Sam interviews James Currier, co-founder and managing partner of NFX, a $1.6B VC firm and the world’s second most popular VC website. James grew up on a dirt road in New Hampshire selling worms to fishermen before landing at prep school, Princeton, and Harvard Business School. The conversation covers network effects in life and business, what makes a “savage founder,” the technology window framework, why AI model companies have no defensibility, the power of language in naming, the sale of Tickle to Monster for $110M, and James’s near-miss at inventing Bitcoin.
Speakers: Sam Parr (host), James Currier (guest, managing partner NFX)
Introduction: From Worms to $1.6 Billion [00:00:00]
Sam: You went from selling worms to — how much does NFX have under management now?
James: Close to $1.6 billion.
Sam: Does that blow your mind?
James: Blows my mind.
Sam: Can you tell your high school story? Because when I was doing my research, it looks like — Harvard, Princeton, exit — you went to the top high school, the top college, the top business school. I just thought you must have come from money or prestige alumni or something. But I guess you were telling me before we started that’s not the case.
James: Yeah. I love the phrase — “they got me out of the mud.” They plucked me from the mud.
I grew up on a dirt road in New Hampshire, about a mile from the nearest paved road. My mom was a music teacher who made about seven bucks an hour. My dad was a carpenter. Sometimes she was a hostess at a nearby restaurant. We had 12 cats and two dogs. We just lived in the middle of nowhere.
My first startup was when I was six. Fishermen would come by nearby and need worms, so I’d dig them out from under the apple trees and put them in the empty cat food cans from our house and sell them for 50 cents. I would make, you know, six bucks a week during the summer.
Then in sixth grade, I got beat up by a guy named James Cody. I hope he’s doing well, but he was kind of brutal. I’m sure he did not have an easy life himself, because he was making my life hard too. And as my friend Lance Casey picked me up off the ground, he said, “Don’t worry, James. We’re going to go to prep school.” I said, “What’s prep school?” He said, “It’s where the smart kids go.” I said, “Do they fight there?” He said, “No, they don’t fight there.” I said, “Well, then I want to go there.”
I’m a small guy. I still weigh 165 pounds. As my sons call me — they’re all now taller than me — they call me “victim weight.” Dad, you’re still victim weight. Fighting wasn’t my forte.
So I went home to my dad and said I want to go to prep school. He’s like, “How did you hear about prep school?” Lance’s dad was the local surgeon. Lance was half Iranian and half Italian — the kids picked on him too. He and I were sort of bonded together, and that really changed my life.
My dad figured out I needed to take the SSAT tests. I took the test, applied, and they let me in. We didn’t have any money, so Exeter paid for it. And that set my whole life off in a different direction. I had used clothes from Goodwill, everybody else had fancy clothes, but we just grinded. By the end of my junior year, I had skipped out of the first two and a half years of Princeton engineering. At the end of high school, they said, “You can choose Harvard, Princeton, or Yale.” And I said, “What’s the furthest place from here?”
I have been assisted by the whole system all the way along. People talk about beating their chest and saying “I’m a self-made man.” It’s complete nonsense. Most of us are a function of a sixth-grade friend who put us on a completely different path.
Sam: Right. And you went from selling worms for 50 cents to — like, blows my mind.
Your Life on Network Effects [00:08:30]
Sam: I’ve written here a bunch of your greatest hits. Let’s start with “your life on network effects.” The nfx.com website is the second most popular VC website in the world — you’ve got 10 people but you’re second. The most popular blog post was called “Your Life on Network Effects.” Can you do the quick explainer?
James: So for somebody who doesn’t know what a network effect is — a network effect is when every new person who uses your product makes the product more valuable for the other users of the product. The great example is Twitter. The more people who are tweeting, the more valuable Twitter becomes for everyone. Facebook, Microsoft operating system — the more people using it, the more valuable it is for WordPerfect to build their software on top of Microsoft so that more people can use it.
If you look at the top seven companies in the world by market cap, five or six of them have network effects at their core. That was not true 20 or 30 years ago. So we study them, we invest in them. We’ve spent the last 20 years becoming the world’s experts at them. We’ve identified 17 of them. They’re mathematical principles.
In talking these through with Eric and others, he started getting wide eyes — “Oh, that affects how I’m dating. That affects where I should live. That affects what happened to my dad.” He was realizing that the analysis of networks and network topologies was actually really applicable to how we live our lives.
Sam: Give me a simple example outside business. Dating, friends, something like that.
James: The simplest and most relevant one is where you choose to live. A city is a network. If you choose to live in a city, you are choosing that network. So basically what the article says is: don’t think of yourself as choosing a job or choosing an industry. Think of yourself as choosing a network.
My company is a network. Who I hire into my network. Which journalist I get to write about me — I bond that person into my network. Which investors I bond into my network. Once you start thinking of everything as networks, the whole world looks a little bit different to you.
Where should I go to find a spouse? Think about your network. When you get married, you’re joining her network, and she’s joining yours. You’re going to have Christmas and Thanksgiving with her parents forever.
What “Your Life on Network Effects” does is break it down into seven phases of your life where you are basically choosing a network, and it will have a really big impact on how your life plays out.
Savage Founders [00:16:00]
Sam: Savage founders. So you’ve been a founder four times, and then the fifth time is starting a venture firm. You’ve invested in 300+ companies. What keeps coming up?
James: In order to do something extraordinary, you have to be relatively savage. You have to be very fast. Very competitive. You tend to have to be pretty aggressive and you just can never stop.
A lot of people say they need to be mission-driven, or they need to have had childhood trauma. That may be true for some people. But in the end, we use the word “savage” because you just go for it every day. You wake up every morning and you’re cranking, and that’s what we look for in founders.
Sam: What are the traits of a savage founder? People would immediately gravitate toward hardworking, determined — things like that.
James: The number one thing that it all rolls up into is speed. You could lay out 16 characteristics you’re looking for, but all of those lead to one thing: speed. When we meet with founders, that’s the main thing. If you look at their speed over the next 5, 6, 7, 8, 10 years when we’re working with them — that’s the main thing that determines their success.
Now to get to speed, you typically have to push out people who aren’t fast. So you end up firing a lot of people who aren’t willing to sacrifice, who don’t enjoy type two fun.
Sam: Is that it?
James: Type one fun is fun in the moment. Type two fun — you look back on it. You were suffering through the whole thing, but at the end you look back and realize it was fun. Like staying up for a hackathon for three straight days and then winning — that’s fun. Not sleeping much for 18 months, but then it succeeds and you’ve got this giant company. You look back and you’re like, I want to do that again.
The other thing is you can’t be afraid of pissing people off. The people who aren’t afraid to say what they’re thinking or have a different view and not please everyone in the room — those people end up doing a lot better. They see the world differently. They’re not scared.
