On this week’s episode I chatted with Sam Lessin, Co-Founder of Fin and General Partner at Slow Ventures.

Sam is, in the truest sense, a Silicon Valley insider. He’s a part of the Harvard tech mafia, friends with Zuckerberg and has built a few different tech startups.

Beyond all of that, he is an extremely deep and abstract thinker. I’ve always been a fan of listening to and learning from him.

During our chat we discussed how he sees the VC model changing (he has some strong opinions on this which are great), the evolution of media and its business models, the differences between US and China government strategies towards tech and a whole lot more. Enjoy.

Show Links

• Follow us on Twitter: @lessin / @slow / @betterwithfin / @mpd‍
• Guest Links: Slow Ventures, Fin, The Information‍
• Article Links: Sam's take on "The End of Venture Capital As We Know It" + a TechCrunch follow up on it
• Books Links: The Invention of News, Lessin’s Lessons‍
• Podcast Links: Twitter, Facebook, LinkedIn

Transcript

MPD: Welcome Sam. Thanks for being here today.

Sam Lessin: Thanks for having me. 

MPD: All right. Uh, let's start off. I always think it's helpful to get people a little background on your primary focus these days before we kind of dive into other stuff. Would you give a little color on slow ventures? 

Sam Lessin: Sure. So as low as a firm that, um, you know, a few friends and I got together and put together, I guess I like about eight years ago now.

Um, that does seed stage investing. Uh, you know, it's kind of a, there's actually, I think there's at this point several firms that kind of have a similar history to this, but when we did it was a little bit more. Yeah. Which is initially it just basically Dan, a few friends, we put together some cash into a common vehicle.

A lot of us were doing our own, uh, angel investing anyway. And so we kind of like created a vehicle that we were investing out of. And there was pretty casual, a few million bucks. And then, you know, um, after I left Facebook, uh, Kevin Colleran, who's one of the other GPS that, Hey, let's make this a real firm.

Right. And so we, you know, we raised the $65 million fall and then $145 million fund. And then. About a half, a billion dollars to this point that we've deployed into early stage companies. Um, we're hyper generalist. So, you know, we've done everything from brands like Casper and, you know, Albers. We were seed investors into things like Robin hood and slack and Postmates, like kind of tech core stuff.

And then, you know, we've also done a ton of crypto. And so I, I took, uh, a few million dollars into the. Crypto investing, you know, out of the fund, starting in like 20 16, 17 has become a major focus. So, you know, we're hardcore generalist. 

MPD: Why is it called slow? That seems to be antithetical that most of the venture, 

Sam Lessin: I mean, look, there's a bunch of stories for this.

You can get into, I mean, one version of the story. There was a, there was a great restaurant called SWOT club. We liked, um, you know, in San Francisco. Um, we also just like, you know, the, the more high, high, high minded version is, we like to point out that, you know, a lot of these things, they are supposed to be overnight successes, start out really slowly and take a long time to ramp.

So we think about it that way. I think there's another version, which is just like, candidly, it's just funny to name a venture fund slow. Um, that's actually what I assumed it was, there's some level. You know, we, we joke that one of the core firm values, we did like a values exercise. One of the core firm values we came up with was the poo emoji.

Um, like we think you can't take yourself too seriously. Um, so we've always, we've always joked. We actually now have a, a growth fund, which isn't officially called slogan. But we liked the idea of the, a find

MPD: you should have named it that why does 

Sam Lessin: is this low growth fund so damn close, right? It's not quite actually named slow growth, but that's kind of the joke is, you know, you gotta have a little fun. 

MPD: That's amazing. Um, so what, what's your for people listening who are entrepreneurs, what's the firm's pitch to founders?

Like why take your money? 

Sam Lessin: Um, cause we're good. I mean, I think like. Our, um, we don't like to pitch the way some other, like, we're not your babysitters, you know, like some people, like we're going to have you all these services for you, and I'm going to handhold you through the entrepreneurial journey and like candidly having been entrepreneurs and built companies, we've had all kinds of bullshit, like entrepreneurship, like super lonely.

It's super hard. We'll never know your business as well as you will. Right. But, you know, there are a few places where we think we can be uniquely helpful, um, in moments like one and we loved being available on text messenger, right? So like our view is like Texas, when you need us, like, we're not on your board.

We don't wanna like get up in your business. We want to be super collaborative, but you know, there's places where we can be helpful from a product perspective. We've seen a lot of companies we've dealt a lot of companies actually like, you know, people have questions about how do we recruit this role? Or like, what do I do strategically here?

Like, we're really good at that. Um, and then I think a little more formally, you know, a lot of our LP is not all of them, but several of our significant LPs are kind of like the best series a investors in the world. Um, and you know, the reality is there's only one thing that kills seed companies, which is running out of money.

Um, and so we're, I think we've gotten pretty darn good at when we work with companies, helping them identify quickly, not all of the things they have to build, right. Cause you have to build tons of things to make your company successful, but what's going to matter. And the answer to. For the next series, I've put the series eight funnels.

What do you really have to get to hit that? And then making sure that we're actually socializing the companies and helping them talk to you, not just, you know, anyone or the, the name of the right people, um, that they should be talking to you about the next round. And I think, you know, you know, we take that pretty seriously.

Like as a partnership, we basically do rolling calls with every major series, a investor in Silicon valley every few weeks. Understand our portfolio talking about what's next talk of what they're looking for, what metrics look like. So we can really guide people through that very critical period. That makes sense.

That makes 

MPD: tons of sense. Um, you're at an interesting place because you're kind of at the nexus of a lot of different dimensions of the tech ecosystem, VC via slow you're out of Facebook. Um, you're an entrepreneur and I know you for a long time now. I know you to be a very big abstract. I would love to hear your perspective on the current state of venture capital and how you see it evolving.

