SPEAKER_03
I remember there were times where the thing I needed, it would cause like $50 and it was just like it was inconceivable that I could afford it. Honestly, Oculus owes more to the iPhone than anything else. I mean, if the iPhone wouldn't have existed, there wouldn't have been broken iPhones for me to buy, unlock, repair, and sell on eBay.

Like if that had not happened, then Oculus probably

SPEAKER_00
wouldn't exist today. What's up? We got Palmer Lucky on the podcast. Palmer is a billionaire.

He

SPEAKER_01
created Oculus, which he sold to Facebook. He's created Andrew, which they make weapons for the government. Super interesting guy.

I'm going to call it right now. I think this is a all-timer episode. You know, you guys know I don't hype it up like that unless it's legit.

This was an all-timer episode. Sam, what are some of the things that we talked about? So early on, we asked him basically

SPEAKER_02
what he did with his money. So he made hundreds of millions of dollars at the age of like 23 or something like that. And we said, where did you put your money? And he was very clear on what he did with it.

He talked about some of his early crypto investments. So he bought crypto way, way early, like in 2010, I think he said, he talked about how he's making minimum wage and then became a billionaire like four or five years after just making minimum wage. What else? We talked about

SPEAKER_01
a couple of different things. Where he likes to hang out on the internet. We're like, dude, where do you know about all this stuff? Where do you learn this stuff? What are your subreddits? What are you listening to and reading? Because I need to start doing some of that.

And then, yeah, he talked about basically like, is World War III going to happen? Right? His company builds tech for the Defense Department, the Department of Defense. And so is World War III going to happen? Is there going to be a nuke? What is a tactical nuke? And then the best part was we said, all right, you sold Oculus and then you created Andrew, which is an even bigger success. I think it's like value to $8 billion or something.

But there was many years in between. Did you consider doing any other ideas? And he opened up and he's like, yeah, actually, there were these two or three other ideas. He had an idea about creating a new kind of prison.

He had an idea that would try to solve obesity. He had a couple of ideas and we go into depth brainstorming with him. So he had it all, man.

He had the crazy backstory, the success story, but he also brought ideas. And then he also argued with us about why he flies coach, even though he's a billionaire and why he may or may not get into a fight with Jason Calakannis. And so this episode had it all.

Had fighting, had ideas, had success stories, it's got it all. All right, enjoy this episode with Palmer Luck.

SPEAKER_02
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SPEAKER_01
All right. I don't know. You don't need too much of an intro, but I'll do it anyways.

Palmer Luck is here, created Oculus, created Enderall. Really interesting dude. And I think we have a bunch of topics.

So I'm not going to kind of belabor the intro. Sam, I know you've been itching. We just, you probably can't say the DM you sent to try to get Palmer on here.

You really wanted this man on the podcast. Why? My first question is to you, Sam. Why? So Palmer, I am like the king of left-handed

SPEAKER_02
compliments. At least that's what they say about me. But I mean them as full-handed compliments or right-handed compliments.

But basically I love freaks. I love weirdos. I love extremists, not like in the political sense, but in the sense of like people who just go all in on stuff and are just passionate about maybe like nerdy or unconventional things.

And you go all in on things. And I love that. I love people.

Even if I don't like what they're going all in on, I'm crazy fascinated by that. And you see one of those guys who just goes all in on things. You've done a lot at a young age and I like weirdos.

And I put you in that category. Thank you. I'm happy to be a

SPEAKER_03
weirdo. I'd rather be a person that people think ill or well of than somebody nobody thinks of at

SPEAKER_02
all. I think well of you, by the way. I think well of you.

Sam had a poster at his office that was

SPEAKER_01
like for his employees. He was like, let your freak flag fly. That was like one of those like corporate values are typically like integrity and like determination.

And his was like, be a freak. All right. So let's start with some of the kind of we're going to try to as much we can avoid VR and avoid the Facebook stuff because mostly just because you've talked about it a bunch of places.

I'm like frankly I'm interested because I am actually a VR fanboy. But Sam has tried to forbid me from asking those questions. So we're going to leave that at the end if I get a little extra time.

But this is a podcast that started. It's called My First Million because we're interested in money and we think it's really funny that the Silicon Valley thing is you have to pretend you

SPEAKER_03
don't like money. And like you're talking about, yeah, you know, we're not doing it here for the money. You know, this money money's money money's not the real objective.

I actually tell my own employees and onboarding that if you work in a place where your boss is saying that you should be worried because it's one thing. It's one thing to say that to the press. It's one thing to say that in your marketing materials.

But you know, if your employees don't believe that at the end of the day you're trying to make their job a fiscally responsible decision, if you're effectively telling them you could be making more money elsewhere and your financial success is not my priority, you should be concerned. Yeah, yeah, exactly. And you kind of did the best of both.

SPEAKER_01
Like for all the kind of ironic people who are like, we're trying to change the world with this like HR onboarding software, you know, you actually kind of did and still made a bunch of money doing

SPEAKER_03
it. So, you know, it's not like an either or 100%. I mean, when I started Oculus, it was not because I thought it would be the thing that would make the most money.

There had never been a successful VR company in history to be clear. And I did it because it was something I was really passionate about. Now that said, one of the things I'm most proud of in my whole career is that everyone who worked at Oculus achieved financial independence because we were able to build something incredible.

And like, I feel great that everyone who was part of that mission and who supported me early on was able to make a bunch of money and a lot of them have gone on to do incredible things. But yeah, Oculus was not done because I thought it was the best way to make money. It's because I thought it really was going to be the best way to change the world in the long run.

Andrel was a little different. That one, it wasn't just, oh, this will be fun. I want to do something really cool.

Andrel was like, I felt like I had to do it or things were going to go really poorly. So, more of a stick than a carrot on that one. How much did you make off the Oculus sale? Oh man, I probably shouldn't say because this is also one of those complex things where, there was the sale.

So, there's what they believe they called the merger consideration portion of the compensation. And then they, you know, you cut an employment deal where they say, we're going to pay you this much for five years. I can say that.

I was locked up on a five-year vesting schedule. So, typical would be for most of our employees were four. I got locked up for five because I was a key guy.

And that money technically is not for the acquisition. It's just what you're being paid for. I had that too.

Yep. So, and of course, you know, you can't, you can't pretend, you can't say they're the same thing or they, they're supposed to be treated differently tax wise, compensation wise. And then of course, there's the bonuses we had.

We had an earn out that was a, it was a, it was a, it was a huge earn out. It was hundreds of millions of dollars for the founders of the company. If we could hit certain sales targets and user hours of time targets.

And we actually had four years to hit those targets and we, we hit them within less than two years. So, we actually did, it's kind of funny with people like, oh man, the acquisition must not be going as well as people expect. It's like, no, we maxed out the top bracket of our earn out because we're, we're, we're kicking butt.

But anyway, it was in the hundreds of millions of dollars. I can tell you that in the healthy hundreds of millions of dollars. A bunch of people who listen to this are founders and,

SPEAKER_01
and like would want to sell their company someday. And both me and Sam, we started this podcast right when we both exited our companies. Cause it's like, all right, we're kind of earning out.

Well, we can't start another company right now, but like, oh, we can start a podcast. That sounds kind of fun. And actually, yeah, just yesterday, I just closed on another sale of a company, but these are small scale compared to what you did, right? Like, congratulations.

Thank you. But you, you sold for, I don't know, two or three billion bucks. How does that happen? Somebody, you know, Zuck comes over to your house and is like, I'll give you three billion dollars for this.

Like, how does that, how does that conversation go down when, when, when, when you're talking about the

SPEAKER_03
sort of like the grand slam type of outcomes? Well, it's a long story, but you know, I know, I know Sam didn't want to talk all about VR, but I can tell you, I can tell you that. No, I can't. This shit's interesting to me.

Oh, great. We, we do, we don't want to talk about VR optics and the metaverse that, but I guess on the business side of it, the interesting thing about the acquisition is that we didn't have any of intention of selling initially when we first had our conversation with Facebook. And I think that really was a positive thing because actually first time we talked, I think basically we were offered a billion dollars to sell.

And we said, no, we're not interested. We think this company's easily going to surpass that value. We think it's not going to be a problem for us to make more money.

And we're happy to work with you guys,

SPEAKER_01
but we don't want to, by the way, was that, was that easy to say no to a billion dollars? I mean, you started this thing like on a Kickstarter, dude, like, you know, at some point where you like, was it hard to say no? Or was it not, not an issue at that point?

SPEAKER_03
It wasn't an issue for me. And I think, I think different people had different opinions. I mean, look, if you, if you look over my career, I've made a lot of similar decisions.

Like when I was starting Oculus, when I was deciding whether I was going to do a Kickstarter or work for someone else, I actually had a job on a job offer on the table from Sony to run a PlayStation VR lab, you know, out of PlayStation group. And when I turned them down, they actually doubled the offer. And then I had to turn them down again.

And a lot of people were wondering, how could you have done that? You know, how could you have decided to do your own thing? It was so much higher risk. And I think that a lot of it is, is social programming. You know, I grew up watching media that conditioned me to believe that when you have an opportunity, you have to take it.

When, you know, when you almost have to follow the narrative and looking back, I'm not sure I could have done anything else. Like, could I have stayed in school instead of starting Oculus? Once I realized I had this breakthrough in VR technology, I think I could not have possibly done it. There's, it's almost to the level of free will not existing.

I could not have chosen that. Could I have gone to work for Sony? Looking back, I don't think so. I think I couldn't have made that decision.

And I think it's actually the same thing with that billion dollar offer. Like, I almost could not have said yes. You know, like, that first offer, I, like, narratively, it makes no sense.

It doesn't align with what I've been trained is, what you do when you're a, you know, when you're a free thinking iconoclast. And so, I couldn't have done it. I think what, what happened is a few things changed over, over time after that initial offer.

You know, we didn't talk to Facebook for, for a few months after that. And a few things happened. One, it became clear that our competition was not only serious, but was going to be putting massive dollars into their success.

It's something not a lot of people remember, but I certainly do because it was a big deal in my mind. The day that we announced, no, the day we find, it wasn't anyway now. The day we finalized the Facebook acquisition was the same day that Sony announced PlayStation VR.

