0:00:05 The DoD is a black box, and I say that meaningfully because we’re trying to fix it.
0:00:09 We want to overwhelm the system with how much better it can be.
0:00:14 The U.S. Army should never trade blood for blood in first contract,
0:00:17 and it should always be blood for an iron, and it should always be their blood.
0:00:25 In 2025, when people think of government, speed or innovation aren’t typically words that come to mind.
0:00:27 But this was not always the case.
0:00:34 In the early 40s, we built the Pentagon in 16 months, shortly after the Manhattan Project took three years.
0:00:43 When the Soviets launched Sputnik in 57, it took a mere 84 days for America to respond with Explorer 1, kicking off the space race.
0:00:49 In the 60s, Kennedy asked for a man on the moon, and the United States Apollo program answered within the decade.
0:00:55 And here’s the thing. The very roots of our technological brawn as a country are deeply rooted in the federal government.
0:01:00 But in recent decades, a gulf has been developing between Silicon Valley and Washington, D.C.
0:01:06 But a renewed interest is developing, and founders building toward the national interest.
0:01:11 But many have no clue how to navigate the black box that is government procurement.
0:01:31 So in today’s episode, recorded live at our third annual American Dynamism Summit in the heart of Washington, D.C., we bring in two chief technology officers from two of the most important institutions in the nation.
0:01:38 Alex Miller is the CTO for the chief of staff of the Army, and Justin Finnelli is the CTO for the Department of the Navy.
0:01:46 Listeners of this podcast may know what a CTO does in the private sector, but what’s this mean in the public sector, especially when?
0:01:51 The CTO position within government came 30 years after it did private sector, right?
0:01:52 And even later than that, after defense.
0:01:59 Joining Alex and Justin is our very own A16Z go-to-market partner focused on American dynamism, Layla Hay.
0:02:06 Together, the three discuss important topics like how we accelerate, shifting from planning years ahead to software speed.
0:02:13 The entire way we think is predict the future three to five years out, land the perfect shot, get a trick shot, and go.
0:02:16 And it just doesn’t work. It does not work.
0:02:18 Also, the reality of resources on the ground.
0:02:24 It is shocking to me how much stuff we buy for soldiers that no one would accept if I handed it to you in your everyday life.
0:02:28 And importantly, whether our leaders have the leeway to fix what’s broken.
0:02:38 We discuss all this and more, including the role of culture in bridging the divide between Silicon Valley and D.C., plus the changes ushered in by the new administration.
0:02:41 So, do we need to rip up the system and start over?
0:02:44 Or are we already on the path to a solution?
0:02:45 Listen in to find out.
0:03:01 As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:03:07 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:03:12 For more details, including a link to our investments, please see A16Z.com slash disclosures.
0:03:22 You both are CTOs of two very important public institutions.
0:03:25 Can we start off with telling us who you are and what you do?
0:03:31 I’m the CTO for the Chief of Staff of the Army, and that is a big title because the Army is a big place.
0:03:33 In my day job, it’s a lot of education.
0:03:45 It’s, I would say, probably 60-40, talking to people about what technology can do for a mission, and then 40% actually hands-on, like putting my engineering cap back on and actually doing things that move the ball forward.
0:04:01 I would say very similarly to a company, what I do as the CTO for the Chief is think about what the North Star should be for the Army in terms of how we leverage technology, how we employ it, and then what our missions are that can leverage it, and then actually going forward and helping people get there.
0:04:06 While companies have boards of directors and presidents and all these different things, we also have a board of directors that is Congress.
0:04:09 We also have stakeholders that are the American people.
0:04:20 However, most companies don’t have 60 years of policy and rules that were written generally by enthusiasts and visionaries but implemented by minimalists.
0:04:22 And what I mean by that is risk minimalists.
0:04:31 So most of our day job is just actually going through and educating, having a unique understanding of what our job is, what the mission is, and having done it to make that connection happen.
0:04:33 And what did you do before you were the CTO?
0:04:41 Before I was the CTO, I was the science and technology advisor for the Army G2, and that is the deputy chief of staff that runs intelligence.
0:04:45 So I was the guy doing all the technology for Army military intelligence.
0:04:52 So I got to do some pretty cool stuff, work with some really interesting people, and that was where all my downrange time was as an intelligence professional.
0:04:53 Justin, how about you?
0:04:58 Justin Finnelli, Department of Navy, so Navy and Marine Corps, chief technology officer.
0:05:00 Just like Alex said, Navy’s a big place.
0:05:02 Oceans are two-thirds of the world.
0:05:05 We want to cover as much ground as possible.
0:05:10 And the CTO position within government came 30 years after it did private sector, right?
0:05:11 And even later than that, after defense.
0:05:21 This is really a late acknowledgement or a nod that commercial technology can be a disruptive force positively for the government, and that we can go much faster.
0:05:23 But we need digital to do that.
0:05:40 And so to Alex’s point, finding innovations from nontraditional partners and at the edge and scaling those much quicker and tying it to some sort of divestment because that money is locked in that three-year period where we’re spending on existing tech.
0:05:43 We’re out there scouting, very similar to how private sector would do.
0:05:51 We’re working with hundreds of internal organizations, in some cases with different kind of sub-optimized or very specific goals.
0:05:58 How do we make that a reconciled space where we can just bring the biggest outcomes to the hardest problems?
0:06:04 And so that alignment piece to bring ultimately outcomes overmatch is our goal.
0:06:06 So you both mentioned industry.
0:06:08 You both mentioned startups.
0:06:15 My colleague Ryan and I actually just wrote a blog post about selling into the DOD because there are these paths that startups can pursue.
0:06:18 We all know about SBIR, STTR.
0:06:24 There are great organizations like DIU and AFWERX that are out there looking to help pave these paths.
0:06:29 But for a lot of startups, working with the Army or the Navy still feels like a black box.
0:06:37 Can you walk us through what kind of pathways are evolving and new opportunities for industry to engage with your organizations?
0:06:39 Let’s talk lexicon first.
0:06:41 And I know it’s a little bit bureaucratic, but I think it’s important.
0:06:43 So startups generally focus on like the R&D side.
0:06:50 So they’re taking a concept up through some type of development into that golden minimally viable product phase.
0:06:57 And the P is really important because it’s not minimally viable prototype, which I think a lot of DOD thinks about in terms of like, hey, that sort of looks like it’s useful.
0:07:02 But what startups are thinking about is, hey, what’s that first product that I can productize and get to market?
0:07:11 For that phase, the DIUs, the works, whether it’s AFWERX or SoftWorks or EagleWorks, like all of these different organizations, that’s exactly where we want them to be.
0:07:14 The reason I say that is because the DOD is a black box.
0:07:18 And I say that meaningfully because we’re trying to fix it.
0:07:26 That black box was set up on purpose because in the 60s and 70s coming out of the Cold War and all the way up through the 90s, we had all these different things.
0:07:36 The Packard Commission for how you think about buying things, the Clinger-Cohen for how you do information technology, Goldwater-Nichols on how you connect mission with buying things.
0:07:41 And all of that is still the rules that we live under and everything since then has been duct tape and bubble gum.
0:07:55 So what we are trying to do is instead of MacGyver-ing our way through that, which all of us have spent a lot of time doing, we are trying to like sort of domically cut through all of it, get rid of all of this extra bureaucracy, work with the Hill so that it’s not a black box.
0:07:57 It’s like the 12-step program.
0:08:00 If you can’t admit there’s a problem, you can’t actually solve the problem.
0:08:01 That’s sort of the left side of the equation.
0:08:07 The right side is what the Army is doing is just bringing industry in and saying, hey, we know we have a problem.
0:08:17 Whether it’s helping us write requirements better so that we know what’s available so we’re not trying to divine that from nothing into, hey, how do we bring consortiums together?
0:08:23 I love the new software strategy from the SecDef because it tells us use other transaction authorities.
0:08:26 Like use the things that Congress has given you and do it aggressively.
0:08:32 So putting consortiums of teams together with industry to say, I’m not going to pretend like I know everything.
0:08:34 We’ve done that for 50 years.
0:08:34 No more.
0:08:38 You tell us what’s available and we’ll tell you the mission and how we can apply it to that.
0:08:41 We want more game changers in this space.
0:08:45 And so when we have barriers, it stops outcomes.
0:08:51 And so in general, we have more companies than we’ve ever seen before who want to work on national security.
0:08:56 There’s a, in general, recognition that this world can be a dangerous place.
0:09:04 And the more secure we are, the better we are at this, the more overmatch there is, the more that we can have peace through strength.
0:09:10 And this is, in my opinion, probably the best alignment that we’ll have in our lifetimes.
0:09:17 This is potentially a century anomaly for actually being able to divest.
0:09:27 It’s very hard to turn things off and then bring new players in and bring new waves of ultimately positive disruption through and through.
0:09:30 And so that translation piece has been very expensive.
0:09:33 And so product market fit is slow.
0:09:37 And at times we turn away companies that would have brought breakthroughs.
0:09:40 But only superior military technology can credibly deter more.
0:09:47 And the fact that we have more people interested in supporting that mission, what does the go-to-market strategy look like?
0:09:50 And so Alex talked on, hey, we have some of these front doors.
0:09:52 We don’t want 100 front doors.
0:09:52 That’s confusing.
0:09:54 So how does streamlining that look like?
0:10:01 If you’re going to completely break through and change the game and you’re selling something that we don’t buy right now, you’re swimming upstream.
0:10:05 And so Andrile has made it through and fought that fight.
0:10:06 SpaceX has.
0:10:07 Palantir has.
0:10:10 But number one, we want that to be more straightforward.
0:10:14 In that particular case, the PTOs are not your first customer.
0:10:15 Sorry, program executive offices.
0:10:23 Maybe we can just quickly talk about what a DOD program office is because I think that’s another black box challenge for startups.
0:10:27 I think a lot of companies know that you generally want to be on that journey.
0:10:34 You know, you get some R&D dollars, you work with DIU, you get an OTA, but ultimately startups want to get to a program of record.
0:10:34 Yeah.
0:10:37 Can you talk about exactly what that is and what that journey looks like?
0:10:37 100%.
0:10:42 So people have heard of program of record if they’ve worked with the DOD or the Defense Department at all.
0:10:46 And so we have 75 program executive offices.
0:10:48 They buy at scale.
0:10:52 These PEOs are made up of program management offices.
0:10:55 And then you have hundreds of those.
0:11:00 Navigating that to figure out where to sell is a scale game.
0:11:02 And it’s been too hard.
0:11:18 So one thing that we’ve started to do within Department of Navy, we have 18 of those 75, is we’ve said, wouldn’t it be easier if we made data-driven decisions and started treating these buys not as sacred program of record, but let’s buy capability per dollar?
0:11:28 And so our move towards military money ball has been to open up the aperture through converting programs of record and program offices to portfolios.
0:11:37 And so we’ve shifted PEO digital, and I believe that we’ll shift even more of those program executive offices across DOD to that.
0:11:40 Now, that’s for a Horizon 1 capability.
0:11:47 So if something improves the way that we’re doing business, if we already have it budgeted, then you can go directly to them.
0:11:57 And there’s actually an index online that shows, I think Steve Blank put it out, that says, here’s what each PEO does, here’s where they are, here’s who you can talk to within them.
0:12:09 The goal there, because they have fixed budgets, is finding something, again, to turn off, because no one has runway to do three years of piloting until you transition something.
0:12:17 If you are doing a Horizon 2 capability, we’re working on a breakthrough, but it’s existing technology, or there is a budget line.
0:12:20 We have now more Valley of Death funds than we used to.
0:12:27 We have small business innovative research, but that’s more of a door prize you need to get to that operations and maintenance long tail funding.
0:12:29 We have something called ATFIT.
0:12:32 Accelerating procurement for innovative technology.
0:12:33 There you go, right?
0:12:36 It allows some breakthroughs to get pulled all the way through.
0:12:38 There’s just not enough of those, right?
0:12:40 There’s just not enough funding and not enough awards.
0:12:47 And so point is, if you can shrink the Valley of Death, you’re doing this in the Horizon 2 and Horizon 1 space.
0:12:52 For three, you probably have to do still like some guerrilla marketing and advertising.
0:12:58 Pull in DIU, pull in the Hill, pull in the requirements writers to make sure that you’re not doing all the translation yourself.
0:13:01 So what if we didn’t do all that?
0:13:04 The cool thing is, everything that Justin just said is a workaround.
0:13:06 It is a workaround to a system that is fundamentally broken.
0:13:10 The cool thing is, PEOs are not actually in statute anywhere.
0:13:12 They don’t exist in law.
0:13:16 We made them up because the rule is that the SecDev gets to determine what that looks like.
0:13:24 So as we think through what the future is, I don’t want to have to know, like that acronym soup, why would we put that on anybody willingly?
0:13:27 The only reason it exists is because the process doesn’t work.
0:13:30 Just a short story on how this works for us.
0:13:34 So Justin talked about we build these requirements and forever they’ve been super gold-plated.
0:13:35 They’re this thick.
0:13:40 They’re every word known to man because people are afraid that if you don’t get it in the requirement, you can’t move to this program.
0:13:47 What if we just stopped doing that because it is not actually what we have to do?
0:13:50 And I’ll give you an example of that for countering unmanned systems.
0:13:52 And there’s lots of startups in this.
0:13:55 And I know that a lot of your founders are not in the threat headspace that I’m in right now.
0:13:57 So think about it.
0:14:01 You’re at an NFL stadium or a soccer stadium and you see a quadcopter.
0:14:06 Like in my world, that’s a horrifying prospect because that means that it’s intruded into your airspace.
0:14:07 You can’t do anything about it.
0:14:08 It’s really hard to bring them down.
0:14:10 Now think about thousands of those.
0:14:12 And that is the real threat that we’re under.
0:14:15 Well, all of our requirements writers, they’re not operations.
0:14:17 They’re not the guys getting shot at.
0:14:18 They’re just trying to do the right thing.
0:14:20 And you write these sort of black box requirements.
0:14:30 I found one the other day as I was going through them that was coming up through the process because it wanted to go to a program where if you took the combination of statistics that they put in there,
0:14:35 like your operational availability, your operational accuracy, and your operational reliability,
0:14:39 what you ended up with was a system that only had to work 51% of the time.
0:14:46 What person at what company is going to go, yeah, I’m okay with my engineers building something that only works 51% of the time.
0:14:49 Or if you flip it, I’m okay with wasting 49% of my resources.
0:14:56 So as we think about what the process should be, and it’s real, this is a with our shield or on it type of moment for the Department of Defense.
0:14:58 I just want to blow up all of that.
0:15:02 Anything that’s below law, we should be able to reshape.
0:15:05 No startup should ever have to go, I want to be a programmer record.
0:15:13 Because what that really turns into is a 30-year long set where Microsoft might have been thinking Office is going to be around forever.
0:15:19 But inside of them, they still had product managers and program managers who were making sure that Excel was really good.
0:15:20 Please don’t stop making Excel good.
0:15:25 The entire world runs on Excel, but they’re not thinking, oh, if I just get it here, I can slow down.
0:15:28 I can take my foot off the pedal, which is what happens and programs a record.
0:15:35 As soon as you make it, as soon as you’ve got that long-term budget, there’s a perverse incentive just to maintain and create inertia.
0:15:39 So my, I guess, theory of the case is I’m going to try to blow up all of that.
0:15:42 The question is, like, how do we increase yield, right?
0:15:49 We have examples where every good idea the government has piloted, DOD has piloted at some point, right?
0:15:55 And so in this particular case on requirements, I worked with a 4,000-page requirements document.
0:15:57 I’m fairly certain no one read all of it.
0:15:57 Do you read it?
0:15:59 No one read all of it cover to cover.
0:16:03 You’d look at, reference it like the dictionary, but it’s a little bit longer.
0:16:09 In this particular case, we said, hey, we’re going to use capability need statements because this isn’t going to get us what we want anyway.
0:16:19 And so we fast-tracked an 18-month process in three months with a couple pages between CNSs, capability need statements, and top-level requirements.
0:16:22 The software acquisition pathway allows us to do that.
0:16:28 And so we already have examples where the right thing is working way better than the old thing.
0:16:29 It’s a K-curve.
0:16:32 This is a matter of scaling what’s working better.
0:16:41 And the only way we do that, because there is some risk aversion, is emphasize that the outcomes and the trade-offs are for our warfighter.
0:16:52 And so when we have the best software developers in the world, where we have the best capability coming in, let’s not cut it down with 1,000 paper cuts, 10,000 paper cuts.
0:16:55 Let’s make decisions based on the impact that they’re making.
0:16:58 We’re doing more of that, but it’s pockets of excellence.
0:16:59 That’s huge.
0:17:04 So there’s this acknowledgement about the black box and then a solution to managing the black box.
0:17:14 Sounds like there’s also major changes happening when it comes to capabilities and being able to say, we need to experiment because the pace of technology is so fast.
0:17:24 We can’t write a requirement for a capability that’s going to be developed three years from now because of the pace of software development, AI, all of these things.
0:17:26 It’s moving so fast that you need to be more agile.
0:17:34 Especially with horizontal capabilities, like artificial intelligence, like how would we pull in artificial intelligence across 75 PEOs?
0:17:38 Like we need to name enterprise services.
0:17:46 And so Defense Innovation Unit actually has a digital on-ramp where they’re trying to streamline that so that we can make buys based on impact.
0:17:52 The chances that a bunch of horizontal organizations were going to do the same thing was always high.
0:17:56 A quick example is we had edge compute ashore.
0:18:06 We had a hyper-converged infrastructure, small box that we could divest a billion dollar purchase and just move to this in every way more capable solution.
0:18:11 We said, “What about that for a float?” And one of the captains of a ship said, “Let’s put it on mine.
0:18:13 Let’s figure out how this works.” We put it there.
0:18:17 He deployed to the Red Sea. It’s on other ships right now.
0:18:26 This is enterprise moving to edge, specifically afloat, in a case that we didn’t need to go down two different procurement paths.
0:18:41 There was another example, actually recently, where we had an electronic warfare solution and we heard that the Army was going to go out and do a request for proposal on something that was really similar with the same long requirements document that we had.
0:18:45 And we said, “Can you just paint this brown and throw it on a Humvee?” And that’s exactly what they did.
0:18:49 They did it in three months for 300K and then that went to scaled fielding.
0:18:55 And so these things are happening. It’s just a matter of can you make the best thing the normal thing.
0:18:58 And Justin said, “It’s treating the value as the actual goal.”
0:19:03 So everyone has heard this. PMs love off of this concept of cost schedule and performance, right?
0:19:06 They want to make sure they hit their timelines at the cost that they were given.
0:19:10 And performance, to me, is like, “Hey, it meets my warfighting needs.”
0:19:19 But performance is actually what’s written in this requirements document, which they might not have actually had any hand in doing or a soldier might not have had any actual hand in informing.
0:19:23 What we were trying to do is flip that and say, “No, your value and time to delivery is your actual need.”
0:19:27 Now, everyone has permission to do the right thing.
0:19:37 So as you think about venture funding all the way up through series X, Y, or Z, where a lot of the companies that we work with actually still live in those spaces, they need to have a front door.
0:19:45 But what we’re doing in the Army is going, “Hey, if you’re ready, let’s go to the field right now.” And I say this a little bit parochially.
0:19:48 The Army is the service that can do that because you can move around the edges of some of your ships.
0:19:50 The Air Force can move around the edges of some of the aircraft.
0:19:53 The capital assets, those are fixed.
0:19:58 What I have the luxury in the Army is we can modify our organizations, we can modify our kit, we can tailor it to mission.
0:20:05 So that’s what we’ve been doing with some of our brigades that have been in Europe and in the Pacific, and frankly, going in and out of the Middle East still.
0:20:09 And this is an open invite for all of the founders and all of the companies.
0:20:13 If you have things that work, we have a front door. We want to try to get you in here.
0:20:23 We want you to be able to engage with Army Futures Command. We want you to be able to engage with our units directly because only the soldiers will actually be able to tell you, yes, this works at a time of crisis.
0:20:28 So I’m super excited because I remember during the global war on terror, we had quick reaction capabilities.
0:20:34 And as a customer, I could go, “I need this right now.” And somebody would go, “Cool, I will get you that.”
0:20:42 In 30 days, I had kit in Afghanistan that was working for me, which told me it was legal, it was moral, it was ethical, we could do it.
0:20:48 But we never actually went back and fixed the system. We just moved off to a side chain and everything was a side quest.
0:20:53 Now we’re saying, “Hey, we got to fix the main storyline.” And everybody’s like, “Oh, we don’t know how to do that.”
0:20:57 This is a period about scaling what actually works. And so I’m excited about what Alex is doing.
0:21:03 That transforming and contact in execution is a big deal because it’s tech-informed.
0:21:07 If you read Origins of Victory, they say it’s not about who necessarily just has the best tech,
0:21:13 it’s how they’re adapting to that tech and using that as advantage. And so the way that we’re measuring
0:21:18 outcomes is we’re now using outcome-driven metrics to figure out, do you move the needle? Not,
0:21:24 is this the best tech or how does this fit into our current operating model? How does this transform us?
0:21:30 And so we are more open and listening to and working with and pulling through more of those
0:21:37 Horizon 3 capabilities than we were. But we need outcomes overmatch. We need it to kick the ass of
0:21:41 whatever’s there right now so we can show that difference. It’s defensible and we can move off of
0:21:42 the old and onto the new.
0:21:46 You’ve mentioned overmatch a couple of times. Can you double click into that and share what exactly
0:21:47 that means?
0:21:53 It’s very hard to make a change for a 15% improvement unless it’s something that you’re doing a lot. We
0:21:59 want to make the case that there are orders of magnitude leaps, right? Like power law leaps. And so
0:22:04 most recently we have a thousand different identity management solutions.
0:22:05 Just a thousand?
0:22:12 So we’ve said Naval Identity Service is the enterprise system. That service is what’s moving forward.
0:22:18 That opens the door to repurposing some of that money, repurposing some of that attention to harder
0:22:26 problems. And so to this point, we are looking for A/B testing that shows that A is no longer a viable
0:22:33 option and there’s much more value from B. If a company comes in like Serana comes in and they said,
0:22:39 we have tests, we use rescale, we use the cloud, and we show that based on running this for a hundred
0:22:45 thousand reps that would have taken 10 years, we can fast forward this. And that is proven. It was
0:22:50 proven on paper. We didn’t have to put that into an exercise. We can now with a lot less risk reduction,
0:22:56 but that is an easier A/B decision because they’ve translated it into our language, which is outcomes.
0:23:00 I’ll give an army example. So we have this concept of mission command. And I don’t want to go into like
0:23:04 army terms because it gives us this false sense of security. Like we’re doing something unique.
0:23:11 We had 17 programs of record in this mission command enterprise. And each one did similar things in the
0:23:16 fact that each one of them had a map. Humans like pixels. We’re really good at seeing pixels. They make us
0:23:22 happy. So we looked at maps. Well, each one of those came with its own mapping server and its own way to
0:23:28 do tiles. And it’s a way to deliver the maps. And it’s a way to store the maps. And about 2015,
0:23:33 16, everybody went, Hey, this Google Earth thing is pretty legit. We should probably just try to use
0:23:40 that. And it took five years for people to go, Oh, we can just start sharing KMLs and KMZs with each
0:23:46 other and start sharing it. Well, by then you had really, really good software companies that had
0:23:50 said, cool, we’re going to give you these enterprise services. I don’t care what map you use. I don’t
0:23:56 care who provides it. You just tell it, you point us to it and we’ll serve it to you. And all of us kind
0:24:01 of went, yeah, I want that. But we couldn’t because we had 17 programs of record owned with their own
0:24:05 vestigial architecture. And we had to do a bunch of architecture, archaeology. And we had a bunch of
0:24:11 people who were protecting their rice bowls in terms of those programs. And it’s only just now in 2025,
0:24:17 are we actually trying to hack and slash and kill some of these systems to go? No. If you want to look
0:24:22 at the map, just look at the map. If you’ve got some weird, unique data, like we do fires, like we do
0:24:27 artillery, like all those unique things that are unique to us as a military, we’ll figure out a
0:24:33 way to get those on the map. But we, the Department of Defense are certainly not in 2025 who is building
0:24:38 the best maps. We’re not building the best data platforms. We’re not building the best API gateways.
0:24:42 So let’s not pretend it. Let’s just get all those pieces together and collapse all of these other
0:24:46 vestigial organs. I cannot describe how excited I am because we’re doing it. We’re doing it live.
0:24:49 And I love it. It’s a leverage play. Yeah.
0:24:52 Like the reuse piece. We’re even using some of what the army’s doing and vice versa.
0:24:56 It’s interesting because I’d never thought about it from this angle, but it’s
0:25:01 not unlike venture capital where we’re making bets on companies. It’s not about, can this company move
0:25:07 the needle by 10x? Because to your point, there’s this switching cost. So we’re investing in 100x solutions.
0:25:07 Yeah.
0:25:14 And then you all need to be able to validate that this new solution is going to provide 100x outcome.
0:25:19 And you also need to be able to replace and sunset capabilities as well. So it sounds like
0:25:20 our organizations are not that dissimilar.
0:25:25 They’re not. And what I appreciate is I’ve learned what venture looks at and how you grade and how you
0:25:32 assess risk is you do not expect every company to be good at everything. And that is a failure that we
0:25:37 as a Department of Defense and really anybody who’s done federal acquisition falls into the trap of where
0:25:43 if you came up and you won a program, I expect you to deliver every part of that top to bottom,
0:25:48 even the stuff you’re not good at. Well, what that does is it creates an amalgamation of things that
0:25:54 people aren’t good at. And you can actually multiply those tolerances across lots of systems until you
0:25:58 get something that looks like, oh, there’s a lot of not good stuff here. Well, what we’re trying to do
0:26:03 now is just figure out I’m a Lego person. Like, how do you find the right Lego pieces and how do you put
0:26:10 them together so that if Justin Corp is really, really good at serving data, I get him serving
0:26:15 data. Layla Corp is really, really good at UI. You’re doing UI. I don’t make you do the things
0:26:19 you’re not good at because frankly, your engineers are focused and excited on doing the things you’re
0:26:25 good at. And I can put all these things together. And that’s what we expect in our everyday lives.
0:26:29 It is shocking to me how much stuff we buy for soldiers that no one would accept if I handed it to
0:26:34 you in your everyday life. And that is a mindset that we are changing. And I love the secretary is
0:26:38 on board. The chief is on board. All of these senior leaders within the army are just really
0:26:42 going, hey, common sense. Like, what’s the value and what’s the opportunity cost of making really
0:26:47 dumb decisions? And how do we stop doing that? Yeah. And one of the unlocks there is they’re
0:26:53 acknowledging the secretary of defense is acknowledging that the software defined warfare is here. And if you
0:26:59 can use one component that is higher performing than others, should we have a fully different
0:27:07 artificial intelligence stack for edge compute for sensor integration than we do with no leverage
0:27:12 as an enterprise use case? No, of course not, right? What does the governance look like versus what does
0:27:19 the compute look like? We need economies of scale. And so we’re working together more with our vendor
0:27:26 partners and even like signaling to some of the investors to say, here is our hard problem, but can we land the
0:27:32 plane on buying them? Can we land the plane in sustainable cost, whether it’s in a program executive
0:27:38 office or not? Everyone should have to sing for their dinner every year. But the idea of bringing those
0:27:45 breakthroughs in and then again, zambonying out the legacy capabilities so we can unplug them for the first
0:27:51 time in a long time. These work together within the valley of death like this is actually happening within
0:27:58 our budget cycle if we do it well. It sounds like you guys are really trying to break down a lot of these
0:28:03 silos with the program offices. There are 75 of them. There are all these different programs and you all are
0:28:10 thinking about how can we find some of these horizontal capabilities that are relevant not just within the
0:28:16 navy or the army but across the services to be able to find economies of scale for your organizations and
0:28:21 that also make it easier for startups to partner with you all and scale with you. Am I hearing that right?
0:28:27 Yes, and one of the things that I’ve been really big on is we need the enterprise to do enterprise things
0:28:33 and get us out of the business of doing things that are common to all. In the intelligence community,
0:28:38 we had this concept of services of common concern and what that means is it is something that everyone
0:28:44 should be able to use. Therefore, don’t let every individual agency or organization do it themselves.
0:28:50 It’s sort of a common sense on the face of it thing. However, in the combat side of the department,
0:28:56 we’ve had a really hard time adopting. I’ll give a couple examples. So the CDAO and DIU and some of
0:28:59 these other organizations have said, “Hey, we’re going to pull capabilities up and deliver it in a common
0:29:05 way for everyone.” That’s great for things that are common so that when Justin and I go back to our offices,
0:29:09 if we need to share data, we can do it in a common way. For things that are unique to me
0:29:15 or unique to him or unique to the Air Force or unique to the Space Force or the Coast Guard, the Marines,
0:29:21 whoever, if it’s really, really, really unique, like can only be done by them and should only be done by them,
0:29:25 that’s where we want to focus on because that’s the niche. But I will keep hampering on this.
0:29:31 There’s option for startups and small companies in all of that because Palantir was an In-Q-Tel
0:29:37 investment. Like we found them as a very small company and now it’s driving a lot of the way we do warfare.
0:29:42 So even those big companies will go, “I’m not good at this, but that company, that really small
0:29:47 company, they’re really good at that. I want them on my team.” We want to unlock all of that and we want
0:29:52 to enable it. And I’m trying not to be super, super technical just because this is not a technology
0:29:59 problem. This is a culture and a process problem that we can apply technology to. I had a chance last
0:30:06 week to sit with all of the big LLM providers and I loved the conversation because they were ruthlessly
0:30:11 honest with me and with each other in that, “Hey, all of these things are available whether it’s Llama
0:30:18 or Claude or ChatGPT or even DeepSeek, they’re all available. What makes them unique and good and
0:30:22 competitive is the unique data sets that their customers have and the unique ways that they’re
0:30:27 going to use them?” That’s us. That’s my job to be able to go, “Hey, here’s the unique mission for my
0:30:31 soldiers and here’s how we’re going to do that.” Startups can’t solve a fundamental deficiency
0:30:36 in us not being able to describe our problems, but they can help us identify where those problems are.
0:30:45 This is why it’s really important to be close to the warfighter. If you are a startup CEO, don’t hire
0:30:52 salespeople before you understand the ecosystem. Move to San Diego, spend nine months near the group
0:30:58 that you are trying to positively enable and empower to do their job 10 or 100 times better than they are
0:31:03 right now. So that proximity piece is real, especially for unique or specific problems. And then more often
0:31:08 than not, there is some aspect that should be evaluated as dual use. From a shared services
0:31:17 perspective, Alex already said it, we’re doing more common and similar than dissimilar from industry.
0:31:23 In some cases, we’re not making the tough decisions to scale what’s working fast enough. And so if we have
0:31:31 more shared services at the department level, how can we do autonomy together as services? How can we make
0:31:36 sure that that is well integrated from the ground up and we’re not like looking at this as an integration
0:31:41 problem because we made separate decisions three years later? From an artificial intelligence perspective,
0:31:48 right now we’re leveraging an Air Force and Army and Navy solution. Can we single up for common enterprise
0:31:54 problems in one place and then other places? Can we have narrow models where we share and all of them feed
0:32:01 into some of the more unique problems like command and control? And so we’re starting to architect in
0:32:06 that way and make decisions based on what’s available, not based on what we’ve done. Now,
0:32:12 one kind of an older comment you made was, we have some things in common with VC. Sure, from a funnel
0:32:19 perspective, that would be the ideal state. One of the tricky parts for us, because we are such a big
0:32:25 organization is finding people who think that way and fanning the flames and empowering them. And so
0:32:31 every organization has latent risk takers, even if they’re conditioned to not take risk. I mean,
0:32:37 the acquisition community teaches us that lowering risk, reducing risk is the goal. So essentially like
0:32:43 playing not to lose. It doesn’t really keep pace in many, many cases with the current trajectory of
0:32:48 technological advancement. And so we have unleashed people, Mavericks, who are willing to work against
0:32:53 their self-interest to bring breakthrough capabilities through. I know, Justin, I could sit here and talk
0:32:57 really deep tech all day long, and we can go into the nuts and bolts. And we will.
0:33:04 There’s two things, the silos, and they just put something in my brain. I want everyone who listens or
0:33:10 see this to understand, we haven’t missed the signal. The department hasn’t missed the signal. In 1968,
0:33:16 something fundamentally changed the way that we do buying in the government. And it has not stopped
0:33:22 changing since then. In 1968, there was a program put directly in the United States budget, and it was
0:33:27 the Minuteman III program. That was the first time that a program by name was put into the budget that we
0:33:33 had to spend money against. Before that, there were just these big pots of money, like the army had
0:33:41 vehicles, and ammunition, and soldiers, and all of the money was just, hey, do what you need to do to
0:33:42 run the army.
0:33:42 A portfolio.
0:33:47 A portfolio. Yeah, absolutely. And then in 1968, bam, Minuteman III is in there. And I get it from a
0:33:50 national security perspective. You want to make sure that money goes into a long-term project, and you want
0:33:54 to make sure that it’s successful because we were the only people who were going to do that. We, the government,
0:34:02 were the only people who were going to do that. Now, today, the army is only 21% of the defense budget.
0:34:06 We are everywhere. We, the army, are everywhere. And again, this is going to sound a little parochial,
0:34:11 but we’re on the border. We’re the global response force. We’re the immediate response force. We’re the
0:34:17 Homeland Defense Brigade. We’re in Haiti. We’re in Africa. We’re in CENTCOM. We’re in PACOM. We are
0:34:23 everywhere. 21% of the budget and less than 50% of that do we have any flexibility to spend to change how
0:34:30 we’re spending. Even less than that, there are thousands of budget line items that are directed to us in the
0:34:35 National Defense Authorization Act everywhere that tell us exactly how we’re going to spend that money.
0:34:38 So it was just, we were talking about earlier, that three-year spin cycle. What that really means
0:34:44 for us is we have to predict the future three to five years out, hope for the best, and then work in the
0:34:51 year of execution to move money around the edges to try to do advanced technology. Otherwise, what happens is
0:34:57 we give money to our labs and they try to do the right thing and they try to pull advanced technology
0:35:03 in and they try to like land this transition, this magical transition where it goes from something
0:35:08 that works in a lab to something that works in the field in one go. And we know that that’s not real
0:35:13 because technology evolves so fast where you could go from something that is a concept to someone writing
0:35:19 it up and doing it in software space in days to weeks. And our entire system, the entire way we
0:35:25 think is predict the future three to five years out, land the perfect shot, get a trick shot, and go.
0:35:30 And it just doesn’t work. It does not work. This is all the more reason if someone does
0:35:37 have a capability that is so much better than what we have in the field right now, like we have stocked
0:35:45 up the pipeline, but the data and the stories associated with that, we want it to be undeniably
0:35:51 good so that we can then make the case. And people come to me and they say, “Isn’t zero-touch AI better
0:35:56 than how you’re doing unified endpoints right now?” Yes, of course it is. And we are trying to make
0:36:01 the case that this will save us money. We need a little bit of capex so that we can get the opex
0:36:08 right by the total cost of ownership and the impact of this from a mission perspective is best for those
0:36:14 who are protecting us, right? Here are ways that we can lower the tail on ineffective things, but we have
0:36:20 to aim at the exact solution that we have, even if it’s a manual process. And if we can find
0:36:26 severable things, we can find enough room until all the workarounds are turned into scaled solutions
0:36:33 that Alex is talking about, we can still pull that through. But if you can make the A to B not close,
0:36:39 blow it away, that’s what we want to see. And so we use world-class alignment metrics to show
0:36:44 how a divestment is possible through a game-changing investment. And that’s a really big change.
0:36:51 We want that to be 90% of the portfolio, you know, like really a big percent of the, like they’re
0:36:57 each’s right. When we still talk about DIU is like less than 1% of the budget. Like these innovation
0:37:04 activities are still very small. So it is a good signal that we’re doing them. The impact of scaling,
0:37:09 what’s working, again, once in a lifetime opportunity, and imagine how much more secure
0:37:16 that our country and the world would be if we were making the exact, ruthless, highest impact decisions
0:37:17 across the board.
0:37:20 So I want to double click into the culture piece.
0:37:22 Is that door locked to protect us?
0:37:29 Yes, it is. The world I’m in, venture capital, we’re in the business of risk. Like we’re all in on risk.
0:37:35 And that’s how we think about the world. Obviously with the Pentagon, that’s different. You all are
0:37:39 making a lot of strides to change that. But I’d love your perspective on like, how do we get closer
0:37:44 together between Silicon Valley and Washington and get that risk appetite up a little bit?
0:37:49 We’re assessing risk on different things. And it’s added necessity. I’m using big weed. There’s a lot
0:37:53 of folks in the department who actually understand venture, whether or not they came from that,
0:37:57 or they’ve just been working with the venture ecosystem for a long time. And I mentioned In-Q-Tel
0:38:03 earlier. That’s a really good, very public facing example. In-Q-Tel’s ratio is 25 outside dollars
0:38:09 for every federal dollar spent. And then dual use takes care of the rest of that. And so this is one
0:38:14 example where we’ve proven this model. What we have to work through, and Justin said it really,
0:38:20 elegantly earlier, the people who take risk, their job, and I don’t want to disparage anybody because
0:38:24 they are hardworking Americans trying to do the right thing. Their job is to minimize the risk to
0:38:30 the government. And the way that they measure risk is the potential for waste, fraud, or abuse of
0:38:36 dollars. So what they’re trying to say is, hey, if I give you a dollar, do I get a dollar of value out of
0:38:42 it? That’s a good metric. What they don’t do is, if I give you a dollar, and I take 10 years to spend
0:38:49 that dollar, is it still worth a dollar? So what we are trying to do is figure out, hey, I’d rather lose
0:38:54 a dollar right now. I’d rather try it on a company and they go, it just didn’t work out, than spend
0:38:59 that 10 years. Because that is also super valuable time that we could be trying to figure out what all
0:39:03 of the players in the startup landscape and all of the players in the venture landscape. And frankly,
0:39:06 all of the, because once you sell your first product, you’re not a startup, your business,
0:39:12 and all the businesses that are available, how do they get us the best war-winning capabilities
0:39:17 right now? Maybe it sounds cheesy, but I mean it. The risk calculus, we’re not comparing the same
0:39:22 things. And what would help is if those venture folks talk to our leadership, continuing to engage,
0:39:27 because we’re going to work up. They need to work laterally to go, hey, the way you measure risk is
0:39:33 fundamentally incoherent with where technology is going. If a quarterback was measured on not making
0:39:40 mistakes versus throwing touchdowns or winning games, the performances would be 100 percent different,
0:39:47 right? And so if your goal is to hedge against anything happening, then you’re fighting against
0:39:53 inflation as opposed to against disruptive technology. We used to have something called
0:39:58 cost as an independent variable. We make anything an acronym, so CAVE. And so this was to say like,
0:40:06 how do you back in and make sure that you’re spending the budget and then optimizing for that? If we had
0:40:13 speed as an independent variable, save, and we measured based on outcomes, then I think that looks
0:40:19 pretty different. That looks more like executing. And so when we say, hey, Unleashed folks, what do
0:40:25 you have? They’re not bringing 20 percent better capability. They’re saying, hey, we’re doing
0:40:30 cross-domain solution right now through a bunch of different program offices. The Army’s doing that as a
0:40:37 service. Can we jump on cross-domain even if it’ll affect or make some people that created something in-house
0:40:43 Upset? Yes. For the sailor and for the Marine? Yes. I just want people to understand who’s listening,
0:40:51 how ridiculous this is. Because cross-domain as a service is an API for binary XML between two networks.