Sam Lessin: That's interesting. So I just wrote the thing I like to do a lot as of right. And, you know, I just wrote, my wife founded a publication called V information. This is a subscription only publication covers the tech industry super deep. And I think super well. Um, and, uh, I wrote a kind of long essays, probably the thing that ended up getting, going most viral over it written recently about kind of what I was talking about, like the end of software VC, um, and comparing a little bit to earlier cycles where, you know, venture capital, um, it's kind of like a thing that comes episodically in, in, in new industries.

If you think about it, like no industry should remain depending on venture capital for. Because if you think about it, venture capital is literally the most expensive money in the world, right? Like, you know, there's, you know, it's available to early stage companies, but the price is really high. Right. You know, and that's how venture capital is such a great financial business, if you're good at it.

Right. Because you're basically selling the most expensive commodity money. Now. So what happens is, is you start out, you have a new business idea and you thesis, maybe it's SAS or cloud, or like whatever area you want to talk about. Crypto. Certainly, you know, I think going through this and initially I was like, well, these are really interesting ideas, but this shit's crazy.

Like, I don't want to invest in this, so you can even call it people like me. And I'm like, wow, that's actually awesome. Here's some very expensive money. Let's go explore. But once those models get figured out, I was like, oh yeah, I know how to value this. I know what the metrics are. We all want to play in it.

Then over time, you know, industries grow out of VC. And I think that's kind of happening in software right now where like the reason you see all these huge mega funds coming in. You know, the leveraged buyout, asset managers getting into doing, you know, growth rounds. It's like everyone kind of understands the model.

They know how good the businesses are and the money gets priced accordingly. So all of a sudden the super expensive venture capital money is just like money. Like you can get, you know, you have a good software idea, you can get it from anywhere. Right. So my view is that one of the, I mean, what's happening right now is preventers at a point where there's a bunch of stuff that used to be software venture capital of Silicon.

Yeah. Which is really not venture capital anymore. Right. And then the real venture capitalists, some people will say, great, that's awesome. I made a shit load of money as a VC. Now I'm going to be an asset manager and that's fine. I'll just raise a hundred times more money and play against the east coast firms.

You know, I think the real people who like VC like me, we just go find Wilder, new shit, the back. Right. And like, that's kind of what I think we're in the cycle of right now. I mean, you know, crypto has been for sure, you know, you know, and I am a big long-term bull. You know, we've done unbelievably well backing early-stage protocols from four years ago.

You know, we were, you know, seed investors in Solano, which is, you know, a 3000 expert turns for us right now. Right? So like that was in an era when no one was doing that. That's kind of become more mainstream. It's no one has got a business, you know, we're still looking for new opportunities in crypto, but then even going into other stuff that people won't back yet.

So I kind of get excited about you talking about the future. I personally am looking for things generally, which no one else wants to fund. Um, and I think that that EDC in general will be pushed away from the software stuff, but it's grown up on or been defined by, by the last 20 years. Do you 

MPD: think that will apply to the super early stage or just growth?

I wonder that some of the firms you're talking about, I agree there they're crowding and we're never, I've never seen a convergence of private equity and venture capital, um, in the same industry until the last three, four or five years. But the private equity guys, I don't know if they understand how to invest in companies pre-cash flow 

Sam Lessin: preoperative metrics.

I think so. I, you know, I said in that article and I stand by the fact, I think seed is relatively more protected than series a on beyond once you're at an a, like, it's just a numbers game at this point. Right. Um, even there's a lot of company building left to do. Um, I think seed is relatively protected, but here's what's happening is it's kind of like, um, everyone's main course is someone else's appetite.

Right. Um, and so what's happening in some ways is there's a lot of companies that are coming in and saying, oh, that's cute. I can write. It used to be like, oh, well, like I'm a growth investor, but whatever. All right. HX, like, who cares? I don't care if I make money on it or not, but like, it's just a way to like, get an active.

And now you have a bunch of series a firms saying, oh, well, we'll write C checks. Why not? Like cares? It's just marketing for us. Right? Candidly, we do this. Like we, we do angle checks at up to a quarter million dollars. We know, we're not trying to actually make our fund on that. Right. Like that's kind of like to be in the industry and be supportive and helpful.

But so because of that dynamic, I think seed is impacted although less, um, is what I. 

MPD: What other sectors are you interested that you think are kind of outside the domain of more traditional capital sources or you look, you mentioned crypto, you looking at space, but also is out there. Yeah. 

Sam Lessin: I mean, we actually, well, we have done some space stuff.

You know, we were seed investors. I put a check in day Astra, which just went public through its back. And like, it was, you know, a space company. So we will do stuff like that. That's a little Wilder. I mean, th you're going to laugh at this because you've heard me pitch this 20 years ago, but. There's a few Wilder opportunities.

We're looking at. Some of them are kind of in the crypto space broadly, but you know, aren't mainstream yet. And like the world Dow Dows and things like that, but I'm pretty excited about, and the other space and until you'll laugh at is we started directly backing humans. Um, so investing in people rather than companies.

Um, and, um, we're doing this in the creator space. We're doing this with entrepreneurs, you know, we backed some great entrepreneurs, not. We're just like, look, we'll buy 5% of whatever you do for the next 30 years. Right. And like, how does that work structure? Like you explain that. So there's two different structures we've created.

Um, one's kind of more entrepreneurial organized or focused. The other is kind of more creator oriented. Um, the entrepreneur ones, like you basically just secret. Right. And then you kind of sign an agreement that says, look, anything you do will be owned by the C Corp. Right. And you're the biggest shareholder.

