Hello everyone and welcome to another episode of How Leaders Lead with David Novak. Today's guest is Philippe Laffont. He's the founder of Coatue Management and one of the world's most successful technology investors. He's grown Coatue from 50 million to over a hundred billion. And he's done it by seeing opportunities others miss, making big bets, and staying willing to change his mind. In today's episode, you'll learn how to build that same type of conviction and also recognize when it might be time to change course. Enjoy this episode with David and Philippe. And be sure to stay tuned to the end of the episode where David and I break down some of the key learnings from this conversation.
You know, you're French and your wife Anna is from Spain, and I know you two love soccer, or football as you would call it. What was it like around your house this year during the World Cup?
Whoever is the guy that said happy wife, happy life is a complete idiot. And I would have traded the whole happiness of my wife for France to win. And unfortunately, Spain won, but I promise you that I was not rooting for Spain and I couldn't care less what the consequences would have been.
Did you guys go to any games?
We saw the semifinal and Spain crushed us. We were very poor even though we were the heavy favorites. And then I did see the final and I was happy that Spain won in the finals because I don't like Argentina either.
You know, was there a moment in the World Cup, Philippe, that stood out to you as a great example of leadership?
I think that the way the Spanish team played throughout the World Cup is the example of leadership in that they lost — or no, they tied their first game against a very small team. And if you look at Spain, I bet most people couldn't even name one player on the Spanish team. But how the Spanish team plays together and manages to keep the ball for like 60 or 70% of the time is incredible.
And so, you look at the French team and everybody knows about Mbappe, but maybe Mbappe is a great individual player, but not a great team player. I don't know enough about soccer, but I do know that there was a certain cohesiveness about the Spanish team, how they play. And I also think that it's true for money management that defense is a great offense, and that in money management, if you only play offense, you're done. Once every 10 or 15 years, you're going to disappear. And so, I'm actually more sort of drawn to the way the Spaniards played.
Well, that's a great, great point. And we're going to talk about your investment philosophy and the learnings you've had in your career as we go through this, but I want to take you back, Philippe, and take you back to where it all started. What's a story from your childhood that shaped the kind of leader you are today?
So I would say that when I was young I was pretty active, lived a very sort of protected life, probably, you know, much too much in the cocoon around school, and then I would go to the tennis club and I played a lot of tennis and that was it. And I got a knee injury right around probably when I was 14 or 15, which happened to be the year that the Apple II computer was created. And funny enough, Apple's largest market outside of the US was France. Somehow there were a lot of Apple computers in France, and I bought an Apple II computer and I learned how to program and also how to exchange, you know, video games and all this kind of stuff, and it brought me into this brand new world of programming and stuff like that. And so in retrospect it was just very lucky to, having been injured, have that sort of pivot into the world of personal computers, and that was probably in 1980, 1981.
Just curious, what was it about you that took you into that computer world at that point? What drove your curiosity?
I was fairly anxious and always wanted to do something. And so when I wasn't able to play tennis, it didn't occur to me that I was going to like read books or, you know, talk about feelings, you know, that was not me. I was like gonna do something, right? And so I just stumbled onto it to be honest. But I think in life you stumble on things and then the ability to stumble multiplied by the ability to be passionate equals the ability to get something, you know, done and to do something. Well, you need to get a little bit of your stumbling mind and then you need to get your passionate mind and then that's when you just focus on that one thing.
Yeah, I love that. The stumble factor combined with passion. That might be a new formula for success.
Maybe. Did you ever stumble in golf or were you always passionate about it, David?
Oh, I stumble in everything. Believe me, you know, I've stumbled my way through life. That's why I like the analogy so well, you know. And then, as I understand it, you moved to the United States when you were 16. Was that hard for you, or did you feel like you were starting over, or what was the challenge there?
