CEOInterviews.AI#151 Joe Lonsdale - The AI-Driven EMP Weapon Built to Destroy New Jersey Drone Swarms

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Narrator0:03

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Sean3:25

Joe Lonsdale, welcome to the show.

J

Joseph Lonsdale3:27

Thanks, Sean. Glad to be here.

S

Sean3:29

Man, I am super excited to talk to you. I've been following what you've been doing and a lot of your different companies for a while now. I know you're a busy guy, and I just want to say it's an honor to have you here. You're involved in so much with technology and also I love what you're doing with the University of Austin. I'd love to hit on that, but I just really appreciate you coming and I've been looking forward to diving into this for a long time.

J

Joseph Lonsdale3:57

I'm excited to be here. It's an honor to be on the show.

S

Sean3:59

Thank you. Thank you. But everybody starts off with an introduction and we could go on for probably an hour here, but I tried to summarize it up here. Joe Lonsdale, you're a real titan of industry and innovation, a man whose journey from Silicon Valley to the halls of policy reads like a modern-day epic. You're a Stanford educated visionary who co-founded Palantir Technologies, a company that's become synonymous with big data and analytics, helping governments and businesses worldwide to make smarter, more informed decisions. After Palantir, you ventured into the world of finance and founded Adpar, revolutionizing how wealth management works, making it transparent and data-driven. Of the nine US defense unicorns, billion-dollar companies, you founded three and were one of the earliest investors in another three. You're deeply invested in education reform. You co-founded Cicero, an organization dedicated to advancing educational opportunities and policy to transform lives and societies. Your influence extends into policy with your involvement in 8VC, a venture capital firm that doesn't just fund startups, it pushes for policies that encourage innovation. You've been an adviser to leading political figures, advocating for a future where technology and policy work hand in hand to solve our biggest challenges. You shape the ideas of the future with your op-eds and articles that often delve into intersection of tech policy and culture. You're a father of five kids. You just had your first son and you've been married for 8 years.

J

Joseph Lonsdale5:42

Yep. That's right.

S

Sean5:43

Congratulations on your son.

J

Joseph Lonsdale5:45

Thank you, Sean. He's 92nd percentile. He's a big little baby.

S

Sean5:48

Yeah. Nice. Healthy boy, huh?

J

Joseph Lonsdale5:51

Yeah.

S

Sean5:54

Well, Joe, I want to do a life story on you starting from childhood and get into all of your different companies and involvement with different things that you're in. But it just so happens that I've been super interested in your company Eperis and I've had several conversations with your business partner Grant for Standing and love him. Amazing guy. But we got a situation going on literally right now in New Jersey with all these drones and nobody seems to know what it is. So I just want to kind of start the interview right there. What the hell do you think these drones are? This is funny. We're going to be at the Army Navy game and so I'm bummed that I don't find out tomorrow probably from all these guys because I'm sure they know. I'm sure they know, but I haven't texted them and asked. I mean, if it's not ours, then it's really incompetent, right? If this is not ours, if this is ours, then it's also kind of weird. Like why are we doing this and freaking people out? But if it's not ours, what the heck, man? Well, I mean, what was it like 2 years ago, we're freaking out about a spy balloon traversing the United States from Washington all the way down to South Carolina.

J

Joseph Lonsdale7:13

I got a good answer on that, though. I'm sure I don't know. I'm sure it's public by now. But I think because of the fact that we let it stay up, we were able to hack into it, trace back where the data was going and find out a lot about the Chinese. And so it turned out in that case it made sense. And it turned out that Xi Jinping didn't even know his underlings had put this balloon up and were doing it. And it was actually bad for China because we used it to hack in. So I think in that case there's a competent answer which makes you feel good that there's not totally incompetent people. Like they met with Biden, they said what they're going to do. He agreed to let him do it and that was fine. So hopefully there's a confident answer for these drones, but it's a weird thing, man. I mean, do you think it's ours? I assume it's ours because if it's not, that's insane. Why would they be flying it over? Why wouldn't they fly this over Area 51 or some testing grounds.

You know what I found out about government, man, is that there are some really great people. There are some amazing special forces guys. Every once in a while in the DoD, you'll have this genius person in the strategy group, and then the vast majority of them are incompetent. So it's just hard for me to say, but I'm hoping they're ours because if they're not ours, that's actually a little bit scary and it's really incompetent that we're not doing something.

S

Sean8:21

Do you think this might be a distraction from something going on in the Middle East or something going on?

J

Joseph Lonsdale8:27

I don't know. Maybe some bad juju going on somewhere else and they're just throwing these things up to distract everybody. If there was another story, then maybe. But I don't know. That's an interesting question. We're going to find out really soon. I'm curious. I don't want to make a bunch of stupid guesses and come out to be an idiot because it's hard for me to know. I actually don't know the answer.

S

Sean8:45

Well, I mean drone warfare is becoming obviously very prevalent.

J

Joseph Lonsdale8:52

Absolutely critical. This is the future of warfare is like lots and lots of manufactured smart weaponized autonomous drones whether they're flying, whether they're on the water, whether they're under the water, whether they're on the land. That is the future of warfare as far as I'm concerned.

S

Sean9:05

So, you know, people, one of the reasons I'm bringing this up is obviously I'm just extremely curious of what your thoughts are, but another reason is, I mean, I've been reading reports on CNN, people are posting the neighborhood watch groups and the Facebook groups and stuff, and people are freaking out. And what I find probably isn't a coincidence but because I believe in a higher power but you have you founded Eperis.

J

Joseph Lonsdale9:38

Yeah.

S

Sean9:38

And Eperis is a directed energy basically a directed EMP weapon and it is I mean it's it seems to me from the reading I've done on it it's defense against drones.

J

Joseph Lonsdale9:42

Eperis is a really important company and I'm proud to be a co-founder there. It's not just me, I can't take credit for it by myself. There are a few other people who were critical: Nathan Mintz, Bomar, other guys, Grant stepped in and played a key role. The background on that by the way is, I'd gotten out of defense for a few years because after Palantir, it's just hard. You have to go talk to senators, you have to go to the DoD. It's stressful stuff. I built companies elsewhere like you mentioned. But then we saw in the early 2010s, we saw a lot of our smartest friends in China were being forced to have their engineers work on military projects. And we said, 'Wait a second, this is not good.' And then we saw our defense primes were not able to attract the best talent at all. So in America, these defense primes had all consolidated in the '90s and obviously Palantir had to compete against them in software side and crushed them, but their hardware side was also going downhill. It was getting worse and this is a big problem that China's getting better. It's getting worse here. And then it turned out that Xi Jinping guy is clearly a commie who's going to try to confront us. He's going to be a serious adversary and that got scary. Then a bunch of my friends, three of the best guys from Palantir with Palmer Lucky started and so we backed that early and basically convinced me at the time looking at all these things and looking at Andre, we better get back involved in defense. So we said okay, we're back involved in defense. What are we going to do? We need to get more of our best and brightest from the tech world, which I'm lucky to come from and have access to, to work on these problems. We mapped out about 20 different areas and we decided to start Eperis first and decided to build that because exactly the future of warfare seemed very clearly to be heading towards drone warfare and it's just not sustainable to fire missiles at drones, right? You're spending a million dollars or $100,000 to shoot down something that costs a lot less than that. So you need a one-to-many effect. You need to be able to shoot cones of energy. And the thing we realized really with the help of some really smart people like Bo and Nathan is that it turns out that the chips in Silicon Valley had gotten to be so powerful and so fast that they can help you control power on very small time scales and get the power to hit the emitter and then fire way farther than anything anyone else was doing. And so the emitters were called gallium nitride. It's just a super efficient way of shooting. Gallium nitride is a GAN, they call them GN. These are super efficient emitters and these exist in other places too. It's a big breakthrough that was really started to be used in the last kind of 10-15 years in a bunch of different contexts. But it turns out if you use the AI chips to get the power to hit the gallium nitride, you're taking a bunch of power and condensing it into like a ten-thousandth of a second or even less. So this burst is a super fast burst and the burst is intense enough because it's so condensed that when it hits the drone, when it hits the electronics, it fries them, destroys them. And then there are all sorts of things you do to tune the burst and figure out how to actually do it most efficiently and effectively to fry these things. And we're now, I'm not supposed to say quite how far away, but you're shooting things down from miles away. And it's not just the little tiny DJI drones, it's the big things that Iran's making for Russia as well. We can take them down quite a far distance away. And what's really cool is you're not just doing it for bases, you're doing it for forward attacks, but you can put smaller versions in the cones. For example, Andrew's Roadrunner, you've seen that, the thing that takes off and lands again. You can put it in one of those missiles and that one's not going to work as far, it's a smaller form factor, but that missile can get up and get pretty close to the bad guy drones, fire a bunch of them, and then come back and land. So things like this you do now too.