And then what am I already investors? And I think it has some huge advantages, um, actually for entrepreneurs, for some entrepreneurs, especially the ones who are going to be prolific over the longterm, because it allows them in theory, to do things like skip their seed rounds, right. And own more of their businesses.

Like all of a sudden, if you have a hold co that we've helped find. Well, you can turn out companies effectively, almost like an incubator, but you don't have to do seed financing anymore. Then you get to own more of your companies skip right to A's, right? Because you can go longer right on your own balance sheet.

And I think that's a very successful strategy that is going to emerge and will, by the way, anyone who's listening. If you are doing this, give us a call. And then on the creator side, you know, I'm a big believer, you know, historically the way a brand was built is you start a product, you know, pet rock, whatever I don't care about.

It gets really big to be like, oh my God, it's a great brand. We love this brand. Does this awesome stuff for us. And the brain is like, cool. Now I can do more stuff, but Amazon's a good example. Like grow up as a bookseller, get to do you earn the right to do more and more products, but the brand comes after.

With all these platforms, Instagram, YouTube, whatever, what you're seeing is all these creators start incredible brands with huge loyalty and know products and then layer products in later. Right. And the thing is, these guys are all completely cashflow bound pretty much. Right. And so we're very interested in financing creators broadly.

We've done some investments in companies that do this, like use creative, you know, things like that. But we're also literally directly saying like, we have a structure where we'll. You know, we bought an investment company. That's like an LLC tach broadly to you, right. We built legal docs around this and we basically say, look, w you know, we we'll just give you no strings attached, you know, money.

Um, and we want a small slice, right. Of whatever you produce over the next period, equity, you know, cashflow, et cetera. Um, so it's early, but we've now done this and we're doing this a few times and like, we're going to do more of it. And we're building a fund around that as well. Um, What's 

MPD: the largest check you've written into.

Sam Lessin: Uh, $1.5 million. Got it 

MPD: out and raise the funding for this. 

Sam Lessin: We basically have like a fun running where we've kind of committed capital to this strategy, but it's not like it's kind of like our slow growth fund, right? Well, actually not quite there actually isn't at least technically all legal entities.

So this is slow people 

MPD: fund. 

Sam Lessin: Is that the, I mean, it's called, we're calling it a creator fund because we're not that good at naming, but the, um, but yeah, so we're, we're doing, I mean, I think there's a lot to do in that space broadly and there's a bunch of reasons. Yeah, we did a bunch of ISA world investing.

We really believe in effectively equity financing for people broadly. Right. And there was a lot of slices at that that are going to be very interesting, but, you know, I wouldn't, you know, um, I seen some, they will probably be growth equity for people, right. And these types of brands, but like, you know, this is the type of thing we talked about, weirder stuff like that.

Stuff is stuff I get infested in, um, that, you know, I'm not, when we're doing these deals, we're not competing. With some other funds because no one else is doing this. We're competing with like, is this a good deal? That is awesome for everyone. Right. Um, 

MPD: now you're focusing on slow these days, but I know you had started a company recently.

I meant it's not that recent anymore. Uh, do you want to give a quick overview of Fen? 

Sam Lessin: Um, things are great. And so, so when I left Facebook, uh, I was very conflicted about whether I wanted to be an operator or an investor as I have always been because the grass is always greener when you're operating.

When you're operating, like, I, God, this is fucking hard. Like investing is that can be broad or whatever, you know, when you're investing, you're like, well, this is cool and really interesting ideas, but I don't really do anything. And like that has its own challenges. And so I kind of tried to have my cake.

I did have my cake and eat it too. We started doing investing, you know, with Ben's and building a fund and. You know, I was, um, um, I adore Andrew Cortinez, one, the two co-founders of Venmo. I love Akron as well. Um, you know, I had been their first investor and help them find their first institutional capital and like in the early days of that.

And so Cotina was also kind of finishing up his corporate gig, having sold Venmo. And we said we got to start something together. And so we started a company thin, you know, when we started with saying, look, we're really interested. Not at that time, everyone was obsessed with like, oh my God, like, AI's perfect.

We're going to have these AI assistants, blah, blah, blah. And we're like, we know this technology, this is complete bullshit. Right. But, but we are interested in how AI and machine learning can augment human processes. And so we ended up saying, well, it'd be cool to build is like her, like a Siri as a superseded.

And just Nixon humans, like, see if we can figure out how to do that. And the idea was, well, we'll build all the technology from the ground up ourselves, nothing off the shelf. And let's just figure out the problem space. And we built a pretty cool assistant business. Um, this has been tried a few times really hard, um, but we did a pretty good job when we got to gross margin, positive and growing and lots of loyal customers.

But we, in the process of doing that actually figured out what we found was even better business, which is. Instrumenting knowledge work. Uh, you know, so if you're working in a factory, everything is instrumented, right? If you are working in front of you by instrument, I mean, you know, understanding per task exactly how each person's completing something, right?

What clicks are they doing? What are they focusing on? What knowledge base pages are they using? Like what is their workflow in knowledge based situations to complete tasks. And then how do you optimize it? There's this whole world, as, as I'm sure, you know, like RPA and like all this type of stuff going on, robotic processing for me, you know, how do you do, but in the end of the day, I mean, I did start my career at Bain and like, and so you have a clean, big data set of like, what's actually happening.

It's super hard to know like what the automated, how what's the pay off of it. And so we've built a pretty good. Uh, we built basically this instrumentation suite that we first we needed for ourselves and we had a hundred people doing these tasks. We were like, I don't, we don't have to fix this or improve it because we don't know what they're doing.