It was not too bad because even before moving to the US as a young kid, I would go to Nantucket every summer because my parents had this one American friend who had a house there. We went one year, we loved it and went back again every year thereafter, and I went for 35 years to Nantucket, which is why Coatue is named Coatue, which is a particular spot on Nantucket. So when I was 16, I was ready to come to the US. I knew about a few things. I knew about peanut butter. I knew about the marshmallow goop, you know, that white stuff that comes out that you can eat. Back then, I used to like that. I knew about the Boston Red Sox, which I still know of even though I live in New York a lot. And so I felt like I was very prepared for the US.
That's good. And you know, fast forward a bit. I understand you went to Chile and you became a pretty good fisherman. You know, what took you to Chile and what made that happen?
You said that you stumbled on a few things. I've also studied your career, Dave. It doesn't seem to me you stumbled that much. I, on the other hand, had some major forced and unforced stumbles. And what happened is I studied undergrad at MIT, I studied graduate at MIT, and as you know I was a psycho fan of Apple. So I had five job interviews at Apple and five rejections, and I did not at the time learn the basic lesson of not putting all your eggs in one basket. All my eggs were in the one basket. And when I could not get a job at Apple I was so distraught I decided to do something totally different and I went to Chile. And I don't know why I picked Chile, but I just went there and I had sort of a little fake job and I had a lot of time on my hands and I did become a very good fisherman as a result of that. So that was the one, and I learned how to speak Spanish. So two good things, since my wife is Spanish.
So when you think about learning how to be a great fisherman — and I understand you're not good, you're great at this — you know, what techniques or what have you learned through fishing that really applies in your mind towards business and leading?
First of all, let me disagree with you. I say I'm great at things, but when a Frenchman says great it means good, when he says world class it means great, and I don't know what world class is. You know, Elon Musk would be world class. So I'm exaggerating a little bit, but to me it seems at the end of the day, passion is the number one skill. Repetition is the number two, but repetition is not boring when you're passionate. And so I think fishing is a very easy sport because it does involve a lot of repetition.
And then I also think that being social is important. And in fishing, the art of fishing is to have a friend who's better than you and tells you where the fish are. Otherwise, you know, you're throwing your rod in the empty. But if some guy whispers to you, hey, today you should check that one area. And so, I do think that there's learning that you learn through other humans. And by the way, it's true in golf. It's true in many things. So I think passion, repetition, and social.
So what first drew you to investing, Philippe?
So after Chile, I went to McKinsey and I was the guy basically — I was an analyst, but it felt like I was also the guy getting the coffee and, you know, opening the doors. And I remember all these CEOs like you who would come in and would be worshiped by McKinsey. And I was like, I want to be one of them. I don't want to be, you know, one of me. And as a result of that, for some reason at the time it was the early 90s, I started buying stocks thanks to my brother Thomas, who, you know, is nine years younger than me. And we had this little account with a thousand bucks at an online brokerage and I still remember the name. It was called Jack and White and we started buying stocks. And in my first or second year at McKinsey I made more money buying stocks than I made at McKinsey. So I was like, oh, I'm done, and I left McKinsey and came back to the US and ended up, you know, working in an investment firm. And, you know, that was lucky, that was what you call a lucky stumble.
Yeah, I understand you actually started out working for free in a small investment firm.
Well, I didn't have, you know, any papers. So, now I'm American, but back then I didn't have any really work papers and I sort of still had a student — I forgot, I had some sort of visa, but I couldn't find a job. And so finally I was like, okay, I'm just gonna work for free because for free someone always takes you. They have such pity and such a good deal, right? But the downside is the guy who gave me a free job, I quit on him after six months. And he also said, why did you quit so early? I was like, pal, I haven't made the time yet. You know, so it made me think that when you have too good of a deal, you know, be careful because the other side probably also knows it's too good of a deal.
So I ended up working for Tiger Management and I went from working for free to working for Tiger, which at the time was one of the two largest hedge funds in the world and had a slew of really young, ambitious people and led by this incredibly charismatic leader who I've also learned a lot from and which I'm sure you knew pretty well, which was Julian Robertson.