If you look at the best personality test in the world — the Big Five, McCrae and Costa, 1972, North Carolina — one of the five scales is agreeableness or disagreeableness. If you are disagreeable, you end up doing better as an entrepreneur, a founder, and a creator, because you don’t have this constant need to please everyone.
Sam: I think about that within founders too. They have these almost rough edges. They have things they believe and they don’t really care if you think it’s nice or right. They believe it’s right, and that’s kind of all that matters. Whether 99% of people agree with them or not, doesn’t matter. Those people might not end up having great friends. They might not have a normal peaceful life. But they’re potentially going to do something extraordinary.
James: And as a venture investor, we have to look for that. I’ve tended to surround myself with people who are both extraordinary and nice — like yourself — but other people don’t really care. Like more of a Peter Thiel type, where he’s just like, I just want the truth, I don’t care if I break people’s beaks.
Sam: Who comes to mind? Because you don’t know what a level 12 looks like until you meet someone and they break your frame. Like you thought you were 10 out of 10 on hard work, then you met David Goggins. Who kind of broke your frame as a savage founder?
James: A couple people. Think about the Poshmark CEO, Manish Chandra. He was constantly revisiting his flows, constantly rebuilding the product, constantly changing his mind. Running a very complicated marketplace product. Having to abandon what you were doing six months ago and do something brand new — it’s a very difficult business to run. He did it for 11 years and exited for billions of dollars. And he’s also a nice person you want to have lunch with, which I really appreciate.
A guy like Khon Guan who nobody knows yet — CEO of Firefly, those video ads on top of rideshares. He’s running six different businesses inside of that. He went through COVID, lost 95% of his revenue, had to adjust because no one was on the street to show ads to. He survived. They’re now profitable. Everyone else got out of the space. He’s going to win it. People will tell his story later.
Speed Is Not What You Think [00:25:00]
Sam: You’ve said speed is not what you think. I actually don’t know what you meant by that.
James: Most people think speed means you’re working 18 hours a day. It’s not that. It’s about an emotional flexibility that allows you to abandon what you were doing before and do the right thing going forward. It isn’t speed on your original idea — it’s speed toward success.
Most ideas don’t work. I always say I have 83 ideas a week, and every three weeks I have half an idea that’s good. It’s literally that volume. The difference between a good idea and what doesn’t work — it’s okay that most things don’t work. The flexibility to move toward what will work is what speed is.
And it’s mostly your emotional tenor. It’s how you manage your network around you. How you manage your spouse to let them know what’s about to come. How you manage your employees so they know — look, we’re going to iterate this. Not twice. 28 times.
Snap, I think, was their 27th app or something like that. Our gaming company — it was our seventh game that finally worked. My first company — it was our 27th test that finally went viral. You have to prepare everyone around you for all the changes, which ends up producing speed.
Stan and I have never lost a dime for anyone. We’ve always made people money for the last 25 years, because we had speed toward the goal of success, not speed toward the original thing we were going to do. We got out of our own way emotionally.
I actually have a lecture I give in private about all the emotional barriers you put up in front of you that causes you to go slowly — and you think it’s fast because school taught you what time looks like. Then maybe you work for a big company like Google or Microsoft and now you think this is how the world moves. You’re wrong. Your speed bar is wrong. You’ve got to raise your speed bar.
Sam: I have a thing here — “the art of unlearning.” Is that what you’re talking about? You learn things, but then as an adult there are five or seven things you have to unlearn?
James: There’s so many things. It’s about speed. It’s about the emphasis on human communication, relationship, versus the actual product. Like everyone focuses on “I want to build this.” No, dude. You’ve got to talk to people. Talk to your customer. Think about that communication.
We have mindsets that get bred into us by the normies. If you want to do something extraordinary, you have to get out of those mindsets.
Why is it that roughly 85-90% of all returns in tech have come from the Bay Area? It’s because the mindsets here are slightly different from New York and London and LA. As a result, things just happen a lot faster and a lot better.
Sam: So the world of technology — open to everybody, everyone’s got a phone, everywhere on earth. And you’re saying 85% of all the money that got made comes from, what, 7 million people in the Bay Area?
James: You’ve got to ask yourself why. The answer is there’s a certain mindset, a certain way of doing things, a certain speed of operating that is different. It’s literally an order of magnitude. You can go faster than you think you can. Once you understand that, once you set your speed bar that way, life opens up for you.
Mike Cassidy is the guy who taught me about speed. He founded Direct Hit, one of the first search engines. Sold it for $500 million after 500 days. He’s done four or five businesses — they’ve all worked. He ended up at X for a while doing Loon. He was the one who originally figured it out in the ’90s.
Sam: What did he tell you?
James: He’s like, “You don’t need to take three months to raise money and get an office and all that stuff. You can do it in four days. I can raise money in two days. I can get an office in half a day. I can hire my team in three days. I can have my product out in two months.” And everyone else was taking two, three, four years. He was literally doing it in two, three, four months.
Sam: Is this a shoot for the stars and land on the moon situation — even if he doesn’t do it in two days, he does it in five, but five is way better than the default five months?
James: That could be it. Yeah.
We have a buddy, I think you might know him — Shaan Ali. We were advising a company. The company said, “We really need to raise money. Desperately.” He said, “Okay, let’s get on the phone now.” They’re like, “We don’t have it ready yet.” He’s like, “So you just told me you desperately need help. Let’s go.”
So we get on a call, they give us what they have for the pitch so far, we give feedback, it’s really useful. Then they go, “How long do you think it’s going to take to make these changes?” He goes, “I think you could probably get 80% of them done in the next few hours. So let’s talk again at 3 p.m.” We had met at 11.
Sam: And I just didn’t even know that was a norm you could do — especially externally, to someone else’s company — be like, “Why are we not having two meetings today? Why not?” As soon as I saw that, my own speed bar got raised. I realized something that was almost an invisible wall really wasn’t real.
James: Right. Most people think of speed as process — standups, schedules, kanban boards. It isn’t. It’s your own emotional mentality. That’s what speed is.
Sam: So if I’m a founder, what are the most common emotional blockers slowing me down from being higher speed?
James: The big one is just fear. You’re fearful of getting it wrong because you were taught all through growing up that getting the answers right on the test got you love, got you appreciation, got you status, got you into the right college. In the real world, that’s just not the case.
Just like Elon — blow up the rockets, blow up the rockets, blow up the rockets so the rockets don’t blow up anymore, right? His speed bar is what you see. He has broken through into a completely different realm. The one that Mike Cassidy has always lived in. There are just a few people living in that realm, and so much is possible once you live in that realm of your mind.
Sam: You can see it everywhere — like with Doge, they set a date from day one. They said “we’ll be done in two years.” People burn out after four years at Tesla or SpaceX, then at Thanksgiving they talk about it like it was the best time of their life. You talk to people who were in World War II and they say the same thing. We were together. We were bonded. We had a mission. That’s type two fun, and going fast is part of that.