S

Sean13:21

So how many drones could like one of these, what do you call the actual weapon? What is it? Leonitis.

J

Joseph Lonsdale13:28

Leonitis is the first version of the product that's being forward deployed with Sencom and it's just going out actually in the next month which is great. The tests have shown you could do about 100 drones at a time in certain conditions. If they're together and flying together, then the thing moves. So you fire. What's great? You know why it's called Eperis? Eperis was the bow of Theseus. Theseus was the guy who started Athens in legend, and in legend his bow had infinite arrows. So that's the point here: you're firing electronic powers, you effectively have infinite arrows. This thing can fire thousands of times and each shot costs almost nothing. So that gives us hope. So basically all these drones in New Jersey, if we wanted to, they could deploy a Leonitis and take it down that way. And if they want to, they could shoot down right now with any number of different types of missiles. But I think there are probably rules from the FAA about what you could do on shore and where you could do it and how you could do it, but eventually you'll probably have things like Leonitis protecting stadiums, protecting airports. That reason we started, by the way, is when we were building Palantir, one of the big focuses was stopping terror attacks. In working and partnering to stop terror attacks with the United States intelligence community, which I think we were very helpful in doing, I have it on my mind, maybe it's a sick thing, but like what's a bad guy going to do? You have to put yourself in the bad guy's shoes and figure it out. One of the things a bad guy could do, which would be horrible, maybe I shouldn't talk about too much, is you can attack a stadium. You can get lots of little drones, put little explosives and cameras on them. It'd be really scary. So I think our stadiums are going to need to be defended by things like this.

S

Sean15:08

Well, yeah. I mean, we just had a former CIA targeter in here just a couple days ago. We just released the interview now, actually yesterday, and she's talking about there are at least 1,000 very well-trained terrorists within our borders right now.

J

Joseph Lonsdale15:30

Yeah, it pisses me off, man. That's crazy. There are some really amazing judges I know who were involved in this. Well, it doesn't matter. Really great decision against the SEC last week. But they go down to the border and they assign them to help because they're overloaded with the cases. And some of the Biden administration judges were letting in people on the watch list and they're like, 'What are you doing? You can't let them in.' He said, 'No, we're instructed to let in everyone.' I still can't believe it, but this is what I'm told by multiple people. There's been Chip Roy, the congressman, wrote about it as well. Isn't that crazy? They're letting these people into our country. Like what are they doing?

S

Sean16:04

What do you think they're doing?

J

Joseph Lonsdale16:06

I think it's this weird ideology where they probably like trying to spend a lot of money while bringing down inflation by bringing in more people, and it's some weird open border ideology. I don't understand it. But the fact that you'd let people in even on watch lists, I guess they think it's not actually dangerous. I don't know. I think these people don't think in terms of bad guys and good guys and we got to keep people safe. It's almost like they're extremely naive people who live in a different type of world than we do. It's weird stuff, man.

S

Sean16:43

Do you think that they want something to happen for a particular reason to start a war?

J

Joseph Lonsdale16:50

It's possible. If they come in and do another terrorist attack, then we go right back to war. That spins up the military-industrial complex.

S

Sean16:53

Yeah. Yeah. That's possible.

And do another terrorist attack, then we go right back to war. That spins up the military-industrial complex.

J

Joseph Lonsdale17:01

There could be someone that sick in the military-industrial complex. I fall in between these factions because on one hand, I think we wasted trillions of dollars over in Afghanistan and Iraq and probably shouldn't have been there in the way we were. Obviously we had to do something after the 9/11 attack, but we probably shouldn't have gone and stayed there and spent all the money and all the lives. But at the same time we do need to stop the bad guys from causing problems. But yeah, I think there are some pretty sick people who are much more aggressive about just always being at war, which is terrible.

S

Sean17:32

Yeah. You know that's one of the things I love about what you're doing is with the traditional military industrial complex companies, we're shooting down $500 drones with million-dollar missiles.

J

Joseph Lonsdale17:48

It's crazy, man. It's not sustainable.

S

Sean17:51

With a company like what you have, Eperis. I mean, it's

J

Joseph Lonsdale17:56

It's not that weight. It's an energy.

S

Sean17:58

It's an energy weapon.

J

Joseph Lonsdale17:59

This is the goal: we're not cost-plus people. I think there's this really sick disease of people that their whole incentive is cost-plus. They just want to use more of their stuff and sell more of their stuff and their incentives are pretty screwed up. I think the better way to do it is to make things much, much cheaper and better and then change the incentives around. Have it be more like a software thing, not like a thing where you're just selling as many as possible at 6%.

S

Sean18:30

I mean, that brings up a whole another topic. I mean what about your personal security? I'm genuinely curious. I mean you've got to be pissing off Lockheed for those guys.

J

Joseph Lonsdale18:39

That's funny. I thought you meant like killing all the terrorists, but yeah that's interesting. I mean, I listen, I think the guy who runs Lockheed, Jim, he ran American Tower. He's a great businessman. He's not from the military industrial complex himself. He's been brought in to figure it out and fix some things because there are some things that are broken there. And he seems like an honorable guy to me. I don't think those kind of guys are... and then the other thing, let's be honest. I'm a step down from Peter Thiel and Alex Karp in fame. They're both 15 years older than me. They're both important mentors to me. They're my co-founders. I think they're the ones who have more security than me. I have my security guy outside. I'm not that worried though.

S

Sean19:18

Right on, man. It's just there's a lot of money at stake here for those companies. Raytheon, Lockheed, Northrop Grumman.

J

Joseph Lonsdale19:26

It's interesting though. I think Sean is not actually in this case. I think it's not the right way to think about it because it's not like there's some evil genius behind Raytheon or something. Raytheon is a conglomeration of all this stuff that merged together in the '90s. There were some great families, great people maybe in the 1940s, '50s, '60s who created some of this stuff. And back then, by the way, it was legit. It was the best stuff in the world. And so you have this conglomeration and then you have all these bureaucrats and all these committees. And the problem with the military-industrial people is they become more like the broken bureaucracy in government. So these bureaucrats, they're mostly cowards. They're mostly people who just automatically want to do more, fill out more forms. They want to go along with whatever's safe. So I think part of the problem with these companies is the fact that they're actually not bold and they're not thoughtful and they're not courageous. So I'm not really afraid of the bureaucrats. I'm kind of just disgusted by them. Does that make sense?

S

Sean20:23

It does make sense. It does make sense. All right, let's break from warfare for a second and let's rewind. Let's go back to your life story. Where did you grow up?

