On conviction, decentralization, and writing online.
Anthony Pompliano, or Pomp, as you might know him, is an American veteran, entrepreneur and technology investor. He’s built and sold numerous companies, ran product and growth teams at Facebook and Snapchat, and currently manages a portfolio worth over $500 million focusing on early-stage tech. He’s more recently the host of the Best Business Show, and The Pomp Podcast, one of the most popular podcasts in business and investing that’s been downloaded over 20M times, and writes a daily newsletter that goes out to over 210,000 people.
Anthony Pompliano
[TRANSCRIPT IS MACHINE GENERATED]
[00:00:00] Alex: Anthony Pompliano, or Pomp, as you might know him, is an American veteran, entrepreneur and technology investor. He's built and sold numerous companies, ran product and growth teams at Facebook and Snapchat, and currently manages a portfolio worth over $500 million focusing on early stage tech. He's more recently the host of the best business show and the Pomp podcast, one of the most popular podcasts in business and investing that's been downloaded over 20 million times, and writes a daily newsletter that goes out to over 210,000 people.
Today, we talked about conviction, decentralization and writing online. Hope you enjoy.
[00:00:38] Alex: So Pomp, you're someone who's been talking about. I'd say Bitcoin, most notably for quite a while now. And obviously there's a lot of people who agree with you. But most of the time, people hold their opinions on, I'd say more contentious topics. Like Bitcoin has been over the last few years, close to the vest at risk of, of being wrong.
You've been very public about it and being right about its validity, at least as a store of value is really paid off in a lot of different ways for you. So to kick us off, I'd like to ask how you view conviction, how you form it, where the capacity for conviction comes from for you and your.
[00:01:10] Pomp: I think that conviction ultimately is determined by your ability to get comfortable with being wrong in public.
Like it's easier to have deep conviction when you're willing to be wrong in public. The other thing I would say is that conviction comes from doing the work and being more of a probabilistic kind of thinker. So a lot of people confuse a conviction for certainty. And I think that ultimately you can get conviction around something that has an 80% chance, and it's easier to get conviction around that than it is to get convinced around something that has a a hundred percent chance for as much harder bar to kind of meet.
So I think that most folks that I talk to that are kind of like, ah, you know, it's, they don't have conviction is because they think in binary terms, it's either a one or a zero it's a hundred or zero I think much more. Or I tried to as much as I can think probabilistic. In that if something is more likely to happen than not, I can have the conviction in the probability.
I don't have to get to a hundred percent now is a little counterintuitive because most people would think like you only get conviction when you get to a hundred percent, but I think it falls back then on like being wrong in public is okay. As long as the promise to a kind of an audience is like, look, when I make a mistake or when I get new information.
And I'm going to be the first one to say like, Hey, I thought this, it ended up not playing out that way now. I think this, and so it's this belief of. You can either present your ideas as invaluable and like you're always going to be right. I think that we've seen like institutions have done that for decades and decades.
But now what we're starting to see is that it's the exact opposite actually. It's that like the people who are the most authentic and kind of most vulnerable in terms of being valuable, they ended up actually gaining the most trust.
[00:02:56] Alex: Gotcha. You know, there's still a lot of naysayers out there as far as Bitcoin is concerned.
I know Bitcoin is inevitable has become a bit of a tagline for you, and I'd be interested in hearing you break that down, especially for anyone with a, maybe a much more traditional financial background. Who's who's listening in.
[00:03:13] Pomp: I mean, th the way that I just look at it is like, do you believe that the world is headed towards more automation?
And people usually say yes, say, okay, Did you know that the money that is used by billions of people around the world is determined by 12 people who aren't elected by the constituents or the citizens. They go into a conference room and they basically make the best decisions they can. And people say, I didn't know that say, okay, do you trust that humans or computers are probably better at remaining disciplined computers?
Okay, well, Bitcoin is a automated central bank that has created a programmatic monetary policy that no matter what happens in the world, war peace, high demand, low demand market, slowdowns, market accelerations, asset price, inflation asset, you know, kind of liquidity crisis. None of it can change the programmatic monetary policy.