Yeah, he was a big shareholder when we first came out and, you know, I was so impressed with him and everybody at Tiger because just the questions you asked were so good. But as I understand it, you know, when you went to Tiger and wanted to get in, you didn't get the job. Tell us that story.
David, you have spies. You know, who the hell has been feeding you all this? So when I applied, which also for me is like one of the most important qualities — we've spoken about a few, right? We said stumble, we said passionate, we said repetition, we said social. Another one is around repetition, is more persistence, which is a more — I think it's a prettier version of saying the same. I applied at Tiger and they saw my resume from MIT, so I got sent to the IT department and then they rejected me. And I was like, no, no, no, I want to apply to the investment staff, not the IT department. And three months later I found a backdoor into the investment staff and got this one interview, and the guy who interviewed me was European and we just hit it off and he gave me a chance.
And I understand you had a two-minute interview with Julian Robertson, is that correct?
Yeah, he was smart because when you got in through — I got to Tiger through a friend of Julian. So, you know, most of the times when you get resumes through friends, you can never tell is it a good resume, not a good resume. So he sent me off to this other guy and Julian said a version of like, look, it's great to meet you, I've heard so much about you, but why don't you go meet this guy? And like, that was the interview. But luckily, the guy he made me meet — you know, you only need to convince one guy early on, and it rarely needs to be the boss, but the boss's right hand or left hand at the beginning is more important than the boss himself.
I'm curious, you know, Philippe, what did Julian teach you that still shapes how you think today?
Everybody knows that with my heavy accent, I have a speech impediment. But imagine with me and this guy with this heavy North Carolina drawl speak. It would like literally be — I also thought he had a speech impediment because I couldn't understand half the things, and we were debating, you know, like EBITDA and earnings and this business and that business, and he liked to debate things. So it was really fun. I'd say the two things that I learned is one, to focus on the long-term fundamentals. Not focus too much on the day-to-day stuff. Don't focus on like what makes a stock move 10%. Focus on what's going to make a stock move 100%. And that's usually trying to figure out, can this business be like a huge business in seven years? I find like 10 years is too long, but five maybe is not long enough. So let's say five to seven years, right? And just focus on, okay, what are the three key questions that if we can answer these three questions in five or seven years this will be a great investment. The simplicity of his thinking is what was most appealing.
You know, Philippe, I understand that you said when you first started in investing that you might have confused luck with skill. Explain.
Well, you know that the general Napoleon, he always said he wanted to have a lucky — it was actually then the emperor. He said he only wanted to have lucky generals, not smart generals. So I think luck plays obviously an important role. I think to me, you know, in the investing world, the way I think about things is I think about thematically sort of what's going on because if you get the theme right, you are already increasing your luck because in general in growth investing like having the wind in your back matters. So I've always tried to simplify my investment thesis by saying, look, can I already have the wind in my back? So for instance, dumb facts, I think since inception the NASDAQ has compounded at 14% per year, but the S&P is only like 11. Okay. But 3% over 50 years, it's an enormous amount of money. I don't know what 1.03 to the power 50 is, but it's a lot more than, you know, maybe it's a 7x or 5x or something like that, right? So I think that's what I mean by luck. What I mean by luck is just like trying to already get some things that roll the ball your way instead of against you.
You then, after three and a half years at Tiger, you decided you were going to go out and you had the conviction to start Coatue. What made you do that? What was driving that decision?
Well, the key thing that was driving that decision — I'd like to tell you that I had this amazing foresight and I was going to be an amazing entrepreneur and I knew I was going to succeed. But the truth is it was much more simple, which is I got fired after three and a half years.
That's a burning platform there.