The Technology Window Framework [00:38:00]
Sam: You have this diagram — the technology window curve. Railroads, the window was open 40 years. Cars, 25. Radio, 24. AI, 8 years so far. Can you make me smarter as a founder? Because timing is everything — being early is the same as being wrong, being late is the same as being wrong.
James: I went to Harvard Business School. I lecture at Stanford, Berkeley, MIT. I’ve never seen anyone teaching this. And it was really surprising to me.
Most big, world-changing companies are a result of riding a particular technology wave. The Southern Pacific Railroad transformed America by leveraging railroad technology — the steel for the rails, the steam engines. That window in the United States was open for only 40 years, from 1830 to 1870. If you were trying to start a railroad company in 1880, you got your ass kicked. The window had closed.
Same thing with cable — open between roughly 1970 and 1984, only a 14-year window, during which all the meaningful cable companies were created.
Consumer internet — it opened in 1994 because in 1993, no consumers, no small businesses, no enterprises were using software in any meaningful way. Then the browser and TCP/IP opened it up. Between 1994 and 2013, it was fantastic to start and invest in consumer software companies. In 2014, the window closed.
You can look at the number of unicorns created from 2014 to today, and it’s really small. Discord, TikTok, Starlink, ChatGPT — maybe 10 in the West. Versus the previous ten years, where you might have 10 times that number, 15 a year.
Automobiles — all the car companies we know were started between 1898 and 1928. Until Tesla, when the window opened again around lithium batteries and electric engines.
The opening and closing of the technology window is very predictable. We don’t know how long it’s going to be — sometimes 40 years, sometimes 8 years like with cell phone networks in the US. But the phases of it are very predictable. There are six phases.
Sam: What are the six phases?
James: The first phase — hobbyists are interested in the technology just for fun. Geeks, basically.
Sam: The the abnormal people, the savage people are probably just hobbyists. But normal people are money- and status-seeking. Right. So they can understand money and status — I want that. How did he get that? I want that. So that’s when the knowledge diffuses.
James: Exactly. And then you get tons of competition flowing in. A lot of investment money comes in. Teams form. Everyone can understand the idea because the knowledge is diffused. Five or six people get together and start a company, they get funded. And then the incumbents arrive. They found the network effect. They had a better management team. They raised more money and crushed the other people. Something happened to give them defensibility. They establish themselves as incumbents and then squeeze down, and the window closes.
If you want to watch a beautiful dramatization of what this looks like, watch the movie Tucker with Jeff Bridges. It came out in the ’90s, about something that happened in 1952. It shows you what it’s like to build a car company in 1952. You just get your ass kicked by the incumbents. The window is shut. There’s nothing you can do.
We see this pattern over and over. It’s very important to understand where you are in the window — whether it’s opening, at peak, or closing — because even if you’re hardworking and super smart with great design and great engineering, you can’t compete with a network effect once it really kicks in.
The Four Defensibilities [00:50:00]
Sam: So what are the defensibilities? You mentioned four.
James: Network effects, embeddedness, scale, and brand. Let me give you a quick example of each.
Brand: Ford. People just keep buying their Fords because they’re loyal, even though the Toyota trucks might be better. Nike — I feel a certain way when I wear it. I project something. Everybody knows what it means. That’s a brand effect. Luxury brands — Louis Vuitton — same thing.
Network effects are the most powerful because they’re really unstoppable. Look at Facebook — one and a half trillion dollars or something. The more people are there, the more valuable the network is. Instagram, WhatsApp, Facebook — classic network effects.
Embedding: Oracle. They embed that software in your operations. You’re going to retire before you rip that stuff out. They charge you 25% more next year and you’re going to pay. There’s nothing you can do.
Scale: Walmart. So many stores, so much buying power. They buy cheaper, they sell cheaper. Everyone just goes there.
Sam: Where does Mr. Beast fit in?
James: Scale. He gets paid the most so he invests the most, so he has the biggest production — he can give away the most money. But it’s a very weak one.
Sam: Why is that?
James: He’s in what I call the fresh produce business. He has to keep producing fresh produce and putting it on the shelves, and then it times out. He’s not building any network effect. He’s not building any embeddedness. You’re consuming his stuff on YouTube, and YouTube has the network effect.
He’s playing blackjack at the blackjack table. And as I’ve taught my sons — you don’t want to be playing blackjack. You want to be the house.
Sam: What would you do if you were Mr. Beast? How do you not be in the fresh produce business?
James: You think about how to create a network effect. Look — he’s got this chocolate brand, Feastables. He told me something great. He goes, “We got into Walmart,” which is like a hard embedding once you get there. He’s like, “I have shelf space now. It doesn’t matter if you make another chocolate brand — I have shelf space.” And he goes, “I sell this color of blue. Hershey sells this dark brown color and I sell this baby blue color.” And he might end up building a brand around that chocolate. But it’ll take years and hundreds of millions of dollars, and it’s not clear that it’ll happen.
Sam: What’s an example of somebody who figured out how to do it with network effects — maybe in content?
James: I can tell you a funny story about where it should have happened and it didn’t. Dana Carvey asked me what he should do with dana carvey.com, and I said: “You should get Robin Williams and one other guy, and the three of you should create the standup comedy website. You guys judge every week who’s the best, have contests. Each of you own 33% of the company, raise some venture capital, and sell it for a billion to whoever.” And I explained all this to him. At the end of an hour and a half, he said, “Yeah, so what do I do with dana carvey.com?” He just couldn’t get out of the frame.
Louis CK and Chappelle — they all sell their specials to Netflix. They might make $10-20 million, but Netflix becomes a multi-hundred-billion-dollar company in the process. Comedians could theoretically say: if we just put our content here together, we own the network where all comedy content is. That’s a much more valuable thing to own than one special. But Netflix is throwing a big bag at them, and they want distribution. It’s the right short-term choice. But somebody who played the long game would have something very different.
Vampire Attacks and Network Bonding [01:02:00]
Sam: You have this concept — vampire attacks.
James: A vampire attack is when you go into a network and try to suck out the blood from what makes that network work. You try to create your own network effect on your platform by sucking out the energy that had been developed on theirs.
Sam: Was the LIV Golf tour a vampire attack?
James: It looked like only a two-year effort and then they collapsed, so I don’t know that it was perfectly executed. But it is the right idea. Saudi Arabia was trying to improve their brand — brand association. They were being restricted by the PGA. They didn’t have a free operating field. They were like, I don’t want to pay 30% to you. Let me do my own thing. They tried it. It’s just hard.