And so ultimately I think that's one way to kind of explain it. Another way that I use is I just explained to them the problems with the devaluation of a currency or the erosion of savings. And once people understand that they say, okay, well, what's the solution. It's like, well, there's something that was created that can't be debased.
And they usually kind of wrap their heads around it pretty.
[00:04:35] Alex: To delve into that a little bit more of the more traditional philosophy here, always points to cashflow as evidence for underlying value in businesses or assets. So keeping in mind that, you know, equating Bitcoin or any kind of token, really to an equity is a bit of a flawed approach.
I'm curious to hear what your response is to people who say that, you know, maybe purely supply and demand driven assets aren't sound.
[00:04:57] Pomp: Yeah, I, I would say that there's a couple of ways to evaluate this. So one is a sound of money in general is reliant on the fact that it's outside the system and no one can create more of it. Right. And so ultimately Bitcoin and gold, both fit that that, that criteria, the second thing is in terms of cashflow the Bitcoin system actually has captured.
Miners are paid right now, you know, 35 to $40 million per day to secure the network. There's transaction fees that go through that network. It's just that there's no centralized entity. That's booking that. It is actually distributed to a decentralized group of miners. And so from a cashflow perspective, there's no way to buy stock in the Bitcoin payments network, right?
The visa payment network, you buy visa stock. If you want to own Facebook's social graph or network, you buy Facebook stock. You can't do that with Bitcoin. You have to buy Bitcoin the asset to get financial exposure to the network. And so when you do that, there's cashflow, it's just that by holding it, you don't necessarily get the cat.
But that's also true when you own Facebook stock, where you own any of this other stuff. It's not like you're getting massive dividends or anything like that. So, so it's unfair to say there's not cashflow. It's just, it's a unique way that the cashflow actually gets booked and, and distributed to people which looks a little bit different than the legacy role, but there is cash.
The third thing I would say is a lot of people talk about like, what is backing an asset? And ultimately the way that I look at that is that. The dollar right. Or other Fiat currencies aren't backed by anything. But Bitcoin is backed by computing power. It's the single most valuable commodity in the world.
It's computing power. And so ultimately Bitcoin is backed by the most valuable commodity, which I think will become more and more apparent and obvious, you know, the coming decades.
[00:06:52] Alex: So culturally speaking especially among the most vocal Bitcoin proponents there exist this strong anti-establishment anti-authoritarian culture, which seems natural for an asset whose strength really lies in self custody and cutting out these financial intermediaries.
I'm interested in where you lie on that spectrum, right? Like what's the role for intermediaries and what do you think the future looks like for them?
[00:07:14] Pomp: Yeah. I think that people like to paint the world as a either or right. It's either you get the incredible kind of self custody and artists, you know, view of the world, like all that type of stuff, or you get some version of the world has to be full of intermediaries, third parties, all that type.
And ultimately where I think it ends up, it's like, there's going to be both. There's going to be people who have self custody, but there's also going to be people who have intermediaries. And what I mean by that is think of the U S dollar. Cash. There's plenty of people who put cash in their wallet, right.
It used physical cash, the cash, the physical cash economy is still really, really important. A lot of jurisdictions at the same time. There's lots of third-party intermediaries. You put your money in the bank. Do you use payment processors, you know, all that type of stuff. So I don't think it's an either or it's a both now with that said it's really, really, really important to have self.
Right to have that ability for people to teach people what that means to build the technology, to have open source technology, all that stuff. It's just, I don't think it's going to be a hundred percent self custody, right. You're still going to have institutions that want to use third parties, et cetera.
And so that's kind of how I think.
[00:08:24] Alex: Gotcha. So to continue along a, a, a big concern for a lot of proponents of Bitcoin, and I'd say crypto more broadly is this sort of existential regulatory risk that exists, you know, even given how little a lot of lawmakers seem to understand this is I guess a non-US example, but I saw you tweet about the Ontario superior court of justice.