And we had known that it was coming for a while. We, we, we actually even shown each other prototypes and stuff, but it really reinforced, this was a serious thing. We're going to have some of the biggest games companies in the world putting hundreds of millions of dollars in and competing with us.

And that made the, the pitch that Facebook came back with, which is, listen, you, maybe you could make more money as an independent company, but if you're with us, we're going to make VR happen much faster. So, yes, you might make more money, but you're going to go much slower than if we were able to artificially supercharge your growth far beyond even what you could do with venture capital. And they were willing to commit billions of dollars a year for a period of a decade or more.

And that's, that's a really tough thing to turn down when you really believe in something.

SPEAKER_01
And is this like literally coming to your house and talking about this, or is there like an army of lawyers in between you guys that are like bankers and, and corporate people?

SPEAKER_03
It was a very small number of people. I mean, it was, it was, I mean, I think that the, the, the lawyers and the accountants are much more likely to be involved in a deal when the deal is contingent on, you know, your, your revenue and your multiples and your PNLs. Like that, that's where you need to drag those people in to really make an assessment.

This was such a high level bet. It's not like, Oh, I think that you have this margin on your headset and you've sold this many development kits. It was so early and the technology so nascent.

The real bet is, do you believe in the metaverse? Do you believe that there's going to be a virtual world parallel to our own when you're living and you're working and you're playing? And then most importantly, do you believe this is the best team in the world to do it? And I didn't know this at the time, but I found out later that Mark had been going around and talking to various university research labs, government research labs, talking to a, you know, seeing what other companies were doing. And their conclusion was we were way ahead of everyone else. And that if, if this was going to happen, this shift to immersive computing, the final computing platform, arguably, that we were the people in the best position to do it.

And that's not something that a lawyer can really give an opinion on. It's not something that an accountant can put a value on. It's, it's a,

SPEAKER_02
it's a very high level bet. What was your personal financial situation when you turned

SPEAKER_03
down the billion dollar offer? So, yeah, I mean, I started Oculus using my own money. And at that time I was working a minimum wage job and living in a 19 foot camper trailer. I was 19 years old.

So for people who aren't familiar with the story to that degree, I mean, I had almost no money, literally had a few hundred dollars in my bank account because I spent all the money that I made putting myself through school and working on virtual reality technology. And I was extraordinarily irate. I had a minimum wage job.

I was also fixing computers on the side for a while. I'd been buying broken iPhones, fixing them and unlocking them, selling those for spare cash. And so I, you know, I'd, I'd, I'd, I'd burned a lot of money on my, on my, on my nutty hobby.

And when we started Oculus, we, we didn't pay ourselves very much. By the time the acquisition happened, I had given myself a raise. We decided that nobody in the company was going to make over a hundred thousand dollars.

We called it the hundred K club. So we were paying the CEO a hundred thousand dollars. I was getting paid a hundred thousand dollars.

And to me, that, that actually felt incredible. I was like, wow, hundred thousand dollars. This is absolutely crazy.

I can, I can

SPEAKER_01
afford anything. You're like, you know how many cell phones, how many iPhones I'd have to fix to make a hundred thousand dollars? Because you were fixing iPhones and like scrubbing boats or

SPEAKER_03
something. I read, is that what you were doing? Yeah. I mean, when I started working on VR stuff, I was, I worked for a few years in a boat yard.

So yeah, scrubbing boats, repainting, repainting the, the, the, the, the bottom paint, sweeping the boat yard, you know, that, that, that type of stuff. So to me, the money was not, was not a huge motivating factor. Also, because maybe, maybe too optimistically, I believed Oculus was going to be worth tens of billions or hundreds of billions of dollars.

So it really wasn't the, the month, I know, I know this is what contrary to what I said before, but it wasn't the money that was motivating me to make the sale. The, it was the pitch. Hey, we're going to get you billions of dollars right now.

Like not, not the, not the compensation for the, for the, for the acquisition, but we're going to give you your, your organization billions of dollars a year to go out and make virtual reality actually happen. And that's what you're going to need to compete with Google, to compete with Sony, to compete with Microsoft, all of which have seen what you're doing, bought in, like they've drunk your Kool-Aid, but they're going to try to kill you over it. That, that was kind of the situation we were in.

And Facebook was one of the very few companies that had a strong incentive to make virtual reality and immersive computing writ large to come about as quickly as possible, because unlike Google, unlike Microsoft, they did not benefit from the status quo in the hardware space. So if we kept using mobile phones and normal computers for, you know, that's 20, 30 years, Google and Microsoft are going to do just fine. Like they're already the winners in that paradigm.

If you can shake everything up and force a reset with immersive computing, AR, VR, MR, whatever you want to call it, it could be that Microsoft is one of the top players and that could be that Apple and Google are, are some of the top players, but it's unlikely that all of them are going to remain the dominant players. And that's an opening for a company like Facebook to come in. And even if they're not first place, forcing the reset puts them in second or third place, instead of being totally subservient to the operating system vendors and to the hardware vendors.

So it was one of those things where there were other companies that were interested. None of them actually had a strong incentive to put billions of dollars into VR on an ongoing basis. And I mean, you can see Google killed their VR program.

First, they killed their PC VR team, then they killed their mobile VR team. Microsoft is winding down their internal efforts. I mean, it's a tough business.

And I'm not convinced that Oculus would still be around if we hadn't had those

SPEAKER_02
resources. I'm going to move on from like asking you these money questions, but I want to ask one more because I do think it's fascinating because you went from like, maybe not having a lot to having a lot. And you're also like an eyeball, which I like.

When I'm sold my business, I put everything into bonds and just Vanguard total index funds and just did like a normal 80 20 split and then eventually some real estate and then HubSpot stock and just normal like basic stuff. What did you do with your money? And what have you because I know you bought like a Marina, I think, are you trying to buy it? I don't know if it went through, but like, what does like someone like you do with that amount of liquidity? So most of it, I did what you're talking about. I

SPEAKER_03
generally don't believe in trying to beat the market through market transactions. I mean, it's one thing to build like, I think you build wealth by building companies. That's where you should be focusing your effort, not trying to be smarter than all the finance guys who are sitting around and using every tool at their disposal to try and to gain the financial market.

So actually, yeah, Vanguard funds like Vanguard 500 total index funds. My grandpa taught me a lot about investing and about how you shouldn't try to beat the market. Probably the, the, the, my investment philosophies informed mostly by John Bogle's little black book on investing.

He's like, look, you know, keep your fees low, keep your costs low and just go with the market. And you know, if the market goes so poorly that I become poor, then the United States has bigger problems. So that was, that was most what I did.

I bought the Marina not as a financial investment. It was actually, it was one of the only marinas. So this is getting a little into the weeds or something probably very few people care about.

But just so you know, in California, almost all marinas, the water is owned by the state or by the feds. And then they do long-term leases, like 30 or 40 years to operators that are allowed to operate those marinas. And they might own, let's say the parking lot, the operator, but they do not own the water.

They do not own the docks. It's just a long-term lease. And they redo that over.

There's only a small handful of marinas in the entire state of California, where the underlying land under the water and the water itself is deeded to a private title. And the marina that I bought was one of those. And you know, without getting into my whole sea-steadying delusion, I think that you're going to end up needing, if you want to have transport ferries that are operating from land out to international waters, you do not want to be in a position where the place you're doing that from is totally dependent on state government bureaucrats choosing to renew your lease on a particular marina.

So that was actually, that was actually a purchase that'll, it'll, it'll pay off someday. You'll see. You all see.

SPEAKER_01
See, I bought my house just like, I liked the walk-in closet was nice. And I was like, oh, that's good enough reason for me. I didn't have to like, you know, go into international

SPEAKER_03
waters. Well, in my case, I did buy, I mean, I did, I did a few things. Like as soon as I had money, I immediately started learning to fly helicopters for real, because I'd always wanted to be a helicopter pilot ever since being a little kid.

So like, it was like, it was like two weeks after the wire completed, I was, I was flying helicopters. So that was really cool. I bought a 69 Mustang convertible.

That was really cool. And I bought a first generation Tesla Model S. That was cool.

And then I bought a house for my parents, you know, it's like the, the, the, it's like the basketball player contract move, you know, you get the money, you buy the, you buy the house for your, for your parents. And then I bought a house for myself that was close to my grandpa, actually. And unfortunately, we then ended up having to move up to Silicon Valley because of the acquisition.

And then he passed away while I was up there. So one of my, one of my regrets, but I'm still in

SPEAKER_01
that house. Wow. Okay. That's amazing. And one other thing I had seen was that you, I don't know if this is even a real thing or it's like some Twitter fake, you know, fake photo or whatever.

SPEAKER_03
Did you buy Bitcoin in 2013? No, no, I bought Bitcoin much earlier than that. I was in very, 2013 is when I was on, I was in the Forbes 30 under 30 and they asked everyone on it for a quote for the print edition. And it was the theme was, what is your advice to other young founders? And my quote was buy more Bitcoin.

But I've actually been involved in Bitcoin since before there were any exchanges. I like, I, I was a true OG on the Bitcoin talk.org forums.

There were no exchanges. You could only do direct transactions for goods. I actually sold a banner ad on my game console modification forum.

It was a one week banner ad on this forum with almost no traffic. And I sold it for 400 Bitcoin. And then I ended up, I ended up buying someone's Samsung, Samsung Galaxy Vibrant, which was the T mobile variant of the first Galaxy phone for 800 Bitcoin, I believe, which at the time was, you know, well, well under a dollar per Bitcoin.

So I've actually been in

SPEAKER_02
16 million very early days. 16. Oh my God. How do you, so like, all right, you, you, we had biology, you know, biology on the pod.

And like, he was one of these guys where he would like give an analogy. He's like, Oh, you know, Bitcoin is kind of like the battle of Tames. And I'm like, bro, you, I needed an analogy for your analogy.

Like I can't tell you about the battle of Tames in World War II. Like I can't have that conversation with you. And you're a little bit like that, where you're talking about like, you just like, through in a few lines, like, Oh, this gaming forum I have, when I was like, well, I could have go down that path.