So we better figure that out. So the classic story, I actually am proud that I, um, I, I don't consider myself a real engineer, but I did actually build the first version of this plugin. Right. Um, myself and a hackathon, because I really want to understand the workflow of some of the agents. And we realized there's an incredible business because, you know, You know, huge companies, Airbnb is, you know, uh, you know, a big customer, people like that, like that, um, have huge knowledge work teams, right?

Doing customer service, things like that. And like, Having them understand what's actually happening so they can scientifically improve the processes is a very important missing piece. Right. And so 

MPD: just to make sure I understand it now, so it's looking at what the knowledge workers are doing, creating essentially patterns around what the routines and work is, so that a third party management can look at it and in turn 

Sam Lessin: dials.

Yeah. We can understand as well and like, and understand, you know, exactly how to improve a process, you know, where gaps are, but basically say like, look, I'm just. Create a full data set time and motion studies, you know, every second of every day, every single person on this 10,000 person team is doing per task.

And then I'm going to start pulling insights and where I can optimize where I can make a process better, which knowledge-based pages are broken, you know, where, when mistakes are made, why? Right. Um, scientifically and then continuously monitor and drive that. And so longly, it was, it became a pretty good business, great business.

We think it's gonna be a huge company like, you know, um, but we kinda got to the point where, you know, Katina and I are. I think pretty good, zero to one guys, but we're not necessarily the best one to two guys in the enterprise SAS world. Um, you've ever seen, like, we're not, we're smart, but like we're not the best.

And so we, we found the best, which is, you know, Evan, Komack, who's the CEO of that brought them in, have kind of set the company up for success. And you know, we're, we're both still involved, but, but he's driving the ship 

MPD: now for people looking at these spaces, right? You picked one of the hardest. Roads to go doing the personal automation.

When the V one offense, the assistant, the personalized assistant, that's really hard technology to build because there's number of applications at building a real, her totally are infinite. How much of it was manual in the beginning. And I asked this for the perspective of someone listening is considering a kind of a machine learning or extremely complex technologies, a venture.

What is the right balance for manual versus automation? When you get started? To set yourself up for success and, you 

Sam Lessin: know, proper Terminator. So what I'd say is, um, one core Jean and I did this, we did this pretty eyes wide open, having both founded and sold companies successfully and kind of being in a financially secure place and being young and hungry and knowing what we were doing.

Right. And like what I, the reason I mentioned that is like, don't start this. Right. We did this super hard. When I saw 

MPD: this, I was like, wow, 

Sam Lessin: did that again? Like not to, like, we did that on purpose. Cause we were like interested in the problem set area. And like, we're like, look, the only way to actually figure this out is to just like actually start doing it and put pedal to the metal and like we'll figure out.

We know, we know it's interesting. We know we'll figure out cool stuff, but like again, like we also did everything custom. Like we built all our own software. You're like, well, that's a dumb decision if you're a startup most of the time, except for that was kind of the point, right? The point was like, okay.

Can we think about this end to end and build in the right infrastructure as part of it, that puts us in a very different place. And so I think it's not a great way to be an entrepreneur. Like we were doing it having from a place of a lot of safety, uh, and you know, like, like wanting to take something on like that, cause we felt uniquely positioned to try.

Um, so the first thing that he was like, don't do that. Right. Um, If you are going to do it right. Having said that you shouldn't do it. And knowing that you shouldn't listen to seed investor and you could do whatever you want. Right. What I say is like, um, you know, look, we, we started out like completely manual.

Like literally we would play this like game where like, you know, one of us would pretend to be asking questions and the other person would literally start off being like, how would I complete this? And like, what software would I want? And then how would I speed it up? And then, you know, things like that, I do think that that's basically the best approach to most automation.

Is like just, you know, you literally like play a game, like where you, you know, with, uh, with that kind of masked man behind the scene, you know, the wizard of Oz style, and then you figure out how to chip away at the problems. And we have invested in a lot of businesses, we would jokingly call them AI or artificial artificial intelligence, um, with like AI, with AI, you know, we've invested in.

Um, uh, like we've invested in some wealth management companies, we invest in a lot of things that like fit this pattern because we think we understand it at this point, which is like, okay, like, which of these businesses, none of which can be as broad as Finn was, but like are good places to build these types of like, semi-automated more efficient human in the loop services effectively versus things that are just like fool's errand.

Um, 

MPD: yeah. Fascinating because there's a place for this. Right. And especially good entrepreneurs who not to chip away at the, uh, at the club. Yeah, I did. The thing that, 

Sam Lessin: the thing I'd say though, is you also have to, I think know yourself, um, which is I think, and this is one thing I think coaching and I didn't like fully internalize when we started the fitness system business is, you know, there's an enormous difference between software and service entrepreneurs.

They're both really valuable and you can make a lot, you can create a lot of value and build very good companies, building services. Software, but I think the leadership required for them is very different. Right. And so there are certain, like, I think that's one thing that, like, we kind of came to, I mean, say the primary reason for the way we've pivoted, but like a part of it, for sure.

Which was like, we kind of realized we were like deeply software people. Right. Um, and like services are just, I find them brutal. That doesn't mean that like they're not important and it doesn't mean that like, you can't build a great service businesses, but like from a personal emotional standpoint, I find services brutal, um, in a way that I, and I liked software, right?

MPD: You mean in terms of dealing with the humans and the customer, 

Sam Lessin: it's kinda like my wife's business, you know, my wife in town, the information, if it's a journalism business, like they have to make their product every day. Right? Like they can't write a day off. Like there's no, like, okay, well we solve that and now we're done.

