-called diseases of aging, this is the per-annual mortality rate graph of our lives. Until age 12, our per-annual mortality rate goes down. And then it flattens through our teens, 20s, and 30s. And after 40, it goes up dramatically. In fact, our per annual mortality rate— I'm sorry, your per annual mortality rate is so low that if you could live at this rate of dying, you would basically live 6,000 years, right? It's just that after 40, your per annual mortality rate starts going up dramatically, and that's why people don't last that long, right? So— If somebody wins Palo Alto Prize and they can tune our body, put the healthcare system back in the body, and we can live like 25-year-olds, lifespan will go up dramatically. It wouldn't be incremental linear anymore. It'd be discontinuous from where we are today. Much better. And we'd look a lot better than we do because hair loss is also a fight or flight response, right? People say hair loss is your mother's, dad's genes. Well, what does a cat do when you scare it? It sheds its hair. It's an escape instinct away from the predator's claws, right? This is a totally predictive idea. OK, so what can you guys do now to improve your HRV? There's many things that actually improve your HRV. Higher the HRV, the better. The worse it is. In fact, it's the single greatest predictor of your chance of dying in the next year is to measure HRV. In fact, this has now become— since I wrote the original article on this in 2003 and filed a series of patents, there's now 5,000 articles written about HRV and aging. It's the thing that's hiding in plain sight. All I'm really doing is re-aggregating it, making the Earth revolve around the sun, and now simplifying everything. So what can you guys do now? Any ideas? So number one is sleep. This is the requisite cat video— cat picture. So what sleep does is sleep improves your HRV. And this is the reason why improving sleep is upstream of reducing every disease of aging. What else improves HRV? Exercise. Exercise and having friends. I'm talking about real friends, not Facebook friends. So exercise improves your HRV. People say having community improves your HRV. I couldn't find any internet pictures of this, so this is another thing that improves HRV. This hypothesis is also the mechanistic explanation for Robert Sapolsky's theory. He talks about how stress is killing us, chronic stress. So one of the things that worsens HRV is chronic stress. Chronic stress. So this is— now think about this as the mechanistic basis of why Sapolsky's right. So my guess is— oh, and here's another thing you can do to avoid making your HRV worse. So we know that stress is bad, but there's a component of stress that doesn't get talked about enough. Have you guys heard of secondhand smoke? Yeah. Okay, so you should know about secondhand stress. Because if somebody next to you is freaking out, you're gonna freak out. Because in the wild, if the wildebeest next to you is freaking out and you don't freak out, you're the one that's gonna get eaten. So we're all wired to make the stress of others our own. Now this is a very important idea, because this means we now have the potential to kill each other by being stressed out, right? You've heard of the idea that heart disease runs in families. They say it's because of your genes. I have no doubt that genes play some role in heart disease. What no one talks about is the paragenetic transmission of heart disease. Type A parents create Type A kids. So this is Palo Alto parenting for you. We've now wrapped ourselves in our fears to a degree of total irrationality. This is how we live today. And this is killing us. This is very important. We need to realize that we can kill our loved ones by being stressed out. So sleep, exercise, friends, sex, avoiding stress, avoiding your own stress, avoiding others that are stressed, not stressing each other out. These are the things that you can do to HRV. Now my guess is in order to win the prize, it's going to be more than all these things. People have been doing these things for 4,000 years and they're all still dead. Yes? Does food come into the equation? Absolutely. So food is one of the things. I took it out, but food is one of the things that Increased stress. And food is one of the things that can improve. So caloric restriction improves HRV, and eating certain diets improves HRV. Bad diets worsen HRV. So it's a pretty good barometer of how you're doing. I took out food because I talked about it last time, and I put this instead, which is the idea of dynamic range. So one of the ways to improve robustness is not only try to make you center, but make you all around stronger. The idea of dynamic range is that we are— we're actually hurting ourselves by making machines around do the work that we used to do, and we're actually narrowing the dynamic range of our experience. In the wild, we