But then you're talking about like this boat marina thing. I'm like, that's a whole conversation, like how on earth you discovered that. And then now, obviously you're doing government stuff, then you've done and you have no bunch about politics, whatever.

How are you becoming so well versed and also so opinionated on such a broad set of topics? Because you have to most of the time, like the best things

SPEAKER_03
that I've done, that I have done in my career have not been going super, super deep on one vertical and then finding the really, really hard gains that are at the end of a long fight that everyone's made. Like an example here would be with just like optics technology. Most people are fighting way at the end of the spectrum where they're trying to like, Oh, we're using new cutting edge materials that increase the ability to control light more precisely by 2%.

And we're trying to figure out the physics of how we can manufacture these polymers. Most of my best ideas have not come from that. They've been from knowing things in totally different fields that have nothing to do with the field or at least people don't think they do.

And then pulling ideas from those fields and applying them in a new way. Like the really key thing that made the Oculus Rift work is just one example. Rather than focusing on trying to make these optical stacks that cost thousands of dollars and weighed a bunch.

And that was really what was making these headsets weigh many pounds and cost tens of thousands dollars. It was the high end optical stack that was able to project images on your retina with minimal distortion. But you needed a bunch of lenses.

They're all very, very expensive, very high precision. What I did is figure out that you could just render a distorted image. Basically render your image, distort it on the graphics card in the inverse way that the lens distorted it.

And then basically you would render an image that looks terrible on the screen. But after viewing it through the lens that I had, which was optimized for high field of view, low weight, low cost, but not optimized to have low distortion, low chromatic aberration or geometric aberration, it would come out looking perfect. That's something where an optical engineer, someone who's working on just optics, would not think of that.

That's very much like a a software idea. But the software people are also not necessarily thinking about how they could obsolesce expensive pieces of optics. And of course, there are people who do that.

I think that some of the best entrepreneurs are people who have understanding that is sufficient in enough areas to pull from one area and solve the biggest problems of another. So I mean, I make it a priority. You asked how do I do it? You make it a priority to know a little about a lot.

SPEAKER_01
So two questions. One, just go back to the Bitcoin thing for a second. Sure. How did you get into it? Like, why were you on the Bitcoin talk forums? Or why did you see it even before, you know, almost anybody? So what were you doing there? And why did it catch your eye? And then, you know, today, 10 years later, there's a whole bunch of people that are disillusioned by it. They say, oh, it's all this time's gone by.

10 years didn't work out. Other people are more bullish than ever. You know, where do you stand now? So what caught your eye? And then where do

SPEAKER_03
you stand now? So, I mean, I think I got into Bitcoin. It would have been mid, mid to late 2010. And I was really fascinated because I mean, look, I'm a guy who was into virtual reality and the metaverse.

This is just adjacent to that. It's another super cool cyberpunk concept. The idea of, you know, untraceable internet currency that is based on only the consensus of all of the cyberpunks who are using it, cryptographically verified and secured with no nation state controlling it or issuing it or diluting it or manipulating like, like what a cool thing when you're a, when you're an anti authority teenager who loves, who loves cyberpunk science fiction.

And so that, that it was like, I bought into the very original cool vision, not the, oh, this is going to be huge for everybody. One, but like, this is, this is, this is cyberpunk incarnate. I have to be a part of this.

And when I started, like my initial thinking was not that it was a good store of value. That was, that's actually been, I think the most contentious thing about crypto is after it started Skyraw, I didn't buy it because I was speculating. Nobody was even thinking about that back then.

Like it's, it's crazy to me to watch all these new crypto kids get in and it seems like it's all about just having, having coins, pumping the value, dumping them. It's really just, you know, these, this financial markets play that I've never believed in. I've, because I always believe in, you know, investing in the whole market, but to me, it was always values as a means of moving wealth around.

It's not as a store for years or decades. It's a way that you can move wealth around without being beholden to any, any centralized authority or centralized power. And I think today, like even for all the issues Bitcoin has and people, you know, putting it down because of it crashing.

Well, first of all, every time there's a Bitcoin crash, it's like, oh no, it's crashed to only 10x what it was two years ago, every single time, every crash is like that. But more importantly, it's still a good way to move value around. That said, my prediction in 2013 was that Bitcoin will go to about $100,000 and then stabilize.

I'm sticking with it. I think, I think it'll get there. I'm not, I'm not sure that it in particular has the, has the appropriate utility to reach a higher

SPEAKER_01
store of value. Wow. Okay. Amazing. And then did you, oh, by the way, I have, and I have to throw

SPEAKER_03
out there, I'm one of those guys who lost a bunch of coins in the Mt. Gox hack. Oh man, I got Goxed good.

And it was, it was one of those things where there was no like looking back, everyone's like, oh my God, I can't believe that, you know, you would have, and I had most of my coins in, in my own wallet, but I had a significant amount on, on Gox because people were transferring coins to my Gox, to my Gox account. And now everyone's like, oh my God, of course you would never keep your coins in an exchange. But like I was 16 years old and like, you know, there was no, there was no like idiot's guide to Bitcoin back then.

It was, it was the type of thing you only used if you were

SPEAKER_01
a crazy, a crazy internet nutter. And so you've mentioned forums and I'm a big forums guy, like I still, I remember, you know, BBS, I wasn't like before, whatever was before BBS, that's not me, but I've been on forums and I love forums. And you talked about the Bitcoin talk forums.

I went and read a bunch of your early posts on the, what was the name of the like, odd retro? No, no, no, the headset one, the head mount display. MTBS3D. Yeah, exactly. Your old, your old post there, I went and like stalked him just to be like, because I like to see the origin.

I'm like, it's fun. Like what are the like archeologists for like the internet? I like to go find the original shit. And so, you know, I saw you posting there and you're like, Hey, I'm trying to build this thing.

I'm thinking about doing this. You did a bunch of like kind of really cool crowdsourced stuff. I think you even like asked Reddit, like, you know, should I buy that? Should we buy Vive or something like that? You did a bunch of cool stuff on forums.

And I thought about that. And some of the like I, when I learned poker, I learned it through forums. Yep. If you think about today, like if who's the 16 year old version of you today, what forums do you think they're hanging out in? What's the thing? Because when you were doing this is 15 years ago, like VR still early and you were early, early, early, same thing with Bitcoin. You were early, early, early.

And so what do you think are the interesting forums today that people are hanging out in that you think will play out over

SPEAKER_02
the next decade or so? And also, what are, what are, what are some of your favorite pockets of the

SPEAKER_03
web and forums that you're hanging out in? I mean, much to my chagrin, I love forums too. I think they are more or less the pinnacle of asynchronous communication. Like if you are doing collaborative product, all of the incentives are correct.

Like so, so I like, I ran a forum, the mod retro forums. It was a forum for people who modified vintage game consoles in particular with a focus on turning them into handheld self-contained units. So cutting apart Nintendo 64s and Super Nintendo's and play stations and then replacing like the power electronics with modern power electronics, running them off of the latest lithium battery technology, although it was Nikad back when, back when I started putting in LCD screens that were designed for portable DVD players and the like and building these self-contained units.

And the forums are interesting because your, your currency is a tension, but you can only get attention by getting people to come in and you respond and engage with you. And so there's a strong incentive to update people on what you're doing to, to write really interesting things and to get people regularly coming back and engaging with your stuff. I mean, that's the dopamine high, right? It's other people care about what I'm doing.

Today, it's been so algorithmically driven that you don't have the same incentives in terms of long-term sustained engagement and, you know, collaborating with people. There's a lot more incentive to do things on your own, do one big push in a form that will cause ordinary people who are not necessarily technically competent to, you know, watch it for at least three minutes so that it's seen as you watching along. And I think the pockets, which is what you asked, like there's great pockets on YouTube, there's great pockets on Reddit.

There's actually a lot of private Facebook groups. So like one eye light, like I'm a member of a night vision group where people build their own night vision goggles and it's got a couple thousand people, but it's it's a private group and very, very much not virally driven. You know, it's not like the TikTok, TikTok, Techno Heads.

It's not like the YouTube Techno Heads. But man, I really miss forums. You know, Mod Retro, we had a core group of a few thousand active members that were, that were doing stuff in the heyday and we're doing a few, a few million page views a month.

And you would, you never see those ratios these days, you know, of, of, of, of, of, of, of, of engagers to, to, to watchers. One last thing I forgot, actually a huge fraction of the people that I hired for Oculus in the early days were volunteer moderators on the Mod Retro forums. Like people always, you know, they hire their network, right? They hire the people that they know that they can trust and that they know our competent.

And that was my network when I was a teenager. It was other, it was other loser gamer teenagers on the internet. And so we, like that, that like we, some of our lead electrical people, our lead hardware people, our lead mechatronics people were all people who had been moderators on Mod Retro.

In fact, the first person I hired for Oculus was, was one of the other moderators. And I actually sent him a message said, Hey, what are you doing this fall? And he said, Oh, I'm, I'm playing, I'm starting, starting college. I said, no, you're not, you're going to come work for me.

And I literally, I like, I told him that on a Friday and I literally drove out in my mini van to pick him up from his mom's house on Monday and he had all his stuff in like four boxes. And I picked him up, we got in my van and we drove to the condemned motel that I was living in. I mean, it was, it was, it was wild.

I mean, that, and that, that was, that was my network. So it's always funny when people are like, Oh, you know, your network is your net worth, you know, we're, we're, we're, you got all the Stanford kids, you get the Ivy kids. And we were just a bunch of internet losers and we did better

SPEAKER_01
than any of them. You're like, I'm hiring HMD alumni. They're like, Oh, is that Harvard,

SPEAKER_03
medical? No, no, head mounted display for alumni. Actually, the guy that I was hiring is his name is Chris Dijkus. And he had never built a head mounted display, but he was, he was very accomplished on the, what a loser.

He had a lot of handheld vintage game consoles. And I knew he was very competent. I knew exact, like you talk about a job interview where you meet someone for, you know, whatever they're, you know, maybe an hour or something.

But I had been seeing this guy's work published on the forum over the course of years. And so I knew he had, I knew he had skills

SPEAKER_02
and I knew he had work ethic. That's exactly, we, me and Sean have hired so many people on Twitter. And I tell people all the time, like, I want to get a job.

