Tyler Cowen on Spotting & Accelerating World-Changing Talent | Join Long Curators Series

This man has spotted more world-changing talent than almost anyone alive. Tyler Cowen isn't just an economist. He's the secret weapon behind some of the biggest names in tech. The person VCs call when they need to find the next unicorn founder. Today, he reveals the playbook that's been hidden in plain sight for over 2 decades.

But I can tell you probably the most common problem I see in talented people. When you ask them, what's your fundraising plan? Where will you go for money? What's your plan for hiring your first 20 people? They haven't thought that through in a focused enough manner.

In this episode, Tyler reveals the exact playbook he uses to spot world-changing talent.

I think people actually lie in interviews much less than is commonly believed.

And the specific strategies anyone can apply. This conversation will change how you think about talent forever.

How ambitious are you?

Hey everyone, I'm very excited to, uh, to have this conversation with Tyler Cowen, one of my favorite people and, uh, one of the best, if not the best talent curators. Also bring light about a lot of topics that we are handling with as a society. Tyler, thank you for being here.

Happy to chat. Hello.

Great. Before we're getting into the talent questions, I wanted to ask what is on your mind these days, what you are thinking about and—

Well, nothing cheery. So Russia, Ukraine, Israel, Iran, the elevated chance of war in the world as a whole, things quite distant from our topic. I think there's many, many things in the world going better, especially with talent. But these few things are more worrying than they were, say, 10 years ago. So I'm torn between being quite optimistic and fairly pessimistic.

What is the hope, Angus, for those geopolitical conflicts? Like, what is the bright side or what, like, how do you think things can get better?

Well, I don't know that they can. I'm certainly glad Iran has been weakened significantly. That's excellent. But when you look at it more medium term, it's not clear that the problems have gone away. And, you know, will there be regime change in a more liberal direction? Would a more liberal Iran in some ways actually be more effective in making trouble in the region? I don't have answers to those questions. I would just say they do not obviously induce bouts of optimism in my brain.

Yeah, like related to that, do you think there are stuff that young people can do to kind of help improve or get involved in these situations, or just like up to existing politicians?

There are probably things young people can do. I'm not sure I know what they are. And if you're not a citizen of Iran or Israel, It's obviously far more difficult, but to try to influence US policy in whatever you think is a better direction, that does have some leverage, right? Uh-huh. At the same time, I don't think policy in that area is primarily voter-driven or even interest group-driven. Depends on the models our key policymakers have of the world. Those might be somewhat locked in at the moment. You could hope to influence such models in the future, it's pretty tough.

Yeah, yeah, I definitely agree. I was just in Israel now before when the whole war was happening and it was pretty scary. So I definitely agree with you on these concerns.

Yeah, but when will it truly feel safe again? I don't know. And you still have Yemen with its periodic sallies into the air. Very hard for me to say, but I feel worse about it than I did some while ago. Yeah.

Let's speak about more fun, fun topics.

Yes. We have more talent than ever before. And that's a huge plus.

Yeah. Yeah. Yeah. Okay. So, so first, before going into talents, I want to speak about talent curators because I feel the topic of like how to spot talents is somewhat underrated and the people that are mainly thinking about it are are VCs, but I feel there should be more people that are thinking about it. I mean, people like Mark Zuckerberg is obviously thinking about it and, and, and get a lot of upside from, from that. But how do you think about talent curation and why, why it's not like even like a topic in the university? Why, why do you think talent sporting or talent curation is not a science, is not more talked about?

I think it's closest to a science in many sports. And there it's talked about quite a bit. And people who do it with numbers earn good salaries. And even online you can find pretty intense debates. How good is this player? How good is that player? People bet on it also. But that's an exceptional area. In most human endeavors, it's much more like an art. And the key question, it's not just spotting talent, but of course there's so many people out there. How do you get the talented people to show up and announce themselves to you is often much more important. If you put a genius in the room, plenty of us could spot that the person deserves some kind of chance, but that's begging the question. So I think Peter Thiel, he calls it the bat signal. What kind of bat signal do you send out to draw those people to you? And that's very definitely far from a science.