There’s an article on nfx.com called “Network Bonding Theory.” It explains it using Messi as an example. PSG offered him X amount of money and some crypto tokens. Everyone was outraged at how much they were paying him. And I said, “They’re still not paying him enough.” Because he moves the licensing for TV rights, he moves viewership. Every game Messi plays in the French soccer system is going to be watched three or four times more by the world than it would have been before. The value to them is way more than they’re going to pay him.
Look at Tiger Woods. If Tiger Woods plays, the PGA makes $1.5 billion more per year. These are nodes in networks. If you could get Tiger to go over here and did the right vampire attack, you could actually create a higher-status, better thing. But it’s literally about measuring the nodes, measuring their effects, and then having a strategy for the order in which you get them and what you compensate them with.
Sam: I have a real-world example. When I was at Twitch, Microsoft tried to do a vampire attack. Twitch was the number one gaming network for watching live streams. The number one streamer was Ninja. Microsoft offered him $20-30 million — he might have been making $6-7 million a year on Twitch. So he leaves, and it’s code red inside Twitch.
There’s people who are like, “We have to keep the integrity, fight back.” Finance people are like, “That doesn’t make financial sense.” Strategists are like, “There’s some tipping point we don’t know where it is.”
One of the ways we looked at it was: for every viewer, how many channels are they bonded to? It turns out if you just take one of those channels out, they’ll just swap to another channel, no problem. But as soon as they lose a certain number of channels in their bonded network, they’ll go wherever those channels go.
And strategically, the competitor took Ninja, who was a Fortnite streamer, but didn’t take the other Fortnite streamers. They took some other guy who played a different style of content, and the fans didn’t overlap. It was very ineffective.
Whereas if they had figured out which cluster of streamers were all core to each other’s network — they may not be the biggest, but if you took those 15 together, you’d create a tipping point. They didn’t have the data or the knowhow.
James: That’s a great story. That’s a perfect example of network bonding. You have to think about it right or you’re going to waste all your money and time, which is what they did.
Language Is a Network Effect [01:16:00]
Sam: What do we got next? Language.
James: There are five things in the world that kind of explain everything. Language is one. Networks is another. Energy — who has the oil, who needs the energy, because our bodies just absorb and expend energy, and countries and households do the same. But one of the most powerful is language and mindsets.
Sam: What do you mean by language? Are we talking English specifically, or more specific than that?
James: More specific. There’s a guy named George Lakoff that people should study — a semiotician at Berkeley. He found that Republicans in the ’70s said, “We are never going to win another election unless we change the dialogue in this country.” So they went around and created a three-ring binder and developed language.
When we talk about taxes, we’re not going to say “tax cuts” — we’re going to say “tax relief.” Because we’re going to use the word “relief,” implying that taxes are a disease or a sickness. They went through every subject and developed their language. They printed tens of thousands of these binders and took them all around the country. Every Republican: use these words. And that was six or eight years before Reagan got elected. Very effective.
George Lakoff was basically saying, “Hey, Democrats, you guys have to start thinking at this level.” This is the way the world functions. It functions on language, and you have to notice that game being played.
People think the name of your company doesn’t matter. Just pick one. It’s fine. Look at Google — random word, don’t worry about it. People think marketing and language comes after you build. Just build a great product and slap a few labels on it before it gets out the door. I believe the opposite.
Sam: Why do names matter, practically?
James: It lowers your cost of user acquisition and increases your lifetime value. We were building a strategy game and had to decide what to call it. We went on Facebook, spent $2,000 on ads: Wars of Mars, Wars of Space, Wars of Atlantis, Wars of the Amazon, Wars of Egypt. The number-one clickthrough blew our mind.
Sam: When you just said them, Atlantis was immediately my pick of the five.
James: Exactly. So we knew it was going to be in Atlantis. Now what is it? Amazon of Atlantis? Realms of Atlantis? Wars of Atlantis? Dragons of Atlantis? We did another 20 variations and spent another $2,000. The number-one clickthrough was actually Amazons of Atlantis, but we knew what people were clicking for — they were looking for drawings of girls. So we discounted that and went with number two: Dragons. “All right, that’s the game. Dragons of Atlantis.”
We knew we would lower our click-through cost by 75%, which gave us a massive advantage over other gaming companies buying ads on Facebook at the time. Then we told the game developers: “It’s going to be dragons, it’s going to be in Atlantis.” The game rolled from there. In year two, I think we did $120 million in revenue.
Sam: By the way, language is one of the ultimate network effects.
James: English. Why are people in India and China studying English? Because English is a more valuable language — higher market cap — because more people speak it, especially in markets that matter. You can’t go to New York if they don’t speak English. If 95% of the world spoke Swahili, learning Swahili would be the most important thing I could do. That’s where all the value is.
Sam: You also said something about language where you said you figure out the words first because you’re describing to yourself what you should be building. It gives you clarity as a product builder.
James: Yeah. We had a product allowing you to store your digital photos. People would come, but not very many, because it wasn’t a multiplayer game. I store them there, I retrieve them there. Single-player game. So I said, “Okay, guys. We’re just going to change the homepage to say ‘share your photos.’”
My team said, “But James, our product doesn’t let people share photos. We’re lying to people. That makes me really uncomfortable.”
I said, “So fix it.”
Three days later, they had figured out how to put in features that let people share photos. Within six months, we had registered 47 million people virally. 47 million — back when there were about 800 million people on the internet. Extremely viral. Because we changed the word.
Building Tickle: Personality Quizzes and $110M Exit [01:33:00]
Sam: You had a lot of virality with Tickle. Do you have any good stories?
James: Tickle is an interesting name, first of all. I learned about the importance of words in part because the first name I had for the company was Emode — which none of you can spell or know what the hell that is.
When I changed the name to Tickle in the middle of it, my board almost wanted to fire me. The entire engineering team threatened to quit. They came to me and said, “We’re all leaving. We don’t want to work for a site that sounds like a porn site.” Everyone was against it.
So the process of deciding on the name — I picked the two most language-savvy people I knew in my company, and it was just the three of us who decided. Then we announced the change. We did not let anybody else in. A little bit like the Luka Doncic trade — if you want to get something done, you’ve got to keep it close to the chest.
We did it, and traffic went up 30% in a week. We had gotten an offer for $45 million as a company when we were called Emode. Six months later, we got an offer for $110 million. It literally doubled the value of the company by changing to a good name — spellable, memorable, interesting, fun to talk about. You can double the value of your company by having the right name.
Sam: What was Tickle?
James: A site where you could take self-assessment tests. Think the first BuzzFeed. We were the first people to put self-assessment tests on the internet. We had five PhDs on staff. We wanted to make something like Myers-Briggs — you could actually learn something meaningful about your character, how you’re wired, so you could make better life decisions.
That’s not what the market wanted. What the market wanted was — which breed of dog are you? Who’s your celebrity match? Which Victoria’s Secret panty are you? Those tests all did really well and got enormous traffic. About 80% of the tests taken were silly and 20% were serious.