0:40:56 That’s all we’re talking about. Now there’s national security implications, but that is a solved problem
0:41:04 and that we are fighting over. We want to keep solved problems solved, get higher up the stack in general.
0:41:09 I think it’s academically interesting to resolve the same problem. That’s for school. And so we have
0:41:15 Marine Innovation Unit that is a way to keep really talented Marines in the reserves who have venture
0:41:20 jobs as their full-time job. We’re using them to scout technologies. We have folks in Europe right now
0:41:25 working with some of the startup founders to say, hey, here is a breakthrough. What would scaling this
0:41:31 look like? Well, it would mess up our program of record plan. That’s not what we’re optimizing for.
0:41:36 We have contracting officers sometimes say, well, I want to do fewer contracts. Well, I want to win.
0:41:42 So then there are really good contracting officers who get that. And short of changing the way that we
0:41:50 fuel incentives measuring how much better, 25 times better the get after it folks are in different
0:41:57 organizations. That K-curve fuels us and it actually gives us more leverage to do more of this. And so
0:42:03 ultimately send your success stories if you are doing this really well and you’re already in and you’ve made
0:42:10 it because we want to double down on this flywheel of this can happen. We don’t want two successes a month.
0:42:16 We want to overwhelm the system with how much better it can be. If you’re not ready when the window of
0:42:22 opportunity opens, sometimes you’re waiting a really long time. And so we put CAPE, mobile virtual network
0:42:29 operator company startup in Guam, and then we needed them. So like, hey, the pilot was ready for actual
0:42:36 use. If we are out hands-on testing with the best stuff, then we have an opportunity to scale in a
0:42:41 significant way, much shorter than any of these timelines you hear about whenever you read about the government.
0:42:46 Very optimistic. And this is really exciting. It feels like we’re in a lightning in the bottle moment where
0:42:54 there’s a lot about to happen. I’d love to just get your quick take on the future, the year ahead, what you both are most excited about.
0:42:59 I’m excited about the idea of we don’t have to prove that these things work anymore.
0:43:06 So if we scale half of what’s working well right now, I mean the software acquisition pathways,
0:43:16 we have gotten more permission, like significant permission to do the right thing. Now, how many people do it and what does that look like and what wins do we get out of that?
0:43:36 And so ultimately, I am excited about participating in the race to have the best technology solutions and the companies that are offering the best breakthroughs to be fielded into that operations and maintenance pot and getting that to the production to our warfighters’ hands sooner.
0:43:47 So I’m excited about the best chance I’ve ever seen in the next six to 12 months to get capability that wasn’t under government contract into full scale production.
0:43:58 Hell yeah. I’m actually really excited about a lot of things. This year, we are going to put the consortium for the Army’s next generation command and control into its program phase.
0:44:06 So right now it’s been in software pathways. Army Futures Command has been piloting this. We have a consortium, and I keep using that term deliberately, of just great companies.
0:44:21 who are going, here’s what technology can bear. And I was at the National Training Center out in the middle of the Mojave Desert last week, and I crawled into an M1A2 set B3 tank, the coolest, you know, eight-year-old Alex was very excited because I was in a tank, but that tank commander…
0:44:22 He was wearing the same socks.
0:44:34 I was wearing this unfortunate son all day long, but I was sitting there with that tank commander, and he showed me because we have taken a 20-year-old tablet that’s mounted in that Abrams that’s really hard to move.
0:44:40 And we’ve given him everything on his TAC device, which is an Android app on an Android phone, and now he can command and control his tank company.
0:44:48 So we’re going to take that next generation command and control and to get that on contract and start moving forward and get that fielded to one of our divisions this year.
0:44:54 In Europe, we’re doing this thing called Project Flytrap. I welcome anybody to come try it. It’s a countering unmanned system.
0:45:07 So we are learning from Ukraine and what’s happening over there, and we’re actually going to, with 5th Corps and with UCRAF, we’re actually going to work on how we scale up adding nonconventional sensors, nonconventional compute.
0:45:18 How do we do automation so that if you were driving, and it doesn’t matter what part of the world you’re in, if you’re an American warfighter and there is a drone threat, there is a bunch of automated decision mechanisms that are just going,
0:45:24 Hey, I sense something in the electromagnetic spectrum. I hear something in acoustics. Here’s what you need to do, and you don’t have to worry about it.
0:45:29 In the IED fight, they taught us something when you’re going to combat readiness. They said, down, out, up.
0:45:34 You have to look down to make sure you’re not stepping an IED. You have to look out to make sure you’re not going to walk into an IED.
0:45:41 You have to look up to make sure that you’re not getting shot at. Now, people have to look and make sure that they aren’t seeing drones flying, and I want to automate that.
0:45:50 We are going to put together a consortium for autonomy, so we’re going to take a lot of the vehicles that the Army has and think about what does an autonomous formation look like?
0:45:58 How does that pair with people so that, and this is true, the U.S. Army should never trade blood for blood in first contract.
0:46:06 It should always be blood for an iron, and it should always be their blood, and we have to make sure that we can actually get the autonomy pieces together, and it’s not one company.
0:46:18 It’s not MillerCorp that’s going to solve autonomy. It’s how do we get the right tool chain in place from SIM all the way through V&B, and then how do we get the right actions and the right libraries, and how do we get ourselves off of this sort of archaic microcontroller-based autonomy kick?
0:46:26 I mean, that’s just off the top of my head. Those are three technology things. What you’re going to do is just mask on the problem so all of the policy blockers that have stopped us.
0:46:34 Like I said, it’s a with-our-shields-or-on-it type of phase. We are going to body block our way through this to do the right thing, because we can’t not do it.
0:46:35 Lura.
0:46:39 I wanted to ask you guys a couple lightning questions. I could talk to you guys all day.
0:46:40 My body is ready.
0:46:48 Okay, very quickly. Very quickly. Red flag, green flag. What do you love startups doing? What do they need to stop doing when they come talk to you?
0:46:56 Red flag. I would say at this point, don’t work with bad requirements. These long requirements documents, there are enough capability needs statements out through software acquisition pathways,
0:47:06 and commercial solution offerings. Don’t bang your head against the wall. Find a top-level requirement or something easier to work with and people who get outcomes.
0:47:19 Green flag. Keep building the product that you started on the path to build. Have your North Star and then work with us to figure out how to do, you know, roof shots as you’re on your way to your moonshot rather than trying to tailor it to us.
0:47:28 The DOD, we are going to be a better customer. I wholeheartedly believe that. But if you had a vision, like go after your vision and then get it in the hands of our warfighters to help tailor it.
0:47:29 Any red flags?
0:47:57 Stop trying to use the Department of Defense as your only means of revenue. And I mean that because if you get complacent with the Department of Defense, then you are no longer actually on the quest that you were on. And it’s just not good. We want to make sure that we have the best war-winning dual-use technology. And if we become the only provider to your technology, it’s neither dual-use, nor are we going to actually maintain the goal of partnering with industry. You were just a part of us at that point.
0:48:04 And keep imagining a safer world. We want the brightest minds to help every aspect of this.
0:48:27 The goal here is to just be so effective that we are getting as much return on investment as possible. And that translates to protecting those who are protecting all of us every day. Technology is the advantage. And if we have the best of America’s talent, working on these types of problems, our hardest problems, like we’ve fixed the alignment problem.
0:48:31 What book should every defense-based founder read?
0:48:33 100-Year Marathon by Michael Pillsbury.
0:48:36 What is the number one misconception
0:48:39 about your service that you would want to dispel?
0:49:07 This is not your granddaddy’s DOD anymore. We will be more flexible. We will be more open-minded. And if you bring data to us, then we will work our butts off to make sure that if the policy is the problem, then that policy will get accepted. We’ve gotten 12 exceptions to policy because we brought data and said this is hurting us. And so these sub-optimizations that we’ve always had, we can do better than that. And we will.
0:49:23 I’m proud of the Army. I make a joke all the time. The Navy and the Army are the only two services in the Constitution. We’ve been doing this since 1775. And everyone knows what the Army brings. I say this just unemotionally. When the world dials 911, the phone rings at Fort Bragg.
0:49:33 It doesn’t ring at Naval Station San Diego. It doesn’t ring at Anderson Air Force Base. And I love my Navy and Air Force brothers. The phone rings at Fort Bragg, North Carolina when the world dials 911.
0:49:46 So the biggest misconception that I would tell people is we haven’t missed this. We’re in the fight still. We’re in the fight globally. And we’re going to transform in contact and continue to transform in contact because we’ve been doing this since 1775.
0:50:03 And we are teammates and we are working together on these problems. And we’re going to start using that buying power to make more effective purchases. Because when the president calls for the carriers before they call Bragg, that we need to be fully integrated and teamed. We fight joint every day.
0:50:07 Love that. And then last one, fun one, favorite military movie.
0:50:15 Top Gun Maverick. That happened on CVN 72, which has one of those hyper-converged infrastructure stacks that we talked about.
0:50:16 It has to.
0:50:16 So we’re moving out.
0:50:18 Is that how they did the post-processing?
0:50:30 I am a big fan of World War II. I used to watch it with my dad. This is going to sound corny. I love Starship Troopers. I know it’s a bad adaptation of the book. It is the mobile infantry. It is just people on the ground just getting it done.
0:50:34 So in the spirit of doing things a little differently, I’ll go with Starship Troopers.
0:50:42 Thank you both so much for your time. So great to know that there are folks like you working at the highest levels of government to help make some of these changes.
0:50:49 All right. That is all for today. If you did make it this far, first of all, thank you.
0:50:57 We put a lot of thought into each of these episodes, whether it’s guests, the calendar Tetris, the cycles with our amazing editor, Tommy, until the music is just right.
0:51:04 So if you’d like what we’ve put together, consider dropping us a line at ratethispodcast.com slash A16Z.
0:51:09 And let us know what your favorite episode is. It’ll make my day, and I’m sure Tommy’s too.
0:51:11 We’ll catch you on the flip side.
0:51:14 Thank you.

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0:01:57 Welcome to Office Hours with Prof G. This is the part of the show where we answer your questions
0:02:01 about business, big tech, entrepreneurship, and whatever else is on your mind. Today, we have
0:02:06 two great listener questions lined up. And then after the break, we’re continuing our new segment,
0:02:11 the Reddit hotline, where we pull questions straight from Reddit. If you’d like to submit a question for
0:02:15 next time, you can send a voice recording to officehours at profgmedia.com. Again, that’s
0:02:21 officehours at profgmedia.com. Or if you prefer to ask on Reddit, post your question on the Scott
0:02:25 Galloway subreddit. Jesus Christ, that’s something I never thought I would say, Scott Galloway subreddit.
0:02:31 And we just might feature it in our next episode. What a thrill! Let’s bust right into it.
0:02:34 First question, I have not heard or seen these questions.
0:02:44 Hi, Scott. Patrick here in South Africa. I am a pro-capitalist, pro-democracy, pro-Western
0:02:52 kind of guy. And I wondered if you had any thoughts on brand USA, given what has happened
0:03:00 between Trump and Vladimir Zelensky in the Oval Office. As someone who has looked to the West with
0:03:08 admiration, I am concerned about whether or not the USA is indeed a fair-weather friend and what
0:03:13 damage is being done to brand USA. Your thoughts would be greatly appreciated. Thanks, Scott, for all
0:03:18 the great work you do. Thanks for the question. And I’m an enormous fan of South Africa. I’ve been to
0:03:24 Cape Town a few times. Obviously, safari is sort of a singular experience. I actually enjoy spending more
0:03:29 time in the cities than I do safari. It’s like two or three days of, look at that lion, look at that
0:03:35 zebra. It’s great. A couple days, that’s fine. And then I start doing the afternoon drive and everyone
0:03:38 gets angry at me because I’m not going on both drives for this magical experience. But anyways, I
0:03:42 absolutely adore Cape Town. If I was a younger man, there’s a lot of shit I would do if I were a younger
0:03:46 man. But one thing I might consider doing is if I could figure out a way to make sort of a Western
0:03:52 salary and live in Cape Town. I just thought in terms of a quality of life, it seemed just like
0:03:59 a fantastic place to live. So just a little bit of data. According to the embassy, the part of Trump’s
0:04:04 presidency that Americans disapprove of most is his handling of the war in Ukraine. Also, more than
0:04:09 half of Americans believe that Trump is too closely aligned with Russia, including more than a quarter of
0:04:14 Republicans. Since the beginning of Trump’s term, foreign opinions of the U.S. have plummeted.
0:04:19 Get this, just 27% of Canadians now see the U.S. as an enemy country. A majority of Americans still see
0:04:28 Canada as an ally. Anyways, across the EU, the most common answer to who is the U.S. to the EU is a
0:04:35 necessary partner over an ally, a rival, and an adversary in every European country. They’re seen as sort of
0:04:43 basically become more from an ally to a necessary evil. Look, first off, let’s back up. What is a brand? A brand is a
0:04:49 promise more than it is the actual performance, and that is before you buy a car, before you attend a
0:04:54 university. I’m about to do a college tour with my son, and he listed the universities he is interested
0:05:01 in seeing. And it came down to things like, it looks like fun, or I like the logo, or the website is cool.
0:05:08 Basically, he has no idea, and he’s facing, he’s basically going to make a decision, which might be
0:05:11 kind of a quarter of a million dollar decision when you look at how much it’s going to cost his parents
0:05:14 to send him to four years to one of these universities. So he’s going to make a quarter of a million dollar
0:05:19 decision with 90 plus points of gross margin, meaning that the majority of that money will go to the
0:05:25 bottom line for whatever institution he ends up at, based on brand. I mean, Hilga will do maybe a one or a
0:05:30 two-hour tour of the university, but it’s basically essentially the promise, the branding, the messaging,
0:05:38 the reputation of the university that will dictate these enormous purchases. Now, bring that back to a
0:05:43 country. There are millions of decisions made every day around trade partners, who you’re going to do
0:05:47 business with, where your kids want to go if they’re incredibly talented and they can go anywhere,
0:05:53 where do they want to go to apply their exceptional human capital? What treaties do we enter? Will we let a
0:06:00 military base be constructed on our own territory? Do we like their media? Will we not cooperate with bad
0:06:04 actors that want to hurt them? Will we not launder money for terrorist organizations? There are millions
0:06:10 of decisions every day, either pro or against certain countries. And here’s the brand impression of the
0:06:18 United States. We’re enormous. We’re enormously wealthy and successful. We make a lot of mistakes,
0:06:24 but our heart is in the right place. We’re always seen, loosely speaking, as the good guys for the
0:06:29 majority of powerful nations and economic powers around the world. And we have reaped enormous
0:06:34 benefit. People want to buy our cars. People want to consume our superhero movies. People want to send
0:06:39 their best and brightest to our universities. People want to cooperate with us. The brand America is one of
0:06:47 the most beneficial, invisible, powerful aircraft carrier squadrons ever, ever manifested by an
0:06:53 organization anywhere. The U.S. brand is staggeringly powerful and has produced all sorts of margin
0:06:59 and ancillary benefits for 200 years for the United States. And that brand has fallen further,
0:07:06 faster than any brand in history over the last two months. We are now seeing, what is the U.S. brand right
0:07:11 now? Surrender to Putin with a mix of measles? I mean, what is our brand right now? You can’t trust us.
0:07:18 We’re not consistent. Tariffs on, tariffs off. I think the U.S. brand has fallen further, faster than
0:07:24 any brand of this size and this depth in history. Thanks for the question. Question number two.
0:07:29 Hi, Scott. I hope you’re doing well. I’ve been following you in the podcast for a few years now.
0:07:32 Thanks for all that you do, especially with regard to helping out young men.
0:07:39 Anyway, my question today is about the value of market research in the era of AI. Given that you
0:07:43 sold your company to Gartner, which is one of the largest tech research firms in the world,
0:07:49 I’m curious about your perspective on this industry. I’m a 34-year-old principal analyst at a large market
0:07:54 research firm. And I’m concerned that the influence of these firms is actually declining as companies
0:08:00 are increasingly using generative AI to get insights into potential markets. What’s your take on the value
0:08:05 of market research? Will it have a place in the future? And if you see it declining, where would
0:08:10 you advise someone with market research experience explore as a next career step? Thank you.
0:08:14 That’s an interesting question. But rather than talking about market research, I’d like to turn
0:08:20 this back to me. Let’s talk about me. So my first firm, when I was 26, I started a company called
0:08:25 Profit Market Research. And basically, we helped big brands figure out their internet strategy and manage
0:08:30 their brand as assets, like a hedge fund manager would manage stocks and portfolio. And I really
0:08:38 enjoyed it. It was fantastic learning, incredibly taxing, personally, a lot of travel, a lot of golf
0:08:44 and dinners with clients, things like that. And I sold the firm for my stake, at least I sold,
0:08:48 I think for a valuation of $33 million, which felt like a lot of money at the time. But the
0:08:53 Dobbomber implosion and a divorce took care of most of that. And then I started a company called L2,
0:08:57 which was a strategy firm that you referenced that I sold to Gardner. I got that one right,
0:09:01 went to a recurring revenue model. Basically, we would collect a shit ton of data and then meet with
0:09:05 a brand on a regular basis and give them our insights around what we think they should do with
0:09:10 their digital footprint. And we’d charge a Nike half a million a year and a smaller brand,
0:09:14 like a Rolex, a hundred grand a year, got to 20 million in revenue, sold for $160 million. And
0:09:18 it was acquired by Gartner. Let me be clear, a nice group of people, they’ve grown their shareholder
0:09:24 value dramatically. They’re clearly doing something right. Everything they did made no fucking sense to
0:09:30 me. When we were acquired, it was like that Seinfeld episode where George Costanza decides to
0:09:35 do the opposite of every instinct and it ends up in life, his life starts going much better. Every
0:09:41 decision they made post-acquisition is exactly the decision I would not have made. I was such a fish
0:09:48 out of water. I was literally a tuna on the deck of a fishing boat, flapping around, trying to figure out
0:09:54 how the fuck did I end up here? How do I get off of this boat and back into the water? I was such a
0:09:59 cultural misfit. And again, I don’t think it’s them. I don’t think it’s me. I just think it is.
0:10:05 This is a firm that basically figured out a way to kind of industrialize and institutionalize
0:10:10 what I would call good, not great research and then sell it to the North Oklahoma State Bank,
0:10:16 whereas we were doing kind of more bespoke, I would argue, insightful research for brands like P&G and
0:10:22 Nike. But look, their company’s worth several billion dollars and L2 was sold for $160 million. So
0:10:26 clearly they’re doing something right and I’m doing something wrong. Now, your question around AI,
0:10:32 I do think companies like Gartner and research companies are going to be able to do a lot more
0:10:38 with a lot less. And this is what I think the honest all hands would be. And that is I’ve got
0:10:42 great news. Our revenues and our EBIT are going to go up. I’ve got even better news. I’m going to need
0:10:47 a third of you to do this in the next five years or a third fewer of you, or maybe two thirds fewer of
0:10:52 you. But you don’t say that at the all hands. I think AI is effectively to corporations what
0:10:58 Ozempic is to the obese. And that is it shuts off the signal that you need to eat more and AI and
0:11:02 boardrooms. And I know this firsthand is shutting off the signal that if we’re growing our revenues,
0:11:06 we have to hire more. That’s just the automatic signal. Oh, we’re growing. We need to hire more.
0:11:12 Well, actually, ever since the meta earnings call three quarters ago that said, hey, we grew revenues
0:11:19 20% and we did it with 22% fewer people, which took earnings up 70%. Let me get this. I can have the
0:11:25 great taste of increased revenues without the calories of increased costs. Well, hold on here.
0:11:31 I like the cut of that jib. Oh my God. That’s how it is right as rain. That’s disco. And I’m talking
0:11:37 like 70s disco, real disco. And so a lot of companies are trying to figure out, especially information
0:11:44 driven companies, how they use AI to create 80, 90% of the value of an analyst for 10% of the cost.
0:11:48 Now, what does that mean? If you’re an analyst in a market research firm, quite frankly,
0:11:53 you want to be a samurai and AI is your weapon boss. Otherwise, someone’s going to come along
0:11:58 with more skilled and more dangerous and put you out of business. I’ve said this a lot. AI is not
0:12:03 going to take your job. Somebody who understands AI is going to take your job. So I actually think
0:12:07 that Gardner will likely, what do I think of shareholder value there? What will happen?
0:12:13 I don’t know. That’s an interesting one. Will AI help or hurt them? I would argue for a firm like
0:12:17 that, it may help them in the short run. They’re going to be able to cut costs. I do not think you want to
0:12:24 be an analyst in a market research firm right now. Or let me put it this way, a mediocre one. And by
0:12:29 virtue of just probability, the bulk of them are mediocre. An exceptional analyst who really
0:12:33 understands AI and knows how to become incredibly productive and put out interesting data.
0:12:39 Like, what do you do? You figure this shit out. I remember when I moved to New York,
0:12:42 they hired an assistant for me. I was running an e-commerce incubator called Brand Farm,
0:12:47 backed by Goldman Sachs, Maveron, J.P. Morgan. Different story. Different story. And they hired
0:12:51 an assistant for me. And the assistant came in and said, I just need to tell you that I don’t like
0:12:55 computers and I don’t use them. I’m like, okay, you can’t work here. And to say that you don’t
0:12:58 understand AI or you’re not interested in it probably means you’re not going to be able to work
0:13:03 in a market research firm. So this is what you want. You want a second screen at work. You want your
0:13:08 screen, your typical computer screen, and then you want a second screen that has nothing but AI on it,
0:13:13 that has mid-journey, that has anthropic, that has chat GPT, and a bunch of the other cats and dogs.
0:13:17 And every time you do a task, you want to turn to your second screen and think, how can my second
0:13:23 screen help my first screen? What additional insight, data, research, ideas really get good at
0:13:27 prompting? And before you know it, your head’s going to spin around all the different shit you can do.
0:13:32 Turn this into a chart. What is a different way to frame this? What types of visuals might better
0:13:38 display this information? What additional data, parables, historical, anthropological evidence can
0:13:42 you do to support the following argument that I’m making in the above two paragraphs, right? I just,
0:13:48 just so incredibly powerful. But your job, and you sound, you know, you are young. You’re 34.
0:13:55 You need to be a weapon. Oh, let’s lay off the guy who really understands AI. Says no firm ever right now.
0:13:59 You want to be that guy. In sum, let me finish where I started. AI’s not going to take your job.
0:14:02 Somebody who understands AI is going to take your job.
0:14:09 We have one quick break, and when we’re back, we’re diving into the depths of Reddit, the bowels of Reddit.
0:14:15 We’re about to do a colonoscopy on Reddit, and I promise to do what I always ask my colonoscopy doctor to do
0:14:19 before I go under, and I think it’s fucking hilarious. I say, will you run your fingers through your hair
0:14:23 when you’re invading me? And they always think that’s really funny, and then I’m out. By the way, that drug,
0:14:28 what’s it called? Propanapol that they give you for the colonoscopy? That shit is money. Wow.
0:14:33 Wow. You are sleeping like a corpse there. We’ll be back for our questions from Reddit.
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0:15:29 Last week, we at Today Explained brought you an episode titled The Joe Rogan of the Left.
0:15:34 The Joe Rogan of the Left was in quotations. It was mostly about a guy named Hassan Piker,
0:15:39 who some say is the Joe Rogan of the Left. But enough about Joe. We made an episode about
0:15:43 Hassan because the Democrats are really courting this dude.
0:15:51 So Hassan Piker is really the only major prominent leftist on Twitch, at least the only one who talks about politics all day.
0:15:56 What’s going on, everybody? I hope everyone’s having a fantastic evening, afternoon, pre-new, no matter where you are.
0:16:03 They want his cosign. They want his endorsement because he’s young and he reaches millions of young people streaming on YouTube,
0:16:06 TikTok, and especially Twitch. But last week, he was streaming us.
0:16:10 Yeah, I was listening on stream and you guys were like,
0:16:13 Hey, you should come on the show if you’re listening. I was like, oops, caught.
0:16:14 You’re a listener.
0:16:16 Yeah. Oh, yeah, I am. Yeah.
0:16:23 Thank you for listening. Head over to the Today Explained feed to hear Hassan Piker explain himself.
0:16:37 Our first question comes from DebtItAll777. And they ask,
0:16:41 Hi, Scott. What are the two things you’ve changed your mind about in the last few years?
0:16:44 And who are the people who most influence you?
0:16:53 So I would say they’re kind of two profound changes in my life. I feel as if I found a little bit more of my purpose.
0:16:57 I think I used to say my purpose was to create economic security for others.
0:17:00 So I’m looking at things or look through things through a professional lens and thought,
0:17:08 OK, I’ve always been very focused on economic security and I thought, OK, now I want to provide economic security for other people.
0:17:14 That’s changed. I think what I find my purpose now is I’m trying to raise
0:17:20 two good men. And by the way, sometimes I’m not very good at it. I’m still struggling with it.
0:17:25 I find parenting, I find almost anything I’ve ever focused on, I can usually get pretty good at.
0:17:31 I don’t know if I’m any good at this parenting thing. I know I’m not bad at it, but I don’t know if I’m good at it.
0:17:34 But I’ve decided my purpose is to raise loving, patriotic men.
0:17:39 And I don’t know if I would have said that a few years ago, that that is my purpose, if you will.
0:17:46 The second thing is, and again, everything for me is kind of, it’s very crass, but I’m very economically driven.
0:17:51 I’ve decided every year that anything above my current wealth, I’m going to give away or spend.
0:17:54 So I’m spending a lot more money and I’m giving away a lot more.
0:18:08 That may sound like virtue signaling, and it is, but I’m trying to really focus on doing a lot with loved ones, getting more involved, and trying to plant the trees, the shade of which I won’t sit under.
0:18:09 And I’m very focused.
0:18:13 I feel like for the first time in a while, I have purpose.
0:18:25 And my purpose is being a relatively good father, and that gives me some comfort, because I think I was sort of wandering around, okay, what is the point here once you get to a certain status of economic security?
0:18:31 And the people who most influence me, I get a lot of influence from the young people I work with.
0:18:34 I find them really inspiring, really intelligent.
0:18:44 I like the way they look at the world, and I spend a lot of time with them, so I think they inform a lot of my view and kind of keep my perspective a little fresher than it would be otherwise.
0:18:47 So I get a lot of inspiration from the kids in the firm.
0:18:49 I think of them as my muses.
0:18:55 And there’s a lot of great influences out there, a lot of great podcasters.
0:19:00 My co-host at Pivot, Kara, I get a lot of cues from her on parenting.
0:19:01 I think she’s a wonderful parent.
0:19:04 I really like Sam Harris.
0:19:07 I get a lot of insight from him, a lot of things I hold on to.
0:19:12 If you have economic security and people who love you, you have an obligation to speak out.
0:19:13 He said that, and it really sort of struck me.
0:19:16 There’s a lot of wonderful role models out there.
0:19:32 But anyways, the two things I think have changed the most, I’m focusing on or really focus on the reward I get from being a father and trying to catch up in terms of adding value to – I saw a chart that just struck me.
0:19:41 And it’s such a nice thing that I try to remember, and that is there’s a chart tracking how much time people are spending helping other people they will never meet.
0:19:42 And it’s at an all-time high.
0:19:46 And I thought to myself, I’m not high enough on that chart.
0:19:52 I need to get a little bit more focused on helping other people even if there’s no reciprocal benefit.
0:19:57 Anyways, kind of a, kind of a, I don’t know, a hallmark answer.
0:19:59 But anyways, I think it’s mostly true.
0:19:59 Is that true?
0:20:01 Anyways, next question.
0:20:08 From 1.6960 reads, Scott, what is a topic you’d like to learn more about?
0:20:15 I’m, I’ve said that in my next life I’m coming back as a Navy SEAL, a Broadway dancer, or an evolutionary anthropologist.
0:20:17 I’ve always regretted not serving my country.
0:20:19 I’ve always thought it’d be fun.
0:20:22 My dad wanted me to go to Annapolis and took me for a tour there.
0:20:27 And then I found out that back then it was all men, that you weren’t allowed to leave the campus the first year.
0:20:30 And then I made the mistake of going to Hillgard Avenue, which is where all the stories are at UCLA.
0:20:31 And it was like a fucking Cinemax movie.
0:20:33 And I said, no, I’m going to UCLA.
0:20:36 But I’ve always regretted not in some way serving.
0:20:38 I’d love to be a Broadway dancer.
0:20:40 I just admire people who can dance.
0:20:41 I cannot.
0:20:44 And I’m just so enthralled and enamored.
0:20:50 My first girlfriend, my first, like, obsession when I moved to New York was a Broadway dancer, Michelle Potter.
0:20:52 She was in the play Chicago.
0:20:53 And she came out.
0:20:55 She’s the first person on stage.
0:20:58 And the way the dancers move, I was just so starstruck and crazy in love with her.
0:21:02 She did not reciprocate my affection.
0:21:05 She was not nearly as in love with me as I was with her.
0:21:07 I think she’s back in Kansas teaching dance class.
0:21:09 Anyways, Michelle, I hope you’re doing well.
0:21:11 Nice person, too.
0:21:15 Anyways, but more than anything, I’d like to come back as evolutionary anthropologist.
0:21:27 I’m just fascinated by our lizard brains, our amygdala, whatever it is, our instincts that create the behaviors or motivate us or shape what we do and who we are every day.
0:21:28 I find it fascinating.
0:21:31 If you want to believe in nature over nurture, just have two kids.
0:21:35 I mean, we just haven’t treated our two sons that differently.
0:21:37 And they are absolutely a different species.
0:21:45 So I’m fascinated by what happened thousands of years ago to us and how it impacts the way we respond to things.
0:21:49 I’d also be very interested in learning more about adolescent psychology.
0:21:53 I’m trying to coach young men and understand more about it.
0:21:58 And I feel as if to be really thoughtful about it, you want to understand kind of what they’re going through.
0:22:06 And I don’t feel as if I know about it to be as helpful as I could be with some of the young men I talk to who are clearly struggling.
0:22:12 So I’d like to learn more about evolutionary anthropology and adolescent psychology.
0:22:13 Thanks for the question.
0:22:23 And lastly, D. Ryan, 7575, asks, what’s your podcast recording setup while traveling?
0:22:24 Huh.
0:22:25 That’s an interesting question.
0:22:33 So I have one of our best hires is a gentleman named Drew Burroughs, who’s our technical director.
0:22:38 And Drew will, when I go on a long trip, sometimes join me and just follow me around and make sure that we’re totally set up.
0:22:40 And he sets up all the studios.
0:22:47 I have exact replicas of my studio in my London, New York, and Florida homes.
0:22:49 If that sounds privileged, it is.
0:22:53 But what he also does for me is he puts together a travel kit.
0:23:00 And it basically looks like kind of a dop kit for, you know, an aging, self-conscious, you know, prima donna.
0:23:01 I’m all of those things.
0:23:04 So if imagine a large toiletry kit.
0:23:09 And in it, it has a mic, a bunch of cords, and a really good headset.
0:23:15 And you plug it into your computer, bring up Riverside, and boom, you’re ready to go.
0:23:20 And then I test shots, test lighting, work with Drew, because I’m usually in some hotel somewhere.
0:23:22 And it’s really fit my lifestyle.
0:23:23 Now, here’s the problem.
0:23:31 If you look at the churn in podcasting, if you were to look at the 100 podcasts and the 50 new entrants and the 50 that dropped out,
0:23:38 and who will likely be the winners and losers over the next 24 months, I think it comes down to one word, video.
0:23:43 Stephen Bartlett, who’s sort of a role model of mine, despite the fact he’s 30 years younger than me.
0:23:49 The first time, literally the first day I was in London, two and a half years ago, I went on his podcast.
0:23:54 And I walked into a studio, and he spends all his money, puts it all back into production value.
0:23:57 It’s basically a TV show posing as a podcast.
0:24:03 He has these cameras, which is just in Austin at South by, and he had recreated a studio.
0:24:09 And there must have been 16 cameras and three cameramen and people editing real time and producing photos as a gift for me when I left.
0:24:11 He’s got the strongest video game.
0:24:19 And if you look at what’s happened over the last couple of years, essentially Spotify and Apple have ceded ground in the podcasting world to YouTube.
0:24:28 People are listening to more podcasts on YouTube in terms of time, listenership in terms of time, than Spotify or Apple.
0:24:31 And it’s based on how good your YouTube game is and your ability to optimize.
0:24:36 And Stephen was showing me how they optimize for guests and test titles and thumbnails.
0:24:38 I mean, they’re just, and we’re not that.
0:24:46 And unfortunately, my desire to kind of optimize for my lifestyle, which includes having a mobile kit, is probably not where the industry is headed.
0:24:53 I think you’re going to see, I’ve predicted that Stephen’s going to overtake Rogan as the biggest podcaster in the world because of his video game.
0:24:56 So my dop kit is just a setup.
0:25:01 It’s just a Shure, I believe, mic, some cords, a stand.
0:25:04 Maybe we’ll publish on Reddit our exact setup.
0:25:06 And Riverside.
0:25:10 And then the key is I have a very talented individual who helps me figure out the lighting.
0:25:16 And then, just like writing a book, the kind of the magic in podcasting, similar to a book, is in the edit.
0:25:28 And that is our producer, Jennifer Sanchez, will spend a lot of time trying to make me sound smarter by adding in sound effects, or more importantly, not what’s in the podcast, but what she decides to take out.
0:25:36 I think the majority of magic happens in the edit, but my mobile kit is essentially a fancy toiletry kit with a few items.
0:25:44 But I wonder if those days are coming to an end, and the new kind of kings and queens of podcasting are going to have serious production values.
0:25:45 Appreciate the question.
0:25:47 That’s all for this episode.
0:25:52 If you’d like to submit a question, please email a voice recording to officehours at propertymedia.com.
0:25:54 Again, that’s officehours at propertymedia.com.
0:26:02 Or, if you prefer to ask Reddit, just post your question on the Scott Galloway subreddit, and we just might feature it in our next Reddit hotline segment.
0:26:14 This episode was produced by Jennifer Sanchez.
0:26:16 Our intern is Dan Shallon.
0:26:18 Drew Burrows is our technical director.
0:26:21 Thank you for listening to the Property Pod from the Vox Media Podcast Network.
0:26:26 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn.
0:26:32 And please follow our Property Markets Pod wherever you get your pods for new episodes every Monday and Thursday.

0:00:04 Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of
0:00:09 The Tim Ferriss Show, where it is my job to interview world-class performers, to break down
0:00:15 how they do what they do, what are the frameworks, tools, influences, so on and so forth that have
0:00:22 helped make them who they are. My guest today is back. At long last, he is one of my most
0:00:28 requested guests for a follow-up, Robert Rodriguez. He is a film director, screenwriter,
0:00:33 producer, cinematographer, editor, and composer. He does everything, absolutely everything.
0:00:38 And to give you an idea of the genesis, while a student at the University of Texas at Austin,
0:00:44 UT Austin, that’s right here in my backyard, in 1991, Rodriguez wrote the script to his first feature
0:00:50 film while sequestered at a drug research facility as a paid subject in a clinical experiment. I’m not
0:00:57 making that up. That paycheck covered the cost of shooting his $7,000 film El Mariachi, which won the
0:01:04 Award at the 1993 Sundance Film Festival, and became the lowest budget movie ever released by a major
0:01:09 studio. If you want the full story on that, listen to our first conversation, which you can find in the
0:01:15 show notes. Rodriguez wrote about these experiences in Rebel Without a Crew, a perennial guide for the
0:01:22 independent filmmaker. Really, it is a guide to bare-bones, bootstrapped entrepreneurship of any
0:01:26 type. It’s worth reading. Then he went on to write, produce, direct, and edit a series of successful
0:01:33 films, including Desperado, From Dusk Till Dawn, The Faculty, and the Spy Kids franchise, which is huge.
0:01:38 Once Upon a Time in Mexico, Frank Miller’s Sin City, We Can Be Heroes. And he’s also collaborated
0:01:44 with director James Cameron on the film adaptation of Alita, Battle Angel. His films have grossed more
0:01:51 than $1.5 billion at the box office. Then, in 2000, I suppose somewhere in the middle there, Rodriguez founded
0:01:57 Troublemaker Studios in Austin, Texas, which I’ve visited a number of times. It’s worth checking out if you
0:02:02 ever have the chance. He recently directed the Lady Gaga, Ariana Grande video, Rain On Me, and episodes of The
0:02:08 Mandalorian, and The Book of Boba Fett, and launched Brass Knuckle Films, an investable action film slate.
0:02:13 What does that mean? If you’ve ever wanted to pitch Robert Rodriguez a film idea, or get profit
0:02:19 participation in action films and sequels, he tells you all about it in this conversation. But there are
0:02:26 lots of tactical takeaways, lots of actionable bits of advice that you can use, and that is his style. He
0:02:33 had an entire dossier of things he’d been collecting over the last nine, 10 years since our last conversation
0:02:39 that he wanted to share on this podcast specifically. So, you can find him on x at x.com
0:02:47 slash Rodriguez, R-O-D-R-I-G-U-E-Z, and on Instagram slash Rodriguez at Rodriguez. He’s Rodriguez everywhere.