I'm like, man, if you just like, you need to post your thoughts so people understand your texture and your taste and your character, like that is significantly better doing it there and then just DMing someone. And then they're just going to click their profile. I'm like, Oh, this person is tweeting all this

SPEAKER_03
like interesting insight that aligns. Exactly. Well, and that's harder to fake too.

If you, if you have somebody who has a history of building things for themselves of doing things because they want to not cause they're getting paid to, that you can't fake that the way that you can fake an interview. It's easy to be like, Oh, I'm passionate about X, Y and Z. Well, show me your years of work that you've done for no money showing that you really are.

And I mean, we, we still hire a lot of people like that at Andral. Like we, we, we have benefits that are intended to lure people like that. Like one of our benefits we have is that we will buy anyone in the company, any tool they want for their personal projects as well as work projects.

And that's the type of thing where people who don't have personal projects who just, you know, they show up to their, to their wage machine and they clock in and they clock out. They're not attracted by that, but the types of people who want to create for the sake of creation, those to those people,

SPEAKER_01
that's a, it's a golden ticket. On that note, we did the same thing. My co-founder, he's a lot like you like 15 at age 15, started working at a dot com during the dot com boom.

It was like, you know, had a job and it was like, what the hell's going on? And always was just doing his own thing. And so he used to buy like 3d printers and robotics and we're building like social apps as like, we didn't need any of this stuff. And I was like, what are you doing? Like, why are we doing this? He's like, because, Hey, I want it.

Like I want to come to a space and like, when I'm done with work, I'm just going to go downstairs to their lab and I'm going to build like a drone, or I'm going to like take this Raspberry Pi and like shove it over here and figure something else out. And he's like, also, that's also how we'll get great people. Like I want to work with other hackers like that who like to tinker on this stuff.

And he's like, he's like, he had had an exit. So he's like, you know, doing very well. His last company went public.

And so he was like, you know, when I was like 16 and 18, 21, like, I just couldn't afford to like the thousand dollar thing that you would need to have. He's like, I just got lucky that the dude down the street would let me come over and play with his thing. And that's like, that was like a life changer of a moment.

He's like, so I just want to do that for people. Like I'm just make it free. Anybody can come in and they could use this stuff.

And he was totally right. Even though like our CFO was like, hey, we can't justify this. He's like, don't worry, I'll pay for it all out of pocket.

And it was

SPEAKER_03
like, and I know, and I know that struggle, you know, like, and it doesn't have to be a thousand dollars. I mean, I remember there were times where the thing I needed, it would cost like $50. And it was just like, it was, it was inconceivable that I could afford it.

I mean, like, honestly, Oculus owes more to the iPhone than anything else. I mean, like if the iPhone wouldn't have existed, there wouldn't have been broken iPhones for me to buy, unlock, repair and sell on eBay. Like because I made tens of thousands of dollars as a teenager on that, on that side hustle.

Like if, if that had not happened, then Oculus probably wouldn't exist today. That's amazing. I want to

SPEAKER_02
ask you a bit about Andrew. But before, before we get to that, what ideas were you pursuing? Or I bet you if you're like us, I imagine you have a list of like things that you're contemplating. What was, what was on that list prior to starting Andrew? I know there was like a prison thing, and but what else were you interested in? Well, what was the prison thing? So start with that one,

SPEAKER_03
because that one sounds interesting. Also, there were two things I was seriously considering. And then one thing that I'm, I'm going to do someday.

So C-Steadying is off the table right now. It's too long term. But there were two short term things that I was looking at aside from Andrew.

So the three choices were fixed national security, solve obesity or solve incarceration. And I tried to think about, you know, what are the ways that I would tackle these issues? And the way I solved defense was I wanted to build a defense products company that upends the incentives that typically exist in the military industrial complex. But the prison one was that I wanted to basically take out the incentives of the private prison complex that exists today.

Right now, private prison companies are growing. There's more and more people being housed in privately operated prisons. They're publicly traded.

And those companies have a strong incentive to lobby for and, and perpetuate laws that incarcerate people for the longest period of time for the least serious crime. In other words, they don't want murderers and terrorists. They want, they want nonviolent drug offenders who will be in prison for a long time.

And when they get out of prison, they want them to come back and be a

SPEAKER_01
repeat customer. They want good tenants. They want good occupancy, good tenants.

SPEAKER_03
And, and the incentives they've set up with the government where the government pre-pays for these beds, the government basically says, well, we've already paid for the bed. So if they're not full, then we're not locking up enough people. It's a very bad set of incentive.

So my idea was that I could start a private prison company that would run as a nonprofit organization. And we would use the tax advantages of that to outcompete private prison companies. And more importantly, we would have a business model that would incent everybody towards the right set of incentives.

So what I wanted to do is go to the government and say, listen, I'll lock up your prisoners, but you don't get to pay us upfront. In fact, you can't pay us upfront. You have to pay us after the person serves their term and then stays out of prison for five years.

Then you're going to pay me. And the idea is that now all of a sudden I'm motivated and, you know, by my whole organization is motivated to get people through as quickly as possible, release them as quickly as possible, and then have them stay out of prison and not return to crime. And I mean, that would have been a game changer.

And it would have been a very attractive business model to these governments that are always, you know, looking to delay their expenditures. The biggest problem that I ran into as I looked into this is it wasn't a technological problem. It was a lobbying and marketing and government affairs problem.

And it wasn't at a federal level where you can basically convince a handful of people and then achieve success. It was going to be this like, this low locale by locale thing where you have a lot of people who depend on prisons for jobs. You have a lot of politicians who are very involved in it.

And also the deals are not recompeded very often. This isn't like enterprise software where people are always on the lookout for a way to get an edge or move to a new provider that could reduce their costs or risk. It's like, oh, yeah, we're going to recompete this deal in 35 years.

And so it would have been this thing where I just couldn't have made an impact fast enough. And so I've been involved with other people who are making impacts in other ways. Okay. So that was one. Well, you couldn't just have

SPEAKER_02
like some Silicon Valley guy wearing like tight jeans and brown shoes, like every other salesperson sitting down like, Hey, so we'd like to have a conversation about your prisoners. We'd like to have your business. Like, you know, no, give me some of your guys.

Unfortunately, not. Yeah.

SPEAKER_03
Yeah. Unfortunately, not. And the thing is the people who make the decisions would not have benefited from us succeeding.

So in business, look, when you're in this is a big, we can get into this with Andrewle too. One of the biggest problems with selling to the government versus with private individuals and businesses, you just have to convince them that it'll be, that it'll be a good thing for them. And then they'll buy them.

The people who are in charge of purchasing for government, they often don't benefit from saving money or reducing their manpower or any of this. In many cases, the guy in charge of making the buying decision, his political power and earning power are directly tied to his ability to keep costs high and to keep manpower up and to not allow anything to displace that. So that was actually the big problem.

I realized that it's nice to think you can solve any problem with with new ideas through disruption, but some things are kind of self-reinforcing, very hard to fix.

SPEAKER_02
All right, everyone. Today's episode is brought to you by Imperfect Action, hosted by Steph Taylor. It's a podcast on HubSpot's podcast network, the audio destination for business professionals.

Imperfect Action is a bite-sized online marketing podcast for business owners. So join Steph Taylor as she answers all your business marketing questions that deep dives into the nitty gritty of online marketing, content marketing, social media marketing, and marketing for strategy for business owners. A few recent episodes include some of the biggest mistakes you can make with your launch.

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SPEAKER_03
it up wherever you get your podcasts. The other thing I was looking at is obesity. Obesity is one of, if not the leading, preventable cause of death in the United States.

There's so many, there's so many other health problems that are the result of obesity. And some people say that we need to make exercise more popular. Some people say that we need to stop normalizing obesity.

Some people say we need medical treatment for it or we need to make healthy eating better. I took a pretty cynical view of it. I said, no, obesity is not going away unless you let American people eat whatever they want, whatever they want, as much as they want with no lifestyle changes, no exercise, and absolutely no effort on their parts whatsoever.

And so within that constraint, what could you do to solve this issue? And the result, the idea I came on was long chain hydro carbon based synthetic food. So in other words, oil based foods, you guys are familiar with impossible burger beyond burger. Have you had them? Yeah.

So I mean, it was probably better than the worst beef burger you've ever had, right? It was at least at that level. It's worse. It's better

SPEAKER_02
than the worst one you've ever had. Yeah. It was a whatever. I'll eat this.

Yeah. Whatever you

SPEAKER_03
eat this, but certainly not up to the level of the best beef burger you've ever had. No. And so one of the interesting, this is where I was drawing from outside, you know, in an outside world, all these people trying to make fake food, they're all trying to build fake food out of food. And I said, well, wait, let's think of this from first principles.

If I'm a materials engineer and I'm trying to solve the set of problems that a fake burger manufacturer is trying to solve, you know, how it feels in your mouth, how it comes apart in your mouth, how it sears, how it cooks, how it changes texture when it's cooked. If I was a chemical or material engineer trying to build, let's say it's not food, just a, you know, a paste, a substance with a certain set of parameters. What am I going to use? Is it, is it beans? Is it chickpeas? Is it corn? No, of course not.

I'm going to use oil because man is a master of oil. We can make it into anything, waxes, gels, solids, anything in between, rubbers, pastes, we can do anything with oil. We can make it into truly anything with almost any material properties that we want.

And so I said, well, let's leverage that. Let's leverage everything we know about making inert hydrocarbons that are non-toxic and use that to make fake food for people that tastes and feels like real food, but has zero caloric value that cannot be absorbed by your body. It just goes right through you,

SPEAKER_02
just like fiber. And these are not that crazy. A Diet Coke for, yeah, it's a, yeah, that exists, dude.

It's called the White Castle, but you're, yeah, you're just saying like the Diet Coke

SPEAKER_03
cheeseburger. Yes, a Diet Coke cheeseburger, the Diet Coke cheese, the Diet Coke dairy products. So I actually started making prototypes of this and I was messing around with frying foods and mineral oil with high flash points because mineral oil also no calories.

I made some paraffin-based cheese. So it was basically like paraffin wax based fake cheese product that you could still make grilled cheese sandwiches with and it tasted great, but at almost no calories. It was, there were a few other wild things that came with it.