Sam: But how did you discover the silly ones?
James: We were off salary. We were running out of money. We were almost dead.
Sam: “Off salary” — is that just like the phase right before death?
James: Yeah, yeah. Rick Marini, my co-founder — we were living in Boston, off salary for six months. And we hit the “screw it” moment, which is always the best moment. The two most powerful words in an entrepreneur’s dictionary. You finally get clarity that you’re not going to do what you set out to do — you’re going to do what’s going to work.
I said, “Let’s just do something that will get traffic because we’ve got to grow this thing so we can survive.” I had a friend at an advertising agency in New York who said, “If you want people to remember your ads, put puppies and babies in the ad.” We watched the Super Bowl ads — sure enough, puppies and babies everywhere.
So I said, “Hey guys, let’s do a puppy test and a baby test.” They said, “Really? Finally, we can do something fun.” They were so excited. And they said, “If we’re doing those, can we do the celebrity match?” I said, “Sure, why not.” So we put up the dog test, the baby test, and the celebrity match test. Eight days later, a million people were trying to get on the website.
Sam: Wow.
James: It was what we call novelty viral. There was no mechanism. No AB testing. No manufactured virality. The person had to tell another friend voluntarily — it was such a cool thing that they had to bring it up at lunch.
Sam: And you sell this company for $110 million or something. Were you rich before that?
James: Not at all. I had a white Toyota Corolla I bought for $10,000. My wife and I had two babies and we were living in a rented apartment.
Sam: Was the company really successful? Like, did you think it was worth $110 million?
James: It was definitely worth $110 million. It was worth more than that, because the company that bought us — Monster — needed our viral ability, our network effects thinking, all the tests we had. But as a standalone business, we would have had to iterate into something else. We would have had to become more like Facebook. The problem was we had started our social network without real names.
The $110M Sale: Putting Employees First [01:46:00]
Sam: You told me a story about when you sold — something you did at the last minute.
James: So we were flying to New York with four of us to pitch the 16-person board of Monster. They had a $7 billion market cap at the time. The night before, on the red-eye, I actually lowered the projections to be more realistic about what we were going to do. It freaked out my team. They were like, “Dude, they’re not going to do this if we lower the projections.” And I said, “No, we need to be more honest with them. This is going to be a long-term relationship.”
In the end, we meet with the 16-person board, they decide to do it, and then we go up to the top floor of the building overlooking Manhattan. This guy, Andy McKelvey — amazing guy, probably 64 or 68 at the time — had acquired 220 companies to build Monster. He had bought Monster.com for $400,000 when he bought an advertising agency in Boston. He didn’t even know he had bought it — it was a side project. He became this East Coast acquisition animal, a lot of character.
Anyway, he says: “So I offered you 91. Would you take a — is there any room to negotiate?”
I said: “Sure, take 10% off.”
He says: “Interesting. What do you want?”
I said: “I want you to pay all of my employees out before you pay me. And I want you to pay my investors before you pay me.”
He’s like, “Well, I can’t do that — then the people will leave.”
I said, “They won’t leave.”
He’s like, “But don’t people just stick around for money?”
I said, “No, that’s not why most people work.”
Sam: So you wanted them to get their money first, and you’d wait a year or whatever for yours. Why?
James: Because I felt that was the right thing to do for my employees and my investors. They had stuck with me over this crazy five-year ride.
Sam: Did you decide that in the moment?
James: In the moment. And he said, “Wow, interesting. So what do you want?” I said, “I want to pay all my employees.” He’s like, “Will you promise me they’ll stay even if I pay them out?” I said, “Yeah.” He said, “Okay. Well then, in that case, I want you around a long time because I can see your character. I can see that you’re a real leader. You’re a mensch. I want to put a three-year earnout on this based on revenue. What about this?” I said, “That sounds good.”
In the end, the acquisition price ended up being not 10% less than 91, but $110 million — because we outperformed.
Sam: Wow. That’s a great story.
James: And had I brought in an investment banker, he never would have returned my email or would have walked away. This is about humans. It’s about people.
Business Bromance: Turning It Into a Giving Competition [01:55:00]
Sam: I actually met your business partner Stan before I met you. Stan Chudnovsky. He’s amazing. When I first met him, at my office — Michael had this glass table you could whiteboard on — and I had just been writing notes as he was talking. I wrote “business bromance” and circled it with a question mark, because he told me you guys had been partners for maybe 15 or 20 years. I could just tell — you know when you see a couple at dinner who’ve been married for 30 years but they’re like they’re on their first date? That’s how he was talking about your partnership.
So I asked him, “What’s the key? How did you make that work?” He told me a bunch of things. But one story — when you sold a company, you owned the vast majority of the company, maybe 90%. You owned more. And at the time of the sale, you at the last minute equalized it in some way. You got it to more like a 50/50 arrangement. You really know what someone’s like when the money hits the table. That’s not the story you normally hear.
James: Stan said it well. He said, “James turned it into a giving competition.” I think that’s the phrase that helps people understand the way he and I look at the world. Turn your relationship into a giving contest. Rule number one.
I’ve read a lot of Greek tragedy. I learned all the classics at Exeter — classically trained. You have to have a long arc and look at what is a good life and what matters.
My point is: the billionaire life is available to you today. It’s just in your mind. I know a lot of billionaires. I’m not one, but I’m nearby. And they all wear the same socks you do. They eat the same steak you do. They have a hot shower just like you have a hot shower. The distance between your life and a billionaire’s life is 99% in your mind.
It’s really not about the money. It’s about the creativity. It’s about the connection. It’s about the friendships. And it’s even harder to make friendships once you have a ton of money, because money freaks people out.
You can have a fun normal life and live like a billionaire. You can have a fun strive life where you go build something. Or you can have a global greatness life where you try to be Elon or Steve Jobs. Those are kind of the three ways to go. Either way, you could live a billionaire life and have a fun life. And either way, you can make yourself miserable with your own mindset. It’s 99% in your brain.
So with me and Stan and Rick Marini, who was also a co-founder at Tickle — Rick and Stan and I just went to Namibia together. We’re going to Turkey together. I’m still friends with all these people starting from ‘99. I’m still friends with people I went to school with in fourth grade. That’s it. That’s life. Without that connectivity, what’s the point?
Sam: The road trip analogy — somebody said it well. You’re trying to go on a road trip. You want to get in a car, you want your pals inside, you want this adventure. You need gas. You need fuel to go on the road trip. But this is not a nationwide tour of gas stations.
James: Right. I love that. Yeah.
Regrets: The Isolated Incubator Mistake [02:06:00]
Sam: I want to do one that’s not positive. Regrets. You told me something when I came to hang out with you. You drew this diagram on a whiteboard — you were at the white-hot center of the Silicon Valley network. You knew all the right people and they liked you. And then you went off to try to build your own empire. And you said the smart thing would have been to join Facebook or invest in Uber.