It's like, oh my God, like we delivered something. Now we have to deliver it again tomorrow. Right. And I just, you know, You know, it's who you are. I think you just have to know yourself a little bit and like, I'm not, I don't like delivering things every day. Like I like really delivering deeply sometimes, and then like not delivering anything for awhile.

MPD: Love that. So I'm glad you mentioned the information because ever since I've known you back when you were at PO uh, the company you sold to Facebook, you had been obsessed with paywalls. That was a Sam lesson special always. Yeah, I did that low and behold, the wife has launched a very successful paywall media site.

Can you tell us a little bit about the information? 

Sam Lessin: Sure. So, yeah, I mean, you hear a point about obsession with paywalls. I mean, When Amazon first released like a payment platform, API is the first thing I did was I built a company called laterally real, literally back in the day, which was basically sub stack in 2008.

Right. Or whatever it was, you know, you can, um, you know, write a newsletter and put a price on it. And we'll like, you know, collect the subscription fees for you and, you know, email this address and we'll distribute it to you over subscribed. Right. Very simple. Did really well, and it's time like that, who really quickly, we were like, oh, there's something here.

But like I got distracted with other businesses and Facebook and things like that. So that kind of thing petered out, although it was cool to see substantial, eventually come back around to it. Um, yeah, look the information. I mean, you know, my wife was a longtime wall street journal reporter, um, had written a huge number of articles for the wall street journal, you know, very hard worker, um, you know, by the tech industry, you know, in, in that, in, in an era.

You know, she's like, look, I think that this was an in that period of people were really heavily biased towards like traffic and, you know, just having a lot of page views and people using the internet that way we can get into why that was. Um, but she was like, well, I think journalism is valuable. And like, I am going to make a serious, you know, push towards, I will do high quality journalism and you will pay me for it.

Like at the time that was shocking. You know, business insider when she launched, literally wrote an article being like everyone's laughing at desk, the lesson. And like, it's one of those, like, yeah, you can laugh mother fuckers. Right. Like, you know, um, but, um, you know, we'll, we'll see who has the last laugh as my wife definitely is, you know, you fast forward, you know, I guess like seven, eight years.

And she founded it and like, you know, subscription media, at least, uh, you know, in a lot of circles. Crazy to like the core everyone's business, you know, they, they were very ahead of their time in terms of doing that. You know, the company is super successful. It grows really nicely. It's, you know, they do quite a bit of revenue and have, you know, a very large subscriber base in tech and finance.

And, you know, they're able to support dozens of full-time journalists covering this stuff. Everyone was always complaining about the death of journalism. Maybe, or maybe you just need like a better business model on the page. Journalists did really well and you get good journalism. Like it's not rocket science.

Um, I think 

MPD: we're seeing that concept spread out more broadly, right? There's um, there's a lot of podcasts popping up now that are really focusing on quality and getting away from the ads. Uh, there's a political podcast. I picked up called breaking point where they tried to argue both the left and the right perspective.

That's useful unto itself, but they're trying to get away from. Uh, the simplicity and narrow messaging of the mainstream media. 

Sam Lessin: Yeah. Well look, I think there's positives and negatives to that, to be clear. The reason I think ad supported media is pretty dumb is because look, I spent a long time at Facebook.

You know, you can look at Google, which is probably the most successful business model in the history of the world. It's like, you will lose right to tech companies for ad dollars in reach, right? Like, because Tik TOK is way more compelling than anything you're ever going to make. Right. Like just straight up.

Right. And so like, I don't. Um, I think it's a fool's errand for most media bands to really be in the ad business though. I do think that obviously some have pulled off niche audiences and they've been salespeople and they do okay. Um, I think people are willing to pay for things they value to that point.

Right. And so like, why not charge them, like align your incentives and like with your audience, I think is great because then you can produce what they want and what they need, not what, you know, I do believe that whoever's paying you is kind of ultimately your real customer. Right. And I think that in terms of decision-making.

And then I'd say like, look, I think, um, the knock on subscription businesses, which I think is true is that they almost by definition will reflect what their customers care about and want, which might not be like always completely, perfectly in the public interest. Right. If that makes sense. And you're going to end up with smaller communities like.

If a hundred years ago, everyone read the same three newspapers and then eventually watched the same two television channels have the same information, shared viewpoint, shared perspective. That's pretty cool function for democracy yet. It's it has its own challenges, but at least everyone on the same page and getting the same information.

The second you get into subscription nieces, the world will divert. You're going to have more and more different, takes an item that's generally very good and very healthy, but there are costs to that. 

MPD: Yeah. I mean, let me just take it, ask a broad question on this top. Do you think the kind of news business model as a whole is broken from a civil responsibility perspective?

Um,

Sam Lessin: I don't know. I mean, if you think history, if you look at the history of the news industry going back hundreds of years, there's a great book called the intervention of news. And we've been through so many cycles at this point. Private newsletters that are expensive that cater or give real information to the people that need it right.

And like are willing to value it. And then eventually some technology comes out and someone goes to the mass play and then that mass play gets super scammy and spammy because that's what they're getting paid. And like candidly, the scintillation of what people want. And then all the elites say, oh my God, this is crap.

I need real information. And pull back into private newsletters and news sources that they pay a lot of money for it. This isn't a new cycle, right. Um, you know, and I think it will continue for a long time and it's kind of a rational cycle. Now, the public interest in this of new. I don't know. I mean, I think, I think, um, I think there's a bunch of democratic of functions, which like businesses are not very well set up to fundamentally support.

And I, you know, like for instance, I'm not a guy I don't believe in double bottom lines or triple bottom lines or quadruple bottom line businesses make money. Right. Like that's what they do. If you don't like the way they make money, then like the government needs to change the framework or the rules by which they make money.