So, it's like, all right. And I got fired for a total unforced error, which is there was a time where a lot of my friends and talented analysts left Tiger. And so I said, oh well, there's one guy left, maybe I should go with him, but I also really like being at Tiger. So I went to J and I said, look, this guy's offered me to leave with him, but I also think I really want to stay with you, but I don't know how I'm doing and, you know, I feel like I'm not doing as well as I should. And he was like, you're amazing, please stay. And then one month later, he had found my replacement. And I realized that I learned a very big lesson, especially true on Wall Street, but you're either in or you're off the boat. There's no in between.
And when I run my firm now 30 years later, I hate the people who have a foot in and a foot out because sometimes we're in the business of having to make important decisions, consequential decisions where a lot of investors' money is at play, and you have to make sure that people's heart is in it, people's mind is in it, people's commitment is in it. So anyway, lesson learned, and I stumbled onto the next thing.
That was a good stumble, and you go out and you raise $50 million, and you stumble right into the dot-com crash. You know, how'd you survive that?
You know, I started January 1st, 2000. I was up 20% after a month. I thought it was going to be so easy. I was annualizing my monthly returns, and obviously the NASDAQ went from 5,000 to 1,000 over three years. But in retrospect, what happens is by having started in such a tough market — and I'll answer to you how I survived — but I basically was then ready for anything after. And all my friends, older people that I met over the years, but that started in the 80s or 90s, they had 10 or 20 years of uninterrupted success. And when the bubble came, they all were like, oh, don't worry, this is only just a one time, it's going to go back. Right? And then it never did.
And so I think what's lucky is when you start in money management at a bad time, you are not afraid to change your mind and to realize that sometimes there's like very important things going on in the economy, and it's like a boat and there's a big storm and it's time to return to port. And there's some people who don't believe in returning to port. They just believe in like just keep going, or maybe, you know, you can tack right or tack left and escape the storm. The truth is that in money management there are storms, and you and I, we've lived through a number of them together. '08 was another one. COVID was another one. Post-COVID was another one. On average there's one very bad event every 10 years where the market can go down like 50% or more. And so three times a decade it goes down 20% or more. So you got to learn how to navigate these things. And there's no better way to navigate choppy waters than to have started navigating choppy waters.
And you definitely had the choppy waters. How did you stay alive during that period?
You know, we said, look, you need to stumble, you need conviction and being passionate, you need persistence, you need to be social. That part I solved through the social, which is that I was not all alone even though I started and I only had two employees, because I had a lot of other money managers and I always made an effort to have a good network of people and be able to call people. And as a result of that, I had probably friends who gave me more time than I deserved, but would explain me things that I had not figured out on my own and made me realize, whoa, now's not the time to necessarily be a hero.
And so because on top of that, we were lucky to start with a hedge fund. We had the shorts protecting against the longs. And over the three years when the market went down 90% we were up about 50. So we had created like — we went from 100 to 150, but the market maybe had gone from 100 to 20. So we had created sort of a six or seven x against the market, and that was enough to really get me going.
Absolutely. And you had two team members at that point in time. How many people do you have in your company now, Philippe?
200, 250, something like that.
And how do you think about the culture, the work environment you're trying to create that'll drive success for your investors?
The stock market affects me, and doing well and doing poorly affects me, and I am the paranoid side of the coin, always complaining or seeing the glass half empty. But luckily one of my co-founders, who also happens to be my brother, he is far more sort of stable and optimistic, and I think having that yin and yang, you know, has been very helpful to me.
Yeah, I was curious to learn that, you know, earlier you said you wanted to be one of those CEOs that were walking into McKinsey, you know, but you call yourself a portfolio manager. You don't call yourself a CEO. Why is that?
I'm a portfolio manager. I'm also a founder. I'm entrepreneurial. When we started, we had 50 million. Today, we are like at almost 100 billion. So we've obviously experienced, you know, a lot of growth. We've added a couple zeros at least, you know, from 100 million to 1 billion to 10 — so we've added three zeros. So I'm not sure I have a fourth one left in the tank, but I'm pretty happy. Three zeros is good. Now, maybe we'll get a fourth, but on top of it, obviously, AUM is not the way you measure success in money management. We can get to that later, but so I like being entrepreneurial by being a founder.