James: That’s right. In 2006 when I left Tickle after the acquisition, I wanted to just build more stuff. Stan and I — we just loved living in each other’s brains. So we created an incubator and built 24 different products over three and a half years. We had so much fun. We were just doing eight different experiments on the internet every day to see what would happen. In the end, we came out with three companies that ended up working, raising venture, doing all that.
But we did it in a way where, as my friends told me later, they didn’t know how to be helpful. They didn’t know — should I send you deals to invest in? Should I come work with you? Should I send you people to hire? Our structure of the incubator wasn’t super network-centric. It was creativity-centric. It was isolated a little bit. And that was a mistake.
Had I gone and worked at Facebook and learned more about that ecosystem, or become a venture guy, or opened up a shingle to say, “Yeah, I’m doing this, but I also want to make 12-20 investments a year as an angel and I can be helpful” — I didn’t do any of those things. That was just a mistake.
Now, I just had four kids in 37 months. My wife and I were moving houses. My mom got dementia. We were busy. There are excuses. But I didn’t have the clarity. And as a mentor, I would suggest to people: think again about the network. Think about everything you do as how does this affect the people and network connectivity I have or don’t have going forward.
Sam: One of the things you said was — you need to create your API. If you want other developers to make their product compatible with yours, you put out documentation. You say, “Here’s what I can do. If you ask me this question, I can give you this data.” And what you had at the time was just a fuzzy API. People didn’t know how to plug into you. They didn’t know where you could help or how you wanted to be helped.
That stuck with me because I have the same problem. I need to make it clear — what am I trying to do? Because when you help people, there’s a lot of goodwill built up. People love to help you back. But not if they don’t understand what game you play, what your superpowers are.
James: Yeah, great idea. The Bay Area more than other cultures is a non-zero-sum thinking environment. That’s one of our key traits. And it’s furthered by this idea of: here’s what I can help you with, here’s how you can help me.
On Leaving California for Taxes [02:17:00]
Sam: What do you think about people who leave California, leave San Francisco, because they don’t want to pay taxes?
James: I think it’s shortsighted. Look, anyone can move. It’s very emotionally sensitive to people about where they want to live. But a lot of people don’t like it here for whatever reason, and they’ll leave or think they can be a big fish in a smaller pond somewhere else.
Generally though, people are moving because their husband’s mother is nearby and can help raise the kids. There’s what we call network gravity that pulls you away from the Bay Area. You just have to fight all the network gravity and be in that ecosystem.
If I can earn 20 times more here and pay 13% extra tax versus New Hampshire or Florida, isn’t that worth it? And if I’m not smart enough and good enough to earn 20 times more — or even two times more — then yeah, I should leave. But this is the NBA. A 13% tax on being able to play in the NBA is nothing.
Sam: I remember you saying that because at the time a lot of people were moving. They were moving not because they didn’t like it, but because: why do I need to be there if I can work online? I’ll save 13%. And you were just like, “That’s insane.” One idea, one investment, one serendipitous conversation, one brunch you go to — those have paid off many times over.
What’s Next: Tech Windows Still Open [02:25:00]
Sam: You’ve been early to a lot of big things. You wrote a blog post about Bitcoin before Bitcoin. You were in social gaming before social gaming took off. You were in social networking before Facebook was invented. So — what’s next?
James: We also got into tech bio in 2016, which is software-driven biology. And we got into AI in 2018 — not quite as early as Benchmark with OpenAI and Elon, but pretty close.
So what’s next? A lot of things. There’s going to be opportunity in robotics that hasn’t existed before. Tech bio — we’re only seven or eight years into it, and that window will be open for 30 years. We’re going to learn so much about DNA. And AI is going to touch everything.
I think AI has created a whole new set of consumer experiences. The window there will be open for three to four years. It hasn’t even really started. We’re writing a blog post about consumer AI and it’s hard to find interesting companies. You’ve got AI Dungeon, Volley, Character AI — maybe 15 or 20, but not 50. We’re waiting. Consumer is back. Tech bio. Robotics. Space is still open for another three to five years.
Sam: Services?
James: Services — with AI. PE firms and startups are going to grab AI and go in to transform all the workings of corporations, service firms, banks. Everything that’s a service to you as a consumer is going to be transformed by AI — faster, cheaper, better, easier. I would encourage people to think through what services businesses in their area they could bring AI to and lower the price by 30%. Just take market share.
Sam: What’s an example?
James: A lawn care business near me is making a million dollars a year in profit. Guy’s ready to retire. I could buy that business at a fair price. But with AI, I’m going to have a robo receptionist. I’m going to go around with a video camera that catalogs every plant. AI gives me X-ray vision for their landscaping — I know what every plant is, their water amounts, everything. I can provide a service no one’s ever been able to provide before. Charge more for high-end clients, or charge the same and give better service, or charge less and just take market share. That’s the opportunity.
AI Model Companies Have No Defensibility [02:36:00]
Sam: Right now with AI there’s a fog of war. All these companies competing to the death. Where’s the value going to accrue? What do you think of people who are investing in OpenAI or the models? Is that where the value is going to be?
James: Yeah, I don’t get it. I don’t get it. I think they’re making a big mistake. In 2022 when we first started writing about this, we said on our blog: AI is going to be like water. You’re going to get free unlimited AI processing on your CPU and your phone within three to four years. There’s no doubt it’s going to be free — in the same way I can use my phone for hours a day without paying anybody anything.
I don’t understand why everyone’s plowing so much money into this, because it’s so clear that you’re going to have open source — whether three, six, or nine months behind. When you’re thinking about defensibility, you have to think about 10, 20, 30 years. The open source is going to end up just taking over, and you’re going to be able to do it on CPUs. Both Nvidia and all these giant LLM companies spending all this money on training are going to go to zero eventually.
That’s why Nvidia is trying to get everyone to use CUDA — because that’s their operating system level. It’s a platform network effect. They’re trying to force a platform effect while they have the hardware everybody wants. It’s smart. I get it. We’ll see if it works.
Same thing with OpenAI. I don’t get it. They have to move up to an operating system layer where there’s a platform network effect, or move up into the application layer where there are network effects. Otherwise DeepSeek or the 20 DeepSeeks that are coming are going to eat their revenue. 96% of all processing in the world is still on CPU, and these models will start working on CPU in the next 24 months. Then what do you do with the Nvidia chips?
Sam: One of the arguments is: “But we have the data.” Chamath has come out and said it’s all about who owns the data. What’s your message to Chamath?
James: I just think that’s wrong. I can synthesize your data. I can cobble together different data sets to approximate it. And if you go to Google and type in “data network effects,” the first article explains why data network effects aren’t that powerful. They’re asymptoting in terms of defensibility.