0:02:54 So, now, just a few words from our sponsors. We’ll get right to this very, very practical tactical
0:03:01 conversation with Robert Rodriguez. Listeners have heard me talk about making before you manage for
0:03:05 the years. All that means to me is that when I wake up, I block out three to four hours to do the most
0:03:11 important things that are generative, creative, podcasting, writing, etc. Before I get to the email
0:03:18 and the admin stuff and the reactive stuff and everyone else’s agenda for my time. For me, let’s
0:03:24 just say I’m a writer and entrepreneur, I need to focus on the making to be happy. If I get sucked
0:03:29 into all the little bits and pieces that are constantly churning, I end up feeling stressed
0:03:35 out. And that is why today’s sponsor is so interesting. It’s been one of the greatest
0:03:42 energetic unlocks in the last few years. So, here we go. I need to find people who are great at managing.
0:03:48 And that is where Cresset Family Office comes in. You spell it C-R-E-S-S-E-T. Cresset Family Office. I was
0:03:54 introduced to them by one of the top CPG investors in the world. Cresset is a prestigious family office
0:04:00 for CEOs, founders, and entrepreneurs. They handle the complex financial planning, uncertain tax
0:04:07 strategies, timely exit planning, bill pay, wires, all the dozens of other parts of wealth management,
0:04:12 just financial management that would otherwise pull me away from doing what I love most, making
0:04:18 things, mastering skills, spending time with the people I care about. And over many years, I was
0:04:23 getting pulled away from that stuff at least a few days a week, and I’ve completely eliminated that.
0:04:28 So, experience the freedom of focusing on what matters to you with the support of a top wealth
0:04:35 management team. You can schedule a call today at CressetCapital.com slash Tim. That’s spelled C-R-E-S-S-E-T.
0:04:41 CressetCapital.com slash Tim to see how Cresset can help streamline your financial plans and grow
0:04:48 your wealth. That’s CressetCapital.com slash Tim. And disclosure, I am a client of Cresset. There are
0:04:52 no material conflicts other than this paid testimonial. And of course, all investing involves
0:05:00 risk, including loss of principle. So, do your due diligence. Way back in the day, in 2010, I published
0:05:07 a book called The 4-Hour Body, which I probably started writing in 2008. And in that book, I
0:05:15 recommended many, many, many things. First-generation continuous glucose monitor and cold exposure and
0:05:21 all sorts of things that have been tested by people from NASA and all over the place. And one thing in
0:05:27 that book was Athletic Greens. I did not get paid to include it. I was using it. That’s how long I’ve
0:05:34 been using what is now known as AG1. AG1 is my all-in-one nutritional insurance. And I just packed up,
0:05:40 for instance, to go off the grid for a while. And the last thing I left out on my countertop to remember
0:05:47 to take, I’m not making this up, I’m looking right in front of me, is travel packets of AG1. So,
0:05:51 rather than taking multiple pills or products to cover your mental clarity, gut health, immune health,
0:05:58 energy, and so on, you can support these areas through one daily scoop of AG1, which tastes great,
0:06:02 even with water. I always just have it with water. I usually take it first thing in the morning,
0:06:05 and it takes me less than two minutes in total. Honestly, it takes me less than a minute.
0:06:11 I just put it in a shaker bottle, shake it up, and I’m done. AG1 bolsters my digestion and nutrient
0:06:17 absorption by including ingredients optimized to support a healthy gut in every scoop. AG1 in
0:06:23 single-serve travel packs, which I mentioned earlier, also makes for the perfect travel companion. I’ll
0:06:28 actually be going totally off the grid, but these things are incredibly, incredibly space-efficient.
0:06:31 You could even put them in a book, frankly. I mean, they’re kind of like bookmarks.
0:06:36 After consuming this product for more than a decade, I chose to invest in AG1,
0:06:41 in 2021 as I trust their no-compromise approach to ingredient sourcing and appreciate their focus
0:06:48 on continuously improving one formula. They go above and beyond by testing for 950 or so contaminants
0:06:53 and impurities compared to the industry standard of 10. AG1 is also tested for heavy metals and 500
0:07:00 various pesticides and herbicides. I’ve started paying a lot of attention to pesticides. That’s a
0:07:05 story for another time. To make sure you’re consuming only the good stuff. AG1 is also NSF
0:07:09 certified for sport. That means if you’re an athlete, you can take it. The certification
0:07:15 process is exhaustive and involves the testing and verification of each ingredient and every finished
0:07:21 batch of AG1. So they take testing very seriously. There’s no better time than today to start a new
0:07:28 healthy habit. And this is an easy one, right? Wake up, water in the shaker bottle, AG1, boom. So take
0:07:34 advantage of this exclusive offer for you, my dear podcast listeners, a free one-year supply of liquid
0:07:41 vitamin D plus five travel packs with your subscription. Simply go to drinkag1.com slash
0:07:48 Tim. That’s the number one. Drinkag1.com slash Tim for a free one-year supply of liquid vitamin D plus
0:07:55 five travel packs with your first subscription purchase. Learn more at drinkag1.com slash Tim.
0:08:01 Optimal minimal. At this altitude, I can run flat out for a half mile before my hands start shaking.
0:08:02 Can I ask you a personal question?
0:08:05 Now would it seem an appropriate time?
0:08:10 what if I did the opposite? I’m a cybernetic organism living tissue over a metal endoskeleton.
0:08:14 The Tim Ferriss Show.
0:08:24 All right. Dr. Rodriguez, here we are again.
0:08:25 Yes.
0:08:27 It has been almost 10 years.
0:08:28 Can you believe it? 10 years.
0:08:32 And I can’t believe it’s been almost 10 years, number one.
0:08:37 My decision to go bald early was helpful in making me look somewhat similar to the way
0:08:38 I always wear a black shirt.
0:08:43 And some people may not know also when I first moved to Austin, which is coming up on eight
0:08:50 years, also nuts. I did not have any plates or silverware at my house.
0:08:56 And I invited you over for dinner, not even thinking of this. And you’re, you’re kind enough
0:09:02 to bring over. I still have it. This red plate and a couple of your like dungeon forks and
0:09:03 knives. Yeah. So thank you for that.
0:09:04 Sure. Absolutely.
0:09:12 And a lot has happened in the last 10 years and we’ve continued to hang out and talk and
0:09:17 you have a whole new bag of tricks. Our first conversation was a barn burner of an episode.
0:09:18 Yeah.
0:09:25 People were super excited by it. There’s a lot of tactical advice and you have explored a
0:09:28 lot. You have found a lot. You’ve fine tuned a lot.
0:09:33 You stumble upon new things. You stumble upon them literally, you know? So yeah, we adopt
0:09:36 them and I’ve stored them away so I can tell you about them.
0:09:36 Look at this.
0:09:39 And I’ve stored 10 years worth of stuff.
0:09:46 So we opened the vault and here we are. Let’s just start with a very broad question. I mean,
0:09:49 what are some of the things that come to mind that have happened since we last spoke?
0:09:55 Well, what’s wild is just like a month ago, we just put out an audio book for the first
0:09:59 time for Rebel Without a Crew. The book that kind of started it all.
0:10:00 And when was that published?
0:10:01 In the 90s.
0:10:02 It was like 95.
0:10:02 Yeah.
0:10:08 Because I remember Desperado, Dust Till Dawn, Four Rooms, and that book all came out within
0:10:09 four months. And my son.
0:10:10 My first four.
0:10:11 Five things.
0:10:12 It was a packed four months.
0:10:13 I’ll never forget.
0:10:19 But it was full of stories and my diary on how I did mariachi. And it really, to this day,
0:10:23 people come up and say, not only did it help them start becoming a filmmaker, but it helped
0:10:30 them start their own business. It just applied to so many things. The idea of just taking on a big
0:10:33 challenge, betting on yourself, going where no one else is. That’s very entrepreneurial stuff.
0:10:38 What’s wild, though, is I hadn’t read it since I wrote it. So when I had to suddenly do an
0:10:44 audio book for it a couple months ago, I was astounded. I’d forgotten so much of the details.
0:10:51 And I was like, now I see why it was so inspirational. It blows your mind. Because when you’re younger,
0:10:57 six months feels like six years. But now when you hear the dates, because the dates of my journal,
0:11:05 how quickly I go from clearly clueless and penniless filmmaker, making a movie, having the idea,
0:11:12 having a movie, doing it by myself, trying to sell it to Spanish home video, to instantly being the
0:11:16 toast of the town. It’s just unbelievable. You could see why people would read the book and just drop it
0:11:21 and go, I got to go make something. Because the only reason that happened is because he took action.
0:11:23 He got up and made that movie.
0:11:31 What do you hear most from that book from readers? Because one that pops up a lot from our episode,
0:11:38 because we talked about it a bit, and also stuck with me in the book, was, and I’m sure you have a
0:11:44 better way to phrase this, but basically making a list of assets, right? Not focusing on what you don’t
0:11:44 have.
0:11:45 Yeah, focus on what you do have.
0:11:50 Right. So if you got a turtle and you have a pit bull and you got a friend who’s a school bus
0:11:52 driver, it’s like, all right, we’re going to figure out how to work that into the script.
0:11:57 And it’s all point of view, right? It’s like, you can really concentrate on what you don’t have
0:12:02 in life. And that becomes your focus. And then that becomes your life. All the things you don’t
0:12:06 have, but you never get. But when you leverage what you do have, it’s all about leveraging what you do
0:12:12 have. It’s also a thing I call freedom of limitations. Like, if we had to make a movie
0:12:17 right now with this room, that’s it. It’s kind of very freeing. It’s like, okay, this is all we
0:12:21 have to work with. You can come up with a million ideas. When you can do anything, remember, we’re
0:12:22 trying to make a short film.
0:12:23 Oh, I know.
0:12:26 When you’ve got unlimited, it’s harder, is it not?
0:12:30 I have to say, that was one of my great embarrassments.
0:12:31 We’re going to talk about it.
0:12:36 We are going to talk about it because it’s exactly what we’re talking about. Because you can do
0:12:41 anything. And a lot of times when you can do anything, you can’t do anything because it’s
0:12:47 too wide. So the smaller aperture, the fact that I had very little things was a blessing. And people
0:12:52 took that lesson, applied it to business. And the whole time I’m reading this, you can hear I’m
0:12:57 laughing. And I stopped several times, many times during the book to update. I go, by the way,
0:13:05 what you just heard never happened before this and never happened against it. It’s very rare. This is
0:13:12 lightning in a bottle. And it’s like a movie. You see incredible setup, payoff, setup, payoff. Where
0:13:17 a setup, huge setup falls in my lap. Don’t even know what to do with it. It pays off in a huge way,
0:13:22 two weeks later. And then three weeks later, then four weeks later. And then you also see why,
0:13:27 like, I was really bummed I couldn’t sell the movie to Spanish Home Video. I was going to sell it for
0:13:32 $20,000 before Christmas. And the contracts weren’t through. I went home a failure. It said,
0:13:37 Merry Christmas. I didn’t sell the movie. I was really bummed. And then you see, because it’s so
0:13:44 a journal. One month later, I had an agent suddenly because of the movie. Good thing I didn’t sell it.
0:13:49 I was chasing those guys down for the contract. They could have had it for $20,000. Two months later,
0:13:50 I sell it for 10 times that.
0:13:55 incredible. And I’m the toast of the town and getting my first movie deal. I mean,
0:14:00 it’s unbelievable. When I was reading it, I was like, now I see why. Because when you’re living
0:14:05 it, you don’t know how special it is until later. 30 years later, it’s like, it still is an unbelievable
0:14:10 story. And I think it will still inspire people today. And in that example too, it makes me think
0:14:16 of advice I got from a mentor of mine at one point. And he said, sometimes you need life to save you from
0:14:21 what you want. Yes. Yes. In that instance, that’s what I really wanted that. And when something
0:14:26 doesn’t work out, we think we made a mistake. Like that’s one of my favorite stories. The keys
0:14:31 to your next success is in your failure because you followed your instinct. You got to dig in deep and
0:14:36 look. And I show you that like, I made a movie called Four Rooms. It bombed, but I took it on
0:14:42 instinct. Not because I thought it would make money. If I just be upset about it and be bummed about it,
0:14:46 like, wow, I must’ve made a wrong choice. I haven’t learned anything. But if I go sift through it,
0:14:51 the ashes of that failure, I find I got the idea for Spy Kids from that because I saw Antonio and
0:14:55 his Asian wives look like a cool international spy couple because they’re dressed in tuxedos. And I
0:14:59 thought, what do these two kids have to say? There’s five of those movies now. And then also it’s an
0:15:05 anthology and it didn’t work. But I thought instead of four stories, maybe three stories, one director,
0:15:11 not multiple directors, I’m going to try it again. Even those anthologies never work. Why would I do
0:15:15 that? Because I just did it and I saw what I could do better. And that was Sin City. Two of my biggest
0:15:20 movies came directly from a movie that you would consider a failure. So you only know
0:15:25 that by journaling, by keeping track of the things that you thought were a mistake and you realize,
0:15:31 oh, with time, that was the right instinct. But sometimes the only way across the river is to slip
0:15:35 on the first two rocks. It’s the only way to get there. And if you don’t do it, you don’t get there.
0:15:39 Yeah. And I’m sure we’ll talk about this more. When I talk to people and they say, yeah, I journal,
0:15:45 right? I’m like, you do, but you should see what Robert does. And I’m sure we’ll talk more about
0:15:50 journaling because it makes me think of one of my friend’s mother’s very sweet older lady. She was on
0:15:57 a chairlift skiing and she’s still very active. She lives in Idaho. She was chatting up the woman next
0:16:00 to her on the ski lift. She’s like, oh, what do you do? And the woman’s like, oh, I’m a swimmer.
0:16:03 And she goes, oh, me too. I’m a swimmer. It was Dara Torres, the Olympian, right? So it’s kind of
0:16:09 there’s journaling and then there’s capital J marque lights journaling, which we’ll get to. But I
0:16:15 want to ask you first, because I just experienced this. Was it yesterday? I’m time traveling because
0:16:23 there’s a whole warp with South by Southwest. But I got to see you on stage with your daughter, Rhiannon.
0:16:29 Yeah. And I thought to myself, holy shit, she’s really good, right? Like I was going to clap
0:16:35 anyway, like no matter what, obviously. But I thought to myself, wow, she’s really good.
0:16:39 I wonder how many performances she’s done. And the answer was?
0:16:43 I know. I waited till the end because I didn’t want to tell anybody. I want to make sure it went right.
0:16:49 She never, ever performed before on stage or to a crowd. Yeah.
0:16:53 But we’ll get to this thing later because I want everybody to hear this. It’s so inspiring.
0:16:59 And I’ve stumbled upon it. It’s counterintuitive parenting. The kids step up.
0:17:01 But we’ll get to that because it’s a big thing.
0:17:02 Yeah. But yeah.
0:17:05 Because it comes back to like parenting and also
0:17:06 creating a space.
0:17:07 Modeling and coaching, right?
0:17:09 And creating a space for them to flourish.
0:17:10 And creating a space for them to flourish.
0:17:14 Not just capability, but confidence into other people.
0:17:16 Yeah. I stumbled upon it.
0:17:16 Okay.
0:17:18 I’ll tell you where it started. It started on Spy Kids.
0:17:19 All right.
0:17:25 My kids were much younger than my two actors. My two actors were eight and 11, Alexa and Daryl.
0:17:30 And my kids were younger. You know, when you’re learning how to raise kids, you tend to go a
0:17:35 little easier on your kid. Not to the Spy Kids because they’re actors. I’m treating them like performers.
0:17:39 So they were having to do, there’s no kid stuntmen. They’re having to do their own stunts.
0:17:44 They’re having to do the daily, daily challenges, mind-bending challenges for these little kids
0:17:48 to be action stars. They’re like mini Tom Cruises that you’re just throwing them in. There’s no
0:17:54 training for that. And at the end of the day, I would just see them become so confident and super
0:17:55 human. The actors.
0:18:01 Even today, the actors. And I would tell myself, I need to make sure I challenge my own kids like this.
0:18:07 Because I saw them go from just regular kids into super kids over the course of those three films.
0:18:12 So I started putting my kids making movies with us. Like one of them came up with Sharkboy Lover Girl.
0:18:17 I put them in as actors, as stunt kids. And I kept thinking, I wonder if they’re going to really
0:18:22 resent me later for putting them to work at a young age because it wasn’t their passion. These two kids
0:18:27 that were in the movie, they wanted to be actors. That’s a different that they chose. But I tried it
0:18:32 anyway. It was an experiment because I thought maybe it’ll give them a cup. And boy, it is just opened up a
0:18:37 whole world. All right. So we’re going to come back to that. Yeah, it is big.
0:18:40 And I’m going to tell you some famous people that it’s inspired. And you’ll go like, oh,
0:18:44 it was directly because of something I told them. All right. All right. So we’re going to get to that.
0:18:52 Now, right next to Rhiannon, there is a huge screen. And there are other things that were
0:18:59 being launched slash announced. So what else? Oh, yeah. The reason we had a big party at my studio
0:19:06 on the back lot of my studio, which still has that huge 90,000 square foot Alita set, because I’m
0:19:11 resourceful enough to put it in a corner of my studio where I could keep it. Since 2016,
0:19:15 we built it with steel support beams so we could have forever. It’s the largest standing set in the
0:19:18 country, if not the world. No kidding. Well, because they mow them down after each movie,
0:19:23 because the next movie is coming in. But I put it in a corner of my big section of my studio so we
0:19:28 can have it to film for Mexico, for other cities. We’ve used it on every movie since then. So we had
0:19:33 our party back there to announce this new movie company that I’m doing because I realized I have
0:19:39 so many resources there. You’ve seen my studio. I’ve got that huge set. I’ve got all the vehicles,
0:19:44 every prop we’ve ever made, every costume. And usually that savings gets passed on to studios,
0:19:49 but they just piss it away. Because it’s just like they got so much overhead. So I thought,
0:19:53 let’s make a slate of action films. It’s called brass knuckle films. Just action. Because action,
0:19:58 there’s an international appetite always. In fact, if you were to ask Netflix right now what they need,
0:20:02 they would say, action, action, action. We don’t have enough action. So let’s make something that
0:20:08 everyone needs and wants. A slate of four pictures, only that fans are usually an afterthought.
0:20:13 They’re only like, right now, people are showing their movies at South by Southwest to get the fans,
0:20:16 to get their friends to go spend money on their movies for the privilege of seeing the movies.
0:20:21 What if they made money on those movies? So you, for the cost of a badge, can invest into my
0:20:26 brass knuckle films for a slate of films. That means you got four bites of the apple.
0:20:31 One of those is going to make money and sequels. And you share in all that because you’re at the ground
0:20:36 floor of development. And that’s the revolution that we’re doing. And people come up to me all the
0:20:40 time with movie ideas saying, I got an idea for you. And they tell me and they’re ready to give
0:20:45 it to me. It’s like, no, you get to come be a co-creator because one of the movies in that slate
0:20:49 is going to be picked from one of the fan investors. And even at the lowest level,
0:20:53 everyone gets to pitch us their action movie idea. And the top 20 gets to pitch it directly to me.
0:20:58 So you can be a co-creator and fan, but there’s other perks. The perks alone would get you great,
0:21:01 but it’s not crowdsourcing. It’s not Kickstarter. You’re actually an investor.
0:21:07 We’re using Republic, which is, uh, you know, can use even an unaccredited investors can come
0:21:11 invest in this. And it’s a platform, an investing platform. They’ve done it in sports and other arenas,
0:21:17 but this is now for film and my movies, especially because I’ve got all my resources to keep the budget
0:21:23 slow. Like, you know how much the original John Wick cost? No idea. 20 million. Okay. 20 million.
0:21:28 The last one was a hundred as the audience grew. So we’re making budgets between 10 and 30 million.
0:21:35 That’s like a, a lower to mid range budget, right? Right. That’s not a lot of money for the chance to
0:21:39 make something that could turn into the billion dollar franchise that it is. Yeah. We just keep
0:21:43 making bites at the apple. One of those is going to turn into that. It’s like a hundred capital.
0:21:48 I mean, it’s, it’s, and it’s so fun because the fans, people, the other thing people always ask me,
0:21:52 you want me to believe, could you kill me in your movie? I’d love to die in your movie. Can you just
0:21:57 have me die in your movie? Chop my head off, run me over, shoot me. Everyone wants to die. So that’s one of the
0:22:02 perks. So you put in enough money, you get to die on screen in a creative way. So it’s a lot of fun.
0:22:05 I miss somebody comes in and they say, Hey, I like that. I like the model a lot.
0:22:10 I want to take 90% of it. Are there kind of limits on what investors can do?
0:22:14 Yeah. This is just for the, the develop. This is true. Like, give us money. Cause we already have,
0:22:17 we can get the money for an action film. We can already fund the whole thing.
0:22:19 Yeah, sure. I mean, the international buyers alone,
0:22:22 and we could keep the domestic and sell it to all these guys.
0:22:27 You like sell the foreign rights and use that to kind of sell the foreign rights to go ahead and
0:22:31 make it if we want, or if we have such a big idea, we could take it to a studio and get all the freedoms
0:22:35 of an independent film. We have a lot of avenues cause they just need it. This is the thing. The
0:22:40 problem is they don’t know how to make an action movie at a price because they have too much over
0:22:41 and they’re just too big. They spend so much.
0:22:47 And that’s why John Wick was an independent movie. That’s why Beekeeper wasn’t in the movie because
0:22:53 you can go make those for less, but there’s always an appetite. We’re not making dream projects or,
0:22:57 you know, art films, you know, we’re not, this is going to be just things that put food on table
0:23:03 because I want the fans to win because it’s going to be one, a great story. And two, they should,
0:23:07 they should enjoy it because they’re the ones when, when you’ve made a movie at a studio,
0:23:11 you don’t even know what you got. Yeah. Then you take it to the fans and show it to them
0:23:16 in a private screening. They give you notes and then you go, oh, we screwed that up. We got to go
0:23:20 fix that. We got to reshoot that. They’re brought in at the end and then told to go spend their money
0:23:25 on it. Yeah. It should start with the fans and as well as finish with the fans. So that’s the
0:23:29 revolutionary thing we’re doing because it’s just like rebel that I could. It’s part of my whole
0:23:36 democratizing the process, making it, removing the smoke and mirrors and letting us all enjoy that
0:23:44 process together because I’ve seen the phenomenon of creating a new label, a label on yourself,
0:23:48 a label on a business. And we’ll get to that. Cause I have it written down. You’ll see the value of
0:23:52 brass knuckle, but I’ll tell you where I did it before. Cause this is something that’s happened
0:23:57 since our last 10 years and it’s a mind blower and it ties into what the first thing you asked about
0:24:03 family. All right, sweet. So before we get there, I am so curious because you’ve written and I’m sure
0:24:11 you’ve read a lot of scripts. If you get 100, 200, 400, 500, who knows pitches?
0:24:14 Okay. Pitches, right. So you’re not getting a script.
0:24:14 No.
0:24:16 So what form does the pitch?
0:24:20 Well, we’ll give a format. It’s short. It’s like, you could be like, it should be less than
0:24:25 five minutes. So maybe two or three pages at the most, maybe one to three pages, something to tell
0:24:29 your story. And if you’ve already written, I’ve had a lot of people come and say, I have an action
0:24:33 script for you. Can I enjoy? I said, well, come be an investor and you can pitch it. I tell you,
0:24:39 I’ve sold more pitches from scripts I’d already half written or written. Cause I know more about the
0:24:43 story. I really know it. So when I go to pitch it, it’s very easy for me to tell you the story.
0:24:48 You’ve got a much better chance than someone who’s just making a pitch, but I will give you a format.
0:24:52 We’ll teach. I want to train people how to do it so that they know. So it’s kind of a film school too.
0:24:57 Can you give us just a teaser of some of the ingredients of, of a good short pitch?
0:25:01 A good pitch is anything that if you, if we could sit here right now and I could tell you a story
0:25:08 about, you know, there’s a guitar player who comes into town. He’s all you want. Music is his life.
0:25:12 And that’s all he thinks about. All he wants to do is find a place for somebody,
0:25:17 you know, to hire him. He goes into a bar in this new town that he walks into.
0:25:23 They don’t hire musicians. He leaves. Second later, a guy with a guitar case full of weapons comes in,
0:25:28 shoots the place up because he’s after the main bed honcho to leave a message.
0:25:34 So now the word gets out, find the guy in black with a guitar case full of weapons. It’s a mistaken
0:25:39 identity thing. By the end, he’ll become the guy with a guitar case full of weapons. And he becomes,
0:25:45 every movie is like a ballad, a sad, tragic ballad. He’s going to meet somebody. She’s going to help him.
0:25:49 She’s going to die. And he goes to the next town, but no longer can play the guitar because he gets
0:25:55 his hands shot. So now he has to become that thing. That’s it. That’s a pitch. But I can tell you that
0:26:00 pitch because I already made that movie. I already wrote that script. It was harder when I was first
0:26:05 just trying to figure it out. I was just taking little cards, but a pitch could be something like
0:26:10 that where I would see the potential in it and go, this one, we can still work on it. We’re going to hire
0:26:16 a writer. It’s that seed of an idea that gets people to stop and listen that you want to find.
0:26:20 That’s the lightning in the bottle. Sometimes it’s just the idea. And everyone’s got an idea,
0:26:25 just like everybody wants to get killed in the movie. So it’s like, this is how we’re going to make it fun
0:26:29 for the fans. Because who’s going to consume it at the end of the day? It’s the fans, not the zombies
0:26:34 in suits that are up there who don’t even watch these movies. I go up there, the disconnect blows my
0:26:38 mind. You go talk to some, not all executives, but you go to some studios, you can tell they don’t
0:26:43 pay to go see a movie. They don’t watch movies. They don’t love movies. It’s a business. And then
0:26:47 you go talk to the fans. I was just South by Southwest. They’re losing their minds. They tell
0:26:52 you about all the movies they’ve seen, about all the things they collect. They should be sharing in that,
0:26:55 not the executives. They’re just going to piss it away.
0:27:03 So you’re very good at hooks. So before we start recording, when we were out on the sidewalk,
0:27:06 about to come into the building, you were like, yeah, there’s this one line.
0:27:09 There’s one line at the end that I figured out. What was the line?
0:27:14 Oh, at the end. So when I told them all about this investment opportunity, at the end, I said,
0:27:22 so this is how you manifest. Because I had been talking about manifesting. They asked me the question,
0:27:26 Robert, you’re very positive, but do you have any human doubts? And I said, no. And I told them
0:27:31 why. And they were all clapping afterwards. So at the end, I said, okay, one more thing on manifesting.
0:27:36 This is how you do it. Next year, it’s our goal to come back to South by Southwest with our first
0:27:41 brass knuckle film. Now ask yourself this, if you have the opportunity to invest in being part of it
0:27:46 and pitch an idea that might be that idea, wouldn’t you rather be sitting up here with us than down
0:27:49 there in the audience? That’s how you manifest.
0:27:57 Yeah, it’s true. You hit it. You set a target. I’m talking about my old trainer. I had an old
0:28:01 trainer who’d be like, we’d be working now. And you can tell he was just making it up as he went,
0:28:06 200, 200 set up, 200 push-ups. And then we just go, go, go, go. And then, you know,
0:28:10 just picking a big number and then just hitting it. That’s kind of what you need to do. Because if you
0:28:15 aim low, you’ll hit low. But if you aim high, you might, it might go low. It might go there. And like
0:28:21 mariachi, when you read it, it went straight up. But if I hadn’t taken the action, it would never
0:28:27 have happened. So, so many people wait. That’s the discussion we had about, remember, you were
0:28:28 talking about making a short film.
0:28:33 Yep. And I said, we just got to commit to making it. We just got to go ready or not. Here we go.
0:28:37 Let’s set a date. We almost did it, but then both of our schedules, both of our schedules got
0:28:42 whacked. But you, you understood the lesson. I understood the lesson because I told somebody
0:28:46 this whole thing and he was there right where you were sitting. I think I told you somebody was right
0:28:51 here and they said, wow, everything you’re saying makes sense. You know, I’ve got a project.
0:28:57 All the pieces are actually pretty much there. I just guess I’m not ready. And I said, that’s going
0:29:03 to be on your tombstone. Here lies so-and-so. He was never ready. Why is it that art you have to be
0:29:06 ready for? In life, you didn’t know you’re going to get a flat tire. You didn’t know you’re going to
0:29:11 go to work and be fired. You didn’t know the fires are going to be raging. Every day, you’re like this,
0:29:15 you know, trying to move with the, you’re not ready. You’re not ready for anything life is
0:29:20 throwing at you, but you make, you become ready on the spot, right? Why is it that we think art and life
0:29:24 should not be the same? Why art has to be, you have to be ready before you can begin.
0:29:30 There’s no relation. They should be the same. You’re not going to be ready until you’re almost
0:29:33 done with a project because a lot of the answers you need are not going to happen until you’re on
0:29:38 the journey. And that’s what keeps most people from doing it. And so that’s why I was going to show you
0:29:43 that real time, but we are going to do it. We’re going to make a short film. You’re not going to know
0:29:47 what you’re going to make it on. And it’s going to fall in our lap because we start the process.
0:29:52 That is a huge, huge, huge lesson. You got to start it.
0:29:56 You just have to start. You got to start. I mean, in a couple of weeks, you know, I have this,
0:29:59 I don’t even know if I’ve told you about this. I have a card game I’ve been working on kind of
0:30:03 secretly for like two years. Card game. Yeah. Card game.
0:30:04 Yeah. You always love, you’re always gifting me card games.
0:30:11 Yeah. I love card games. And the reason that it happened ultimately is just booking a flight to go
0:30:18 spend time with a master game designer and deciding by the time we leave, we’re either going to have a
0:30:27 game or we will have stopped because we did a couple of, I would say B minus attempts where we didn’t
0:30:33 commit in that type of way. And we met in different places around the country and we would play test
0:30:38 different options and different concepts. And then this final trip was like, okay, look, we’re both
0:30:44 really busy. We’ve given this a few shots this time. We’re just going to pound our heads against the
0:30:51 wall. You’re aiming up there now, and we’re going to have a game or this is it. And that kicked off the
0:30:53 whole process. Now it’s going to be in thousands of stores.
0:30:57 That’s great. That’s the way that’s, you know, you used to ask me, how do you get so much done?
0:31:05 It’s like, you know, I set the bridge on fire and then I run across. Otherwise it’s not enough steak.
0:31:11 You have a way out. Like the last ones you had, you had a way out. Yeah. Y’all didn’t have that goal.
0:31:13 Yeah. You’ll take the escape route. Yeah. It’s easier.
0:31:18 But if you just have, you’ve burned the bridge, you’ve got to go. When we have a deadline,
0:31:22 it’s a blessing. Like today, I even asked you earlier yesterday, I said, do you really need it
0:31:26 by tomorrow? Cause we could push it to later. No, no, let’s do it. Yeah. So when you have a deadline,
0:31:30 you said you make it happen, you make it happen, but we tend not to do that with ourselves and it’s a
0:31:38 crippling thing. Just a quick, thanks to one of our sponsors and we’ll be right back to the show.
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0:33:11 thinking of the audio book that you just produced and the book, we have spoken over the years about
0:33:13 you writing another book.
0:33:13 Yes.
0:33:15 So what happened to that one?
0:33:16 What happened to that one?
0:33:20 You told me right after we had our talk, he says, “Did you finish that book?” Because I sounded like I was
0:33:27 almost ready. The idea was called “The Creative Life” because, you know, I gave a talk once about
0:33:32 Pro Max or something about creativity. They introduced me and they said, “Robert,
0:33:37 cinematographer, editor, composer, screenwriter.” They went through all my credits. And I got up there
0:33:42 and I said, “I feel dizzy just hearing all that stuff.” And there’s this book out. I always see it
0:33:47 in the bookstores at the airport. It’s called “The One Thing” about doing one thing. And I was thinking,
0:33:51 “Well, that doesn’t apply to me, obviously.” But then I thought, “There actually is one thing that I do when
0:34:00 I think about it. It’s not those jobs. I live a creative life. I apply creativity to everything I do. And that’s why
0:34:05 anything that touches creativity is open to me. So I can paint. I can draw. I can do anything.
0:34:11 Because 90% of any one of those jobs is actually the creative part. The technical part about any
0:34:17 one of those, whether it’s music, say, 90% creative. Some of the best musicians don’t know how to read or write
0:34:22 music. That’s the technical part. So I realized that as I did all those jobs, that was the thing.
0:34:25 So I said, “I want to write a book called ‘The Creative Life’ where every chapter is about
0:34:31 raising your kids, painting, drawing, filmmaking. You’re going to see the same lesson over and over
0:34:36 because it all applies.” So that was the idea. And you asked what happened to it. It’s like,
0:34:43 “I’m going through this whole new chapter that’s so massive. I would feel dumb to put out the book
0:34:48 now because I know this is going to change all my thinking.” And it was when I turned 50, I thought,
0:34:55 “I wonder if there’s some other job I could have where I don’t have to be doing this harder work
0:35:00 as filmmaking. But the knowledge I have, there must be something. I don’t even know what jobs are out
0:35:05 there. This is the first job I ever got was making movies. I was so young. So I literally bought jobs
0:35:10 for dummies and was looking through it. No joke, because they have these little icons just to see
0:35:14 what’s even out there. I was like, “I don’t want that. I don’t want that.” It got to filmmaker and that
0:35:20 little icon is a guy with his arms up like this. And it said, “This is the best job. Get to be creative
0:35:26 with your friends, make stuff, and then just sit back and let the money roll in.” It said, “But,” it says, “But,
0:35:35 99% of film students don’t get this job. So forget that dream. Oh, clearly I got the best job.” But I used to
0:35:39 think, “Well, I guess I could keep making movies. I guess that’s been good to me. I guess I could just
0:35:46 keep making more.” But then I had to work with my kids for that Red 11 project, remember? It was one
0:35:51 where we had to do another Mariachi, another $7,000 movie, but with digital cameras and show people how
0:35:55 it was done today. We were going to make one and I made all the other filmmakers that were in our group
0:36:01 for this TV show I was doing called Rebel Without a Crew. You could only bring one person, just like I had
0:36:05 Carlos Gallardo, the main actor from Mariachi, only one person. You got to do everything. He can be your
0:36:08 sound man or he can be your cameraman, but you got to do everything. You got to edit it, you got to shoot it,
0:36:12 you got to write it, and you got two weeks. Like, I had only two weeks to do Mariachi. And I saw the
0:36:18 filmmakers, just like that thing I was saying about the kids pushing them, they’d only done short films.
0:36:22 None of them had done a feature. This is your first feature. And we’re going to document it,
0:36:27 so the documentary camera is going to be on you, like, you know, reality TV. I saw them turn superhuman
0:36:30 between the first week and the second week. Once they started shooting, they had no idea how they were
0:36:36 going to do it. They were like, “Oh my God, this is just so hard.” By the second week, I go to ask them how it’s
0:36:40 going. They’re already talking about their next three films. Suddenly their idea of what impossible
0:36:46 was went from that to that. And so I did that as well. I wanted to do that, but with my kid,
0:36:50 Racer, I picked one kid, my son, Racer, who hadn’t been working with me in film at all for a while.
0:36:54 I brought him to be my co-writer, my co-lighter, my sound guy, and I didn’t show him how to use the
0:36:59 sound equipment. I waited till we were about to start filming. Then I was like, “Okay, this is how
0:37:04 it works. Go.” And because we’re documented. And I wanted to show people that even without any experience,
0:37:09 you can go make a movie in two weeks with no money. And we did. And that thing ended up going to festivals,
0:37:16 even getting over to Director’s Fortnight at Cannes. People were flying us and paying us to go speak
0:37:21 about our masterclass on how we made that movie and show clips from the making of.
0:37:27 We’re making money from this little no money movie. The only reason we had to stop doing a tour,
0:37:33 we went to Columbia, we went to Sweden, we went to Paris. I mean, we were doing really well.
0:37:37 My kids were like, “Dad, you’re right. This is really weird.” I said, “Yeah, better than I thought.” We
0:37:40 only had to stop because we’re shooting “We Can Be Heroes.” But the reason I’m talking about this label,
0:37:45 what blew my mind about it is my kids… Labels you apply to yourself.
0:37:50 Yeah. Labels you apply to yourself and to just a label like a company, a fake company within your
0:37:55 realm, like Brass Knuckle. I would call that a label. I still do other things, but that has a very specific
0:38:00 target. And I’m getting all kinds of ideas just popping in my head because I started that. It’s
0:38:04 just this phenomenon, like ideas I never would have thought of before, because now it’s got a place to
0:38:08 go. Just like with yourself, there’s a label I’ll tell you about. I came about that with yourself
0:38:13 that really transformed. But my kids, I thought, “They’re going to resent me again. I’m afraid they
0:38:18 might resent me for having to do this $7,000 movie for two weeks and see how much hard work it is.”
0:38:23 Because they had their own interests. They weren’t going to want you to make movies. But I said, “I need
0:38:27 him to be in it because he’ll be a good example.” And I made my other son act in it because he made
0:38:32 those knives. I was inspired to make one of the characters a knife guy. And I asked them to do the
0:38:37 score too with me, write the score. And I thought, “They have their own interests. They’re going to work on
0:38:42 this one day and hate it. I’m prepared for that.” Instead, they came at the end of the day,
0:38:45 all excited, their eyes all bugging out of their head. And they were like, “Dad,
0:38:52 the actor didn’t show up. The script didn’t match the location at all. And when we asked you in the
0:38:57 morning, what were we going to do?” You said, “I don’t know. We’ll figure it out.” And we thought,
0:39:05 finally, the movie that stumped my dad. But then by the end, we figured it out. They’re all excited. I went,
0:39:10 oh, they don’t realize that’s the creative process. That’s every day on a movie. But it’s also every
0:39:15 day in life. It’s the same. And I realized on the making of that movie, so little of what I was
0:39:22 teaching them was filmmaking. It was all life lessons. How to take on this impossible challenge.
0:39:27 Two-man crew making a feature. I didn’t know we were going to go to Cannes. I actually didn’t
0:39:32 predict any of that. I just wanted to finish for the project. But you get blessed because of that.
0:39:38 And the label we created is because my son had come to me and said, “I wanted to draw comics,
0:39:43 but I wasn’t born in the golden age of comics.” But I am born in the golden age of technology. So
0:39:49 I’m thinking maybe instead of doing storytelling through comics, give up the drawing thing and do
0:39:53 it like with VR. So let’s start a VR company. Let’s start a company. I’ll show you how this works.
0:39:59 All these VR companies need people to buy their helmets. They need product. If I call them up and say,
0:40:04 “I have a VR company, they’ll give us money to go make them a short film.” Sure enough,
0:40:09 I just said, “Here, we all have double our names, all the kids. Let’s start a company called Double R.
0:40:13 It’s the label we made. So now we’re going to make t-shirts. We’re going to make notepads.”