J

Joseph Lonsdale20:34

Grew up in Fremont, California, the East Bay near Silicon Valley. I'm the oldest of three boys. I have two amazing younger brothers. I was with one of them yesterday in Miami and they both live in Austin, although one of them spends a lot of time in Asia.

S

Sean20:48

Right on. What did you like? What did you grow up doing? What were your hobbies?

J

Joseph Lonsdale20:52

A lot of sports, a lot of video games. As a baseball player, I was a swimmer. Got the gold medal in breaststroke for the East Bay swim league.

S

Sean21:02

Nice. Nice.

J

Joseph Lonsdale21:03

My family is very competitive. We're very competitive, whether it's sports, whether it's games. Each of my brothers and I were state chess champions. My dad was the top chess coach. We thought it was because we were smart. After we left my elementary school, they kept coaching. They kept winning the state every year for 20 years.

S

Sean21:17

No kidding.

J

Joseph Lonsdale21:17

My dad's super competitive.

S

Sean21:19

You still play chess?

J

Joseph Lonsdale21:20

It's for fun. Yeah. When you're playing at that age when we were playing seriously competitively, it wasn't about being smart. It was about my dad training us. And we had to do it 30 hours a week if we wanted to stay on top. So it was a very serious commitment from the age of like 6 to 12 or so.

S

Sean21:35

Who's the best chess player in the family?

J

Joseph Lonsdale21:36

I think I am. Don't ask my brother Jeff.

S

Sean21:41

Are you teaching your kids chess?

J

Joseph Lonsdale21:43

We're starting to. It's actually really funny. My oldest kids are daughters, I have five kids, so my daughters are the older ones, four, six, and seven and a half. They do the little tactics with me and stuff, but I came in the other day when I was trying to teach them and they said, 'Daddy, look, the pieces aren't fighting anymore. They're getting married.' I'm working on it.

S

Sean22:06

Nice. Nice. What kind of games were you into?

J

Joseph Lonsdale22:10

Like every Nintendo game. We played baseball a lot as a pitcher. We played a lot of video games. Parents think it's bad for kids, but I thought it was pretty fun.

S

Sean22:21

How old are you?

J

Joseph Lonsdale22:22

I'm 42.

S

Sean22:23

42. Okay. So same age. So yeah. You grew up with Nintendo.

J

Joseph Lonsdale22:27

Nintendo. Super Nintendo. Yeah. All that kind of stuff.

S

Sean22:30

Right on. Well, what got you so interested in tech?

J

Joseph Lonsdale22:34

Well, I was lucky to grow up in Silicon Valley. I was nerdy myself, but I had even nerdier friends who were teaching me stuff. I had a small group of friends who were way ahead in math and stuff. Programming and math have a lot in common. So I got these guys teaching me how to program at 9, 10, 11 years old, which is normal nowadays, but back then that was pretty unusual. One of the friends, his dad was at Intel and they got these Pentium chips back in the '90s and we did this rig where you'd figure out how to overclock them and use liquid nitrogen to cool it off, just silly stuff to make Quake 2 work a little better. I was in that whole scene and a lot of my friends' older brothers were building companies, so I was really lucky to be exposed to this stuff.

S

Sean23:21

Very interesting.

J

Joseph Lonsdale23:22

Yeah.

S

Sean23:25

Where did you go after high school?

J

Joseph Lonsdale23:26

So I went to Stanford Computer Science, which is right in the area. It's actually funny. My mom made me apply last minute to Stanford. I was always going to go to Caltech or MIT. I went back and read my application and it was the most obnoxious thing ever because I was so eager for them to think I was so great. When you read it, you're like, 'Screw this kid, we shouldn't let him in anywhere because he thinks he's the coolest guy ever.' I was 17 and pretty overconfident. But I suppose Stanford let me in because I did it last minute and it didn't sound quite as arrogant.

S

Sean24:02

So Stanford you started interning at PayPal learning from

J

Joseph Lonsdale24:07

Yeah. No. So all the really smart and interesting programmers, I met a bunch of them who were a little older than me. I was lucky to be a little bit ahead in programming already because I before I got there. So I got to know some of the older kids and some of the really bright ones were going to work at PayPal and interning at PayPal. So I applied my freshman year. I thought this is really cool, I want to go work with these people. I knew who Peter Thiel was. He'd founded the Stanford Review, which I was working with, and I became a big editor. And they actually rejected me in my first year. I applied again and got in sophomore year.

S

Sean24:39

No kidding. Yeah. What was it like? I mean, I don't remember what it was like back then, but Peter Thiel, Elon Musk, Max Levchin, Reid Hoffman. I mean, were these big names in the space then?

J

Joseph Lonsdale24:50

They were definitely not big names. No one knew who any of these people were. Not at all. So everybody's like, 'Oh, it's such a coincidence that all these companies came out of PayPal, but now that we know who Elon is and who Peter Thiel is and who these guys are, it's like, of course, they're all together there. There's got to be a lot of crazy stuff that comes out of it.' And it was a power law. There were actually two groups: Elon had X.com and Peter had Confinity, and they had a bunch of their smartest friends each building stuff. There were about eight companies in the payment space and these guys were at war with each other. This really talented team was trying to win and they finally realized they should merge rather than destroy each other. The companies merged and I hear Elon kept trying to rename it X. He finally got his way later. But no, it's an amazing group of people. I was just a kid. I get no credit at all for anything that happened there, but I learned a hell of a lot from all these people.

S

Sean25:43

That's a hell of a group of mentors. You keep in touch with all these guys?

J

Joseph Lonsdale25:47

A bunch of them. Yeah. David Sacks has that show. They let me on last week. The All-In thing is entertaining. Peter's someone I see a lot and he still backs a lot of things I do. Elon lives in Austin, Texas now and is a good friend. I text him and bug him sometimes. I'm trying to be helpful with the stuff going on in government.

S

Sean26:07

Yeah. Oh, you are involved with that, right?

J

Joseph Lonsdale26:09

I do my best to help. I have a bunch of friends who are involved full-time and I've passed a bunch of people in. I'm obsessed with the policy world. So yeah, I'm trying to be helpful there.

S

Sean26:17

Good. It's good to have you in there. Yeah.

Um, so after PayPal, you went on to build in social media. What were you doing in there?

J

Joseph Lonsdale26:26

Oh, I didn't build anything in social media. I worked for Peter Thiel after PayPal, and he had a global macro hedge fund, but he also was the first investor in Facebook at the time. So I don't get any credit for that either, but I got to know really well the Facebook founders and the office and the culture. And then right after that, he backed me to start Palantir with my roommate from Stanford.

S

Sean26:47

What got your interest in national security? Because it sounds like you made a switch there.

J

Joseph Lonsdale26:51

I'd always been pretty interested in it. If you look at computer science, as a young man who likes things young men like, there are games and cool defense stuff. When you grew up in computer science in Silicon Valley in the '80s and '90s, you'd constantly hear stories about stuff the NSA was doing and the US government was doing that was way ahead of everything else back in the '60s and '70s. So it's almost this mythical thing where some of the coolest, most talented guys were there. There's literally stuff that was done by the NSA in the '70s that the very top academics at Stanford and MIT only figured out 15 years later. So it was just this is what the cool guys are doing, the smartest people are working on these problems. And as a kid, you watch James Bond and you want to get the bad guys, stop the bad guys. So I was always fascinated by that world. And at PayPal, the thing that came up was the Chinese and Russian mafia were stealing all our money. PayPal was losing several million dollars a month back then. It was very unprofitable because you'd use your card at 7-Eleven and the cashier would take the numbers and sell them to the Russians. Then the Russians would run them through accounts and you'd get a chargeback. PayPal had to eat it. This was happening at massive scale and PayPal and its competitors were going under. So we had to figure out how to go after it. We ended up taking a bunch of our customer service people, building investigative tools, and helping them catch the bad guys and turn them into Secret Service and FBI. So I got to know a bunch of these Secret Service FBI guys around 2000, 2001, 2002.