Here’s the thing: if ChatGPT sees what I’m typing and gets incrementally better, the next guy behind me can’t perceive that it’s incrementally better. The increment is too small to be perceived by the user.
I also think this is a fiction that Google and Microsoft tell Wall Street and their employees for two reasons. They tell Wall Street: “We’re going to win because we have the data.” They tell employees: “Why would you leave? We’re going to win because we have all the data.” There might be some applications where that’s true. But in the end, Microsoft and Google are not going to win because of the data. They’re going to win because of scale and distribution. They won the game 20, 30, 40 years ago, and that’s why they get a chance to win today. Not because of the data — I can get your data, dude.
Sam: Buy or sell Nvidia?
James: I don’t give investment advice. But opinion — I would sell Nvidia long-term. I would still be a Google and Microsoft buyer, because of the distribution. There’s going to be tremendous value created for consumers, small businesses, and enterprises, and they already have their hooks in. They’re the incumbents. We are in the age of incumbents when it comes to software. They’re going to win because of distribution, not data.
Sam: If you were the CEO of OpenAI, what would you do?
James: I would try to build an operating layer and get everybody to sign into it — the same way Microsoft has their operating system layer. Then I’d create two or three applications the way Microsoft did in the ’90s with Office. Then I’d go buy up other companies, just run the Microsoft playbook.
The problem is that Microsoft’s main product was the operating system, so they had the network effect from day one. OpenAI does not have a network effect at all. The main thing they have right now is distribution and subscriptions, but consumers and SMBs are fickle. They’ll move off to something for $10 or $5 as long as it’s good enough.
Sam: Where’s the juiciest opportunity then?
James: The application layer and the operating layer. We’re investing in things that can build network effects — typically verticals where people can get rapid growth and network effects so that even after a year or two, their scale makes it hard for anyone to compete.
Something like AI Dungeon — a role-playing game based on AI. First AI gaming company. Still the biggest, still the most advanced. They’re going to build out a network effect around AI-powered RPG games. Or a company like EvenUp — AI for personal injury lawyers. It’s a vertical Microsoft and Google don’t want. But it’s still an $80-billion-a-year industry. The AI helps them evaluate cases, collect data, figure out what the court case would look like and whether they’d actually get the money they want — which judges actually like, because then lawyers aren’t bringing specious cases.
We’re also investing in dev tools and architecture speedups, because you can get distribution quickly and build lock-in the way Atlassian has done.
If You Were 25 in 2025 [02:55:00]
Sam: If you were 25 again — and it’s 2025 — you, Stan, and Rick are hanging out again. What do you think you’d be doing?
James: First, I’d have the conversation: do we want to have a fun normal life, a fun strive life, or a global greatness life?
Sam: And what’s your answer?
James: Global greatness. I think it’s just fun to play in that game. At Tickle, we registered 150 million users when there were 600 million people on the internet. That was touching the world. It was kind of fun. I like to work at scale — things that scale are software, media, money, and a few other things.
But you would have to decide. Don’t think you have to be Steve Jobs to live a great life. You can have a fun normal life. You’re in the global greatness game, but you seem like you’re not Steve Jobs. You seem happy.
Sam: That was one of my notes — I love this guy’s lifestyle. You showed up in a fun shirt. We hung out for a couple hours. You told me you spend months out of the year with your kids, you travel. You were writing a TV show for fun. You weren’t sleeping on the factory floor. You seemed like a happy dude with balance, but still scaling.
James: I’m upper middle class, lower upper class — in that borderland. I get invited to the rooms where global greatness is happening, but I love spending time with my wife and kids. That’s my priority.
Everyone tells me I look younger than I am. I’m like, it’s because I love my wife and I don’t drink alcohol. It’s pretty simple.
We’ve taken the kids to hike Everest base camp. We’ve sailed across the ocean. We got attacked by orcas and our boat was destroyed. We go snow camping in winters and live in igloos. We do all the fun stuff.
Sam: Did you have to wait until you were wealthy to do those things?
James: No. Right after college, I moved jobs every six months and sailed across both the Atlantic and the Pacific. I learned to paraglide, to scuba dive. I lived in Hong Kong, lived in Beijing. All in my 20s.
Then I realized I wanted to do some global greatness. So I started grinding. I ground for three years at Battery Ventures as an associate in Boston. Then a year and a half at Harvard Business School, where I met my wife. Then in my startups. But once I had plenty of money, I ground again because it was fun. It was type two fun. It was creativity, it was generativeness.
This is the thing — I love this word “generative.” If you want to understand what Elon is doing, he’s just generating. He’s generating tweets, he’s generating kids, he’s generating companies. He’s just moving stuff around. A lot of people here in the Bay Area are like that, not as extreme.
Craig Donato, who’s head of revenue at Roblox — he’s been terraforming the American River to create an incredible camp for him and his friends. He bought it for $240,000 and worked on it with his own hands for 22 years. And yet he’s worth way more money than any of us need, because that’s what he loves doing. It’s type two fun.
There’s always been this adventuring approach I’ve had. Other than that grind of maybe eight years to get somewhere, it’s all just been: pick up the adventures every minute you can, because life is short.
On Admiring Elon Without Worshipping [03:07:00]
Sam: You don’t seem to be in the Elon worship camp. Like, “he’s the north star and everybody else should feel bad about themselves for not being closer to Elon.” You’re in my camp — you admire parts of him, not all. Who do you admire? Who do you learn from a lot?
James: I’m certainly inspired by what Elon’s been able to do. When I knew him in the 2000s, we were in some of the same circles. He just seemed like a normal guy. Really. He seemed like a really generative, cool guy — like Craig Donato or like anybody else. You couldn’t have picked him out in a room.
I remember in 2007 after the third rocket blew up, I emailed him and said, “It’s going to work eventually, and when you do, it’ll make it all the more sweet. Just keep going.” And he emailed me back like four hours later: “Thanks, man. I needed that.” He was in the trenches, putting everything on the line. Just an entrepreneur doing entrepreneurial things. Whether you’re doing a bakery or a construction company or whatever, you go through that same journey. What was admirable about him is that he was clear-eyed in his effort. And he just keeps expanding the scale at which he’s operating.
The Nearly-Bitcoin Story [03:15:00]
Sam: You had this idea for one world currency. Before Bitcoin.
James: In 1997, there was a thing called Cyber Gold. I was at Battery Ventures and was trying to convince my bosses we should look at this, because we were going to have software-based currencies. This guy approached us and said, “I’ve got this thing called Cyber Gold — I think we’re going to have software-based gold, currencies, and we’re going to pay each other in them.” I said, “That actually sounds logical. That sounds like the real future.”
Then a few years later at Tickle, we saw a Korean company selling a digital rose — 32 by 32 pixels — for $4.95. One of my engineers said, “Hey James, come take a look.” It was in Korean, so we didn’t know what was going on, but we could see there was a price on this little digital thing you could send to a girl on this social network.