I also built a device that injected soda syrup, threw a stream onto your tongue directly as carbonated water flowed over it because it turns out you can only detect. It's a weird perceptual thing. People think of optical illusions as, as you know, the main type of illusion that's out there, but there's also physical illusions.

Like if you, if you put putting in your mouth, your body assumes that the full mass of the pudding is comprised of whatever is touching your tongue. But if you can create physically structured foods where the part that's touching your tongue is different than the bulk of the rest of the material, your body still thinks that the entire bulk of it is whatever is touching your tongue. Anyway, I went down this rabbit hole for a while.

Dude, what, what does your house look like? Well, I mean, it's a little more boring now, but at the time when, when I was acquired by Facebook, I moved up to the Bay Area and we had about 10 people living in a 13,000 square foot home that was built in the thirties on six acres. And so we turned the dining room into a machine shop. We turned, we turned the, there was like a, like a ballroom for dancing and we turned that into an assembly area and, and, and welding, welding room.

I mean, we had a soft goods room and as one does, sunny area as someone does. It was, it was, it was, it was, it was, it was, it was

SPEAKER_01
really cool. I don't even know what that means. What are soft goods? Oh, so like, so like cream cheese?

SPEAKER_03
I mean, like the traditional example that when people talk about like a soft goods engineer would be like, like tennis shoes, bras, you know, things that are incorporating fabrics and also plaid, or think, you know, like, like a tennis, a tennis racket is, is, is, is an example of soft good engineering where you've got, you know, the handle and the shock absorption and all that. But like in our case, it was for head mounted display stuff. So like head mounted display straps, the fact, the fabric associated with it.

We also were, you know, we're also cosplayers. So we were also building our, building our anime costumes there. So a lot of soft good

SPEAKER_01
stuff. The more you talk, the more I realized you do the one thing that we celebrate the most on this podcast. Cause they're like, people are like, I don't get it.

Like you and Sam, you do a certain style of entrepreneurship, right? Like for example, I optimized for just, I want it to be me and one other dude. I don't want any employees. I don't want to go to an office and I just want max leverage.

And I'm not trying to be a billionaire. I don't want to raise money. I want to own the whole thing and just do it my way on whatever projects are fun.

But then sometimes we'll celebrate like the you and Elon Musk's of the world that are going huge. And sometimes we celebrate this dude who's making this Chrome extension and he makes 20 K a month and lives in, you know, Bali and he's having fun. And so people don't get it.

They're like, what are you, like, which one do you admire? Like, I get it. Tech crunch admires this thing and VCs admire this thing. But you guys seem to be across the board and we're like, we like people that just define the wind, define winning on their terms and then like actualize it.

So like, you have in a house with 13 other people that has like, you know, an assembly room and a soft goods room and whatever, it seems like you're

SPEAKER_03
living your best life in that state. Maybe 100%. And it's the weird thing about what I get to do now.

Like, you know, these, these all sound, you know, like, like fun things, but I'm still getting to do that. And like, and roll, we have all kinds of stuff like that going on. Actually, the tough thing is the coolest things that we're doing here, I can't even necessarily talk about because the most successful projects that are doing the cool going in the coolest directions are the ones that that we have to keep kind of on wraps.

Oh, I have to say on petroleum food, just in case anyone's wondering why I didn't do that. One, I thought national security would would be a better use of my time. And that was because I realized tech was that national security was a technological problem in addition to being a lobbying and marketing problem and sales problem.

The problem with petroleum foods is that it was not sustainable if using new oil as a feedstock, it would just, it would consume too much. And the good news is you can recycle hydrocarbons. But then, I mean, if you, I don't know if you can see where this is going, but it means you're going to literally be like centrifuging oil out of the sewer system and then reusing it to construct new food.

And I realized they have you have you seen all the media coverage of pinks pinks lime at McDonald's and that's just I saw it. It looks kind of gross. Yeah. Do you think people want to buy food that's literally remanufactured from sewage? You know, that that was kind of the main problem. I said, you know what? I'm pretty good at marketing and sales.

I am not good enough to sell sewer food to people. I'm going to need to, I'm going to need to figure that out. Well, it's, it's, it's, it's like, it's almost too good of a story, right? Like, like I under sometimes I think the media is unfair, but it's like, could you expect them to not, you know, sensationalize literally a guy who's, who's selling reprocessed sewage as food? Like it's like, they have to cover it in a sensational way.

And I can't even blame them for it. And I decided I would rather work in an area where technological improvement would be the main way that you would compete. We didn't need to, you know, do crazy marketing.

You just had to be competent and be better than all of the other players, which was not necessarily that high of a bar. Do you, you talked about the media for a

SPEAKER_01
second. And I, when I was doing research, I was like, you know, there's this great Silicon Valley post that's called like the hands of time of social media, of media and Silicon Valley. It's like, it starts at noon and it's like, you're born, you know, nobody's ever heard of you.

Then at one, you're like emerging at three, you're like the star. Everybody loves you. And it like goes and then it cycles all the way back to midnight.

And it's like, you're evil, you're ruining society and you're like destroyed democracy and whatever else. And this happens with every hot company and every hot founder, whatever. And when I was looking at your media coverage to do research, it's all like, this is the boy wonder.

He's 19 years old. He's making virtual reality real. He's doing this out of his garage and his house or whatever.

And then it turns into like, this guy is like, you know, the MAGA super evil guy. He's getting fired by Facebook. And then it's like, the defense stuff.

So you've seen kind of both sides of the media machine. Oh, yeah. That make you kind of jaded.

Like, where do you trust the media today? And like, how do you think about, you know, the media?

SPEAKER_03
Well, there's an interesting quote that people often misuse from the Nolan Batman movies. You either die a hero or live, see yourself live long enough to become the villain. And a lot of people misunderstand that they think that it means you start out as a hero and then eventually descend into, into being, you know, a bad guy.

And they look at Harvey Dent and they think that's the moral, but that's not what was what Harvey Dent was saying. Harvey Dent had actually always been a kind of crooked power seeking political type. What, what, what he was saying is that he had always been the same person fighting for the same ideals and that he just lived long enough to see the world change around him that so that people started saying that what he was was a villain.

You know, he didn't say that you become the villain. You literally to see yourself become the villain in the eyes of everyone else. And I feel like I've definitely been through, been through that a little bit.

I mean, it's worth noting I'm not inclined to dislike the media naturally. A lot of people assume that that must be the case. I don't know if you know this, I was a journalism major at Cal State Long Beach.

I was actually the online editor of the, of the school paper, the daily 49er. So I, I buy no meat. Like there was a time where I thought I was going to go into a career in tech journalism.

And so I, I never really had, had any issues with it as a, as you know, I thought it was a very, a very honorable thing to do, you know, to go out and be the guy who digs and gets the truth and lets people know what's going on that they otherwise would not have the ability or the time to suss out themselves. And then unfortunately I've had quite a few experiences with the media. It's like, do I trust the media? It's like, well, I mean, I've had like literally dozens of major outlets post literally fabricated quotes from me, things that never happened.

They said, you know, all we did, all these terrible things that just never even happened. And then refused to correct them for years on end. So it's one of those people like, oh, Palmer, why do you attack the media? It's like, I don't know.

Like there's not any real way to, to get, to get around this. I mean, like, we're not talking about tiny outlets. Like the New York Times posted a quote for me that I literally never said.

And I told them like, Hey, you, you said that I said this, I never said that. They said, well, it's, it's, it's, it's more or less what you said. We don't think the meeting is different.

And I was like, yeah, but your, your, your ethics guide, I know, I know what it is. I was taught the New York Times style guide when I was in journalism school. It doesn't, it doesn't say you get to quote me and paraphrase me.

And you think that it isn't, doesn't mean anything different. And then of course everyone re quotes their fake quote. So, you know, at the end of that, it's hard to say, Oh yeah, I trust the media.

SPEAKER_02
You're like, I don't think a quote means what you think it means. You know, you're like, those, those like, you know, those little signs in the paper that say it's a quote, that, that means something different than what, than what you guys are saying.

SPEAKER_03
Well, I explained to them, I said, I said, your quote for me is literally missing six of the words that I said, but you have it in quotes with a period. And I, I never said that. And it was actually, and it, well, there was no period because it was part of a longer run on argument I was making that did not even have a period there.

And they're like, Oh, well, we don't think it really changes the meaning. So just, yeah, yeah, without belaboring the point, you know, I think you, you can't trust the media to do the right thing. And if you do, you're probably going to get burned at some point.

It worked for me for a while until it didn't.

SPEAKER_02
What does Andrew do? And what made you realize that the, the, the approach to solve that problem was the approach that you picked, because that seems like such a grand, I mean, I understand the high level, what you do, but it's so grand that I think, well, like Oculus was fairly grand, but I kind of get that you can kind of tinker in your garage and come up with a nifty product and whatever. And like no one's going to like get hurt really. And it's like a pretty simple process.

It's hard, but simple. Andrew, I'm like, Oh my God, I don't even know where to start. I mean, I get, I've seen the movie with Jonah Hill where he's like a war dog or whatever it's called where you like buys and sell weapons.

And I'm like, is that what Andrew does? And yeah, yeah. I'm like, is that what Andrew does? And how on earth does even a rich guy who's 28 in his apartment or his big house come up with this? This is crazy. Like who do you call? You call it? Hey, hey, Baraka.

I was thinking, you know, maybe we could try this like MVP. You know what I mean? I don't

SPEAKER_03
even know how you start that. I mean, it's tough and it is such a big problem and so unapproachable that very few people do approach it. I mean, like very big picture.

Andrew is trying to build the next major defense prime, meaning we were the prime contract holder. We're not a subcontractor to existing primes like Lockheed Martin or Raytheon or Northrop Grumman or Boeing. 80% of the US defense budget goes to just a handful of companies, these big primes that just completely dominate the industry and they get paid on what's called a cost plus basis.

They get paid for their time, materials, fixed percentage of profit on top, which means that they're incentivized to move slowly. They actually make more money when they come up with more expensive systems, more money when they sell more of something, more money when it even breaks more often because they get to sell more parts for it. I mean, it's a really bizarre contracting system that we created in World War II to basically take over the US war machine, or sorry, the US industrial machine, turn it into a war machine because companies like Ford were saying, Hey, I can't even quote you what it's going to cost to make a tank because I've never really, you know, this has never really been my business.