Nunchuck this, this Bitcoin self custody solution to disclose user information and freeze users, Bitcoin, which obviously they can't do. Of course you have these snippets of like congressmen on the hill asking Zuckerberg, how Facebook makes money. You're asking alphabet CEO questions about the iPhone. I mean, all this in mind, are you optimistic about the regulatory outlook here?
Does some things look more rosy than others to you?
[00:09:08] Pomp: Yeah, I, I think that. Regulators have really tough job. They've got to understand a brand new industry while it's being built in real time. And they've got to figure out what old rules apply, where should we create variations to those roles and where do we need new rules?
And that's just a difficult job in general. Now with that said there can be rules established through collaboration between regulators participants, et cetera. So I think collaboration is really important, but I do have faith that we're going to get to a good place. It's just a super bumpy road along the way.
Right, right. Th there's uncertainty there, there's a lack of clarity that there's even folks who seem to kind of be on power trips. Like there's just in various jurisdictions around the world. There's going to be bumps along the way, but ultimately over a long period of time, I think we ended up in the right spot and think up in the right spot is the the ultimate goal.
Just take some time to get there. And we got to kind of make sure that we educate those regulators as best we can along.
[00:10:13] Alex: To shift gears for a second here now web has had a pretty incredible year, which besides being one of the greatest terminology, rebrands of all time, in my opinion, has also been met with its fair share of skepticism.
I know you backpedal a little bit on your opinion on NFTs a little while back, but I'm curious to hear you break down what you actually see value in. As far as web three goes, like, what do you buy as actually unique use case? And what don't you think is really worth.
[00:10:40] Pomp: I think that there's a couple of pieces that are important to pay attention to one is decentralization really matters. It matters of security. And if you're going to build a decentralized financial system, right. I think that the web three world, all this stuff. It has to be decentralized. And it's like, that's a really, really important part.
Bitcoin for sure is decentralized. There's other things that are pretty decentralized and hopefully moving in the same direction as Bitcoin. But there's a lot of stuff that's pretending to be decentralized or claiming to be decentralized. That's not. So I think that's like a really important kind of aspect for, for things that need.
Right. The, for things that could come under nation, state attack, et cetera, de-centralization only matters. There's another area where I say that a lot of folks are using the terminology decentralized, but really what they mean is automated. It's like smart contracts are good. A standpoint where there's a lot of stuff that you can use smart contracts for, but nothing to do with decentralization.
Like actually you don't need these centralization. You may want centralization. In some cases you want efficiency. But smart contracts are automation. And so I think that there is some really, really interesting ideas around like automated finance. And how do you use some of these technologies to, to do that in a digitally native way?
And then the last thing I'll say is I'm a big believer that the technology is empowering this entire like revolution around imagination and creative. Like, it's fun to build on the internet right now. And it's got people inspired to try to change the world. Now, some things are more important to changing the world than others, right?
Obviously I think Bitcoin is the single most important technology in the world right now and has the potential to positively impact billions and billions of people's lives. But that doesn't discount the importance to other technologies or other things people are doing. Right. It just happens to be, that's my view.
That's what I want to focus on for the most part. But there's a lot of other stuff that like, if it can help people make more. If it can you know, kind of democratize access to opportunities, if it can you know, end up actually making a small business, more efficient and somebody gets more money to support their family, like, like there's so many things that are cool and like important, but then also you can get into the stuff that's just.
Like there's people trading a bunch of JPEGs on the internet and you know, the Bitcoin community and other people that are kind of critical of it. I think they rightfully point out like, Hey, a lot of this stuff, probably isn't decentralized. A lot of this stuff is not going to be valuable over a long period of time.
Even people in the NFT community say that stuff at the same time. I think you can hold those views and also say like, why are people doing it because it's fun or they think they're going to get rich. And like, there's a lot of shit that people do that has nothing to do with crypto that either fun or they think they're going to get rid of.
And so I think it's just like being sober about like, what is this stuff? And like, what's really going to quote unquote, change the world. And what's more just like entertainment or, or kind of capitalistic pursuits is important. But it doesn't mean that we shouldn't experience that. We shouldn't try different things.