Stan was standing behind me, and I turned around and looked at him, and I said, “There it is. People are going to buy pixels.” This was 2001, 2002. People are going to buy pixels because it just affects your brain. It’s all in our minds.
Then Second Life comes along. I go to a tech conference called PC Forum, and there’s this guy sitting next to me. He waves over two other guys — turns out it’s Larry and Sergey. The four of us sit on a couch in the sun and he opens his laptop. He’s like, “I’ve got this thing called Second Life. This is how it works.” I said, “So do you have a currency?” He goes, “Yes. It’s called Linden dollars.”
I went outside with Philip — that was Philip Rosedale — and said: “The only question now is, Philip, what color are the robes? Meaning — I see what you’re doing. You’re creating a religion. You’re moving humanity into another realm.” And he was like, “Oh. You really know what I’m doing.” So I ended up on his board with Mitch Kapor and Bill Gurley for five years.
Second Life got big. It was on the cover of every magazine. They raised over a billion dollars from Goldman and others. In the end, it didn’t become the world-changing thing. But what Zuckerberg is trying to do right now with his virtual world is still behind what Philip and Cory Ondrejka were able to do with the technology in 2003 and 2004. They’re still that far ahead.
The cool thing about Second Life was that the players used Linden dollars as a real currency — buying, selling, trading at full level. Not just in-game gems for power-ups. A fully baked currency. You could trade Linden dollars against US dollars and British pounds on open exchanges. We measured the world as $760 million of GDP and watched the number of people making more than $1,000 a month in Second Life — because people were actually living in there.
We realized: money is just completely made up in our heads. We went off the gold standard in ‘72. There’s nothing to money. It’s all just in our minds.
Sam: So when you say it’s all in our minds, you mean — as long as we all believe it, it works. As soon as one of us doesn’t believe it, there’s nothing underneath it.
James: It’s the belief network effect. It’s actually one of the 17 network effects. And Bitcoin is just purely — Bitcoin’s a memecoin. The best one. The most powerful. But it’s on a spectrum. It’s not a different thing. The dollar is also a memecoin. And they just list out the reasons to believe. What underlies the belief? Why do you believe in the US dollar? We have aircraft carriers. We have a tax base. Those are reasons to believe. With Bitcoin, you can’t print anymore — that’s a negative for the dollar. So you just list out for every currency what the reasons to believe are. They’re on a spectrum.
Sam: So in 2004, you bought blue.com?
James: I bought blue.com because I believed we should create the world’s cyber-currency. Blue, because you have greenbacks — dollars — and then you have the blue currency. A global currency.
So I went to Philip. We got together every week on Wednesday afternoons — Mitch Kapor and Philip and me and Stan. We would talk about how we were going to pull this off. This wasn’t just a drunk conversation. It went on for a bunch of weeks.
Back then we had BitTorrent — a distributed thing where everyone had a copy or pieces of a file. We were going to create a torrented currency, encrypted, independent. We were going through it week by week, nailing down all these topics. Then we came to something we couldn’t figure out — this creates seigniorage to the US dollar, which is illegal after laws put in place after the Civil War. There were 1,600 different currencies in the US before the Civil War. Creating a currency that’s above or senior to the dollar — essentially, the law outlawed any currency which wasn’t the US dollar.
We knew the FTC would come after us at some point. The SEC and FTC did shut Facebook down from launching Libra, because Facebook was already too powerful. We knew what needed to happen: we needed to have an immaculate conception. We needed to be born so that no one knew it was us. Because Philip had four kids. I had four kids. We had plenty of money. We like being American. We don’t want to have a target on our back. We had too much to lose.
The problem was we had talked at David Hornik’s lobby — Philip and I had led a talk with about 20 people about one currency to rule them all. At the end they said, “I guess we know who’s going to go do this.” Twenty people outside the room knew we were working on it. We couldn’t solve the anonymity problem. So we didn’t go forward.
Then about a year later, I get an email from Philip saying: “Is this you? Did you do this?” And it’s the Bitcoin paper.
Sam: Wow.
James: And he was pissed. He’s like, “You cut me out! You cut me out!” And I was like, “No, dude. It’s not me.” And in fact, of the two of us, it’s more likely to be you. Is it you? And he said, “No, it’s not me.”
Sam: So you missed out on creating Bitcoin. Did you buy?
James: Yeah, of course. Of course. I was lecturing about it. I went to the next tech conference and led a session on Bitcoin. About 35 people came. A whole bunch went and bought. Six people have come up to me and said, “I owe my house to you.”
Sam: Why are you not a hundred billionaire then?
James: I bought a bunch, but not an infinite amount. I have this entrepreneurial stubbornness — when I had an idea and somebody else did it, I have a resistance to investing in it. Like, I don’t know, I want them to fail. Or slash — I don’t invest in it.
Sam: Wait, you believe in it so much, you almost wanted to do it. Yeah.
James: I have a creator stubbornness. I want to have been the creator rather than the participant.
Sam: I have that too.
On Relationships, Self-Improvement, and Therapy [03:35:00]
Sam: You had this great line. You go — you mentioned some couples therapy you dip into or something like that — and you said, “Therapy is just realizing how much of an asshole you are. Makes you a better partner.”
James: Totally. I’m a big fan of taking any self-improvement thing that comes along. Why not? What have you got to lose? And anybody who’s hesitant to do that stuff — not only do I find them not courageous, but I also think they’re missing out on the fact that interpersonal relationships are the most important thing you do in your life. They determine whether you’re going to be successful at your business. They determine whether you have a good death. All the things that are important are determined by that.
My wife is the nicest person in the world. Of anyone I know, she’s the person who needs therapy least. And she heard about Landmark Forum from our friends and said, “Oh, I want to do it.” I said, “Why?” She goes, “Oh, because then I might be able to love people better.” What an attitude, right?
So she and I took five classes at the Landmark Forum over two years. I don’t think I’d be married without it, because I just hadn’t been developed in the basic ways. If you go to Stanford Business School and ask people what’s the best thing they took, they say Touchy-Feely. Same at Harvard — they call it LEAD. Most important thing you learn, and people don’t focus on them.
Conscious leadership — great program. Joe Hudson’s programs. Hoffman Institute. All these ways to further and deepen yourself. That makes relationships like mine with Stan go easier. And you can have as much money as you want or as little money as you want, and still be happy as hell.
On the fourth course at Landmark Forum, the scales fell from my eyes. I’m like, “Oh. I’m a total asshole. I understand. I’m an asshole in all these ways.” And unless you admit to yourself that you’re an asshole, how can you stop being an asshole? Step one of the asshole recovery program.
Sam: James, thanks for doing this, man. Long time coming.
James: Thank you, Sam.