Claims

Venture Fund Invests in World-Resilience Companies

Reid runs a venture capital fund with Chris Anderson of TED that invests in companies believed to make the world more resilient, while his decade-long voluntary public service has focused entirely on bio-risk.

A serious scientific theory of companies should be able to predict when a company such as Google will go bust.

Across 23,000 US companies, income and assets scale sublinearly with size (number of employees) like biology, indicating companies become dominated not by superlinear innovation and ideas but by economies of scale — namely bureaucracy and administration.

Because companies scale sublinearly, the theory predicts sigmoidal growth for them; Walmart's growth from 1994 to 2008 matched the theory's predicted red line, and this pattern repeats across all 23,000 companies — they all start as hockey sticks, then bend over and die like organisms.

Rocket Lab is a real, second-in-launch company (not a Ponzi), recommended at ~$10 and now ~$50, illustrating that money should flow to genuine frontier-technology companies in space and AI infrastructure rather than fake companies run by sociopaths.

A money counter app should not charge a subscription because competitors who have already researched this don't, and it is a one-off utility tool without ongoing cost, so a subscription model doesn't fit even though subscriptions generate more revenue.

Targeting app keywords with low competition (below 50) but decent popularity (above 20), using a keyword tool like Astro, lets developers capture organic App Store traffic and reduce reliance on marketing.

Whether Comet is worth $200/month requires disciplined measurement: adding up the 5–15 minute increments it saves throughout the day; if it saves 10–15 hours a month it is clearly worth it, and at a $35/hour valuation 10 hours saved yields close to 2x ROI monthly—representing a new valuation paradigm for software driven by baked-in cognitive intelligence.

When prompted with the thesis that TikTok Shop's slowdown affects social commerce broadly and may impact Amazon's outlook, Comet's analysis concluded Amazon is pursuing an agnostic social commerce approach—explicitly responding to TikTok with integrations across Instagram, Snap, Pinterest, and YouTube Shorts—and is hedging risk and investing further rather than ignoring the slowdown.

Concentrating supply chains on a single supplier produces 'pseudo-efficiency' — a better bottom line achieved by being short an option whose cost does not appear in the numbers until a tail event (such as a supplier in Wuhan during COVID) materializes; robustness instead requires redundancy and inventory, which is not a true cost but can be antifragile because in a crisis squeeze the commodity price spikes and stockpiled inventory can be sold.

Over-optimization is self-defeating ('pseudo-optimization'): driving a Ferrari at 500 km/h will not get you there faster than a bicycle because the odds are you will never arrive — extreme optimization without redundancy raises the probability of catastrophic failure.

The number one way people get ruined in modern business is not betting too much but cutting corners and doing unethical or illegal things; ending up in prison or with a ruined reputation is equivalent to being wiped to zero, so reputational ruin should be treated as ergodic ruin and avoided absolutely.

The hardest and most valuable skill in building a startup is not implementing features but identifying what truly matters and ruthlessly narrowing each new feature to its MVP — done in two stages (at brainstorm, then after a few hours of building) — because most parts of a feature are unnecessary and most people work on things that don't matter.

OpenAI's announcement of ChatGPT Tasks validates that an AI-powered productivity tool with built-in background AI agents is the future, proving David's vectal concept was right.

Large innovation almost never comes from incumbents in the field — across retailing (Amazon vs Walmart), media (Netflix/YouTube/Facebook vs NBC/CBS), transport (Uber, Airbnb), space (SpaceX vs Boeing/Lockheed), biotech (Genentech), and COVID vaccines (Moderna/BioNTech vs big pharma) — because experts extrapolate the past while founder-driven companies have permission to try crazy things.

The 2030s will see a faster rate of demise of Fortune 500 companies than ever before, because most Fortune 500 companies should not be run even remotely the way they're running by 2040, and the transformative reinvention won't come from existing companies — someone new will reinvent each industry.

Calling oneself 'founder friendly' is a real disservice to founders — like telling a five-year-old you'll always say yes — whereas the right approach is teaching founders to make decisions and lengthening the leash over time, giving them the final say while always challenging and debating them.

Even the strongest founders benefit from a debating partner who challenges them but does not make decisions — like a pro athlete with a coach — which is why Khosla refuses to sit on boards or take governance votes, instead doing regular dinners/quarterly sessions to challenge founders while always granting them the final vote.

When we invested in Square in 2010, Jack Dorsey had just been fired from Twitter and had four failed startups on his Wikipedia, so traditional wisdom would say don't back him.

The OpenAI investment was a conviction bet of more than twice Khosla's largest initial venture investment in 40 years, made in 2018 (closing early 2019) when consensus held AI was 'a science project' and OpenAI wasn't even using transformer models — driven by the belief that the right team plus resources would figure it out and that it was 'too important not to try.'

Most people reduce risk to increase the probability of success; Khosla does the opposite — he starts with wanting high consequences of success and doesn't care about the probability of failure, because incumbents who 'can't afford to fail' can't take large risks.

First-principles thinking, rapid learning, and hubris are the essential characteristics of great entrepreneurs — and the most important question when evaluating a startup is how much they've changed their plan over the last three months, signaling rapid evolution rather than deep domain expertise.