And that's the government's job. You know, ideal, you have good people who are making the right decisions. Ideally ESG aligns with the bottom line, but like being like, well, businesses, we need to overload that concept with more responsibilities, right. Because they're successful and good. And like, they need to do more things I think is like a very wrong approach personally.

Um, sewing into the civic responsibility to news. I think it's a tough place, right? Like I'm not sure, you know, I don't, I'm glad that journalists and I think people should feel, uh, like a sense of importance to obviously the truth and reality. And like, I think that's actually just good business. Like I think if you, if you publish a bunch of lies or untruths, at some point, we're just not going to pay you anymore, unless they're really scintillating, it's just entertainment in which case they might.

But like, they're not paying you as a news company anymore. They're paying you cause it's comical. Right. Um, right. But that's been confusing to folks. I know that's actually the, I think that's the real problem is that historically. If you think about it, um, you are a newspaper, you are so profitable that you are, and there was nothing else to look at.

There's nothing else interesting going on while you were stuck at home reading a newspaper, there's no fucking TV or radio or people are hanging out with their social media. So you kind of have this weird monopoly status where like you basically could shove news down people's throat, a lot of which they maybe didn't even want.

But you were also the only entertainment source. So they kind of put up with it for the entertainment, if that made sense. And what happens is with technology, it turns out there's like all these classes of businesses that are way more entertaining than the news. Right. And so it's really hard unless you're selling to professional audience that values.

Right to Ram news down people's throat. Right. Cause they're like, well, I'd rather just be entertained. Like Tik TOK is really entertaining. Right. And so, I dunno, I think these are all kind of like natural business dynamics that are paying out and like the historical model of like, you know, everyone trusts the New York times, which by the way you shouldn't trust the New York times is fine.

Right. Like, but they're, they definitely have their viewpoints. They definitely come with an agenda. Right. Um, they're pretty naked about that. Like, you know, I think those error, I think it's just like an acquaintance bygone era. 

MPD: I mean, you've been looking at and studying the kind of the communication space, one form or another for a really long time, then you landed a Facebook.

I mean, it's obviously a major topic of our day who can or should be responsible for preventing the spread of misinformation on social media. How do we deal with 

Sam Lessin: that? Well, look, I can only give you obviously my very limited opinion. I haven't worked at Facebook in a long time now, but look here. Um, you know, like, um, it's like, there's a great, like Simpsons, like old man yells at the wind type for whatever.

Like here's, here's the reality. In the end of the day, it's like, we've lived for a long time if physical space that we really understood the rules of, right. Like we understood how information flowed and we understood how to interact with each other. And, and candidly, there was a nice iterative game to it where like, you know, if you lie your neighbor a bunch and they're your neighbor, like there's real costs if they don't trust you anymore.

Right. And there's like, and things like if thinking about. We also live in a world where like, you don't think there was misinformation floating around the world. Like 100 years ago it was rampant. Right? The problem was, it was in back rooms and living rooms, you know, in conversation spaces, we had no ability to measure or understand.

Right. So what's happened with the internet and I think what's happening very real. Time is a few things. One is like the stakes, um, around communication, especially with low light forms. Right have been really shifted dramatically because you're no longer interacting with the 10 people that you're going to.

In fact, with you, your whole life, you interacting with eight, 8 billion voices, right? Most of whom you have no idea who they are or who to trust or what's going on. Right. And so I think that's a really cognitively dissonant thing for society to deal with. And then, you know, beyond that, when you think about the measurability of this stuff, all of these terrible things, misinformation, hate speech, all this terrible stuff that has been going on for us.

All of a sudden you're laid bare, right? You're like, oh my God, we can measure this. Now this is terrible. So it's kinda like, you know, it's like all of a sudden when you add that measurability and that insight, you're like, oh my God, like, wow, there's a lot of bad stuff in the world. And I think that's like a real shock moment for people.

So there's like a fundamental technological set of problems. And then there's like a realization that's happened with the digitization of, of content that I think is really scary for people. I'll be honest. My. This is like an adolescent. It's like we're in an adolescent phase of the internet. The thing that I think we would really screw up for the longterm is actually bad and overregulation and control of speech, not under regulation of control and speed.

And the reason that you see under that stuff, you're like, oh my God, this is terrible. Like what tools do we have to stop this heinous stuff? Right. That we would maybe there all along, but now you see, and you're like, you want to have that reaction, but the problem is, is like, look, technology is super powerful.

Like historically you might ban a type of speech from a public square, but you'd never stop it. Like speeches, free speeches open, right? Like people can always say things in backroom. And I mean, that's incredibly important escape valve for scary authoritarian governments. Right. And really basil, like, I think it's very important that we have the freedom to say whatever we want with.

The technology actually threatens that for the first time in a pretty unfathomable away. Right. Like, you know, there's an old Russian joke, which is like, oh, in Russia, it's not that we don't have free speech. We just might not have freedom after speech. Right. Which is kind of a, a joke about that. That was true.

I mean, like you could never reregulate really, you could only regulate now all of a sudden that's fine. Like I can say, okay, I'm going to say. And I know only penalize, but at least I can say it. I can get the ideas out, this idea that in the digital space I can set to perfect censorship, public, private, whatever is completely terrifying.

Right. Um, and like, I think actually one of the most existential threats to humanity in the midterm, it's an abstract one and people are. They're very bad at trading short term, real realities for mid-term existential threats. We're just terrible at it's the same reason we can't control global warming, right.

As we just were absolutely awful at this. But I do worry that, you know, you talking about regulating speech on the internet, who should do it, that it, uh, you know, the risks that we use. Arguments about speech. We don't like even extreme stuff. Like child porn is like perfect example. Everyone hates child porn.