S

Sean28:54

And I don't remember that at all. Wow. How long did it take you guys to solve that problem?

J

Joseph Lonsdale29:00

It was a cat and mouse game because every time you figure out what the bad guys are doing, they change their method. We tried to use AI, but AI wasn't nearly as good 20 years ago. Machine learning could detect some things, but you really needed the human intelligence layers. You'd have a machine learning layer and tools to let people see what was going on and keep iterating and staying ahead of them. The tools were good enough. We cut down the fraud by about 90% and that made it profitable. Then PayPal was sold to eBay. So the anti-fraud thing was a big piece of what made PayPal work. And we got to know these secret service guys. They're good guys, a lot of them are good old boys. They're not tech guys, they're just trying to figure out what the internet thing is and how to catch the bad guys. They'd come to us for advice. I got to know quite a few of them. They come to me for advice on other stuff. We started chatting with them because cyber crime was a new thing. Then 9/11 happened. We saw the government spend billions of dollars trying to build new tools to help them do better, to stop future stuff. The stuff they were building horrified us. It was based on principles from maybe 20 years ago. We were like, 'Wait a second, Silicon Valley exists. We've done all these new things with all the top talent.' It was so disconnected. We realized this is really scary because our country is spending tens of billions of dollars on stuff that doesn't work, that's 20 years out of date. That's when we realized we got to figure out how to get involved and fix this.

S

Sean30:27

And how did you get involved?

J

Joseph Lonsdale30:29

We started Palantir with Stephen and I. I got a bunch of my friends who were in PhD computer science programs one summer to come and sketch and draw it up with us. They all thought we were totally crazy, so we couldn't convince them to join. A few of them joined a few years later. What is Palantir? At a very high level, Palantir is an effort to take the very top technology culture in Silicon Valley and apply it

We started Palantir to solve the most important problems in institutions without tech cultures, like intelligence and defense. Initially, there were four pillars: data integration, search discovery, analysis, knowledge management, and collaboration. Governments spent billions gathering data in thousands of databases with complex access rules. Our job was to empower analysts by integrating all data, letting them ask simple questions like 'Take this guy we found near bin Laden, show me links to anyone else' and iteratively explore while respecting rules. Palantir was about organizing information to extend human intelligence across massive datasets. When AI came along, it became even more powerful to add predictive capabilities. We worked with special forces to solve hard problems, and then the Army wanted it too. We gave it to them for free, just asking them to show us the lives saved. Later, when a general awarded a $5 billion contract to a friend's company instead, we had to sue the government and won. When users finally got Palantir, they said it was amazing, but they thought we were liars because competitors had spread lies.

S

Sean34:26

Man, that had to be pretty enraging, too.

J

Joseph Lonsdale34:29

It was frustrating, saving lives for free while others trashed us. But Palantir and SpaceX paved the way. Now generals and Congress are more open to innovation, which is a much better place than 15 years ago.

S

Sean34:56

That's great to hear. I don't have much trust in anybody in government.

J

Joseph Lonsdale35:05

There are some good ones who really care; you just have to partner with them.

S

Sean35:09

Becoming one of the top serial entrepreneurs, what are some lessons learned for building companies?

J

Joseph Lonsdale35:22

First, you need a great technology culture where the best engineers fight to join. That's number one for building a multi-billion dollar company. With a great tech culture, you can iterate faster — we'd go back to DC every two weeks and do six months of work in two weeks. Number two, you need a clear vision about a gap in the world. Building companies is hard; no one believes in you, so you need overconfidence to persist.

S

Sean36:55

I didn't ask about your childhood, but did you grow up wealthy?

J

Joseph Lonsdale37:01

More middle class. My dad was smart but prioritized family over money. He was content with middle class, which I admire.

S

Sean37:56

How did you get going? How did you find capital to hire the best tech people?

J

Joseph Lonsdale38:10

At Palantir and Addepar, we offered lower salaries and higher equity. We gave candidates three choices: more cash and less upside, or less cash and more upside. The best always chose less cash and more upside because they were confident we'd win. I'd show them the shares would be worth $5 billion if we succeeded — people said that was too high, but now it's worth $160 billion.

S

Sean39:03

What percentage of ownership would an early engineer get?

J

Joseph Lonsdale39:08

An early strong engineer might get 1%, diluted over time. Later people get 0.5% or 0.25%. But 0.1% of a few billion is still huge.

S

Sean39:38

Was there a turning point?

J

Joseph Lonsdale39:44

Three years in, some top engineers wanted to quit. I convinced them to push six more months. Alex Karp got FBI and CIA moving, and suddenly bigger contracts came. It was close to dying early on. Building takes time — you need to be a little crazy.

S

Sean40:32

Super inspiring. What was next after Palantir?

J

Joseph Lonsdale40:43

I was helping Peter with hedge funds, and after the 2008 financial crisis, we saw finance was messy. I built Addepar to organize wealth management. It took three years and was hard, but now Addepar is the leader, with $7 trillion reported on the platform.

S

Sean41:51

You crossed $7 trillion. That's huge.

J

Joseph Lonsdale41:55

Yes, big investment advisors and family offices use Addepar for all their data, reporting, and decisions. It makes finance more data-driven, breaking the old boys' club.

S

Sean42:31

Very interesting. We're talking about AI — it takes a lot of energy.

J

Joseph Lonsdale42:46

Yes, initially companies used cloud infrastructure, and Amazon, Google, Oracle made money. Now there's a trillion-dollar investment in AI infrastructure with Nvidia chips. We'll need more power — many of us support nuclear, but we have to scale up. I think this administration will do that. Solar is part of the solution, but it's intermittent. For baseload, natural gas and nuclear are obvious. Fusion is progressing; the Q ratio has crossed one, and it might become economic around 1.5 to 2 in the early 2030s. America's investment in fusion from both sides of the aisle is great for civilization — cheap energy helps everyone, especially the working class.

S

Sean46:04

Can you explain why cheaper energy helps the economy and middle class?

J

Joseph Lonsdale46:15

Energy is the cost of everything — food, driving, manufacturing. Cheaper energy makes everything cheaper, improving standard of living. It also makes environmental cleanup cheaper. History shows standard of living tracks almost one-to-one with energy cost.

S

Sean47:00

What's the holdback with nuclear energy?

J

Joseph Lonsdale47:03

Two things. On fission (existing nuclear), insane regulations by the Nuclear Regulatory Commission made it unprofitable. My father sold to nuclear plants and had to bring 60 binders of nonsense. It crushed the industry for generations. Finally, people like my friend's wife and others are pushing back. The new administration with Chris Wright as Energy Secretary should help. On fusion, we just haven't had the technology, but investment might get us there in a decade.

S

Sean49:08

Do you think big oil and gas lobbyists blocked nuclear?

J

Joseph Lonsdale49:13

Possible. The German Green Party was founded on anti-nuclear, and on the right, oil and gas may have influenced. But today, most are not blocking. The vibe shift is toward what's best for America. I think we'll fix regulations.

S

Sean51:34

Are you concerned China manufactures a lot of our energy equipment?

J

Joseph Lonsdale51:38

Yes, we lack advanced manufacturing. In WWII, we had an industrial base to shift. We need it back for defense. Trump turned the conversation; tariffs on China make sense.

S

Sean52:21

How do we start updating the grid?