And they said, okay, fine, we'll pay you whatever it costs and then a fixed percentage of profit on top to make sure that you are able to keep running your business. And then unfortunately, we just kept doing that, even though we were no longer in an existential war mode. And so in the last 35 years since the end of the Cold War, the government had completely lost its ability to grow small defense companies into large defense and accounts companies.

I mean, Samuel Colt went from working in his tiny garage workshop to arming the entire Western world. That's what we used to be able to do. You can start small and get big if you had the best stuff.

But in the last 35 years, there were only two unicorns before Andrel in the defense base. And 35 years not just being chosen arbitrarily, it's basically since the end of the Cold War. During the Cold War, we did turn small defense companies into into major players.

But since then it's Palantir, SpaceX, both founded by billionaires, and then nobody else. That's it. And so it's so hard to get in.

Founders say, I have no idea how I could possibly start a defense company. So they don't start a defense company. Venture capitalists say, I'm not going to invest in a defense company.

There's no examples of success in the last 35 years, less the billionaires who can do anything. I'm sure they could have done whatever they wanted with their billions. And so the VCs don't want to invest in it.

And this is and then smart employees don't want to go work at defense startups because they look at the landscape. They say, look, this might be a cool lifestyle business, but it's never going to grow to a scale where the equity that I'm given is a significant is a significant way to generate money for me and my family. And so I said, man, you know, if it really does take lots and lots of money and lots and lots of influence and really smart people that I'm in a position to start a company that very few people are very few founders have experienced running a multi-billion dollar company with thousands of employees, mass manufacturing, millions of pieces of hardware and are and are willing to give up the adoration of their peers in the media.

Like that was actually probably the most important factor. If I would have just left Oculus by retiring on my own, it would have been much harder for me to go into an area like building weapons for the U S and our allies, because so many people got so angry about it. You know, friends that I had who didn't want to talk to me anymore, investors who said that not only would we never make money, but that what we were doing was morally reprehensible and wrong.

And I was trying to explain to people, listen, we live in a world where our major strategic adversaries are rapidly building advanced technology that has no peer here in the United States, war machine. Major conflict is imminent in Asia, in Europe, with a lot of our strong allies and partners. And we need to be ready not just to win those wars.

The goal is not to win awards to deter a war from happening in the first place. And if we don't have the tools we need to deter them, then war is inevitable. And you guys probably remember how things were, you know, I guess that you bought five or six years ago.

It was a very, very popular to believe that we're at the end of history and that peace is too profitable for anyone to rock the boat. And that that was the thing that would keep everybody in line. I think that Russia invading Ukraine finally woke up a lot of people to realize that history is not over.

Land borders are not fixed. And like, I mean, look how wild it is that Europe is still buying billions of dollars of goods from Russia, even as Russia literally invades Europe. I mean, like, that's, that's how screwed, that's how screwed they are.

And I think people, people did not see this a few years ago. And I felt, I felt a little bit like a crazy person. And if I'll ramble on one more thing, you've probably heard me say this before elsewhere, but we're living in the first time in US history where the most innovative, powerful, and large technology companies in our country refuse to work with the military.

That's never been the case. Our most powerful companies have always understood that they had a responsibility to aid with national security. But now, I mean, whether you're talking about Google or in particular Apple, I mean, Apple's got 95% of their manufacturing in China.

They agreed to invest, they've invested hundreds of billions of dollars in manufacturing capacity there. They've agreed to invest a further $275 billion in Chinese manufacturing in exchange for being allowed to operate as an independent company in China, instead of being nationalized into a joint venture majority owned by China. I mean, they, they, they're in a position where if they do anything to upset the Chinese government, one person in China could sign one piece of paper that would wipe out the most powerful company in the entire world instantly, a $2 trillion company.

Like they are not masters of their own destiny, not by any means. And I guess I want to stress this because it's never been the case in history. And that had me terrified.

You know, I, I, five years ago, I could see we're on the precipice of war with advanced powers who had fully suppressed our most advanced technology companies through economic tools. And you know, I don't understand why more people were not scared by that, but I felt like I couldn't do anything that was more important than starting Andrewle to start help solving that problem. And thanks for letting me ramble for so long than that.

I know that was a long ramble, but I've got a lot of, a lot of emotional built up inside of it.

SPEAKER_01
No, I mean, that's why we wanted you on is to hear what you're doing and why. And you also flipped like the common denominator with either the prison thing, the food, the oil based foods, foods or this is that you kind of looked at it from another angle and also maybe flipped the incentives to the cost structure. So what you were saying was, let's say with the prison thing, you wanted to be incentivized to keep people out of prison rather than in prison for as long as

SPEAKER_02
possible. Exactly. Sounds so simple, right? Well, it is simple, but it's not easy.

Yeah.

SPEAKER_01
Yeah. Well, and it sounds like what you ran into there was the incentive for the local official who, you know, who decides on these things may have been to have a bigger budget and not a smaller budget. And so, you know, your incentives were sort of clashing.

Right. Whereas with and he

SPEAKER_03
doesn't have to say, I'm not buying your thing because my incentives are wrong. You'd be like, Oh, we've done an assessment of all the vendors and this one really has a lot more experience and we don't want to take a risk on a new vendor. It could literally be that simple.

He people like, Oh, but how would they justify the business model? You know, it would be so much better. It's like, he doesn't have to. He could just be like, Nope, I do a trisk.

And so what's the business model

SPEAKER_01
with Andrew? Cause you're not doing cost plus. You're doing something else.

SPEAKER_03
We're a defense product company. I mean, we, we work the way it's not even a revolutionary business model. It's the way every tech company works.

You use your own money, you build a product, you make it work, and then you go to customers and you sell it to them. And that is a very hard thing to do in the defense space. But we've basically bet that we will be able to pick the right things to work on.

They will be able to find the right partners in government to help tell us what we should be investing our own money in ahead of time. And that in the end, when it works, that we'll be able to sell most of the time to the government. Now there will be times where we get screwed.

There will be times where we don't build things that work and it's our own money that we burned instead of taxpayers. But on the whole, we're very incentivized to be efficient. We don't want it.

Things to drag out. We don't want to drag it out to be a 10 year R and D program on a cost plus basis when we can get it done in six months with some really, really smart ideas. And so we've got the right incentives and we're basically out there trying to convince the Department of Defense and politicians that this is the way that all defense companies should be working.

Everyone should live in fear looking over their own shoulder knowing that if they fail, that they're the ones

SPEAKER_01
who are going to get screwed, not taxpayers. So when you get a contract that's like, we got a $900 million contract, that's after you've already produced the product and they're basically just agreeing to buy the goods at that point. Is that what that means in your case?

SPEAKER_03
Yeah. I mean, we recently just won a billion dollar contract with Socom special operations command to do all of their counter drone work. So basically protecting like building the hardware and software that is defending them from drones that are attacking their installations and positions.

And we started working on our counter drone system using all of our own money years and years ago before we had any customer. We just we started building the hardware and the software, building our interceptors, building our jammers. And then we, it was after we invested a ton of our own money and proved that this was the right way to solve the problem that we were able to go.

And actually there was a full competition for who they were going to select for this. And they did basically a shoot off between all these different companies. And some of the companies that we beat were actually getting paid by the government to develop their systems using government money.

But we had invested quite a bit more money and moved much faster. And there were literally contractors that were complaining saying, this isn't fair. We have to compete with Andrel and they've been investing their own money for years.

How could we possibly be expected to compete when the government's only given us, you know, tens of millions of dollars over the course of the last two years. And I'm like, guys, like, of course this is how it works. Like you could have won if you had spent your own money.

If you had spent your own money for five years, you probably would be able to compete with us on an even playing field, but you can't take no risk and expect all of the reward. And we spent a lot less than these companies developing much better capabilities

SPEAKER_02
because we have the right incentives. So you're, you're, I think you're 30 years old. So you're, we're all about the same age.

You're sitting there with just 30 a few weeks ago. Well, happy birthday. You're sitting there in a fucking Hawaiian T-shirt with a goatee.

I, you're probably the type of dude who walks around barefooted all the time and you're talking about cosplay. And yet you just said, we just want a billion dollar contract from the government. How do you work up like the, the hoivos, the confidence to think like, I'm going to go in against all these gray haired suits and like they're going to, the government's eventually going to take me seriously.

I'm going to sell this, sell this thing. I mean, or do you have people selling on your behalf? I, I, you know,

SPEAKER_03
some people think that I should, that I should dress differently and try to kind of, you know, appeal to the government sensibilities and like, you know, I should be dressing in a suit and I should be very, very straight laced and you know, be very, very serious all the time. But I think that one of the most important things that aneral is doing is not just building technology ourselves, but it's inspiring other companies to work in defense, not just company, like inspiring companies that aren't in defense to pivot in defense and inspiring people to start new defense companies. And if they see me like becoming a boring guy who's, who's, you know, has to make himself super lame to sell to the government, that's not a lifestyle that they're going to want to lead.

You know, and so we need to show that they can be successful and show them that it's, that it's going to be fun. Now, I also want to keep wearing flip-flops and Hawaiian shirts. So maybe I'm, maybe this is just, you know, post facto justification.

SPEAKER_02
No, I'm a board.

SPEAKER_03
But I feel like I'd be doing everyone a disservice if I were to change.

SPEAKER_01
Yeah, I think it's working. Now, you know, we, the podcast is all about the future. We're always brainstorming ideas, opportunities, but none of that matters if there's not really a future.

If this is about to become World War three, there's nukes flying everywhere. So you're kind of a lot more in the loop than any guest that we've ever had on this. What's going to happen here? Is this, what are the odds of like, you know, this sort of Ukraine, Russia conflict breaking out into something a lot more serious and like, you know, is there going to be a nuclear weapon, you know, in our, in your future?

SPEAKER_03
So, I mean, it's very hard to predict. There's people who are better at this than me. Like, what I always tell people is like, our role is to build the tools and then you have to trust in democracy to deploy them correctly.