Yeah, I agree. We also feel that when people are coming to us is much better conversation, much more nice to have, much more fun to have than, than you are approaching out of the blue to someone. So I definitely agree that the whole environment is much better that way. I mean, you are one of the best talent curators. Like, what are the things that you did over the years as experiments that you think helped to create that bad signal for the right people?

Well, initially none of it was planned, but I think you need some kind of output that a fair number of talented people know, but it's not too well known. So you don't want to be Taylor Swift where the whole world shows up on your doorstep and it's like having a big telephone book. You're back to where you started. So in the case of my talent curating, it started with a blog and then a podcast, neither being intended for that purpose, and they're both somewhat obscure. Are intellectual or difficult, and that's selecting for people of a certain kind. I think that is important. If you look at what the company Stripe does with Stripe Press and its online magazine Works in Progress, I think that's a good example of something that is probably working. So this mix of popular enough with the right people, but actually obscure and somewhat esoteric at the same time for conceptual enterprises that want very smart people. That's one way to start thinking about this.

A follow-up question is exactly what you start saying about Stripe. And I also heard from someone that, uh, Curse is doing something very interesting where they are, uh, all the people that they are interviewing, they let them work for 2 days on the project and then, uh, and then introducing the project. And based on that, they are kind of deciding if, uh, if the talent is a, is a fit, but what are some of the unique, uh, talent curators approaches that you heard about, like recently, that are cool in your opinion or interesting?

A lot of them are pretty simple. The question is whether institutions have the flexibility to make it a priority. So when Mark Zuckerberg did all these recent AI hires, he reached out to them individually, and that was quite effective. Again, that's super simple, like your grandmother might think of it, but most institutions just don't quite get around to doing it. People in the middle, the HR department, they might discourage the CEO or founder from being too active in that role. It feels like something they can't manage or get blamed for. And I just say, go for it. So really treat your priorities like priorities when it comes to recruiting. It's both one of the best and also least followed pieces of advice.

Yeah, when institutions or companies are growing, they become redundant. Maybe Maybe it's because the founders is not as active at a certain point, or I don't know what is the real reason that the machine is kind of soulless after a certain point.

I tell a lot of institutions they need to figure out who are their best talent spotters. And no matter what their titles, have them actually spending a lot of time spotting, interviewing, hiring, recruiting, retaining, whatever it is they need to be doing, and not really care how they fit into the rest of the hierarchy. Just make sure they're doing that and it will pay off. Again, it's one of these things. It sounds quite obvious. Probably it is quite obvious, but most groups just don't do it. They have these formalities and they stick with them.

Yeah, yeah, for sure. Okay, so talent spotting is one thing, but talent cultivation is something that I'm also thinking about a lot. And like, from the people that you gave grants to in the past, what do you think are the type of problems that they face? I feel like institutions that used to give legitimacy to those people are not as effective as it used to be. Like, but what do you think some of the problems that talents are facing today, this legitimacy or, or something else?

Well, those institutions just don't teach you that much, but I can tell you probably the most common problem I see in talented people. They're very, very excited about their idea, which may or may not be good, but sometimes it will be very good. But when you ask them very simple questions like, what's your fundraising plan? Where will you go for money? What's your plan for hiring your first 20 people? They haven't thought that through in a focused enough manner. And again, that's a, a super simple point. The people who will do brilliant things, they, they should be focused on the idea, but they get a little too carried away by the ideas and they neglect a lot of the follow-up and execution. Now, fortunately, those are, for the most part, teachable skills, but someone has to be there to be teaching it. And that's tough. Yeah.

I guess most people are carried away by stories like the Steve Jobs story and other, other stories. And they are thinking it's just like, if it's a good idea, it's everything will handle itself. But, but they don't think enough about the less sexy parts.

I had someone basically ask me for $600,000 yesterday. Which it would be above our range in any case. But I just said, well, if we couldn't give you anything, what's your plan B for raising that money? And there was no answer. So I just gave a flat out no. But I said, if you get back to me with a plan that is not crazy, you know, maybe we'd give you a much smaller sum to just support you while you work through that plan. And again, super simple, but it happens again and again and again. Also with nonprofits, they come to me. The key question is not, do you have a great idea for social change? Most of them do. The question is, do you know some people who are potential donors where you can start asking for money? And that's a less fun thing to think about.

Yeah. And also other less fun things to think about, what's like how to hire people.