J

Joseph Lonsdale52:33

We need more advanced manufacturing here, subsidies, and competition. Also fix regulations and incentives to update.

S

Sean52:57

Let's take a quick break.

N

Narrator53:01

I'd like to invite you to gain access to an exclusive experience on Vigilance Elite Patreon. Our patrons drive the show. Benefits include behind-the-scenes footage, early access, live Zoom calls, merch. Join at patreon.com/vigilanceelite. Thank you for listening to the Shaun Ryan Show. Please leave a review on iTunes. Let's get back to the show.

S

Sean54:03

All right, Joe, we're back. We talked about the incoming administration. Who are you most excited about?

J

Joseph Lonsdale54:15

I'm most excited about Elon and the DOGE effort. I've been working on small government policy for 20 years. The vibe shift is exactly what I've been thinking. They're already making plans, sprinting on day-one priorities. They'll bring over 100 people into agencies and be aggressive from the start.

S

Sean54:40

They're already doing it, man. They can't officially yet, but people are pinging me for engineers and lawyers.

J

Joseph Lonsdale54:55

Do you think they'll have it all mapped out before they step in?

S

Sean54:58

Yes, they have day-one priorities and are sprinting. They'll have a lot ready.

J

Joseph Lonsdale55:13

Where do you think they'll start? Agency by agency?

S

Sean55:23

They're putting a few people directly into each agency. The transition team is hiring policy placements. They'll come out with general things and remove certain people and regulations.

J

Joseph Lonsdale55:54

How much pushback will they get, and will it affect their effort?

S

Sean55:59

It's good that the Supreme Court is pro-liberty and skeptical of bureaucracy. The bureaucracy is a powerful interest. In the 1970s, Congress put in rules to make it impossible to hold people accountable. But the Constitution intends the president to have unitary authority. We control the presidency and courts, partially Congress. We should get a lot done.

J

Joseph Lonsdale57:08

I hope so. The whole world is watching. Even Keir Starmer's government knows they have to cut bureaucracies. They are unelected cancers. If Elon, Trump, and VC can't do it, it's not possible. We need to root for them for civilization.

Who else are you excited about? Cleaning out the DOJ with Kash Patel will remove corruption. There are good people in the FBI, but so much waste.

S

Sean58:24

I'm ecstatic about Cash. What do you think about Chris Ray resigning?

J

Joseph Lonsdale58:36

They're probably afraid. The vibe shifted from bureaucratic, cowardly, guilt-ridden to greatness, courage, joyous ambition. Credentialism is being replaced by judgment and common sense. Nature is healing.

S

Sean59:16

Do you think we'll see mass pardons?

J

Joseph Lonsdale59:20

I'm scared of that. I get him pardoning his son, but the way he did it was sketchy, covering the whole Ukraine period. The family is terrible.

It's crazy. He was 300,000 behind on rent and tried to pay with art made from his [ __ ]. He got away with it and is pardoned now.

S

Sean59:55

I'm worried about more mass pardons. The joke is he'd pardon SPF because they give so much to Democrats. I really hope not.

Do you have any concerns with the upcoming administration?

J

Joseph Lonsdale1:00:10

I disagree with Trump on the ports automation decision. I think he's wrong, but it's okay to disagree. I agree with many things he does, but giving in to union mafia is not what I'd do.

S

Sean1:01:15

Well, let's move back into Eperus. I'm fascinated. How did that pop up on your radar? What was going through your head when it started?

J

Joseph Lonsdale1:01:29

We realized China is an adversary. Future war involves massive drone swarms. We need ways to stop them. With new chip capabilities, we built electronic warfare weapons. With $30-40 million, we outperformed competitors who spent billions, shooting down drones nine and a half times farther.

S

Sean1:02:44

Are you serious?

J

Joseph Lonsdale1:02:44

Nine and a half times farther. Developed by a team combining Silicon Valley and electronic warfare expertise, building on existing knowledge.

S

Sean1:03:20

Is Leonitis an offensive weapon as well as a defensive weapon?

J

Joseph Lonsdale1:03:22

It's primarily defensive, protecting a city or base, but during an offensive you want to stop drones and other attacks. You can also turn off the electronics in an area you're attacking.

S

Sean1:03:49

Yeah. So, what would you point the weapon at? Could you take out a city?

J

Joseph Lonsdale1:03:57

What do you mean? Turn off the power. You can turn off power in a cone over a far distance, so you could turn off an area of a town or city and move it to turn off more.

S

Sean1:04:10

Holy [ __ ]

J

Joseph Lonsdale1:04:12

It's pretty crazy, right?

S

Sean1:04:14

We used to think about the EMP from a nuke in the high atmosphere. That's a much more aggressive and scary version. But this thing can be used repeatedly without hurting anyone.

Could this take out a nuke mid-flight?

J

Joseph Lonsdale1:04:35

It could. It fries electronics. For satellite defense, you'd blast it miles away and adjust. Same for cargo planes. You blast the missile, it becomes dumb.

S

Sean1:05:14

right?

J

Joseph Lonsdale1:05:15

So there are things like that for defending planes.

Some version of these will definitely be deployed on planes. The question is what type of planes and drones we use in 10 years. But we definitely want cargo planes.

S

Sean1:05:35

What other type of stuff will these be deployed on? Naval ships I would assume.

J

Joseph Lonsdale1:05:41

Ships. Our company Seronic is building thousands of smart autonomous weaponized vessels. You'd put this on them to turn things off during battle.

S

Sean1:05:59

Are there different sizes now?

J

Joseph Lonsdale1:06:00

100%. Leonitis is a certain size. If put in an Android Roadrunner, it might only shoot 20-30 meters, but the Roadrunner can fly up to a swarm, shoot multiple times, and land again. Combining with that would be great.

S

Sean1:06:35

man. Could you go into the Roadrunner a little bit?

J

Joseph Lonsdale1:06:38

I'm lucky to be an early investor in Andreal. Brian Shyf, Trey Stevens, Matt Grim, and Palantir superstars co-founded with my friend Palmer. Palmer started Oculus, I backed him. He was a crazy 20-year-old. We gave him money, co-led the next round, then Facebook bought it. He got kicked out of Facebook for being a Republican.

S

Sean1:07:08

What? You know about this?

I didn't know that.

J

Joseph Lonsdale1:07:11

Yeah, he put up a billboard against Hillary. He was outspoken. Suddenly a billionaire in his mid-20s with opinions in woke Silicon Valley. Facebook attacked him. Many have apologized now. I was at his wedding. He flew in a helicopter in tails. He's hilarious.

S

Sean1:08:13

Damn, that's awesome.

J

Joseph Lonsdale1:08:14

He's basically America's Iron Man. He invented the first real VR in America. Then he partners with my Palantir guys to start Andreal. They have crazy cool products, running circles around primes. They raised billions at a $15-20 billion valuation. One product is a missile that can launch, come back, and be reused. It's a tiny fraction of the cost of similar missiles.

S

Sean1:09:09

Are you kidding me?

J

Joseph Lonsdale1:09:10

He's competing against stuff costing $1-3 million. We sell for $250k with better margins. That's why you want to avoid cost-plus; you want re-engineering from scratch.

S

Sean1:09:27

Wow.

J

Joseph Lonsdale1:09:27

Because with cost-plus, your job is to make it as expensive as possible. Without it, you have a better framework.

S

Sean1:09:36

You mentioned Lockheed, Raytheon, Boeing. You guys are underneath them. Do you see that flipping?

J

Joseph Lonsdale1:09:45

Yeah, there's still amazing expertise in the military-industrial base. Those companies are important, but for anything new and innovative with hard software, they don't have the cultures or top people. Silicon Valley got far ahead. When I first wrote a check in 2016, people in bio said they wouldn't work with me if I did defense. Now with the vibe shift, it's popular.