And people are like, Oh, you know, when would you stop supplying weapons to Ukraine? And, you know, is there a point where you'd be too, you know, where you, where you think that we should, where you would make sure that you're not part of a nuclear escalation? And I say, listen, if you believe in democracy at all, then you should not want US foreign policy to be dictated by the ever changing whims of technology executives. Like what an extraordinarily dangerous precedent to set that, you know, you'll build weapons for the people you are politically aligned with, and then you'll suddenly drop it despite the U.S. like, what it really is, is I will sell to the people that the U.S. State Department and the US DOD want me to. Like if that, that, that, because they have information that I don't, they have intelligence that I do not.

And I cannot second guess that and say, Oh, you know, I would stop supplying if I thought there was this level of escalation. But, you know, with that out of the way, I think that we are going to see a tactical nuke get used. And for people who are not familiar with the difference, tactical nuclear weapons are designed for tactical use as part of a battle for basically conventional warfare tactics.

So blowing up an armored division or taking out a wing of bombers or maybe even destroying an airfield. Strategic nuclear weapons are used to deter mass nuclear exchange and to engage in, you know, strategic level annihilation of cities and the like. The United States disassembled all of our tactical nuclear weapons a long time ago.

We decided that our war doctrine did not allow for tactical nukes. Nukes are only something you use at a strategic level to deter other people from using them against you. That is not the case for Russia.

Russia has tactical nuclear weapons. If they train to use them, they, it is part of their doctrine that they will use them in conventional conflict. And they are even just having that in their doctrine shows that to some degree they are willing to bet that the United States and nobody else would respond with strategic nuclear weapons in response to use of a tactical nuclear weapon.

And if some people say, oh, even saying that they will use a nuke is akin to supporting Russia and saying we shouldn't support Ukraine. I am not saying that at all. I think actually appeasement has the longer, the greater risk.

I mean, if you can show, if you show to the world that even the threat of small scale tactical nuclear weapons is enough to deter any kind of intervention in any kind of conventional warfare, you actually hugely incentivize the nations of the world to obtain their own tactical nuclear weapons. Like you don't really actually want the calculus to tip that way where countries look and say, wow, all Russia had to do was threaten to use their tactical nukes. And then they were allowed to operate with impunity in a conventional invasion and nobody was willing to stop to do anything about it or even stop buying their exports.

Like that's the, that, that, that, that would be a very, very bad precedent to set even beyond this war. And so for that reason, I think this is a little contrarian and not everyone agrees, but I think that the odds of a tactical nuclear weapon are very high. It will not be used on the United States.

It will not be used on a NATO ally. It'll probably be a tactical nuclear weapon used to strike some inarguably military target. Like it probably, they're not going to, they're not going to nuke cave.

It's much more likely that it would be a port or a, you know, or, or an air installation or, or something like that. And I, the reason I like to talk about this is I want people to get comfortable with this because there's this idea that you use, you use, and use a nuclear weapon and all of a sudden you're in world war three. I think that's actually probably the wrong, the wrong way to look at it, because if you do that, you're tacitly admitting that tactical nuclear weapons deserve a strategic nuclear level response.

And if you set that up as, you know, the, the nice lubricated path we all

SPEAKER_02
slide down. Yeah. Things get really bad. Really sounds like selfish and tripe.

But I think I, it's important to me and I bet it's important to a lot of people. What does that mean for me? A wealthy American with money in the stock market who lives in a nice life. Like, does that mean that like inflation is going to get huge? Does that mean that my investments are going to go down? Does that mean that like people I know, I don't know anyone in Ukraine.

So I care about them, but like, does that mean people I know are going to get hurt? What does that mean for me?

SPEAKER_03
It's a fair question. You know, I'm in a different position. I know, I know people who are from Ukraine.

I even, I know people who are in Ukraine. So for me, it does get a little bit personal and we have employees here who are, who are deeply, deeply, you know, involved in one way or another with the people of Ukraine. But I think mostly you need to boil it now not to necessarily a Ukraine specific question, but the broader geopolitical question is the United States, the world police, are we going to help our allies and to what extent? And I'm not saying that that necessarily means that we need to throw ourselves into World War three over every conflict, but we do need to very carefully weigh like what, what will happen in Taiwan if we completely pulled out? Like there's a million ways to tackle this.

So I'm not trying to set up a straw man here, but I'll throw out one that is actually very popular with certain politicians. They say we should completely pull out. We should not engage.

This is not our problem. Let the, let the ex-Soviet guys duke it out. They can do whatever they want.

Well, one, they're the first issue is our European allies are going to be in pretty bad shape if they have Russia right on their border, able to move deep, deep, deep into Europe without any kind of buffer. More importantly, what do you think China's going to do if they see that that's the United States attitude? They say, wow, like there, there, there is a price they will not pay. There is, there is a certain level they are not willing to get engaged at.

If we can raise the cost above that level, then they will make the short-term decision to not get engaged. That's very dangerous for Taiwan, which is in turn very dangerous for semiconductors and for our entire economy. Like if Taiwan actually gets invaded by China, you could see a 30 or 40% drop in the stock market beyond what we've already seen.

That's not even, that's not even a, that's not even a, a crazy assumption. That's like a pretty well backed up by all of the, the boring establishment economics guys prediction. So that, that, that the way that I see it is, you know, your question, why should I care? Because if we want to maintain credibility as a player that can deter wars, not just win wars, then we have to take actions that maintain our credibility there.

If we, if we were to say the ultimate version, it's just you're on your own world, we're all, and we're going to do our own thing. We're going to get screwed by that very, very quickly. And so there's something between zero engagement and, you know, D-Day 2.

0 that we have to do.

SPEAKER_01
This is great. Palmer, where can people find you if they want to go work at Andrewle or, you know, read more of your stuff, your blog or Twitter? Where should people follow you or

SPEAKER_03
find you if they like this? Oh man. Well, my, my, my, my handle, my handle across social media is Palmer Tech, but you can find me on Twitter under the handle Palmer Lucky. There's my website, PalmerLucky.

com, the number one Palmer Lucky blog on the internet. And there is also I got WordPress site split up. I'm coming for you.

Hey, my, my, my WordPress too. Great tool.

SPEAKER_02
Yeah. You tell me about PalmerLucky69.com. He's, is this new project he's working on?

SPEAKER_03
Yeah. It's got a lot of problems. Oh man. I got to check this out. That sounds right up my alley.

SPEAKER_01
Oh wait, wait, I forgot. Do you want to rip a WWE style promo at Jason Callicanus who's coming after you? He's challenging you to a fight. Why would you challenge a guy who builds weapons for a living to a fight? I don't understand this, but if you want to rip a WWE style promo, this is, this is no place.

There are 100,000 entrepreneurs ready to back you here if you can get them on

SPEAKER_03
your side. I mean, maybe this is because I all like, look, I don't know if you can tell, like, I'm actually a pretty big guy. Like I weigh about 250 pounds.

I'm six feet tall. Like I understand the mechanics of fighting well enough and I've done enough of it recreationally to understand that it's unlikely that somebody who's like, you know, five foot five and 140 pounds is gonna, is gonna, is gonna have a good shot. But the thing is I don't, I'm not, I'm not a, I'm not a physical violence kind of guy.

I think it's weird to be like, Oh yeah, you don't like me. Well, I could beat you in hand to hand combat. It's like, well, I mean, maybe, but like your ideas are still bad.

It doesn't, it's one doesn't, one doesn't solve the other. So no, I unfortunately, I don't think I'll be thrown, I don't think I'll be thrown down the gauntlet beyond, beyond noting that just statistically speaking, you know, if you just look at the fights between people of, of one bulk versus another, there's, there's a clear trend. Yeah. There's weight classes for a

SPEAKER_02
reason. Dude, is this the most Silicon Valley call out ever? I know the mechanics of fighting.

SPEAKER_01
Physics, physics is on my side, bitch.

SPEAKER_03
And for, and for people who are listening and don't know, the very short version is Jason, Jason Calacanis said a bunch of really awful stuff about me for years starting back in 2016, what, you know, when he said that I'm a terrible person, that I don't care about my family or my, I think he said Palmer lucky is a complete moron who doesn't care about his employees or his families or his friends. And then I'll, you know, Palmer's an idiot. He's a moron.

Zuckerberg should fire him, get rid of him. What a useless waste of space. Then I get fired.

He celebrates it over and over. Oh man, I'm so glad they fired Palmer. What a terrible loser, et cetera, et cetera.

Anyway, then he just didn't, then he just didn't talk to me for years, never reached out. And then he invites me to go speak it on his podcast and then at his conference. So I went there and I, I basically just told people, I'm like, I can't believe Jason invited me.

It's only because I've plowed my way back to having a second unicorn before the age of 30. Like this guy treating me like total garbage for years. He's never apologized.

He's spread a bunch of law, even insult society spread a bunch of lies about me. And then at the, and I say, look at all this shit he said about me. Like this is like a hair deck.

It was amazing. And then, and I did that at the end of my talk about, you know, basically the future of conflict and particularly the war in Ukraine. And then at the conference, he said that he was sorry if he said anything that offended me.

But then when he put my video up, he said, actually, I take it back. Everything that I said was accurate. And I don't regret exactly what I said about him.

And so now people keep hitting me up. Be like, you guys need to bury the hatchet, you know, meet in the middle. I'm like, I didn't do anything.

You can't meet them. You're right. Maybe, maybe I don't care about my family, but, you know, we can admit I care about my friends.

Let's meet in the middle. It's like, no, no, it's not going to happen. Anyway, so now Jason's saying that he can, that he can beat me up on any, and, you know, look, maybe he could, but the odds don't seem in his favor.

SPEAKER_01
I do think he trains Jiu-Jitsu. So he does have that going for him, if I recall correctly.

SPEAKER_03
Hey, you know, I did karate one time when I was a kid. But eventually you get old. Well, now it's been wild for me because, I mean, my whole career, I've been a whiz kid, you know, it's like the Palmer Lucky Value proposition is, wow, look at that guy.

He's improbably successful given his age. And now it's just, look at Palmer. He's, yeah, he's successful, I guess, you know, 30.

