Trae Stephens (@traestephens) is a partner at Founders Fund and co-founder and Executive Chairman of Anduril
In this conversation, Trae Stephens and Patrick O’Shaughnessy discuss choosing good quests, American Dynamism, his experience at Palantir, lessons learned from Peter Thiel, starting Anduril, the state of defense technology, progress, stagnation, what he and Founders Fund looks for in founders, religion, virtue, and more
We need more low-margin businesses
- A lot of high-margin software businesses have no impact on society, and sometimes even a negative impact on society.
- There are high-margin software companies that do important things, but many are related to advertising, capturing human attention, or creating obscure developer tools for enterprises.
- These software companies pull talented engineers away from working on more important problems.
- Important problems are often solved by businesses with low margins building with atoms, not exclusively bits.
- Low-margin businesses are harder to start and operate, but that does not make them any less important.
Lobbyists are not all that bad!
- The Founding Fathers could literally read every document during their day, but today’s members of Congress may have expertise in one field.
- Most members of Congress are professional politicians who have not done anything prior to their career in politics.
- Effectively, lobbyists provide information to members of Congress related to the things they vote on.
- Lobbyists consume information; communicate the information to their network who work in critical offices on Capitol Hill, which tend to be committee-based; and hopefully, this is done in a way that helps members of Congress be more informed on the issues they vote on.
Peter Thiel’s view on mimetic theory
Mimetic theory: People want what other people want.
- Most conflict over scarce resources does not arise from differences but from similarities.
- Mimetic desire is the primary motivation for conflict in society because we are all going after the scarce resources that other people want.
- In highly competitive spaces, all the capital gets taken away.
- Things become monopolies when someone has an idea that someone else doesn’t have.
American Dynamism
- Katherine Boyle of a16z coined the term “American Dynamism” to categorize companies building in the hard-tech space, often government-facing, and often for national security.
- These companies do not exclusively have to be patriotic or nationalistic to fit in the category; perhaps the “dynamism” part is even more important than the “American” part of it.
- Making money is the mission of most technology founders, whether they say it out loud or not.
Entrepreneurship insights
- Fundraising is a skill.
- At least one person on the founding team needs to be really good at fundraising.
- Entrepreneurs erroneously think that their company will automatically get funding if they have a good idea, but that is not the case.
- Entrepreneurs must take ownership when it comes to raising money for their businesses.
- Having the willingness to do whatever role needs to be done, regardless of how high or low status the role appears to be, is a strong indicator of successful entrepreneurs.
Why many people are on no quest at all
- There is a lack of passion that comes from the general liberal arts mindset.
- Young people are told not to specialize and to be jacks-of-all-trades, and then they are told in college to pick the thing that they want to do for the rest of their lives.
- This may be creating an identity crisis in the younger generation.
- It is difficult for young people to devote themselves to a single career without a good reason for doing so.
- Many young people default to tracked behaviors where they choose the safer, consensus “next step” over and over again.
- They keep pushing decisions further out into the future, then get into their mid-30s and have no idea how they ended up where they are.
