Episode 24: Anthony Pompliano - CEO of Professional Capital Management

Absolutely. Thanks so much for having me.

Yeah, look, I think that our parents were the perfect combination of disciplinarians, but also knew when to let us be boys. And you know, grew up in a family, there's five boys in the family. Three of us are pretty public in terms of social media and stuff, but we got two brothers who hide in the shadows. And we grew up in a house that basically encouraged competition. We competed at every single thing we did. Who could eat their food the fastest? Who could race up the stairs the fastest? Who could, you know, play basketball the best? Whatever the thing was, we competed at it. Probably, you know, really frustrated my parents a lot. But it was a great environment to grow up in because you constantly were all just making each other better. When you got, you know, four best friends that are there with you every single day, it's pretty compelling.

Well, I think that there's some core, you know, similarities, right? There's obviously this idea of teamwork, there's idea of leadership, and there's this idea of, there's feedback. If you don't perform, there's varying degrees of punishment or loss. Obviously the military and college football, you know, one's life and death, the other one's not. But I do think that there's some core concepts that kind of traverse those different parts of my life. And you know, again, it goes back to that they're all different forms of competition. And so the thing that I really like is when you have competition, you need teamwork, you need leadership, you need the ability to experience loss so you can learn and improve and continue to kind of push forward. And so I think that really those were just manifestations of how I grew up. It was just kind of, you know, taking it to the extreme.

Yeah, look, I, you know, played football. I was in the army. I deployed to Iraq in 2008, 2009. I came back, I graduated from college and from there built and sold a number of software startups. I worked at Facebook for two years on the growth team there and then I started investing full-time. During that time I've invested in over 300 private companies and had the fortunate ability on top of that to also build a number of businesses, everything from, you know, one of the largest independent financial media companies in the world to also a number of other companies that we've incubated across everything from real estate analytics to software and, you know, again it's just kind of competing in the professional space. So I like to think that investing is kind of the competitive sport for, you know, thinkers and I think that building companies is, you know, a great form of competition as well in terms of can you actually solve the problem for the user and can you make the various metrics that you care about grow.

Yeah. Well, worked alongside is very generous of you. You know, I was a little peon that had the opportunity to just be in the room with them and I was excited about, you know, maybe I felt like some of their aura or whatever would rub off on me. But I did work alongside a team of two other people. There was three of us and really the focus was how do we help them grow their online following and, you know, at the time I really didn't understand at first like why are we doing this but then quickly this whole idea of like going direct being able to talk to your user base, talk to, you know, your constituents is obviously very important something I've benefited from after I left. And so the things that you realize in working with these people is they're great leaders but also, you know, there was this one meeting that I'll never forget with Mark Zuckerberg and in the meeting I don't even remember what we were talking about I just remember understanding that we were having a very high level conversation and there was a screenshot in one of the slides and he called out a very nuanced design component of the screenshot and basically was like why is it like that that's not how it's supposed to be. I remember thinking to myself I'm like wait a minute this guy is like a multi-billionaire runs Facebook, you know, he's thinking of a not a bet the company type decision but definitely a pretty big impactful thing and yet he's able to drill down into the explicit details of literally pixels and then go back, you know, within seconds back to the high-level decision. And so I think that type of range of, you know, being really focused on the high level stuff but being able to drill into the details is a great example of what it takes to run those businesses. And obviously, you know, Zuck has done a fantastic job of building a business that I think is the envy of the world.

Competition. The competitors want to be where they can compete. And it's no different, I think, in the NBA than it is in, you know, JV basketball, than it is in Facebook or it is on Wall Street is you have people who are highly ambitious. They're very intelligent. They work very hard. And they're trying to figure something out. They're trying to beat the competitor. They're trying to beat the peer, right? And that is a thing that has worked throughout human history is whenever you have competition, it usually ends up creating a better product. It ends up creating a better business and ends up creating a better innovation. And so I think that, you know, that's the story of my life and it's why I enjoy doing what I do. But I think that culture also shows up in, take Facebook for example. The way that they would manifest that is they basically would put posters on the wall and they would talk about these things and, you know, move fast and break things. Think about how strong your culture has to be in move fast and break things for it literally to have permeated outside the walls of that company and now be something that every single person in the world who hears that phrase associates it with that company. Like that is such a strong culture, right? It's such a product market fit for a cultural message with a certain point in time and a certain group of people. And so I think that's really the thing that sets a lot of these companies apart is the cultures aren't the same, but the structure, the importance of the culture, the way that they actually will hire people who are cultural fits, the way they encourage the culture, the way that they, you know, kind of operate on a day-to-day basis and live those cultural values that is similar in every single one of these businesses regardless of what the individual kind of cultural, you know, ethos are regardless of the business.