Or people who have the illusion they can do things not on a full-time basis. That's a common problem. That's pretty much always a no. And then people who lack confidence, and that's harder to spot sometimes. But I think in a lot of interviews, it's something you really want to get at. A lot of people have bravado. Many fewer have confidence.

Yes. Like, how do you spot people that are doing other things in parallel? You just ask them, or are you asking them directly? Are you working on other things? In parallel or asking other questions to understand that point?

It's been remarkable to me throughout my whole life. I think people actually lie in interviews much less than is commonly believed. And you should often ask more direct questions. You'll learn a lot. They may not tell you the whole truth, but they'll let out critical pieces of how things are. So if you simply ask someone, how ambitious are you? Sounds like a very stupid question, but I found it's very useful. And when people have crises of confidence, it typically comes out in some manner or another, and maybe they were not themselves aware of it. I'm not saying they're lying to you, but they'll just express all these doubts about their ambitions, and then you need to gauge those.

Yeah, yeah, yeah. Another question about how to test talents. What are some of the interview questions you would take or steal from good talent curators like Patrick Collison, Peter Thiel, Daniel Grosser, or others? What are some of the specific questions that you can get essence or important information?

I always change my questions. There are actually files circulating around. They used to be online, probably they still are. Like, what are Tyler Cowen's questions? And if people have prepared, there's no point. But I think just getting people talking about anything they're excited about is quite useful. And just see how they handle a conversation when they're not prepared. I don't really care what the topic is. The topic has to be something I know something about to judge their response. But the topic probably shouldn't be their proposal. It's great when the topic is their proposal, if you know a lot about their proposal. But most things I don't know a lot about, nor does anyone. And you don't want to just hear them drone on, here are my slides, here's my deck, here's my blah, blah, blah. You're bored. They might even be bored presenting it. You're not sure at the end. So you want to make some headway instead.

Yeah, even if you're asking just like general questions, what do you think about that book or about that design style or about Just a general topic about cucumbers even.

Exactly.

It doesn't have to be like a smart question. You just see how they react to a question that they didn't expect that will come and then see them on their environment, like on their real selves.

You know, someone I was speaking to from Berlin, Germany. So I said, why has Berlin been doing such a bad job with its infrastructure? You get it. How conceptual are they? How detail-oriented are they? Like they can't never have thought about that. You're not asking that they be an expert, but can they present the idea clearly, defend it, cite some detail, understand potential problems in their explanation? It's a great test. And they can prepare for that one thing if someone hears this interview and puts that question into the file. But then I ask about something else about Berlin or whatever the city is. So you need questions if you're at all known doing this. That are a bit hard to track.

Yeah. I mean, moving like to a bit of general question, like a bit abstract, but I thought it would be interesting to ask it anyway. What is the definition of talent and how do you think this definition is changing, if any? Because I feel like the world is changing in a more meaningful way in the sense that the systems are changing. With vibe coding, for example, VCs have to change and I feel like with With AI, education should change. And so I feel like more, like the changes are more radical. So do you think talent, like the definition of what is a talent changes as well, or?

I think it's changed a lot, even in the last few years. So the way I see it, the power of a single individual, Sam Altman or Mark Zuckerberg and Elon Musk, it's really gone up. And with AI, it will probably go up a lot more. So I'm looking just for people who can make a difference. I'm not saying that's the right definition for everyone. You know, maybe you need to hire people to staff your Walmart and you're just looking for people who will show up in the morning. That's fine, but it's a very different endeavor. But people who will make a difference, that's quite a tall order, but it's becoming more and more important, I'm convinced.

So you think like the main difference is that the individual is more empowered, is getting more like the, like what it can do is, is blowing.

Well, the most talented people, I'm not sure it's changed much for the average. I don't feel those people are losing power, but then the main change I see is toward the top.

And how would you define the top in terms of unique features and traits? Like what are the traits that you think define a talent today? Just ambition or curiosity or other things?

I call it a multiplicative model. So you need 7 or 8 different things really to a pretty high degree. So one is smarts, but you don't have to be Einstein. Another is hard work and another is ambition. The others are probably context dependent. So if it's basketball, that might be height, right? But not for many things. But at the very least, ambition, smarts, hard work, willingness to learn are a good place to start. And to make a difference, typically you need to have all of those and then some others.