And so you say child porn. I was like, I have no response. I can't argue pro child porn. No one would ever would do that. Yeah, using that as having an apple right now, as a way to pry into visibility access and ultimately control of human speech is utterly terrifying. And I think anything we can do to push back against that is, is very important in the bedroom to long-term society.

Yeah. We 

MPD: just had, uh, someone on the show who is basically an expert on us, Chinese relations. And we talked a lot about the Chinese model. And I think beyond the economic competition, the prospect of potential war, all these awful things that might be coming. There's a very interesting sociological dynamic right now where we have two case studies developing in parallel.

We've got America, which has values free speech, uh, on the internet, but there is no single source of truth and friends and family members think the world is completely upside down from what I think. And then in China, there is a single source of truth is the government, but there's no opportunity to deviate from it.

So it's this which one's going to hold well. It's very 

Sam Lessin: interesting. And here's the problem. The problem we do face globally as a society is the Chinese model. Definitely more efficient and very successful in the short efficient, in the short run. It's way less resilience to cataclysm. Uh, you know, outcomes, right?

Like you can't get rid of dictator is that you talk about that, that version. And that's very scary. Um, and it's also not clear that in the long run, it's actually a better model, right? Because the reality is you cut off all this creativity and discovery and innovation that might be super important. So it destroys a lot of resilience and a lot of creativity that I think is like pretty critical for humanity's longterm set.

But the problem is it just like any authoritarian or like authoritarians even harder? Any dictorial centrally driven system is more efficient in the short run. Right. And so I think that's like the really big challenge is, you know, the, my big argument is this. Here's another thing about it, China. The U S has a choice the U S can choose to effectively go in the direction of being I'll call it China light, right.

Or it can go in the direction of being like, no, it will be the free world. Right. And so the question is, which did the U S do like you're in, you know, Europe I'd argue is going towards the China light version. Right. Um, I think they're getting less successful competitive strategy. Being like a shittier version of China, because we'll never get, we'll never be able to do what they do.

Right. But being like a shittier version of them, is that a terrible strategy? Like what you want to do in our position, even forget like anything else, competitively is stake out the opposite end of the spectrum and the weight for the wheel of history to turn in your favor. Right? 

MPD: Cause they have a single point of failure right in the gut.

Yeah, there's 

Sam Lessin: no single points of failure. It's just like a database, like a versus a distributed cryptosystem. It's like, it's incredibly efficient until it's not the brakes. 

MPD: Right. Well, let's talk about decentralization, um, where we're on the topics, you know, over the last 50 years or so, uh, you know, this technology has enabled decentralization of a whole bunch of institutions that people never thought it would be broken up.

Internet Bitcoin, all these things have kind of broken things up. What are the institutions that are still centralized that you think will be broken apart in the future? 

Sam Lessin: Well, interestingly, I think that the cycles of centralization and decentralization are constant, and I'd also say, keep in mind, like, you know, what technology does.

I don't think it's quite so simple to say it's just decentralized a lot of stuff, but I'd say it's like, there's a lot of stuff. The technology always makes the middle dropout, right? When you get more efficient and clear about things with really high. He's a barbell effect. What do you have? A hyper centralization and hyper de-centralization, but things that are kind of centralized go away right.

Is what I would say. They ha they, they get replaced by one of the two extremes. So yeah, the internet has actually probably centralized. Human speech. Right. Um, information, whatever. Unfathomably right. Um, you know, you think about even like, when were talking about news before, it's like, how many newspapers are they used to be?

How many new people are there now? Right. Like, you know, like, or, you know, how many will open up Google everyday when they have a quiet, like there's massive centralization, right. On one hand, you know, Facebook and communication, like what percentage of human communication is now on a single platform versus this it's, it's massive.

And at the same time, to your point, there's a whole bunch of functions and institutions that used to be semi centralized or much more centralized that are getting blown into decentralized bits across the ether. I think there's a lot of competition between these two poles. So, you know, when you say what centralizing gets decentralized, I, you know, I don't, I don't know if like a ready, made great answer for that.

Um, but I actually think that like a lot of things that are central. We'll get these holes and you know what, interestingly, I think a lot of things that are decentralized will get centralized. Right. And they'll go, we're just going to go through that comes to mind when you say that that's, what's gonna get centralized.

Yeah. Um, well I think for instance, let's talk really big picture. It's like, what's going to happen to nation states. Wait, we have a weird number of nation states right now. Right? Right. Like, you know, that is a kind of a semi centralized system. Right. You would expect that with the internet, right. We're either going to go to.

You know that the crazy tech visions of self sovereignty and like, you know, digital citizenship and, you know, not even digital centers, but like, you know, I'm, I belong to some tribe. I just invented it doesn't matter where I'm located. That's one version, what could be the decentralized future and like crypto people like that.

And the other version is actually like, look, you're going to end up with like two spheres, like Chinese spirit and American sphere. And. You know, that's about it. Right. And like a lot of other national bird borders become completely irrelevant. Right. Um, and that's been okay 

MPD: throughout history as technology, uh, information and transportation have become easier.

You've just seen consolidation. I mean, there used to be 15 Italian states and now there's one. Well, I think, you know, he's had 

Sam Lessin: European. I see in the United States, there are what the 50 states we have completely erased. Right. Like made tons of sense when it took a day, it traveled across nah, you know, New Hampshire makes no sense, right.

To have the number of states we have at this point. Right. And it's causing a lot of problems. Right. Because the reality is I take like local taxes, you know, in a frictionless world, you know, a bunch of my colleagues now are Texans. Right. Or, you know, and like, I just, I think that, like, we have an unstable number of states now, the.