Well, the beauty is that all of those people have the same problem, right? Which is that we're never going to stop spending money from the government. So, if government spending is out of control, then that means that the national debt is going to continue to go up. The only way to deal with the national debt is we got to debase the currency. And so, historically, for decades, the way that you could get financial security in America was you could save your way to that financial freedom, right? Think of, you know, if you were to ask your grandparents or your great-grandparents for financial advice, they say spend less than you make and you can live a life that most people would love to live. But now that's no longer true because the debasement of that currency is not the, you know, reported 2% inflation. Instead, if you look at things like the money supply growth is closer to 8%. And so somewhere above 2% is the actual debasement rate, call 5 to 8%. And so if your cash is being essentially evaporated at 5 to 8%, they need to find a solution. Now there's a lot of solutions out there, right? You can go and you can buy stocks. You can go and you can buy real estate. You can go and you can buy gold. There's a lot of things you can do. But Bitcoin in particular was purpose-built for this problem. It's a store of value that brings all of the timeless principles of a store of value to the modern age. And so you don't need to pick an individual stock. You don't need to go and try to understand what its earnings are. You don't need to try to understand when should you buy the stock and when should you sell the stock. On the real estate, you don't need to go and get a mortgage. You don't need to go and actually look through Zillow. You don't need to go and try to find a tenant to rent it out. You don't need to make repairs to the roof. When it looks at things like gold, you don't have to try to figure out where am I going to store this big heavy thing of gold. You don't have to try to figure out how can I spend it. Bitcoin is taking all the best attributes of these other assets and it puts it into a digital asset that is decentralized, meaning that nobody else owns it, but it's also liquid and it's secure and it's available 24/7 and it can be sent to anyone in the world within seconds completely for free. And so I look at it less about, you know, Bitcoin is some magic bullet and I look at it much more as there's a problem in the world that is shared by everyone. Whether you're 10 years old, 21 years old, or you're a billionaire, every single person has the same problem, which is if you put your wealth in cash, the government is going to inflate it away. And if that's the case, then what do you need to do? You need to find a store of value. And the store of value that the entire younger generation has chosen as their preferred store of value is Bitcoin. And so from a demographic standpoint, if young people are going to store their value in there, then naturally as time passes, that asset is going to become bigger and bigger over time. Now, of course, people will say, 'Well, real estate's been around for as long as I've lived. Real estate's been around for, you know, centuries, or gold's been around for thousands of years.' What I explained to them, though, is if you're under the age of 40, 50 years old, you don't know a life that isn't have fiat currency at the center of it. So the difference between if you're let's say 15 years old, the difference between fiat since 1971 or Bitcoin since 2009 is exactly the same time period. You don't know a difference. Both of them been around your entire life. And so the difference between 50 years and 15 years is not that big compared to maybe a gold that's been around for thousands of years. And I think that's ultimately Bitcoin's big value proposition is it's the simple store of value, which I look at as a digital savings account. In your regular world, you have a savings account, you have a checking account, you have a brokerage account. In this digital world, I think you're gonna have a digital savings account, which is Bitcoin. You're gonna have a digital checking account, which are stable coins. And then you're going to have a brokerage account. You're going to go and you're going to buy stocks or you're going to go buy different assets that you want to speculate on them going up in price and creating more assets for you to save in. No different than the world that we live in today. It's just the form factor changes. And I think Bitcoin will be a big winner in that world.

Well, the beauty of Bitcoin is that it's one of these assets that's a tool. And so when you have a tool, it's different things to different people, right? It's kind of like a shovel. You may need a shovel because you want to dig a hole into your backyard because you want to put in a pool. Somebody else may need a shovel because they want to dig a hole because they're burying a loved one. Somebody else may need a shovel because it's a ceremonial thing because they're breaking ground on a brand new dream of theirs to build a high-rise building, right? There's all these kind of different use cases for the tool. Now, the tool is a shovel, right? Bitcoin, it's a store of value. So, it has the same purpose, but the reason why you may use it is because you think it's censorship resistant. You're really worried about that. I may use it because I'm worried that somebody may seize my assets and so I have seizure resistance. There's other people who may use it because they say, you know, it's really cheap for me to send from one country to another country. I want to send money back home to my family. So although it's the same thing in terms of its actual application, it can be used in so many different ways that it's something different to different people. Now, if that's true for use case, then ideology is the same. The beauty of Bitcoin is that Republicans and Democrats both like it. The beauty is that young people and old people, any ethnicity, they all like it. Doesn't matter what language they speak or how much money they have or where they grew up, right? Every single one of those different cohorts of human population, somebody there likes Bitcoin. And so it goes back to this idea of a tool is apolitical. It is not anything worried about geography. It doesn't care about wealth status. Doesn't care about education level. It's simply a tool to be used. And so those ideologies, you know, how can you find somebody who's a Christian, who's a Muslim, who is Jewish, who is this, who is that, right? You put them, they all use the same tool. And so whether it's religion or, you know, kind of more secular type of ideologies, every single person in one of those groups uses Bitcoin. And that's the beauty of it is that it can, you know, be important to you, but can also serve everyone else as well. And it's not a zero-sum game.