It's just you know, trying to focus on like, what's like the long-term durable assets or, or kind of market dynamics. That's what I'm really focused on. And naturally. And I'm thinking a lot about,
[00:13:54] Alex: you know, what some people might not know about you is that you worked for some time running product and growth teams at Facebook and Snapchat.
It's a really unique experience to have had a specialist, both companies who started pivoting pretty aggressively into AR XR and these metaverse sort of peripherals. So I'm curious to hear what's your take on Snap's future, the Metta rebrand and their future, whether that's sort of centered around hardware around protocols or anything.
[00:14:18] Pomp: Yeah, I don't think I've got like unique views than most people on both those companies. They obviously both are filled with incredibly talented individuals. They're both working on some pretty hard problems. I do think it's you know, likely that we will continue to see more and more these large companies trying to figure out what's their strategy kind of going after this industry.
And my guess is that they will be more successful than most people give them credit for, but they still won't be able to achieve in the short term all of their ambitious goals. And that's what makes those companies so special is like, they actually are very good at executing. And they're very ambitious.
And so like, we probably are underestimating how much progress they'll make and how much successful. But they are probably overestimating from an ambition standpoint, what they can accomplish. And that's actually healthy. Like if they'd accomplished all their goals, they probably aren't thinking big enough.
Right. But that's, that's really the thoughts. I don't know if I've gotten any kind of unique views on like the specifics of their
[00:15:15] Alex: strategy. Yeah. That's fair enough. Shifting gears for a second. Again, the biggest reason I'd say I'm able to sit here and talk with you, and the reason you've been able to reach so many people is this practice of writing online.
And so I'd like to split this into two parts, firstly, at a more macro level, we've started to see this incredible trend yourself included of these media companies have one. I mean that literally, cause I'm sure you have some people helping you out, but you know, when a guy like Joe Rogan can 10 X CNN's viewership, there's clearly something happening.
What do you think this extrapolates to in the future? Is this a trend? You see content.
[00:15:45] Pomp: Yeah, I think that it's it's a trend it's been happening for a long time, frankly. It, it just so happens that it's all being exasperated or magnified now. But this is a trend that's been happening for 30 years, right?
Lower trust and institutions, democratization of access lower friction for production of content. Et cetera. And like blogs were a version of this Twitter was a version of this podcast or a version of this, et cetera. And, and so I think that really what we're seeing is the culmination of, you know, 20, 30 years worth of work for a lot of of these platforms and technologies.
Ultimately I think that again, it goes back to this idea of like authenticity wins on the know. And there's a lot of institutions that were pretty stubborn and they didn't want to kind of go down that path. And I think now they realize like, Hey, we should do this. And I actually think that you know, the top media organizations they're going to survive, it's kind of like higher education, Harvard, Yale, Stanford, MIT Wharton, et cetera, like they're going to stay around.
Right. It's all of the, like tier two tier three colleges that are. Because higher education can get disrupted, but the ones with the best brands are the absolute cream of the crop. They're going to stick around. And actually they may cement their their moats over time. Same with content is like if the tier two and tier three media outlets that get crushed here by the internet and the top 1% you know, kind of think of it as like the New York times, the wall street journal, they say.
And so I think that that's an important kind of distinction is it's not that all mainstream media gets destroyed or kind of beaten in the free market of competition seemed like all higher education doesn't go away. It actually ends up being much more related to like, where are you in the distribution of, of those.
[00:17:30] Alex: Gotcha. You know, as a second part to that question, what's your advice to anyone looking to recruit an audience online? You're at, I think 1.5 million on Twitter, which is an unfathomable number with tons tuning into your podcast, receiving your daily letter. Now the the best business show, which I'm a really big fan of.
What would you say is the biggest driver of that success? Is it as simple as consistency over time? Or is there more to it than that?
[00:17:54] Pomp: Yeah, I mean, this sounds really stupid. I think it's just showing up every day and not being scared of saying what you believe. Like there's so many people I talked to and it's like, comical, like, man, I wish that I could like, just tweet what I, what I think.