S

Sean1:10:52

You mentioned Facebook kicking him out because of a billboard. What do you think about Zuckerberg trying to get in with the conservative crowd?

J

Joseph Lonsdale1:10:57

Yeah. Zuckerberg is not super political himself. He has appreciation for liberty and conservative sides. But the culture inside Facebook from universities is poisonous and leftist. They do things without telling him. He should be bolder and stop censoring conservatives. He started off moderate left but his philanthropy gets taken over by activists.

S

Sean1:12:35

And he's busy with his business, his wife and him don't want fights, so activists take over and do terrible stuff.

J

Joseph Lonsdale1:12:53

My guess is he didn't even understand how much it would screw things up. That's not an excuse, but it's the reality of how these orgs evolve with crazy activists inside.

S

Sean1:13:06

Yeah, I see what you're saying. So you're basically saying he wasn't necessarily the catalyst but he...

J

Joseph Lonsdale1:13:10

He wasn't the George Soros. He wasn't doing the crazy bad stuff himself. Silicon Valley people on the moderate left have been too tolerant of activists taking over. We need these guys to get balls, have courage, and excise these parts of their orgs.

S

Sean1:13:59

I mean, you're obviously a major player in tech. How have you kept that rot out of your companies?

J

Joseph Lonsdale1:14:08

You got to be really disciplined in hiring, fast to fire. It's not about left vs right, it's about activists and cancel culture. As soon as you see that, you can't tolerate it.

S

Sean1:14:28

Do you build culture under your companies?

J

Joseph Lonsdale1:14:30

You have to. CEOs set the tone by how hard they work and the values. One of our values is patriotism. We're principled optimists, patriots, fighting for the truth. The vibe shift is about living with the truth even if dangerous.

S

Sean1:15:04

It's a great way to put it. Back to the future of warfare. What are some things other countries are getting involved in that concern you?

J

Joseph Lonsdale1:15:15

The fact that we let China and Russia become close allies is ridiculous. That was a huge strategic mistake. The biggest concern right now is Turkey. Russia and China are obvious, Iran too, but Turkey is the wild card. Ataturk created Turkey as a secular Muslim country with institutions to stop Islamists. Erdogan, who we thought was a moderate, secretly is strongly Islamist. He staged a coup to wipe out anti-Islamist forces. Now he's conquered Syria, killing Kurds. Turkey has nuclear weapons. I'm scared what they do next.

S

Sean1:17:56

[ __ ] I didn't even know that. What about technology? Are you worried about China developing anything? Russia?

J

Joseph Lonsdale1:18:11

China has advanced technology in hypersonics, submarines, etc. They're trying to copy SpaceX. They'll get there eventually. I'm scared by space stuff. There's a network effect: for the cost of one aircraft carrier, you can put 150,000 things in space that can drop on people within 1 meter. Whoever has that first can stop others from launching. We need to think about it. That's why many of us were in favor of Space Force.

S

Sean1:20:00

Wow. Is there anything else that you're aware of going on?

J

Joseph Lonsdale1:20:07

China has about 200 times our shipbuilding capacity. In WWII, we needed multiple ships to take out a German battleship. Now our destroyers are more advanced, but if someone has 200 times capacity, that's scary. We need to get our capacity up. My friends and I started Seronic to build 500 ships in Austin next year, using AI for swarms of weaponized vessels.

S

Sean1:21:22

That space thing blows my mind. If that happens or we're not up there already, with that one meter thing, you could stop anything else from coming up. That's global domination.

J

Joseph Lonsdale1:21:38

Yeah. But we really don't want war in space because it could create a giant mess of junk. Starlink is good for the world; hopefully no one destroys it.

S

Sean1:21:58

Wow. That's fascinating. Let's go into Seronic.

J

Joseph Lonsdale1:22:04

Mhm.

S

Sean1:22:05

That's what we were just talking about. Exactly.

J

Joseph Lonsdale1:22:07

So the reason this is so important is that there are no interfaces for controlling one to many that work. If you ever played Starcraft or World of Warcraft, you need modern AI-enabled versions. One of my friends built Riot Games. We need to iterate on interfaces because right now five guys fly one drone. That won't work for thousands of ships. AI should augment people in charge.

S

Sean1:22:56

Man, you are involved in so many things. How about Anderal? Did I pronounce it correctly?

J

Joseph Lonsdale1:23:02

Yeah. Andreal is the one that Palmer Lucky and my three Palantir colleagues started. It's doing the Roadrunner and other great stuff.

S

Sean1:23:15

What do you think about Neuralink?

J

Joseph Lonsdale1:23:18

I think it's cool. A lot of talent moved to Austin. They're making amazing progress. It can help paralyzed people, back pain. It's a little scary if you get high bandwidth into your brain, but overall it's positive.

S

Sean1:23:48

I mean, does it worry you at all?

J

Joseph Lonsdale1:23:50

Well, I trust Elon and the people working on it, but having companies access directly into brains is a scary concept. Overall, near term it's 100% positive. Imagine being paralyzed and only able to blink. This lets them communicate, play games. It's a godsend. But 30 years from now, we need to make sure crazy things don't happen.

S

Sean1:24:43

Yeah. I read something a couple weeks ago saying it's helping blind people potentially see.

J

Joseph Lonsdale1:24:50

100%. There are all sorts of amazing things. For people with injuries, back pain, you could adjust it. We're going towards a golden age. There are always negative possibilities, but we shouldn't stop doing positive things.

S

Sean1:25:14

Yeah. Let's move into fighting for Western civilization and your efforts to combat wokeness.

J

Joseph Lonsdale1:25:29

Yeah.

S

Sean1:25:29

When did you start doing that?

J

Joseph Lonsdale1:25:32

Even at the Stanford Review, there was a version of that. It wasn't called wokeness then, it was political correctness run amok. It wasn't as extreme. Things started getting crazy around 2014-2015. Something snapped. It became all about virtue signaling. Black Lives Matter groups said they were Marxists, and my non-Marxist friends gave them money. I argued why are you giving these people money? They said it's the thing to do to promote racial justice. I thought, what the [ __ ] is that? There have been egregious things in our country's past, like Secretary Knox not wanting black people in the Navy.

And there were even some of these heroes, like Dory Miller in 1941 at Pearl Harbor. The ship gets attacked, he goes and saves a bunch of people, carrying them out. He's never even trained, runs up to the anti-aircraft gun and shoots down Japanese planes. Total badass. And they still treated him like shit because he was African-American at a time when people were treated like shit. So I think there's a generation that's traumatized correctly from how horrible we were, and that's still in the psyche. So that's the steel man. There is something there we should be remembering and pissed off about.

S

Sean1:28:05

But then the answer is not to do things that divide us further and spread Marxism. It was very cowardly because everyone kind of knew this is kind of wrong, doesn't fully make sense, but I don't want to think about it. I just want to go along because I don't want to have trouble in my life. And it just swept through our country.

J

Joseph Lonsdale1:28:25

When I think of Black Lives Matter, I think of burning towns down.

S

Sean1:28:30

Yeah. It's just like this anger.