0:40:17 And they loved them. They were looking at them. Because now any project, any of you have,
0:40:21 if Rhiannon has an album she wants to do, or Rebel wants to put out a knife, then we can do it through
0:40:24 Double R. It’s our company. Now, when you have a company, you have a label,
0:40:30 it’s now manifested. Now you got to do stuff to fill. You have to do stuff to put into it,
0:40:31 right? Yeah.
0:40:35 You get all these ideas. Michelle Rodriguez and Norman Reedus are in this movie called The Limit.
0:40:41 Remember that one? They made us a logo, Double R logo, big logo. It went in front of our $7,000
0:40:46 movie also. It went around the world. That same year, three projects in one year,
0:40:52 I went to Netflix to ask if they needed any movies. And they said, “We need family,
0:40:56 spy kids type thing. Can you come up with something?” I kind of came up with it in the room.
0:41:00 People are always ripping off spy kids. I should just rip off myself. Little kids have to save their
0:41:04 parents. Only what if they’re superheroes and the parents are superheroes that get captured,
0:41:09 like the Avengers get captured. Little kids with superpowers, they don’t know how to use them yet.
0:41:15 And the little girl who has no powers has to wrangle them together to work together to go save the day.
0:41:22 Simple pitch, right? I wrote it out, wrote it with my kids. We came up with all these fun,
0:41:28 special powers we’ve never seen in any movie. We took it. We sold it. It’s the biggest movie on Netflix,
0:41:33 most watched and rewatched movie in their history. Nothing can touch it because kids watch it over and
0:41:40 over and over. And that has a big, glorious, the same double R logo in front of it. And my kids were
0:41:46 just like, “Dad, this really works.” I was like, “It’s better than I thought. I was just doing it as an
0:41:51 example. I did not know it was going to put food on the table in that way.” So I’m going to do that
0:41:55 again with Brass Knuckle, but with the fans, because we’ve done that before. Because I told them,
0:42:01 “Come be a part of it because proximity is everything.” Remember I showed you that painter I went and watched
0:42:07 and how my painting changed. Even though he didn’t teach me one thing, except I saw that he just had
0:42:12 a regular brush, regular paint. He didn’t know how he was going to attack it each time. It made you go
0:42:18 like, “Oh, I thought I needed to know something. I had a mental block.” And I went and did it again.
0:42:22 And it was like, there it was. It was unbelievable. The proximity sometimes sees your loss. I tell people,
0:42:27 if you come be a part of the company, the proximity to us as filmmakers making this stuff,
0:42:31 you’re going to get 10 ideas, 20 ideas on your own. You’re going to see your own thing. You’ll be
0:42:37 part of this, but it’s almost like a masterclass without me even trying to teach you. That’s just
0:42:43 what I found by being proximity, by being around James Cameron, by being around George Lucas,
0:42:47 by being around Spielberg. They didn’t necessarily give me lessons, but just seeing how they move
0:42:52 through the world, even for just a moment in time, transforms you completely.
0:42:57 So let’s say somebody’s listening to this and those are big names out of reach for most folks.
0:43:03 But they’re equivalent in their world. They’re equivalents of people that they really admire,
0:43:08 that if they just had proximity to them, they didn’t even have to get a lesson from them.
0:43:12 And they would just, it would just change because you’re just, you know, your parents used to tell
0:43:16 you this, be careful who your peers are. That meant one thing when you were younger, it means even more
0:43:20 now when you’re older, like surround yourself with people who are heavy hitters. We talk to each other
0:43:24 all the time because it just raises our game. Remember you coming over to my house and seeing,
0:43:28 Hey, what chopper is that? Did you, you know, you’re like seeing upgrades that you can have
0:43:34 just by proximity, you pick stuff up. Can you say more about labels?
0:43:39 And so label, I’m going to give you my favorite label example. And it’s a thing I’ve realized now
0:43:44 when I did the audio book that I already knew and had forgot. People would come up to me sometimes
0:43:49 and tell me some quote from my book. And I’d be like, that’s from my book. I was smart back then.
0:43:57 What happened? But there was something I said in the book saying, stop aspiring. Stop saying you’re
0:44:02 an aspiring filmmaker. People come up to you. I’m aspiring filmmaker. The words we use are really
0:44:06 strong. You’re always going to be aspiring. You’re never going to get there. If you call yourself
0:44:10 somebody who’s on the journey, say you’re a filmmaker, make a card, make a business. I said,
0:44:17 make a business card that says, I did director, cinematographer, editor. Then what do you have
0:44:21 to do? Just like the label, you have to conform to your identity. You have to go do that stuff now.
0:44:25 And suddenly I have movies out. You go make movies because that’s what a filmmaker does.
0:44:27 What does an aspiring filmmaker do?
0:44:28 – Aspires. – Aspires.
0:44:33 – Yeah, you aspire. I knew that back then, but I’d forgotten it. The reason I remember it is,
0:44:36 okay, you always remark, “Hey, Robert, you’re always in good shape.”
0:44:41 Did I ever tell you I hate sports? I hate working out. Did I ever tell you that?
0:44:46 – I’m not sure you tell me. – All through high school, they would want me to be on the team.
0:44:50 Small school. I was so tall. Please come be on our team. I was like, I don’t know.
0:44:52 – Which sport? Football? – Any of them. Basketball,
0:44:56 football. We need players. And you’re so big. Come be on the… I was like,
0:45:00 I don’t even know how these games are played. I’ve never followed sports. I’m a filmmaker.
0:45:04 I’m an artist. I’m a musician. And there’s a line in the faculty, Elijah Wood says,
0:45:07 that’s my line. I used to tell people, I don’t think you should run unless you’re being chased.
0:45:11 I just did not love exercise at all. But then later when I was making movies,
0:45:15 my back kept going out because I was doing steady cam because I was sitting drawing for long hours.
0:45:21 My back every year would go out really bad where I needed like a walker and a quarter sun shot,
0:45:25 you know, quarter sun shots on my back. I remember Ricardo Montalban and his wheelchair at 84.
0:45:32 And I had a walker when Spike gets to my back and he goes, Robert, I’m 84. What’s your excuse?
0:45:37 You have to work out. I was like, I know, I know, but I don’t know how. I hate sports.
0:45:41 I hate working out. The next year I worked with Stallone on Spike gets three. And I said,
0:45:47 how can I get better shape so my back doesn’t keep going out? He goes, get thee a trainer.
0:45:52 Anyone who ever got anywhere physically had a trainer. I say, even you, don’t you know,
0:45:57 don’t you just go train? No. He said, no, no. I’d rather, you know, rearrange my sock drawer than go
0:46:02 work out. I was like, well, even if you even need a trainer, well, what chance do us mortal men have?
0:46:07 So I got a trainer and I would hide from him. I would pay him not to show up. I hated it.
0:46:13 I hated working out. I would feel sick when he’s coming over and I would half-ass the workouts,
0:46:18 you know, cause I hate it. So this woman, a friend of mine from Mexico, older woman,
0:46:21 my doctor told me I have to stop smoking. So I’m not smoking right now. I said,
0:46:27 you’re going to go back to smoking because your identity is a smoker. You’re saying you’re a smoker.
0:46:32 You’re going to go back. You have to change your identity. You have to say, I’m a non-smoker.
0:46:37 I’m a non-smoker. Cause then if you just identify yourself as that, you’re going to then conform
0:46:42 to your identity and you’re going to, what does a non-smoker do? They hate smoke. It makes them sick.
0:46:47 Stay away from cigarettes. All right. I’ll try that. I don’t know if it worked cause I didn’t follow up,
0:46:52 but right away I thought, Hey, I should apply that to myself. What, what the, it’s a good thing to go
0:46:56 checklist yourself every few years. Where are some places that I’m not doing that,
0:47:01 that I can change the label. So you know what I did? And you got to go 180. If you go by degrees,
0:47:06 you’re going to get anywhere. 20%, 30% bullshit. 180. Of course I hate working out. What do I say to
0:47:12 myself all the time? I hate sports. I hate working out. I hate exercise. I love food.
0:47:21 I have to change my identity. You know what I said? I’m an athlete. I’m an athlete. I’m an athlete.
0:47:27 By the next day, everything changed. What does an athlete do? Loves to work out. Makes time to work
0:47:31 out. There is no time, but you make time when you love something. You eat right because you’re an
0:47:38 athlete. As soon as your identity changes, your label, you conform to that. So that’s the power of
0:47:44 identity and the words we choose to describe ourselves. I catch people all the time describing
0:47:49 themselves and I go, you got to change that. You’re already out of the gate. You’re talking about yourself
0:47:53 in a way that’s not going to help you. Besides the aspiring, which you mentioned,
0:48:01 where people are handicapping themselves by labeling, using that term within say filmmaking,
0:48:08 are there other ways that you see people handicap themselves just in terms of how they view themselves
0:48:15 or their situation or what they have or don’t have? Are there any other common patterns that come up?
0:48:21 Common ones. I don’t know. Anything that takes you out of the game early by a belief,
0:48:26 you have. I don’t have access. Everyone has access now. You have a phone. You can make actually a story
0:48:31 on a phone or you can write. I just say, whenever I hear anyone use some kind of negative
0:48:36 connotation to something like, “Well, I want to make something, but I just don’t have the time.” It’s
0:48:40 like, there’s no time. If you’re waiting for time to have, it’s not going to happen. All the time is
0:48:47 gone. There’s no time. But we can make time. We can make time for anything that we put our mind to.
0:48:53 So don’t give me that shit. That’s like taking a hatchet and chopping off your left leg before the race.
0:48:59 You literally did this to yourself. You just hobbled yourself for no reason with these beliefs. And it’s
0:49:05 all you. You’re your own worst enemy. You’re like the one in the audience in your way. The biggest
0:49:09 obstacle in your life is you. Always. I asked this question outside because I was curious what your
0:49:14 answer was. But one of the questions that came up was, “So, Robert, you’re real positive. Do you have
0:49:15 any human doubts?”
0:49:17 I wanted to come back to that. Yeah. And your answer was no.
0:49:20 Yeah. We’ll come back to that. I just didn’t want to forget. It seemed like I could work it in here.
0:49:25 Yeah. Yeah. No. Don’t get after it. I wanted to, because I’m sure a lot of people are like, “What? No doubts?”
0:49:26 Yeah.
0:49:29 Okay. So walk us through that.
0:49:34 Yeah. So they said, “Robert, you’re real positive. Do you have any human doubts?”
0:49:38 And I said, just to give me a chance to think, because I had never heard it that way, human doubts.
0:49:44 But I said, “What do you all think?” And then I see people going like, “Yes, yes, yes, yes, yes, yes, yes.”
0:49:48 Because that’s the real answer you would probably give. But I like to do counterintuitive for
0:49:55 everything. So I went, “No.” Why? Because that’s a manifestation, isn’t it? And I have no human
0:50:02 doubts. Because I know the process, too. You can’t wait to be ready. They say knowing is half the battle.
0:50:06 What’s the other half? Not knowing. I think that’s more important, because that’s where the magic is.
0:50:09 You don’t know what the other half is. Not knowing is half the battle.
0:50:14 Yeah. Not knowing is the major part of the battle. I got there to the set. I didn’t know I was
0:50:18 going to do any of it. But as soon as I saw how limited the options were,
0:50:23 suddenly it became very clear. There was only one way to do it. And if you have that confidence going
0:50:29 into each day, you shouldn’t have any doubt. You shouldn’t have any fear. A failure, my biggest
0:50:34 successes came from my failure. So why would I fear that? What doubts? I couldn’t think of any. Can you
0:50:38 think of a doubt I should have? Like, give me an example of one doubt you think, or even you,
0:50:44 what doubts would you have? I think I need to basically take the last four minutes and just
0:50:47 listen to it every morning. I just need to replay that every morning. I think it’s a good reminder.
0:50:50 Okay. But what doubts do you have? Well, I’ll tell you, I mean, and this is,
0:50:55 you know, hopefully my parents aren’t listening to this, but like, I grew up in a, in a household
0:51:02 where there was a lot of, there’s a lot of negativity and there’s a lot of, we don’t have X because we’re
0:51:07 never going to have Y because we can’t ever have Z because.
0:51:10 Did you already prove that wrong though? Yeah, no, exactly.
0:51:13 That’s all right. Now you go off your own history now instead of that history.
0:51:16 No, totally. So there’s, there’s software to overwrite.
0:51:19 Yeah. And those are formative years. So yeah, that’s, that’s, that’s hard.
0:51:22 I can’t think of any excuses that you should have.
0:51:27 What doubts would you think you would have just so I can hear? Cause then I go, okay,
0:51:31 I agree with that. I just hadn’t thought of any, the spot, it was so on the spot. I was wondering
0:51:35 what you would answer on the spotlight. You know what I appreciate about the question is how
0:51:40 effective it is at making you stumble because of the human doubts.
0:51:45 Yeah. Let’s drop the human doubts. Let’s just drop the human doubts.
0:51:49 Let’s just drop human. No, I know. I just love that. I’m like, wow, that’s a masterful judo move.
0:51:54 Have you dropped that? Doubts. What doubts do you have? They wanted to humanize you because you sound
0:51:57 like Superman when you talk, you know, a lot of times when we give these talks, everyone thinks you’re
0:52:00 Superman, but we know each other. We know that we all have
0:52:05 weaknesses and this and that, but we don’t want that. And we don’t want to manifest that.
0:52:10 So we don’t dwell. Yeah, totally. I would say that my inclination would be if I were on stage in your
0:52:15 place, I probably would have said yes. But then if we dug a little deeper into what that means to me,
0:52:18 I think it would differ from probably how a lot of people would use it. Right.
0:52:23 So I would have doubts in the sense that I don’t know how something is going to turn out,
0:52:29 but that doesn’t, but that doesn’t mean that I don’t get started. And that doesn’t mean that I
0:52:35 stop experimenting because yeah, my whole thing is like, look, for instance, like I’m launching this
0:52:40 game. People are like, what a game? Like that doesn’t make any sense. It doesn’t connect to the
0:52:44 other things that you’re doing. I’m like, exactly. Because I want to see what’s behind door number
0:52:49 three. And I’m not going to know unless I do this thing that’s off menu. So what, like, what are you
0:52:54 going to do with it? What’s next? I have no idea because anything I could plan now is not going to be
0:53:01 as interesting as a lot that is going to surface. If I do well with whatever the next step is in front of
0:53:08 me, that’s it. That’s all I need to figure out. And a lot of the time you’re, as you said, you’re going
0:53:14 to get there and circumstances will have changed. The thing that was supposed to get shipped from
0:53:21 the warehouse isn’t there. And you’re like, okay. And actually, you know, side story,
0:53:25 I’ll keep it super short. And then I want to actually ask you about a name that came to mind
0:53:30 when you said the creative life, because then I thought the creative act and I thought Rick Rubin,
0:53:36 and I know you’ve met Rick Rubin. So I want to ask that. But when I had my very first presentation
0:53:43 at South by Southwest 2007, it was the launch of the four hour work week. And I had put together the
0:53:50 most incredible presentation of my life. I had rehearsed at a friend’s garage to his chihuahuas.
0:53:54 That was the only test audience I had. And if they got bored and walked away, I had to change my,
0:54:00 my presentation. That was the only fine tuning, but I was so proud of this huge deck that I put
0:54:04 together. PowerPoint. I get to the venue, my computer crashes.
0:54:10 And it’s like, well, here we are now. Now what roll up the sleeves now.
0:54:13 And it ended up being so much better than if I had used the slides,
0:54:17 it ended up being so much better because I’d rehearsed enough that I knew the material. I
0:54:21 didn’t need the visual references. That was a self doubt that I had that I wouldn’t be able
0:54:25 to give it without the slides. And then the slides went away and it was better than I could have.
0:54:29 So you might have it. And so you can have a doubt, but you’re not going to live and breathe by that.
0:54:32 You’re going to push past it really quickly because you should have fear. You should have
0:54:37 some fear going into something. Yeah. I call it fear forward. Fear forward. Yeah.
0:54:42 Fear forward. Yeah. Like have the fear, but don’t, don’t let it cripple you. Just go forward,
0:54:45 knowing you’re doing something that’s outside of your comfort zone and you’re going to reap
0:54:50 great benefits. Yeah. You might slip on the first two rocks. It might be four rooms.
0:54:53 But if you don’t look at it with a negative point of view, you turn it into a spine.
0:54:56 I think that’s an RR merch t-shirt opportunity. Yeah, that’s an RR merch t-shirt opportunity.
0:55:00 I told somebody that years ago, they went, fear forward. I like this. I guess that’s kind of catchy.
0:55:04 But I tell you, I got to tell my kids this after we did this project together. I said,
0:55:10 now you really know how it works. Because my son Racer said he was helping me with a film,
0:55:15 right? Yeah. By the end of the two weeks, they interviewed him about it. He’s waxing
0:55:20 philosophical about the creative process like he’s been doing it for a decade. Yeah. He said,
0:55:28 I never knew how my dad did El Mariachi. I mean, every day was, everything was just falling apart,
0:55:32 but we’d figure it out. Every day was figured out. But I never knew how he did that movie for no money.
0:55:36 But now I do because we just did it. Yeah. He didn’t know either. He just started. Most people
0:55:42 never start. He figured it out day by day. And now he knew it in his blood because he had just done
0:55:47 it. So I got them together and said, this was the greatest project we could have done together when you
0:55:52 work with your kids. Because they get to be in the boat with you figuring stuff out. They see you
0:55:56 trying to figure it out. And they’re figuring, they’re part of the solution. We’re going to get
0:56:04 into this. I’m going to talk about nepotism. Why anyone who says anything negative about nepotism,
0:56:07 you just get slapped in the face and kicked in the balls by their kids. It’ll blow your mind.
0:56:10 All right. We’re going to come back. We’ll get back to it. But this is the main thing. This is the main
0:56:17 thing about this is that I told them, if I ever get hit by a bus, you all know what to do now because
0:56:22 we just did it. It’s all life lessons. Yeah. You get together, you make your plan,
0:56:27 which is like your script. You make it as bulletproof as possible. So then you can go
0:56:33 do your film shoot. So you can go take action. Watch it all fucking fall apart. It’s like your
0:56:39 projector thing. And then that’s when you roll up your sleeves and go, now let’s take this chicken
0:56:45 shit and make chicken salad. And it always comes out better. It always comes out better than your
0:56:51 original plan. Every time. Wash, rinse, repeat. That’s life. You just learned the most valuable lesson
0:56:55 of life on this little microcosm of what life is, which is a movie. Because remember,
0:57:00 life and art should be the same. You’re writing a story and you’re writing your own story while
0:57:03 you’re doing it. The story of who you are and who you’re going to become and what you’re going to
0:57:08 achieve. As you’re writing a fake story, that’s why they go together. That’s why people identify with
0:57:14 stories. You’re literally, we’re writing our own story. So do you have doubts? Yeah, but I’m going to
0:57:18 write past it. I’m going to write my story to where I’m not the guy that has doubts. So that’s the power of
0:57:24 creativity and labeling. And that’s a label. Am I going to say I’m a guy who has doubts? No,
0:57:29 because then guess what? Now I have doubts. Yeah. And if there is a doubt I can identify,
0:57:34 I’m sure, like you just did, figure out a way past it right away. So that’s why I would just say blanket.
0:57:38 I don’t have any doubts because I don’t want to be the guy that has doubts. And I’m going to figure
0:57:41 out, you know, it’s kind of like you have to make your business card first that says a guy with no
0:57:47 doubts. I’ll add that to it. I have no doubts. I remember Kevin Smith, filmmaker, clerks and all that.
0:57:53 He sent me a script called Dogma. He said, I wrote this script. It’s got special effects. It’s
0:57:57 all out of my wheelhouse. I said, but you wrote it. And he goes, yeah, but it’s definitely a Robert
0:58:02 Rodriguez movie. You direct it. I go, why didn’t you want to direct it? It’s too big for me. Well,
0:58:07 now you have to make it. You fear forward. You’re doing something that pulls you out of your wheelhouse.
0:58:11 And you’re going to, he was so thankful that I told him that and that he did it, gave him the
0:58:15 permission to go do it. And it transformed his career, you know, because now he wasn’t doing
0:58:21 the comfort zone. He was now going even way, reaching way beyond. So fear forward, get out of
0:58:26 the comfort zone. That means you’re on the right track. If you don’t have fear on something you’re
0:58:30 going to do that day, probably fucking wasting your time. You’re doing something that you’re just
0:58:35 spinning your wheels. So you want to put yourself out there. That’s not the same as having doubt.
0:58:40 I don’t think, I think it’s just, it’s a, it’s a good litmus test. I have a little bit of doubt
0:58:43 that this is my daughter’s going to be able to inform tomorrow because it’s the first time
0:58:47 in front of a crowd. She may get nervous. I don’t know. She’s never seen a crowd.
0:58:51 She might step out and see the crowd and freeze. Who knows? But I don’t want to put that out there
0:58:54 because I don’t want to manifest that. I want to manifest and we’re going to have cameras filming.
0:59:00 We’re going to make this a big moment. And she rose to the occasion because she looked like a seasoned
0:59:07 vet. So Rick Rubin, his very first podcast, as far as I’m aware, was on this podcast,
0:59:14 the Tim Ferriss show ages ago. It was in his sauna. He actually, he actually didn’t think I was going to
0:59:19 say yes because he had a barrel sauna at what was Shangri-La in Malibu and ended up burning down.
0:59:25 Sadly, this is quite a few years ago now, but he said, okay, okay, we’ll do the podcast. At that time,
0:59:30 he basically did next to no media. And he said, we’ll do the podcast, but it has to be in the
0:59:34 sauna and we’re going to do the sauna and then cold plunge and sauna. And I was like, all right,
0:59:41 just sweating it out. So we did it in the sauna. Now, the one thing we neglected to consider was not
0:59:45 the temperature of the recorder because I could put that on the floor and it was fine. It was the mic.
0:59:51 So we had to wrap those in towels as we did the interview, but you got to meet Rick
0:59:57 handful of years ago. What was that like? I don’t want to even speculate. I mean,
1:00:02 I have my own guesses as to like how you guys might measure interact, but what was that like?
1:00:06 Oh, it was wonderful. He showed up at my house. Okay.
1:00:12 You know, he’s in town producing a band. I heard he wanted to meet me. So I said, yeah,
1:00:16 you can just come to the house. So he shows up at my house. So I figured, oh, he’s probably heard
1:00:21 some of my podcast stuff very similar to, you know, his creativity. We all approach it differently. We
1:00:27 all have our own theories. Like, so he shows up and he goes, I don’t know who you are or what you do
1:00:30 or anything about you, but I had a feeling I was supposed to come meet you. And I went,
1:00:36 so I said, you came to the right place. I’m going to show you my house. You know,
1:00:38 you’ve seen my crazy house. I’m going to talk about my house. I’m talking about how I
1:00:43 drew it first, envisioned it, built it. By the time I finish telling you about my house,
1:00:48 you’ll know who I am. So I go out and I give him the whole tour and he’s like, okay, okay. Yeah.
1:00:51 That was just like my house. It might’ve been the one in Malibu. That’s just like my house in
1:00:56 somewhere. And he goes, we’re the same guy. So we go outside to where my waterfall is.
1:01:00 And my phone, we sit and he puts his feet up and we just start talking. I just start,
1:01:04 he just wants to hear about it. So I start telling him what we’re talking about, all this creativity,
1:01:09 my whole spiel on it. And he’s like, yeah, yeah, yeah. We’re going on and going on and going on,
1:01:16 going on. I’m doing most of the talking. And then as we’re leaving, he said, I want to give you my book.
1:01:21 I’m about to put out a book. This book wasn’t out yet. So he ran into the car, came back out,
1:01:24 and it was just like a galley version of the book. I said, what is this? And he’ll,
1:01:28 actually, it’s pretty much everything we were just talking about is in there.
1:01:32 I was like, really? Okay. I’ll give you my books. I gave my books. The picture I have,
1:01:36 I’ll show you is him with my book in front of my house. And then he left. And then when he left,
1:01:42 I’m reading, I’m like, oh my God, I read the book. It’s so similar, but different to things that I,
1:01:49 because we all come at it from a different area, but his solutions were similar, but different because
1:01:53 it’s from a different world than mine, same questions, same kind of things. It’s that hive
1:01:58 brain. I don’t know when you, and you said this before you said, because you’re a creative, I know
1:02:04 other creatives like this, you have one foot in the magic realm. And it’s like when your foot’s in there,
1:02:08 you pick up the signal from the others. You all kind of get ideas from each other before you even
1:02:12 met. It’s why he knew to show up. And I’ve had people just show up, drawn there, known they’re
1:02:17 supposed to be there, not knowing why. It’s this kind of magical thing that when you get into the
1:02:22 creativity world, you really are tapping into the universe in a way to get your ideas. Because
1:02:25 your brain’s not smart enough. I’m not smart enough to come up with these ideas. They’re out there.
1:02:29 And everyone in every discipline has a different line for that. Like Keith Richards says,
1:02:33 I don’t come up with these riffs. They’re all floating around. I was just the first one to pull
1:02:37 it down and use it. You know, they all have their version of that, that it’s not from them. And that’s
1:02:41 the best way to think because then there’s no ego evolved. And if you have no ego, that it’s just,
1:02:46 you’re a conduit for this creative spirit to come through you. Well, then you can do anything. I can be
1:02:50 a good pipe. I just get my ego out of the way and let it come through. Because you know,
1:02:54 when you’re in a flow, you know, you start, I don’t want to write this book. And then you start writing,
1:02:58 the first few lines come out, then it starts going and you can’t even believe what’s coming out.
1:03:03 It’s because creative spirit, and my theory is, doesn’t have hands. It’s waiting for you to get
1:03:10 off your ass and pick up the pen and then it can help take over. And so always take action. That’s why
1:03:16 I say always take action. Don’t wait to be inspired. Action first, inspiration second. Because if you wait
1:03:21 to be inspired, like to make your short film, good luck. They ain’t ever coming. But if you just start
1:03:27 making the film, ideas you never in a million years would have come up with come into your head,
1:03:32 because it’s not you. It’s coming through you now. It’s like, finally, you’re going to go make that
1:03:37 film we’ve been wanting to make. Creative spirit must be very disappointed in people who don’t take action,
1:03:43 who sit there. And I tell you where I figured this out. When I was a cartoonist at 19, I had a daily
1:03:48 cartoon strip. It’d take me hours to draw it. I would have to draw a little bit, try to figure
1:03:53 out a joke. And I’d have a deadline every day. I wouldn’t get paid. I needed the money. I already
1:03:58 had two jobs. So one day I thought, I’ve got to figure out a better, easier way. I wonder if I could
1:04:05 just come up with a method where I go home, sit, and just try and picture it. Just picture it and then
1:04:10 go draw it. And I’d sit there for hours and be like, deadline’s over. Oh, shit, I got to go do this.
1:04:14 I’d have to pick up the pen and draw. And as soon as I started drawing, I would draw one drawing,
1:04:18 three others. And then I was kind of, oh, this kind of drawing kind of goes with that.
1:04:24 I put that there, and then that would be formulated. That’s the process. It’s not going to come to you
1:04:28 if you’re just sitting on your ass waiting for it to make magic. You have to physically pick up the pen,
1:04:35 or pick up the camera, or pick up the guitar. And then it’s like, thank God, because it doesn’t have
1:04:40 hands. Now I can come to you. Now let me take over. And that’s the whole magic of creativity. So you
1:04:45 shouldn’t have any doubts if you could do it. As soon as you say, wow, I don’t know how I did that.
1:04:49 I wonder if I can do it again. You just shut the pipe because your ego got in the way. You thought
1:04:55 it was you. It’s not you. It’s coming through you. So just be a clear pipe. I know that works because
1:05:01 I taught that to my kids in a class when they were younger. And right away, they each wrote a book.
1:05:07 It was unbelievable because they didn’t have anything to unlearn. They didn’t have any experience yet,
1:05:13 where we all have more doubts now because we’re older. It’s like that thing where you teach a
1:05:19 class full of grade school kids. Who can write a novel? Who can be the president? Who can do an opera?
1:05:22 Who can dance belly? They all put their hands up because they don’t know better. You keep asking them as
1:05:28 the years go on. Hands start going down. Even with no life experience, they just all stop believing
1:05:34 they’re that person without any evidence that they’re not. I always wanted to be that kid who had
1:05:39 his hands up. No matter what. Even if it was something I didn’t know how to do. Put your hand up because
1:05:44 you’re figuring it out as you go. Don’t have a doubt. Just go do it. Just go do it. Seems to be working
1:05:48 for you. It’s been working for you. Do you ever see that movie “Being There” with Peter Sellers?
1:05:55 No. He’s so naive. Yeah. He’s just a gardener. Yeah. But he gets hit by a car and he ends up in
1:06:00 Washington and everyone thinks he’s so smart because he’s just talking about the garden and they all read
1:06:09 into him. And by the end, he walks across the lake. Oh. Because he doesn’t know you can’t.
1:06:14 He doesn’t know you can’t do it. It’s the most beautiful movie you can see. Peter Sellers,
1:06:18 I think, got an Oscar for it or nomination, at least. Amazing. And it’s amazing. And you’re just like,
1:06:23 oh my God, they all think he’s this prophet. And everyone’s quoting him and doing their own version
1:06:28 of what he’s saying. But he’s just saying, when the roots are strong, the garden will flourish.
1:06:35 And everybody’s like, whoa. But that naive quality. You want to keep that naive quality.
1:06:39 That’s what got me to do Mariachi. I didn’t know it couldn’t be done. It was only till later when
1:06:43 people said, how’d you make that movie for $7,000? You know, that’s impossible. I was like, really?
1:06:48 You’re just like, it didn’t seem that hard. But if you’re telling me, I guess I just followed my nose
1:06:52 and I ended up at the top of Mount Everest somehow. I wasn’t trying to do that. But to some
1:06:58 people, it was impossible. But to me, it was just solutions I came up with to make up for what I
1:07:03 didn’t have. Yeah. What does your journaling look like these days? Or what insights have you had?
1:07:08 I hope I can inspire everybody to journal. Because it’s really weird. I go do a talk and I say,
1:07:14 how many people keep a diary or journal? It could be like a group of 400 people. I’ll see two hands.
1:07:19 Three hands. I’m like, oh my God, if I can leave you with any impression.
1:07:28 My big thing now, I tell people, this is my theory, living is reliving. Because you go to a concert and
1:07:34 people have their video cameras up and everybody says, put it away, live in the moment. Counterintuitive,
1:07:42 I say, the moment fleets. You’re not going to even remember it tomorrow. Do you even remember who was
1:07:48 standing next to you? Don’t worry, yesterday. From day to day, it just goes by. Because we see life
1:07:55 at 96 frames per second, 20K resolution, surround sound. Right now I’m looking at you, but I can see
1:07:59 there’s a glass here. I can see in the peripheral, there’s someone over here operating this thing.
1:08:07 A year from now, five, and then 10, all our three-pound meat computer can process.
1:08:11 They might have a file photo of you in a t-shirt and me in a t-shirt, because we kind of remember
1:08:16 each other that way. But the metadata will be some kind of narrative that we spoke and had a good time.
1:08:19 Yep. That’s it. That’s all you’re going to have. And when you journal,
1:08:26 I’m shocked. I was trying to figure out when I bought certain guitars, I couldn’t remember. I knew some
1:08:30 were gifted, but I couldn’t remember. I just did a word search in my journals, because I have a year-by-year
1:08:35 journal. Guitar, guitar, guitar. So I’d read, and it shocked me that, oh, wow, I thought I bought
1:08:39 this one. It was a gift from this person. How can I not remember that? This is a big guitar. This is
1:08:44 like a $10,000 guitar. How would I not remember that? And I would read a little bit of the diary
1:08:50 around it. I was floored. Have you go back 10 years, even 15 years? It’s like you’re reading
1:08:54 someone else’s journal. You’re reading someone else’s journal. And it’s like, I guess I just have
1:09:01 to take it for what it’s there. Well, my mom actually gave me a box of papers that was sitting
1:09:06 in one of the rooms in my childhood home. She said, “What do you want to do with this?” And I opened it up,
1:09:15 and in that box were printed out emails that I had sent my mom when I was 15 from Japan
1:09:20 to tell her what I was up to. And I did not remember. That was one of the most formative
1:09:27 experiences of my life. I have a lot of memories from that period. I did not remember 99% of what
1:09:31 I put in those emails. It’s got like a dehydrated version that you have to put water on to reconstruct,
1:09:36 but even then it mostly just fades away. You don’t even recognize it. So it’s so important to keep to
1:09:40 your history. But what’s your favorite jokes and your favorite things about life that you share with your
1:09:48 brothers, your family? It’s all past stuff. So living is reliving. My kids now love watching
1:09:52 the movies of them growing. I shot so much video and kept journals of all their childhood. They all
1:09:56 journal now, but they have their whole childhood because I gave them the journals of their childhood.
1:09:59 They got their whole life journaled. But I’ve been showing them home movies recently because I’ve
1:10:02 been digitizing all the old tapes. And I thought, “They’re not going to dig this. Some of this
1:10:09 shit looks like VHS.” It’s so cruddy compared to today’s HD stuff. I was showing them footage of
1:10:16 them younger. And I have tons of it. I thought later in life I could rewatch and relive their wonderful
1:10:21 childhood, right? Forget it. I don’t remember even filming this stuff. It’s like “New Adventures of.”
1:10:27 We’re watching it not knowing what’s going to happen next. And they’re watching it. I saw my son leaning
1:10:31 into the screen to see what was around the corner. I said, “You just leaned into the screen.” They said,
1:10:37 “Oh, wow. I left the living room. This is like virtual reality to me.” And I was like, “Wow, that’s
1:10:45 interesting.” Then I realized why. Compared to our memory, that’s virtual reality. Even the crappiest VHS
1:10:51 tape. You hear the sounds. You see the place. You start reformulating. They cannot stop watching it.
1:10:57 Every time they come over, we watch new fun tape. And we find classic new things that become
1:11:04 benchmarks of humor and jokes that become iconic. Reliving is living. Like my mom turned 75.
1:11:08 And I said, “We gotta do something for your 75th birthday.” And she said, “No, no, no, no. I don’t
1:11:13 want anything done.” Why not? Because nothing can top my 65th birthday. 65th? What happened then?
1:11:18 “Oh, you gave me a car. And you flew in everybody from out of town.” I was like, “Really? I don’t remember
1:11:23 that. It was only 10 years before.” I must have tape. I looked it up, found the tape, put it in. Oh my
1:11:27 God, I didn’t remember anything. So I recut the tape, took it to her. And we had a big party and I
1:11:34 showed the tape. She was crying more. Now she knows when she gets the key, what it means. She’s like,
1:11:38 “Oh my God.” I was like, “I don’t have to do anything anymore. We’ll just play the old tapes.”
1:11:45 It was more appreciated. Living is reliving because that’s when it becomes iconic. And in the moment,
1:11:50 this is all just flying by and we don’t know what’s important. It’s only by journaling that you go,
1:11:54 this person’s no longer with us. What he said changed my life. And I didn’t know. And I forgot
1:12:00 that he told me this at this time. If I had not journaled that. So if your life is worth anything,
1:12:05 write it down. Because then you’ll be surprised how much of it is more valuable than you think.
1:12:07 And you’re only going to know that by journaling.
1:12:10 What’s your process? Is it like end of day? Word document?
1:12:17 It’s like 12:12 a.m. an alarm goes off. It says journal. Because I figure by 12 at night,
1:12:25 I will finish with most bullshit that I can actually sit and do it. I’ve actually got my partner writing
1:12:30 journal now. Never kept a journal before. But because of the stuff I just said,
1:12:34 you’re starting to see the value in it. And they send me their journal too. That’s always the best.
1:12:38 If you’re a partner or else will journal. Because seeing someone else’s perspective on a big event,
1:12:41 you have to journal every day if you don’t want. But at least the big events. Valentine’s,
1:12:46 Christmas, birthday, special trip, journal. I’m going to take you on a trip with journal for me
1:12:50 and give me that as a gift. And it’s wonderful. Is it bullets, points? Is it a page?
1:12:55 Tell you what, I used to sometimes just do bullets, just like I try to write more now. Because I’ve
1:13:00 gone back. I try to write more, just more detail about what happened. Just because it’s going to be
1:13:06 gone. Now I know it goes away. It’s not going to trigger your memory. In the earlier days, if I only had
1:13:11 time to write some bullet point type stuff, I would just do that because I thought my memory,
1:13:19 no, gone, gone. It’s someone else’s journal. Just know that. Even like seven years ago,
1:13:24 before my son started writing music for me, he had told me, I found a diary and he said,
1:13:31 Rebel told me his one year, five year, and 10 year plan. It was great. And I was like, what did he
1:13:34 write? What did he tell me? I don’t remember. And I asked him, did you have it somewhere? He goes,
1:13:37 oh yeah, I have it on my phone. Oh shit, it’s not on my phone. It’s in my diary. Oh,
1:13:42 please find it and send it because now I want to know. Because your whole life changed after that.
1:13:48 I really want to know now with more interest than when you first told me. Because now we know that
1:13:55 that whatever you said is not the path that ended up. And so, yeah, journaling is so powerful and so
1:14:02 needed. Because you think you’re going to remember, it’s just a meat computer. It’s not going to remember it at
1:14:06 all. And now I just find myself having to leave myself breadcrumbs all day because my memory is
1:14:13 fading anyway, just to know what I’m doing, much less what I already did. But it does become iconic
1:14:17 and you find some really fun stuff. And if we find a video, oh my God, this is the best thing. We find
1:14:24 a video of us playing, having a great time at 2003. And the weird thing you’ll find if you videotape your
1:14:33 kids and journal, you find these weird 20 year full circle moments, you know, full circle moments. Like
1:14:38 we just started working with a studio, their favorite animation studio in Japan. They love
1:14:43 Japan. They love Japan. They’re all about Japan. Japanese knife making. They build houses with no
1:14:44 nails. My kids.
1:14:45 Oh yeah. The joiner is amazing.
1:14:48 I found the videotape first time I told them about Japan.
1:14:53 Me telling them, and I had, I taped it because I wanted to see their reaction because it was like,
1:14:58 you’re going to love this place. And you see their eyes light up and they watch it now and go,
1:15:04 that was the moment of inception. That was the moment we never forgot. And we built upon and to
1:15:08 see that is amazing. But then you go back to the journal because there’s stuff in the journal that’s
1:15:14 not on video and vice versa. And I go, wow, you know what we were doing, what I was doing while we were
1:15:19 playing all those games. I was wheeling and dealing big deals in LA for once upon a time, Mexico and
1:15:23 Cincinnati or, you know, and they see the context of what was happening in between those moments.