Right. And like one of the things that I've probably done in my life to empower that is I just keep thinking about like, . I don't want to be in a situation where something I say on the internet, someone can call me and tell me to shut up. Right. And normally, if you've got like a regular job, your boss can do that.
Right. If you're dependent on you know, certain types of business partners. It's pretty clear that like, if an advertiser on our content called me and was like, you can't say that, I'd say, okay, I appreciate your concern, but like, we probably shouldn't work. Right. And, and so like ultimately being able to be quote unquote free, whatever the hell that means at this point to say what you believe, I think is really important.
And so I think that that's a huge piece of it is to some degree you're saying what everyone's thinking, but no one else. And so the person who says it, people say like, yeah, I agree. And what you allow, what a lot of people don't want to talk about, which is actually pretty funny is that you would be surprised.
And the people who reach out to me are the, you know, the most successful people in their industries. And like, I could never say that, but like you're, you're dead on. And, and so I think that, like that is really telling where there's people who just, they just can't say it. It's like, okay, that's fine, but I can, and I believe it.
And I stand by what I said, sometimes I'm wrong. I'll admit when I'm wrong. Sometimes I'm right. And, you know, frankly, I just move on. Right. When I'm right. I don't need to take the victory lap and like, let's go, let's see what happens. And so that's kind
[00:19:38] Alex: of what. Gotcha to start to wrap us up here, pump, I'd like to delve into something a bit more timely.
You know, it's an interesting day to be talking, like I said before, we started recording this cause we're sitting here and it's been less than a day since Russia invaded Ukraine, maybe an hour ago for a set of sanctions were announced and things look like they're going to get pretty interesting. Before we drill into that though, I'd like to hear what your thoughts are on the longer term implications of decentralization, geopolitically.
Balaji Srinivasan is the sort of prophetic vision of, of a centralized east and a decentralized west. But I'm curious to hear how this plays out on a larger scale in your mind.
[00:20:11] Pomp: Short answers. I don't know anything more than anybody else. My view on it now, which I reserved the right to change in the future is what we are watching is those in power.
Are continuing to try to implement what they have used to get into power and stay in power over the last hundred years, financial sanctions global reserve currencies lots and lots of, kind of posturing media manipulation, et cetera. And I just think that what was previously. Possible slash valuable slash productive was possible and productive and valuable because there was no other alternatives.
When you add in alternatives. Now, all of a sudden. You have to be careful because you actually may be accelerating the adoption of these technologies. And I think that that ultimately is what we're watching with. You know, some of these sanctions and stuff is if the United States is sanctioning Russia, China's sanctioning us defense contractors.
If Canada is sanctioning their own citizens, people around the world start saying like, this is madness How do I get to a place where I don't have to worry about. this And they look for censorship resistant technologies. And I think that's where Bitcoin is going to end up being quite quite valuable
[00:21:35] Alex: pomp. Last question for you here.
And it's pretty straightforward. What's something you're excited about that you don't think enough people are paying attention to.
[00:21:44] Pomp: I would say.
I think that there is a lot of focus on Bitcoin and cryptocurrencies, et cetera, on the financial aspects. I fundamentally believe Bitcoin will do more for billions of people around the world than all philanthropy combined. And that sounds like an insane, crazy. But the reason why I believe that is because if you really analyze many global problems and you approach it from a first principles standpoint, you can boil it down to the corruption of money.
That is the root cause of some of this stuff. And so if you can fix the money, you can quite literally fix the. And so it's, you know, it's awesome. When Bitcoin's going up, people are looking at the financial kind of gains or losses. I just like everyone else. I get excited, right. All this stuff. But I do think that the piece of this entire industry that deserves more attention is the fact that there is very real positive impact on people's lives, regardless of price, regardless of financial assets, all this stuff.
This is important stuff. And I think that ultimately that's why it's going to kind of work or be adopted or everyone think about it. It's because there's people around the world who need this technology and it's our job to make sure that we get it right.
[00:23:00] Alex: Pomp,
thank you, man. It's it's really been a pleasure.
[00:23:03] Pomp: All right, buddy. Sounds good.
Talk soon!
[00:23:05] Alex: Later!