It's our system is so deeply entrenched. Right? Um, that it's kind of hard to imagine it, but you know, it's funny this federal government used to regulate interstate commerce, which actually wasn't that much commerce. Now everything's interstate commerce. So like, you know, these are really interesting set of questions about what centralizes or decentralizes.

Um, but we really shouldn't have 50 states. Let's be clear. 

MPD: So I want to take a left turn here. Uh, I know your dad, uh, was a big figure. I know he passed away a handful of years ago. Um, he was a legend on the wall street side of the world, uh, and then had his own venture fund. Um, before he passed, he wrote a book.

Do you mind telling us quickly about the book lessons, lessons 

Sam Lessin: like my dad was, I love my dad. He's an amazing guy. He was a visionary for sure. Um, and obviously a very hard worker as well and had a, you know, as he said that amazing career on wall street. And then really, as he used to say, you know, there was a period where he was the largest.

East coast angel investor, which he used to say is like, kind of like being like saying you're the smartest utilities executive. Um, but the, um, you know, but yeah, and, you know, look, he had actually several medical incidents throughout his life that were pretty serious. Like he almost died in his thirties.

He almost died in his forties. He then did die in his fifties, but he, I think he was always very aware of his mortality and that kind of led two things. One is I think, you know, he always looked at it. He says, you know, once you've lived through one really serious near death, You kind of change. It does really fundamentally change your perspective on how you want to spend your time and like what you value.

And I think, you know, it's one of those things that all blessings or curses and all curses are blessings. I think it really helped him live a very good life and a life where he got to prioritize what he cared about at the time you did have. And the second is he was very obsessed with in, I think, a healthy way, like reflecting and leaving notes for his kids, if that makes sense.

Um, and one of those, the form of this. That he wrote, you know, I'll sensibly for his children, but he also gave it to one of the people about called lessons lessons, which was kind of like his 99 points on life. And it's a good read, actually, it's a short read, but it's a good, it's a good read. It has a lot of good, good lessons.

MPD: So you were kind enough to give me a copy of the book way back when, and I was looking for it before we chatted today. If I remember correctly, there was a story about the tea, what time he used to show up at the office when he first started his job. Do you remember 

Sam Lessin: that? No, he hit me. So he, I can remember this.

He would go to the office insanely early. He would be there literally at four 30 at latest five in the morning. Uh, you know, he'd go from our house in New Jersey, uh, over the bridge. And you know, I think that a few factors in that one is. I mean, I hate or traffic too, right? Like, you know, if you know the idea of commuting when everyone else is commuting and just spending an hour in traffic versus, you know, 15 minutes speeding on the west side highway or 20 minutes, if you're being efficient about it is, you know, there's a night and day difference there.

I mean, I, I, for a while I was commuting from San Francisco to New York and I got to say, I'm sorry, from San Francisco to face. And I did the same thing. I was, I wouldn't, I mean, I wasn't quite four 30, but I would, I mean, there was me and one other guy in the building from six 30 to nine 30 every morning.

Um, uh, and so that was one piece. And the other thing is it's like, I think, I think, I think he said in the book, which is true, is like, it's pretty easy to look smart when you had a three hour advantage on everyone else in the office. 

MPD: Right. And that's a big insight and you know, it's funny that seemed like maybe just an anecdote.

But, uh, it felt like the first time I had seen someone really successful saying something that I had kind of operated with throughout my whole life. Yeah. And it also came up in, um, I believe it was in Tony Shay's book, delivering happiness, the idea of figuring out a five-star experience and then brainstorming your ways to a six star and then a seven star.

This idea of just really, absolutely overdoing it to make sure you win. And that is a concept that I was just talking to an intern about. Um, a week or two ago, giving them some career advice and I'm like, just depends on what you want to do, but if you want to win, there's the five star. There's a seven star.

There's a nine 30 arrival. And then there's a 3:30 AM arrival. You can control outcomes. It was very inspiring for me, validating for me to hear your dad through his 

Sam Lessin: book. Describe that. I think that there a lot of lessons in there and I think that's a good one. I mean, I definitely, I mean, I remember even when I was doing an internship in college, There was nothing internship, no one cared.

I was always there, you know, before the crack of Dawn, before anything opened and I'd have to sit in Starbucks and wait for the office to open because I literally couldn't get into the building. Cause like I very much internalized the, the first in the office. Right. Um, and that meant now here's the flip side to that, which I learned in my own life.

And I think my dad suffered from in some ways, which is you got to pick your battles then because there's always a cost, right? Like if you're going to be wrong with a four 30. You know, you're going to be out early. You just can't, it is impossible to work until midnight. Right. And see if they're like re factor, you know, your life around that, you know, if you want to deliver a seven star experience at certain things, other things will, will slip.

Um, and so I think actually the other important lesson for any intern or person coming up is like, actually, I think one of the most important things is yes, working very hard, but almost more important is be really careful about the battles. And then be okay with leasing everything else. Right. Um, and like releasing things that don't fit because you literally, I mean, the idea that you can consistently outwork everyone on everything all the time, you will kill yourself.

Right. You have to pick what matters. And I think a lot of people work really hard, but they pick the wrong battles. Um, the other way to think about. 

MPD: Sandoz terrific. Having you on brilliant as always. Thanks for the insight. Good 

Sam Lessin: to see you as always.

MPD: Awesome. Just have Sam on today. I think I'm always smarter after I talked to him. If you like what you heard, please look us up with a like, or a five-star review and feel free to share with them. You can find me on Twitter at MPD to hear more of my conversations with innovators, subscribe on YouTube, Facebook, or any major podcast platform.

Just search for innovation with Mark Peter Davis.