Tyler Cowen: preference

Transcript context

…Exactly. By the way, not just the person is weirder than whatever the conventional norm is, but the idea is weird, too. Everyone listening to this podcast probably understands Ethereum at this point. That’s kind of priced in. The paranoia that all venture capitalists live in is, of course, the new thing is not going to be Ethereum. The thing that overtakes Ethereum — there’ll be vigor and more exciting — will probably be — I don’t know — it’d be some weird biotech thing, some weird thing that could be artificial intelligence. You wouldn’t even label it that way. You live in constant paranoia of some type of different market or some type of different person becoming really big and really important. In venture, of course, your errors are errors of omission, not commission. It’s a good old Warren Buffet phrase. You can’t miss. You’re deeply thinking about dark horses. The entire reason I even have this idea to share with you about YC and whatnot and the selection and the group consensus mechanic there is because there’s deep paranoia. You have this reflexive effect, where now everyone’s looking for the dark horse. Does the dark horse actually change? The system gets a bit dynamic in that way. That’s, I think, the big innovation with venture, is that you’re constantly hunting for people that look different, and you’re rewarded to do so much more, I think, than in any other industry. You end up learning to appreciate the humility in all of it. Although we are about to publish a book on this topic, and we think we have something to share with the world, I’m still deep in the Dunning-Kruger collapse in this topic. I think the main idea in my mind about the book at a deep level of, I think, the impact it could hopefully have is, actually, to reduce and to bring everyone down into the Dunning-Kruger abyss, where we are now, and realize this is actually a much deeper topic than most people pay attention to. No, I view our central message in the book as, right now, the world is failing at talent spotting, and this needs to be a much more major topic of conversation. We have our ideas on how to do it better, but if we can simply convince people of that, I will be relatively happy. Yes. I think, to me, proof of this is SpaceX. Look, SpaceX, until fairly recently, wasn’t really doing anything new from a physics standpoint. There weren’t any new physics discoveries that Elon, in a lab in LA, figured out that von Neumann couldn’t figure out. It’s yesterday’s technology. It’s just that he is a better router and allocator of capital to the right talent. You see this time and time again. Many Elon companies are this. He just manages to put the right people doing the right thing. If you were to try to really explain to a five-year-old at a very basic level, why aren’t there more SpaceX’s, I think it comes down to the right people don’t have the right jobs for human progress. Once you start viewing the world through this lens, it’s really hard to unsee it, at least for me.…

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