live in ambient light, so when it's light out, we get exposed to sun. When it's dark out, we're in darkness. But now in the modern world, when it's light out, we stay indoors. And when it's nighttime, we turn on lights. So our dynamic range of experience is really narrowed. And because our ability to make melatonin is driven by exposure to sunlight, we're now causing melatonin dysfunctions because our dynamic range is narrowing. You can also sense this through, uh, things like temperature. Um, we're supposed to be able to live in ambient temperatures. So if it's 100 degrees out, you know how to deal with it. When it's 40 degrees out, your body basically burns brown fat. And accommodates, right? In the modern world, we're trying to be 70 degrees all the time. We moved to Palo Alto. Now we turn on HVAC systems, so we're always trying to live right around 70. What happens then is that our bodies weaken. Our ability to be robust decreases, right? Because we're losing our dynamic range. So now when I go to the East Coast, my dad's wearing a t-shirt and I'm wearing a parka because I've now debuffered. We're losing our buffers because we're losing dynamic range. In fact, one of our clients, when I gave this talk 10 years ago, she said, you know, my husband can tell the difference between 71 and 69. That's a catastrophe. If you can feel the difference between 2 degrees in your house, that means you've lost your robustness, right? So we're getting more brittle. And this is happening really everywhere in our lives. We're losing dynamic range of our muscles. This is temperature. We're losing dynamic range of sunlight. All these things point to, if you haven't been exposed to dynamic range for a long time, don't go out there and suddenly try to swim in the ice water or suddenly run out in the sun, 'cause because of environmental discontinuity, in nature you never go from 70 to 20 degrees, right? You go gradually. In the modern world, if you do that, you're gonna have heart attacks. In the mod— in the old world, you don't go from no sun to sun. In the modern world, you go from 51 weeks of being indoors and 52nd week you're in Hawaii, and that's why you end up with these— Diseases of discontinuity. Okay, and this is the last one I wanna end with. So what I particularly like about laughing, 'cause laughing improves HRV, it's actually the only therapy we have, well, all of our diseases of stress are contagious because I said earlier stress is contagious, right? Plus viruses are contagious. But none of our modern therapies are contagious. If I gave you a drug to treat your hypertension, it's not gonna make you feel any better, right? The only therapy for improving HIV that's contagious is? Laughing. Laughing, right? And it costs nothing. So those are among the things that you guys can do to try to improve your HIV. So I wanna now close with the third thing I want you to remember. Remember the first one was, what is it? Be a camera. Be a camera. What was the second one? Aim high. Aim high. And the third one— this is going to require no time to go over because it's sort of self-evident— is to do. Now, be a verb. Why is this important? Because we tend to think in nouns. So people say the most important thing is having passion. But when you watch kids, they don't have passion. What do they do? They love, right? So, like, I love baseball, so I learned English and I learned math because I love baseball. My son is a musician because he loves music. And as adults, we're quick to correct them by saying, oh, they got passions. Yeah, yeah, they got passion. Passion is a noun. Let's think about why this makes a huge difference. Passion is something we have. Love is something we bestow. So passion is all about me, and love is all about you. Like, I would never say to my child, I have a passion for you. You would just say— I love you. I love you, right? One is a noun, one is a verb. People say, I have gifts, or people say they have gifts. What does it mean to have gifts? Isn't gifts about giving, or is it about having, right? So give— gift is something you give. It's not something you have. And at the end of the day, at the end of our lives, 6,000 years from now. Are we the sum of what we have, or are we the sum of what we did? So when you think about being an entrepreneur, just remember the word entrepreneur is a noun. There actually is no English word to entrepreneurate, even though it comes from the French entreprendre, which means to start something. And the English language, we've somehow lost the verb. We only have The noun and the adverb. So when you think about the 3rd rule, think about taking action. Being an entrepreneur, which is what this school is all about, is about starting something. So this is the start of your Draper University experience, and this is the start of your journey as entrepreneurs. Thank you very much. Thank you.