1:15:29 And you get this clear picture of, Oh my God, you can totally be all in as a dad and all in
1:15:34 as a businessman. And that teaches them about life. Like, wow, you can have it all. You really can.
1:15:38 You know, it just, it just helps in so many ways to document your life.
1:15:41 Do you have any other parenting hacks?
1:15:45 The biggest life hacks is just working with your kids. Like I said, I stumbled upon it,
1:15:51 but then when I saw a racer being so excited about what he learned about the creative process,
1:15:56 and then I realized everything I was teaching them was life lessons. I went from fearing that
1:16:02 they were going to resent me to realizing I’m going to make all of them work on a film with me.
1:16:05 That’s just going to be, this is what you got to do.
1:16:05 Part of the deal.
1:16:09 Part of the deal. Not so that you can become a filmmaker because you’re going to learn more
1:16:14 about life. These are life lessons and it’s the best way to do it. It’s project-based.
1:16:19 It’s challenging. So my son, when we did We Can Be Heroes, I thought, okay,
1:16:23 he’s done a few scores for me. Because he’d been playing piano since he was four. They all played
1:16:27 piano. And it was just to connect right to the left side of the brain. That’s all we gave them that
1:16:31 for. But he was our best piano player. And at the end, he did his last recital after high school was
1:16:36 finished. And he was already doing knives, Japanese knives making. And he won Forged in Fire. Oh,
1:16:41 my God. Did I tell you he won Forged in Fire? My son got on, when he was 18, got on Forged in Fire.
1:16:46 As a TV show. And won. That TV show. Out doing all these other blacksmiths. Because he’d been
1:16:52 teaching himself Japanese knife making. And I asked him, how did you win? You won $10,000. How did you,
1:16:56 what was your mindset? You were using tools you’d never even used before. They were just throwing
1:17:02 stuff at you and problem solving, creative problem solving. And he gives me this samurai answer that I,
1:17:06 that I love. He said, I convinced myself that I had already won. Somehow I won.
1:17:11 And so when I’d come up against the challenge, instead of thinking what I had to do to get past
1:17:15 the challenge, I just needed to remember what I did to get there. I was just like,
1:17:16 whoa!
1:17:19 Some musashi samurai stuff.
1:17:20 Wow! I was like, wow!
1:17:25 But again, you’ll come up with innovations when you’re thrown into the fire.
1:17:31 And so he was doing so good with the music, he composed a couple of scores for me,
1:17:35 but they were just all synth-based for Red 11, for that short film that was a VR film.
1:17:40 We can be heroes, though. That’s my bag. I do orchestral stuff. We’ll do the score for that
1:17:44 together. That way I can teach him orchestral scoring, because that’ll be the next stage.
1:17:49 He writes the first piece, not even a picture. He saw what picture I was editing. He went and wrote
1:17:54 it to me. It’s like John Williams. It was huge. It was massive. And I was like, okay, yeah,
1:17:57 sure. Let me check it out. I’ll try it to picture. I didn’t want him to see me try it to picture.
1:18:03 I put it to picture. It matched. I doubled it, tripled it. It fit this whole five-minute sequence.
1:18:08 I called him up 10 minutes later. Come back up here and watch. It hits everything perfectly. If
1:18:13 you can do more of this there, more of that there. He was stunned. I said, good news and bad news.
1:18:21 Good news is, it’s awesome. Bad news is, I can’t help you at all. I don’t know how you did this.
1:18:25 Where did you learn music theory? They don’t teach you that in piano, because I never learned
1:18:28 theory, and I was always proud of that. That’s the 10% I thought you didn’t need to know.
1:18:32 No, I learned different. Now he can manipulate music because he knows theory. He goes, oh, I learned it
1:18:36 on YouTube. I was like, well, I’ll tell you what. You’re going to have to write the whole score,
1:18:41 but I’ll help you. I’ll be your assistant. I’ll edit it. I’ll show you how you can repeat themes.
1:18:47 And he sat there, and he did it, and I could just see he was just under the gauntlet. I said, dude,
1:18:50 this is the only way to learn. Throw you in the deep end. If you get a lung full of water,
1:18:56 we’ll fish you out. And his eyes were like this big. But years later, he came back to me and said,
1:19:01 I’m so thankful you did that. My whole life changed because I didn’t know I could do it,
1:19:06 but I had no choice. He knew I could not help him. I wasn’t doing it as some kind of weird
1:19:13 teaching exercise. I said, let me see your charts. The thing you have going on in the baseline only,
1:19:17 I would do a whole score with that. How’d you come up with all this? I can’t help you.
1:19:23 And I remember the conductor said, we recorded in Vienna, stopped midway.
1:19:24 I think you sent me a video.
1:19:25 Of him conducting.
1:19:26 Yes.
1:19:30 I said, go learn on YouTube real quick how to conduct. I want you to conduct one of them
1:19:35 because I want video of you with a James Bond orchestra conducting your own piece because I
1:19:39 never got to do that. And it’s, you’re so proud when your kids can take on the challenge and you
1:19:44 see it just transforms their life. But he, the Vienna conductor stopped the score and said,
1:19:49 this is a magnificent score. I can’t believe you’re 20. He was 20 at the time. But again,
1:19:55 you throw your kids in the deep end. And I tell this to all the parents I can because it’s counterintuitive.
1:20:00 A lot of parents would say, I don’t want to push, but I tell you, if you have the opportunity to work
1:20:06 with your kids, do it because it enriches your life because you are mentoring them.
1:20:11 They’re mentoring you because they’re, they’re figuring out shit like that that you never would
1:20:16 have thought of. You’re doing a project based thing together. That’s impossible that you’re
1:20:20 all going to overcome together. You know, how many parents do you know, like try to give their kids
1:20:24 advice on, on their job and the kids just like that. You don’t, you don’t know. You’re not in my shoes.
1:20:28 You’re in their shoes. You’re all trying to figure it out together. So you’re actually useful. You’re
1:20:33 not just some Geppetto who’s worried about their kid all the time. I always say, don’t just parent,
1:20:39 partner. Because after a certain age, as soon as they’re teenagers, they replace you with their peers
1:20:43 because you become useless to them. If you want a relationship last long time, partner. Don’t parent
1:20:48 anymore. They don’t need a parent anymore. They need a partner. They need a mentor. They need an OB-1.
1:20:51 Because that’s what they look for in their life. Mentors, be their mentor.
1:20:56 Their confidence grows when they’re mentoring you back and they’re seeing their confidence soar.
1:21:01 And it’s family time. You’re checking all the boxes. I don’t even do anything anymore. I don’t
1:21:07 take any job, any assignment, unless it’s going to involve my children. Because life is so good that
1:21:11 way. You’re checking all the boxes. You’re preparing them for life. You’re learning from them. They’re
1:21:16 learning from you. And it’s family time. I was telling this to Stallone. I was having dinner with Stallone
1:21:21 and his wife. It was pre-COVID, right after COVID, something. I had just done We Can Be Heroes,
1:21:27 this movie, the biggest movie on Netflix. And I was telling my son to score. I wrote it with my kids
1:21:35 and all this. And Jennifer was like, her eyes were just wide. Like, whoa, she hit Stallone. She goes,
1:21:37 you don’t work with your daughters. You don’t work with your daughters.
1:21:43 I was like, well, man, I wouldn’t get anybody in trouble here, right? You know,
1:21:49 maybe I should reel it back a little bit. But sure enough, next year, his daughters have podcasts.
1:21:53 He would show up every once in a while to help, you know, boost some ratings and stuff. Now they have
1:21:59 a TV show. It’s family Stallone. For all of them together, working together, they live that dream.
1:22:04 And they’re just so happy. So I tell people, because they, people can’t unhear it when they
1:22:10 hear it. They just need to know someone did it and that it worked to know, oh, I have a way to try
1:22:14 that with my kids. Because I didn’t know my kids would want it to work with me. You know what happened
1:22:19 was my kid’s teacher told me, you know, your son, Racer, when he was like 15, he loves nights. We’re
1:22:23 studying nights and we’re talking about squires. And I asked, well, who would you want to apprentice
1:22:29 under? And he said, my dad. I was like, really? He’s never told me that. Did he say that?
1:22:32 He goes, yeah, he said it to your dad. I was like, wow.
1:22:33 How did that feel here?
1:22:39 It was wild. It made you, see, kids have egos too. They don’t want to just tell you that. They
1:22:43 might tell someone else, but they’re not going to tell you. So don’t assume, don’t assume they
1:22:48 don’t want to be part of your life or be part of your work. Since I’ve been working with my kids since
1:22:54 they were very young, I didn’t know it would keep going for 20 years, you know? And now it’s just
1:23:00 become the thing that we do. And they endlessly inspire me because they just have that confidence
1:23:06 built in, but we’re building a go-kart together. So I tell, I know some parents would dismiss it as
1:23:12 an opportunity like that and call it entitlement, but wow, you’re so wrong. So wrong. Let me set you
1:23:17 straight because this would be, you know, a curse on your life if you don’t at least know this. I would
1:23:22 say, and I’m curious if you agree you’re not, or if you have your own position on it. I would say
1:23:25 that if you have an opportunity to work with your children, if you’re in that position, because I
1:23:32 don’t know, maybe not all jobs adapt to that, but take it. It’s a tremendous gift to everyone involved
1:23:38 and beyond because if you refuse to do so, because you’re afraid other people will call it nepotism,
1:23:43 you are missing out the most important opportunity of your collective lives.
1:23:51 Because look, what happens as parents when we pass away? Don’t we just give everything that we created
1:23:59 to our children? Is that not entitlement? That they had no part in building? There was an opportunity
1:24:04 to build this with them so that when they inherited, they could go, “I made this with my dad.”
1:24:14 Right? So it’s like, “Oh, thanks, dad, for all this shit that I had no part of,
1:24:20 that you went and made without me being involved at all, getting that chance to have that mentorship
1:24:28 go both ways, to build something together, to have that family time together, because you were afraid
1:24:36 someone would call you up for nepotism. Thanks.” I’m having a ball and it’s inspiring everyone who’s a parent
1:24:43 to go partner instead of parent their child and have a relationship that lasts your whole life.
1:24:50 Yeah. I mean, what strikes me about it also, I mean, there’s trust fund kids or trustafarians
1:24:55 have a, have a new term. Well, it’s, it’s not exactly the same, but it gets used similarly. Nepo babies,
1:25:01 right? But the connotation of that word, I don’t think applies to you at all because at least,
1:25:07 and this is not the Merriam-Webster definition, but when I think of nepotism, there’s a sort of unearned
1:25:20 giving implied, right, right? There’s an unearned giving implied. And then there is teaching, which you
1:25:27 know, and then there is another thing I would say a step above that, which is enabling someone
1:25:32 specifically to have the confidence that they can figure it out, that they can learn, right? You
1:25:38 didn’t tell your son to go to YouTube and learn music theory, but you put him in situations or you
1:25:48 hinted at forthcoming situations that would require a lot of tap dancing and figuring things out. And if we
1:25:56 were to create some type of like Maslow’s hierarchy of working with your kids, there are different
1:26:03 things you can impart or give. And I would say the lowest level is giving someone a fish, right? Instead
1:26:10 of teaching them to fish. But then above teaching someone to fish, teaching your kids to fish is saying,
1:26:17 hey, whether it’s piano, fishing, music theory, or something that you are going to come up with on
1:26:22 your own as a solution to a problem or a challenge or a dream that I can’t even think of, I’m going to
1:26:29 put you into enough circumstances that you have the confidence you can fear forward. You have the
1:26:33 confidence that not knowing is half the battle, but you will get there.
1:26:37 You can tell them that stuff all you want, but when they’re doing it with you, they learn so
1:26:41 much better. I mean, that’s why I said, even after the couch with your hands behind you trying to come
1:26:45 up with the comic strip. It’s not going to happen. It’s not going to happen, but you can tell them all
1:26:49 that, but it’s different when they’ve lived it too. And that’s why I did the whole, if I get hit by a bus,
1:26:53 you know what to do because it’s true. Now they know it in their bones. When I, we did a talk in
1:26:58 Colombia with a, with a $7,000 movie that we did together. I mean, the boys, we went, they flew us
1:27:04 down there to go talk and everyone was in Colombia. These guys live in poverty. They were leaning
1:27:09 forward to find out how to make a movie with no money so they could get out of there. And we’re
1:27:14 talking and one woman was asking a question about screenwriting and I was giving my answer. And Racer
1:27:19 said, cause he had written the script of me. Now he wanted to stand up and say, what he’s saying is
1:27:24 really true because he had lived it already. It wasn’t, this is the stuff he’d heard before,
1:27:29 but now it really sank in because he was there. And what’s cool is if you build your family up,
1:27:33 like your team like that, you know what I hear so much now that I hadn’t probably because I’m older
1:27:38 and I’ve been around longer. A lot of people will just assume I’m too busy to do whatever project
1:27:43 I’m doing alone. So they said, yeah, we can’t wait to work with you and your team. Most people have a
1:27:49 team. My team is my kids. And it’s got more jobs. Like a video game company wanted to
1:27:54 be in partnership with me and said, well, let me tell you who my team is. All my kids are gamers.
1:27:57 I got them into games when they were really little. They know this world inside out. One of them is
1:28:03 even a game designer. That’s my team. And they’re in my house. We love this. We want to work with you.
1:28:07 And we’re going to take it to the next level because we’ve done this other project and this
1:28:11 other project. And this was the process we did these done deal. We’re doing it now. Now my kids get to
1:28:17 make a game, a real game, like a big ass game. And you get to do it together because you’ve already
1:28:20 trained them to be, and it used to be a joke when I had so many kids, I had five kids.
1:28:23 I would say, oh, yes, my future cast and crew. I would just say it as a joke. Hey,
1:28:26 it turned out to be true. They’re my cast and crew.
1:28:35 So is there anything to the story of the double R’s besides the fact that you have the double R’s?
1:28:36 Is there more to it?
1:28:41 Yeah. The double R’s was just from a family of 10 kids. My mom’s name is Rebecca and my sister’s name
1:28:47 is Rebecca. We’re the only double R’s, my mom, my sister, me. And I always just loved the alliteration
1:28:52 of that. You know, like the double R’s, it was really powerful. R and R. Rebecca Rodriguez.
1:28:58 Robert Rodriguez. So once you name the first kid with an R name, well, then the second one,
1:29:01 and then the third one, and I gave them regular middle names, so they didn’t have to be,
1:29:08 you know, so like there’s Rocket, Valentin, Rodriguez, Avellan. It can be Valentin Avellan,
1:29:13 or it can be Rocket Rodriguez, or Rayson Rodriguez, or Maximiliano Avellan. If they want to go into
1:29:18 politics and not be pro wrestlers, they can change their name. But I didn’t know they were going to
1:29:22 keep those names past childhood. They thought it was just fun kid names. Yeah. Everybody has five
1:29:27 names. One is Ro, Joaquin, Cecilio, Rodriguez. One has five names. So he can pick his identity.
1:29:30 I wanted him to just use it as a little- Every time he has to fill out a government
1:29:34 form, he’s like, oh, God damn it. I’m not going to use that. But they didn’t want to get rid of their
1:29:38 first names. They love their first names. So I thought, let’s keep, if everyone’s keeping their
1:29:43 first name, let’s own it. Double R is kind of a cool logo. What’s fun was that it just looks cool.
1:29:47 Double R. And it means all of us. And it makes this like a tribe. And it makes this all,
1:29:51 and it gave them a lot of pride. I was surprised how much pride they had in it. And they all started
1:29:55 coming up with ideas. Rick Rubin comes over and he saw them holding a picture up. And he goes,
1:30:01 R-R. I did, double R. That was my artist’s name when he was a, you know, a DJ. He was double R.
1:30:07 I was like, that’s amazing. This is one of my other favorite things that when I’ve told parents,
1:30:11 they go, I want to try that with my kids. It was something I stumbled upon. You know,
1:30:15 I was having some kind of family talk with the kids. We usually have these things we call tribe talks,
1:30:19 where you talk about anything. It’s like, like we’re a tribe. Like we help each other out.
1:30:21 They get so excited about a tribe talk. Let’s have a tribe talk.
1:30:24 And the tribe talk is like asking one another for help.
1:30:29 I just, if I have a new thing I want to talk about that’s going to affect their lives later,
1:30:33 let’s have a tribe talk about this. They’re like so excited because they learn about something that
1:30:37 I want to share with them to prepare them for life. Something that I might’ve just learned that I
1:30:42 wish I could take a time machine and tell myself, you can’t. The closest thing to it is telling your
1:30:46 children. Because I used to think any advice I’d give them, I’m afraid it might probably just go in
1:30:51 one ear and out the other because it’s not real to them yet. They probably have to live through it and
1:30:56 find their own mistakes. No, they would process it and give it back to me. And I would be like,
1:31:01 where’d you get that philosophy? You told me that. I didn’t tell it to you like that. I said,
1:31:04 I might’ve said glass is half empty or half full. Oh yeah, well, we built upon it. Well,
1:31:11 they take what you tell them and build upon it. Right? So this one was, I thought I’m going to be
1:31:16 very honest with them and tell them all the major decisions I made in the life, walk them through.
1:31:21 Cause there’s a funny scene. It came up because of a movie and we did another spike kids. There’s a scene
1:31:25 where the parents are talking about operation fireball with such memories about it. And the
1:31:30 little girl asks, what is that exactly? Oh, we beat up the bad guy. We blew up his lair and all this
1:31:34 stuff. And she’s just like, you could have done it a better way. You could have gone to him.
1:31:38 Nicely. You could have talked to him, seen his aesthetic and it plays it out. Right? So I thought,
1:31:41 I’m going to try that with my kids. I bet if I told them all the decisions I was faced with
1:31:48 that a lot of times are lose, lose, there’s no, there’s no clear way to go. And as you think 10 years
1:31:52 later, you’ll see what the real answer should have been. Nothing. There’s never clarity. Sometimes
1:31:57 I’m curious to see what they would have done with the knowledge more evolved.
1:32:04 So I walk them through. It was fascinating. It was fascinating. At every turn. Okay.
1:32:12 A or B, which way would you go? I’m not going to tell you what I did. They both suck. And do you
1:32:17 know what they say? I don’t want to have to pick. No, you have to pick. I had to pick. You have to pick.
1:32:24 They pick every time it was the same until one. They go, it’s a big one. They go, well,
1:32:28 if that’s the circumstances, that’s what the knowledge you have. We go, yeah, that’s all the
1:32:33 knowledge you have. I would have done what you did too. I would have left. I should have done that. I
1:32:37 didn’t. I stayed. Let me tell you what happened because I stayed. I should have done that. I knew
1:32:41 I should have done that. But I went ahead and stayed because that’s the right thing to do. I did the right
1:32:45 thing. And it blew up in my face. Watch. Boom, boom, boom, boom, boom, boom, boom, boom, boom.
1:32:48 The right thing by external. Right thing, external, external status.
1:32:54 That anyone else counterintuitive though would say, with the evidence you have,
1:32:59 it’s counterintuitive as it sounds. It should go that way. So you picked the right thing. I should
1:33:04 have done that, but because I decided to do the right thing. You just felt so good after. And they
1:33:11 were so excited knowing now what life really is like. It’s going to throw shit at you that’s no
1:33:16 clear answer. Even with all this time, no clarity. They know that it’s a lot tougher.
1:33:22 And they’re invested because it’s you and them in a way. So I tell parents, I told, I won’t tell you,
1:33:27 but several others were like, I’m going to try that with my kids for sure. I’m going to tell my kids
1:33:32 that. I’m curious to see what they say because you want to see if they remix a better version of you.
1:33:37 But you might be surprised that it’s just as unfathomable to them to have an answer as you did.
1:33:40 Okay. Life hack. My favorite life hack. Have you seen,
1:33:44 I showed you that little spark amp, right? That I can play guitar.
1:33:45 You did in your kitchen.
1:33:50 So no time. Even when you try to make time, you can’t make consistent time. You’re supposed to
1:33:56 walk 10,000 steps for your health, especially after 50 or whatever. I have time for that. It takes an
1:34:00 hour, an hour and a half. I don’t have enough things to listen to or phone calls to make to go do that.
1:34:07 Then I love guitar. I can’t be playing guitar for a freaking hour. You listen to Tom Morello on this
1:34:12 master class. You want to get better at guitar? Play for an hour a day. If you want to get better than that,
1:34:15 more. So I started trying to do an hour a day. I couldn’t do it consistently. So I’d be like,
1:34:19 God, I want to play guitar. I have no time to walk. So I put them together. The spark amps,
1:34:23 they have some that are really small. And now they just came out with the headphones that you just put
1:34:27 it on. It’s the amp is built in and you plug in your guitar wireless. And I used to have just the
1:34:33 the one in my pocket, their older one. And I put a playlist on the backing tracks, drums and bass for
1:34:39 songs, my favorite songs that I play to. And I walk just around my house and you forget you’re even
1:34:44 there. It’s like the Angus Young workout. You know, he’s always doing that or Eddie Van Halen running
1:34:49 around. The music drives you. You don’t even, the room is gone. You’re in a stadium. You’re walking
1:34:57 across the stage. Your house is bigger than most stages walking across. I put on like an hour to an
1:35:06 hour and a half playlist. This was like 10 or 12 songs. Easy. 15,000 steps, 17,000 steps. Easy.
1:35:11 You don’t even know you did it. You don’t even remember walking. You’re so transported. You’re so
1:35:16 busy doing this that I’ll be at the end of my playlist. I’m going to keep playing. And you just
1:35:20 keep walking. That’s why you saw me in the crowd, walking through the crowd. I’m so used to playing
1:35:24 walking. You’re so used to walking. I went walking through the crowd, greeting everybody that I knew
1:35:29 instead of, I said, well, shit, I can play and walk and not have some looking, because I got that
1:35:36 training. But anyway, anyone who’s a guitarist, the best life hack, you get an hour plus practice every day.
1:35:42 I got so much better on guitar because of it. And you’re walking and you’re not even feeling it.
1:35:47 I don’t even remember doing it. Biggest life hack there. I couldn’t wait to tell you. I call it the
1:35:52 rock walk. The rock walk. Gotta do the rock walk. My friend goes out in the neighborhood with his
1:35:55 thing. He just walks around the neighborhood. When I saw you on stage with your daughter,
1:36:02 that’s the most I’ve seen you play guitar. I’ve only seen your guitars in the house. Right. But that was
1:36:07 the most actual playtime I have seen. Wow. Yeah. Yeah. That’s so funny too. That’s right.
1:36:12 Because I don’t go just play songs with the Hello Kitty guitar. Yeah. Rocking the Hello Kitty. It’s a
1:36:18 good guitar. It looks great. Yeah. Robert, we’ll have to do this more than once a decade, but
1:36:25 yeah. Uh, thank you so much for all the stories and I took a ton of notes. How can people learn
1:36:31 more about brass knuckle films? Where should they go? Should they check out? There’s a brass knuckle
1:36:37 films, you know, website where you can learn all about it. Get all the updates, show you how you can
1:36:43 invest. You’ll see all the perks and things for the different levels. Get a part of it. It’s a community.
1:36:48 I think it’s really going to appeal to anyone who’s a fan of action movies, but also filmmakers,
1:36:54 but just people who are interested and people who consume. Don’t just be a consumer. Make the money
1:36:58 back. I want you to make the money so that you’re not just consuming and watching a movie. If you like
1:37:03 movies, this is the best way. I tried to figure out ever since I was a kid, how can I get paid to
1:37:06 watch movies? Because I watch movies all the time. It’s the closest thing.
1:37:13 Yeah. Brass knuckle films. Beautiful. All right, folks. We’re going to link in the
1:37:15 show notes to everything. Timed up blog session podcast. Thank you, Robert.
1:37:19 Thank you for giving me a forum to tell people that no people were here because everyone listens
1:37:24 to your thing. Because I just, just like with my book, I always wanted, as soon as I made mariachi,
1:37:29 I wanted to share it with people because I knew I would have appreciated hearing that as a filmmaker
1:37:33 who had no money from a family of 10, that it was possible because everyone made it sound like it was
1:37:37 not. So I just wanted to shout it from the mountaintop. And it’s still feeling that same
1:37:42 way as I discover things. I want, I want to tell people because it, the feedback loop is amazing.
1:37:45 You know, when people come back and tell you how they worked it into their life in their own way,
1:37:50 it inspires you all over again, inspires you even you’re like, well, you just inspired me now to go
1:37:55 try that way. So yeah, I love sharing that. Yeah. Incredibly energizing. It’s a virtuous circle.
1:38:01 And for everybody listening and watching till next time, be just a little bit kinder than is
1:38:04 necessary to others and to yourself. Thanks for tuning in.
1:38:11 Hey guys, this is Tim again, just one more thing before you take off. And that is five bullet Friday.
1:38:15 Would you enjoy getting a short email from me every Friday that provides a little fun
1:38:20 before the weekend between one and a half and 2 million people subscribe to my free newsletter,
1:38:26 my super short newsletter called five bullet Friday, easy to sign up, easy to cancel. It is
1:38:31 basically a half page that I send out every Friday to share the coolest things I’ve found
1:38:36 or discovered or have started exploring over that week. It’s kind of like my diary of cool things.
1:38:42 It often includes articles. I’m reading books. I’m reading albums, perhaps gadgets, gizmos,
1:38:47 all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast
1:38:54 guests. And these strange esoteric things end up in my field and then I test them and then I share them
1:39:00 with you. So if that sounds fun, again, it’s very short, a little tiny bite of goodness before you head
1:39:05 off for the weekend, something to think about. If you’d like to try it out, just go to Tim dot blog
1:39:11 slash Friday, type that into your browser, Tim dot blog slash Friday, drop in your email and you’ll
1:39:18 get the very next one. Thanks for listening. Way back in the day in 2010, I published a book called
1:39:25 The Four Hour Body, which I probably started writing in 2008. And in that book, I recommended many,
1:39:34 many, many, many things first generation continuous glucose monitor and cold exposure and all sorts of
1:39:39 things that have been tested by people from NASA and all over the place. And one thing in that book
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1:39:51 what is now known as AG one. AG one is my all in one nutritional insurance. And I just packed up for
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1:42:19 Listeners have heard me talk about making before you manage for years. All that means to me is when I wake
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1:42:37 everyone else’s agenda for my time. For me, let’s just say I’m a writer and entrepreneur. I need to
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0:00:03 The fundamentals of investing hasn’t changed at all.
0:00:08 Buying great things or great businesses, holding for long periods of time, earning cash returns.
0:00:11 What’s changed is the environment around it.
0:00:14 The whole backbone of the world is changing.
0:00:21 Behind your phone or your computer, you can have this podcast on your cell phone and go for a run in the morning.
0:00:31 How that gets delivered to you is data center storing it, fiber delivering it to you, going to a tower and bringing it down to your phone wireless.
0:00:37 And all of that needs enormous amounts of infrastructure, and all of that is built by private enterprise.
0:00:46 50% of the backbone of what we own today did not exist as an asset class for investment 20 years ago.
0:00:49 Well, you have over a trillion dollars in management now.
0:00:51 It sounds like a lot of money.
0:00:53 It is a lot of money.
0:00:54 It’s a trillion dollars.
0:00:58 But it’s not that much when you do what we do.
0:01:08 Welcome to The Knowledge Project.
0:01:10 I’m your host, Shane Parrish.
0:01:16 In a world where knowledge is powered, this podcast is your toolkit for mastering the best of what other people have already figured out.
0:01:26 If you want to take your learning to the next level, consider joining our membership program at fs.blog.com.
0:01:38 As a member, you’ll get my personal reflections at the end of every episode, early access to episodes, no ads, including this, exclusive content, hand-edited transcripts, and so much more.
0:01:41 Check out the link in the show notes for more.
0:01:45 Most investors see markets as a race to outperform every quarter.
0:01:49 Our guest today, however, sees them as a marathon measured in decades.
0:01:59 As CEO of Brookfield Asset Management, he’s quietly spent decades building a trillion-dollar business, investing patiently in the invisible machinery of the global economy.
0:02:13 While others chase short-term returns, Flat position Brookfield to capitalize on massive global shifts from digitalization and low-carbon energy to a reshaped global supply chain, years before they appeared on anyone else’s radar.
0:02:22 In this rare public conversation, it’s only the second podcast he’s ever done, Flat reveals not just what he invests in, but how he thinks.
0:02:35 From spotting trends early to structuring deals for resilience across economic cycles to placing big, bold bets that compound steadily over time, he offers a masterclass in patient, disciplined investing.
0:02:50 Whether you’re allocating capital, building a business, or simply navigating uncertainty, you’ll learn how one of today’s most influential but private investors sees around economic corners and why his ability to ignore short-term noise might be his greatest competitive advantage of all.
0:03:02 I want to start with how investing has changed over the past 23 years, I think, since you’ve been CEO.
0:03:06 Look, on the first level, I’d say it hasn’t changed at all.
0:03:17 What investing is about is to buying great things or great businesses, holding for long periods of time, earning cash returns, and that hasn’t changed at all.
0:03:21 So, the fundamentals of investing are exactly the way they were before.
0:03:24 What’s changed is the environment around it.
0:03:27 And I mentioned a couple things.
0:03:31 First one is many businesses are publicly traded.
0:03:40 And the indexing and passive investing has changed the publicly traded market for investments.
0:03:44 It’s very different than the actual investments.
0:03:46 The investments are still the same, and what we do is still the same.
0:03:53 How they trade in the market and whether they’re included in indexes has changed how they trade in the public markets.
0:03:58 So, I think that is probably the fundamental biggest thing.
0:04:14 The second thing, and this is, I’d say maybe the most simple way to say it is, 50% of the things that we invest in today did not exist as an investment asset class for investors like us 20 years ago.
0:04:16 50%.
0:04:19 And we invest in the backbone of the global economy.
0:04:20 Like, these are simple things.
0:04:22 We deliver your water in the morning.
0:04:25 We toll the road you drive on in the afternoon.
0:04:29 We deliver your power to your house.
0:04:34 We, the data center that powers your phone, we own.
0:04:38 Those are all really backbone things.
0:04:39 So, what we do is backbone.
0:04:43 This is not innovative venture capital that we’re doing.
0:04:51 But 50% of the backbone of what we own today did not exist as an asset class for investment 20 years ago.
0:05:01 What percentage of that would you say is new things versus governments maybe privatizing some of the services they used to deliver?
0:05:06 When we started in infrastructure 25 years ago, we were among the first.
0:05:10 We thought that it would be governments privatizing.
0:05:12 And to some extent, it is.
0:05:15 And it’s not, they’re not privatizing because they have a hard time selling assets.
0:05:19 What they do is they’re just not investing.
0:05:20 Therefore, private enterprise takes it up.
0:05:29 But the biggest area of investment today is really just the whole backbone of the world is changing.
0:05:37 So, the digitization of the whole world behind your phone or your computer.
0:05:42 As you know, laptops didn’t exist before.
0:05:43 The internet didn’t exist before.
0:05:45 Cell phones didn’t exist before.
0:05:50 Today, you can have this podcast on your cell phone and go for a run in the morning.
0:06:01 How that gets delivered to you is data center storing it, fiber delivering it to you, going to a tower and bringing it down to your phone wireless.
0:06:05 And all of that needs enormous amounts of infrastructure.
0:06:08 And all of that is built by private enterprise.
0:06:16 Virtually every, in fact, not virtually, all of that is delivered to you as an individual.
0:06:21 And this is 8 billion people in the world getting that delivered to them in various forms.
0:06:23 It’s all delivered by private money.
0:06:25 And that’s what’s changed.
0:06:29 It’s before, historically, that was built out by governments.
0:06:33 Today, it’s being built out by private enterprise.
0:06:37 You know, to use an example, we own all of the telecom towers.
0:06:41 Not all, but we own a very substantial portion of the telecom towers in India.
0:06:49 They deliver all the phone and wireless infrastructure to many individuals in India.
0:06:52 And that was originally built by Reliance Industries, GEO.
0:07:01 We bought it from them and we support their and other telecom companies’ activities through those telecom towers.
0:07:04 And historically, that would have been built by government.
0:07:08 But it was, that’s built by private enterprise.
0:07:14 Let’s go back to the rise of passive, maybe versus historically more active investing.
0:07:15 What implications do you see?
0:07:17 What opportunities are created?
0:07:24 Look, in everything, when I say there’s a problem, there’s always an opportunity.
0:07:27 And I think that’s the Chinese symbol, right?
0:07:28 Problem and opportunity.
0:07:33 For some companies, smaller, midsize, don’t fit indexes.
0:07:42 They will be lost within public markets investing because active investors may not be investing in those sectors anymore.
0:07:45 And if you don’t fit the indexes, you have no buyers.
0:07:59 Increasingly, though, what it’s doing is that it’s creating a large disparity in some securities at points in time between the price of them in the market and the value of the underlying assets.
0:08:04 Back to, you asked me first question, what has changed in the investing world?
0:08:05 And I said nothing.
0:08:07 That’s related to value.
0:08:13 What’s changed is the price of some things trades up and down.
0:08:22 If over the last 18, 24 months, if you’ve been one of the big technology stocks in the world, everyone needed or wanted to buy you in the indexes.
0:08:25 And therefore, their multiples traded very high.
0:08:34 But if you were something that didn’t neatly fit the indexes, it traded at a low price.
0:08:38 The opportunities are that we can take those companies private.
0:08:42 So, we took a large container shipping company private.
0:08:46 It had one analyst and nobody following it.
0:08:48 It fit in no indexes.
0:08:50 It was a $6 billion company.
0:08:52 And we took it private.
0:08:54 And it’s been an exceptional investment.
0:09:05 So, we continue to, I’d say, capitalize on opportunities where we understand the value and the price is not trading at that in the markets.
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0:11:59 What can you do with a private company that you can’t do with a public company?
0:12:04 Well, firstly, you don’t have to look at what the price is versus the value.
0:12:07 You just know what the value is and you run it for what it is.
0:12:18 But secondly, we can operate differently, finance differently, invest for the future, and run a business like somebody should just run it.
0:12:28 If you and I owned a business privately, we wouldn’t care about whether the stock went up or down tomorrow morning.
0:12:29 We just run our business.
0:12:30 Cash flow comes out.
0:12:34 We decide, should we divin it out to ourselves to use together?
0:12:36 Or should we keep it in the business and invest?
0:12:45 And that’s really the difference is all you look at is the fundamentals of your business if you’re private.
0:12:56 And if you’re public, people tend to get distracted by the trading price of the security when it’s not really relevant.
0:13:03 Some businesses need access to capital and have to raise capital and therefore their price is important.
0:13:09 But most businesses that are listed don’t need access to capital.
0:13:15 They’re only listed because they’re large and they happen to be just – they need owners and therefore they’re in the public markets.
0:13:22 They’re never issuing equity and therefore the price of the security in the market really doesn’t matter.
0:13:35 And in fact, it’s a distraction, which is why when people often ask me what happened with the alternatives industry and why did it grow the extent that it grew over the last 25 years?
0:13:51 And it’s really grown that way because private assets are – the fundamentals are exactly perfectly matched to the fundamentals of what institutional investors want to have in their portfolios.
0:14:00 And maybe even more importantly, by owning them privately, they don’t have to have the distraction of the public market.
0:14:07 They don’t have to get confused that you and I bought a telecom tower business.
0:14:10 It generates a 6% yield.
0:14:13 It grows at 4% every year.
0:14:17 And we don’t have to invest much cash flow into it.
0:14:18 So, it’s free cash flow.
0:14:26 And if it’s privately owned, it’s just – we just watch the cash flow and keep growing and try to enhance the business and grow it.
0:14:27 And that’s what we do privately.
0:14:36 If it trades in the public market and today it’s worth $20 and tomorrow because of whatever happens in the markets, it’s worth $10, nothing changed in the business.
0:14:43 And that distraction is what causes people issues.
0:14:45 They sometimes make rash decisions.
0:14:55 And I’d say that’s maybe the biggest enhancement to long-term investors by having private assets.
0:14:58 I take it you’re not an efficient market hypothesis person.
0:15:01 You know, I – no.
0:15:02 The answer is no.
0:15:07 The markets are never efficient.
0:15:13 In fact, very seldom do they ever trade at the actual value of securities.
0:15:18 Most of the time, they trade above or below.
0:15:21 Very seldom do they trade at the value.
0:15:23 But yes, I guess there are many theories in life.
0:15:34 Let’s talk about some of the trends going on in the world today that you see from your aperture that you think have a long runway that we’re maybe just beginning on or maybe in the middle endings on.
0:15:44 So we generally have three sort of themes that we invest around or – we have a few themes we invest around at all points in time.
0:15:44 Today we have three.
0:15:56 The first one is just the digitalization of everything and the amount of capital that’s being invested behind that digitalization.
0:16:18 And really what it is is there are many, many, many, many, many trillions of dollars going into the movement of information into the cloud, onto your phone, and just the digitalization of everything behind it.
0:16:34 And that has been enhanced, increased, enhanced, by artificial intelligence and the networks being set up now to harness artificial intelligence.
0:16:42 And maybe the most simplest way to explain it is everyone thinks of artificial intelligence as chat GPT.
0:16:48 I’m going to get it to write my cooking class memorandum.
0:16:58 But really what the – where the money is going to be made is the application of artificial intelligence into business.
0:17:14 And simply stated that’s taking processes in service and industrial businesses and making them more efficient by using advanced robotics who have learned how to make –
0:17:20 how to run those processes from models run on artificial intelligence.
0:17:23 And we’re in the very, very early stages of that.
0:17:36 But from an infrastructure standpoint, the amount of money being put behind this is in amounts which have almost never been seen invested before.
0:17:40 So that’s sort of the first theme we have of investment.
0:17:50 And it both affects our operating businesses because we’re now applying artificial intelligence in our business to make them better and they’ll be more productive.
0:17:59 And we’re also investing and supporting many of the technology companies with their funding for the re-digitalization of the world.
0:18:08 Let’s spend a few minutes on digitalization before we move on in the sense of there’s vast data centers being created today.
0:18:20 I would love to hear your thinking on whether that investment is going to be where winners are accrued or re-overinvesting as we typically do in booms and busts.
0:18:27 And then walk me through sort of like how you see winners emerging in this from end to end, right?
0:18:32 You generate energy, you lease data centers, you – walk me through how you see that.
0:18:38 So there’s no straight line in investing to success.
0:18:43 And usually at points in time, people will lose money because they get overexcited.