J

Joseph Lonsdale1:28:32

It's just this anger expressed aggressively and righteously, and people fanning the flames of that anger and divisiveness. It's really sad because in the 1990s we got to a really good place where it became much less racist, everyone was more optimistic about working and living together. And then there were race grifters who reignited a lot of stuff and caused trouble. The woke stuff is not just about race; it's about general illiberal energy, not about truth, but about conquering for the far left and demonizing anyone who stands in their way. It was a very scary time in our society the last decade. A lot of our universities have been conquered by these neo-Marxists. If you stand up and speak out against anything part of their cause, they do their best to crush you. In history, sociology, anthropology departments, they don't allow any professor who doesn't agree with their woke view. For a long time we've not been graduating professors who understand the other perspective. John Stuart Mill said if you don't understand the other argument, you don't understand yours very well. That's the case now in most of our society; they don't deeply understand the other side because they've demonized it and kicked it out. It's very dangerous.

S

Sean1:30:22

How are you combating this stuff?

J

Joseph Lonsdale1:30:24

There's a lot of different ways. One way is as a leader to role model speaking out and courage. The classical virtues are powerful against this. The more one person shows courage, a few more show courage, and it snowballs. Once people are showing courage, they can't get us anymore. They need us to be afraid. Another thing, we got to create new media. I'm an investor in Bari Weiss's Free Press, and Arena Magazine. We're trying to build more media sources.

S

Sean1:30:56

What is the magazine?

J

Joseph Lonsdale1:30:57

Arena. A-R-N-A magazine.

S

Sean1:30:59

Arena magazine.

J

Joseph Lonsdale1:31:00

Yeah. We're creating new media. Basically, there used to be things like Wired, Scientific American, TechCrunch, and they were all conquered by crazy woke people who hate markets and hate America. I don't want my entrepreneurs talking to TechCrunch when it constantly attacks us. So let's build new media. Arena is growing quickly. And the University of Austin is based on this as well. My friends Bari Weiss and Niall Ferguson, probably the greatest living historian, thought there needs to be at least one top university not conquered by these goddamn Marxists.

S

Sean1:31:44

Man, that's a... when did the University of Austin start?

J

Joseph Lonsdale1:31:47

Our first class just started. It took us three years to launch, which was pretty fast because there are lots of barriers, thousands of pages of regulation. Existing universities don't want competition; they try to block you. But we found one that's pretty good. We have 92 students in the first class. A lot of these kids turned down the very top schools to be there. The idea is pursuit of truth, a patriotic institution, but we have people on both sides. It's not a conservative institution; that would be a failure because you need to understand both sides. It's an institution that engages with the last thousand years of great ideas that built Western civilization. There are three great traditions: the classical virtues from Rome and Greece, Judeo-Christianity which gives dignity to every human life, and the scientific and philosophical enlightenment from the 17th and 18th centuries. Our school should teach these traditions, engage and debate them, and apply them today. Our founders understood these deeply and used that wisdom to craft our Constitution. If we don't apply that today and instead go off into woke nonsense, we'll break our civilization. So let's have leaders who are courageous and know these things.

S

Sean1:34:04

Man, so 92 students is the first class.

J

Joseph Lonsdale1:34:08

We're going to try to do more than 100 next class. It's very funny, you're not allowed to be fully accredited until you've graduated a class. So trolls say 'the unaccredited university.' I say, 'Yeah, that's the rule.'

S

Sean1:34:23

How big do you think it will get?

J

Joseph Lonsdale1:34:25

Stanford and Harvard have like 1600, 1900 kids. I'd love to scale that over 20 years. You don't want to go too fast because you want tough experiences for students. I want to launch a master's degree in a couple years, an innovation master's to compete with Stanford and Harvard Business School. We want to train leaders how to think about our civilization and be fighters for America. We call them philosopher builders, like Elon, who fight for our civilization as well as build.

S

Sean1:35:15

Wow. How many applicants do you guys have?

J

Joseph Lonsdale1:35:17

We got several hundred applicants. The Common App is where most applications come through, but we're not allowed on it until we're accredited. So even though it was several hundred, it would have been a lot higher. But we're still getting a lot of great people.

S

Sean1:35:34

How are you vetting the professors?

J

Joseph Lonsdale1:35:36

Niall Ferguson himself is a great professor. We have a set of amazing people, really top deans whose job is to recruit new professors. We're getting some pretty famous names applying. We have about 25 really top professors. It's fun for me to go learn from them.

S

Sean1:35:59

Are you spending a lot of time there?

J

Joseph Lonsdale1:36:01

Yeah, I'm the chairman of the board and try to design this new master's degree, create opportunities for students, and give scholarships. Right now all students are on scholarship. I even give extra scholarships for really top students to turn down the best places and come.

S

Sean1:36:20

Wow. Any scholarship?

J

Joseph Lonsdale1:36:23

What's that?

S

Sean1:36:24

Any scholarships?

J

Joseph Lonsdale1:36:25

Yeah, everyone there gets their tuition covered right now. We're giving scholarships beyond that for great people.

S

Sean1:36:34

I mean it seems like you guys are getting a lot of interest. I saw it on 60 Minutes. What is the media saying? Sounds like there's a lot of trouble.

J

Joseph Lonsdale1:36:47

60 Minutes was surprisingly positive. I really appreciate that they came and gave it a fair treatment. When we launched, everyone attacked and mocked us. Other universities don't want competition. But we're getting a lot of positive news. We have several thousand donors now, dozens who've given over a million dollars each. It's a movement whose time has come. If things are broken, you get together and build something new. Dozens of other universities are referring to us on their boards, saying 'Why don't we do this?' That's the whole point, to bring everything back in the same direction.

S

Sean1:37:31

Man, I love it. Let's move into the Cicero Institute.

J

Joseph Lonsdale1:37:37

Yeah.

S

Sean1:37:38

What is it?

J

Joseph Lonsdale1:37:39

Cicero Institute is our policy group. We work in states, not DC. There are 50 states, and our founders intended stuff to happen at the states. States are supposed to be where most government happens. Federal has gotten too big, but states still have a lot of power. We like to fix broken systems that governments or special interests broke. For example, vocational education was more prominent in the 60s and 70s, but people said send everyone to college. It turns out a lot of people go to college and get degrees with no real skills or jobs. I don't think everyone should go to college. So we fund vocational schools. The problem is badly run schools. In Texas, there are 27 high-end technical schools. They weren't working well. So we said fund them based on the average salary of graduates. Schools started figuring out what skills to teach and which businesses to partner with. Salaries doubled.

S

Sean1:39:33

Wow.

J

Joseph Lonsdale1:39:34

Salaries doubled coming out of these schools.

S

Sean1:39:35

No kidding.

J

Joseph Lonsdale1:39:36

So that's an example. We draft the law, go to the legislature, find sponsors, convince the governor's administration, help write op-eds, hire lawyers to draft the law, get stakeholders involved, prepare for opposition, and get the law passed. It fixes the problem.

S

Sean1:40:08

How fast is this spreading?

J

Joseph Lonsdale1:40:10

It usually takes two or three years to get a law done. We've been doing it for eight years and got dozens of laws passed in 17 states last year. We have teams in 20 states. We hire people who used to be lieutenant governors or speakers of the house. They're lobbyists, but it's the coolest type because they get to work on something they agree with. They charge us way less. Every state is different, so you have to push it through. It's playing the lobbying game for the good guys, which is a lot of fun.

S

Sean1:40:52

Are you guys in Tennessee?

J

Joseph Lonsdale1:40:54

We do have teams in Tennessee. Governor Bill Lee has been a great guy to work with.

S

Sean1:40:58

He has been.

J

Joseph Lonsdale1:40:59

He's a strong governor, a lot of pro-freedom things. There's a bunch of stuff we're working on for next time. I apologize, I should have checked the notes.

S

Sean1:41:10

All good. I just love that you guys are operating here.

J

Joseph Lonsdale1:41:13

You got a strong set of leaders here. I think all three houses—both sides of Congress and the governor—are red, so there's a lot of bold things we can get done.