I was listening to your conversation with Daniel Gross about a year ago, and you spoke about the archetypes of talents and how, like, the new 10x talent will probably look weird and not only look weird in what they're working on, but also look weird and how they look like. For example, Mark Zuckerberg was the hoodie archetype and Vitalik looks completely different. What do you think are new archetypes that you see emerging? Like, do you see new archetypes that are weird to you? You're not really able to identify what they are about these days?

Well, it's really very hard and I try to travel to make up for some of my deficiencies. But for instance, in AI research, so many of the core people are ethnic Chinese from China. That's great. Great that we have them. But my understanding of Chinese culture is not nearly as good as, say, North American culture. Now, I've been to China 11 times, which is like a start. Look, still, it's not where I'm from and there's barriers of language. I've been going to India every year. I've now been there 8 times. I find that an easier place to get a grip on things. Africa is a growth area for talent. Again, there's a lot of quite different cultures. No one really is well suited to deal with this. We're used to there being 3 or 4 main places like, oh, the Northeast, California, you know, maybe Israel, Tel Aviv. But it's much, much harder. And exponentially getting harder all the time.

Yeah. And an interesting trend that I see recently is that institutions that used to be, or, you know, very like elite talent curators like Y Combinator and others are missing. And obviously anyone can miss, but I see type of companies or type of talents like this company called Cluly that is on the surface is doing something like unethical, but but it's very much needed, like, you know, faking interviews and then, and also it's applied on the crypto companies. But the question, what kind of traits do you think the top institutions are missing? Do you think there is some important credentials that today's top talent curators are underrating?

Well, I think there's a cycle of sorts. As any institution becomes too successful, It becomes more risk-averse. It has bigger staff. There are too many stakeholders. It's too easy for them to do well by playing it safe. And they tend to decay. There are exceptions to this. Like, I think Stanford has in some ways still been getting better. The New York Times, oddly enough, has gotten better in some significant ways where you would have thought they have the top post, they'll just be complacent. I'm not saying I like all of what they've done. But commercially, they've done phenomenally well. But for the most part, it's decay and bureaucratization.

It's the same thing like the Democrats versus the Republicans and the definition of who is a liberal and who is Republican changes based on the abundance that and the success that this party is having. Yeah. So maybe the same thing is happening with every organism, not only with political parties.

That's right. And you know, the Trump movement. Whatever one thinks of it, agrees, disagrees. Trump didn't think he would win the first time. That was in a way a big advantage. And it's still a sort of revolutionary movement. It too will ossify. The next generation of it will be quite different. Uh, but it takes a lot of chances. Well, we'll see how good those chances are, but it's striking to me how different it is from, say, the Biden people. We've got to hold on to Biden, this old guy. Well, he had to step down. Of course, we choose the vice president. What else would you do? She's next in line. It's her turn. Uh, such a different mentality. Uh, but again, the Trump forces will become more like that to the extent they keep on winning.

Yeah. In terms of cities, like, do you think there is, uh, emerging cities right now, um, both within and outside of the US that are becoming like top talent hubs? You mentioned Africa, you mentioned India.

Well, in India, Tamil Nadu has a place. Now you could say Chennai is the city, but a lot of it is actually not coming from Chennai proper. But I'm very, very bullish on South India, and I think there's a lot of evidence supporting that. Suburban Ontario, again, not a city, and everyone from there leaves. Typically they go to the Bay Area, sometimes Cambridge, Mass., or New York. But I'm extremely bullish on that for teenagers, mostly children of immigrants. Those would be some top picks. Africa, I see ferment, I see signs. I don't really quite see it happening yet, but it seems to me it's a place to keep our eye on. Everyone says Nigeria. I don't disagree, but I think we need to be a little more open-minded and just keep a lot of places under consideration. But right now the flow is not really there.

That's interesting. I'm thinking a lot about, you know, like the societal problems that we have and the structures to solve those societal problems. A lot of issues that people, whether they are inflation, whether they are institutions that are not operating like as they should, or, you know, expensive housing prices. Do you think the quest of what to do as a young teenager should change or change because it used to be just like going to the university or, or starting a startup and usually not things like Imbee or things like Plasticlist. I really like Nat Friedman and the project that he is doing, but do you think like the quest for most people should change to solve more of those problems and less to build another product?