But I have found that I can only have about 10 or 20 people, maybe 50 around me. And one of the things that I'm so impressed that you did and others do is you're able to lead an army of thousands and thousands. Me, I barely remember, you know, the name of the 50 people around me, and I also like to spend time with them. Then I'm also happy with them. I'm unhappy with them. I'm screaming at them. They're screaming at me. We disagree. We reagree.
The money management culture is very — I think for a good firm needs to be fairly combative or at least very argumentative, very much because it has to be one where you agree to go in a room in an investment committee and you put your heart out and you debate, and it has to be that the best idea wins. It cannot be that seniority, experience, all this in my mind around, well, young kid, what you said is interesting, but I know better, right? To me these are all the ways that old people constrain young people and constrain the new way of thinking. By and large in investing it's all about figuring out the future, and so especially in what we do, which is tech investing. And so I like that kind of culture, and I like — and, you know, if one day I could name, I don't know, something, you know, like my little 13-foot Boston Whaler, I would name it, you know, Pugnacious or something like that.
Pug. There you go. You might have a new nickname I might give you there.
You know, people call me Pepe Le Pew. So if you call me Pugnacious, that's a big upgrade.
I'm gonna call you Pug. I like Pug. I think that's a good one.
Sounds like a little meek dog, but fine. I'll take it.
I don't know. Maybe it should be pugnacious with the emphasis on the nacious.
I love it. Now, the one thing you do, you know, is you definitely lead some incredibly smart, highly educated people. What have you learned about leading high IQ people like you do?
Well, as you know, I've prefaced this whole thing. I told you when you invited me that you're not inviting necessarily a per se leader, right? Because I can't lead a lot of people. But the things I've tried to do is I've tried to say that number one, people love to learn. So I think that's great. People love to be in a meritocracy. That's also very important. And people love being in a place where if the counter to you being and having the right to tell them that their idea is really dumb and probably using some even worse choice words is the fact that they have a good idea, you're willing to empower them and give them the capital to, you know, pursue that idea. So that part of the firm is what makes people very excited.
The second part is I hate to be so crude, but you also have to pay people way well, and you don't pay them according to seniority. You pay them according to, at the end of the day, results. I would say that's probably not the biggest one, but it's still an important one. And the third one is you have to give people a path for growth and success and ownership and give them something that at the end of the day, every day they go, I'd rather work inside of this firm than go on my own.
And I think to be honest there, Dave, we did not know how to do this very well over time, but we've become much better at doing it. We've become better around the investment committee, the culture that we've created, the people that we have, and we've also become better at that we reward people well, but in a way that also incentivizes them to be very loyal. And so we end up having a group of people that let's say that I would be maybe a decent — not a good, but a decent commander of like a small SWAT team, but I would be a terrible, you know, in the army or the navy, right? Because anyway, that's my probably mediocre analogy to you.
And you know, you mentioned Thomas earlier, your brother, and the yin and the yang. And he's really been a big culture champion and has, you know, been leading the army basically that you've built to a certain extent. What's it like working with the brother and how's it made your company better in your mind?
Working with my brother, the advantage is I knew that whatever the disagreement, we would always do what's best for the company. And over the years, we've had disagreements. Sometimes we've had personal reasons why we could be more or less engaged in something or something else. But at the end of the day, this faith that we're always going to do what's right for the business because then it leads to the fact that we're always going to try to come up to the best decision for the business. And the best decision for business is always very simple. It's what's the best decision for our investors? Because at the end of the day with investors, your long-term track record matters a lot. But investors know that you're not going to always be the number one every year. And sometimes you're going to have stumbles. What investors really care is there you always have to think about what's in their best interest, what's fair, what's ethical. And for us, that's always been very important.