0:18:51 But there’s – we’re in a period of time where this is a major, major build out of what’s going on.
0:19:00 The clear winners in this AI revolution are going to be the major technology companies.
0:19:01 That’s sort of easy.
0:19:03 They’re very sophisticated.
0:19:05 They have large balance sheets and capital to deploy.
0:19:12 They’ve already developed models and they’re going to be very, very – they’re going to win.
0:19:13 They’re going to win.
0:19:14 And they have the data.
0:19:15 And they have enormous amounts of data.
0:19:18 So all of – they’re going to win.
0:19:19 That’s easy.
0:19:28 Like I’m not sure there’s anything that I would – that’s helpful to anyone listening to this if I tell you, oh, you should buy Google.
0:19:32 These are going to be great companies and they’re going to continue to be great.
0:19:45 The winners that are unknown today are the companies that are going to figure out how to apply artificial intelligence into their businesses and make them better.
0:19:53 And there are many businesses today where you cannot get people to operate the businesses.
0:19:55 There just aren’t enough people.
0:20:12 And if you can, therefore, deploy robotics into businesses and shrink the amount of labor you need or there are plants that are being operated in Asia that had high dollar value.
0:20:13 That’s why they went there.
0:20:16 But the reason – high dollar value products.
0:20:18 But they went there because there was high labor component.
0:20:28 If you can shrink the labor component, many of those plants can come back to where the demand is, specifically, I’d say, the United States.
0:20:41 So, the unknown winners are going to be the companies that can apply artificial intelligence into their businesses and make them more efficient and more profitable.
0:20:45 And I think those that do it will win.
0:20:46 Those that don’t, some will fall behind.
0:20:53 But the productivity advances we see over the next 20 years probably will be unprecedented for a period of time.
0:20:59 Certainly, we haven’t seen it for a long time in business across America.
0:21:06 Is there anybody you’re tracking externally that you would never acquire, that you admire how they’re applying sort of technology?
0:21:09 You know, we’re in the early, early stages of this.
0:21:12 And so, we’re trying to learn from everybody.
0:21:14 We’re talking to many.
0:21:22 We, of course, given our scale, we have access to very significant resources and we can talk to most people.
0:21:24 So, we talk to all the technology greats.
0:21:27 We deal with all of them fundamentally in our business.
0:21:35 In addition to that, we’re continuing to learn and apply these technologies within our business.
0:21:54 And what I can tell you is the early learnings of our business, some of our industrial businesses are, and why I say the things I just said to you, is that the early learnings are that the advancement of productivity is very, very significant.
0:21:57 And you see that in your battery.
0:21:59 Like, you guys make half the batteries in the world, don’t you?
0:22:04 Look, we make just under half of the car batteries.
0:22:04 Yeah.
0:22:10 I mean, we make the little car battery that starts your car, you know, when you get up in the morning, it doesn’t start, and you have to go get a new one.
0:22:11 So, that normally-
0:22:12 Happens all the time.
0:22:13 Half of those-
0:22:13 In winter.
0:22:15 Half of those will come from us.
0:22:15 Yeah.
0:22:17 That are out there.
0:22:20 And it’s an amazing business.
0:22:25 And we continue to re-you know, we’re always trying to optimize businesses.
0:22:39 Our job is to invest in businesses and make them better so that they will grow greater amounts of cash flow so we can continue to invest in the businesses and provide dividends to our owners.
0:22:55 And so, as we try to make these better, we’re applying artificial intelligence into all our businesses, including that battery business, which is, and why it’s a perfect one for these type of applications is we have 25,000 people in 20 plants.
0:23:03 We do very repetitive process, and as a result, and we have $9 billion of costs within the business.
0:23:13 If you can improve those by 30%, that’s a lot of money to the bottom line, and it can be very significant for the company.
0:23:18 Is there another example that stands out about how you’re applying AI to the businesses that you control?
0:23:31 You know, every single business we have, we have a healthcare business where we have, we approve your healthcare in the United States.
0:23:41 If you need a back surgery and you need authorization from your insurance company to do it, we take the phone call from you, and we approve it online.
0:23:49 We approve your $150,000 operation or not, and our agents do that.
0:23:57 And today, the amount of information we can put up when you call in is incredible, even from two years ago is incredible.
0:24:06 And that just helps us make better decisions quicker and serve our clients who are the healthcare companies better.
0:24:08 And, but it’s everywhere.
0:24:19 You know, the putting, we’re, you know, we’re applying these type of things in all the businesses, but we’re in the, we’re in the first inning of this.
0:24:26 So it’s, um, anybody that has started should start, uh, be, and it’s not too late.
0:24:29 We’re in the early innings of the application of this.
0:24:31 It’s exciting to see where it’s going.
0:24:33 So we have a trend of digitalization.
0:24:35 What other big trends do you see?
0:24:42 The second one is that there is a transition of the world to low carbon energy.
0:24:49 And, uh, and I say it that way because what, what’s really important here is we just have less carbon out there.
0:25:06 And, and, but what’s, what’s even more important today is that solar and wind, which is where we’re, um, which is what’s filling the gap, are the lowest cost energy sources for power in the world, in most countries today.
0:25:16 And why that’s really important is it doesn’t matter whether you choose to have less carbon or no, don’t care about less carbon.
0:25:19 What you do choose is to pay less for your power.
0:25:24 And, uh, and that, that, that’s the, the simple economics are today.
0:25:28 If you go to somebody and say, do you want to pay more for your power?
0:25:32 They will say, they will say, no, I don’t want to pay more for the power.
0:25:33 I’d rather pay less.
0:25:38 And, and as a result of it, the lowest cost power in most countries of the world is solar and wind.
0:25:40 Therefore, you’re going to choose solar and wind.
0:25:45 So it’s inexorable that we’re going to build out most, more solar and wind in the world.
0:25:52 Um, in the United States today, there’s no doubt we’re drilling more oil, which is, remember, oil is not used in power.
0:25:58 Oil is used for basically cars, chemicals, and, um, planes.
0:26:04 They, it goes into jet engine fuel, goes into car engine fuel, and it goes into chemicals.
0:26:06 And that has nothing to do with power.
0:26:08 Uh, oil is not used for power.
0:26:14 Natural gas is, and a natural gas is one of the great assets the United States has.
0:26:17 Um, it’s going to export it for a long time.
0:26:19 It’s going to use a lot of it in America.
0:26:24 Eventually batteries and nuclear will be the base load and it won’t be natural gas,
0:26:29 but it’s being shipped elsewhere in the world.
0:26:36 And where it’s going to is needed for base load because they, they, um, they, they need that,
0:26:43 that base load power or it’s replacing coal, which is hugely beneficial to the world.
0:26:52 So, natural gas is an incredibly important bridge fuel in America and long-term fuel in many other places in the world.
0:26:59 So, the LNG market, uh, in the United States is extremely important and very lucrative for a long period of time.
0:27:01 So, let me make sure I understand this.
0:27:09 So, wind and solar, low cost, and then gas is sort of the base load when there’s no wind or solar because we don’t yet have the batteries to time shift?
0:27:16 Well, you know, we have, we have base load capacity in the U.S., which is nuclear, um, that will continue to grow.
0:27:19 We can talk about nuclear if we have time later.
0:27:28 Um, what’s happening, uh, in, in grids is that you need something to stabilize the grids and to store when,
0:27:38 because remember, solar, the sun only shines during the day, it’s usually dark at night, and wind actually, usually only blows at night.
0:27:50 But you normally don’t have, the, the, um, incidents of both together are not always the case, and you have to have something to bridge one of those.
0:28:11 And, uh, increasingly, in past, nuclear’s done that, and gas has done that, increasingly battery storage, uh, at scale, distributed, will help both with trends, transmission bottlenecks, but also with the, um, the two offsetting, uh, amounts.
0:28:16 How do you see the trend with, like, data centers in terms of electrical use?
0:28:21 Do you see that continuing to be, because these take a long time to permit, to get into place?
0:28:24 Or do you see that reducing, uh, in time?
0:28:34 So, so the reason why, uh, one of your questions earlier, which I really didn’t answer, was, um, our data centers, are we, like, are we going to get in trouble with the amount of money that’s going into data centers?
0:28:41 And the answer is no, and it’s largely because it takes a long time to permit a data center.
0:28:42 Mm-hmm.
0:28:53 You need to find power to power the data center, and the needs of the technology companies are very significant, and on top of that, energy usage everywhere is going up.
0:29:08 And as a result of that, it just takes time to bring sites on, and most sites today that are available to be built are already contracted to somebody for the next 20 years.
0:29:29 So, um, we’re in a, we’re at a, a point in time where it’s, it’s, we’re now trying to entitle new sites, and we’re, because of our vast real estate business, our vast power business, our vast data center business, we’re as skilled and as, um, integrated as they are to entitle new sites.
0:29:50 But it takes time, and, um, we’ve got some really exciting large sites coming, but these most, the earliest big one that’s going to come on that’s brand new that we’re entitling will, and even though it has enormous advantages because of, it already has power, it’ll be years away.
0:29:56 And so, you’re, like, all your risk is, you’re de-risked because you’re not doing it unless it’s contracted out, is that?
0:29:58 Generally, yes.
0:30:13 We’re not, uh, we don’t, we’ve, we’ve, in the past, we never have, and, uh, I don’t think we, um, we need to take risk on that, and therefore it’s like, when we build an office building, you know, you’re, you, you let it to a bunch of tenants, then you build it for them.
0:30:19 And, uh, you don’t have to take the risk on that, in particular in these, because of the, um, demand for it.
0:30:22 And what’s the third trend that you see?
0:30:38 So, so the, the third trend that we, um, identified a long time ago, and I’d say it’s, uh, changed even more, but is more relevant today than ever, which is just the de-globalization of industry.
0:30:46 And I, or I’d call it the re-industrialization of countries because of what’s going on in the world.
0:30:48 And, uh, that started with COVID.
0:31:08 It started with, um, uh, the Asia West issues, which, as you can imagine, that one has only, um, the, the, uh, since we coined that four years ago, five years ago, it’s only increased given what’s been going on.
0:31:22 Um, but increasingly many companies are moving, uh, industrial capacity back to Western markets where on balance they can, um, make sense of putting plants there.
0:31:28 And part of it’s for supply chain, pharmaceuticals, uh, need, now need to be next.
0:31:38 Some of it needs to be next to customer, um, because they get caught during COVID that all of a sudden all my manufacturing’s in China.
0:31:39 How do I get it here?
0:31:41 It can’t get out of China.
0:31:59 So increasingly those type of things, um, but, but also with tariffs and with other things, um, you’re going to, uh, relocate manufacturing capacity back to, to other markets and, and be low, more local.
0:32:15 Um, and, um, what I would say is things, many things went to Asia and a lot of them will stay there and the Asian markets will be fine with this because they’ve, they’ve now matured to the point where they are service economies in themselves.
0:32:29 But, um, many products that have been developed there will move back to America because the labor components with robotics coming in are becoming less and less and less.
0:32:36 So the reason for them to be in Asia is, um, less there today than it’s ever been.
0:32:47 And on top of that, if there happens to be a tariff long, if there is a tariff longer term, then, um, then it’s even going to quicken that process up.
0:32:57 What do you see as the second order, either opportunities or challenges to that sort of call it repatriation of manufacturing?
0:33:01 Look, I think China, it’s a, it’s an economy in itself today.
0:33:03 It’s 1.5 billion people.
0:33:05 They’re getting richer every day.
0:33:08 They’re turning into a consumer service society.
0:33:11 There’s not that much of manufacturing that’s relevant to them.
0:33:17 I think they will, they will do extremely well as a country, uh, on their own.
0:33:29 But there are some countries in the world where they haven’t yet transformed themselves to be service economies and they’re reliant on jobs that were from outsourced manufacturing.
0:33:37 And if you can do that closer to consumer, those, um, countries may have some issues.
0:33:43 On balance for Western countries, I’ll just take the U.S.
0:33:50 As an example, you’re bringing some jobs back, maybe not as many as left before to make the product.
0:33:52 But if that product comes back, you’ve actually added jobs.
0:34:06 And, uh, and that’s very positive, which sort of leads to the long-term story of America, which is the long-term story of America is extremely strong because, um, the U.S.
0:34:18 today has, uh, energy, capital, and technology dominance, energy, capital, and technology dominance.
0:34:22 There’s nobody in the world that has a technology businesses that the U.S. has.
0:34:26 There’s nothing in the world that has the capital markets the U.S. has.
0:34:42 And, um, the U.S. just by nature has dominance, nature and some hard work has dominance in oil, in gas, in solar, and in wind, and it has dominance in nuclear.
0:34:49 And those five things together give it energy dominance in the world for a long, long period of time.
0:35:07 And, um, so I think those three, those three things are going to make, on top of one of the greatest GDPs in the world, an entrepreneurial class, manufacturing moving back, at least to some extent, a lot or to some extent.
0:35:10 On balance, it’s going to be positive for, for growth.
0:35:15 Um, the U.S. has a pretty good runway going forward.
0:35:26 It sounds like you think we’re at an inflection point for productivity and some of the, the job losses will be offset by sort of the remanufacturing, uh, coming back to the U.S.
0:35:32 How, how do you, where do you think we are in that, like that game, I guess?
0:35:35 There is no straight line in anything.
0:35:39 Everyone always thinks that, uh, somebody says something and it’s going to happen tomorrow morning.
0:35:48 Usually, usually it happens, uh, in greater amounts, but it takes longer periods of time and takes slower than you think it would happen.
0:35:52 Um, I, I would say we’re in the early stages of all of this.
0:35:56 Uh, we’re seeing, going to see productivity advances and nobody just flips a switch.
0:35:59 Thing is, nobody ever flips a switch.
0:36:03 These are incremental changes over very long periods of time.
0:36:23 But it’s, what it means is that, is that the application of greater intelligence into businesses is going to, um, make business better, more efficient, more productive, and, um, and better, better, better for the world, frankly.
0:36:27 Um, that, that, that just makes us all, uh, smarter.
0:36:28 You mentioned real estate.
0:36:33 How has that changed over the past, I would say 10, but specifically five years?
0:36:43 You know, again, I would say, uh, over the past, uh, 25, 30 years, 10 years, five years, um, these things always just evolve.
0:36:56 And, uh, you know, industrial capacity used to be just used for manufacturing, storage of goods, and today it’s used for transportation of many goods that are delivered to homes.
0:37:02 So industrial has changed, enormously changed as a business over the past 10 years.
0:37:10 Retail has changed because people used to do all their shopping, uh, uh, in stores.
0:37:17 Today, what they do is they do very bespoke shopping in stores and they want experiences in stores.
0:37:21 But if you want to buy paper towels, you usually don’t go to the mall.
0:37:23 You just order it online.
0:37:32 And, um, but, but if you want to have a meal and you want to go and try on a shirt or pair of pants or have some fun for the afternoon, you go to the mall.
0:37:41 And that’s, that’s what’s changed is that commodity goods, if you own commodity, if you want almost today commodity anything, it’s bad.
0:37:43 If you own commodity office, bad.
0:37:45 If you own commodity retail, bad.
0:37:47 If you own commodity industrial, bad.
0:37:49 In fact, if you own commodity hotels, bad.
0:37:58 Um, if you, what’s great today is all of those things in the top 25%.
0:38:05 And our, our view always has been buy the best, uh, own the best, buy the best, continue to reinvest into the best.
0:38:07 And so our real estate is among the best in the world.
0:38:14 Um, and we continue to, um, experience some, some great numbers.
0:38:26 Uh, look over the last five years because of COVID and because other things, and because interest rates went up by 400, 500 base points, um, all of that disrupted the real estate market.
0:38:31 But the, the worst is, uh, behind us by far.
0:38:37 We’re looking in the real view mirror by, by, um, uh, what happened in real estate.
0:38:43 And in fact, this time the fundamentals are actually pretty good in most things.
0:38:52 Um, it’s just, there are some people that have, uh, capital structures that aren’t built for these financing markets.
0:38:59 Uh, and therefore they have to put capital in to be able to deleverage or whatever they have to do or, or somebody else will take over the asset.
0:39:05 Um, but that’s not a, a huge issue across the world.
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0:41:09 Maybe spend a few minutes and sort of like take me behind the scenes in how you think about risk and how you think about interest rates and how you think about debt when it comes to assets.
0:41:19 Our fundamental thesis of investing is that you should put a prudent amount of debt on assets that can withstand markets.
0:41:24 If you can, then you should fix it because you know your cost.
0:41:33 And from time to time, if you got it wrong, you put a little more, make sure you have a little more money around to put it in and support your asset.
0:41:39 So, we’ve always conservatively financed our businesses and assets.
0:41:45 All of our financing is asset by asset by asset by asset or business by business by business by business.
0:41:54 So, any debt that we accumulate onto our consolidated balance sheet is just the accumulation of a whole bunch of single asset financings.
0:42:04 And it’s not that we ever want to or think that we will give back assets or not live up.
0:42:13 In fact, our reputation is with our lenders is that we’re one of the best sponsors in the world to borrow, lend money to because we support our businesses.
0:42:21 But buying, having asset by asset by asset by asset financing allows you to just deal with the situation one by one by one.
0:42:27 And its duration, I mean, they’re spread over long, long periods of time.
0:42:36 And with interest rates, I think the most important thing to remember is we don’t borrow the treasury rate.
0:42:38 Only the government borrows at treasury rates.
0:42:44 And what we borrow at is treasury rate plus spread.
0:42:44 Yeah.
0:42:53 And historically, spreads were 200 basis points and interest rates were 300 basis points and therefore you borrow it at five.
0:42:58 And when COVID hit, interest rate, the treasury rate went to zero.
0:42:59 Yeah.
0:43:06 And what the borrower, most of the lenders said to us is, meh, I’m not going to lend you at 200 over and give you three.
0:43:10 I’m widening that out to 350.
0:43:15 So I’ll give you five or four and a half.
0:43:21 And therefore, before we were borrowing at five and in COVID, we were borrowing at four and a half.
0:43:25 So when people say, oh, geez, you got all this financing in COVID.
0:43:36 Yes, maybe some people did and some people got very low rates because rates were zero and they might have borrowed at two at an extreme point in time,
0:43:37 but not very much.
0:43:40 And most of it, lenders just widened the spread out.
0:43:43 Today, base rates are high.
0:43:44 We’re back to five.
0:43:45 Guess what?
0:43:49 Spreads are the lowest they’ve ever been in history.
0:43:55 We just did a 30-year Brookfield Corporation financing.
0:44:02 So we’re borrowing money for 30 years fixed for that time period and is 125 over.
0:44:10 So spreads, basically all in coupons are important.
0:44:20 And that’s really important to remember about investing in real assets, real estate, but also infrastructure, renewables, et cetera.
0:44:25 What distortions do you see by sort of like historically low interest rates?
0:44:27 And even by today’s standards, you mentioned they went up.
0:44:32 They have gone up quite a bit, but historically, they’re still well below average.
0:44:33 Yeah.
0:44:43 Look, I think that maybe is the most important point to note here is that interest rates aren’t that high.
0:44:48 They’re higher than they were because interest rates went to zero.
0:44:52 And for a number of years after the financial crisis, they were close to zero.
0:44:57 And now they’re actually in a relatively normal range.
0:45:04 I’m sure we’re going to see another 50, 100 base points off of the short rates.
0:45:10 And we’re going to settle into just a regular range of rates.
0:45:19 But these rates are actually pretty normal and for our business, very constructive.
0:45:25 And the things that we can do and we’re refinancing it because the coupons aren’t that much different than what they were before.
0:45:42 People, we talked about sort of dislocations providing opportunities and, you know, maybe spend a few minutes walking me through how you think of positioning to manage the recycle, but not only maintain your assets, but also take advantage of dislocations in the market.
0:45:52 So the first thing one has to do when there are dislocations in the market is make sure that you were prepared for it.
0:45:59 So the one thing you should do always when times are really good is ensure that you’re preparing for the down markets that’s coming.
0:46:06 The ones that don’t usually aren’t successful in the fullness of time.
0:46:13 But if you are prepared, the first order of business is let’s double down and make sure that we’re fully prepared.
0:46:25 But then secondly, and I’d say coming out of recessions or cycles, coming out of the bottom, what’s most important is just have everything you have intact.
0:46:27 Do not lose anything.
0:46:33 Do not lose too much and keep going because there’ll be many people who will have lost stuff.
0:46:43 What’s even better to enhance the business is at that point in time as the market’s starting to recover.
0:46:56 And once you’re comfortable, we’ve taken care of all the things within our business that you can then invest capital into new businesses at that point in time.
0:47:08 That’s the difference between the great winners and long-term investing and those that are just in the middle.
0:47:12 You have almost, well, you have over a trillion dollars in management now.
0:47:17 How do you fend off the pressure to deploy that money?
0:47:20 It sounds like a lot of money.
0:47:22 It is a lot of money.
0:47:23 It sounds like a lot of money.
0:47:25 It’s a trillion dollars.
0:47:28 But it’s not that much when you do what we do.
0:47:36 A couple of years ago, we bought Deutsche Telekom, half a Deutsche Telekom, telecom tower business in Germany and Austria.
0:47:38 It’s a $20 billion transaction.
0:47:42 We’re building for Microsoft $13 billion of power plants.
0:47:50 We’re building with Intel a $32 billion fabrication plant in Arizona.
0:47:52 You know, I can go through the list.
0:48:00 These are large transactions that consume significant amounts of capital that earn excellent long-term returns.
0:48:09 And I’ve just used that to say we’ve been doing this a long time.
0:48:24 What we promise our investors and our clients is that we will take moderate amounts of risk, not no risk, but moderate amounts of risk, and earn good returns over long periods of time.
0:48:26 We won’t shoot the lights out.
0:48:29 You’re not going to get 45% returns every year.
0:48:32 And we’re not trying for that.
0:48:38 But average returns over an above average period of time equal outstanding returns.
0:48:39 And that’s the point.
0:48:46 The point is, our parent companies earn 19% annualized returns for 30 years.
0:48:52 When you compound up, which doesn’t sound like very much, 19% returns annualized for 30 years.
0:48:56 Like, just when you say that in that line, it doesn’t sound like that much.
0:49:03 But I think that’s a million dollars became almost $200 million over that period of time, or $1,000 became $200,000.
0:49:04 It’s a lot.
0:49:14 And so the point is, success in investing isn’t about making a lot of money in a short period of time.
0:49:21 What it’s really about is earning reasonable returns over very long periods of time.
0:49:23 And look, that’s Berkshire Hathaway.
0:49:34 Berkshire Hathaway is successful because they have been able to deploy capital at reasonable rounds of turn over very long periods of time.
0:49:39 And that’s the success of long-term investing.
0:49:41 Is that a company you look up to?
0:49:46 Look, they’ve done an incredible job in their business over a very long period of time.
0:49:48 Maybe you mentioned over 30 years.
0:49:53 Walk me through a little bit of the history of Brookfield and then the future, where we’re going.
0:49:56 So we started as an operating business.
0:49:59 We just invested for ourselves.
0:50:05 We had the businesses that we basically have today.
0:50:14 Infrastructure, real estate, renewables, and industrial service, we call private equity today, businesses, and credit lending.
0:50:15 Those were our five businesses.
0:50:17 We did it for ourselves and we lent money.
0:50:39 And 25 years ago, we decided that we could take those skills we had and turn them into a business to be able to manage some of our money and some of our institutional or other clients’ money and offer alternatives into those funds.
0:50:45 When it started, nobody wanted to invest with us because they didn’t really understand alternatives.
0:50:49 And today, that’s turned into a trillion-dollar business.
0:51:02 It’s been extremely successful, largely because these products are ideal for institutional and retail clients to invest into.
0:51:11 And the past 25 years has been about institutional and this comment is not meant to say that they won’t be investing.
0:51:20 But their increase from going from zero to some of them are at 30%, 40%, 50% alternatives.
0:51:24 When you go from zero to 50%, you can’t go to 100%.
0:51:27 So, a lot of them are at their numbers.
0:51:36 But what’s happening today and to your question of the future is that the same phenomena is now happening in retail.
0:51:38 Retail being individuals.
0:51:41 401ks in the U.S. are going to open up to alternatives.
0:51:45 I think plans around the world will open up to alternatives.
0:51:50 Alternatives are ideal products for retail as well.
0:51:56 In fact, they’re almost more ideal because you’re saving for your retirement.
0:52:06 And what better to have in there than a product that earns a reasonable return over a very long period of time and can compound.
0:52:21 And so, the future of our asset management business is really about that, the opening up of retail and continued growth of retail wealth with our products.
0:52:27 Doing the same things that we do for institutions, exact same.
0:52:34 But now, just opening up in different types of products that are suited or tailored for individuals.
0:52:36 What does that mean?
0:52:40 Maybe walk me through it because, you know, I’ve always thought you’ve had these available to people.
0:52:43 I could go buy Brookfield Infrastructure on the public market.
0:52:47 You can buy it in the public market that fits in a stock portfolio.
0:52:55 But to date, we haven’t offered you a product for your 401k in the private market.
0:52:56 Okay.
0:53:05 That was open to you to say, do you want to buy infrastructure with us and just own a bunch of data centers and different things like that?
0:53:22 We happen to have a couple of listed ones that are very unique, but what people want is private assets within their portfolios, and that’s going to increase, I’d say, exponentially over the next 20 years.
0:53:27 So, retail is sort of the future, but another big area that you’re investing in is insurance.
0:53:32 Maybe walk me through some of the opportunities you see over the next 20 or 30 years in insurance.
0:53:44 Yeah, so outside of our asset management business, we decided to take a portion of our capital and put it into insurance five years ago.
0:53:57 It was a fortuitous time because we bought some excellent insurance companies at a point in time where they weren’t doing very well because interest rates were extremely low and they weren’t earning very high returns on their capital.
0:54:01 Fast forward four years later, the companies are doing extremely well.
0:54:05 We’re making $2 billion a year of cash flow within the business.
0:54:11 And insurance for us is, I’d say the following.
0:54:19 Firstly, and maybe just to go back, our goal was get in the insurance business, not because we wanted to be in insurance.
0:54:31 What our goal is, is our clients come to us because they want our investment skills.
0:54:40 What we have is a very unique offering, is a bunch of investment skills that can create products for long-term investors.
0:54:52 Our insurance company now, being $120 billion of assets, is a perfect long-term investor into all of the things we do for our asset management business.
0:55:14 We have a special expertise to be able to offer because we have greater access or greater comfort with all the investment products to be able to put into the insurance companies than most other groups out there.
0:55:18 Maybe there’s a few others like us, but not very many.
0:55:21 And therefore, we have a special benefit for that.
0:55:26 So, we’ve chosen annuities in the United States largely.
0:55:29 So far, we’ve now just got licensed in the United Kingdom.
0:55:32 Why annuities?
0:55:33 What appeals to you about that?
0:55:36 It’s just because they’re low-risk liabilities.
0:55:40 We’re not taking on high risk on the liability side.
0:55:46 Our goal originally in getting into this was don’t take risk on the liabilities, earn our money on the asset side.
0:55:53 And we have this unique ability to earn excess returns on the asset side.
0:56:10 And our goal was put very significant amounts of capital and overcapitalize the businesses, which allows us to do things on the asset side of the balance sheet, which is very different than many insurance companies.
0:56:11 Like what?
0:56:14 You know, we can own real estate to a greater extent.
0:56:16 We can own alternatives to a greater extent.
0:56:18 We can own infrastructure to a greater extent.
0:56:24 We can own high-yield bonds as opposed to just fixed income on the market.
0:56:29 All the things that we do for our clients, we can put them in the insurance company.
0:56:34 And they may take more capital, but we’ve overcapitalized the company.
0:56:36 So, we started with $4 billion.
0:56:44 We’ve increased the capital, I think, to $16, $17 billion of book equity within the business.
0:56:46 We continue to overcapitalize.
0:56:57 But on top of that, we have another $150 billion of capital up top that if we need more money, we’ll put it into the insurance companies to ensure they’re healthy and better than any that are out there.
0:57:08 And we have an excellent relationship with the regulators and explain all these things to them and are very transparent with all the transactions we do with them.
0:57:30 And we happen to have some very unique things that we can do because, you know, for example, if we own an office building and somebody owns the other half and they want to sell and we know that’s a really cheap price they’re going to sell at, that’s a great real estate investment for our insurance company.
0:57:36 Very seldom do people have that opportunity with our knowledge and access to opportunities.
0:57:40 So, it’s a pretty unique offering.
0:57:43 And that’s what we bring to the table.
0:57:48 Do you think you’ll get out of annuity, well, stay in annuities but expand into other businesses?
0:57:57 I’m imagining short duration stuff is probably a property and casualty doesn’t lend itself to that type of investing, but maybe reinsurance or?
0:58:03 Yeah, look, I would say we wanted to start, this is a 25-year venture.
0:58:04 We’re five years in.
0:58:10 We wanted to start to make sure that we knew what we were doing.
0:58:13 We met all our regulators.
0:58:14 We earned their respect.
0:58:21 And we could operate and figure out what were all the risks.
0:58:23 We’ve been in it five years.
0:58:24 We’re very comfortable.
0:58:36 Over time, we may branch out into other types of other products that we can understand that fit our skill set.
0:58:39 And that’s really what’s important to us.
0:58:47 So, first, we’re expanding internationally writing annuities or pension risk transfer annuities, which are both are very similar.
0:59:03 So, instead of going out of our comfort zone on the type of liability, what we’re doing today is we’re expanding to the UK, which is a big pension risk transfer market.
0:59:06 And that’s just a different way to expand.
0:59:09 Are the pension risks defined benefit or defined contribution?
0:59:19 These are pension risk transfer means, which happens in the US, Canada, and the UK largely, those three places in the world.
0:59:27 What it means is that if there’s a corporation that has a defined benefit plan that wants to get it off their balance sheet.
0:59:31 So, they have a $10 billion plan.
0:59:33 There’s 10 billion assets, 10 billion liabilities.
0:59:37 They can commute that plan to us and we can, our insurance company can take it.
0:59:40 So, they’re no longer on the hook for the plan.
0:59:44 They’re no longer at risk on the assets or the liabilities.
0:59:46 We’ve assumed that risk.
0:59:48 We will now pay their pensioners.
0:59:55 And they gave us the assets to earn over time, hopefully, the amount of money to pay all their pensioners.
0:59:57 And if not, we’re on the hook for it, not them.
1:00:03 Can you spend a few minutes walking me through the machinery of Brookfield and why you’ve structured it the way you have?
1:00:05 Look, I would just say –
1:00:11 I’ll preface this with like one of the criticisms from the outside in is that it’s super complicated.
1:00:14 There’s a lot of different entities and moving parts.
1:00:15 How do you think through that?
1:00:22 So, I would just say that, yes, there are probably more pieces of Brookfield.
1:00:36 First-hand launch, I might disagree first by saying there are many companies in the world that are large like us and they have as many pieces as we do.
1:00:38 That’s the first point.
1:00:40 So, I’m not sure that’s actually a true statement.
1:00:46 But I’ll take your points at face value.
1:00:53 And I would just say each one of the pieces we’ve set up has been highly thought through and contributes a lot to the business.
1:00:57 These are not random things we’ve done.
1:01:03 They’re very specific and they contribute enormous value in the long term to the company.
1:01:12 And because of that, we have to explain them more to maybe – sometimes have to explain them more to investors.
1:01:24 But for our friends, they understand exactly why those pieces are there and what they do for us and what each accomplishes.
1:01:34 In the short term, we could wave a wand and get rid of all those, as you denote, complicated parts.
1:01:36 We could wave a wand and get rid of them all.
1:01:40 In the long term, it would be bad for shareholders.
1:01:43 Less returns would be earned.
1:01:47 We would be more at financial risk.
1:02:00 We would have – we have the maximum amount of flexibility within our structure to be able to go through, deal with opportunities, risks, and everything that’s out there.
1:02:09 So, I just – I – look, we can always do better on explaining the pieces and we try all the time.
1:02:14 And it’s incredibly – our reputation is incredibly important to us.
1:02:24 So, when people criticize us about our structure, our different things that are there, we try to double down and make sure we explain it all to people.
1:02:32 But what I – I would just say that each of those pieces is really important and contribute a lot to the business.
1:02:39 Hypothetically, if you were to all put it under one umbrella, how would that change the opportunity set available to you?
1:02:44 It would just mean dilution to some shareholder.
1:02:50 And, for example, we spun off our asset management business two years ago.
1:02:59 There’s a whole group of U.S. investors, largely, that buy asset management businesses that only want to be invested in asset management.
1:03:03 They don’t want to own assets that we own.
1:03:05 They don’t want to be invested in insurance.
1:03:07 They don’t want to do all the other things we do.
1:03:21 They don’t want to change – like our parent company, Brookfield Corporation, it has changed in 35 years in many different ways in many different times for the benefit of all of us.
1:03:27 But you need to trust us when we’re changing.
1:03:36 Brookfield Asset Management is a pure play asset management business that’s asset light that will probably never be anything different.
1:03:40 You can trust us for that and that’s what it is.
1:03:50 So, they’re just different audiences and it just allows us to have a security which is tailored to that audience.
1:04:04 And if we want to offer it to somebody in the public markets or to another alternative manager we want to merge in or something, it gives us the opportunity to do that and not have to deal with all the other issues that we have.
1:04:09 Well, what about your insurance business or what about your investments or what are you going to do next?
1:04:13 And it just allows us to do that.
1:04:16 So, I don’t – we could do it.
1:04:20 It just would take away a lot of the great benefits we have in the organization.
1:04:28 If you put your investor Bruce hat on, which of the businesses do you think is the best positioned for the next 15 years?
1:04:29 And I’m not asking returns.
1:04:33 I just mean which business do you think is the best competitively positioned?
1:04:35 I just think they’re all different.
1:04:37 They’re all totally different.
1:04:44 Everything we invest into has enormous opportunity going forward as long as we execute properly.
1:04:47 But they’re – each one of them is different.
1:04:50 I get excited.
1:05:00 I could get excited about having all of my net worth in every single one of them and they’re all pretty exciting going forward.
1:05:03 Maybe spend a few minutes on talent and people.
1:05:10 Brookfield is known to take really big bets with what from the outside looking in would be young people.
1:05:14 What do you see in people that gives you the confidence to take bets in them?
1:05:20 How do you build a culture where meritocracy rises and people can take big bets?
1:05:26 So we’ve always had the view that – well, firstly, we’re an extreme meritocracy.
1:05:28 This is a partnership.
1:05:30 It’s a partnership of individuals.
1:05:39 When we leave the partnership, our shares that if you’re an owner or controller of the partnership, they go away.
1:05:41 They go on to somebody else.
1:05:47 So nobody’s family will ever be part of this partnership.
1:05:48 It’s a meritocracy.
1:06:10 Second, we’ve always had the view that a cross between wise, older people and smart, aggressive, young people both give you the gravitas to deal with situations which you need a little history.
1:06:18 But also allow you to be – allow you to know more about what’s going on today.
1:06:26 I’m positive our 30-year-olds today in the business know more about technology than I do because they’ve grown up with it differently.
1:06:38 It allows us to be faster, better, quicker to every new trend in the world and what’s going on out there.
1:06:47 And it also, I’d say, creates a culture where people want to be here and get ahead because they know they can.
1:07:04 And so I – look, we brought to the partners and to our senior people three years ago, we brought Connor Teske forward as the next person that will be the CEO of the asset management business.
1:07:10 That was internally vetted.
1:07:20 It was then externally vetted and today we’re in the process of him continuing to meet clients and investors and all those kind of things.
1:07:23 And I think he’s 37 years old today.
1:07:31 He’s incredibly passionate, talented, and he’ll bring through a whole new group of people within the company.
1:07:38 And re-energizing businesses is what makes them better and different.
1:07:42 Walk me through some of those meetings where you’re making a big investment decision.
1:07:43 What goes on behind the scenes?
1:07:45 How do you quantify risk?
1:07:46 Where do you spend your time on deals?
1:07:53 Our investment process is we only invest in things that we deal with and know.
1:07:58 We have people on the ground and our knowledge of the business.
1:08:07 And we’re – our investment committees are normally only focused on downside protection.
1:08:10 Upside will always take care of itself.
1:08:17 And whether you shoot for 16%, 22%, 29%, 18%, none of those matter.
1:08:19 They’re all great.
1:08:23 What’s really important is what are the risks?
1:08:25 What can go wrong?
1:08:27 How bad could it get?
1:08:31 And how do we deal with it if that happens?
1:08:39 And so we spend virtually all of our time on downside protection at our investment committees and that’s all that’s important to us.
1:08:41 When you’re wrong, where are you typically wrong?
1:08:44 And you haven’t been wrong a lot.
1:08:44 No, no.
1:08:45 Look, we make mistakes.
1:08:47 We try to make small mistakes.
1:08:48 I’d say that’s it.
1:08:51 When we’re wrong, where are we wrong?
1:09:15 We’re wrong in increment – in small ways which aren’t – you don’t know about them very much because in the last 35 years, we’ve been right generally on the large things and nothing has been irreparably harmful.
1:09:26 And that’s because the things we do are small, incremental, and when we make mistakes, we make them along the way.
1:09:37 And we encourage people to keep learning and growing because if you don’t make some mistakes, you never advance, but do not make big mistakes.
1:09:42 And I’d say that’s the biggest thing we try to impress across the organization.
1:09:44 You mentioned the investment committee.
1:09:52 I just wonder, behind the scenes, are investment decisions signed off by one person or is it a committee that signs off?
1:09:56 And if it’s a committee, how do you hold people accountable or responsible for those?
1:10:08 So our – usually what happens is some transaction came into the company some way or we had an idea and we don’t talk to somebody and a transaction came about.
1:10:13 It’s then approved by – it’s approved by today because we have these vast businesses.
1:10:25 It’s approved in the business, but then we have one committee that – it’s almost like an allocation committee up top because we want to know how many – across the organization, we want to know how many transactions are happening at any one point in time.
1:10:29 So we’re not compromising, like you said, how could you make a mistake?
1:10:37 If everybody made a massive transaction at the same point in time, what we’re probably betting on is a cycle.
1:10:40 And you may not want that.
1:10:42 And if you do, you better knowingly do it.
1:11:00 And so in addition to all the deals being approved down below where accountability comes from, we have an oversight committee that approves everything that goes on in the organization, which includes six or eight of us.
1:11:10 And that approves everything really just to be a final governor over the entire organization.
1:11:19 Are there patterns to cycles that you notice in advance of them happening where you’re like, we’re at the first inning or we’re at the late stages?
1:11:21 What are the signs that you look for?