Polite feedback to entrepreneurs is a disservice ('I prefer brutal honesty to hypocritical politeness in vain'); the only things that genuinely help a founder are those that change or challenge their thinking, and great founders love this while insecure ones avoid it.

I've been doing venture capital for 40 years and have gone through every large innovation cycle, but I've never seen a cycle like this one.

Founders overweight the dilution math (keeping 90% vs 88% of the company) and underweight strategic path choices, when in fact the strategic path can create a 500% swing in the value of their stake — so the real opportunity for value maximization is in building the company well, not in optimizing investment terms.

Diehl's sales staff are not on commission, which he frames as ensuring honest, needs-based recommendations rather than pressure selling.

When someone answers gear questions for you, you must consider whether they are trying to sell you something; an honest seller gives the true answer rather than the most profitable one (e.g., always recommending a preamp).

Big businesses entering high-end audio reduce costs to pennies and treat it purely as a business, which Diehl views as detrimental ('I hate it when bean counters get involved').

Naming famous marketers (Alex Hormozi, Dan Kennedy, Gary Halbert) in the instructions gives the AI more information on the desired copywriting style.

Because the project supplies extensive context, generating a video sales letter and landing page copy within it saves substantial time and produces significantly higher relevance and quality than writing from scratch.

AI-generated marketing copy is a strong starting point and massive timesaver but typically requires light editing and a personal touch before it is send-ready.

You should use separate projects when work differs in style or instructions, such as separate content-creation projects for Instagram, LinkedIn, and X, because writing style differs per platform.

US automakers lost ground to imports primarily because American cars were more expensive than foreign cars but not correspondingly better, driven by higher wages and a unique fringe benefit package including lifetime medical care amounting to $1,900 per car by 2008.

In 2024, half of the 16 million vehicles sold in the US were imports (including 500,000 Volkswagens), compared with imports representing only 0.03% of US cars sold in 1949.

Humanoid robots will be the biggest product ever in history by far, with AI agents functioning as a digital workforce working alongside human employees—given examples of the desired work product, generating attempts, receiving feedback, and being guardrailed by rules of what they're not allowed to do or say.

Thanks to Jane Street for sponsoring this Art of the Problem video; Jane Street is a quantitative trading firm hiring machine learning engineers, researchers, and interns.

Platform 2 is designed to scale to every US metro, with an optimistic plan to launch in 10 to 20 major US metros next year.

Zipline manufactures the Platform 2 craft in America, in San Francisco, with 12 manufacturing lines and a little north of a thousand parts per aircraft.

The current instant-delivery model is inefficient because a 3,000 lb gas combustion vehicle driven by a human delivers items averaging only 5 pounds, making it expensive, surprisingly slow, environmentally damaging, and a source of neighborhood traffic.

Drone delivery is roughly 10 times as fast as car delivery and can economically serve a delivery radius of at least 10 miles versus the 3-4 mile limit of most delivery services, effectively 10x-ing the number of customers reachable from any given business.

Zipline installs a wall-mounted pickup portal at shipper sites (health systems like Mayo Clinic, Cleveland Clinic, the VA, or restaurants like Sweetgreen, Aino Farms, and Walmart) so anyone in the building can pass items through and have them delivered directly to a home with as little as a dinner plate of space.

Travel is consistently the first industry to adopt a new technology platform shift (as seen with websites and mobile phones, and now AI), because the purchase decision and intermediate stages are digital and non-physical even though the product is experiential; retail and e-commerce follow closely behind.

The most exciting frontier of AI is not building AI apps themselves but entrepreneurs in non-technology fields (education, health, food services) using AI as a component to solve problems in their core business, because AI amplifies cognitive capability across every field of human endeavor.

AI can potentially double to triple every one of Hayden's companies per year; whereas leadership teams used to set sustainable growth goals of 30-50% year-over-year, scalable companies can now achieve roughly 10x that with AI, while less scalable brick-and-mortar businesses can reach 60-100% growth per year.

On the actual sales side, AI can help with call reviews, pipeline management, and autoresponders, making a sales manager roughly three times more effective by removing reporting work — but it currently cannot take calls, so output is still bounded by humans taking calls, though that may change in the next year or two.

AI will produce a 'democratization of execution' — narrowing the gap between small and large companies by letting even a one-person company perform thorough processes (like top-grading) previously reserved for very large firms — but the pace varies by industry: digital, software, marketing, legal, and finance move fast while brick-and-mortar takes several years.

Hayden spends roughly the first five hours of each day (waking around 4:30) learning and tinkering with AI, and over the past decade has spent about 40 hours a week learning something, systematizing what works, and teaching it to his leadership teams.

Acquire helps people become acquisition entrepreneurs by buying roughly million-dollar-a-year profitable cash-flow businesses financed through SBA loans, while Empower handles the seller side via exit planning, connecting buyers and sellers.

AI will eliminate the director layer of organizations entirely while expanding the manager layer, helping companies bypass the 'valley of death' growth stage; the future structure will be far larger companies with far fewer employees — essentially owner plus front-level people, with AI serving as the director and CEO layers.

AI with the master prompt collapsed work that previously took months — an AI hiring/job-description package would have taken an HR director and CEO the better part of a week with multiple meetings, and documenting fulfillment-engine SOPs that originally took months and many people now replaces at least three months of work.