Well, products help solve a lot of those problems, so I don't think it's either or. I think you have to be totally committed to what you're doing to make a difference. So you're not sitting around and analyzing this in the abstract. You'll fall into something the way I fell into economics in the 1970s. At that time, communism was the biggest problem. And I thought, well, we need to stop the whole world from falling into communism. That was a quite good intuition at the time. It's gone very well. The intuition is still good, but it takes very, very different concrete forms. Like even China, it's not really communist at the moment. It's much more complicated. It has a lot of private business. So, but yeah, you're going to take it from the world one way or the other. Otherwise, I would just say good luck. Like no one today is going to write great music in the Baroque style of Johann Sebastian Bach. It's somehow not a part of our world. It's not that people don't have talent, but it's just not going to click with, with you or with anyone.

Why do you think that there is less new things in, in the art world, in like things like Bach, things like, like new art or new music, or I feel there is a bit of a cultural stagnation. Um, what is the, like, how do you think about that?

I think very often we get new forms when there are new technologies. So the 1950s, electric guitar comes along. Many things come from that, that without the electric guitar would not have been possible. In the 1960s, it's the recording studio. In the 1990s, it's digital music. So you get techno, dance music, more advanced forms of rap. That's all highly innovative. We haven't quite had a significant breakthrough in a while. I think with AI we will have one. I don't think AI music is good now. AI art is a bit further advanced, not quite there, but I think over the next 10, 15 years, hybrid versions of humans and AIs working together will do great things and there'll be this new incredible wave of innovation, I would predict. We'll see, right?

That's cool. Yeah. And it's interesting that you're thinking about it much more methodologically. Yeah, I didn't thought about it like that, that, um, it's very similar to the progress in other spaces. And it's not like just like people lost their taste or something.

You know, I think about history of the piano. If we had stuck with forte piano, like those strongest late sonatas of Beethoven and others would not have been possible or not have been nearly as good. So it does rely on technology. It doesn't take out the role of human inspiration. But, uh, we're kind of in between technologies for a while. So in movies, we have all this CGI. Maybe it was interesting at first. Now it's quite boring. The next thing possibly is AI-generated content for at least parts of movies. And I'm very bullish there, but I wouldn't say we have it yet.

What do you think some of the areas that are, that needs to get more attention or they are underrated from talents, like? Like, what are the types of things that you are not seeing enough of in the EV applicants or in general, and you would like to see more of if you'd have a magic wand?

Well, I'm a big believer that we have two areas that are going just great. And they get a lot of attention. I wouldn't say they're underrated, but I just think more and more and more would be great for them. And that's biomedicine and AI. And of course, they overlap and are increasingly interconnected. And they're going so, so well. People who try to work on how can we build a home more cheaply, I'm all for it. I've actually supported some work in that, but it's clearly not going well. But those two areas, double down, triple down. I think there's so much to be done and will be done, and it's not going to end anytime soon. So that's what I'm bullish on. I would never say it's underrated. I'm just not sure people have fully realized that it can more or less just keep on going forever.

I would imagine that in order to work on those areas, you need a lot of capital or you need like a wet lab access and stuff like that. Like, do you see projects that are using open source approaches and, or the project that you're talking about are projects that need a lot of capital and a lot of like equipment to start working on?

Well, this is a big problem, I think. Things are more and more split. There's the super early stage and then the very late stage. The very late stage now needs so much capital, even a lot of VCs don't come to the table with enough. And it will be more over time, private equity, private credit, major intermediaries that are not used to taking risk. And there's already a culture clash. Now, my own efforts, they're at very early stage that is still cheap. So maybe I get an 18-year-old in a suburb of Toronto saying, I'd like $8,000 for cloud computing credits. And it's not going to finish anything, but it will help them do something great when they're 34 to accelerate them now. And I do that. That's a no-brainer to me if they're smart.

So what are the type of things that this, this kid can do, for example, to simulate a protein folding or something on that areas or?