1:11:33 I would just say that cycles are never the same, but they sort of rhyme and they look similar.
1:11:41 So the one thing of having wise older guys around, I’ll consider myself that today.
1:11:47 I used to be a young, unwise individual.
1:11:49 I’ll try to consider myself.
1:11:51 I know I’m old, just not sure I’m wise.
1:12:09 But some of the reason for having the wiser individual around is having the elongated knowledge of what goes on in cycles and what goes on in periods.
1:12:11 And we’ve seen this before, is helpful.
1:12:17 Sometimes it’s a hindrance, but sometimes it’s very helpful for context.
1:12:35 And therefore, that’s what makes great organizations, I think, in our view, is that you have the combination of the tenacity and passion to make investments and be successful,
1:12:53 tempered by the knowledge and skills of past and what’s gone wrong to be able to bring together risk management and drive to succeed.
1:13:07 I’m curious, like, how would you pass that on to somebody in your organization or me if you were to sort of hear the things I look for or don’t look for?
1:13:14 You know, I would say, in general, we don’t do training, quote, unquote.
1:13:20 But every day, every single person in this organization is learning.
1:13:24 And it’s a learned by osmosis process.
1:13:29 We have open plan in the place, including myself, never had an office.
1:13:33 And people talk to one another.
1:13:36 And it’s very interactive.
1:13:43 And therefore, while I started off by saying we don’t train anybody, we train them every single day.
1:13:46 And it’s just different than sending people to school.
1:13:48 Do you do, like, postmortems after an investment?
1:13:49 And what’s the key?
1:13:51 Oh, yeah, especially the bad ones.
1:13:53 What goes into those?
1:13:54 Like, walk me through that.
1:13:55 Take me behind the scenes.
1:14:04 We try to look at, look, the successful ones, you can usually identify and know what happened.
1:14:10 The unsuccessful ones are harder to identify what happened.
1:14:15 But often there are reasons why.
1:14:17 And it either comes down to execution.
1:14:20 You didn’t execute properly.
1:14:25 You had, you mistimed the market.
1:14:30 Or you just made a bad, bad, flawed investment decision.
1:14:32 And those are the worst.
1:14:33 You mistimed the market.
1:14:35 Nah, you know, it’s okay.
1:14:42 But making flawed investment decisions is really bad.
1:14:46 Is that where you’ve got the business strength wrong?
1:14:48 The competitive dynamics wrong?
1:14:49 You don’t understand?
1:14:59 I just, sometimes it’s, we’re, sometimes we’re pushing out into areas which are adjunct to what we do and we probably shouldn’t have.
1:15:00 We really didn’t know what we were doing.
1:15:03 Not often does it happen, but once in a while.
1:15:13 How much of your investment decision, you focus on the downside, but how much of it is like we’re modeling it the next five years and then we’re tracking to that model?
1:15:22 The only thing I tell you about a model that’s produced in an investment committee is it will never be exactly what happens.
1:15:34 But I’d say if you get the, we’re trying to get the trends right, is really what it is, is in investing, it’s can you get the trend right?
1:15:46 And I would say most of our investing is we’re trying to get the price right for value and therefore often we’re buying at a discount to what we think is the value of something.
1:15:53 And therefore, that’s an important thing to note.
1:15:56 How do you think about the geopolitical risk?
1:16:08 We invest in backbone infrastructure largely and even our private equity businesses are backbone infrastructure type businesses.
1:16:23 Therefore, what’s important for us is to go to good countries with good people that you can operate with the standards we operate with and that those countries respect rule of law and will over time be good places to invest.
1:16:26 We don’t really sell over borders.
1:16:40 So, in the United States, where we are, we own data centers and telecom towers and real estate and industrial facilities and all of the things that we own in the U.S.
1:16:42 and we make batteries and we, etc.
1:16:46 All of those are consumed by individuals or companies in the United States.
1:16:47 They’re not shipped.
1:16:49 We make power.
1:16:51 It’s used within state.
1:16:58 Politics don’t really matter to us.
1:16:59 You know, they do in the margin.
1:17:06 But on balance, as long as you invest in a good country, you’re going to be fine.
1:17:09 And by good, I’m assuming you mean stable, rule of law.
1:17:11 How do you think you’re good?
1:17:16 Good means for us it has to be large enough to be able to invest.
1:17:19 Like we can’t have small countries just not because they’re not good.
1:17:20 They’re not a good place to invest.
1:17:21 It’s just not meaningful to us.
1:17:36 When you have a trillion dollars things, the benefit or the drawback is that you can’t go to a little country.
1:17:39 Like we just, we can’t invest a hundred million dollars.
1:17:40 It’s not relevant to us.
1:17:43 So we need large places.
1:17:50 We’d like them to have, we need to operate with the standards that we operate globally with.
1:17:55 We need to be, we’d like to have large GDP.
1:17:56 We’d like to have it growing.
1:18:04 And we’d like to have a currency that’s relatively, it doesn’t have to grow better than everyone else.
1:18:05 It just has to stay consistent.
1:18:07 If it’s highly volatile, not good.
1:18:10 If it goes down over the long periods of time, bad.
1:18:17 So we’d, we’d rather pick countries with those, those factors.
1:18:20 And, but it all comes down to price.
1:18:28 Like some, some have all that and then you, you, you invest when you can.
1:18:30 But, but for us, we have to have people on the ground.
1:18:32 So we pick those countries very methodically.
1:18:33 We put people on the ground.
1:18:38 We invest from time to time, new investments when we find the opportunities.
1:18:41 But we don’t randomly go to countries.
1:18:43 Like this is not a random business.
1:18:44 This is hard work.
1:18:50 Therefore, we have to be in country, be able to action an opportunity when it comes.
1:18:54 And therefore, if we’re not in a country and somebody calls us with an opportunity,
1:18:57 we just say, sorry, we’re not set up to do that.
1:18:58 Can’t, no can do.
1:19:03 It seems like part of your secret sauce is not only doing that in advance, but also
1:19:08 you seem to prove the model before you take outside investors into it.
1:19:13 You know, like I would say we have a large amount of capital ourself.
1:19:15 We’ve always invested ourself.
1:19:19 We want to make mistakes with our own money first, not with others.
1:19:24 Our reputation with our clients is the only thing we have.
1:19:27 And, and that’s really important to us.
1:19:30 And, and we try to incrementally grow to prices.
1:19:35 For example, we, we have a massive platform in the United States.
1:19:37 So we started insurance in the United States.
1:19:43 Now we’re going to the UK to do the same thing we did in the United States.
1:19:47 And we just got licensed to do that.
1:19:52 But it’s, um, we now have all the experience we have from the United States.
1:19:55 We probably couldn’t have started there.
1:19:56 Right.
1:19:59 Because we just didn’t have the same presence there as we had here.
1:20:05 And we always end these interviews with the same question, which is, what is success for you?
1:20:16 Brookfield, uh, is one of the great investment, uh, management groups in the world today.
1:20:31 And 20 years from today, success is that it is, um, bigger, broader, um, more relevant to clients, uh, and continues to do exactly what it does today for everybody.
1:20:35 And earn, earn reasonable returns with, with downside risk protected.
1:20:41 And if we can do that, we’ll have felt success, uh, of all of this.
1:20:50 Thanks for listening and learning with us.
1:20:58 The Farnham Street blog is where you can learn more about my new book, clear thinking, turning ordinary moments into extraordinary results.
1:21:07 It’s a transformative guide that hands you the tools to master your fate, sharpen your decision-making and set yourself up for unparalleled success.
1:21:12 Learn more at fs.blog slash clear until next time.

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0:00:51 Have you noticed that headlights seem brighter these days?
0:00:53 It’s more than just a nuisance for some people.
0:00:58 Those headlights and other LED lights knocked me out of being a teacher.
0:01:02 I just, I couldn’t get to work anymore without suffering these impacts,
0:01:04 these neurological, psychological impacts.
0:01:07 The dark side of those gleaming headlights.
0:01:10 That’s this week on Explain It To Me.
0:01:13 Listen every Sunday morning, wherever you get your podcasts.
0:01:18 Welcome to Raging Moderates.
0:01:19 I’m Jessica Tarlov.
0:01:24 Scott’s off today, but I’ve got a guest who knows the inner workings of Trump’s world better than most.
0:01:26 She’s been in the room, she’s seen how the machine operates,
0:01:30 and she’s here to help us make sense of what’s happening inside the current administration.
0:01:32 Kellyanne Conway joins us today.
0:01:34 Welcome to the show, Kellyanne.
0:01:35 Thank you, Jess.
0:01:36 Nice to be with you.
0:01:38 It’s nice to be with you off campus a bit.
0:01:42 I feel like, you know, we’re always at Fox and you have like three minutes to speak,
0:01:44 and now we have an hour.
0:01:46 Let’s dig in.
0:01:47 Let’s dig in.
0:01:49 In today’s episode of Raging Moderates,
0:01:52 we’re going to be talking about the biggest scandal to hit the Trump administration yet,
0:01:55 Trump’s immigration policies heading to the Supreme Court,
0:01:59 and what a post-Trump world looks like for both Republicans and Democrats.
0:02:04 So last week, the biggest political story was by far and away Signalgate,
0:02:06 and the fallout is still unfolding.
0:02:09 The Atlantic’s editor-in-chief, Jeffrey Goldberg,
0:02:13 somehow got added to a Signal group chat where top Trump administration officials
0:02:16 were talking about airstrikes on the Houthis in Yemen.
0:02:20 The White House tried to push back, but once the Atlantic published the full transcript,
0:02:21 things only got messier.
0:02:25 Now Congress is looking into it, Republicans are in damage control mode,
0:02:28 and national security concerns are piling up.
0:02:34 Kellyanne, what’s your kind of top-line feeling about so-called Signalgate?
0:02:36 What did you think when you saw the story?
0:02:38 Do you feel any differently than you did on day one?
0:02:42 Well, clearly it was a mistake, and a mistake has been admitted and rectified.
0:02:46 Nobody was purposely inviting a reporter, let alone Jeffrey Goldberg of the Atlantic,
0:02:53 to this group chat where the Secretary of Defense predominantly was giving an update
0:02:58 to the national security team and others like the chief of staff and deputy chief of staff
0:03:02 for policy and the like on what was about to happen in Yemen.
0:03:06 And when I hear he was invited, he wasn’t invited.
0:03:07 I don’t have Jeffrey Goldberg in my contacts.
0:03:12 I can’t add him to anything on my phone, certainly for many of the reasons that President Trump has
0:03:14 actually articulated himself.
0:03:20 I think this is one thing that a big bone that the media will continue to gnaw on, though,
0:03:25 because it seems like the very first time they can truly sink their teeth into the administration,
0:03:26 and President Trump said as much.
0:03:29 Jessica, people tried it with the January 6th pardons.
0:03:30 They tried it with the doge cuts.
0:03:36 They’re trying it by torching and burning down the dealerships of innocent Tesla dealers and
0:03:37 sellers and owners.
0:03:42 They’re trying everything they can, but I would really echo what Governor Gavin Newsom said over
0:03:48 the weekend, if not previously, which is that the Democrats are suffering a big image and messaging
0:03:48 problem now.
0:03:50 It’s not about another messenger.
0:03:51 It’s about a message.
0:03:57 And I think if the entire party is really centered on how can we screw Trump and the American
0:04:05 president and, by extension, America herself, then this signal event that was revealed one
0:04:11 week ago today, Jessica, will be probably the best and highest hope.
0:04:16 But it’s a distraction away from the volume and velocity with which President Trump and his
0:04:17 administration are operating.
0:04:22 If you look at the CBS YouGov poll over the weekend, you look at other polling, people
0:04:27 are fairly—they’re giving Donald Trump the space and the grace this time to build an
0:04:34 economy, to stop the illegal border crossings, to stop these wars that he inherited in Ukraine
0:04:38 and the Middle East, and to get energy production back online.
0:04:44 I don’t know why we had a war on fossil fuels and fracking and why President Biden paused the
0:04:45 LNG permits.
0:04:51 But all these things that President Trump is doing that Americans do like cannot be subsumed
0:04:56 by something that was accidental, unintentional, and a mistake.
0:04:56 Yeah.
0:05:00 So there was a lot in there, and I want to try to pick most of it apart.
0:05:08 But there were a ton of specifics in the conversation, most coming from Secretary Hegseth, some coming
0:05:12 from National Security Advisor Mike Waltz, that are not just casual conversation.
0:05:14 People have said this is obviously classified.
0:05:20 If someone of a lower rank had done something like this, they would be out of a job and maybe
0:05:22 going before a military tribunal.
0:05:24 The American public knows how serious this is.
0:05:26 YouGov did some polling on it.
0:05:28 Fifty-three percent say that this is a serious problem.
0:05:34 And conversely, for instance, Trump’s classified documents case was less—as a percentage—less
0:05:38 serious Clinton’s emails, as well as Biden’s classified documents.
0:05:45 So the American public understands that this is very serious and it’s not something to brush
0:05:45 over.
0:05:50 And I don’t think the administration is going to be able to, even if you want to paint this
0:05:52 as something of a media obsession.
0:05:53 Well, it certainly is a media obsession.
0:05:57 Fifty-three percent of Americans, you’re saying, based on the way a particular poll question was
0:06:02 asked in a particular poll, say this is serious, but 99 percent of the mainstream media says
0:06:02 it is.
0:06:04 So there’s a disconnect there, as usual.
0:06:11 But look, I’m glad you admitted that the Donald Trump documents case in Mar-a-Lago was thin.
0:06:13 That’s all obviously been litigated.
0:06:21 I disagree completely that President Biden housing his classified documents next to an old Corvette
0:06:26 in a garage that his son also had access to and his myriad problems.
0:06:28 I do think that’s serious.
0:06:33 And frankly, the country rejected Hillary Clinton for many reasons, but in part because they didn’t
0:06:33 trust her.
0:06:37 They shot—if you look at the Washington Post polling right before the election in 2016,
0:06:42 Jessica, people didn’t think she was honest or trustworthy, ABC News, Washington Post poll,
0:06:47 and others, and part of it was because of the way she had handled her emails, the way
0:06:52 she had handled, I don’t know, dozens or a dozen or so phones and bleach bidding and all
0:06:53 of that.
0:07:00 So I think this is important just because, thank God, no damage was done, and thank God that
0:07:01 the mission was successful.
0:07:04 And people are about production and delivery.
0:07:08 I think the Democrats only want to be about process when they think it benefits them.
0:07:10 And I know Trump derangement syndrome is real.
0:07:12 I know it starts at stage five.
0:07:15 I know there’s no vaccine cure or therapeutic for it.
0:07:20 But in this case, it was a successful mission, and people will focus on that.
0:07:28 They will wonder why the facts that under Biden’s watch, there were 174 attacks on our Navy warships,
0:07:34 that these terrorists and these pirates were disrupting regular routes so that you could
0:07:37 not have safe and efficient passage in these routes.
0:07:44 And now this is all being turned around because you actually have bold leadership in the White
0:07:45 House and in the national defense team.
0:07:47 So people should look at the success of the mission.
0:07:49 I believe they will.
0:07:55 And again, when mistakes are made, I think the most important thing to do in life and in
0:07:59 politics and anywhere else in the national security team is to admit the mistake, figure
0:08:03 out how it happened, promise that it will never happen again.
0:08:10 If mistakes were made in Afghanistan, then I’ve yet to hear President Biden or Vice President
0:08:17 Harris say it, the most energy that President Biden seemed to exert after 13 service members
0:08:22 were senselessly killed because he went against the advice of most of his national security team
0:08:27 and his generals and withdrew out of Afghanistan on a dime almost immediately.
0:08:32 The most energy he exerted was looking at his watch while the grief stricken families were just
0:08:36 looking for a little bit of grace and recognition from the commander in chief.
0:08:41 That is something Democrats have been very critical of, leaving Bagram Air Force Base in the
0:08:45 wingspan of China, leaving the Taliban in charge of Afghanistan.
0:08:49 I mean, really, Jessica, what’s the point that we had a female vice president who wanted to be the
0:08:53 first female president of the United States in Kamala Harris if the women in Afghanistan have
0:08:58 fewer rights and less free now because of the policy prescriptions and the decisions that
0:08:59 she and her boss made?
0:09:07 And so if we’re going to talk about relative circumstances and consequences, I think the
0:09:10 more relevant ones are letting just millions in here across the border.
0:09:15 I think it’s going to be a very rough week and month of April for the Biden team, Biden-Harris
0:09:19 team, with respect to all these books coming out where you’ve got
0:09:26 Biden people talking on the record and unattributed about Biden’s compromised capacity.
0:09:30 So if we’re going to talk about relative things, I think this is very important.
0:09:34 The fact that these books say that Kamala Harris’s aides were preparing for Joe Biden to
0:09:37 die in his first term is like…
0:09:39 I actually think that that was just responsible.
0:09:43 Frankly, if you have the oldest president in history, you should be open to the fact that
0:09:44 he might pass away.
0:09:48 But listen, I know that I’m going to have a very bad April on the five.
0:09:49 I am prepared for it.
0:09:51 We’re going to be talking about this ad nauseum.
0:09:55 But I’m not trying to do a comparison.
0:10:00 I’m trying to have a conversation about this as a scandal in and of itself.
0:10:05 And I do want to note that the Trump’s classified documents case, it wasn’t adjudicated.
0:10:07 It was dismissed because Donald Trump won.
0:10:08 Eileen Cannon just did what he wanted.
0:10:14 And Hillary Clinton was investigated by the FBI, the State Department and Congress over that.
0:10:16 And as you said, she ended up losing the election.
0:10:20 So using those as comps, I don’t think is really fair in this circumstance.
0:10:25 And it seems quite clear from the Wall Street Journal’s reporting that National Security Advisor
0:10:30 Mike Waltz used information that we got from the Israelis, so an ally of ours, an incredibly
0:10:36 important one, about the missile expert who was heading into his girlfriend’s house, which
0:10:37 they ended up striking.
0:10:43 And the Israelis are apparently very upset about this, expressing to the White House that
0:10:45 sources and methods were compromised.
0:10:50 And it seems like a pretty clear line between sources and methods and something being classified.
0:10:56 And if we are to grow from this, do you feel like the administration should open themselves
0:10:58 up to investigations?
0:11:00 There should be a DOJ investigation.
0:11:03 I know we’re going to get the Senate Armed Services looking into it.
0:11:07 Roger Wicker is on board with that, and Jack Reed, the ranking Democrat as well.
0:11:12 But do you think that that’s deserved or that we’re going to move forward with legitimate
0:11:16 and earnest investigations into how something like this could happen and why they were on
0:11:20 some of them personal phones and using an unsecured app?
0:11:25 Because, you know, if those phones were hacked by the Russians, the Chinese, the Iranians, they
0:11:27 don’t need to have someone’s password to get into signal.
0:11:29 They can just see everything that’s happening on the phone.
0:11:31 So, Jessica, there’s much to unpack there.
0:11:36 I, like you, am aware of the public reports that the Senate Armed Services Committee intends
0:11:41 to investigate what happened and why and how and the like.
0:11:43 That’s probably the most appropriate form.
0:11:50 This country seems super fatigued from Department of Justice investigations, particularly in this
0:11:51 last.
0:11:56 Merrick Garland, Jack Smith, and all the law firms now paying some of the ultimate prices
0:12:00 and, frankly, capitulating immediately because of their involvement.
0:12:03 But, look, I take national security very seriously.
0:12:08 I was not a national security official, but I had a TSSI when I was in the White House.
0:12:11 And I will tell you, I don’t have Signal on my phone.
0:12:12 I don’t have Jeffrey Goldberg in my contacts.
0:12:14 Why not?
0:12:19 Well, just I would note that in the first Trump administration, the first time I even learned
0:12:24 about Signal, one of the people who worked there who liked to call everybody else a leaker seemed
0:12:25 to live on Signal.
0:12:26 So I get it.
0:12:32 But in this case, I do take very seriously the sworn testimony almost a week ago, Jessica,
0:12:39 of John Ratcliffe, formerly of ODNI, now our CIA director.
0:12:44 And he swore under oath to the Senate last week that one of the first things that he was told,
0:12:48 which, you know, the rest of the team would have been told when he became the CIA director
0:12:55 two months ago, is that Signal was installed on his computer and that it was an acceptable
0:12:56 way of communicating.
0:13:03 If that’s the CIA director talking, I’m going to give that the legitimacy and credence that
0:13:03 it deserves.
0:13:10 So, yes, I think if you’re going to have investigations, the legislative branch wanted to look at what the
0:13:13 executive branch did is probably the way this is going to go.
0:13:20 But again, and I like the fact that President Trump, as is his practice, very unique and
0:13:24 typical for him, was forward facing about this saying, I don’t know what happened.
0:13:25 I don’t use Signal.
0:13:26 I wasn’t part of that.
0:13:28 But we’re going to take a look at it.
0:13:29 I’ve asked Mike Waltz to take a look at it.
0:13:30 He’s a good man.
0:13:35 Then, you know, he admitted it came from his team or him himself, put the group together,
0:13:39 accidentally added someone and the like.
0:13:45 You’ve had two national security officials on two different days last week testify under
0:13:45 oath.
0:13:50 Tulsi Gabbard, ODNI, and of course, the aforementioned CIA director, John Radcliffe.
0:13:51 Yeah.
0:13:53 Well, Tulsi had to correct herself from the day before.
0:13:55 She had a bit of a brain fog.
0:13:59 And yes, Signal was installed and it was Biden-era guidance, but you were supposed to use it for
0:14:01 ordinary text messaging.
0:14:03 You were not supposed to use it for classified information.
0:14:10 But you touched on something that is always, as an outsider who’s very interested on the
0:14:16 inside of what goes on in Trump world, this tension between how Trump feels about the media and
0:14:23 especially someone like Jeffrey Goldberg, who he has been mad at, to say the least, for several
0:14:25 years now because of the suckers and losers story.
0:14:26 Well, it’s just a lie.
0:14:29 Okay.
0:14:32 Yeah, we’re certainly not going to litigate that today, but we know what Jeffrey Goldberg
0:14:34 means to Trump.
0:14:40 But do you think that the bigger sin, if in the president’s mind, is the fact that someone
0:14:45 was clearly in contact with Jeffrey Goldberg, maybe obviously unintentionally putting him
0:14:50 in that chat and this whole thesis of he got, quote unquote, sucked in is obviously ridiculous,
0:14:56 or is what his top national security heads were doing the bigger sin?
0:15:01 So is it the, you know, maybe you’re a leaker, you’re talking to the press, or is it the sharing
0:15:03 of classified information and being in that group chat?
0:15:04 That’s all hypothetical.
0:15:09 And the president, I think, himself has said, others have said there was nothing classified
0:15:09 in there.
0:15:17 But look, I think there’s just too much, too many hypotheticals in there for me to make a
0:15:22 credible judgment until we know all of the facts.
0:15:25 But I will say it’s not just Jeffrey Goldberg.
0:15:29 I mean, sure, the Atlantic was first out there perhaps saying impeach him.
0:15:29 I don’t know.
0:15:33 I think the Washington Post at 12, 15, 15 minutes after President Trump was born in on January
0:15:37 20, 2017, the Washington Post said now, you know, it’s time to impeach.
0:15:40 Maybe a different post now, but that was the post then.
0:15:44 Let’s not even want an American president to succeed or America to succeed.
0:15:51 And that’s been, look, Jessica, that the mainstream media’s job in the Trump era too often has
0:15:53 not been to get the story, but to get the president.
0:15:56 And I think it helped him win this time, frankly.
0:16:01 I think it has absolutely helped President Trump, who is seen as resilient and a survivor and gotten
0:16:07 the biggest second chance I’ve ever seen for anyone in this second term eight years before
0:16:13 after he was first elected, that I think that the mainstream media’s overall approval rating
0:16:15 going way down.
0:16:21 And there’s sort of this sort of elite, effete way of telling everybody, this is what’s important
0:16:26 to you as a consumer of news and information, as a voter, as an American.
0:16:28 And we’re going to tell you what’s best for you.
0:16:34 And if you disagree, you’re racist, xenophobic, uneducated, hillbilly, wearing a red MAGA hat.
0:16:39 I mean, look at this ridiculous, crazed woman who committed crimes on video just from this
0:16:40 weekend on New York City subway.
0:16:42 It’s in the New York Post today.
0:16:46 She’s like, she’s wagging her finger in a guy’s face because he has on a red MAGA hat.
0:16:48 And she’s calling him all these names.
0:16:51 I like to call her names too, but why would I dignify her?
0:16:55 Except that what happens is she chases him off the platform and face plants.
0:16:57 I mean, people just have to stop.
0:17:00 You have to stop committing violence at Tesla dealerships.
0:17:03 You have to stop wagging your finger in front of people’s faces.
0:17:08 And, you know, part of me, as Trump’s campaign manager in 2016, and then counseled the president
0:17:13 from day one, I had 24-7 Secret Service when we first arrived in Washington.
0:17:19 And inside my house was a seven-year-old, eight-year-old, a 12-year-old, and a 12-year-old.
0:17:20 That is a disgrace.
0:17:23 And that’s only because of the threats of violence.
0:17:25 So sure, we can talk about this, that, and the other.
0:17:30 But what the media have done, them direct messaging my 14-, 15-year-old daughter at the
0:17:32 time, disgrace should be held to account.
0:17:35 So I don’t lump everybody in there.
0:17:41 But this whole notion that the job is to, quote, stop Trump, get Trump rather than get the story,
0:17:46 that’s why when things like Signal happened last week, sure, people were held to account.
0:17:49 The president had a special meeting, had the cameras in there, as he always does.
0:17:51 What a difference from Biden-Harris.
0:17:55 Has the cameras in there, is answering the questions, is saying Mike Waltz took responsibility, and
0:17:57 or is going to further investigate it.
0:18:00 So at least he’s engaging in the media.
0:18:02 It’s not particular to any one reporter.
0:18:03 It’s his entire ethos.
0:18:07 George Stephanopoulos, ABC News, has had to pay $15 million.
0:18:14 He was repeatedly told, don’t call Donald Trump, don’t refer to him by that word, and kept doing
0:18:14 it anyway.
0:18:19 You’ve got all these other places, like Metta, now giving money to President Trump’s library.
0:18:24 I mean, people are having silence and shadow ban and censor, not just of the former president
0:18:27 of the United States at the time, but his supporters, too.
0:18:32 Couldn’t you argue, though, that they’re doing that because they’re afraid of President Trump
0:18:38 and what he might do, versus that they genuinely feel some sort of affection for him, or they’ve
0:18:39 seen the light?
0:18:43 Like with Mark Zuckerberg, I think that that’s quite clear what’s going on.
0:18:44 He doesn’t want to be investigated.
0:18:46 He already has a case that’s coming up.
0:18:52 So, I don’t know, you think everyone just woke up one day and were like, oh, you know,
0:18:57 I’ve been blind to how incredible President Trump is and what a huge victim he is?
0:18:59 Or people are trying to be smart business folks?
0:19:05 Whatever combination it is of what you suggested, let me suggest an alternative to that, which
0:19:13 is many of them have said, wow, that was a really overwrought, unfair reaction to what
0:19:18 was happening where we’re shadow banning, censoring, and silencing websites.
0:19:24 I mean, people looked at the New York Post losing its Twitter feed for two weeks before
0:19:29 the 2020 elections because they dared to tell the truth that no one else would, that Hunter
0:19:31 Biden’s laptop is real.
0:19:35 And there’s discussion on there that’s actually relevant to voters in making the decision between
0:19:37 Trump and Biden in 2020.
0:19:42 They’d want to know about all this money flowing to the Biden family from Ukraine, from China.
0:19:49 This guy, Hunter Biden, I mean, Joe Biden may have no energy, but Hunter Biden had no energy
0:19:52 experience and he’s on the border Burisma and so on and so forth.
0:19:57 And he’s talking to the big guy and he’s so that was all relevant, but it was shut down
0:19:58 by Jack Mercy on Twitter.
0:20:02 And so was the New York Post and then 51 intelligence officers, et cetera.
0:20:08 Like this is all this makes people feel that there is not just two tiers, two tiered system
0:20:11 of justice, Jessica, but a two tiered system of media allowances.
0:20:16 Like the First Amendment somehow applies less to people because they like or vote for Donald
0:20:16 Trump.
0:20:17 And that’s just not fair.
0:20:19 And I think there’s been a big comeuppance that way.
0:20:21 I totally agree with you.
0:20:25 I mean, I listen, I work our colleagues feel similarly to you.
0:20:27 I talk about this on an almost daily basis.
0:20:32 I would know what the laptop story that was down for 24 hours and Donald Trump was the
0:20:37 one in office when this was going on and coordinated with social media companies for quote unquote
0:20:41 censorship, certainly about covid, just the same as any Democrat would have.
0:20:47 But, you know, I tend to think the election was not going to get swayed on Hunter Biden’s dick
0:20:52 picks. And that was what was the main concern of his father, which were on that laptop.
0:20:55 But listen, what’s done is done.
0:21:00 And frankly, I think Democrats would have been better off if Trump had won in 2020 versus
0:21:01 won this time.
0:21:06 And I know a lot of people in his orbit who feel the same way that he had this those four
0:21:11 years to prepare for this new administration and is doing things obviously very differently
0:21:16 and in some ways getting higher marks, his approval is up, his approval on immigration.
0:21:18 That’s the only area that he is above water.
0:21:20 And I want to get into talking about that.
0:21:23 But, you know, the American public seems to be broadly behind him in that.
0:21:30 So I always appreciate how quickly you can get to the points that you want to make as someone
0:21:31 who tries to do this for a living.
0:21:33 I’m always like, I should be more like Kellyanne.
0:21:34 I could get there faster.
0:21:44 But before we get off of SignalGate, do you feel that they are going to stop using this
0:21:47 app for these kinds of conversations, that there will be a lesson learned?
0:21:55 Because I do think in general that the American public is forgiving and they want to hear that
0:21:59 there has been responsibility taken and that there are going to be changes made.
0:22:04 And I know that, I mean, it was public reporting, so you could say that it was inaccurate,
0:22:11 but that apparently Susie Wiles and Marco Rubio, J.D. Vance wanted Trump to get rid of Mike Waltz,
0:22:18 that Pete Hegseth is safe in all of this, even though he was sharing the specifics in enormous detail
0:22:21 that everyone who has served has said couldn’t be anything but classified.
0:22:25 But do you think there is going to be a change of direction in terms of how they communicate
0:22:25 about these matters?
0:22:26 Perhaps.
0:22:33 But, and look, the, ideally, and this is not, and I think President Trump made this clear,
0:22:38 as did others, over the weekend, if not last week, Jessica, even ideally you’d want to be
0:22:40 in a skiff altogether physically.
0:22:40 Yeah.
0:22:41 You can’t be.
0:22:46 And so I think that when things are happening in real time and you’re trying to keep people
0:22:53 apprised, I appreciate the fact, actually, that there were 18 people, 19, unfortunately,
0:22:57 but take Goldberg off of there, that there were 18 people in the know.
0:23:02 That, that was my, that’s always been my experience as an advisor to President Trump, as his counselor
0:23:04 in the White House, is like, there is more and not fewer.
0:23:09 And I appreciate that because you should have, you know, even the Bible says there is wisdom
0:23:12 in a multitude of counselors, quite literally.
0:23:17 So I appreciate that, again, as opposed to a Secretary of Defense who has ambulances coming
0:23:19 to his house and they brush it under the rug.
0:23:20 We don’t know who’s in charge.
0:23:24 The President, the Commander-in-Chief doesn’t know his Secretary of Defense is under anesthesia,
0:23:25 is at the hospital.
0:23:33 All this is, I think I use it as an example because it’s Exhibit A of endless exhibits of how secretive
0:23:41 and furtive and just, I think, presuming that we, the people, are so stupid and unworthy of truth
0:23:44 and transparency in the last administration that this is so refreshing.
0:23:50 So you’re even asking questions that are held to a higher standard automatically because of how public-facing
0:23:56 and available and accessible President Trump and his team have been to the media, to the public, and the like.
0:23:57 I just wanted to correct one thing.
0:24:03 I may have misheard you that the report in the Wall Street Journal, you said that the Chief of Staff
0:24:06 and the Vice President and others, one of my friends, was gone?
0:24:07 Politico.
0:24:08 Oh.
0:24:09 Reported that.
0:24:10 Politico, I don’t know.
0:24:15 I had read the Wall Street Journal piece where the President had allegedly been asking people what
0:24:22 they thought, something I’m familiar with, and that folks just felt, you know, keep things as they are.
0:24:28 I know President Trump also, Mike Flynn, his first national security advisor, I was there,
0:24:34 was gone within a month of the inauguration, and I know there’s, you know, a certain sensitivity that was
0:24:35 much more serious, frankly.
0:24:40 But in any event, meaning what the President was saying, was considering, because he was
0:24:42 very nice about Mike Flynn.
0:24:47 He sent me on TV that morning, called me at 6.04 a.m. and said, who’s on TV?
0:24:51 And I said, well, we took ourselves off because, you know, of what happened with General Flynn
0:24:55 last night, and you’re going to have a press conference today at 2 o’clock on something totally
0:24:55 different.
0:24:56 You’ll be asked about this.
0:24:57 I didn’t want to get ahead of you.
0:24:58 He’s like, no, no, no, go out there.
0:25:02 So I went on some morning shows, and, you know, we weren’t saying a number of things.
0:25:08 But I just say this because remember that those who—I’ll give you this analogy.
0:25:14 Lots of people saying right now, we did not vote for Elon Musk, didn’t vote for Donald Trump
0:25:14 either.
0:25:16 So they should check themselves a little bit.
0:25:17 Same thing here.
0:25:23 Those saying, you must fire your national security advisor, just want a scalp on the wall.
0:25:26 It’s just another way to hurt President Trump, and by extension, hurt America.
0:25:34 Why, when we have these successful strikes against the Houthis, who, for whatever insane
0:25:39 reason, Jessica, and I’ve talked about it before, insane, incomprehensible reason, you’re smart
0:25:40 and you’re honest.
0:25:46 So tell us why, in the very first week, within days of being sworn in, President Biden would
0:25:51 delist the Houthis from the FTO, the Foreign Terrorist Organization.
0:25:52 This makes no sense to anyone.
0:25:53 They are foreign terrorists.
0:25:55 So Trump puts them back on.
0:25:56 We have successful strikes.
0:25:57 That’s great.
0:26:00 We also are trying to deal with this Russian-Ukraine war.
0:26:08 He’s trying to bring the rest of the hostages out and home and get peace in the Middle East,
0:26:10 some kind of deal in the Middle East.
0:26:15 So why, when all that’s happening, should the President of the United States shake up his
0:26:18 national security team because of an unintentional mistake?
0:26:24 I do think it’s a lot bigger than that, and my foundational question is about it just being
0:26:28 fully investigated in the same way that the Hillary Clinton server was or the classified
0:26:34 documents cases on either side with Biden and Trump, though that was cut prematurely short
0:26:35 by his win.
0:26:39 And to your points about the Biden administration and the, you know, withdrawal from Afghanistan,
0:26:42 they lost, right?
0:26:48 So using this example or trying to go back in time and using it as a comp, Biden-Harris lost
0:26:51 or Harris-Walls, which was the extension of Biden-Harris.
0:26:54 And the American public did largely feel the same way as you.
0:26:58 But Biden’s approval rating dropped after the Afghanistan withdrawal, and it never recovered.
0:27:02 At some points, it went even lower, I think the lowest in history.
0:27:08 Well, especially among independents, I think Biden really never recaptured any kind of footing
0:27:09 with independents.
0:27:12 Let me just say, I’m not concerned about the political consequences at all.
0:27:20 And so the fact that Biden-Harris lost because they had not one but two, uninspiring, not particularly
0:27:26 compelling or great speakers as their candidates, as their nominees, the electoral consequences,
0:27:34 that election was, gosh, 40 months, 39 months after about late August 2021, early November
0:27:34 2024.
0:27:37 So over three years, Jessica, after the Afghanistan withdrawal.
0:27:42 I’m not talking about electoral consequences or political fallout because the immediate fallout
0:27:44 in Afghanistan was what I said.
0:27:49 We left billions of dollars worth of technology and equipment at Bagram Air Force Base, which
0:27:54 I remember the late, God rest his soul, Senator Joe Lieberman had said at the time, like,
0:27:56 gee, this is something I helped negotiate, too.
0:27:59 Lots of Democrats, lots of Republicans felt Bagram was the right place.
0:28:03 You know, this was the right place to negotiate an airstrip.
0:28:09 And, you know, leaving Afghanistan in the hands of the Taliban, I mean, it just washed away all
0:28:12 the work that these three administrations had done.
0:28:16 So I just, I’m not worried about political consequences so much as what does this all mean?
0:28:22 And if we do, if we assess it that way, then we say this was a mistake.
0:28:26 It is being corrected, should not be repeated.
0:28:32 And, and most importantly, the whole, the mission was successful.
0:28:36 That I feel like every American should be able to applaud and appreciate,
0:28:40 no matter how they feel about President Trump, his national security team,
0:28:46 or the use of signal and the accidental inclusion of any reporter, by the way, let alone a hostile
0:28:46 one.
0:28:49 Yeah, well, I do have to.
0:28:55 Scott isn’t here to say it for himself, but someone who gets pulled over for a DUI has on
0:28:56 average done it 80 times.
0:28:59 So that is the larger issue here.
0:29:01 I am thrilled that the mission was successful.
0:29:05 You know, fist pump, American flag, fire emoji, all of the things.
0:29:11 I just think that we need to be more careful about this and, you know, really get to the
0:29:17 bottom of how often this is going on, especially with a group that big that doesn’t usually involve
0:29:19 Jeffrey Goldberg, but we have more to talk about.
0:29:20 So let’s take a quick break.
0:29:21 Stay with us.
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0:31:49 Okay, that email is done.
0:31:52 Next on my to-do list, pick up dress for Friday’s fundraiser.
0:31:55 Okay, all right, where are my keys?
0:31:56 Oh, in my pocket.
0:31:58 Let’s go.
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0:32:24 Oops, that was my exit.
0:32:26 Oh, well, that’s fine.
0:32:27 I’ve got time.
0:32:35 After the meeting, I gotta remember to schedule flights for our girls’ trip, but that’s for later.
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0:33:09 Yep, I’m on it.
0:33:13 I mean, that’s totally fine by me.
0:33:17 Play Celebrity Memoir Book Club.
0:33:19 I’m Claire Parker.
0:33:21 And I’m Ashley Hamilton.
0:33:24 And this is Celebrity Memoir Book Club.