Anyway, so I've been dealing with the psychological impact of that. I wouldn't really want to compete with you

SPEAKER_01
in anything. And also, you know, I find Jason very entertaining. I don't know him personally, very well or anything, but, but, you know, he's entertaining, but he also, I think, was totally wrong in this circumstance.

I remember when I first heard him say all that shit, I looked it up. I was like, man, Palmer must have, well, actually called you Parker Lucky. I was like, oh man, this Parker Lucky, this, this, this plucky little guy must have done something really messed up.

And then I saw what was actually done and I saw the coverage and I was like, oh, he, he donated $10,000 to, you know, like this thing or whatever. Right. But Jason was out there saying, he says,

SPEAKER_03
Palmer's paying Trump supporters. Extreme terror trolling or something. Yeah, yeah, yeah, yeah, extreme terror trolling.

He said, not quite violent, but close to it. And he's posting anti-semitic memes and misogynistic hate attacks. It's like, dude, it was $9,000 to a billboard.

Like you've, you've given a heck of a lot more to, to spice your political stuff than that.

SPEAKER_01
A billboard, a billboard, you know, in a political cause or a political donation is nothing. Like, you know, I think that's one of the big, one of the big hypocrisies. Not as mainstream as you can get, actually.

One of the big hypocrisies of Silicon Valley is like, it's all about open-mindedness unless you disagree with us, unless you, unless you believe in the thing I don't agree with. Then how dare you believe that, you know, how dare you support that candidate I don't like. How dare you, you know, that half the country, you know, votes for whatever.

It's

SPEAKER_03
one of the great hypocrisies. Well, it's so, it's so foreign to me too, because I mean, like, one of my best friends is a socialist. Like we strongly disagree politically, but running Oculus, I was never, I, I, like, I had my political beliefs, but they were like 1% of my time in thinking.

99% of it was on VR and my company. And it's, it's, it's, it's actually very funny where like, there was a story recently that, you know, Palmer, Palmer lucky, you know, a very outspoken Republican. I'm like, I mean, I've literally tweeted about politics two times in eight years.

Like, yeah, I'm not outspoken by any means, but to them it means like, oh, there was this story years ago where he privately donated not using his name. And that means he's an outspoken Republican. And, you know, imagine if people like Mark Zuckerberg outspoken Democrat does X.

Like, nobody would

SPEAKER_01
ever, nobody would ever do that. The auto correct would be like, you must have made a mistake. The Senate doesn't get typed.

Yeah, but you know, I mean, that, but that's the best part about

SPEAKER_03
Andrewle is that, you know, like I am my political beliefs, like our CEO, Brian Schimpf, he's very much a Democrat. And we have a huge mix of people at Andrewle across the entire political spectrum. And what we've done is said, listen, we, we might not agree on everything, but we agree on the importance of national security.

We agree that the United States needs to have the tools that deter Russia, China and other aggressors from getting into fights with our partners and allies. And we agree that we can save taxpayers hundreds of billions of dollars a year while we make tens of billions of dollars a year. And if we agree on those things, we need to put aside the differences and you'll focus on what's, what's the same.

And I think that's been a really healthy company, company culture. Like a lot of other companies, you know, they'll, they'll, they want to take one political side of the other. And we've been very clear.

No, we are not a politically oriented company. We are a mission oriented company. And to the extent like if a Republican does something that's bad for our mission, we're going to push back on it.

If a Democrat does something that is bad for our mission, we're going to push back on it. But it needs to be about our ability to, you know, defend the West, not our, you know, our personal opinions on how the country should be run. So that's, that's, that's, I, I highly encourage people to set that, to set that tone when they're starting their own companies.

If you want to be able to attract people from all over the country, all over the world of all different political persuasions. Because if you pick aside, you're, you're alienating huge swaths of people, not just the people who disagree with you, but also people who don't want to be in a company that's partisan and might not even care one way or the other. I know there's a lot of people here like, look, I don't, I don't even really have a strong political set of beliefs, but I do know I don't want to work in a place where that's the thing that drives all our decisions.

SPEAKER_01
You're like, oh, we got the office socialists just walking around giving away snacks. It's awesome. It's great.

You need to have never worked place like this. Dude, you're awesome.

SPEAKER_02
That's right. I'm, I'm so pumped that you came on. This is, this is, this has been amazing.

I

SPEAKER_03
would love you to come on again. Well, wait, I have to bring up one more thing. So I get a chance to bring something up.

Fine. We got, we got to talk about the, the tweet you made where you said that there's no way that there's any billionaires out there that actually fly coach

SPEAKER_02
and don't fly. Oh yes. Good. You have got a good memory. Do you, do you fly coach? Oh, you, you do fly coach.

You said that. You're an idiot. What are you doing? J.

Cal was right.

SPEAKER_03
I mean, so, so I, I, I, I, the reason I wanted to chat about it is because yeah, I, I think I responded. I told you like, Hey, you're wrong. Like I, I actually do.

I don't fly private and I do fly coach for me. It's, it's a, it's a, it's a reason thing where with exceptions for long, like long, long international travel, we only cover coach travel for our employees. It's like, look, it's only a few hours.

Like it is a very bad use of company money for us to be buying business or first class for people because we have so much travel at the company. We could easily spend a very serious fraction of our resources on just people traveling in slightly better seats. And so, and it's especially, especially bad when it's like, oh, am I really going to pay you to like, you know, fly business class for three hours to a place where you're then going to like sweat it out in the desert for a week? Like, you know, it's only like a nut.

You know, it's the coach seats better than the desert. You and your wife or your girlfriend or whatever, if you're going to Europe, you're going to fly coach. Even when I use my own money, I fly coach.

And people say, well, why don't you just fly first class? Why don't you fly business? And here's why, because I expect my employees to fly coach and even like, yes, I have a lot of money, but it's if I don't also do it, it feels like I'm out of touch or I don't know what it's like. Or, you know, oh, it's easy for you to say that we should fly coach because you don't have to do it because you happen to have a bunch of money. And so for me, a lot of us setting example, like, look, it's not actually that bad.

I am willing to do it even when I pay for my own travel because

SPEAKER_02
that's that I think it's not that bad. And so don't you have like people who want to like kill you or like hurt you? I mean, aren't you like, I mean, like, like you've got the whole anti Trump crowd who sees you and they're like, go f yourself. And then now you're like dealing with Lockheed, Martin and stuff.

Surely they want to like kneecap you. You're got all in podcast fanatics. Yeah, you got Jason Calcane is going to come kind of like you and a Nuggy like something's going to happen.

You know what I mean? Like surely like there's like some type of security risk. Also, I maybe you have life insurance or something like that. If they're going to ensure you, I'd be like, dog, you're doing you're you got to have this a security person with you or you got to like have someone with you.

Like surely there's some type of security risk where you got to think like beyond just like, hey, guys, I'm in solitude with you on this flight. Like I get it. Like,

SPEAKER_03
I mean, surely there's some type of like you're totally right. And I mean, it depends on the trip where the trip is and what I'm doing. And like, I make sure to keep myself safe.

And I probably don't want to get into the specifics because, you know, like you said, there's people out there who who are who are not fans of me. And like you mentioned, you know, Jason Calcane us and the Trump people. But like, what about the Mexican cartels that we've cost hundreds of millions of dollars in drug trade? What about, you know, all the people who have been foiled in attacks on US military forces because of our stuff? And you know, there's actually a long list of people who are more who are scarier than Jason Calcane us, if you can believe it.

Look, you're right that to some degree that that's a worry. But I also think that in general, if someone's going to come to kill me, it's probably going to be a place where they know I'm going to be. And there's, there's actually much higher, like to me, the high risk place is actually not on a, on a flight in the secure zone.

Yeah, it's not on Southwest in the secure zone of an airport. It's actually probably more likely to be the restaurants I go to too much. But anyway, I guess I want to explain, that's why I do it.

If I'm going to ask my employees to do it, I need to do it too, even when it's my own money, even when it's my own cost, because otherwise you are like, you become an out. It's not just that I appear out of touch. I would literally be out of touch.

Maybe one day coach gets so bad that I tell everyone, guys, you know what, I hear you, we're all going business now. But I think, I think today is not that day.

SPEAKER_02
You're crazy. I've agreed with everything you've said, except for that. You are crazy.

SPEAKER_01
Yeah, no, I'm actually glad you said this because I was feeling like, man, this guy's great. He's funny. He's smart.

He's just really big thinker. I'm glad you have something you're totally wrong about. It makes me feel so much better to end this interview.

That's a great service you did for everybody here by having this absolute nonsense policy for yourself. If I go get you, if I'm the guy who flies to go get that billion dollar contract and I'm flying back in the C zone of Southwest, I'm riding the next day at work.

SPEAKER_03
I'm telling you, I love the back of the plane on the window. Nobody bothers you. You can get on.

You can let everybody get off the plane before you do. You don't have to fight anybody. You just, you know, let everyone feel, I got to throw this in.

My grandpa was a pilot for United Airlines for over 40 years. And so I also grew up around commercial airlines. And so this might be another thing.

Like to me, there is a certain romanticism to like mass market, mass available air travel. Like what an incredible thing. And we did it.

America did it. We figured out how to make it economically viable and we build everyone else's airplanes. Like it is an American thing.

And so I, even when you're on everyone else's planes, they're mostly made by Americans and the ones that are made by Europeans were made with American technology. So I, I, I also like, I also like

SPEAKER_01
that part. I think feet are gross. You're into coach.

I think coach is gross. Well, yeah, to each their own. And I think we'll leave it at that.

I agree to disagree. Each their own.

SPEAKER_02
No, look, I, I disagree with that opinion, but I respect it like hell. And I respect you. You're, you're the best man.

I would love for you to come on if you want, like in a few weeks, a few months whenever and talk some more about ideas. I'm a fan of yours. So this feels really cool that you're

SPEAKER_03
here. Maybe we, thank you. I appreciate that.

This has been a lot of fun. We covered some good

SPEAKER_02
ground today. Yes. And maybe we've suckered you into becoming friends with us. So if you ever want, you can DSDM us on Twitter.

We come up, Hobies, who knows? I don't know. Maybe we'll see what happens,

SPEAKER_03
but this has been awesome coming, coming down anytime. All right, sweet. Thank you so much.

SPEAKER_00
All right. See you guys later.