Or there's all kinds of problems they're working on, how to limit falls in nursing homes, how to fix parts of epilepsy, how to postpone menopause. There's just so many problems in biomedicine that when you look at them honestly, you look even at the research in good journals and you just say, like, the quantitative techniques here, they're crap. And I'm no expert in these areas, but as an economist, I can look at those papers and just sniff and say, there's a lot of crap here. And if you support an 18-year-old who quantitatively is leagues ahead of, say, the 40-year-olds in the field, and at some point will be that 40-year-old. I think on literally all these problems with AI assistance, they're going to make big breakthroughs. And that's what I'm bullish on. I think it's a great thing to invest in, and I'm not commanding major resources, but to help people out at that early stage when there's no money in it for other people and you can just help them. Again, I'm a big fan of doing that.

Beautiful. Yeah, I mean, on the, on the capital side, what type of capital innovation, uh, you think we are lacking? For example, you mentioned this culture clash between, uh, different capital needs, but also the structure of the VC and the structure of charities. I saw a couple of days ago the announcement of Open Philanthropy that they are funding type of things that, that usually otherwise wouldn't get enough funding. But on the capital stack, what do you think are currently missing or need to be updated?

Well, this is an issue in progress, but just truly scaling AI and its energy demands, there's a whole host of efforts underway. They might succeed. Some are being done by Meta. There's the big project with OpenAI in the US government and United Arab Emirates. None are sure things, but those are very important. They require enormous amounts of money and governance, and they're very hard to manage, and they're also politically sensitive. Very difficult.

Yeah, like I'm thinking a lot about how to, for example, make a new type of financial instruments that, for example, there is someone called Ronald Cohen in Israel that have a fund that that is kind of investing based on results. So he's kind of improving India. And if he reaches certain unemployment percentages in India, the Indian government is paying him something. So I'm thinking about other mechanisms outside of like the charity or the VCs and the private equity kind of structures, because there is a lot of problems that are, that are kind of in the middle.

I don't have answers for those, but I think about them all the time. And I see them popping up more and more. That they're popping up is a sign we're making progress. We're closer to converting ideas into real things that work. But real things that work cost a lot of money.

Yeah. What's your thoughts about crypto? Are you a fan of something that is happening in crypto or?

I think the United States is doing a good thing by essentially legalizing crypto. I would say I'm quite agnostic on how far it will go. Or how important it will be. I've been pleasantly surprised at how strong the demand for stablecoins has been. Whether that will last as other payment systems improve is unclear to me because, yes, there's innovation, but there's innovation in non-crypto too. So it's a race. I'm not convinced crypto will win that race. Crypto may be the money for the AIs. That's another use. So I'd like to see the experimentation. Uh, one of the good things the Trump people are doing, but it's also very complicated the way they're doing it. And, uh, it will take a lot of jiggering and iteration to get it right. I think it won't work that well at first, I suspect.

Yeah. One of the interesting, uh, data points that I saw is that Tether, one of the biggest, uh, stablecoin companies, holds more treasuries than any company. And it's basically the 6th, uh, in the country's, uh, ranks. So it, So they are basically a buyer of bonds, which is a positive thing for the United States. So I think that's one of the reasons that the US is bullish on stablecoins.

Yeah, that's great. But keep in mind, we're making this devil's bargain. We're going to legalize it and then highly regulate it. Now, is that on net a good bargain? You know, at some point it's going to come anyway. So let's get it over with and try it now. But there's parts about that bargain where I'm quite skeptical because the mentality and vitality of crypto has been pro-innovation, not all about regulation. And some of that's going to be lost.

Yeah, I completely agree. I didn't thought about this, uh, this bargain. If it will end up being the same amount of regulation, people will still, will just use the traditional systems.

That's right. And then like, what have you gained? But again, we're at the point we need to try the next step. And let's just see what happens. So the genius act, it's likely to pass. That will be good. Let's wait, watch, and observe, and then take the next step.

Beautiful. Tyler, it was an amazing conversation. Do you have any questions to me?

How ambitious are you?

I don't know if I'm ambitious, but I want to have like a capital instruments that represent talent and represent ideas in a way that is more than just meme coins. I think that would be beneficial and kind of a flexible financial instrument that can drive a lot of progress. I don't know if that's ambitious, but it's definitely something that I would like to see in the world, like a flexible capital vehicle that anyone can participate in and represent like projects and ideas.

That's highly ambitious. And that's a great note to close on.

Perfect.