0:33:29 Welcome back.
0:33:47 I want to talk about immigration, but if we can quickly touch on tariffs, because I don’t think I’ve actually heard you speak about, quote-unquote, Liberation Day, which is coming up on Wednesday, when we’re going to shake up the world trade order and make sure that Americans are, quote-unquote, treated fairly.
0:33:48 Where do you stand on this?
0:33:49 Where do you stand on this?
0:34:03 I’ve noticed that Howard Lutnick, who has been on TV a lot, has now seemingly been banned from the Sunday shows, or at least he was last weekend, probably after he made that comment about his 94-year-old mother-in-law who doesn’t care about her Social Security check.
0:34:07 But what’s your temperature on the use of tariffs?
0:34:15 Because we know the American public is not into them, and that’s strong majorities across all our polling, including the Fox poll on that one.
0:34:18 69% said it’s going to make products more expensive for us.
0:34:21 It’s by far and away Trump’s weakest point.
0:34:24 So where are you on the tariffs?
0:34:25 Well, a few things, Jessica.
0:34:34 First of all, Secretary Lutnick, the Secretary of Commerce, was also given in his portfolio almost immediately and certainly publicly by President-elect Trump trade as well.
0:34:47 So we have the USTR trade representative, Jameson Greer, served all four years as chief of staff to the US trade representative, Bob Lighthizer, Ambassador Bob Lighthizer, in the first term, very seasoned, very experienced.
0:34:49 Lutnick was—
0:34:52 I think that was the JG that was supposed to be in the chat, by the way.
0:34:55 The Jeffrey Goldberg was the Jameson Greer.
0:34:55 It could be Jameson Greer.
0:34:55 Yeah.
0:34:56 I read that.
0:34:58 That makes some sense, yes.
0:34:59 Yeah.
0:35:09 And so I say this because Lutnick, you know, continues to be a very key player in this administration, along with Secretary Besant and others with respect to tariffs and trade.
0:35:11 Now, here’s the thing with tariffs.
0:35:20 Every Secretary of the Treasury, from Alexander Hamilton to Scott Besant, should—not that they all would, but they should admit, acknowledge that the main purpose of tariffs is twofold.
0:35:23 One is to raise revenue for this country.
0:35:30 And the second is to protect vital American industries and its workers and, really, America and American security herself.
0:35:35 And national security piece of this is very much on President Trump’s mind.
0:35:39 President Trump has added a third rationale for tariffs.
0:35:53 It is either, Jessica, to compel or incentivize transformative changes in behavior by countries or companies or collections of countries—EU, I’m looking at you—on matters that either affect goods and services.
0:36:06 For example, let’s rebalance this export-import, non-reciprocal, unfair, imbalanced trade relationship on automobiles, on spirits, on other goods and services.
0:36:15 But when President Trump started the tariff conversation in November, pre-Thanksgiving, it was about Mexico and Canada.
0:36:17 And I want you to avoid tariffs.
0:36:21 You must get your, quote, criminals and drugs out of our country.
0:36:29 President Trudeau, lately, of the prime ministership of Canada, ran down to Mar-a-Lago to meet with the president.
0:36:37 President-elect Claudia Sheinbaum, the fairly newly elected at that time Mexican president, called the president several times.
0:36:38 They had conversations.
0:36:47 But fast forward, in office, when President Trump threatened it again, or not even threatened, stated it again, not as a negotiating tool, but as a tool in and of itself.
0:36:58 Lo and behold, both Canada and Mexico find 10,000 robust, fully trained, healthy males to go on the front lines and help with border security.
0:37:01 Each of them comes up with a billion or more, with a B.
0:37:08 And in the case of Canada, they come up with a fentanyl czar to help with that.
0:37:18 But since I was the point person for the drug crisis in the first term in the White House, I will tell you, 1% is 50% too much, because that represents a lot of death and destruction in our nation.
0:37:33 And then, of course, the Mexican president, who seems to be forging a decent working relationship with President Trump, Jessica, she also, you know, is doing more to work with our border control and other national security team members, components.
0:37:34 So that’s all working.
0:37:36 I would just say this.
0:37:47 My favorite T-shirt of the winter was, that had to do with politics and governance was, I survived the global trade war, February 3rd, 2025, to February 3rd, 2025.
0:37:51 That was roughly nine weeks ago or 10 weeks ago or so.
0:37:57 And it was, it was, everybody freaked out the weekend before, this, that, and the other is going to happen.
0:37:57 He can’t do this.
0:37:58 It’ll explode prices.
0:38:03 And it didn’t last that long because people sort of either negotiated or capitulated.
0:38:06 You can see whatever, you can use whatever term you want, depending on the circumstances.
0:38:11 Donald Trump would also tell people, President Trump would tell people, Jessica, tariffs are your choice, not his.
0:38:15 That if you want to avoid tariffs, start making more here.
0:38:21 So Mercedes-Benz says that they are the largest net exporter in the whole state of Georgia.
0:38:22 I’m like, wow.
0:38:24 I had to read it three times.
0:38:24 Really?
0:38:27 They’re the, they make a lot of Mercedes there, but they’re net exporters.
0:38:32 They’re making Mercedes in the United States of America and exporting them somewhere else.
0:38:46 Same thing with Toyota, BMW, you saw the deal that the leader of Hyundai made with Governor Landry, Jeff Landry, at the White House last week, announcing more.
0:38:52 So you can’t stand up a new factory or a facility tomorrow, but you sure the heck can have a blueprint that’s real.
0:38:55 And you can also take advantage of something else.
0:39:04 President Trump in mid to late September was at a Georgia town hall, and it was about manufacturing, and he was flanked by two banners, Jessica.
0:39:09 One said made in the USA, and the other one said 15% corporate tax rate.
0:39:14 Now, when Donald Trump got there, when we were there eight years ago, the corporate tax rate was 35%.
0:39:15 Thank you.
0:39:22 President Obama with the Nobel Peace Prize, it wasn’t for taxes, I guess, 35%, which had led to 100 corporate incursions.
0:39:32 That’s U.S.-based companies legally parking their wealth and their headquarters overseas because they literally can’t afford to do business in the U.S. of A.
0:39:34 Those corporate incursions were reversed.
0:39:38 We repatriated billions of dollars and trillions that had been parked legally overseas.
0:39:48 The corporate tax rate went from 35%, the highest in the OECD at the time, to 21%, lower than the OECD average of 23%.
0:39:53 Now, here comes President Trump saying, well, you can get 15% corporate tax rate.
0:39:55 Lots of corporations say, how do I do that?
0:39:57 Read Banner One, made in the USA.
0:40:06 He has since said, if you, if your company wants to invest $1 billion, and most of these companies are investing many billions, or could and should,
0:40:15 If you invest $1 billion, President Trump’s team will give you the white glove treatment, and you will, they will accelerate permitting and approval processes.
0:40:18 He has said this publicly in social media posts, and he has said it since.
0:40:23 So, there are ways to avoid tariffs without whining about higher prices.
0:40:25 You’ve got to make more in this country.
0:40:27 And tariffs is a long-term play.
0:40:29 I think nobody should be surprised.
0:40:33 Build the Wall 2016 is like tariffs and trade 2024.
0:40:35 He promised to do this.
0:40:43 It’s about American investment, American manufacturing, American jobs, American industry, American national security, and America herself.
0:40:44 This is a long-term play.
0:40:44 Last point.
0:41:02 This country knows, and every smart, honest Democrat knows, that we had persistent, punishing, high prices on almost everything, including basics, like fuel and groceries, for four years.
0:41:04 And we didn’t have these tariffs.
0:41:13 So, folks know that poor economic policy coming out of a White House, or Washington, D.C. at the time under Biden-Harris, leads to higher prices.
0:41:29 They’re giving—I think they’re more likely to give Trump the space and the grace for a while longer to get us back to the 2019 levels of wage growth, of job production, of interest rates, and of that rising tide lifting all boats pre-pandemic.
0:41:34 You did say build the wall, but the wall didn’t get built.
0:41:38 So, maybe the lesson is that the tariffs just aren’t going to happen, because you’re right.
0:41:41 February 3rd, they were coming on, and then they were taken off.
0:41:44 And Claudia Sheinbaum basically repackaged something that was already happening.
0:41:50 Those troops were promised under the Biden administration, and as you mentioned, any death from fentanyl should never happen.
0:41:53 But fentanyl is not our problem with the Canadians.
0:41:57 And Trump was the one who negotiated the USMCA, if he has such huge problems with it.
0:42:02 But my concern is for the American public.
0:42:04 They know that this is going to hurt them.
0:42:09 We’ve heard from Peter Navarro, Secretary Lutnik, et cetera, that there would be some short-term pain.
0:42:12 Even President Trump has said it, and J.D. Vance has said it.
0:42:23 And I don’t know if the American public deserves that when they, you know, took a big leap of faith, a lot of these voters, and went with Trump, people who were traditionally Democratic voters or might have sat out.
0:42:29 And they thought that their lives were going to get economically better on day one, because that’s what they were promised.
0:42:33 And tariffs, I’m not saying they can’t be used.
0:42:38 Obviously, we kept the China tariffs that Trump implemented under Biden, even extended them, I think, threefold.
0:42:46 But it’s a very risky gamble for this grand bargain that he’s going after, the Mar-a-Lago Accords or whatever we’re going to end up having.
0:42:52 I think with Trump, you also have to price in other macroeconomic factors when it comes to tariffs.
0:43:06 So, again, if we can balance the whole trade relationship on specific categories of goods and services, Jessica, as goes other countries or collections of countries and even some companies, that’s going to help.
0:43:18 If they extend, if not expand, the Tax Cut and Jobs Act from 2017, which we’ve all been living under, whether people realize it or not, if you lose some of those benefits, you’re going to feel it.
0:43:31 So, if that gets extended and expanded, that, like, no tax on tips, no tax on Social Security, et cetera, then, and even the ECCA, the Educational Choice for Children Act, that President Trump has clearly said he wants to be part of reconciliation.
0:43:36 I have no idea to this moment, zero, how Democrats can be against school choice.
0:43:48 I have no idea why we’re trapping kids of all backgrounds in some of the failing schools when their parents can exercise a choice as to where they go to school and what is taught there.
0:43:50 So, there’s a lot going on in reconciliation.
0:43:52 I think you also have to price in the de-reg agenda.
0:43:56 We had more regulation under Biden-Harris.
0:43:58 We’re going to have fewer regulation, less regulation.
0:44:01 You have to price in the energy production that’s going to happen.
0:44:05 So, I feel like there are other component parts to the macroeconomy.
0:44:06 These things take time.
0:44:11 And you said something at the beginning, which is important, and I’m going to give you a rationale for it.
0:44:17 You said something like, look, President Trump is doing things a little bit differently this time, and he’s got high marks and everything.
0:44:21 This time, he’s getting us back to where we were in 2019.
0:44:28 But he also is undoing some of the grievous, grave damage that was done in the last four years.
0:44:32 And it’s not even – they’re not even pulling things out root and branch.
0:44:41 There are some seedlings, as I’ve told them, planted above the soil that you just have to blow down, like, all these ridiculous new programs and expenditures that are mind-blowing to people.
0:44:55 I think even a smaller federal government footprint and less government spending, whatever that ends up looking like, you have to price all of that in and not just look at tariffs in – not you, everybody – in isolation.
0:44:56 Totally.
0:45:08 I’m happy to do that, and I know that there are some smart people on my side of the aisle who think that we do need the higher levels of tariffs, like the Bernie Sanders and the Sherrod Browns of the world, Tim Ryan.
0:45:23 But, you know, when I look at the larger picture – and this will get us to immigration as well – but we have a 35 percent chance, now Goldman Sachs, of going into a recession, which we did not have.
0:45:24 We have slow GDP growth.
0:45:29 Consumer confidence is falling at a rapid pace.
0:45:36 So it’s not as rosy as one would or that you were painting it, and I get it.
0:45:38 You know, progress is slow but certain.
0:45:53 But when you look at the reconciliation bill and the fact that they want to jam through these tax cuts for people, not just the high earners and what we thought of it, of people earning over $400,000, but $700,000, and they’re going to offset that with cuts to Medicaid up to $880 billion.
0:45:59 You know, that’s going to be inflationary, and that’s just like a payout also to your friends.
0:46:04 And how are you also going to avoid huge inflation with the deportations?
0:46:12 And that’s how I want to get us into this immigration conversation, because, you know, ICE is doing what ICE said that they were going to.
0:46:28 We know that it is inflationary to have, what, half the workforce that you were going to have, not just when we stop getting our goods from Canada that funds the hotel industry, you know, all our lumber, cement, et cetera.
0:46:31 But how do you square those things?
0:46:33 Deporting some of these criminals?
0:46:35 It’s more than that.
0:46:36 And you know, well, you know that it’s more than that.
0:46:54 I do want to talk about the criminal part of it and the fact that there are, at least that we know of, a few innocents that have been sent to this El Salvadorian prison camp for having tattoos that no one paid attention to, like what they actually were, like the autism awareness tattoo or a crown with mom written on it.
0:47:03 But yeah, if he does do a deportation force, which was one of his promises and certainly what Tom Homan wants, what is the outcome of that going to be?
0:47:16 Well, the outcome in many ways is to make sure that we mitigate the chances of another Rachel Morin or Jocelyn Nagourney or Lake and Riley, all of whom were murdered.
0:47:21 And the case of two of them brutally raped with where they were murdered.
0:47:31 Jocelyn Nagourney is a 12-year-old girl raped for two hours under a bridge and then murdered by two people who should not have been here who were here illegally.
0:47:34 And so that doesn’t mean everybody is like that.
0:47:35 Of course not.
0:47:38 What it means is they’re like that and they shouldn’t be here.
0:47:40 And you know what, Jessica?
0:47:51 I feel like the last four years, the biggest epidemic, even though more people died from COVID under Biden than Trump, but the biggest epidemic, certainly that we don’t discuss, is the epidemic of looking the other way.
0:47:54 Of pretending that we don’t see someone’s pain, that we don’t see what’s happening.
0:48:04 And to allow upwards of 10 million people here illegally, and then once they’re here, people can turn on Fox News, probably not much else.
0:48:15 That’s why it’s the highest rated by far of any of the cable stations, or open up their phones and see, see the same people who just got here illegally in New York City.
0:48:25 Get free cell phones, clothing, hotel rooms in New York City, cash, debit cards, your kid’s seat in a New York City classroom.
0:48:27 And people are looking at it saying, that’s not fair.
0:48:28 Oh, you’re a racist.
0:48:32 Actually, I’m an African-American 28-year-old male who says that’s not fair.
0:48:34 Where’s my cell phone upgrade?
0:48:34 Where’s my free clothing?
0:48:38 When was the last time I could take my kids to a hotel room in New York City?
0:48:44 Because I live in this condition, or I’m temporarily homeless, temporarily homeless.
0:48:46 So people just said that’s not fair.
0:48:53 And fairness over wokeness, but really over unfairness, was a huge reason why Trump got elected.
0:48:57 Strength over weakness, and fairness over wokeness slash unfairness, which is slightly different.
0:49:06 So I don’t think, there’s a reason that President Trump’s approval rating, as you said out at the beginning of your podcast, is today is highest on immigration.
0:49:09 Because he does see himself keeping the promises.
0:49:19 And some of the wall was built, Biden had to spitefully take some of that down and let the stuff rot there, because a lot was done on spite, not even ideological differences.
0:49:25 But the premise is the same, which is it all got worse in the last four years.
0:49:42 And all of a sudden, Jessica, an issue that was mired in low single digits, illegal immigration, border security, mired in low single digits, and trade and tariffs was hardly even an asterisk in our polling and everybody else’s polling 10 years ago.
0:49:45 An asterisk means less than 1% mentioned as most important problem.
0:49:53 10 years ago, right about now, when a guy named Donald J. Trump said, I’m going to run for president, but here’s what I’m going to talk about.
0:49:58 He elevated these issues into the national consciousness to international criticism and ridicule.
0:50:02 His company lost contracts and his name on buildings.
0:50:03 Oh, my God, look what he’s doing.
0:50:17 And fast forward, the fall of 2024, thanks to his first term and Biden’s only term, that immigration, border security was now the number two issue in all seven swing states and in all the national polling.
0:50:24 It had risen that high because people started to see for themselves that they live in a border state no matter where they live.
0:50:28 So I feel like, again, talking about space and grace, people will give it.
0:50:42 And if there are folks who are unfairly, unnecessarily swept up in some of this, they will do, I’m sure that they are doing, probably free counsel from some of these groups, they will make a claim about that.
0:50:45 And that will be adjudicated more likely than not.
0:50:46 But I wanted to say something else.
0:50:50 You know, these students, well, the guy’s 30 years old.
0:50:55 He lives in university housing at Columbia, but he was a graduate student there a while ago, I guess.
0:50:57 The 30-year-old who wants to-
0:50:58 Mahmood Khalil.
0:51:00 Yeah, wants to be a poster child.
0:51:06 And the other one, I think she’s at Columbia, but she, you know, she’s another one.
0:51:09 She’s here since she was seven, et cetera, complaining.
0:51:30 If you read, you know, what you have to do if you’re here on a student visa, I mean, this is, you know, if you look at student visa, if you look at criminal activity, national security, public safety concerns, revocation of visa, you know, it says the State Department can revoke a student visa at its discretion, often without prior notice, if it believes a student’s presence conflicts with U.S. interests.
0:51:35 And I think that Marco Rubio, our Secretary of State, is making that very clear.
0:51:41 He said recently, quote, every day I find another one of these lunatics and revoke their visa.
0:51:42 What are they doing?
0:51:43 Well, we see what they’re doing.
0:51:55 The same two eyes that sees the debit cards, cell phones, cash, clothing, hotel rooms, your kid’s seat in the New York City classroom, sees these folks, they’re so bold, they’re wary, they’re all masked up, so we can’t see them.
0:52:01 We see them protesting, I think, inciting violence, making people feel uncomfortable.
0:52:08 I know students at Columbia right now as we speak, and they feel uncomfortable, and the Jewish ones feel completely uncomfortable.
0:52:10 They feel threatened, threatened.
0:52:17 Nobody should, that should not be an occupational hazard of being at Columbia or any other campus in this country.
0:52:23 And so if you look at the national security or public safety concerns, a lot of this could fit under there easily.
0:52:43 You know, the Trump administration’s current stance, as articulated by Secretary of State Rubio, has expanded this national security and public safety concern to target students, you know, to cover students involved in some of these anti-Semitic, anti-Israel activism, you know, citing some foreign policy implications.
0:52:55 But I just can’t believe anybody can argue the fact that these kids can’t go to campus, they miss their final exams, they have to, you know, shelter in place in their dorms because you’ve got some of these folks.
0:52:58 And then what did their big, bold acting president do?
0:53:07 Not to be confused with the former president of Columbia University, who also resigned, but the new acting president resigned because she capitulated to President Trump.
0:53:11 All of a sudden, her favorite color is not red or blue, it’s green.
0:53:23 And she’s so worried about losing the $400 million in federal funding that we fork over to Columbia University so that we can see this nonsense on the campus that she capitulated about a mask mandate.
0:53:25 It’s fascinating to watch.
0:53:28 It’s not just the tech companies given to the president’s library.
0:53:35 It’s not just the big law firms, big law that was against him a year ago and for the preceding seven years.
0:53:41 It is giving hundreds of millions of dollars in pro bono work to issues he cares about.
0:53:44 I hope the drug crisis is one of them, and veterans and school choice.
0:53:49 Those are great causes for a big law to fund if they can’t see their way to fund it themselves.
0:54:08 And now you have university presidents who were allowing this to happen, who were greenlighting it, who Elise Stefanik, at the time the number three in the House of Representatives, she just embarrassed them into oblivion in the case of two or three of them because they’re lying under oath.
0:54:13 They don’t know if anti-Semitism is anti-Semitism when the rest of us do.
0:54:25 And so I think there’s a lot going on here, but if you actually read the student visa piece, there is a lot of latitude for the country.
0:54:34 If you feel like somebody who’s here on a student visa, which is a privilege, by the way, not a right, not a right, then there’s a lot of latitude for this administration.
0:54:36 Yeah, understood.
0:54:41 Mahmoud Khalil is here on a green card, which is a much higher threshold than just a student visa.
0:54:45 And the student that you’re referring to from Columbia, I believe her first name is Chung.
0:54:48 She’s been here since she was seven from South Korea.
0:54:55 So and I think at least based on the reporting that I’ve seen that she just participated in a in a sit in.
0:55:02 And now we don’t her lawyers know where she is, but we we don’t know where she is at this point.
0:55:06 And I’m you know, I was very outspoken about the protests on campus.
0:55:10 I did think that the university presidents were clearly not doing enough.
0:55:22 And if you had slotted in any other protected class for Jew, this never would have been allowed to proliferate if you had been blocking trans kids or black kids from going to classes or going to Chabad.
0:55:37 But it does feel like this administration is really overreaching in terms of regulating the First Amendment, which is something that they claim to be celebrating during the campaign and try to make it out like we were the party that couldn’t take it.
0:55:40 That couldn’t listen to people who have divergent viewpoints.
0:55:45 And I’m concerned about that and I’m concerned about how they’re going after big law firms.
0:55:56 And some of these law firms that they’re targeting are just guilty of, you know, representing people with cases that the Trump administration didn’t like or having anything to do with Jack Smith.
0:56:06 And I think the ones that are capitulating, as you said, offering $40 million, $100 million of, quote unquote, pro bono work are just kind of laying down for Trump.
0:56:13 And I’m glad to see that there are other law firms that are standing with the Perkins cooies of the world and standing up to them.
0:56:15 We have one more topic, though.
0:56:16 We got to take a quick break.
0:56:17 Stay with us.
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0:57:45 Today Explained here with Eric Levitt, senior correspondent at Vox.com, to talk about the 2024 election.
0:57:46 That can’t be right.
0:57:48 Eric, I thought we were done with that.
0:57:49 I feel like I’m Pacino in three.
0:57:53 Just when I thought I was out, they pulled me back in.
0:57:55 Why are we talking about the 2024 election again?
0:58:05 The reason why we’re still looking back is that it takes a while after an election to get all of the most high-quality data on what exactly happened.
0:58:09 So, the full picture is starting to just come into view now.
0:58:17 And you wrote a piece about the full picture for Vox recently, and it did bonkers business on the internet.
0:58:18 What did it say?
0:58:19 What struck a chord?
0:58:25 Yeah, so this was my interview with David Shore of Blue Rose Research.
0:58:31 He’s one of the biggest sort of democratic data gurus in the party.
0:58:36 And basically, the big picture headline takeaways are…
0:58:49 So, we want to introduce you to another show from our network and your next favorite money podcast, for ours, of course.
0:58:54 Net Worth and Chill hosts Vivian Tu as a former Wall Street trader turned finance expert and entrepreneur.
0:59:00 She shares common financial struggles and gives actionable tips and advice on how to make the most of your money.
0:59:07 Past guests include Nicole Yoder, a leading fertility doctor who breaks down the complex world of reproductive medicine and the financial costs of those treatments.
0:59:12 And divorce attorney Jackie Combs, who talks about love and divorce and why everyone should have a prenup.
0:59:16 Episodes of Net Worth and Chill are released every Wednesday.
0:59:19 Listen wherever you get your podcasts or watch full episodes on YouTube.
0:59:21 I absolutely love Vivian Tu.
0:59:22 I think she does a great job.
0:59:27 Welcome back.
0:59:31 I’m still here with Kellyanne, who has been so gracious with her time.
0:59:41 I think this is probably going to be your favorite conversation because I’m opening myself up to democratic criticism, or at least I’m inviting it, versus you’re always good at getting it, even when I don’t ask for it.
0:59:44 But we’re only two months into the administration.
0:59:52 I would love, I mean, it sounds like you do think that it has been going really well thus far, and Democrats are scrambling.
0:59:54 We know this, especially, I think, on the Senate side.
0:59:57 In the House, I think Hakeem Jeffries has been doing a good job.
1:00:04 But, you know, where do you think things stand in terms of the Democratic reboot or what we have to do?
1:00:12 The New York Times editorial board was out this weekend with an op-ed that basically said that Democrats are in denialism of the message from 2024.
1:00:21 And then I also want to get your take, and maybe actually do this one first, on what life after Trump looks like for the Republican Party.
1:00:28 He called Kristen Welker over the weekend and basically said that a third term was a possibility, that there are methods to do it.
1:00:36 But for the purpose of this conversation, you know, let’s say that he is going to leave office when his term is up.
1:00:38 Where do you think the Republican Party goes?
1:00:45 It’s a great question, and I think we got a couple tea leaps about it, Jessica, in the 2024 down-ballot elections.
1:00:56 So President Trump swept all seven swing states, and along with him, Republicans flipped United States Senate seats in Pennsylvania and Ohio,
1:01:03 defeating long-term Democratic veterans who were winning by double digits in their re-elections.
1:01:08 Previously, Sherrod Brown in Ohio, Bob Casey Jr. in Pennsylvania.
1:01:11 In addition, flipping the John Tester seat in Montana.
1:01:21 However, in four of the swing states that President Trump carried, Arizona by six points, Nevada handily, Wisconsin, Michigan, much smaller margins,
1:01:25 those four Republican Senate candidates came up short.
1:01:34 And whereas President Trump was overly unfairly blamed for the midterm losses or the lack of a red wave in 2022,
1:01:38 in 2024, he basically was a gift to all of these candidates.
1:01:49 He’s got strength at the top of the ticket, and all that means, plenty of money, plenty of personal visits inside the state by the nominee, President Trump,
1:01:54 plenty of juice for these candidates, endorsing them, helping them, and yet they came up short,
1:02:04 which tells you something about the difference between Trump’s strength within the electorate and some and all of the Republicans not named Donald J. Trump.
1:02:09 So that’s a little view into the future, a recent one.
1:02:16 And then we’ll see what happens on Tuesday, on April 1st, with these special elections in a couple of Florida seats.
1:02:20 I actually think, I hope those Republicans win and we keep the seats.
1:02:26 I actually think if they don’t, it’s not, everybody’s going to rush and say the same thing as the lemmings always do.
1:02:32 Oh my God, it shows that Trump’s not popular, he doesn’t have the juices, administration’s over, signal, signal, signal.
1:02:34 I actually think it’s the opposite.
1:02:39 It shows what I just said yet again, which is, if you’re not him and you’re not at the top of the ticket,
1:02:45 then there’s something special about him where people gravitate toward him, turn out for him,
1:02:52 whether it’s at rallies, whether in the bleeding sun or the pouring rain for days to wait just to see him and be part of it.
1:02:55 That’s something that the party will need to grapple with.
1:03:04 I don’t think we’re going to go back to being this sort of globalist, amnesty, maybe some higher taxes,
1:03:13 maybe not a lot of D-reg, maybe Beba, restrain this, restrain that kind of party that was a losing model for Mitt Romney, for John McCain.
1:03:20 I think that along with Ronald Reagan, 1980, Newt Gingrich and the contract with America, 94, Trump, 2016,
1:03:30 those are the three most transformative party-changing, coalition-shifting elections in my lifetime and so in many of our lifetimes.
1:03:34 So I feel like he’ll still have his mark on the party.
1:03:36 There is no obvious heir apparent.
1:03:42 Obviously, his vice president would have a good chance, but the president himself said he’s not endorsing Vice President Vance or anyone else right now,
1:03:45 which is smart because he needs to do a lot of stuff.
1:03:47 You can’t talk about politics in 2020.
1:03:48 You’ve got to do policy in 2025.
1:03:50 So that’s smart.
1:03:55 On the Democratic side, I think it’s the worst I’ve seen the Democratic Party in a very, very long time.
1:04:03 It just seems rudderless, shiftless, overly angry, without direction, probably a lot of internal fighting that we don’t even see.
1:04:10 And it’s, you know, in any 12-step program, Jessica, even if you reduce it to eight, nine, or expand it to 20 steps,
1:04:13 the first one must be acknowledgement.
1:04:16 And I haven’t seen that yet, let alone getting to acceptance.
1:04:22 I haven’t seen acknowledging the fact that Kamala Harris had everything she wanted.
1:04:25 stop with the, she only had 100 days or whatnot.
1:04:27 What would she have done on day 108 or 109?
1:04:28 Same stuff.
1:04:37 I mean, she had all the king’s horses, all the king’s men, the mainstream media, academia, plenty of money, excitement, history on her side, etc.
1:04:39 Making history on her side.
1:04:41 That wasn’t the right model.
1:04:58 And I think even some of these governors and folks in the House or Senate who could be rising up as Democratic spokespeople are physiologically incapable of answering a question or declaring a sentence without saying Trump, Trump, Trump four times in it.
1:05:08 So unless and until somebody can get him out of their mind and stop pretending that the best antidote to Trump is anti-Trump, that’s just not it.
1:05:19 But until the party, you know, the Democratic Party, the worst thing that’s happened to it, in my view, is ceding, C-E-D-I-N-G, some of these core Democratic constituencies to President Trump.
1:05:25 So he won more Jewish Americans, more women than he than he should have against a female candidate.
1:05:26 I agree.
1:05:27 People.
1:05:30 He won more Hispanics, African-Americans, union households.
1:05:32 He won more political independence.
1:05:34 And this was the election, Jessica.
1:05:37 This is what the Democrats, I think, don’t seem to grasp yet.
1:05:42 2024 at the presidential level marked the election where Americans said, that’s it.
1:05:43 I’ve had enough.
1:05:49 No more will you tell me who I am, what to think and how to vote based on my age, my gender.
1:05:58 My race, my religion, my union membership, whether I’m married or not, whether I have kids at home or not, my sexual orientation.
1:06:03 I mean, all of the, and even my political registration and or my past voting preferences.
1:06:08 People are like, excuse me, this is the one time when I can exercise my own judgment, make my own choices.
1:06:16 And I’m going to do that irrespective of Barack Obama wagging his finger at young African-American men and saying, I’m telling you to do this.
1:06:18 You got to do this for me.
1:06:25 And then goes back to his compound in the golf course or in Martha’s Vineyard or whatnot, which he’s welcome to have.
1:06:31 But then you can’t wonder, though, why the Obama coalition in 2012 is now Trump country.
1:06:37 And if you look at the migration of voters from Obama 12 to Trump 2024, it is nothing but startling.
1:06:42 The Democratic Party I grew up around, half Irish, half Italian, a house full of women.
1:06:49 My father left, you know, feminist movement, Roe versus Wade movement, women in the workforce, including my own mom, reluctantly movement.
1:06:57 You had every man in my every man in my family to this moment is in a is in a union, a private trade.
1:07:17 That Democratic Party looks so distant now and it’s just been subsumed by this odd stew of liberal overreach and academia and Hollywood and media and frankly, just losing touch with, if not outright ridiculing people who work for a living, people who don’t have fancy degrees.
1:07:22 And most of this country is that and most of the Democratic Party right now is not.
1:07:27 Yeah, listen, I’m not one of the ones who’s in denial about what happened.
1:07:30 And I think there’s a lot of truth to what you were saying.
1:07:39 But if Donald Trump is the guy, right, he is the heart and soul of this party and he will not be on the ballot in 2028.
1:07:43 I’m going to mark you down for the he knows that he has to go category.
1:07:43 Right.
1:07:44 I didn’t say that.
1:07:45 I just said that.
1:07:47 Well, Kelly, yes, that I.
1:07:50 He’s listen, there’s he hears that from other people.
1:07:51 That’s nice.
1:07:54 I mean, crazy people talk to all of us.
1:07:56 I mean, the entrance on the exit.
1:07:56 Well, it also comes.
1:07:57 But you’re not a.
1:07:58 I mean, you were.
1:08:00 People didn’t vote for him the first two times, Jessica.
1:08:01 I think you mentioned some of them earlier.
1:08:08 But you were I mean, you were a standout in 2020 amongst people who were close to him who never bought into the big lie.
1:08:12 You said, Mr. President, you lost the election and, you know, you got to move out.
1:08:17 So are you saying the door is open to a third term?
1:08:20 No, I’m saying that when there’s talk of it again, when your colleagues in the media.
1:08:24 This is him on the phone with Kristen Welker.
1:08:25 I’m not.
1:08:26 This isn’t colleagues in the media.
1:08:27 It’s in his own voice.
1:08:30 Well, but again, he’s hearing that from people.
1:08:31 There’s so what?
1:08:34 I’ve heard that I’m the most beautiful woman in the world.
1:08:35 I know it’s not true.
1:08:36 Sure you are.
1:08:37 Definitely.
1:08:37 Thank you.
1:08:39 You’re a good friend.
1:08:40 But come on here.
1:08:40 Absolutely.
1:08:45 But no, I think it’s beside the point right now when he’s got too much to do.
1:08:51 But it does tell you one thing, that no matter, you know, assassin’s bullet, all these indictments,
1:08:59 court cases, impeachments, everything else, 2020, et cetera, January 6th, and so on and so
1:09:06 forth, that President Trump is seen as a guy who can overcome all that and have a critical
1:09:11 mass, in this case, many, tens of millions of Americans, highest ever for a Republican
1:09:14 in many ways, focus on him and vote for him.
1:09:17 I think it shows you, and it wasn’t for lack of trying.
1:09:21 I mean, one of the biggest mistakes the Democrats made, in my view, I’m glad they made it, but
1:09:27 in 2023 and 2024, was sort of dismissing all types of Democratic primary opponents against
1:09:32 President Biden, including one RFK junior, now the secretary of HHS under a Republican
1:09:33 president, Trump.
1:09:39 I think the lack of primaries hurt, and I was a huge voice, often criticized within my own
1:09:41 party for saying this about my Republican Party.
1:09:46 This nonsense of clearing the field based on electability, thank God I haven’t heard the
1:09:52 word electability in a very long time, and that’s important because this whole matter that you
1:09:57 rob the people of their voice and their choice months, if not years before an election, is folly.
1:10:00 Let the people decide, and it wasn’t for lack of trying.
1:10:06 Gosh, eight, nine, I don’t know how many, many Republicans ran for president in 2024, as did
1:10:13 President Trump, and he won decisively, embarrassingly, in all of their states, beating them handily.
1:10:17 So he’s sort of earned this, but I think that it’s not so-
1:10:19 Well, he hasn’t earned the right to violate the Constitution.
1:10:20 No, no, no, no, I didn’t say that.
1:10:24 I said he’s earned, no, no, no, I said he’s earned the presidency now, meaning he-
1:10:24 Right.
1:10:26 No, no, no, please don’t misquote me.
1:10:28 I haven’t said anything about that.
1:10:29 I believe in the Constitution.
1:10:33 The president knows that presidents are term-limited.
1:10:34 He is hearing from everything.
1:10:35 Two terms.
1:10:36 What can we do about that?
1:10:37 You know, blah, blah, blah.
1:10:37 No.
1:10:38 He’s going to focus on policy.
1:10:39 Nothing to do.
1:10:39 See?
1:10:41 But I just want to say this about it.
1:10:48 It does tell you that he’s got more of, he’s got much more prominence in the Republican
1:10:51 Party and the conservative movement, which is different than the Republican Party.
1:10:55 People always trying to criticize him and tear him down with, oh, it’s just a base, a base,
1:11:00 a base, like these dopes, nepo babies on the left who now consider themselves reporters.
1:11:01 And you know who I’m talking about.
1:11:03 They’re probably watching now.
1:11:05 I know so much Trump and his base.
1:11:06 What base?
1:11:06 It’s a base plus.
1:11:08 The guy won all seven swing states.
1:11:09 He won the popular vote.
1:11:11 It’s base plus, plus, plus, plus.
1:11:13 I say this for a very simple reason.
1:11:19 The Democratic Party, for whatever else, I think still could rely upon one Barack Obama and occasionally
1:11:23 his wife, although we see her pop up every four years to come to a convention and criticize
1:11:26 Trump and now on a podcast to insult her husband.
1:11:34 But we don’t, you know, the Obamas, the Clintons, you could always count on a few super popular
1:11:40 stand-the-test-of-time Democrats to raise money, to raise hackles, to get out there and do stuff
1:11:41 for the party.
1:11:42 I don’t think that’s true.
1:11:47 I think, if anything, the rising people in your party, Jessica, and the Democratic Party
1:11:49 are scary socialists.
1:11:53 You know, Bernie Sanders has 15,000 people in Arizona recently.
1:11:54 Elizabeth Warren’s always on the rise.
1:12:00 AOC and the squad that doesn’t do squad, as Nancy Pelosi said, quote, she said, and I’ll
1:12:03 quote Nancy Pelosi, quote, this glass of water could have won in their districts.
1:12:08 Really, I think, going roughshod on the squad at the time, saying they’re all in safe seats.
1:12:10 How could they have not won?
1:12:15 And so there’s just a lot of generational tension, ideological tension.
1:12:20 I think the difference between do we go back and try to recapture the working class of America
1:12:25 versus are there enough elite, effete, like us in the Democratic Party in the hierarchy
1:12:26 to win elections.
1:12:32 There’s so much hand-wringing, white-knuckle hand-wringing now of everybody so nervous in the
1:12:36 Democratic Party, where I think the answers are pretty simple, which is you can’t tell people
1:12:40 who they are, how to think, and how to vote, and what’s good for them.
1:12:45 They need to tell you that is, as you know, that’s polling 101, that’s voting 101, it’s
1:12:46 politics 101.
1:12:49 People have a funny way of telling you what’s important to them.
1:12:50 You can’t tell them.
1:12:53 But as for this, it’s just another way of, oh, look at Donald Trump.
1:12:54 He wants to be president for life.
1:12:56 He’s hearing that from other people.
1:12:57 He respects the Constitution.
1:13:05 But there’s no question the most important person in 2026, in the midterms, and 2028 is
1:13:05 Donald J. Trump.
1:13:07 Okay.
1:13:08 We’ve got to leave it there.
1:13:12 And if we talk more, I want to talk about Josh Shapiro and Wes Moore, because they are not
1:13:14 Democratic socialists, and I think they’re doing a pretty good job.
1:13:16 But I take all the criticism.
1:13:19 I’m into the South flagellation about what happened.
1:13:23 I want to thank you, especially Kellyanne, for being here with me, and everyone for listening
1:13:24 to Raging Moderates.
1:13:27 Our producers are David Toledo and Shanene Onike.
1:13:29 Our technical director is Drew Burrows.
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1:13:46 And thank you for being here, Kellyanne.
1:13:47 I really appreciate it.
1:13:48 Thanks for having me.
1:13:48 Yeah.
1:13:49 I’ll see you at work.
1:13:51 That’s right.
1:13:52 Take care.
1:13:53 You too.
1:13:53 Thank you.