On top of that, since we were both foreigners, once we got a taste of being in America, we wanted to make sure just we could stay. So it was very easy for us to make the right decisions because we never wanted to be in a position where — see, that's why an unrelated anecdote, sorry to you, you'll learn by now that I constantly diverge, so keep —
Keep going, I love it, I'm loving it.
Being an immigrant has a huge advantage, which is that I never took for granted staying in the US, and I have become very, very pro-American, which drives my French friends bonkers. And so now I'm like double American to piss them off even more because it's so funny to see the — and I never took for granted that like, whoa, you know, I'm here now. Of course, I'm a citizen. My six kids are American and my wife who was Spanish is also American. But it wasn't always the case. And I still to this day, today, if you ask me, am I a guest of the country? I still feel like a guest, and that drives you to need to do things like extra well and like you cannot up, and that I think is an important driver.
Hello friends. I hope you're loving this conversation. Be sure to stay tuned to the very end of the episode. As always, David and I are going to debrief some of the concepts that he talks about with this week's guest. So stay tuned to the very end and I will see you soon.
I want to call some on you. Okay. Because you say you're not a leader. You start out with $50 million. You're now one of the largest firms in the world. You're the acknowledged technology investment guru. You lead. I mean, you just articulated, you know, what you want the firm to do, how you manage high IQ people. You know, I have a hard time looking at you saying, you know, and I'm not being patronizing at all, but it's hard for me to say, oh, this guy isn't a leader. So what do you think of that challenge?
Because the scale of our company is small, I've never considered myself a great leader. To me, like there's like great political leaders. I have a lot of respect for CEOs because a CEO is a very difficult job because you're leading a lot of people, but you were not the founder. So it's very difficult to lead a company that you didn't found because when you found the company, then like your mistakes are like, who cares? I created this company, you know, leave me alone. And so you lead big organization, there's a lot of downside. I'm a founder, more an entrepreneur, but I feel like at least I've surrounded myself with people who can deal with my inherent weaknesses, you know, and I think —
That's a great leadership skill. That's a great leadership skill.
But I'm not a professional leader, but I have been willing to recognize that like, look, I don't really know how to do — like I got a great person in HR. Okay, why is she great? She's incredibly devoted to the firm. We've been together for many years and I know she will go to war for me. So you need people like that, you know, to help you. We have an amazing person in marketing who's helped me, you know, grow the business over time.
And then on the investment staff, the one big thing is years ago I had a very good advisor called Tony James, which I'm sure you know. I don't know if he's been on your show. He was the president of Blackstone. He sort of just introduced a simple idea which is don't think about the different things that you do as products. Think of them as businesses. So our hedge fund is a business. Our venture is a business. Our growth is a business. Our credit is a business. Our hybrid capital solution is a business. And so now we've installed investors, but we've also installed business leaders.
So at my very small scale, if you're not a great leader, at least figuring out the chessboard and letting other people play chess for you is important. And me, I focused mostly on like, is this a good investment idea or a bad investment idea, and am I in a forum where I can argue, you know, violently and not upset anyone about it? That's what I try to, you know, stick to.
Sounds like healthy debate, healthy decision to me. You know, you spent your career, Philippe, trying to see things before everyone else does. You know, how do you recognize, how do you go about recognizing the major shift?
Even though I'm an MIT undergrad in computer science and economics and I was also MIT grad in computer science, so think of me as like 50% nerd and 50% dork, you know, from the educational viewpoint. I was lucky in part by also being an immigrant that I was interested in history. I'm terrible at like regular, you know, world history or US history. I think I barely passed the exam to become an American citizen because I only studied like one hour before, you know, the questions, barely made it. But I was a very good historian of technology.
And so I can tell you why there was whale oil, why did electricity take over, what happened to the horses when the canals got created, why at the beginning of the car industry was one-third steam, one-third electric, and one-third gasoline. I can tell you why the gasoline one. And so I sort of got in my mind this sort of view literally probably from 1750 on of all the different sort of techs and how they diffuse and how they go up and back down, right?