S

Sean1:41:26

Amazing. What other states are you guys in?

J

Joseph Lonsdale1:41:29

We do a lot in Florida, Texas of course, Missouri, Georgia, all over the country. Arizona was a big place for us, but it's harder now with the current governor. Even with moderate Democrats, we get along. Most of the time our laws get votes from both parties. Moderate Democrats love our stuff because it's about fixing things with incentives and accountability. The far left hates us because they're tied to government unions that don't want accountability. So in left administrations, we can't get through the far left, but we still get a lot done in purple and red states.

What about homelessness? That's a big one for us. We've passed a bunch of laws. I come from San Francisco, which is totally screwed because of homelessness. Special interests, the NGOs, lobby for money. Even 20 years ago, people said tie money to results, but they screamed and yelled. They're so powerful because they become the biggest donors. Politicians don't want to piss them off. These NGOs started giving free houses to their friends, creating incentives to bring more homeless with super generous stuff and free drugs. It's a total mess. The worst part is the vulnerability index for homes. Have you heard of this?

S

Sean1:43:17

No.

J

Joseph Lonsdale1:43:20

So if you talk to people on the far left, they say we want to give homes to people who need them. But there's an infinite line for free homes. So they prioritize by vulnerability: you get more points if you're on drugs, not in a recovery program, if you commit a crime, if it's a violent crime, if your kids are in treatment. They give points for bad things, creating an incentive. We followed a homeless guy around in Austin. He went in looking for job training, and a young progressive woman said, 'No, you deserve a home. Here's how to get a tent.' He said he was going to stay with his cousin, and she said, 'Don't tell me that, it's better if you have a tent, you'll get a home sooner.' He came back two months later and didn't qualify. He said, 'I heard if I was on drugs, I'd be more likely to have a home.' She said, 'That's technically true, but we don't like to think of it that way.'

S

Sean1:44:52

You believe that?

J

Joseph Lonsdale1:44:53

This is raging. This pisses me off. Why do you think I get so involved in policy? It pisses me off.

S

Sean1:44:58

It's crazy. It's breaking our country.

J

Joseph Lonsdale1:45:01

So we passed a bunch of laws in Georgia, Florida, and other places completely fixing the incentives and getting rid of this nonsense. Red states still need to hold these NGOs accountable. If they get any government money, they should be transparent on outcomes. A lot of these are just lobbying groups for the extremes. Do you think any blue states will adopt this? I think so. You have to first do it somewhere and prove it works. Then moderates in blue states will do it too. That's the fight. I have friends who are moderate Democrats in SF fighting hard against the far left. It's moderates against the far left, and I think the moderates will win. They'll put in accountability and incentives, defund the corrupt stuff. I'm bullish it's going to happen, but it's a tough battle because there's so much money for extremists. In California, over two million people work for the government, and they all have to give a piece of their paycheck to government unions that fund this complex. There's a lot of corruption. But there's a vibe shift away from bureaucracy, cowards, and guilt, towards greatness, courage, and positive ambition. I think we're going the right way.

S

Sean1:46:33

That's amazing to hear. I also see you're involved in trying to fix the prison and parole systems.

J

Joseph Lonsdale1:46:42

Yeah, that's similar to the vocational thing. If you're running a probation or prison system, you want people to succeed and not commit crime, to come out employed. You want to create incentives for the people running it to hit goals. There are programs that work and programs that don't. Most prisons have terrible cultures, guards hate prisoners, prisoners hate guards. There's bad leadership. You can't automatically create good leadership, but you can incentivize it. None of our states do this. So we're working with governors and legislators to make these systems work better for society.

S

Sean1:47:43

Am I missing anything? What else are you working on?

J

Joseph Lonsdale1:47:46

That's a lot.

S

Sean1:47:47

I don't know. That's fun, man.

I mean, how do you manage? You're involved in so many things. You got five kids, you're married. How do you manage all the tech companies, the University of Austin, everything?

J

Joseph Lonsdale1:48:05

You have to have really great people around you who are in charge of each organization. Somehow Elon stays a CEO. I think he's an alien, a genius. But for me, I can't be in charge of all these things at once. So I get someone better than me and work as chairman or co-founder. The more you surround yourself with great people inspired by what you're doing, the more advantage you have. It snowballs. We don't always get things right; there are lots of mistakes. You iterate. We're not infallible, but you do your best to push in the right direction.

S

Sean1:48:51

Do you want to talk about any of those mistakes? Anything big you've learned from?

J

Joseph Lonsdale1:48:56

Oh, goodness. There's a general thing. When I was younger, I thought I could be in charge of a lot of things at once. But if you're in charge of too much, a lot of it starts to break at once. So my new rule is I'm only responsible for the failure of one thing at a time.

S

Sean1:49:15

I'm going to take that advice.

J

Joseph Lonsdale1:49:16

It's important because once you start having success, you try to do a lot at once. But then you're totally screwed. So you want other people responsible for each thing. They have to own a piece of it too. That's why nonprofits are hard for me; in for-profits, people own equity and think about it all the time.

S

Sean1:49:50

How do you recruit them? I'm curious because I'm trying to build my company and I have no business sense.

J

Joseph Lonsdale1:49:56

We have a pretty big talent network. We spend a lot of time on this. We have fellows and nurture relationships at about 20 universities. We figure out where the top talent is, be helpful to them, get to know them. I'm still figuring it out. Maybe some smart person will hear this and want to come work with us.

S

Sean1:50:21

Right on. What do you have, any particular venture you're most excited about?

J

Joseph Lonsdale1:50:27

The defense stuff is exciting, but the bio stuff is really important because it's saving lives. There's nothing more pure than building a therapeutic company that treats and saves lives. For example, Orca Bio, which we backed early on. They sort cells one by one using semiconductor technology from Stanford. This is useful for cell therapies. Cell therapies are a huge field. The simplest form is a bone marrow transplant for late-stage blood cancer. It cures the cancer but has a 15-20% death rate from rejection. With this new sorting, the rejection rate is almost nothing. Not only does it save thousands more lives, but rebooting the immune system seems to cure autoimmune diseases like Crohn's and multiple sclerosis. We lost my aunt to MS. We're starting a phase one trial with the FDA for a potential cure for MS. That's really exciting.

S

Sean1:52:45

Man, that's incredible.

J

Joseph Lonsdale1:52:47

It's fun stuff. The breakthroughs coming out of top universities with the latest technology are inspiring. I feel we're going towards a really positive direction if we can keep things functional.

S

Sean1:52:58

Wow, man. Congratulations. You're doing phenomenal things for the country and the world.

J

Joseph Lonsdale1:53:09

Well, I'm honored to be part of this stuff that all these other amazing people are doing. I get to invest and back them. We live in an awesome civilization with so many smart people doing great things. We should be more positive about that.

S

Sean1:53:21

I'm honored to have you here. I'm so thankful we met. You're an amazing human being. Who are three people you'd like to see on this show?

J

Joseph Lonsdale1:53:34

At some point you got to get Elon on, of course. He's the king of the moment. My other two most important mentors are Peter Thiel and Alex Karp. I learned the most from them in my youth. They're both extraordinary individuals. Alex is my co-founder of Palantir, and Peter was co-founder of PayPal and one of the intellectual leaders. Even though Peter wasn't involved in this election, a lot of things he created led to this stuff happening. He's someone I really admire. Maybe you can put in a word for us.

S

Sean1:54:09

I'll let him know.

But, Joe, it was seriously an honor to have you here. I hope to see you again.

J

Joseph Lonsdale1:54:17

Thank you, Sean.

S

Sean1:54:17

Thank you.

J

Joseph Lonsdale1:54:18

Cheers.

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