And in particular talking about today, the reason why today is so important is if I were to summarize the history of technology from 1750 to 1950, you had 200 years which was the industrial revolution. It culminated with the war that industrialized a lot of the last big things, but before that it was, you know, Henry Ford and before that it was the agriculture and all of these things, right? In 1950 we move from the industrial age to the information age with the advent of the first semiconductor, the first mainframe, and basically from 1950 to 2020 we have seven of these waves within that 70-year block, which was the mainframe, the minicomputer, the PC, the internet — then that gives rise, sorry, networking, then gives rise to the internet, then you had the mobile internet, and then you had cloud. Seven waves in 70 years. Each wave is about 10 years.
2020 — it's actually not true, it was 2022, but let's say 2020 because it started before — we get a new semiconductor piece that leads to a new gigantic age, which is the intelligence age. And in the intelligence age, the atomic unit of the intelligence age is the GPU. And the GPU is the equivalent of the neuron, and all the GPUs connected to others because as you know the power of GPUs is the more you connect one GPU to the other the smarter the whole system gets. So all those hundreds of thousands of fiber optical cables that connect all the GPUs together, this is a synapse.
And the reason why this is such an interesting age is we've moved from the age of dumb semiconductors, calculator style, that you just make smaller and smaller, faster and faster, to a brand new architecture that mimics the brain. And the transformer model and these LLMs probably mimic more the way that a brain works. And so I feel again, it's lucky, but also you have to recognize when you stumble onto either a wave or when you stumble onto an age, right? And an age is comprised of multiple waves, and we are at the beginning of I think this third really, really big fundamental shift in how society produces, gets organized, and everything.
And you know, we have this gigantic shift and you figured it out, and you figured it out earlier than most. Then you do what you call, you know, peel back the onion around that big idea. Talk a little bit about that.
So we have this concept in the investment world that you don't need a lot of ideas, and in fact you only need a few ideas, and we call them BFI, and B stands for big, I stands for idea, and F stands for — well, you can figure out what the F stands for, right? So you got these big, big ideas, BFIs, and in each wave you only need like one or two or three BFIs over 10 years. And the BFI, it's like almost like the grove. And then that's the BFI, the theme, the BFI is like a grove of aspen trees. And then the stocks are like trees, but all those — I forgot if it's the aspen or no — you know that they're all connected to this one root, and there's this one root that connects all these trees together.
And I always felt so like if you think about it recently, the BFI was Nvidia, and once you figured out Nvidia you could figure out the supply chain, then you figured out that Nvidia was going to need DRAM memory, then flash memory, and then blah blah blah, and that was the idea, right? If you think that now the new BFI is OpenAI and Anthropic, then go figure out what hangs off BFI, what hangs off Anthropic and OpenAI. Back in the age of the PC, it was Wintel, it was Microsoft and Windows and Dell, right? In the age of the internet, it was Google and Facebook and Amazon, right? In the age of cloud, it turns out that it was Azure, which belongs to Microsoft, it was AWS that belongs to Amazon.
So interesting, some companies have a foot on one wave and then found a way to surf the other wave. And then some companies they up, and there's usually cultural reasons. Like you could say like maybe IBM, they were at the pinnacle with the mainframe and the PC, but somehow they were not able to transition to the age of the internet, to the age of cloud and things like that, and now it's not the same company it used to be. Right? So I also think like it's important, that's why I try sometimes to pivot and stuff, but it's like you're surfing these waves and you got to sometimes say this is a good wave and I can surf it for 10 years, but sometimes there's this one junction where you go, I got to get off this wave and get on that wave.
And sometimes I've managed to do that, and then one time I totally missed the wave, and I missed the cloud wave, and for two or three years we did really poorly. And in retrospect what I've learned from this is never too late to change waves, and every day is a new day.
